With 2023 drawing to an end, we wanted to share the most relevant ESG controversies during the year. In this article, we provide a comprehensive overview of the year's top ESG controversies, breaking them down into the three pillars of ESG: Environmental, Social, and Governance. Through our research, we will explore each of these areas in detail, shedding light on the most talked-about controversies and the companies involved.

Methodology

To gain a comprehensive understanding of the ESG risks in 2023, we conducted a thorough analysis of web mentions related to SESAMm’s ESG taxonomy across our expansive data lake with 20B+ articles. This allowed us to evaluate the overall volume of mentions related to each risk category: Environmental (E), Social (S), and Governance (G).

ESG Risks Over Time

Before diving into the details, we looked into the main trends over the last few years in ESG trends. We found a detectable increase in the volume of ESG-related web mentions, with an emphasis on social risks. Especially since the start of 2020, social risks have been on a consistent upward trajectory. Notably, there was a significant spike in mentions around mid-2020 following mass protests amid the COVID-19 lockdown, in addition to reports of cyberattacks and allegations of sexual assault. Furthermore, 2021 saw an uptick in mentions related to issues of racism (Black Lives Matter movement) and homophobia.

ESG Risks: Focus 2023

We outlined the prominent risks in 2023: social risks, with layoffs and strikes gaining attention; environmental risks, marked by wildfires and oil spills; and governance risks, where tax evasion and ethical violations like bribery were in focus. Each risk category underscores the urgent issues facing society and the need for accountability and action.

Environmental Controversies of 2023

Environmental risks may not match the sheer number of mentions that social risks receive, but their presence in discussions has steadily grown over the year, particularly in the third quarter. Let's explore the most common controversies that have emerged.

Climate Change and Policy

Climate change dominated environmental discussions in 2023. A noticeable peak in mentions arose in the latter half of the year, particularly around heatwaves and debates surrounding climate policies.

Atmospheric Emissions

September saw increased discussions about atmospheric emissions, notably due to the emissions from volcanic eruptions,  hybrid cars, and the discovery of toxic metals in food products.

Impact on Biodiversity

The wildfires that spread in June sparked significant debates around their impact on biodiversity, leading to increased mentions and concerns related to environmental preservation.

Top 5 Environmental Controversies

These controversies are ranked by relative volume*.

• Marathon Petroleum
  

Volume of mentions: 62

Relative volume: 69%

A significant portion of environmental risk discussions surrounding Marathon Petroleum was due to its chemical leak in Garyville. This incident led to massive fires, so large they could be observed from space. (source)

• Nestlé
  

Volume of mentions: 30

Relative volume: 54%

Nestlé faced scrutiny in 2023, with over half of its environmental risk mentions associated with drought controversies. The company was urged to cease its water mining activities following severe droughts in France. (source)

• Coca-Cola
  

Volume of mentions: 178

Relative volume: 53%

Coca-Cola garnered attention due to a hydrochloric acid leak in January 2023, leading to significant environmental concerns. (source)

• ExxonMobil
  

Volume of mentions: 571

Relative volume: 31%

Exxon, along with Guyana’s environmental agency, was implicated in breaches of oil spill insurance policies. (source)

• Shell
  

Volume of mentions: 872

Relative volume: 23%

An oil spill from a Shell pipeline adversely affected farms and a river in a region of Nigeria already grappling with pollution. (source)

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)

Governance Controversies of 2023

Governance risks, though often overlooked, play a pivotal role in shaping corporate responsibility and ethical conduct. In 2023, several governance controversy trends emerged:

Money Laundering

Tax evasion was a major topic of discussion in the first quarter, highlighting the need for greater transparency and accountability within corporations.

Bribery

There was a significant increase in mentions related to bribery cases, underscoring the challenges in maintaining ethical governance standards.

Competitive Behavior

This year has witnessed a rise in competitive conduct controversies, with several companies being scrutinized. Antitrust violations, price manipulation, and digital advertising dominance are central to these disputes.

