Recently, SESAMm sat down with ClimateAction to discuss the evoloving ESG regularlatory landscape and its impact on businesses and investors alike. Below we’ve gathered key takeawyas from that discussion.

Addressing ESG Challenges

Organizations are facing the challenge of managing a broad range of ESG-related risks while adapting to new legal requirements. These include tracking greenhouse gas emissions, monitoring labor practices, and ensuring board diversity, all while meeting the expectations of multiple stakeholders, including shareholders, employees, governments, and communities.

Frameworks like the Organisation for Economic Co-operation and Development (OECD) guidelines, the UN Global Compact, and the International Labour Organization conventions provide a foundation for best practices in these areas. However, implementing these standards effectively requires companies to go beyond compliance and actively engage with stakeholder feedback.

The Role of ESG Data and Stakeholder Insights

Companies and investors are increasingly shifting to robust data sources to craft effective ESG strategies. ESG data collection now includes not only internal metrics, such as workplace safety statistics and environmental performance indicators but also external stakeholder perspectives. These insights, drawn from media coverage, social media sentiment, and reports from non-governmental organizations, provide a more comprehensive understanding of a company's impact and reputation.
For investors, this information is necessary for assessing risks and opportunities in their portfolios. By integrating external feedback into their analyses, investors can better align their strategies with regulatory demands and societal expectations.

Leveraging Advanced Technologies in ESG Monitoring

Artificial intelligence (AI) and natural language processing (NLP) technologies have emerged as effective tools for ESG monitoring and reporting. These technologies can analyze vast amounts of data from diverse sources, including news articles, social media posts, and corporate reports, to identify potential ESG controversies and risks.

The benefits of AI-driven ESG analysis are particularly evident in sectors with limited traditional data, such as private equity. By expanding coverage to include smaller or less transparent companies, AI enables investors to gain deeper insights into their portfolios.

Furthermore, advances in AI, particularly large language models, have enhanced the ability to detect and analyze a wider range of events that might impact a company's ESG performance. This capability helps address one of the primary limitations of ESG reporting—reliance on self-reported data, which may not fully capture a company's real-world impact.

Preparing for the Future

As ESG regulations become more stringent and stakeholder expectations rise, businesses and investors must adopt proactive strategies. By leveraging advanced technologies and comprehensive data sources, they can better manage ESG risks and align with regulatory requirements. This approach not only ensures compliance but also enhances reputation and long-term sustainability, positioning organizations to thrive in an increasingly ESG-focused world.

The integration of stakeholder feedback into ESG assessments represents a significant shift in how organizations view their responsibilities. By combining traditional metrics with innovative technologies, companies, and investors can build strategies that reflect both regulatory priorities and societal values. This holistic approach is essential for navigating the complex and rapidly changing ESG landscape.

Access the full interview here.

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Paris, France – June 25, 2024 – SESAMm, a leader in AI-powered text analysis for financial services, proudly announces its inclusion in the AIFinTech100 list by FinTech Global for the second consecutive year. This recognition highlights SESAMm's commitment to sustainability and ESG through the application of advanced AI technologies.

FinTech Global's annual AIFinTech100 list, now in its fourth year, showcases the top 100 AI companies that are revolutionizing the financial services industry. The list is carefully curated by a panel of industry experts who evaluate over 2,000 fintech companies worldwide. This year’s criteria focused on the transformative impact and the innovative use of generative AI in financial services, from banking and insurance to investment and customer experience.

"We are honored to be listed again on the AIFinTech100. This recognition highlights our leadership in employing AI to detect ESG controversies, helping our clients proactively manage risks and uphold sustainability commitments,” said Sylvain Forté, SESAMm’s CEO. “At SESAMm, we aim to transform financial analysis by ensuring it is as responsible as innovative."

FinTech Global director Richard Sachar said "SESAMm has been selected for the AIFinTech100 list due to their exceptional capabilities in ESG controversy detection using AI. Their technology plays a pivotal role in enabling the financial industry to address and navigate ESG risks effectively, marking a significant advancement in sustainable finance."

The inclusion of SESAMm in this year's AIFinTech100 comes at a time when the financial sector is increasingly relying on AI to enhance operational efficiencies and customer interactions. With AI investments in FinTech expected to reach $44.08 billion by 2024, SESAMm continues to lead the charge by providing cutting-edge solutions that address the complex needs of today’s financial institutions.

About SESAMm

SESAMm is an innovative fintech firm specializing in AI-powered text analysis for asset managers, private equity firms, and financial institutions. Its flagship product, TextReveal, offers actionable insights into ESG risks and investment opportunities, cementing SESAMm’s role as a leading provider of financial intelligence and predictive analytics.

For more information about SESAMm and its innovative solutions, please visit www.sesamm.com.

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.

Greenwashing in ESG has become harder to detect, not easier, because the corporate playbook has matured. Claims are vaguer, disclosure is more selective. Meanwhile, two adjacent problems have grown up next to it: greenwishing and greenhushing. The biggest greenwashing risk in your portfolio probably isn't the company you suspect, it's the one you don't. This guide is about all three, and how AI surfaces them at the speed your investment process needs.

Over the past decade, many organizations have improved their carbon footprints, from recyclable and biodegradable packaging and single-use plastic to planting trees and reducing their greenhouse gas emissions. However, some businesses and companies looking to boost their eco-friendly image without committing to serious changes and addressing environmental issues have been associated with false green marketing. We call this "Greenwashing."

