Ebook: ESG Controversies: A Comparative Study of Public vs Private Sectors
March 5, 2024
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5 mins read
In our newest research, "ESG Controversies: A Comparative Study of Public vs Private Sectors," our ESG and Research & Analytics teams present an exhaustive study on the nuances of ESG controversies across public and private sectors. We combined artificial intelligence with our extensive dataset of over 25 billion documents to extract ESG controversies in both sectors. This research highlights the increased visibility and scrutiny of public companies compared to the more discretion in private companies. A case study on IKEA uncovers challenges in product safety and human capital, underlining the importance of proactive sustainability practices. The study examines these sectors' alignment with major ESG frameworks, including the UN Global Compact and Sustainable Development Goals, offering invaluable insights for enhancing corporate ESG strategies.
Key takeaways:
Public companies are under constant observation, leading to higher exposure to ESG risks such as pollution, labor disputes, and governance failures. This visibility is partly due to regulatory requirements for transparency, making every aspect of their operations subject to public and investor scrutiny.
Private companies, while benefiting from less regulatory oversight, encounter substantial repercussions from ESG controversies. These can manifest as sudden shifts in investor confidence, challenges in securing financing, or damage to reputation, underscoring the critical need for comprehensive risk management approaches that encompass environmental, social, and governance factors.
The case study on IKEA provides an in-depth look at specific issues like product recalls due to safety concerns and the complexities of managing a global workforce. It highlights IKEA's efforts to implement forward-thinking sustainability initiatives and human capital management practices as key components of its corporate strategy, demonstrating the tangible benefits of such measures in mitigating ESG risks.
ESG controversies and breaches of SDG goals vary notably between public and private sectors. Public companies frequently encounter more visible and consistent ESG risks, while private companies, although subject to less scrutiny, experience significant impacts when controversies occur.
Dive deeper into ESG controversies and uncover strategies for navigating these challenges effectively. Download "ESG Controversies: A Comparative Study of Public vs Private Sectors" and equip your organization with the insights needed to enhance your ESG practices for a sustainable future. Fill out the form below to access your copy and lead the way in corporate sustainability.
2018 proved to be an eventful year for SESAMm with multiple renowned customers acquired, our A series fundraising campaign, numerous prizes won and milestones reached. Here is a look back at our rewarding year 2018 followed by our next steps for 2019.
Successful market entry in the US and around the world
The rapid growth of the alternative data industry and of SESAMm
As a Fintech company specialized in alternative data for Asset Management, 2018 represented a thrilling year in our industry and 2019 already promises to be even more exciting.
During 2018, after our very first business trip in the United States, our international sales development beyond Europe began accelerating. In just one year, we already signed contracts with multiple clients. These include major hedge funds in the US and a major global trading company managing $100 billion in financial assets and part of the Top 10 in its market. The US market represents a powerful strategic growth driver and we are already preparing to open an office there soon!
SESAMm signed its first contract with a client in Africa: Ipro Investment, renown asset manager established for 25 years specialized in emerging markets. Finally, we also signed a contract with our first Japanese client, Nikko Global Wrap, one of the subsidiaries of Sumitomo Mitsui Asset Management which is a major asset manager in Japan managing JPY 1.7 trillion.
Strengthening and developing our position in Europe
At the European level, SESAMm has also extended its customer portfolio:
Groupama AM: new major clients and leading French Asset Management players managing €103 billion Asset under Management (AuM);
Société Générale: leading French bank present all over the world;
Raiffeisen Bank International: one of the leading banks in Europe with more than 50,000 employees servicing over 16.5 million customers and possessing around 2,400 business outlets;
GT Patrimoine : the largest consulting and private management firm in the Lorraine area and based in France for 12 years.
In addition, after our 1st successful collaboration, a new contract was signed with Candriam, leading Asset Management firm and members of the New York Life Group, managing more than $112 billion AuM worldwide.
We are very proud to see how much traction we gained in just a year. The growing use and interest in alternative data for the Asset Management industry, both for quantitative and fundamental funds and asset managers, lead us to prepare for new opportunities of growth & business development.
Cutting edge solutions to respond to market needs
Big Data & AI for Cryptocurrencies
Our first cryptocurrency project began in early 2018. Initially, we started tracking the evolution of the most popular cryptocurrencies, such as Bitcoin (BTC) and Ethereum (ETH) and we analyzed their social data to produce social sentiment & emotions indicators. These indicators have since been integrated into our visualization platform of market sentiment, L’Humeur des Marchés.
This led us to establish a unique partnership based on L’Humeur des Marchés with NapoleonX, a major player as the leading French cryptocurrency manager: the first sentiment and emotion cryptocurrencies analysis destined for the general public. Since then, ETH and BTC sentiment, emotions & opinion value from SESAMm has been available to individual investors and the general public on NapoleonX platform.