Top 5 Governance Controversies

These controversies are ranked by relative volume*.

• FTX
  

Volume of mentions: 8,085

Relative volume: 40%

FTX, a notable entity in the financial sector, found itself at the center of governance controversies. A significant portion of the discussions surrounding FTX's governance risks in 2023 pertained to allegations of its founder's involvement in bribery schemes. (source)

• Apple
  

Volume of mentions: 3,162

Relative volume: 28%

Apple, a tech giant, faced scrutiny as a third of its governance risk mentions revolved around antitrust violations reported in October 2023. (source)

• Microsoft
  

Volume of mentions: 4,429

Relative volume: 25%

Microsoft encountered legal challenges with its deal with Activision. The company had to approach the court to reject the FTC's request to halt the deal. (source)

• X (formerly Twitter)
  

Volume of mentions: 2,251

Relative volume: 18%

X/Twitter, another major player in the tech industry, faced legal challenges when a judge dismissed a shareholder lawsuit against Elon Musk concerning a Twitter buyout. (source)

• Google
  

Volume of mentions: 3,920

Relative volume: 13%

Google faced judicial sanctions for allegedly destroying evidence in an antitrust case, further emphasizing the critical governance challenges even major tech giants face. (source)

Conclusion

In conclusion, the year 2023 proved to be eventful in the ESG landscape. From environmental concerns sparked by significant events like chemical leaks and wildfires to social challenges such as widespread layoffs and discrimination and governance risks underscored by bribery and antitrust violations, the year offered a comprehensive view of the myriad challenges companies face in the modern era.

Understanding these controversies and the companies involved provides invaluable insights for stakeholders, especially in the private equity and asset management sectors. AI-driven ESG insights, like those provided by SESAMm, can be pivotal in navigating the ever-evolving ESG landscape, ensuring informed decision-making and proactive risk management.

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.

PARIS, FRANCE, le 1er mars 2023 — SESAMm, leader du traitement automatique des langues, un domaine de pointe de l'intelligence artificielle, a annoncé aujourd'hui la clôture d'une levée de fonds en série B2 de 35 millions d'euros (37 millions de dollars US). L’objectif : accélérer sa croissance et son développement international.

Cette opération permettra à SESAMm de poursuivre son expansion notamment aux Etats-Unis et en Asie, et de soutenir ses développements technologiques en intelligence artificielle pour l’analyse ESG (critères Environnementaux, Sociaux et de Gouvernance des entreprises) et de sentiment. En complément, cette levée de capitaux permettra de recruter des talents clés en ESG, développement informatique et intelligence artificielle, ventes et marketing.

Ce nouveau tour de table a été mené conjointement par Elaia, une société de venture capital spécialisée dans la deep tech, et Opera Tech Ventures, fonds de capital-risque de BNP Paribas (BNPP). Cette levée de fonds bénéficie également de la participation du gestionnaire d'actifs Unigestion, de la banque Raiffeisen Bank International (RBI) à travers son entité de venture capital Elevator Ventures, d’AFG Partners, de CEGEE Capital ainsi que des investisseurs historiques de SESAMm, incluant Carlyle (CG) et New Alpha Asset Management, qui ont participé à la précédente série B1. Cette opération porte le total des fonds levés par SESAMm à 50 millions d'euros.

"Nous sommes ravis de soutenir les ambitions de SESAMm, qui exploite une technologie de pointe pour créer des données d’analyse et de suivi de tendances ESG. Nous sommes très impressionnés par la qualité et l’expertise de son équipe de direction, opérant d’ores et déjà  sur tous les continents et pour des clients institutionnels de premier rang au niveau mondial.

La vision d’apporter ces indicateurs ESG technologiques à l’industrie financière et aux grandes entreprises représente un réel changement de paradigme et nous sommes très heureux de faire partie de cette aventure aux côtés de l’équipe de SESAMm", a déclaré Pauline Roux, Partner chez Elaia.

