As we reflect on the year 2023, it's important to highlight the most significant ESG controversies that made headlines. Our last article in this series focused on the environmental aspect. This time, we turn our attention to the social pillar of ESG, focusing on issues such as strikes, layoffs, human rights violations, and discrimination against minority groups. We emphasize the need for accountability and action to address these pressing social issues and promote social responsibility.

Social Risks: Focus 2023

In 2023, social risks were the most significant, with layoffs and strikes gaining significant attention. It's crucial to acknowledge these social risks and take accountability and action to address them, as they underscore the urgent issues facing society.

Social Controversies of 2023

Social risks have taken the forefront in 2023, with notable web mentions increasing significantly. Here are the most relevant controversial topics:

Social Dialogue

Social discourse intensified at the start of the year, with news of widespread strikes in various sectors, including aviation and education, primarily driven by pay disputes. The wave of layoffs in several tech companies was the talk of the town, especially during the first quarter of the year.

Respect for Human Rights

The year saw an uptick in mentions related to human rights, especially controversies surrounding racism, data privacy violations, sexual harassment, and breaches of GDPR.

Diversity and Inclusion

Discrimination against minority groups, including the LGBTQ community and people of color, and age-based discrimination became a significant topic of discussion in 2023.

Top 5 Social Controversies

These controversies are ranked by relative volume*.

• McDonald's
  

Volume of mentions: 8,903

Relative volume: 87%

McDonald's faced substantial social risks in 2023 due to significant layoffs of its corporate staff in April. The move led to public concern and discussions around the company's employment practices and stability. (source)

• Google
  

Volume of mentions: 13,504

Relative volume: 43%

Google found itself in the spotlight as it faced challenges related to major layoffs in January and October of 2023. These layoffs contributed to almost half of the social risk mentions associated with the tech giant. (source)

• Meta
  

Volume of mentions: 10,965

Relative volume: 38%

Meta, formerly known as Facebook, also faced scrutiny as 38% of the company's social risk mentions revolved around layoffs that took place in March and October 2023. (source)

• Microsoft
  

Volume of mentions: 6,060

Relative volume: 28%

Microsoft faced challenges due to disruptions caused by cyberattacks in early June. In addition, the company had to navigate through controversies related to layoffs, contributing to its social risks. (source)

• X (formerly Twitter)
  

Volume of mentions: 7,246

Relative volume: 8%

X/Twitter experienced a global outage, which was followed by significant layoffs. These events led to considerable public discussions and social risks for the company. (source)

Conclusion

In summary, environmental risks remain a major concern for ESG, but the social pillar of ESG has become increasingly critical, especially in 2023. As we move forward, it's important for companies to acknowledge and address social risks, such as layoffs, strikes, human rights violations, and diversity and inclusion issues. By promoting social responsibility, companies can make a positive impact on society, create a more sustainable future, and enhance their reputation as socially responsible organizations.

Click here to learn about the top environmental and governance controversies in 2023.

Relative volume*: Relative to the total volume of E, S, or G risks for the company during the same period.

SESAMm’s AI Technology Reveals ESG Insights

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.

The aerospace and defense industry frequently faces ESG controversies, as these companies contend with high-exposure incidents that draw significant public and regulatory attention. In our recent webinar and ebook, we examined how AI-driven ESG evaluations enable early risk detection in these industries. Now, we want to explore what SESAMm's new Controversy Exposure Score (CES) can tell us about these same companies, including Boeing, SpaceX, Blue Origin, Raytheon, Lockheed Martin, and Airbus.

To learn more about the CES score, click here: SESAMm Launches Controversy Exposure Score.

The aerospace and defense industry’s controversies mainly revolve around safety, labor issues, and regulatory concerns, which cause the CES scores to fluctuate considerably over time, influenced by both the volume and intensity of the events.

Boeing Analysis

Boeing has been consistently at the forefront of ESG controversies, experiencing fluctuating intensities that directly impact its CES score. These fluctuations are often tied to specific high-profile events. The company's high-intensity controversies, particularly related to deadly crashes and fraud allegations over safety concerns, have driven notable spikes in its CES score during the past few years.

Significant crash incidents and safety issues have recurred throughout the years. This has resulted in increased FAA scrutiny of Boeing in early 2021 following Boeing 787 inspections, followed by continuous inspections into the 2018 — 2019 crash scandals, which are reflected in the two CES spikes during 2021. In 2022, the CES score rose again as the company was sentenced to pay $2.5 billion for criminal charges and $200 million in settlements for SEC charges for misleading investors, both over the 737 Max scandal.
In 2023, Boeing was ordered to appear in court for criminal settlements, an event classified as a high-intensity controversy, paired with significant media exposure reflected in the number of articles shared. This led to a surge in the CES spike despite the lower overall number of events during that period.
In 2024, the U.S. urged Boeing to plead guilty to fraud charges related to the fatal crashes, further intensified by a whistleblower's release of additional safety concerns, resulting in further CES spikes. The most recent surge in the CES was triggered by a widespread employee strike over a contract offer, representing yet another setback for Boeing, whose reputation and finances have already been strained by manufacturing issues and federal investigations this year.
Ultimately, both high-volume and high-intensity events related to Boeing’s controversies have contributed to the high CES score reflecting the company’s risks.