The evolution of L’Humeur des Marchés
Our platform L’Humeur des Marchés is an essential tool to guide companies in their investments. During 2018, multiple improvements were added into L’Humeur des Marchés to further enhance its insights & analytics. For example, users have now the possibility to build automated strategies which can generate daily trading signals. Multiple new features were also added such as a strategic backtesting system, daily alerts with 3 years of history and day+1 signal to forecast market movements giving asset managers an edge over competitors.
"L'humeur des marchés" is SESAMm's data visualization platform to analyze market sentiment & emotion for asset management
L’Humeur des Marchés, our data visualization platform
Finally, additional filters have been added to better study & analyze market sentiment: there are now 6 different filters for data sources (sort by sources from web & press, news, blogs, discussions, social trading or all of them) and 9 languages covered (sort by English, French, Spanish, Chinese, Japanese, Portuguese, Italian, German or all of them). These new filters allow for a wider and more accurate coverage of assets, leading to improved tools & insights for investment decision.
Global recognition & awards for SESAMm
To accomplish our worldwide ambitions, we have started being more and more present abroad, especially at international events. They represent great occasions to promote SESAMm, demonstrate the unique benefits and advantages brought by our technologies & solutions and finally create business opportunities.
This year, we participated in many international events in the US and in Japan, including New York and Hong Kong for Eagle Alpha’s Alternative Data event, Canada, Africa and even London at the French Fintech Tour.
Having been selected for unique international awards reinforces our confidence in the benefits of our solutions for the Asset Management industry, for example with “Talk data to me” by Neudata, Elevator Lab Competition, and Groupama’s award “Créateur de confiance” (Trust Creator) among others.
SESAMm won the pitch "Talk data to Me" of Alternative Data Summit event by Neudata
SESAMm pitch “Talk Data to Me” winner during Alternative Data Summit by Neudata
Moreover, SESAMm has competed in several acceleration programs, in which we were selected in the following ones:
Fintech Business Camp Tokyo, the Tokyo Metropolitan Government accelerator program by Invest Tokyo and powered by Accenture;
Elevator Lab, Acceleration program of Raiffeisen Bank International where SESAMm competed and was selected;
French Tech Tour America, IMPACT USA’s program to prepare and discover North America’s markets & opportunities;
Pass French Tech, La French Tech’s highly selective program for hyper-growth startups & companies.
SESAMm’s Demo Day Presentation during Fintech Business Camp Tokyo
SESAMm’s plans for 2019: recruitment, development and growth
This year, we are very proud to see our team grow so much in so little time: we had 16 collaborators at the beginning of January 2018 and we are now a team of 28 members! Talented profiles have joined SESAMm team with NLP, AI & Quant engineers & experts from world-renowned schools. New collaborators will join SESAMm in the first quarter of 2019 and we are still recruiting in various fields such as Data Science, Quantitative Analysis, IT and Natural Language Processing among others. You can find all our offers on our dedicated page SESAMm Career!
Following our international success, especially in the US and in Japan, we are now preparing to open an office in the US in the following months and are already considering this option for Japan. Next month’s promise to be exciting and we will be participating in multiple events such as AI & Data Science for trading in New York in March, Machine Learning in Quant Finance by GFMI in April, and many events & conferences on alternative data, data science, Artificial Intelligence and Big Data for Asset Management around the world.
As you can see, 2018 represented SESAMm an exceptional year for its growth with new customers, including global companies, technological improvements for our solutions & services and a bigger and even more motivated team! Our major event in 2018 was the accomplishment of a €2.6 million Series A fundraising campaign, which enabled us to continue our international development, mainly in America and Asia, and the recruitment of many profiles. 2019 will represent another step for SESAMm to become a leading company in the alternative data solutions in the world. Stay tuned: SESAMm news will arrive soon!
Paris, France and London, UK – July 11, 2024 – SESAMm, a leader in AI-powered text analysis for ESG insights, is pleased to announce that Sustainable Fitch, a leading provider of ESG data, analysis, and research for the sustainability and fixed-income market, will be integrating SESAMm’s data into its ESG Scores and Ratings.
Sustainable Fitch provides ESG data and analytics to both the public and private markets, including asset owners and asset managers. Sustainable Fitch will use SESAMm analytics to monitor companies and industries at a granular level, allowing them to provide further insights to clients to aid their investment and due diligence decision-making.
Sylvain Forté, CEO of SESAMm, commented, “We are excited that a recognized leader in ESG analysis is using our insights for their ESG analysis. Our AI-powered text analysis will provide deeper insights and broader coverage, helping Sustainable Fitch to deliver high-quality ESG data and ratings.”
