Brendan Murphy

Insight Investment’s outlook for 2026 is one of caution with select opportunities. Many credit markets look expensive, with spreads leaving little room for shocks, but persistent investor demand continues to provide support.

We see better value in areas such as local-currency emerging market debt and parts of secured finance, while investment grade, high yield and municipals call for careful credit selection.

Currency markets, meanwhile, remain shaped by U.S. policy and fiscal dynamics.

Investment grade credit

With spreads remaining as low as they are, we have reduced our perspective on investment grade credit to neutral overall, with valuations being tight, offset by a modestly positive cyclical position, although the strength of that cyclical support may be more tenuous than it previously was.

Overall, we are exercising caution in our credit positioning as we do not believe that spreads at current levels offer sufficient risk premium to cover for any large shock, geopolitical or otherwise, that may occur.

However, we recognise that investors remain hungry for yield, with higher government bond yields underpinning that appetite. From a technical standpoint, as long as the investor demand remains as strong as it has been, it is difficult to envisage a material widening of credit spreads from the current lows.

One feature we remain aware of is that swap rates have fallen through government yields lately, which means that credit may appear to be more expensively valued when viewed against government bonds, than when one views it against swap rates.

High yield credit

Similar to the investment grade market, high yield (HY) valuations appear expensive to us, with spreads as tight as they are. However, that negative is being offset by a modestly positive, though potentially fragile, cyclical driver.

We believe investors should not discount the improvement in credit quality that has taken place in HY over time. All other things equal, such an improvement would naturally precipitate a reduction in the market-wide level of credit spread.

We retain a preference for short duration areas of the HY market as we believe these offer less vulnerability to what we see is the most likely type of shock, namely an unexpectedly sharp setback in economic activity.

We continue to see relatively strong demand from investors wanting to lock in attractive yield levels, which helps us retain an optimistic stance for the asset class.

Emerging market debt

We currently view local currency emerging market (EM) debt favourably for several reasons.

We believe a US rate cut will make local rates more appealing given an observed correlation between US interest rates and local currency debt.

We are also seeing stronger flows for emerging market debt. Conditions for emerging market corporate debt have improved, partly as structural weakness in the US dollar is a tailwind for all assets. US policy and trade uncertainty appears to be encouraging investors to allocate less to US assets and more to regional emerging markets. Generally, spreads are tight partly as net supply is negative.

We see more value from high yield parts of the EM markets over investment grade.

Secured finance (structured credit)

Mortgage-backed securities (MBS) have caught up to other high quality spread sectors recently. A key factor was remarks made by Fed chair Jerome Powell at Jackson Hole indicating that rates would be cut soon.

Spreads have tended to be relatively steady recently, but as they have moved close to 30bp we believe that could warrant a reduction in the prevailing overweight position. Conversely, if spreads widen to 40bp, we will likely view that as an opportunity to increase our weighting.

Considering US Treasuries, if 10-year yields were to rise we would not view that as being supportive for MBS.

Looking ahead to the first quarter of 2026, we believe a relaxation of Basel II capital rules for banks would likely lead to increased purchases of MBS.

US municipal bonds

In our view, municipal credit conditions remain solid, supported by very high reserves and cash balances that have accumulated over the last few years.

Some of the executive actions taken by the Trump administration could have negative credit implications across large segments of public finance.

Tariffs and reductions in the federal workforce could slow economic growth, which could have a negative impact on income and sales tax receipts. At the same time, cuts in federal spending in areas such as Medicaid, “green” infrastructure initiatives, and federal disaster relief could add to pressure on state/local budgets.

Uncertain changes to federal policy could drive heightened volatility in credit conditions ahead. We believe a more cautious approach to credit selection would be prudent, with an increased emphasis on balance sheet strength, liquidity and operating flexibility.

Currencies

From a structural perspective, we believe there are a number of negative influences capable of putting pressure on the USD.

• First, the USD is seen as being moderately expensive and is not supported by the outlook for fiscal policy and apparent attacks on the independence of the Fed, all of which could also help undermine the perception of American exceptionalism.
• In addition, we believe the market is long US assets with limited currency hedging in place.

However, real rates in the US are relatively high, which is supportive, and they may not decline significantly unless there is real evidence of economic damage taking place. While a weaker USD may be considered beneficial for US growth, if it prevents inflation declining quickly enough, the Fed may not feel able to cut rates as quickly as the US administration would like.