SpaceX Analysis

While SpaceX initially had relatively low controversy volumes and intensities in 2020, its CES score has steadily increased as well, aligning with the growth in controversies.

Notable peaks occurred in 2021, linked to controversies such as hiring discrimination concerns, an FAA investigation into test launches, and approval withholding for the Starship launch tower. Mid–2022 saw additional challenges, including CEO sexual harassment charges. Into 2023 and 2024, SpaceX’s scrutiny increased due to workplace environment-related lawsuits over hiring policy against refugees and sexual harassment and discrimination against women.
Despite these events, SpaceX's controversies are less intense than Boeing's, so SpaceX has relatively lower CES scores.

Blue Origin Analysis

Blue Origin’s controversies have shown an increase over time. This surge was attributed to its conflict with NASA and SpaceX over the “Moon-landing” project. In 2022, Blue Origin faced FAA scrutiny over a flight anomaly and a workplace discrimination lawsuit. In 2023, further setbacks came from an espionage case, an engine explosion, and lawsuits involving discriminatory practices. The company experienced another wave of controversies in 2024, driven by an FAA investigation into parachute deployment failures and fresh allegations of workplace discrimination.
Although Blue Origin’s controversies are relatively low in volume, occasional spikes have caused notable increases in its CES score.

Raytheon Analysis

Raytheon's CES score has remained moderate, with periodic surges between 2020 and 2021. These spikes were triggered by ESG risk events such as investor class action, violations of domestic preference laws, and the company’s involvement in Yemen's civil war. In 2022, the company faced another surge of controversies driven by an antitrust action lawsuit and further protests related to the situation in Yemen. In 2023, the CES score rose again amid backlash against the war in Gaza, the ongoing 2021 investors class action, environmental lawsuit, and FAA safety concerns for the company’s subsidiaries Pratt & Whitney, which also faced penalties for violating antiboycott regulations.
Despite the diversity of ESG controversies, Raytheon’s overall CES score remains moderate compared to Boeing, thanks to the lower intensity of events it has encountered.

Lockheed Martin Analysis

Lockheed Martin's CES score has been relatively low and stable over time, with some fluctuations and few spikes. Mid–2021, the company had to pay a $10.28 million settlement for overcharging allegations; another notable surge occurred in 2022, triggered by FTC antitrust concerns over its Aerojet deal and an investor class action. The company’s involvement in war crimes in Yemen and Palestine during 2023 and 2024 has further fueled its controversies exposure hence the CES spikes.
Though low in volume, Lockheed Martin’s controversies were marked by high-intensity events and media exposure, which contributed to significant spikes in its CES score.

Airbus Analysis

Airbus controversies events are relatively stable, with a slight decline overall and few spikes over time, as reflected in their CES score.

In early 2020, Airbus faced fraud and non-compliance allegations, along with a securities class action claim. By mid–2020, the company became embroiled in a bribery scandal. Toward the end of 2020 and into 2021, the long-standing Boeing-Airbus subsidy dispute resurfaced. In 2022, the bribery case remained unresolved, leading to Airbus agreeing to a $4 billion fine while also facing a $339 million class action lawsuit. The bribery allegations were still unfolding in 2023, accompanied by corruption claims in 2024.
Compared to Boeing, Airbus has experienced fewer controversies in terms of volume and less severe high–intensity events. As a result, its CES score has remained relatively stable over time, with only minor fluctuations, primarily driven by legal investigations.

Conclusion

In the aerospace and defense industry, ESG controversies continue to shape the reputational and operational risks of leading companies. Boeing, SpaceX, Blue Origin, Raytheon, Lockheed Martin, and Airbus each face unique challenges that are reflected in their CES scores. While Boeing and Airbus have seen higher volumes and intensities of events, others like SpaceX and Blue Origin have witnessed moderate to low exposure but still face periodic scrutiny due to high–impact incidents. As these companies navigate evolving regulatory landscapes, labor concerns, and public perception, their CES scores will remain a critical indicator of their ESG performance.
Download the ebook “The Boeing Scandal: Can AI Predict Controversies Before Traditional Tools?” to learn more about the Boeing scandal.

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In our latest research, “Unmasking Greenwashing with AI” our ESG and Research & Analytics teams provide a comprehensive analysis of greenwashing trends using AI-powered text analysis.

• Notable increase in mentions of greenwashing, with a 3.3x rise since 2021.
• This increase suggests both a real growth in deceptive sustainability practices and a rise in public awareness.
• Greenwashing represents 55% of all reputational laundering, underscoring a major shift towards environmental deception.
• Surge in climate lawsuits with over 3x increase in climate change lawsuits since 2020, highlighting legal risks for misleading practices
• It underscores the financial sector’s dual role in both contributing to and fighting against greenwashing through its investment practices

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