Gianluca Spinetti, Global Head of ESG Analytics at Sustainable Fitch, added, “Working with SESAMm technology allows us to leverage their advanced solutions to enhance our ESG Scores and Ratings offering. By integrating SESAMm’s extensive data coverage, we can offer our clients more comprehensive ESG insights.”
About SESAMm
SESAMm is a global leader in AI-powered text analytics, specializing in providing insights on ESG controversies and positive-impact events. With its cutting-edge technology, SESAMm helps private equity firms, asset managers, and other financial institutions, as well as ESG consulting firms and rating agencies, monitor and analyze vast amounts of textual data to identify potential risks and opportunities in their investments. For more information, visit SESAMm.
About Sustainable Fitch
Sustainable Fitch provides rigorous, human-powered sustainability research, analysis, and data for the fixed-income market, including ESG Ratings, Second Party Opinions, thought leadership, and more, with a focus on ESG impact. Our objective and substantive suite of products provides transparency, consistency, and granularity that enables confidence in decision-making. Powered by the human insight that has differentiated Fitch for over 100 years, Sustainable Fitch brings experience and heritage to help the financial community make smarter decisions using the best ESG information available.
Discover unparalleled insights into ESG controversies, risks, and opportunities across industries. Learn more about how SESAMm can help you analyze millions of private and public companies using AI-powered text analysis tools.
Despite its promises, the clean energy sector, featuring companies like NextEra Energy, First Solar, and Siemens Energy, faces significant challenges across ESG fronts. Governance issues include lawsuits over misleading financial practices and greenwashing accusations. Environmentally, the sector struggles with defective technology and product performance failures, eroding trust in renewable energy solutions. Social and labor challenges are also prevalent, including discrimination lawsuits, unsafe working conditions, and customer dissatisfaction stemming from product failures and poor service. Furthermore, the growing threat of cybersecurity vulnerabilities within clean energy infrastructure poses risks to both operational systems and consumer data.
What are the most pressing ESG challenges currently facing the clean energy sector? Read on to find out.
NextEra Energy: ESG Challenges and Legal Disputes
NextEra Energy faces several ESG controversies despite being less exposed than its peers. Governance issues include a $1.2 billion impairment related to the Mountain Valley Pipeline and a $350 million antitrust lawsuit for allegedly obstructing a competitor’s clean energy project. It has also faced legal challenges, notably investigations into its political donations connected to its bid for Jacksonville’s public utility. Environmental concerns involve growing opposition to its solar and battery projects and lobbying against rooftop solar policies, along with protests over its wind and drilling operations in Florida, which are subject to a class-action lawsuit for environmental risks. Additionally, the company is investigating wind turbine collapses and is engaged in legal disputes regarding employee rights, including a retaliation lawsuit and a $500,000 settlement over debt collection practices.
First Solar has been dealing with a mix of ESG challenges. The solar manufacturer is locked in patent litigation with JinkoSolar while struggling with broader industry headwinds like polysilicon oversupply, hurting bookings, and creating manufacturing problems. CEO Mark Widmar has pointed to policy uncertainty as a major roadblock, saying failed climate legislation is hampering domestic solar production. The company is also cleaning house with its Malaysian contractors over unethical labor practices. Despite proposed subsidy cuts dragging down the stock, RBC analysts still see nearly 40% upside potential as First Solar works through these operational and regulatory pressures.
Siemens Energy: ESG Controversies and Operational Challenges
Siemens Energy is facing multiple ESG controversies, including criticism for its reliance on fossil fuels and accusations of greenwashing. Its Siemens Gamesa unit struggles with turbine quality issues, resulting in financial losses, employee layoffs, and legal disputes, including a blocked asset sale in India and corruption allegations. The company is also under legal scrutiny for delays in the Akkuyu nuclear project and past sanctions violations. Additionally, Siemens Energy has been criticized for a data breach involving MOVEit software and vulnerabilities in its products. Socially, it has faced backlash for abolishing its women’s quota in the U.S. and labor unrest at Siemens Gamesa facilities, including strikes over working conditions.
In conclusion, the clean energy sector faces critical ESG challenges that threaten its potential for sustainable growth. Companies like Tesla, Siemens Energy, and NextEra Energy must prioritize transparency, improve governance, and address environmental and social issues to regain stakeholder trust. By proactively tackling these concerns, the sector can strengthen its credibility and better contribute to global sustainability efforts. The path forward is challenging, but addressing these challenges is essential for the clean energy industry's success in combating climate change.
Reach out to SESAMm
TextReveal’s web data analysis of over five million public and private companies is essential for keeping tabs on ESG investment risks. To learn more about how you can analyze web data or to request a demo, reach out to one of our representatives.
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