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PARIS, December 16, 2021
SESAMm, an alternative data specialist at the forefront of AI-based text analytics, and EthiFinance, a non-financial analysis and consulting agency with expertise in sustainable development, are now working together to launch a new unique service: Identifying and scoring ESG controversies on European Small & Midsize Enterprises (SMEs).
When dealing with SMEs, a common issue with traditional data providers and rating agencies is the lack of coverage. Information gaps and opacity about a company can negatively affect asset managers in their investment decisions.
EthiFinance possesses strong expertise in rating SMEs – both listed and private – for the purpose of portfolio due diligence and monitoring. SESAMm’s TextReveal® tool leverages Natural Language Processing (NLP) to analyze more than 16 billion online articles and messages to track ESG topics.
“We have been working with SESAMm for months and have now reached a stage where we can deliver quality and depth of results needed to create reliable and relevant ESG alerts.”, shares Xavier Leroy, Head of Investor Services from EthiFinance “Our teams of ESG analysts have enhanced and refined these alerts for controversies into our methodology, thus ensuring value to our clients”.
Controversy detections are notoriously difficult to assess and evaluate properly, be it the language barrier, lack of data, or difficulty for machines to work with ambiguity. The democratization of artificial intelligence and data science, the exponential growth of data, and wider access to more computing power have provided a fertile ground for new solutions to address this issue.
“Natural Language Processing is a game-changer, especially when working on ESG. Combined with alternative data, it helps us crunch billions of articles in dozens of languages and detect controversies very quickly” explains Sylvain Forté, CEO of SESAMm. “By fine-tuning TextReveal® with EthiFinance’s expertise in ESG, we are able to reach excellent results with 100% accuracy on the detection of critical controversies.”
SESAMm’s data and tools are leveraged globally by asset managers like The Carlyle Group, to conduct ESG studies for the purpose of due diligence, company analysis, and risk management. The partnership with EthiFinance breaks new ground thanks to its unique expertise in sustainability, ESG know-how, and very specific focus on European midsized companies.
SESAMm and EthiFinance have also developed a specific virality indicator to help assess how ESG controversies are spreading on the web. “This technological edge relies on an enormous amount of data which we can access through SESAMm’s platform,” shares Leroy.
A worldwide scandal, significantly impacting a company’s market price and its ESG scoring, can start from just one article or post, sometimes in a very niche community. SESAMm’s data lake, with its billions of articles and documents, serves as a real-time curated proxy of the internet enabling the timely detection of such scandals and the subsequent insights.
“This level of speed and depth of information not only represents a headstart when it comes to the competition but also a safety-net for asset managers, looking to monitor and manage their portfolio” confides Forté. “This innovative approach can be applied to other regions, Europe is only a starting point.”
The two companies are now working together to expand this innovative approach to listed companies across Europe.
Founded in 2004, EthiFinance is a non-financial analysis and consulting agency that supports its clients in managing risks and opportunities related to sustainable development.
EthiFinance develops services tailor-made to meet the specific needs of its clients, including investors, banks, companies and not-for-profit organizations.
Since 2017, EthiFinance has been working closely with Spread Research, a French financial rating agency (registered with ESMA) and independent credit research provider. The two companies are now part of the Qivalio Group.
Qivalio is an innovative European group providing rating, research, and consulting services in the field of sustainable finance. The Group provides solutions for investors, companies and organizations to address the challenges raised by financing as well as social and environmental transformations.
For more information: www.ethifinance.com/en/
SESAMm (www.sesamm.com) is an innovative company specializing in alternative data and artificial intelligence for investment. Its team builds analytics and indicators, such as Sentiment Analytics, ESG Indicators, and investment signals by analyzing billions of web articles and messages using natural language processing and machine learning. With its NLP platform TextReveal®, SESAMm addresses the entire value chain of alpha research. With 6 offices including Paris, New York, London, and Tokyo, SESAMm works with major hedge funds, banks, private equity firms, corporate and asset management clients around the world for fundamental or quantitative investment use cases, market analysis and competitive insights.
For more information: www.sesamm.com
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