Intensity Score
The intensity score is a comprehensive measure, ranging from 1 to 5 (from low to high severity), used to assess the impact of a specific Environmental, Social, and Governance (ESG) event on a particular company.
How It Works
Fine-tuned score:
We fine-tune a Large Language Model (LLM) to replicate the assessments of ESG analysts in evaluating the risks that events pose to companies. To achieve this, our internal ESG Expert team applies our intensity score methodology to annotate thousands of events, allowing us to have a large training dataset (training and testing).
This methodology is based on three pillars:
- Impact on the company: The reputational risk for the company as well as the financial and operational impact.
- Impact on stakeholders: The volume of stakeholders impacted and the degree of the impact.
- Level of responsibility: The legal risks and the level of the company’s involvement (accidental, negligence, or intentional).
Each pillar is assigned a score from 1 to 5 by our team of ESG Experts which then contributes to the final intensity score.
For the training of our LLM, we only consider articles for which two independent analysts have an identical final score. This allows us to have a high level of confidence in our training dataset, ensuring consistency and accuracy in our assessments.
Volume impact:
SESAMm applies a bonus or penalty to the LLM score based on how many articles mention the event compared to the company’s usual coverage. Specifically, we calculate the ESG Relative Volume by counting the number of ESG articles mentioning the company over the last 90 days.
- If the ESG event gets a high coverage in the media compared to the company's 90-day average, we apply a bonus (+1 or +2) to the Intensity Score.
- If the ESG event gets a low coverage in the media compared to the company's 90-day average, we apply a penalty (-1 or -2) to the Intensity Score.
This helps ensure our final score reflects the event’s severity and the level of media attention it receives.