There’s no denying that ESG risk exposure in the pharmaceutical industry is high. This stems from the intense regulatory oversight, complex global operations, and the sector’s direct impact on public health. Governance issues represent the most persistent challenge, with leading companies repeatedly facing bribery and corruption cases, antitrust and excessive pricing investigations, misleading marketing practices, patent disputes, and data integrity concerns, often resulting in significant fines, large settlements, and prolonged legal scrutiny across jurisdictions.

Social risks are closely tied to product safety and workforce management, as evidenced by recurring drug recalls, regulatory suspensions, and litigations linked to adverse patient outcomes, alongside layoffs, labor disputes, and workplace safety concerns. Environmental risks, while comparatively less frequent, increasingly center on credibility and compliance, including sustainability reporting weaknesses, greenwashing allegations, and operational environmental violations.

What are the most persistent ESG challenges in the pharmaceutical industry? Read on to find out.

GlaxoSmithKline: Legal Battles and Social Accountability

While taking a deeper look at GlaxoSmithKline (GSK), we found that the company has a very high Controversy Exposure Score (CES) of 88/100. This elevated score reflects a sustained pattern of governance and social controversies rather than isolated incidents.
On the governance side, GSK has repeatedly faced major legal and regulatory actions, including a $2.2 billion settlement linked to Zantac, a $235 million patent award upheld by the U.S. Supreme Court, and multiple fines for misleading marketing, anticompetitive behavior, and bribery. Several of these events are flagged as UN Global Compact (UNGC) violations, particularly under principles related to anti-corruption, labor rights, and ethical business conduct, while others remain under UNGC watchlist classification.

Social risks further expose GSK, including recurring product recalls and regulatory suspensions tied to contamination, dosing, and packaging defects, as well as labor disputes, strikes, and large-scale layoffs across Europe and the United States. Together, the CES score and UNGC screening highlight persistent governance weaknesses and social risk drivers that continue to shape GSK’s overall risk profile.

Key Controversies:

• GSK workers to strike after rejecting pay offer at pharmaceutical giant
• Pharmaceuticals giant GSK aims to cut 720 jobs in Wallonia
• GSK told to pay up for experiments in Mother and Baby homes at meeting of Sligo County Council
• Pharmaceuticals giant GSK to pay $2.2bn to settle Zantac lawsuits
• Judge: GlaxoSmithKline Can Be Held Liable for Fatal Injuries Suffered From Generic Equivalent of Lamictal

Novartis: Governance and Sustainability Concerns

Similar to GSK, Novartis shows very high controversy exposure, with a CES of 84/100, reflecting sustained ESG headwinds rather than isolated events. Governance risks are the primary driver of this elevated score, with Novartis facing repeated fraud and bribery allegations, competition and price-fixing investigations, patent disputes, and data integrity concerns across multiple jurisdictions. These issues have resulted in significant financial consequences, including nearly $1 billion in U.S. settlements related to improper physician incentives, $345 million to resolve foreign corruption cases, a €444 million antitrust fine in Europe, and several high-value patent dispute settlements.

A number of these controversies are flagged under UNGC screening, primarily classified as Watchlist events, particularly in relation to anti-corruption, ethical conduct, and legal compliance. Environmental risks also contribute to Novartis’ exposure, following greenwashing allegations and scrutiny over the credibility of its net-zero commitments. On the social front, large-scale workforce reductions, protests, strikes, and voluntary product recalls linked to safety oversight have further intensified the company’s overall risk profile.

Key Controversies:

• Novartis Case Closes in US with Deal Excluding Greek Bribe Allegations
• Novartis pays close to $1 billion to settle suit over doctors' bribes
• Belgium Authority imposes a EUR 2.78 million fine on Novartis
• Novartis used manipulated data in winning Zolgensma approval, FDA says
• Greenwashing: Accusations against Novartis and Nestlé

Roche: Facing the Spotlight on Governance and Ethics

While lower than some of its peers, Roche shows a high level of controversy exposure, with a CES of 64/100. This score still reflects recurring ESG controversies across governance, social, and operational dimensions. Governance-related risks are the main contributors, with Roche involved in multiple lawsuits linked to bribery allegations, antitrust and excessive pricing practices, patent disputes, and marketing misconduct, including a €444 million antitrust fine in Europe.

