Social Responsibility Case. 2011

1. Harinder Samra Andrew Springer Douglas Haggard

2. Bloomberg's Core Values
Socially
Responsible
Investing:
1. Social
2. Environmental
3. Ethical Mission
Vision
Statement: Statement1:
Progress with To deliver the
Sustainability best information
possible
Environmental
Social
Governance:
Measurement of
Corporate
Responsibility
Analysis Recommendation Implementation Financials Conclusion

3. 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

4. Current Weaknesses
• ESG related terminal sales low
• ESG Research is labor Intensive
• Gaps in “non-financial” data
?
Analysis Recommendation Implementation Financials Conclusion

5. 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

6. 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

7. Decision
Outsource In House
Analysis Recommendation Implementation Financials Conclusion

8. Recommendations
Develop
Promote New
Derive ESG Data Industry Specific
ESG Tools
Benchmarks
Issues Issues
Issues
Assumptions based on Developing a fair and
Unknown benefits of
incomplete data unbiased system
new tools
Risks Risks
Risks
Compromised Negative impact of
Lack of adoption
integrity imprecise ratings
Analysis Recommendation Implementation Financials Conclusion

9. Recommendations
Develop
Promote New
Derive ESG Data Industry Specific
ESG Tools
Benchmarks
Issues Issues
Issues
Assumptions based on Developing a fair and
Unknown benefits of
incomplete data unbiased system
new tools
Risks Risks
Risks
Compromised Negative impact of
Lack of adoption
integrity imprecise ratings
Analysis Recommendation Implementation Financials Conclusion

10. Recommendations
Develop
Promote New
Derive ESG Data Industry Specific
ESG Tools
Benchmarks
Issues Issues
Issues
Assumptions based on Developing a fair and
Unknown benefits of
incomplete data unbiased system
new tools
Risks Risks
Risks
Compromised Negative impact of
Lack of adoption
integrity imprecise ratings
Analysis Recommendation Implementation Financials Conclusion

11. 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

12. 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

13. Timeline of Implementation
March 2011 June September December 2012 2013
Recruitment and
Hiring of New
Employees
“Data Scraping”
and Quantitative
Analysis of Data
Develop Industry
Specific Rating
System
Rollout of new
ESG Products
Promotion of New ESG Analytical Tools
Evaluation of
Implementation
1 Short Term 2 Long Term
Analysis Recommendation Implementation Financials Conclusion

14. Assumptions
US and EU SRI assets under Traders to asset ratio 1
management $9.941 trillion4,5 trader/$750m assets
SRI portfolios increasing 3.6%
Cost of Living Increase 3% yearly4
Euro to Dollar exchange rate Inflation rate 2%7
$1.37536
Analysis Recommendation Implementation Financials Conclusion

15. Cost of Deriving Data
1. Hiring Employees
Average 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

16. Projected Profit for US and EU
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
$ (000)
(2011) (2012) (2013) (2014) (2015) (2016)
New Cost 5,952 6,010 6,191 6,376 6,568 6,765
Projected
119 12,843 13,306 13,785 14,280 14,795
Growth
Recurring
119 1,296 13,161 24,454 38,188 51,382
Units Sold
Net Profit
(3714) 5,284 13,180 21,360 29,836 38,618
After Tax
Projected 5 year Profit $104,563,937
Analysis Recommendation Implementation Financials Conclusion

17. Cost Vs. Net Profit
45,000
40,000
35,000
30,000
25,000
20,000
$ (000's)
15,000
10,000
5,000
0
-5,000
-10,000
2011 2012 2013 2014 2015 2016
Analysis Recommendation Implementation Financials Conclusion

18. Projected Market Share
Present Market Share
Bloomberg
.56%
Growth
Opportunity
Market Share 2016
Results of Bloomberg
23.79%
recommendations Growth
Opportunity
Analysis Recommendation Implementation Financials Conclusion

19. Conclusion
By implementing our recommendations, Bloomberg will
•Maintain its core values
•Encourage Corporate Responsibility
•Gain market share in SRI investment segment
Analysis Recommendation Implementation Financials Conclusion

20. THANK YOU

21. 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

22. References
1. http://georgedearing.com/bloombergs-mission-statement-via-slmader
2. http://www.hoovers.com/bloomberg-l.p./--ID__40671--/freeuk-co-
factsheet.xhtml
3. http://www.fool.com/investing/general/2010/06/02/reinforce-your-returns-
with-social-responsibility.aspx?source=isesitlnk0000001&mrr=1.00
4. http://www.socialinvest.org/resources/sriguide/srifacts.cfm
5. 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-team
9. http://www.salary.com/salary/index.asp

23. Appendix
Companies with stand alone and integrated
responsibility reports, by country 2005-2008