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Transcript of Bloomberg
Harinder Samra Andrew Springer Douglas Haggard
Bloomberg's Core Values
Analysis Recommendation Implementation Financials Conclusion
Socially Responsible
Investing:1. Social
2. Environmental3. Ethical Mission
Statement1:
To deliver the best information
possible
Environmental Social
Governance:Measurement of
Corporate Responsibility
Vision Statement:
Progress with Sustainability
Competitive Advantage
• Leader in analytic research• All in one computerized
terminals• Globally used software• Multiplatform media delivery• Fortune 100 best company to
work for2
• Top 50 green company2
Analysis Recommendation Implementation Financials Conclusion
Current Weaknesses
• ESG related terminal sales low• ESG Research is labor Intensive• Gaps in “non-financial” data
?
Analysis Recommendation Implementation Financials Conclusion
Continuing Opportunities
• Deriving data• Creating analytical tools to measure ESG metrics• SRI screened funds increasing• SRI index returned 9.5% yearly versus S & P 500 8.6%
3
• Potential growth in carbon credit trading
Analysis Recommendation Implementation Financials Conclusion
Biggest Threats
• Competitors offering ESG data to SRI fund managers• No international standards on collecting data• Competitors gaining ground is rapidly expanding SRI
market
Analysis Recommendation Implementation Financials Conclusion
Decision
Outsource In House
Specific data collection
Fits Core Values
Control of the data quality
Less labor intensive
Analysis Recommendation Implementation Financials Conclusion
Recommendations
Derive ESG DataDevelop
Industry Specific Benchmarks
Promote New ESG Tools
IssuesAssumptions based on incomplete data
RisksCompromised integrity
IssuesDeveloping a fair and unbiased system
RisksNegative impact of imprecise ratings
IssuesUnknown benefits of new tools
RisksLack of adoption
Analysis Recommendation Implementation Financials Conclusion
Recommendations
Derive ESG DataDevelop
Industry Specific Benchmarks
Promote New ESG Tools
IssuesAssumptions based on incomplete data
RisksCompromised integrity
IssuesDeveloping a fair and unbiased system
RisksNegative impact of imprecise ratings
IssuesUnknown benefits of new tools
RisksLack of adoption
Analysis Recommendation Implementation Financials Conclusion
Recommendations
Derive ESG DataDevelop
Industry Specific Benchmarks
Promote New ESG Tools
IssuesAssumptions based on incomplete data
RisksCompromised integrity
IssuesDeveloping a fair and unbiased system
RisksNegative impact of imprecise ratings
IssuesUnknown benefits of new tools
RisksLack of adoption
Analysis Recommendation Implementation Financials Conclusion
Recommendation Effects
Provides the best information available to evaluate SRI metrics
Positions Bloomberg to capture emerging market share
Position Bloomberg as a leader in information on Carbon Trading
Analysis Recommendation Implementation Financials Conclusion
Implementation
Hire employees to derive ESG data
Make rating system relative to industry
Roll out marketing and promotion plan to push ESG analytical tools
Analysis Recommendation Implementation Financials Conclusion
Timeline of Implementation
March 2011 June September December 2012 2013
“Data Scraping” and Quantitative Analysis of Data
Recruitment and Hiring of New
Employees
Develop Industry Specific Rating
System
Rollout of new ESG Products
Evaluation of Implementation
1 2Short Term Long Term
Promotion of New ESG Analytical Tools
Analysis Recommendation Implementation Financials Conclusion
Assumptions
US and EU SRI assets under management $9.941 trillion
4,5
Traders to asset ratio 1 trader/$750m assets
SRI portfolios increasing 3.6% yearly
4Cost of Living Increase 3%
Euro to Dollar exchange rate $1.3753
6
Inflation rate 2%7
Analysis Recommendation Implementation Financials Conclusion
Cost of Deriving Data
1. Hiring EmployeesAverage Salary for research analysts in New York City with 1-4yr experience including,
Health Benefits & Compensation
Trucost employees 11 analysts8
Bloomberg at the start of the roll out in 2008 had 5 analysts
According to our calculations:
117k X 6 New analysts9
250k X 1 Ph.D. statistician9 952k a year
2. Marketing Plan$ 5 million per year for employee training and sales material
Analysis Recommendation Implementation Financials Conclusion
Projected Profit for US and EU
$ (000) Year 0 (2011)
Year 1(2012)
Year 2 (2013)
Year 3 (2014)
Year 4 (2015)
Year 5(2016)
New Cost 5,952 6,010 6,191 6,376 6,568 6,765
Projected Growth 119 12,843 13,306 13,785 14,280 14,795
Recurring Units Sold 119 1,296 13,161 24,454 38,188 51,382
Net Profit After Tax (3714) 5,284 13,180 21,360 29,836 38,618
Projected 5 year Profit $104,563,937
Analysis Recommendation Implementation Financials Conclusion
Cost Vs. Net Profit
2011 2012 2013 2014 2015 2016-10,000
0
10,000
20,000
30,000
40,000
50,000
CostNet Profit
$ (0
00's)
Analysis Recommendation Implementation Financials Conclusion
Projected Market Share
Present Market Share
BloombergGrowth Opportu-nity
Market Share 2016
BloombergGrowth Op-portunity
Results of recommendations
Analysis Recommendation Implementation Financials Conclusion
.56%
23.79%
By implementing our recommendations, Bloomberg will• Maintain its core values• Encourage Corporate Responsibility• Gain market share in SRI investment segment
Conclusion
Analysis Recommendation Implementation Financials Conclusion
THANK YOU
INDEX
Slide Slide
1 Intro 11 Recommendation Effects
2 Bloomberg’s Core Values 12 Assumptions
3 Competitive Advantage 13 Cost of Deriving Data
4 Current Weaknesses 14 Projected Profit for US and EU
5 Continuing Opportunities 15 Cost vs. Net Profit
6 Biggest Threats 16 Projected Market Share
7 Decision 17 Implementation
8 Recommendations Stage 1 18 Timeline of Implementation
9 Recommendations Stage 2 19 Conclusion
10 Recommendations Stage 3 20 End
References
1. http://georgedearing.com/bloombergs-mission-statement-via-slmader2. http://www.hoovers.com/bloomberg-l.p./--ID__40671--/freeuk-co-
factsheet.xhtml3. http://www.fool.com/investing/general/2010/06/02/reinforce-your-returns-
with-social-responsibility.aspx?source=isesitlnk0000001&mrr=1.004. http://www.socialinvest.org/resources/sriguide/srifacts.cfm5. http://www.eurosif.org/sri-resources/sri-faq 6. http://www.x-rates.com/7. http://www.usinflationcalculator.com/interest-rates/long-term-inflation-target-
of-17-to-2-set-by-fed/1000388/8. http://www.trucost.com/our-team9. http://www.salary.com/salary/index.asp
Appendix
Companies with stand alone and integrated responsibility reports, by country 2005-2008