Insig AI PLC on Monday launched its Transparency and Disclosure Index, designed to give investors a better sense of how effectively firms are disclosing non-financial information.

Shares in the London-based data science and machine learning firm were up 18% at 20.70 pence each in London on Monday morning.

The index, which Insig AI developed following discussions with FTSE 100 and FTSE 250-listed companies, uses evidence-based analysis to show how ‘transparent’ companies are.

Using artificial intelligence and machine learning, the tool analyses machine-readable sentences from corporate disclosure documents in order to simplify corporate reporting for market participants.

Insig AI said the index is a response to an abundance of non-financial information that has now ‘overwhelmed corporate reporting’.

For example, BT Group PLC and Tesco PLC produced 47 and 46 separate reports respectively last year.

According to Insig AI, the Transparency and Disclosure Index framework is based on best practice principles behind the convergence of reporting standards. Reports are compared to best practice, benchmarking against peer groups, measuring website clarity and accessibility of documents.

The index highlights where the range of sustainability documents is considered excessive.

It also flags where companies may be over-using certain keywords identified as being commonly used in green-washing without evidence, and which could be possibly misleading.

‘The vast majority of corporates want to do the right thing. However, because there remains no definitive standard for what is required, corporates are overloading information and defeating the object of providing clarity to stakeholders,’ said Executive Chair Richard Bernstein.

‘Streamlining disclosure and making information easily available is urgently required. The TDI provides objective, constructive and actionable information for companies to do just that.’

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