"Dans un contexte où il est de plus en plus critique d’accompagner la prise de décision grâce à des sources de données pertinentes, nous avons trouvé le produit de SESAMm très efficace pour aider à identifier, filtrer et évaluer des informations clés, tant sur de petites sociétés privées que sur des plus grandes entreprises. Nous partageons pleinement la vision de son équipe et sommes très fiers de soutenir SESAMm dans son développement", a déclaré Thibaut Schlaeppi, Managing Director d'Opera Tech Ventures.

SESAMm est un fournisseur de données leader dans l’utilisation du traitement automatique des langues, et qui compte parmi ses clients les plus grandes sociétés de private equity, banques et gestionnaires d’actifs, ainsi que des entreprises de tous secteurs. Grâce à son data lake de plus de 20 milliards de documents, en croissance de 20 % chaque année, SESAMm fournit des données et technologies pour générer des analyses innovantes. Les cas d'utilisation sont multiples et incluent la détection de controverses, les scores réputationnels, les indicateurs ESG et ODD (Objectifs de Développement Durable), le due diligence d'investissement ou encore le suivi automatisé de fournisseurs.

"Depuis que nous avons commencé à travailler avec SESAMm en tant qu’investisseur et client il y a plus de deux ans, nous avons été impressionnés à la fois par la croissance de l'entreprise et par ses indicateurs de pointe qui ont appuyé nos processus de recherche de sociétés, de due diligence et de création de valeur pour les sociétés de notre portefeuille", a déclaré Matt Anderson, Chief Digital Officer de Carlyle. "Nous sommes ravis de renforcer notre partenariat avec SESAMm en participant à ce nouveau tour de table."

Le CEO de SESAMm Sylvain Forté, son COO Pierre Rinaldi et son CTO Florian Aubry ont cofondé SESAMm en 2014. Avec leur équipe de près de 100 experts de la donnée, ils travaillent sur de grandes quantités d'informations textuelles issues du web, des sites d'actualités aux rapports d’ONG en passant par les médias sociaux, pour les transformer en puissantes informations pertinentes et rapidement exploitables.

Sylvain Forté, CEO et cofondateur de SESAMm, a partagé: "Nous sommes heureux et reconnaissants d’avoir finalisé cette levée de fonds de 35 millions d'euros pour poursuivre notre croissance et nous étendre sur de nouveaux marchés internationaux tels que Singapour. Lever ce montant important dans des conditions de marché tendues est une validation supplémentaire de la pertinence des deux tendances clés qui sont au cœur de SESAMm : l'intelligence artificielle et l’ESG. Nos outils permettent ainsi à toutes les entreprises de prendre de meilleures décisions et de combler les manques de données, notamment dans l’ESG, sur les entreprises publiques et privées."

À propos de SESAMm

SESAMm est une société d'intelligence artificielle de premier plan, au service des sociétés d'investissement et des entreprises du monde entier. SESAMm analyse plus de 20 milliards de documents en temps réel afin notamment de détecter automatiquement les controverses sur les investissements, les clients et les fournisseurs, calculer des scores ESG et d'impact positif, améliorer le due diligence et le sourcing en private equity et analyser le sentiment sur les actifs financiers.

À propos d'Elaia

Elaia est une société de venture capital spécialisée dans le financement des entreprises technologiques en phase d'amorçage. La société se focalise sur les startups des secteurs du logiciel, du web et des médias numériques et a démontré sa capacité à soutenir des entreprises devenant performantes et rentables. L'équipe d'Elaia est composée d'investisseurs et d'entrepreneurs expérimentés qui apportent des conseils et un soutien précieux aux startups de leur portefeuille. En s'attachant à aider les entreprises à croître et se développer, Elaia est un partenaire de choix pour tout entrepreneur qui souhaite lancer une entreprise technologique.

