All our best wishes for this new year 2019!

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 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!

ESG frameworks and regulations have developed due to rising awareness of sustainability and supply chain risks. They aim to enhance transparency, accountability, and ethics, encouraging environmental preservation, social improvement, and better governance. While fostering innovation and financial benefits, aligning with sustainable development goals, these measures might increase costs for businesses, especially smaller ones. Differences across regions and a focus on compliance could inhibit real change, promoting a superficial 'tick-box' approach rather than significant enhancements.

This article takes an in-depth view of some of the most relevant recent regulations and analyzes how effective they seem to be.

Unraveling Supply Chain Regulations: From Past to Present

We traced the evolution of supply chain regulations from non-binding guidelines to binding laws, examining their impact on corporate sustainability. Along the way, we explored the challenges businesses face as they strive to comply with these constantly evolving standards.

Note: The list of regulations and frameworks mentioned is a high-level list of the most mentioned acts.

Global and Non-binding

When analyzing global and non-binding regulations, although they provide crucial frameworks for promoting corporate accountability by offering guidelines for responsible business conduct, they also have limitations. For instance, they lack legal enforceability due to their non-binding nature, potentially hindering compliance. Given the broad scope of the guidelines, implementation challenges arise, particularly in regions with weak governance.

Here are a few examples of recent sustainability regulations:

By Region and Binding

Binding legislation requires companies to meet specific standards in sustainability, environmental protection, and social responsibility. Non-compliance risks legal penalties and reputational damage. However, weak enforcement, insufficient penalties, and legal ambiguities often lead to criticism.
Additionally, logistical and resource constraints, especially across borders, limit the effectiveness of regulatory bodies in monitoring and enforcing compliance. Furthermore, the penalties imposed are often disproportionately low. Moreover, these bodies depend on companies’ self-reporting without independent verification, leading to underreporting.

By Country/State and Binding

State or country legislation on supply chains encounters several challenges. These include jurisdictional limitations, enforcement difficulties due to resource constraints, and compliance burdens, especially for smaller businesses. Additionally, fragmented regulations across states or countries can complicate compliance for companies operating nationally. This underscores the importance of coordinated efforts between states and the federal government to address supply chain issues effectively.
In addition, regulatory bodies contend with logistical and resource limitations, mainly when operating across borders, which can hinder their effectiveness in monitoring and enforcing compliance.

Unveiling Vulnerabilities Sector Screening for Supply Chain Controversies

In this section, we explore the evolving landscape of supply chain regulatory frameworks and ESG risks in supply chain management. We also dive into how future regulations will affect global trade, corporate responsibility, and sustainability efforts.

Supply Chain Controversies Over Time

We analyzed supply chain-related controversies from 2019 onwards and found a consistent increase each year, peaking in 2023. Concurrently, mentions of various frameworks, laws, and legislations [mentioned in Part I] related to these issues have also risen.
Our analysis reveals a strong and positive correlation between the two trends (r=0.99), indicating a significant relationship. While the apparent increase in supply chain issues, breaches, and controversies may be concerning, it's largely caused by implementing more frameworks that increase visibility and accountability. Even without binding regulations, companies' reputations are affected. Thus, the proliferation of laws and frameworks contributes to the heightened online attention to these breaches.

Supply Chain Controversies: An ESG Analysis

For this analysis, we primarily focused on environmental and social issues within the supply chain, as legislation often targets these areas due to their significant external impacts. Issues like environmental damage and labor violations are most likely to occur in the supply chain and can profoundly affect communities and ecosystems. Governance issues, on the other hand, are more internal and directly pertain to a company's operations and management practices.
Therefore, we analyzed a sample of 31,011 entities across industries with frequent mentions of ESG-related supply chain risks, focusing on social and environmental risks.

Specialized Retail has the highest incidence of social and environmental controversies, followed by Technology Software and Automobile & Components, respectively.
As shown in the graph above, many of the issues highlighted in the Social ESG supply chain pillar are driven by human and labor rights breaches, which significantly contribute to the ESG risks mentioned.

Social Risks in the Supply Chain

In specialized retail, many brands face scrutiny for alleged forced labor; some examples include Amazon, Hugo Boss, Diesel, and Costco.
Additionally, Amazon garnered widespread attention when the company settled a $1.9 million human rights abuse claim. Consumer groups sued Starbucks over deceptive ethical sourcing claims linked to human rights issues.
Walmart and Centric were also investigated for human rights violations. Moreover, reports tie Amazon and IKEA suppliers to forced labor. These controversies dominate ESG supply chain discussions in retail.

