Unlock the Future of Risk Mitigation with AI-Driven Insights

The chemicals industry, often perceived as the backbone of modern economies, is undergoing a notable shift. With the world's focus now fixed on environmental, social, and governance (ESG) initiatives, this sector finds itself at the crossroads of risk and opportunity. In this “ESG Data Trends,” we dive deeper into the chemicals’ market ESG performance, studying the example of Ineos.

The chemicals industry: riding the ESG wave

Post-2020, the chemical market has seen an increase in web mentions. Several factors—from gas shortages rattling this energy-intensive market to escalating environmental concerns—have ushered in a new era of sustainability discussions. But which chemicals are stealing the limelight?
Chlorine, Ammonia, and Base Chemicals like Ethylene and Propylene account for over half of the chemical web mentions. And it's not just about their volume. The narrative is changing too. The industry is leaning towards eco-conscious production, championing innovations like recycled propylene, Renewable-Benzene, and Green ammonia.

What's interesting about this is the emphasis on ESG initiatives over ESG risks. It's a clear signal that the industry is taking action toward sustainability and is making tangible strides. When looking at the industry’s ESG risks mentions, we found that Arkema has the highest percentage of ESG Risks driven mainly by environmental incidents and impact on biodiversity due to a chemical plant explosion in 2017, followed by UOP LLC, which displays the highest proportion of Social related risks as a consequence of layoffs.

Conversely, across the industry, the volume of ESG initiatives indicates a significant commitment to sustainable related practices. Environmental-related practices are the most mentioned initiatives in the chemicals industry; precisely, two pillars stand out in ESG initiatives: climate change reduction and circular economy strategies. LyondellBasell displays the highest percentage of ESG initiatives mentions due to its climate change reduction and circular economy strategies, where the company is working towards greenhouse gas reductions and advancing plastic waste recycling. Despite having the highest environmental risk mentions, Arkema has the highest social-related initiatives with corporate social responsibility.

Case study: Ineos

The TextReveal Dashboard detected another chemicals company with an increasing number of mentions, the British multinational Ineos. After the announcement of Ineos Grenadier's off-roader in 2020, the number of mentions more than doubled, increasing Ineos' overall volume. Later on, the company’s mentions have been relatively increasing after cooling down from the announcement, with a significant increase in 2022 following M&A and collaboration announcements, sustainability actions, and controversies around its CEO, Jim Ratcliffe.

We also detected a geographical shift in mentions. Once dominant in the US, Ineos mentions dropped from 65% in 2015 to roughly 30% in 2022. Europe, on the other hand, has seen a spike from 25% to over 65%. Sentiment analysis offers another layer of insight.

While the sentiment has largely remained steady, there have been dips, especially during periods associated with fracking controversies and environmental incidents, including a toxic chemical spill. Digging deeper into Ineos’ ESG risks, there has been a decrease over the recent years; nonetheless, before 2019, we captured a relatively higher number of risks, mainly environmental–related controversies, coming from mentions about overexploitation of resources, namely fracking. Social-related risks display a significant proportion of data driven by social dialogue controversies as we capture multiple mentions of protests, particularly in 2017.

While Ineos ESG risks mentions represent 2.46% of its overall data share, its ESG initiatives mentions represent 5.91% of its web presence, signaling a more positive outlook for the firm, at least from a perception point of view. Furthermore, we detected that environmental–related initiatives are the main focus for Ineos, particularly climate change, while social initiatives arise, particularly in 2018, due to product safety mentions.

Data sources

To produce this analysis, we combined natural language processing with billions of textual web data related to the chemicals market. Using NLP-powered models gives us an edge as we can extract ESG, SDG, and financial insights that aren’t necessarily obvious or easy to detect. These insights help investors make better investment decisions. SESAMm leverages artificial intelligence and machine learning technologies to help you decipher and understand timely sentiment, trends, and ESG metrics on a wide range of public and private companies.

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 request a demo, contact one of our representatives.

As we commemorate Earth Day this year, it's important to confront our planet's harsh realities. Despite the numerous efforts of scientists, activists, and the tech-savvy younger generation, the ecological crisis deepens, underscored by persistent natural resource deterioration and escalating climate challenges. Today, we are driven more than ever to harness innovative technologies, including artificial intelligence (AI), to advance environmental, social, and corporate governance (ESG) initiatives and attain sustainability for a better future.

