Putting Principles into Practice: Insight calls on banks to move global economy to more sustainable footing

Insight Investment, a leading global investment manager, has written to 28 banks across developed and emerging markets urging them to consider green bond issuance. It calls on them to support and promote the mobilisation of environment-focused debt and loans, which it believes will help shift the global economy to a more sustainable path.
Insight, a founding signatory to the UN-supported Principles for Responsible Investment (PRI) and pioneer of environmental, social and governance  investing in fixed income, said in its latest report on responsible investment – Putting Principles into Practice – that it added 43 green bonds to client portfolios in 2017, more than in any previous year. Adrian Grey, Chief Investment Officer – Active Management, Insight Investment said: “Green bonds can be effective in directing finance towards industries and businesses that are adapting to a low-carbon economy. We are calling on banks to consider green bond issuance as a means for them to help finance the transition to a low-carbon future.  They have a critical role to play in supporting nascent and established businesses, helping them to build a strong market position.”
Putting Principles into Practice also describes a new ranking system developed by Insight which it considers to be an investment industry first for assessing how well fixed income corporate credit issuers are managing climate change-related risks. The ‘climate risk model’ – created for institutional investors to use in monitoring the transition of corporates to a low-carbon economy – is a ranking model which assesses the disclosures of 1900 corporates. It found the general quality of fixed income disclosures to be very poor, despite pockets of excellence. Grey said: “At this point most companies are simply not providing enough information for investors to properly assess the risks associated with climate change. We are however hopeful that this situation is about to rapidly change in line with the increased focus on these issues from investors and regulators.”
Insight has also launched the Insight Sustainable Euro Corporate Bond Fund which aims to achieve both a social and environmental impact by allocating to companies with superior ESG profiles. It also seeks to have a significantly lower carbon intensity footprint than index levels and engages with the management teams of companies with deteriorating ESG profiles.