The automotive industry ranks second as notable companies like Tesla face criticism, with allegations ranging from opening showrooms in China linked to genocide allegations leading to backlash and investigations led by the US Senate. Tesla's involvement with child labor and its battery material supplier's recurrent human rights abuses further add to the scrutiny.
Furthermore, we detect multiple mentions regarding Volkswagen's supplier breach that could impact up to 3.3 million customers. Moreover, slave labor accusations resurface for Volkswagen in Brazil, while companies like Toyota Motor, General Motors, Tesla, and Volkswagen suppliers are accused of exploitative labor practices in Southeast Asian factories.

Regarding the other industries, we also see that technology hardware displays a significant proportion of mentions stemming from mentions of forced labor for Lenovo, Cisco, and Intel, and numerous controversies regarding Apple, among many other allegations.

Similarly, Companies from the food and beverage manufacturers industry were also linked with human rights violations and infringements on labor rights, with companies like Tyson Foods, McDonald's, Hershey,  Pepsi, and Nestle having multiple supplier issues connected with child labor, discrimination, and exploitative work. While Technology Software companies mentions were primarily related to contractors and content moderators’ health & safety issues and labor rights infringements from companies like Meta, Microsoft, and Google.

Environmental Risks in the Supply Chain

Environmental risks, though relatively fewer in proportion compared to social risks across sectors' supply chains are notably prevalent in specific sectors, notably in oil and gas, where incidents such as oil-well blasts are due to the lack of safety practices, improper disposal, harmful emissions from gas flaring, unremedied oil spills disproportionately impact communities and contractor negligence. This negligence has resulted in substantial environmental harm, endangering both communities and workers and, in some cases, leading to fatalities.

In specialized retail, brands’ suppliers are linked to deforestation, illegal extraction of minerals, animal cruelty, and illegal waste disposal. Similarly, controversies arise from controversial mining, breaches of clean air acts by suppliers, deforestation, and questionable cobalt sourcing in the auto and components sector. Environmental concerns also impact the food and beverage supply chain, with prevalent issues like deforestation, animal abuse, and unethical sourcing.

In sum, the evolving supply chain regulations reflect a global commitment to sustainability and ethical business practices. Navigating these regulations presents challenges and opportunities for businesses to lead in corporate responsibility and advance principles of environmental stewardship and social equity. Embracing these regulations as a compass rather than a constraint can help chart a course toward a sustainable future.

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.

At the RBI Innovation Summit in November 2023, SESAMm's CEO, Sylvain Forté, and Suleiman Arabiat, Senior Investment Manager at Elevator Ventures, shared an interview about the intersection of artificial intelligence and ESG data analytics. This conversation highlighted SESAMm's commitment to revolutionizing how ESG data is analyzed and utilized in the financial sector.

Sylvain Forté, SESAMm's CEO and co-founder, illustrated the company's impact in detecting ESG controversies using advanced AI. By processing billions of documents, SESAMm offers a unique capability to identify environmental, social, and governance issues that influence companies. This cutting-edge approach is particularly important for private equity firms, asset managers, banks, and corporations, providing them with critical data for informed decision-making.

The interview dove into the essence of ESG – encompassing environmental, social, and governance topics – and its growing importance in regulatory frameworks worldwide. SESAMm’s AI-driven technology scans online content in over 100 languages, from major media publications to niche NGO websites, to detect and alert clients about potential controversies.

Forté shared the birth of SESAMm, tracing back to 2014 when the initial idea burgeoned from a passion for AI and its application in text analysis. This nascent idea evolved into a specialized focus on ESG controversy analysis, aligning with the increasing regulatory emphasis on sustainable investment strategies.

One of the major challenges SESAMm faced was maintaining focus while leveraging its complex technology platform for the right use cases. This journey led us to tailor our technology for end business users, aligning with the company's growth and scalability goals.
As we continue to expand, particularly in the US market and private equity sector, we remain committed to enhancing our offerings in asset management and exploring partnerships in the fintech space. This journey reflects a fusion of technological innovation and dedication to sustainable investment practices, signaling a transformative era in ESG data analytics powered by AI.

To gain deeper insights into how SESAMm is shaping the future of ESG data analytics with AI, watch the full interview between SESAMm's CEO, Sylvain Forté, and Suleiman Arabiat at the RBI Innovation Summit.

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.