Learn “How Organizations Are Using NLP To Detect Greenwashing.”

Deteriorating Natural Resources

Over the past decades, our natural reserves have alarmingly diminished. By March 2024, the Earth’s average surface temperature has increased to approximately 54.9°F (12.7°C), a seemingly minor increase that masks significant polar ice melt and accelerated climate change.

Greenhouse gas emissions have increased to 37.4 billion metric tons in 2023. According to the United Nations, this is caused by burning fossil fuels, industrialization, food production, over-consumption, and manufacturing.

The loss of biodiversity is growing so fast that we now have around 44,000 species extinct due to climate change, drought, and floods. For example, plastic waste is considered the main contributor to ocean acidification, along with oil and toxins dispensed in the ocean by transportation and shipping companies. Moreover, mass production and mass consumption of food, fast fashion, furniture, and more are, along with urbanism, major factors leading to deforestation and natural resource depletion.

Human Concerns and Environmental Anxiety

These issues not only affect nature but also human well-being. A recent study shows that younger generations face a new form of anxiety called environmental anxiety. It results from their fear of where this crisis leads them and the unclear and ambiguous future. For example, we'll likely suffer from clean water scarcity by 2050, which might produce diseases and epidemics. At this rate, the weather will become hotter, damaging nature and causing massive wildfires. As a result, some areas might become inhabitable, causing mass migration and immigration, resulting in overpopulated cities.

Leveraging AI and ESG for a Sustainable Future

Innovative technologies such as AI are revolutionizing our approach to sustainability. AI tools analyze large amounts of data to monitor ESG metrics effectively, helping organizations to make informed decisions that align with sustainability goals. These technologies facilitate smarter resource management, reduce waste through predictive analytics, and improve energy efficiency. By integrating AI with ESG initiatives, businesses can enhance their operational efficiency and contribute significantly to environmental conservation.

Learn “How Successful Investors Are Using AI to Get ESG Data: A Quick Guide.”

Hope for Change

Despite these daunting challenges, there is room for optimism. From awareness campaigns to employing technology for recycling and reusing resources to building robotic animals to prevent animal captivity, researchers and organizations are doing their best to limit environmental damage. Governments are altering laws and regulations and signing treaties in partnership with active associations and organizations, which are joining efforts to improve life on Earth. Emerging businesses strive to leave an environmental and social footprint by integrating the United Nations' Sustainable Development Goals (SDG) within their corporate culture.

Conclusion

In sum, if we, as a whole, take proper action, the current climate threat could diminish within the next few decades. Helping us get there are more affordable means for renewable energy generation and organic produce and public awareness. We're all capable of making a difference through funding organizations, monitoring our waste and consumption, or participating in local community actions and initiatives. Also, we can learn more about how to help protect wildlife. But NOW is the time to take action to guarantee a better future for us and future generations.

Happy Earth Day!

We recently held an insightful webinar co-hosted by Charlotte Salmon of Indefi and Alejandro Plaza of SESAMm, titled "AI in ESG Due Diligence: Best Practices from Indefi and SESAMm." The session explored the innovative application of artificial intelligence in the ESG risk assessment process.

During the webinar, Charlotte and Alejandro discussed how Indefi's proven strategies, when combined with SESAMm's cutting-edge AI platform, can significantly enhance ESG risk management and the selection of target companies.
One of the key highlights was a detailed case study on major delivery apps, including Glovo, Uber Eats, DoorDash, Deliveroo, Grubhub, and Just Eat. This segment covered industry and competitive analysis, sentiment analysis, and a deep dive into ESG controversies and positive SDG impacts associated with these companies.

Key Topics Covered:

• Due diligence process for ESG risk assessment
• AI integration in ESG risk management
• Selection of target companies
• Delivery apps case study: industry and competitive analysis, sentiment analysis, and deep dives into ESG controversies and SDG positive impacts

Don't miss out on this opportunity to learn from industry leaders about the future of ESG due diligence. Watch the full webinar replay: