Seven Bangladeshi companies made it to Bloomberg’s list of sustainable companies for environmental, social and governance (ESG) performance last year. More than 16 thousand listed companies from all over the world are included in this list. More than 93 percent of the international market capitalization is held by these companies.
The companies featured in Bloomberg’s list are Grameenphone, British American Tobacco (BAT) Bangladesh, Marico Bangladesh, BRAC Bank, IDLC Finance, Square Pharmaceuticals and Walton Hi-Tech Industries.
Despite being on the list, the Bloomberg ESG scores of Bangladeshi companies are quite lower than the scores of other companies in the region. For example, the top 100 Indian companies score between 50 and 70. On the other hand, Bangladeshi companies score between 23 and 40. Note that the total score is given out of 100.
ESG ratings are important to attract international investors, experts say. Because many foreign investors, especially European institutional investors, now want to see whether certain ESG criteria are met before investing.
Several leading listed companies in Bangladesh have adopted the Sustainable Development Goals (SDGs) in their day-to-day operations, which are in line with ESG ideals.
Bloomberg, the leading international ESG scoring organization, takes relevant, quantifiable information from standard sustainability reports of various companies and assigns scores to companies based on them. Investors using the Bloomberg terminal make investment decisions based on this score.
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Leading telecommunications company Grameenphone has been practicing sustainable business for a long time. The multinational company also publishes an annual sustainability report. Grameenphone received the highest score of 39.6 among Bangladeshi companies in Bloomberg ESG Universe. According to the data, the company is improving every year.
Tobacco market leader BAT Bangladesh is second with a score of 35.4 and haircare market leader Marico Bangladesh is third with a score of 34.9. Domestic institution BRAC Bank Limited has a Bloomberg ESG score of 33.1. And IDLC Finance, the country’s largest non-banking financial institution, is next with a score of 31.1. Square Pharmaceuticals, the leading company in the pharmaceuticals market, has a score of 26, and Walton, the leading company in the country’s electronics market, has a score of 23.7.
By 2025, global ESG assets will exceed trillion, accounting for more than one-third of total assets under management, according to Bloomberg data.
Emerging economies are becoming hubs for ESG, with $190 billion in sustainable funds in 2022, according to BRAC EPL Stock Brokerage, a local brokerage that serves foreign portfolio investors.
India forced top 1,000 companies to disclose ESG information by implementing Business Responsibility and Sustainability Report rules during the pandemic. Due to this, the country has been ranked third in the MSCI Emerging Markets ESG Leaders Index.
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Thailand has also mandated the publication of EAGC reports for listed companies to meet growing investor demand. In 2020, Bloomberg started to create its own ESG database of international capital markets.
Bloomberg’s APAC ESG Data Team Lead Yellie Park said, ‘Bloomberg prioritizes companies in their rankings that disclose their ESG information in a separate ESG report or integrated annual report. These reports should be prepared according to the guidelines of Global Reporting Initiative (GRI), Sustainability Accounting Standards Board or International Sustainability Standards Board.
Unfortunately, after working together for five years, Dhaka Stock Exchange (DSE) and GRI found only 14 listed companies in Bangladesh, whose sustainability factors were in line with GRI standards. On the other hand, there are more than 80 such companies in Sri Lanka.
