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<h3>The Brief</h3>
<ul>
<li>Build a proprietary ESG risk scoring model for debt instruments for a portfolio of private entities.</li>
<li>Combine ESG scores from a major ratings agency with alternative ESG data available for private entities not covered by the ratings agency.</li>
<li>Support the build of an investment manager’s portfolio that beats the benchmark index’s ESG score while delivering competitive returns.</li>
<li>Apply data science, AI and optimisation techniques to construct efficient portfolios.</li>
<li>Deliver a market-leading solution, the first of its kind, fully auditable that attracts capital.</li>
</ul>
<h3>Approach to ESG risk</h3>
Every organisation is exposed to ESG risk by the nature and scale of their operations.  Companies can mitigate this risk to avoid material risk.  To assess if ESG risk has been mitigated sufficiently, there are two measurable risk components: Exposure and Management.
<ul>
<li>ESG Exposure is fundamentally a factor of the industry and region in which the company operates, and is based on a system of materiality.</li>
<li>ESG Management is company-specific and assessed through analysing a company’s risk awareness and mitigation, gathered primarily from evidence published in reports.</li>
<li>These two components can be combined to reflect proportionality and produce a single ESG Risk Score that can be integrated into investment decision-making.</li>
</ul>
<h3>When data is lacking</h3>
When modelling company risk, ESG Exposure can to a reasonable degree be estimated by its industry average as it is a factor of operations, size and location.  So, in cases where a company is not covered by a ratings agency, a score can be estimated as the best available technique.  This approach is less reliable for assessing ESG Management, where companies diverge greatly in their approaches to addressing risk exposure. 
Therefore, Insig AI integrated alternative sources of ESG data to assess ESG Management.  Our data compliments the ESG ratings agency score and enhances the industry average scores for companies not covered by the ratings agency.
<h3>Part 1:  Building an ESG Exposure scoring model</h3>
<h4>Re-build an ESG Exposure scoring model from scratch in line with client’s risk methodology.</h4>
<ol>
<li>Disaggregate, re-build and re-weight elements of the ESG ratings agency data into a new scoring model to give the manager greater control over risk factors at a more granular level.</li>
<li>Forensic entity mapping between data providers which use different identifiers and formats, including MSCI, Capital IQ and S&amp;P to improve data reliability.</li>
<li>Implement ESG risk factors specific to debt instruments such as loan maturity in line with investment manager’s proprietary methodology.</li>
</ol>
<h3>Part 2:  Developing a new ESG Management score</h3>
<h4>Create an innovative ESG Management scoring methodology based on company disclosures that is appropriate for entities not covered by the ESG ratings agency.</h4>
<ol>
<li>Collect, tag and validate all Annual Reports and ESG/Sustainability Reports published on portfolio and benchmark fund companies’ websites since 2019.</li>
<li>Convert all documents (mostly in .pdf format) to machine readable text. Split text into sentences, tag and store in a cloud-based database.</li>
<li>Apply a ESG issue-specific Natural Language Processing (NLP) models over the text. NLP models are expert-trained to assess sentences for their relevance to ESG risk issues such as climate change, water, human rights and workforce.</li>
<li>NLP models generate an ESG Disclosure metric based on volume of relevant sentences in the company’s disclosures.</li>
<li>This ESG Disclosure metric is mapped and weighted with the ESG ratings agency data to produce the combined ESG Management score.</li>
</ol>
<h3>Part 3: Generating the final ESG Risk Score</h3>
<h4>Combine ESG Exposure and ESG Management into a final ESG Risk Score for the portfolio manager to assess in a web-based application.</h4>
<ol>
<li>ESG Exposure and ESG Management scores combine into a single, company specific ESG Risk score.</li>
<li>The scoring model is first developed with the investment manager, then coded into Python and finally delivered in a web-based application.</li>
<li>Design a graphic front end that allows the investment manager to compare the portfolio against the benchmark and adjust parameters.</li>
<li>The code, methodology and application are fully transparent and auditable and by third</li>
<li>ESG Risk score is integrated with fundamental investment data in Insig AI’s machine-learning portfolio optimisation tool.</li>
</ol>
<h3>Outcomes</h3>
An innovative fund is launched which aims to build integrated ESG portfolios, establish the investment manager as a leader in ESG investment and successfully attract capital to sustainable methodologies.  The model can be applied to the clients&#8217; other debt and equity products.
Get in touch to find out if our approach could be applied to your credit or debt portfolio, and accelerate your ESG investing journey: <a href="mailto:info@insg.ai">info@insg.ai</a>

building-best-practice-esg-risk-scoring-for-private-entities

Building a best practice ESG risk scoring system for private entities

The Insig AI &#8216;UK Financial Services Sector Gender Pay Gap ‘Walk vs Talk’ Report&#8217; uses a combination of technology and manual data validation, to analyse the relationship between pay gap disclosure levels and the reported hourly gender pay gap in the financial services sector and has been featured in:
IFA Magazine: <a style="color: #0000ff;" href="https://ifamagazine.com/article/financial-services-sector-not-walking-the-talk-on-gender-pay-gap/">Link</a>
Markets Media: <a style="color: #0000ff;" href="https://www.marketsmedia.com/financial-services-not-walking-the-talk-on-gender-pay-gap/">Link</a>
Commercial Risk: <a style="color: #0000ff;" href="https://www.commercialriskonline.com/uk-financial-services-in-danger-of-social-washing-gender-pay-gap/">Link</a>
The full report can be found below:
&nbsp;
For UK Large Cap companies in the Financial Services sector, Insig AI’s ESG data specialists asked – &#8220;What is the relationship between the actual Gender Pay Gap, and levels of disclosure around the issue?&#8221;
The data revealed that
<ul>
<li>14 of the 20 FTSE 100 companies in the Financial Services sector currently have a higher than average gender pay gap</li>
<li>Of these, 9 also show higher than average pay gap disclosure levels</li>
<li>Large dispersion and little consistency for the sector on both ‘Walk’ and ‘Talk’</li>
</ul>
Sector trends
We analysed the relationship between pay gap disclosure levels based on keywords and phrases (‘Talk’) and the reported mean hourly gender pay gap % (‘Walk’) for FTSE 100 companies between 2017 and 2021/22 to examine trends (see Appendix E for methodology).
We found that 14 of the 20 FTSE 100 Financial Services companies that disclosed in 2021/22 have higher than average gender pay gaps (‘Walk&#8217;) compared to the FTSE 100.  Of these 14 with high pay gaps, the level of disclosure on the issues (‘Talk’) is split half and half when compared to the FTSE100 average (Appendix A).
This indicates that overall, the sector is talking a lot about the issue, but still struggling to reduce its pay gap in line with other large businesses in the UK (Appendix D).
Companies vary widely when it comes to their relationship between ‘Walk’ vs ‘Talk’ (Appendix C), with some in danger of being called out for ‘social washing’ or on the other hand, lack of engagement.
 
On the agenda since 2017
Since 2017, companies of a certain size in the UK have been required to report their gender pay gap metrics.  The intention is that transparency will drive accountability and action among businesses to address the issue and reduce inequality.
In the 5 years since, Insig AI’s data shows that while ‘Talk’ among the Financial Services sector has more than doubled from an average of 106 mentions to 232, the actual pay gap has reduced from 29.5% to 24.7%, still above the 19% FTSE100 average.
&nbsp;
What GPG means in ESG
The gender pay gap metric is used by investors and ESG ratings agencies as one of the indicators of how a company manages its workforce risk and opportunity as part of ESG assessment.  Research repeatedly shows that an equitable and diverse workforce is ‘good for business’.
The two companies that did not disclose their numbers either to Gov.UK or through their own reporting are opting out based on number of UK sub-entity employees falling below the regulatory threshold of 250.
&nbsp;
Lacking consistency
The research shows that the Financial Services sector has one of the largest ranges between individual companies’ gender pay gaps (‘Walk’) of all sectors, along with the Consumer Discretionary and Consumer Staples sectors.  The data also reveals a high dispersion on levels of Talk, second only to Consumer Staples (Appendix B).
This suggests this peer group of companies are very taking different approaches to the issue, which may impact their reputation through an ESG lens.
&nbsp;
Commentary (Diana Rose, Head of ESG Research)
We know that different sectors have unique profiles when it comes to gender and diversity, bringing legacies and cultures that play out in metrics such as the gender pay gap. We also know this isn’t simple, and absolutely not about quick fixes.
But, it has been 5 years since regulation made it crystal clear to corporates that their stakeholders care about the gender pay gap, and want to see considered, committed, courageous action.
The FTSE 100 data appears to be moving in the right direction, but it seems the finance industry still has a long way to go.  There’s wide variety in how companies are tackling the issue.
When there is all the ‘Talk’ and the needle still isn’t moving on the ‘Walk’, then businesses must be called out as this can be evidence of ‘social washing’.  At the same time, some firms are lagging not only on bringing the ‘Walk’ % metric down, but also when it comes to ‘Talk’, which is just as concerning.
Suffragette Emily Davison famously said, ‘deeds, not words’. But words still matter here, as they wrap around the deed with the ‘why’, the ‘what’ and ‘how’.
The Government wants the metrics, but also encourages companies to disclose their strategies and action plans to address the pay gap, wherever it is.  Transparency through disclosure is essential to give context, clarity and accountability around the number, which can never tell the full story by itself.
From an investor’s perspective, if a finance company still isn’t engaging on gender diversity in 2022, then questions have to be raised about how well it is managing other workforce issues that will limit its talent pool, skills retention, diversity of thought, reputation and resilience (<a href="https://hbr.org/2018/07/the-other-diversity-dividend">https://hbr.org/2018/07/the-other-diversity-dividend</a>).
Gender is fundamental, but just the start; other diversity factors such as ethnicity, age, disability, and education that are not only fundamental to an equitable society, but important for building a brilliant and future-fit workforce.
&nbsp;
Appendix A
Scatter graph of all FTSE 100 companies by ‘Walk’ and ‘Talk’, divided in 4 groups in relation to the averages.
<a href="https://insigai.io/?attachment_id=2919" rel="attachment wp-att-2919"><img decoding="async" class="alignnone size-full wp-image-2919" src="https://insigai.io/wp-content/uploads/2022/11/Insig-1.jpg" alt="" width="903" height="665" srcset="https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-1.jpg?resize=200%2C147&amp;ssl=1 200w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-1.jpg?resize=300%2C221&amp;ssl=1 300w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-1.jpg?resize=400%2C295&amp;ssl=1 400w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-1.jpg?resize=600%2C442&amp;ssl=1 600w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-1.jpg?resize=768%2C566&amp;ssl=1 768w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-1.jpg?resize=800%2C589&amp;ssl=1 800w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-1.jpg?fit=903%2C665&amp;ssl=1 903w" sizes="(max-width: 903px) 100vw, 903px" /></a>
&nbsp;
Table of FTSE 100 Financial Services companies, divided into 4 groups in relation to FTSE 100 average.
<a href="https://insigai.io/?attachment_id=2920" rel="attachment wp-att-2920"><img decoding="async" class="alignnone size-full wp-image-2920" src="https://insigai.io/wp-content/uploads/2022/11/Insig-2.jpg" alt="" width="797" height="279" srcset="https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-2.jpg?resize=200%2C70&amp;ssl=1 200w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-2.jpg?resize=300%2C105&amp;ssl=1 300w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-2.jpg?resize=400%2C140&amp;ssl=1 400w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-2.jpg?resize=600%2C210&amp;ssl=1 600w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-2.jpg?resize=768%2C269&amp;ssl=1 768w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-2.jpg?fit=797%2C279&amp;ssl=1 797w" sizes="(max-width: 797px) 100vw, 797px" /></a>
&nbsp;
Table of FTSE 100 Financial Services sector companies’ ‘Walk’ and ‘Talk’ data, 2021/22.
 <a href="https://insigai.io/?attachment_id=2921" rel="attachment wp-att-2921"><img decoding="async" class="alignnone size-full wp-image-2921" src="https://insigai.io/wp-content/uploads/2022/11/Insig-3.jpg" alt="" width="663" height="586" srcset="https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-3.jpg?resize=200%2C177&amp;ssl=1 200w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-3.jpg?resize=300%2C265&amp;ssl=1 300w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-3.jpg?resize=400%2C354&amp;ssl=1 400w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-3.jpg?resize=600%2C530&amp;ssl=1 600w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-3.jpg?fit=663%2C586&amp;ssl=1 663w" sizes="(max-width: 663px) 100vw, 663px" /></a>
&nbsp;
Appendix B
Range of gender pay gap metric by sector (‘Walk’), 2021/22
<a href="https://insigai.io/?attachment_id=2922" rel="attachment wp-att-2922"><img decoding="async" class="alignnone size-full wp-image-2922" src="https://insigai.io/wp-content/uploads/2022/11/Insig-4.png" alt="" width="1379" height="776" srcset="https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-4.png?resize=200%2C113&amp;ssl=1 200w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-4.png?resize=300%2C169&amp;ssl=1 300w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-4.png?resize=400%2C225&amp;ssl=1 400w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-4.png?resize=600%2C338&amp;ssl=1 600w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-4.png?resize=768%2C432&amp;ssl=1 768w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-4.png?resize=800%2C450&amp;ssl=1 800w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-4.png?resize=1024%2C576&amp;ssl=1 1024w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-4.png?resize=1200%2C675&amp;ssl=1 1200w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-4.png?fit=1379%2C776&amp;ssl=1 1379w" sizes="(max-width: 1379px) 100vw, 1379px" /></a>
&nbsp;
Range of pay gap disclosure levels by sector (‘Talk’), 2021/22
<a href="https://insigai.io/?attachment_id=2923" rel="attachment wp-att-2923"><img decoding="async" class="alignnone size-full wp-image-2923" src="https://insigai.io/wp-content/uploads/2022/11/Insig-5.jpg" alt="" width="1379" height="782" srcset="https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-5.jpg?resize=200%2C113&amp;ssl=1 200w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-5.jpg?resize=300%2C170&amp;ssl=1 300w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-5.jpg?resize=400%2C227&amp;ssl=1 400w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-5.jpg?resize=600%2C340&amp;ssl=1 600w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-5.jpg?resize=768%2C436&amp;ssl=1 768w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-5.jpg?resize=800%2C454&amp;ssl=1 800w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-5.jpg?resize=1024%2C581&amp;ssl=1 1024w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-5.jpg?resize=1200%2C680&amp;ssl=1 1200w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-5.jpg?fit=1379%2C782&amp;ssl=1 1379w" sizes="(max-width: 1379px) 100vw, 1379px" /></a>
How the read the chart
The Box and Whisker chart shows the range of disclosure counts within a sector.  All values are ranked from smallest to largest.
&nbsp;
Appendix C
Scatter graph of all FTSE 100 companies in scope by Walk, Talk, and market cap, 2021/22
<a href="https://insigai.io/?attachment_id=2924" rel="attachment wp-att-2924"><img decoding="async" class="alignnone size-full wp-image-2924" src="https://insigai.io/wp-content/uploads/2022/11/Insig-6.jpg" alt="" width="1233" height="871" srcset="https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-6.jpg?resize=200%2C141&amp;ssl=1 200w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-6.jpg?resize=300%2C212&amp;ssl=1 300w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-6.jpg?resize=400%2C283&amp;ssl=1 400w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-6.jpg?resize=600%2C424&amp;ssl=1 600w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-6.jpg?resize=768%2C543&amp;ssl=1 768w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-6.jpg?resize=800%2C565&amp;ssl=1 800w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-6.jpg?resize=1024%2C723&amp;ssl=1 1024w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-6.jpg?resize=1200%2C848&amp;ssl=1 1200w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-6.jpg?fit=1233%2C871&amp;ssl=1 1233w" sizes="(max-width: 1233px) 100vw, 1233px" /></a>
&nbsp;
Appendix D
Sector averages for the FTSE 100 for ‘Walk’ and ‘Talk’, 2021/22
<a href="https://insigai.io/?attachment_id=2925" rel="attachment wp-att-2925"><img decoding="async" class="alignnone size-full wp-image-2925" src="https://insigai.io/wp-content/uploads/2022/11/Insig-7.jpg" alt="" width="903" height="555" srcset="https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-7.jpg?resize=200%2C123&amp;ssl=1 200w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-7.jpg?resize=300%2C184&amp;ssl=1 300w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-7.jpg?resize=400%2C246&amp;ssl=1 400w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-7.jpg?resize=600%2C369&amp;ssl=1 600w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-7.jpg?resize=768%2C472&amp;ssl=1 768w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-7.jpg?resize=800%2C492&amp;ssl=1 800w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/11/Insig-7.jpg?fit=903%2C555&amp;ssl=1 903w" sizes="(max-width: 903px) 100vw, 903px" /></a>
&nbsp;
Appendix E 
Insig AI Methodology
Scope
We have analysed the companies that make up the UK FTSE 100 (as at May 2022) and collected data from 2018-2022.
&nbsp;
Data sources – quantitative and qualitative
<ol>
<li>Quantitative (‘Walk’)</li>
</ol>
We use the publicly available gender pay gap metrics as reported by each company to the UK Government (https://gender-pay-gap.service.gov.uk/).  This is a requirement for all companies in the UK with over 250 employees.
Eight pay gap metrics are reported, and we have chosen to use the mean pay gap based on hourly pay, which is explained on the website as providing a ‘good overall indication’ of the gap.
Where companies do not report on the Gov.UK platform, the metric is collected manually by searching for relevant pay gap reports in the public domain.
The gender pay gap is expressed as a % and referred to as ‘pay gap metric’ or ‘Walk’.
&nbsp;
<ol>
<li>Qualitative (‘Talk’)</li>
</ol>
We measure the volume of disclosure around pay gap terms and phrases, counted across each company’s body of corporate disclosures as published as PDFs on their websites.
The documents in scope include Annual Reports, Sustainability and ESG Reports, Diversity and Inclusion Reports, and Pay Gap Reports, as well as other financial and ESG related documents.  These are manually collected, tagged and validated by our analysts.
PDF documents are converted to machine readable text which is run through a search technology that returns counts of exact matches per document. These counts then summed to produce a total per company per year on which the analysis is based; referred to ‘pay gap disclosure or ‘Talk’.
The terms/phrases counted are as follows and are designed to capture how much a company is talking about these issues.  They are based on established and progressive ESG framework metrics:
<table>
<tbody>
<tr>
<td width="190">Gender related</td>
<td width="187">Generic talk</td>
<td width="190">Other diversity factors / emerging metrics</td>
</tr>
<tr>
<td width="190">Gender pay gap
Gender balance
Female average pay
Male average pay
Equal pay
Gender bonus gap
Gender diversity
Women on the board
Gender representation
Board representation
Bonus gap</td>
<td width="187">Inclusion
Diversity
Equality
Fair pay
Work life balance
Inclusive recruitment
Black Lives Matter
LGBTQ</td>
<td width="190">Living wage
Ethnicity pay gap
Diversity pay gap
Retention rate
Parental leave
Return to work rate
Age representation
Diversity representation
Diversity and inclusion training</td>
</tr>
</tbody>
</table>
&nbsp;
NOTE: We use a combined 2021/22 pay gap quantitative metric which takes the data point most recently available.  This is due to companies publishing at different times.  If a company’s 2021 or 2022 metric cannot be sourced, the company is excluded from the analysis.

uk-financial-services-sector-gender-pay-gap-walk-vs-talk-report

UK Financial Services Sector Gender Pay Gap ‘Walk vs Talk’ Report

ESG is creating data nightmare for companies and investors alike
In 2015, FTSE 100 companies published an average of 8 corporate disclosure  documents a year. Fast-forward to 2022, and the same companies are now publishing 13 documents a year!
There are now over 60 different document types being published, of which more than 50 are ESG-specific. The onus on companies to disclose ever more ESG information is creating a data nightmare, for themselves and their investors.
&nbsp;
If ever there’s time to standardize ESG reporting, it’s now..
One of the core principles behind ESG reporting is transparency. As it stands, it appears that companies are doing their best to make their ESG disclosures available and accessible, but with no formal reporting standard, it’s a free-for-all.
There are no agreed boundaries on when,where, how and in what format to publish, let alone style vs content.The challenges this creates for anyone trying to evaluate ESG disclosures are that it’s onerous, manual, unpredictable and can feel like an endless task. This is leading investors to the reliance on the assessment of an ESG ratings agency, which creates its own issues of subjectivity and lack of transparency.
With the onus on business to get ESG ‘right’, it’s just as difficult for companies to know what to report on and how. ESG is a growing concept, but it remains immature, with a lot of conflicting views and different approaches being suggested every year. Creating a one-size-fits-all reporting guide is difficult, because of a range of factors such as company size, group structure, and the materiality of ESG issues being so different across sectors.
As a result, the disclosure of non-financial information by companies often feels like guess work. Some companies choose to include an ESG section in their Annual Report, some choose to prepare a separate Sustainability Report, or create an Integrated Report that contains financials and non-financials combined. In some cases, companies publish up to a dozen reports each year, often duplicating content across their documents.
There is also confusion around accessibility of documents once published. A great example is the CDP platform. Corporates are tasked with completing very detailed disclosures to the CDP and the content is uploaded to the CDP platform. From a corporate perspective they have done their job, but the CDP charges for access to this data. Information that’s assumed to be ‘published’ may not in reality be available to investment decision-makers.
&nbsp;
Lost in Translation
When looking at the company’s own publishing platform, their websites, the work put into gathering and collating ESG disclosure can be “lost in translation” when the website isn’t built with the accessibility of content in mind.
It’s sometimes obvious that websites are built to prioritise design and flash over usability. The use of moving parts and appealing visuals often gets in the way of finding the actual content therein. By being really sophisticated and snazzy, the websites end up being confusing, inconsistent, sometimes, built like a maze of links and pages that refer and redirect to each other. The issues are often exacerbated with big consumer companies, with websites geared to attract customers as well as provide information. Those often end up being content black holes.
Another issue we come across is that published documents can disappear as soon as the company decides to remodel their website, change domain, or even just update the content. There are often clues about historical reports peppered around company websites, like press releases detailing that a company has published their first Integrated Report, only to offer the reader a broken link.
&nbsp;
Out of Sight 
We also commonly find a large amount of ESG information, such as privacy policies, published on company websites as a web page in html format, with no option to download the content. There is a danger in trusting that information, as web pages tend not to be dated, and they can easily be retroactively amended, or even deleted.
Companies tend only to surface their latest reports clearly on their websites. Of course, the latest Sustainability Report is the most relevant, and as such, is promoted by the company. This can make finding previous years difficult, or even impossible. There are cases where the new report replaces the previous one on the relevant webpage, even sometimes using the same url. In these cases, a user may assume that the previous report never existed, though that wouldn&#8217;t be accurate.
Anyone looking for information on a specific ESG issue faces additional hurdles given there isn’t a universal format that companies follow to disclose non-financial information. Someone interested in water metrics for example could hope to find the data in any number of reports. Has the company decided to include the information as part of their Annual Report? Or have they published a Sustainability Report which should include water related disclosures? Did they opt for the publication of a more specific Water Report? Released an annual ESG Data document?
The issue with a lack of consistent format also means there isn’t consistent titling across companies or even years. It’s sometimes difficult to know what document includes what information. Companies themselves often change how they report year on year, making tracking targets and performance difficult.
&nbsp;
Neverending Story 
The painful reality for anyone looking to make decisions on this information is that it feels  impossible to know for certain that you have all the relevant information until you’d explored the entirety of the website, downloaded all the reports you’d found and then read them, or at least looked at their contents table, assuming they provided one.
For our team of expert collectors, it takes an average of 45 minutes per company to gather the relevant documents from a website. This is before they’ve been organised, usefully categorised and tagged so that the all important analysis on the content can start.
&nbsp;
ESG v2.0