À propos d'Opera Tech Ventures de BNP Paribas

Opera Tech Ventures est la branche VC de BNP Paribas, lancée en 2018 avec l'objectif d'investir dans des startups qui transforment l'industrie financière. Le fonds est géré par BNP Paribas Asset Management France, au sein de sa division Private Assets, dédiée à la gestion d'actifs privés. Avec une dimension globale, Opera Tech Ventures soutient les entrepreneurs qui construisent des entreprises ambitieuses, de la série A à la série C, avec des investissements allant de 3 à 15 millions d'euros.

À propos de Carlyle

Carlyle (NASDAQ : CG) est une société d'investissement mondiale possédant une expertise sectorielle approfondie et qui déploie des capitaux privés dans trois secteurs d'activité : Global Private Equity, Global Credit et Global Investment Solutions. Avec 373 milliards de dollars d'actifs sous gestion au 31 décembre 2022, l'objectif de Carlyle est d'investir judicieusement et de créer de la valeur au nom de ses investisseurs, des sociétés de son portefeuille et des communautés dans lesquelles nous vivons et investissons. Carlyle emploie plus de 2 100 personnes dans 29 bureaux répartis sur cinq continents. Pour plus d'informations, consultez le site www.carlyle.com. Suivez Carlyle sur Twitter @OneCarlyle.

Contact média

Danny Calogero
dcalogero@fullyvested.com
+44 7891 563 294

As the year comes to an end, we wanted to highlight the most relevant ESG controversies during 2023. This article zeroes in on these risks, showing their critical role in corporate ethics and responsibility. Throughout the year, we've seen a variety of governance-related challenges that highlight the urgent need for corporate accountability.

Governance Risks: Focus 2023

We highlighted the most significant governance risks in 2023. From tax evasion to ethical breaches such as bribery, these issues highlighted the growing importance of strong, ethical governance in corporate conduct.

Governance Controversies of 2023

Governance risks, though often overlooked, play a pivotal role in shaping corporate responsibility and ethical conduct. In 2023, several governance controversy trends emerged:

Money Laundering

Tax evasion was a major topic of discussion in the first quarter, highlighting the need for greater transparency and accountability within corporations.

Bribery

There was a significant increase in mentions related to bribery cases, underscoring the challenges in maintaining ethical governance standards.

Competitive Behavior

This year has witnessed a rise in competitive conduct controversies, with several companies being scrutinized. Antitrust violations, price manipulation, and digital advertising dominance are central to these disputes.

Top 5 Governance Controversies

These controversies are ranked by relative volume*.

• FTX
  

Volume of mentions: 8,085

Relative volume: 40%

FTX, a notable entity in the financial sector, found itself at the center of governance controversies. A significant portion of the discussions surrounding FTX's governance risks in 2023 pertained to allegations of its founder's involvement in bribery schemes. (source)

• Apple
  

Volume of mentions: 3,162

Relative volume: 28%

Apple, a tech giant, faced scrutiny as a third of its governance risk mentions revolved around antitrust violations reported in October 2023. (source)

• Microsoft
  

Volume of mentions: 4,429

Relative volume: 25%

Microsoft encountered legal challenges with its deal with Activision. The company had to approach the court to reject the FTC's request to halt the deal. (source)

• X (formerly Twitter)
  

Volume of mentions: 2,251

Relative volume: 18%

X/Twitter, another major player in the tech industry, faced legal challenges when a judge dismissed a shareholder lawsuit against Elon Musk concerning a Twitter buyout. (source)

• Google
  

Volume of mentions: 3,920

Relative volume: 13%

Google faced judicial sanctions for allegedly destroying evidence in an antitrust case, further emphasizing the critical governance challenges even major tech giants face. (source)

Conclusion

In 2023, governance issues, particularly tax evasion and bribery, significantly impacted the ESG landscape, challenging corporate integrity and highlighting the importance of strong ethical standards. For private equity firms and financial institutions, these developments emphasize the value of AI-powered governance analysis in identifying risks and promoting transparency and accountability. The insights gained from this year's governance controversies are important for steering towards more responsible and sustainable business practices in the future.
Remember to check out the top 5 environmental and social controversies of 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.