Several of these events are captured under the UNGC screening, predominantly classified as Watchlist cases, particularly in relation to anti-corruption, competition practices, and governance standards. Environmental risks have also emerged, with the Ethos Foundation publicly challenging Roche’s sustainability reporting and executive remuneration practices, and its subsidiary Genentech was fined $158k for hazardous materials violations. On the social front, Roche has faced drug recalls tied to safety deficiencies, large-scale global layoffs, reported employee exposure to hazardous substances, and legal rulings related to workplace discrimination, all contributing to its overall ESG risk profile.

Key Controversies:

• Emails and Bribery Samples Offered by Roche Drug Company to Authorities
• Les laboratoires Novartis, Roche et Genentech condamnées à 444 M€ d’amende
• Roche settles US patent lawsuit against Biogen over blockbuster arthritis drug
• The Ethos Foundation raises its voice against Roche
• Roche Reports Employee Exposure to Ethylene Oxide Due to Packaging Issues

Conclusion

Across GlaxoSmithKline, Novartis, and Roche, ESG risk in the pharmaceutical sector is clearly structural. Governance controversies remain the most persistent and financially material, while social risks tied to product safety and workforce practices continue to drive litigation and reputational pressure. Environmental issues, though less frequent, increasingly raise questions around credibility and compliance.

Together, these cases highlight the need for continuous, forward-looking risk monitoring in a sector where regulatory scrutiny, public trust, and long-term value are tightly connected.

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.

Hello, and welcome to our ongoing series on Generative AI in Finance. I’m Sylvain Forté, CEO and co-founder of SESAMm, and in our first article of the series, we’ll explore how generative AI is reshaping the financial industry. At SESAMm, we’ve been fortunate to be at the forefront of this revolution, witnessing the transformational power of large language models like ChatGPT and its iterations.

Unprecedented Evolution in Generative AI

Let's begin with an overview of the current generative AI landscape. Over the last few years, we've seen an explosion in the capabilities of generative AI, particularly in text processing. From BERT to GPT4, large language models (LLMs) have demonstrated increasingly impressive capabilities. These models, performing at a human level for many tasks, are rapidly evolving, making the past six months feel like an exponential leap in the AI domain.
Generative AI is no longer a speculative idea but rather an early adoption phase of a powerful technology. At SESAMm, we've leveraged our partnerships with OpenAI and other organizations to gain high-level access to these AI models, allowing us to harness this potential and democratize access to intelligence. It’s an exciting shift that, while reshuffling business models and job roles, promises enormous productivity gains and increased overall value. The key, of course, is ensuring that these benefits extend to society as a whole.

The Disruption in Financial Sector

The finance sector, with its vast array of text-based tasks, stands to gain enormously from generative AI. Any repetitive yet intelligence-heavy tasks — think verification, document generation, or client communication — are ripe for automation.
Finance, despite being a highly intelligent sector, often sees that intelligence is misspent on routine tasks. Generative AI can realign this balance, reducing costs, enhancing service quality, and building trust. Whether private equity, asset management, or commercial banking, AI can streamline processes, delivering an efficiency boost that significantly enhances customer satisfaction.
In private equity, the automation possibilities could reshape the sector, bringing it closer to the public markets. In asset management and banking, cost reduction and service enhancement could lead to a dramatic rise in customer satisfaction.

Concrete Use Cases of Generative AI in Finance

So, how does this look in practice? Generative AI can automate numerous finance tasks, including creating reports, verifying information, summarizing news or earnings calls, and even making internal data searchable. Imagine a system that can help asset managers match various types of datasets based on a user query in natural language, thereby making data access and interpretation simpler. This could vastly improve the user experience with business software, reducing effort and time spent. While some applications, like a fully automated financial advisor or AI-led trading and hedging, might present more significant challenges, their potential benefits could revolutionize these sectors.

Overcoming Roadblocks

Of course, every transformation comes with challenges. The key is discerning which use cases are suited for full automation and which require human oversight. Data privacy concerns will also influence decisions about whether to use proprietary or open-source models.
There will inevitably be resistance to change within organizations, but the 'Google test' can help navigate data privacy issues: if an employee would conduct that search or share that data on Google, it's likely safe to share with a proprietary Generative AI solution.

