06 August 2019
Insight Investment has "pioneered new environmental, social and governance approaches to fixed income" over the past year, including two new ESG risk models.
The London-based investment manager claims its climate-risk analysis model focused on corporate bonds is an industry first.
It ranks 1,900 corporate issuers – both investment grade and high yield – according to how they manage climate-related risks and opportunities.
Insight has about £648 billion ($790 billion) of assets under management – of which about £12.4 billion is in strategies that take ESG issues into account, it claims.
Meanwhile, Environmental Finance awards judges commended Insight's country sustainability risk model for bond portfolios, which they said "is a great innovative addition to its product and service offering".
Using this model, Insight generates two sustainability ratings for each country: an overall ESG rating of between one and five; and an ESG momentum score. The latter provides an indication of a country's improvement or deterioration with regard to ESG factors over a six-year period. It is designed to help to identify how countries' susceptibility to ESG risks evolves over time.
Insight said both models feed into its "extensive" engagement programme with companies.
Joshua Kendall, senior ESG analyst at the firm, said more than 50% of its 1,300 engagements in 2018 were focused on ESG issues.
In 2019, Insight plans to introduce a new engagement platform "to enable a more efficient process for recording, monitoring and reporting engagement activity", Kendall said. This new system will provide credit and ESG analysts a central resource in which to examine historical engagement activity.
It is also developing proprietary ESG data across its credit universe that will help it conduct research and "fill in the gaps in third-party ESG data".