Having gone through the tough process of uncovering yet one data disclosure barrier after another to sound ESG reporting and research, we have harnessed expertise and technology to help dispel the nightmare of analysing ESG data to support the next generation of ESG, whatever that may look like.
Our platform provides users with a central repository of company ESG disclosures, categorised by report type and ESG issue. Using machine learning, each report is split into sentences and passed through AI models. Each sentence is scored against 15 issue-specific classifiers, so users can filter and surface relevant sentences out of the noise.
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APPENDIX<a href="https://insigai.io/?attachment_id=2899" rel="attachment wp-att-2899"><img decoding="async" class="wp-image-2899 aligncenter" src="https://insigai.io/wp-content/uploads/2022/10/Insig-Table.jpg" alt="" width="687" height="87" srcset="https://i0.wp.com/insigai.io/wp-content/uploads/2022/10/Insig-Table.jpg?resize=200%2C25&amp;ssl=1 200w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/10/Insig-Table.jpg?resize=300%2C38&amp;ssl=1 300w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/10/Insig-Table.jpg?resize=400%2C51&amp;ssl=1 400w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/10/Insig-Table.jpg?resize=600%2C76&amp;ssl=1 600w, https://i0.wp.com/insigai.io/wp-content/uploads/2022/10/Insig-Table.jpg?fit=624%2C79&amp;ssl=1 624w" sizes="(max-width: 687px) 100vw, 687px" /></a>
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Report Types &#8211; 60 distinct report types
<table style="width: 97.75%; height: 1155px;" width="624">
<tbody>
<tr style="height: 53px;">
<td style="width: 209.219px; height: 53px;">
20-F
</td>
<td style="width: 203.672px; height: 53px;">Financial Statements</td>
<td style="width: 189.109px; height: 53px;">Privacy Policy</td>
</tr>
<tr style="height: 58px;">
<td style="width: 209.219px; height: 58px;">Annual report</td>
<td style="width: 203.672px; height: 58px;">Gender Pay Gap Report</td>
<td style="width: 189.109px; height: 58px;">Quarterly Results</td>
</tr>
<tr style="height: 58px;">
<td style="width: 209.219px; height: 58px;">Anti-Bribery and Corruption Policy</td>
<td style="width: 203.672px; height: 58px;">Governance Guidelines</td>
<td style="width: 189.109px; height: 58px;">Remuneration Policy</td>
</tr>
<tr style="height: 58px;">
<td style="width: 209.219px; height: 58px;">Audit and Risk Report</td>
<td style="width: 203.672px; height: 58px;">Governance Report</td>
<td style="width: 189.109px; height: 58px;">Remuneration Report</td>
</tr>
<tr style="height: 58px;">
<td style="width: 209.219px; height: 58px;">Climate Change Policy</td>
<td style="width: 203.672px; height: 58px;">Half-year Report</td>
<td style="width: 189.109px; height: 58px;">Social Impact Report</td>
</tr>
<tr style="height: 58px;">
<td style="width: 209.219px; height: 58px;">Climate Change Report</td>
<td style="width: 203.672px; height: 58px;">Health and Safety Policy</td>
<td style="width: 189.109px; height: 58px;">Sourcing/Supply Chain Policy</td>
</tr>
<tr style="height: 58px;">
<td style="width: 209.219px; height: 58px;">Code of Conduct</td>
<td style="width: 203.672px; height: 58px;">Human Rights Policy</td>
<td style="width: 189.109px; height: 58px;">Sourcing/Supply Chain Report</td>
</tr>
<tr style="height: 58px;">
<td style="width: 209.219px; height: 58px;">Code of Ethics</td>
<td style="width: 203.672px; height: 58px;">Human Rights Report</td>
<td style="width: 189.109px; height: 58px;">Stakeholder Report</td>
</tr>
<tr style="height: 58px;">
<td style="width: 209.219px; height: 58px;">Community Relations Policy</td>
<td style="width: 203.672px; height: 58px;">Integrated Report</td>
<td style="width: 189.109px; height: 58px;">Supplier Code of Conduct</td>
</tr>
<tr style="height: 58px;">
<td style="width: 209.219px; height: 58px;">Consumer Policy</td>
<td style="width: 203.672px; height: 58px;">Modern Slavery Statement</td>
<td style="width: 189.109px; height: 58px;">Sustainability Policy</td>
</tr>
<tr style="height: 58px;">
<td style="width: 209.219px; height: 58px;">Diversity Report</td>
<td style="width: 203.672px; height: 58px;">Other Environmental Document</td>
<td style="width: 189.109px; height: 58px;">Sustainability Report</td>
</tr>
<tr style="height: 58px;">
<td style="width: 209.219px; height: 58px;">Diversity Statement</td>
<td style="width: 203.672px; height: 58px;">Other Environmental Report</td>
<td style="width: 189.109px; height: 58px;">Sustainability Report Annex</td>
</tr>
<tr style="height: 58px;">
<td style="width: 209.219px; height: 58px;">Earnings Call</td>
<td style="width: 203.672px; height: 58px;">Other Financial Document</td>
<td style="width: 189.109px; height: 58px;">Sustainability Whitepaper</td>
</tr>
<tr style="height: 58px;">
<td style="width: 209.219px; height: 58px;">Ecology Policy</td>
<td style="width: 203.672px; height: 58px;">Other Governance Document</td>
<td style="width: 189.109px; height: 58px;">Tax Policy</td>
</tr>
<tr style="height: 58px;">
<td style="width: 209.219px; height: 58px;">Ecology Report</td>
<td style="width: 203.672px; height: 58px;">Other Governance Report</td>
<td style="width: 189.109px; height: 58px;">Tax Report</td>
</tr>
<tr style="height: 58px;">
<td style="width: 209.219px; height: 58px;">Employment Policy</td>
<td style="width: 203.672px; height: 58px;">Other Social Document</td>
<td style="width: 189.109px; height: 58px;">Waste Report</td>
</tr>
<tr style="height: 58px;">
<td style="width: 209.219px; height: 58px;">Environmental Policy</td>
<td style="width: 203.672px; height: 58px;">Other Social Report</td>
<td style="width: 189.109px; height: 58px;">Water Policy</td>
</tr>
<tr style="height: 58px;">
<td style="width: 209.219px; height: 58px;">Environmental Report</td>
<td style="width: 203.672px; height: 58px;">Other Sustainability Document</td>
<td style="width: 189.109px; height: 58px;">Water Report</td>
</tr>
<tr style="height: 58px;">
<td style="width: 209.219px; height: 58px;">ESG Data</td>
<td style="width: 203.672px; height: 58px;">Palm Oil Policy</td>
<td style="width: 189.109px; height: 58px;">Whitepaper (Environment)</td>
</tr>
<tr style="height: 58px;">
<td style="width: 209.219px; height: 58px;">ESG Report</td>
<td style="width: 203.672px; height: 58px;">Payments to Government Report</td>
<td style="width: 189.109px; height: 58px;">Wood and Pulp Policy</td>
</tr>
</tbody>
</table>