Generative AI and Risk Mitigation

Risk mitigation strategies can greatly benefit from generative AI. From detecting and preventing fraud to managing market risks, generative AI can verify identities, cross-reference databases, and analyze vast amounts of data. For instance, at SESAMm, we're developing an ESG controversy detection solution that can be an invaluable tool for risk mitigation.

Improving Investment Decision-Making

Generative AI’s ability to process and analyze massive amounts of data accurately and quickly makes it a formidable tool for investment decision-making. By identifying patterns, trends, and correlations that humans might miss, generative AI can provide a more comprehensive, data-driven perspective, aiding portfolio optimization, asset allocation, and investment risk management.

Streamlining Operations for Efficiency

Generative AI's efficiency and accuracy promise to transform financial institutions. By automating time-consuming tasks like report generation and client communication, AI can free employees to focus on strategic tasks that require critical thinking.
Imagine being able to ask complex questions to your banking app in natural language and getting immediate, accurate responses. Such high-quality service was unthinkable a few years ago, but with generative AI, it's within our reach.
The future of the financial sector is undeniably tied to the successful implementation of generative AI solutions. The potential is vast, the challenges are surmountable, and the rewards are great. In my view, generative AI is the key to a more efficient, cost-effective, and customer-centric financial sector.

To learn more about SESAMm’s innovative solutions and how we’re pushing the boundaries with generative AI, read the second part of this series here.

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.

BNP Paribas has released its 2025 ESG Global Survey, revealing how institutional investors are adapting their sustainability strategies in the face of shifting market dynamics, rising regulatory scrutiny, and increased public skepticism. The report surveyed 420 asset owners, asset managers, and private capital firms across 29 countries, representing a combined $33.8 trillion in assets under management, and paints a complex but ultimately optimistic picture of ESG’s evolution.

Resilient Commitment Amid a Changing Landscape

Despite growing political backlash and accusations of greenwashing in various markets, investor commitment to ESG remains strong. A large majority, 87%, said their ESG or sustainability objectives have remained stable, and fewer than 3% expect to scale back their commitments. Furthermore, 84% anticipate that their organizations will continue to progress on sustainability goals through 2030.

However, this confidence is paired with a new sense of caution. Forty-one percent of respondents reported a more restrained approach to publicly promoting their ESG activities. This shift reflects broader concerns about reputational risk and regulatory ambiguity, particularly in markets where ESG has become politicized. Still, the underlying momentum toward long-term ESG integration appears undeterred.

From Broad ESG to Thematic and Impact Strategies

The report also signals a shift from general ESG investing toward more targeted strategies, especially thematic investing. Eighty-five percent of participants now apply sustainability criteria to investment decisions, and 59% actively pursue thematic strategies such as climate resilience or social equity.
Top investment priorities over the next two years include increasing allocations to the energy transition, divesting from carbon-intensive assets, and using active ownership to push portfolio companies toward improved ESG outcomes. This thematic focus suggests a maturation of ESG strategies, with more precise goals and performance expectations.

Emergence of ESG “Pacesetters”

A standout insight from the survey is the rise of “pacesetters,” the 19% of respondents that have achieved the highest levels of ESG integration. These advanced investors have already embedded ESG factors across portfolios, including metrics related to social impact, biodiversity, and “The Just Transition Mechanism”. Nearly all pacesetters are actively decarbonizing their portfolios and report alignment with broader societal and environmental goals.

This group is not only more sophisticated in managing ESG risk but also more likely to view ESG as a long-term value driver. Their practices highlight what comprehensive ESG adoption can look like when paired with sufficient resources, internal alignment, and robust data.

Private Capital’s Expanding ESG Role

Private capital managers are also emerging as key ESG players. More than half are using active ownership strategies, while 76% emphasize social impact, and 63% are engaged in just transition initiatives. These firms see ESG as an opportunity to generate alpha, align with stakeholder expectations, and lead in sustainability-driven innovation.

The Critical Role of Data and Partnerships

Finally, the survey underscores the growing importance of ESG data and trusted partners. Nearly half of all respondents expect to increase budgets for ESG data acquisition and analysis. When selecting financial partners, ESG reputation and expertise are increasingly decisive factors.

Overall, the 2025 survey shows that institutional investors remain deeply committed to ESG, but are evolving in how they execute and communicate these strategies. The future of ESG appears less about bold declarations and more about targeted, data-driven action.

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.