Bloomberg Impact Report: Determining Materiality
Bloomberg’s sustainability program began in 2007. From the beginning, we recognized the importance of identifying areas of impact relevant to our business. While this initial assessment was focused primarily on environmental mitigation, our continuing revision and stakeholder engagement processes, along with guidance from the Global Reporting Initiative (GRI), led us to expand the scope of sustainability to reflect a much broader array of material issues.
For our 2014 Sustainability Report, as in prior years, Bloomberg is following the GRI guidelines. After utilizing G3 since our initial GRI-compliant report in 2010, this year we are moving to the G4 framework and incorporating the Media Sector supplement.
Also noteworthy in 2014 is the integration of sector-specific reporting standards from the Sustainability Accounting Standards Board (SASB). Under SASB’s industry classification system, Bloomberg’s business offerings can be categorized into three distinct industries: Internet Media & Services, Media Production & Distribution and Professional Services.
SASB standards are designed for use within a public company’s annual 10-K filing to the SEC, and the complementary nature of utilizing multiple reporting frameworks — here, namely GRI and SASB — is most evident in the context of a public company’s reporting activities (between its regulated filings to the SEC and its unregulated sustainability report). While Bloomberg, as a private company, is not subject to those filing requirements, we have nevertheless embarked on what we believe to be an important integrative exercise given the rapid evolution of the corporate reporting field.
Bloomberg is utilizing these frameworks in an integrative fashion for the purposes of this reporting exercise and has produced what is essentially a sample MD&A (Management Discussion & Analysis) for Bloomberg’s three applicable SASB industries (located on online at www.bloomberg.com/bcause) alongside the full GRI G4 index (located online at www.bloomberg.com/bcause). It is an opportunity for Bloomberg to show that the GRI and SASB reporting frameworks can be complimentary pieces in a comprehensive sustainability reporting effort.
At the heart of this exercise lies the concept of “materiality,” which is defined in different ways under various reporting frameworks. We do not attempt to formally reconcile divergent uses of the term (as between SASB and GRI). Rather, we have developed an implementation methodology that enables the use of both definitions in the context of a single report by a private company. “Materiality” understood within the GRI framework first leads us to consider a spectrum of issues that are deemed salient in reflecting the company’s environmental and social impacts on a wide array of stakeholders. Accordingly, we begin with the larger universe of potentially relevant issues and metrics as delineated under G4. However, as to one specific stakeholder group — the investor community — we turn to SASB’s standards, which reflect the application of a U.S. legal/regulatory definition of materiality as derived from the “reasonable investor” standard. In utilizing SASB’s standards for each of the applicable sectors, we rely on its evidence-based research process to have surfaced those industry topics most likely to be salient for Bloomberg L.P.’s financial and operational performance.
This report leads with a high-level “Topics” table of both SASB’s potentially material general topics for the applicable sectors set within the context of GRI’s broader array of “Aspects.” While we have conducted an exercise of determining what is actually material to Bloomberg L.P. (since under both frameworks, the ultimate determination of materiality is left to the corporate entity), we acknowledge that this is but a half-step in the direction of a truly streamlined report. For 2014, Bloomberg continues to report on the full complement of applicable GRI indicators. As we look to 2015, we will embark on an extensive stakeholder engagement process to conduct a more targeted materiality exercise, determining the most relevant, substantively material indicators culled from both GRI and SASB, thereby continuing to rationalize and improve our reporting process.
Bloomberg’s aforementioned stakeholder engagement process is conducted annually for the purposes of determining materiality and soliciting feedback on all facets of our sustainability program. As described on page 6 in greater detail, it reflects a comprehensive process requiring input from a number of strategic partners, including customers, vendors, employees, nonprofits, and other experts.