ESG-is-creating-data-nightmare-for-companies-and-investors-alike

ESG is creating data nightmare for companies and investors alike

esg-marketing-video-1

Video: ESG disclosures have exploded. But we’ve got you covered with everything at your fingertips.

esg-marketing-video-2

Video: Don’t spend hundreds of hours drowning in reports. Get everything at your fingertips.

According to our data, 70 per cent of the UK&#8217;s blue-chip firms were not meeting expectations on climate related disclosures. You can read our ESG Research Director, Diana Rose&#8217;s thoughts on this in the latest This is Money article below.
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<a href="https://www.thisismoney.co.uk/money/markets/article-11089707/Grocers-Tesco-Ocado-falling-short-green-promises.html">https://www.thisismoney.co.uk/money/markets/article-11089707/Grocers-Tesco-Ocado-falling-short-green-promises.html</a>

household-names-from-tesco-to-ocado-failing-to-give-enough-information-about-how-they-will-survive-in-a-greener-economy-

Household names from Tesco to Ocado failing to give enough information about how they will survive in a 'greener' economy

<a href="https://ifamagazine.com/article/lcaw2022-balancing-the-net-zero-ambition-with-the-greenwashing-tightrope-diana-rose/">https://ifamagazine.com/article/lcaw2022-balancing-the-net-zero-ambition-with-the-greenwashing-tightrope-diana-rose/</a>
Our ESG Research Director Diana Rose was quoted in IFA Magazine regarding her thoughts on the 4th annual London Climate Action Week and the increasing role of finance in achieving our net zero ambitions in the UK.
You can read the article in full using the link above.

balancing-the-net-zero-ambition-with-the-greenwashing-tightrope

Balancing the net-zero ambition with the greenwashing tightrope

ESG Research Director Diana Rose recently spoke with Elric Langton of Small Company Champion.
In his editorial for ShareScope, Elric looked at how ESG will impact lives, investments, and Corporates’ role in the implementation and consequences of attempts to bypass ESG. He also looked at how Insig AI is helping fund managers navigate and build wealth through the use of AI.
You can read Elric’s insights and Diana’s comments here:
<a href="https://knowledge.sharescope.co.uk/2022/06/29/how-important-is-esg-to-the-global-financial-institutions-and-global-business-and-are-we-ready/">https://knowledge.sharescope.co.uk/2022/06/29/how-important-is-esg-to-the-global-financial-institutions-and-global-business-and-are-we-ready/</a>

How-important-is-ESG-to-the-global-financial-institutions-and-global-business-and-are-we-ready

How important is ESG to the global financial institutions, and global business and are we ready?

tesla-kicked-out-of-s&p-ESG-index

Tesla kicked out of S&P’s ESG Index: What just happened

This case may be the first of its kind, but we all know it won&#8217;t be the last.  The SEC&#8217;s greenwashing taskforce is on a mission and this will be a wake up call to fund managers.  This particular case is around the claim that all stocks went through an ESG quality review as part of its investment process, which they apparently didn&#8217;t.
Overstating the ESG qualities of a fund to attract capital (ie greenwashing) is a very real problem which risks damaging not only the credibility of ESG, but its potential to actually get capital flowing in ways that will benefit society and help make the planet liveable for our children.
However, I must admit I don&#8217;t envy the regulators trying to police ESG space.  It often feels like it&#8217;s going through the tricky teenage years and right now they&#8217;re having a pretty wild party.  What is an &#8216;ESG quality review&#8217; in the first place?  Every fund will take a different approach to this process, but it&#8217;s guaranteed there will be subjectivity and maybe even smoke and mirrors.  What can bring integrity back to ESG funds, (aside from telling the truth about whether or not these quality reviews are being done at all) is oversight and transparency on the process; consistency and due diligence in the method.
Regulation is coming down the pipeline soon to crack down on the freeloaders at the party.
At Insig AI, we speak to a lot of asset managers anticipating regulation and striving for best practice.  They talk about the time pressures to turn around ESG analysis, and costs and expertise overheads of doing the research they want to on stocks as limiting factors.  This is why we&#8217;ve designed AI tools to take the pain out of doing due diligence on your portfolio&#8217;s public disclosures on ESG with transparency and consistency &#8211; to bring integrity to the ESG review process so that our clients aren&#8217;t looking over their shoulder for the greenwashing police.

sec-issues-first-greenwashing-fine-to-an-investment-adviser

SEC issues first 'greenwashing' fine to an investment adviser

Our disclosure research tool lets you rapidly discover actionable insights about companies’ ESG disclosures.