Defining Concepts

What is Greenwashing?

Greenwashing is a practice used by businesses to represent themselves as more sustainable than they truly are. Greenpeace and the Environmental Protection Agency define greenwashing as making false and misleading claims about a product's environmental benefits or practices, services, technology, or company practices. Greenwashing typically involves companies spending more money on advertising and marketing than on implementing sustainable business practices that minimize environmental impact. These false green claims can deceive consumers into believing that a product or company is more environmentally friendly than it is, leading to increased sales and profits. As a result, false advertising, misleading initiatives, and groundless claims have increased green investors' exposure to risks emerging from potential lawsuits from activist groups, image deterioration, and heavy losses in assets invested.

In recent years, new concepts have emerged alongside greenwashing:

• Greenhushing refers to a company’s refusal to publicize ESG information. The company may fear pushback from stakeholders who would find its sustainability efforts lacking or from investors who believe ESG undermines returns.
• Greenwishing, or unintentional greenwashing, describes a practice where a company hopes to meet certain sustainability commitments but simply does not have the means to do so.

High-Profile Greenwashing Case Studies

When talking about greenwashing, the usual suspects are the oil and gas industry, the food and beverage sector, and other environmentally impactful industries. However, the financial industry has also been embroiled in its own greenwashing controversies.

DWS Greenwashing Analysis

DWS Group has been at the center of repeated greenwashing allegations. In April 2025, the firm was fined €25 million by German prosecutors for misleading ESG claims, building on years of scrutiny. It all started in 2021 with whistleblower claims that DWS overstated its ESG credentials, triggering investigations by both U.S. and German authorities. A police raid in June 2022 led to the CEO’s resignation, and in 2023, the SEC fined DWS $25 million for ESG misstatements. Lawsuits in Germany also allege false advertising around ESG. Greenpeace condemned DWS’s ESG bonus scheme as cosmetic rather than meaningful. Despite public commitments to sustainability, these controversies underscore a pattern of overstated ESG practices designed to attract investors.

BNY Mellon Greenwashing Analysis

BNY Mellon faced similar regulatory action. In May 2022, the SEC fined BNY Mellon Investment Adviser, Inc. $1.5 million for misleading statements about ESG integration in mutual funds. Although the funds were marketed as ESG-focused, the SEC found that BNY Mellon failed to apply ESG quality review as consistently as claimed, raising concerns about greenwashing in the financial sector.

The Challenges of Detecting Greenwashing

It’s challenging to produce an accurate assessment of environmental, social, and governance (ESG) factors, which creates opportunities for companies to hide ineffective and fake green initiatives. According to Regtank, the main challenges to detecting greenwashing include:

• Lack of reporting standards – There’s no universal set of standards for ESG compliance.
• Lack of transparency – Companies often don’t disclose the specifics of their “green campaigns,” making it hard for investors and consumers to verify their claims.
• Limited consumer awareness – Misleading marketing can exploit consumers’ eco-consciousness and brand loyalty, reducing scrutiny of false green claims.
  

These gaps lead to inaccurate ESG data and scores, allowing greenwashers to avoid accountability. Ultimately, detecting greenwashing requires careful scrutiny of company claims and a deep understanding of their supply chains and operations.

How Artificial Intelligence Detects Greenwashing

As greenwashing practices become more common, activist investors, journalists, and the general public are using social media, news outlets, and blogs to highlight false claims. Artificial intelligence (AI) has become an invaluable tool in the early detection of greenwashing by analyzing vast amounts of public data.

At SESAMm, we use generative AI and LLMs to identify greenwashing risks across billions of web-based articles. Our data lake covers over 25 billion articles in more than 100 languages from four million news sources, blogs, social media platforms, and forums, analyzing data on five million public and private companies. Through our AI platform, we generate reliable, timely, and comprehensive insights to detect greenwashing, monitor ESG controversies, and identify related risks.

The Regulatory Landscape

The rise of greenwashing is not going unnoticed by regulators, as frameworks like the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) directly target misleading sustainability claims and hollow marketing.

1. The CSRD significantly strengthens the requirements for companies to substantiate their sustainability commitments. Mandating standardized and detailed ESG disclosures directly addresses the practice of greenwashing, where companies exaggerate their environmental credentials in marketing without meaningful follow-through. Under the CSRD, companies can no longer rely on vague or selectively presented data—any gaps or inconsistencies in their sustainability claims will be exposed in public filings, making greenwashing much riskier. This means an end to cherry-picked data and a shift toward more comprehensive, comparable, and verifiable ESG performance for investors and stakeholders.
2. The CSDDD (if it stands) further reinforces these efforts by obligating companies to go beyond marketing statements and prove they’re actively managing environmental and human rights impacts throughout their supply chains. This directive closes loopholes that greenwashing often exploits, such as highlighting only direct operations while ignoring supplier practices. By requiring due diligence on environmental impacts across the value chain, the CSDDD aims to turn sustainability from a branding exercise into a legal and operational priority. If real supply chain actions don’t support a company’s green claims, it could face legal action and reputational damage.

Looking Ahead

Looking ahead, greenwashing will continue to face intense scrutiny from regulators, investors, and the public. With evolving regulatory frameworks like CSRD and CSDDD, the pressure is on for companies to ensure genuine environmental responsibility—not just green advertising. At SESAMm, we believe that the combination of regulatory rigor and advanced AI technologies will play a critical role in uncovering false green claims and supporting investors in navigating ESG risks with greater transparency and accountability.

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.