Controversy Exposure Score

The Controversy Exposure Score (CES) is a continuous score ranging from 0 to 100. It incorporates SESAMm’s proprietary Intensity and Volume scores to provide an ongoing, real-time measure of a company’s exposure to ESG risks, allowing stakeholders to understand and monitor risk over time. The CES includes a time component that takes into consideration how ESG controversies evolve according to their severity level.

Two main components impact the score’s value:

• Intensity Score: Measures the severity of each ESG incident, considering its impact on a company’s reputational, stakeholder, financial, and legal standing. This score is derived from a Large Language Model (LLM) fine-tuned by SESAMm’s experts and trained on thousands of humanly annotated events.
• Volume Score: The Volume Score assesses the number of articles associated with an event, calculated using a short-term rolling window. To ensure accuracy, the Volume Score is normalized against the average article volume concerning the company and relevant ESG topics over the past year, reducing potential bias.

How it’s calculated

To calculate the CES, we use advanced AI models that filter the 25 billion articles in our data lake by company and identify which articles discuss ESG-related controversies. Then each identified controversy is assessed for its importance using SESAMm’s proprietary Intensity Score. Controversies are also clustered to avoid redundancy and to ensure that the CES captures the main events impacting a company’s reputation rather than being skewed by repeated coverage of the same incident.

We then apply a temporal filter to the clustered data to check if a similar controversy was recently reported and if it had a higher intensity at that time. If so, the score is adjusted to reflect the recency and relevance of the controversy, preventing outdated incidents from overly influencing the current score. One final filtering step is performed using SOTA LLMs to remove any controversies that are not genuinely related to ESG issues.