Managing ESG Incidents: Best Practices and Sentometrics’ Approach
Press-release - Jan 20, 2025
In today’s ESG-driven landscape, every company faces the risk of incidents or controversies. While such events are inevitable, they are not inherently detrimental. The true test of a company’s ESG commitment lies in how it responds. Transparent, prompt, and accountable actions not only mitigate reputational damage but also reinforce stakeholder confidence and demonstrate alignment with global frameworks like the CSRD (Corporate Sustainability Reporting Directive) and the CSDDD (Corporate Sustainability Due Diligence Directive).
At Sentometrics, we combine cutting-edge AI capabilities with human analysis and rigorous quality checks to ensure nuanced, reliable ESG incident assessments. This dual approach guarantees that our evaluations capture both the speed and precision of AI and the contextual understanding of expert analysts.
Best Practices in ESG Incident Management: Nationale Loterij, Bel&Bo, and Evonik Antwerpen
Nationale Loterij: A Benchmark for Transparency and Accountability
When allegations of money laundering involving former Vice Premier Didier Reynders surfaced, the Belgian National Lottery acted swiftly to address concerns. After parliamentary questions regarding their fraud prevention mechanisms, the company issued a comprehensive 12-page explanatory note alongside a press release.
This transparent and proactive response mitigated reputational risks, reassured stakeholders, and provided a clear roadmap for corrective measures. As a result, Sentometrics classified the case as “resolved,” with no further criticism from external stakeholders. The National Lottery’s actions serve as a model of how transparency and communication can uphold trust and demonstrate good governance even amidst high-profile controversies.
Bel&Bo: A Case Study in Responsible Supply Chain Management
Bel&Bo faced indirect scrutiny after a US NGO report uncovered human rights violations, including forced labor and child labor, in India’s cotton industry. While not directly sourcing from the implicated producers, Bel&Bo acknowledged the complexity of tracing cotton supply chains. Rather than severing ties immediately, which could exacerbate supplier issues, the company adopted a thoughtful, phased approach.
- Transparency and Dialogue: Bel&Bo openly addressed the challenges in supply chain traceability, acknowledging areas for improvement.
- Collaborative Solutions: Partnering with Fairtrade, they mapped their cotton supply chain and conducted external audits to detect and address potential abuses.
- Proactive Action: In 2024, they launched Belgium’s first Fairtrade cotton collection, demonstrating leadership in sustainable practices.
Sentometrics assessed this case as “resolved.” Their measured, collaborative response highlights the importance of transparency, strategic partnerships, and proactive measures in managing ESG risks effectively.
Evonik Antwerpen: Setting a Standard for Environmental Transparency
In June 2024, Bond Beter Leefmilieu praised Evonik for its thorough reapplication for a permit at the Port of Antwerp. Initially, in 2022, Flemish Environment Minister Zuhal Demir granted Evonik a two-year provisional permit to address concerns over nitrogen emissions, climate plans, and PFAS discharge.
Following a detailed environmental assessment and proactive measures like CO2 reduction, the company revised its initial submission, addressing key concerns. This earned them recognition for transparency and open dialogue. In September 2024, Minister Demir granted Evonik an indefinite permit.
Bond Beter Leefmilieu commended their approach, stating: This is the first time we’ve seen such a thoroughly prepared permit application. Any industrial company seeking a permit should take this as an example. A strong application, where all impacts are mapped and addressed, is an important point for legal certainty.
Evonik’s actions highlight how proactive engagement, thorough assessments, and transparent communication can transform challenges into an opportunity to lead by example
Sentometrics’ Assessment Process: Combining AI with Human Expertise
At Sentometrics, we recognize that automated insights alone are not sufficient to capture the complexity of ESG-related incidents. That’s why our process integrates advanced AI analysis with human intervention at multiple stages:
- Initial Analysis: AI identifies, categorizes, and evaluates incidents based on credible sources, such as investigative reports or media coverage.
- Contextual Review: Human analysts review AI findings, ensuring accuracy, relevance, and alignment with ESG frameworks.
- Final Quality Checks: The assessment undergoes rigorous quality control to guarantee a balanced and comprehensive report.
This workflow is iterative, involving continuous learning between AI and human annotation. We also incorporate feedback from companies and stakeholders involved in incidents, enhancing the overall reliability and fairness of our assessments.
Call to Action: Collaborate for More Comprehensive Assessments
We encourage companies to respond to emails they may receive from Sentometrics regarding ESG incidents. Your input, whether in the form of corrective actions, press releases, or additional context, is critical in ensuring accurate and fair assessments.
Should your company be identified in an ESG-related incident, you will receive a notification with details of the event. You are invited to share:
- Feedback or context about the incident.
- Information on corrective or preventive measures implemented.
- Relevant documents, such as press releases or reports.
All responses are accessible only to authorized clients and subscribers to our database. Your cooperation strengthens the quality of our assessments, ensures balanced reporting, and demonstrates your commitment to addressing ESG concerns transparently.
Why Transparency Matters
As the examples of Nationale Loterij, Bel&Bo, and Evonik Antwerpen illustrate, transparency, prompt action, and collaboration can transform ESG controversies into opportunities for growth. Companies that adopt such approaches not only reinforce stakeholder trust but also align with emerging regulations like the CSRD & CSDDD, ensuring long-term resilience and sustainability.
For more information or to discuss our methodology, please feel free to contact Sentometrics. Together, we can shape a future of responsible business practices and sustainable development.