Fast insights

You’ll be able to develop a deeper understanding of target companies and initiate evidence-based investment strategies.

Deeper analysis and engagement

You can rest assured knowing your due diligence is based on a rigorous methodology and robust data.

Rigorous methodology

With the ability to pinpoint relevant information at the sentence level, your analysis and decisions are both auditable and transparent.

Auditable and transparent

Our simple-to-use tool gives you instant access to a comprehensive database of all relevant ESG disclosures. We make it easy to unpick what a company is actually saying – and what it’s not saying – about ESG. Filter through the noise of wordy reports to uncover trends, understand a company’s direction of travel, and benchmark against peer groups.

When research is no longer a bottleneck, you can make the most of the ESG investment opportunity. Your analysts can drill down into the details and give you quality insights quicker.  So you can make better evidence-based decisions. And look each of your stakeholders in the eye knowing you have conducted the most thorough analysis possible.

As stakeholder scrutiny tightens, you can bring consistency, structure and transparency to your ESG due diligence. Never again miss a development and never again fear being caught out by regulatory change.

Gain a competitive edge by making better evidence-based decisions, quickly, easily and with complete confidence.

With our ESG Disclosure Research Tool, you will gain a competitive edge. You’ll make better decisions, quickly, easily and confident in the knowledge you’ve got everything covered.

We employ a range of cutting edge tools as well as extensive reviewing and auditing to ensure our data quality is class-leading.

Quality

We build our datasets ‘customer-first’ resulting in highly intuitive and thoughtful products which rapidly deliver value to our customers.

Value

We are a specialist provider: offering the highest quality customer service and the tightest feedback loops is extremely important to us.

Service

Our data solutions are trusted by clients who use them in live production environments trading billions of dollars daily.

Trust

A hybrid human-machine process allows for highly accurate identification of elements including management discussion and analysis, risk disclosures, guidance and speaker information.

The data has been designed with the quantitative investor in mind, key features include long and bias-free history, point in time entity identifies, full versioning of all changes and easy access via AWS S3.

Text is manually labelled using a custom taxonomy to enable nuanced analysis and like-for-like text comparison. Text is extracted from underlying PDF filings (annual and interim reports) and unwanted elements are identified and removed.

We provide company filings at your fingertips. Filing DB is the first database of extracted and structured text from global company filings and is optimised for investors.

Our team comprises of data, technology and ESG experts enabling us to engage the necessary resources to solve any client issue.

Joined Up Expertise

As such we are able to develop proprietary ESG tools to give our clients deeper insights into their portfolios.

Insightful

We assist our clients in using these ESG insights to engage target companies and develop evidence-based strategies. 

Engagement

With the ultimate goal being to help our clients make sustainable ESG investment decisions through AI and data solutions.

Responsible Investment

We deliver products, such as NLP scoring and bespoke ESG ratings metrics, to enhance investment strategies; enabling asset managers to transition to a data-centric business model, advance and scale their analytical potential and gain value, speed and strategic leverage.

Leveraging our data science expertise has enabled us to deliver AI solutions to clients to solve issues such as portfolio optimisation and fund constraints.

Through our cloud data infrastructure we are able to host bespoke web applications and integrate third party tools to deliver value for our clients.  

We are able to deliver bespoke tools that solves our clients unique needs and aligns with their investment approaches. We are able to organise different types of data from 3rd party providers and proprietary sources around a client-lead framework to generate decision-useful outputs.

Our tools support ESG analysts, corporate advisers and investment managers in operating more efficiently

Our solutions are designed to compliment in-house processes and bespoke frameworks

We apply principles of best practice in ESG investment and transparency to help our clients gain a sustainable edge

Our solutions will support compliance to shifting regulation; they can also be applied disruptively to innovate and drive change

Deliver your sustainable investment edge through future-proof AI and ESG data solutions

Clients and Affiliations

Master ESG data and unlock value

Sustainable edge

Future proofing

Trusted partner and consultant

Fast implementation, faster results

Our solutions

Bespoke Data Science Solutions

Our solutions

ESG Disclosure Research Tool

Our solutions

Filing DB

Our solutions

Bespoke Data Science Solutions

Our solutions

ESG Disclosure Research Tool

Company news and views on the market

Building a best practice ESG risk scoring system for private entities

UK Financial Services Sector Gender Pay Gap ‘Walk vs Talk’ Report

ESG is creating data nightmare for companies and investors alike

Video: ESG disclosures have exploded. But we’ve got you covered with everything at your fingertips.

Video: Don’t spend hundreds of hours drowning in reports. Get everything at your fingertips.

Household names from Tesco to Ocado failing to give enough information about how they will survive in a 'greener' economy

Ready to find out more?