Balancing caution with opportunity

Fixed income investors face a market where valuations leave little room for error, making caution essential. Yet opportunities remain in local-currency emerging market debt, selected secured finance, and shorter-duration high yield. With spreads tight across investment grade, high yield, and municipals, disciplined credit selection and focus on balance-sheet strength are critical.

A cautious stance on valuations, paired with readiness to act when dislocations arise, is the most effective way to navigate the current fixed income environment.

By Brendan Murphy, Head of Fixed Income, North America

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Amy Clements

Insight Investment, an A$1.3trn^[1] global institutional leader in asset management, is responding to increased demand from Australian institutional investors for bespoke fixed income and risk management solutions.

Amy Clements, Head of Distribution, Australia and New Zealand, said the business was seeing clear demand from superannuation funds, family offices and private wealth firms for sophisticated and tailored strategies to strengthen resilience and capture long-term opportunities. “Asset owners are seeking strategies that span fixed income, risk-managed overlays and outcome-oriented portfolios,” she said.

Insight has responded to the increasing demand by appointing David Lee as Business Development Associate. David has a deep understanding of the superannuation industry, having previously held roles in investment and risk functions at Qantas Super and Commonwealth Superannuation Corporation.

“Insight is known for building close and cooperative partnerships with clients,” said Clements. “David’s appointment reinforces Insight’s role as a leading partner in delivering institutional-grade fixed income and risk management solutions. His technical expertise and markets experience will help support the evolving needs of asset owners and enhance our ability to meet this rising demand.”

Insight employs 277 investment professionals globally and has 1,115 staff in total1. Assets under management in Australia have increased by 85% to A$69bn since December 20231.

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Notes:
[1] As at 30 June 2025. Assets under management (AUM) are represented by the value of cash securities and other economic exposure managed for clients. Where the methodology defines it, some asset reporting focuses on cash securities only. Figures shown in AUD. FX rates as per WM Reuters 4pm spot rates. Reflects the AUM of Insight, the corporate brand for certain companies operated by Insight Investment Management Limited (IIML). Insight includes, among others, Insight Investment Management (Global) Limited (IIMG), Insight Investment International Limited (IIIL), Insight Investment Management (Europe) Limited (IIMEL) and Insight North America LLC (INA), each of which provides asset management services.

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Peter Bentley

The Fed, constrained by tariff-driven inflation, should deliver a modest rate cut in late 2025 before embarking on a more decisive easing cycle in 2026 in response to economic slowdown.

Until we have greater visibility on the outlook, and given spreads are relatively tight, we believe a defensive stance remains appropriate in credit. Within that framework, we continue to identify opportunities in less cyclical sectors like utilities and telecommunications providers, and by exploiting regional divergences. For example, Europe’s fiscal expansion and China’s stimulus are expected to support regional growth, offering diversification opportunities. Our investment regime framework points to a more challenging period ahead and has been guiding us to position accordingly. Although spreads have tightened, yields remain more attractive than a few years ago.

Focus on quality and resilient cashflows

This leaves us with a bias towards investment grade credit and government bonds within those mandates where we have the flexibility to take a more defensive view.

But that doesn’t mean we don’t see opportunities to add value. Less cyclical sectors such as utilities offer attractive spreads, and relative insulation from global tariff risks, as they typically operate within domestic markets. For these companies, the primary concern is of a broader economic slowdown. This can be mitigated by focusing on companies with predictable and resilient cashflows that can typically withstand economic volatility. Telecommunications providers can exemplify this resilience, as consumers prioritise mobile services over other expenses, ensuring steady demand even during economic downturns.

Emerging market franchises offer spread premium

In the hunt for strong domestic franchises with tariff resilience, it may also be the perfect time to broaden the search. With the appropriate expertise, many such opportunities can be found in the emerging world. These companies, which issue debt in US dollars, often dominate their domestic market but their developing market status means they trade at a yield premium. Telecommunications providers in Latin America serve as a prime example for those seeking to take advantage of the spread premium available in lower-rated credits.

European fiscal expansion creates regional tailwinds

There are also opportunities at an inter-regional level. The proposed relaxation of the German debt brake to allow greater defence spending, alongside a new €500bn infrastructure investment fund, is expected to boost growth across the eurozone. Arguably, fiscal largesse has been a critical driver of US exceptionalism in recent years, and Europe now seems ready to embark on a significant fiscal expansion. This is expected to underpin European growth and the outlook for a range of companies operating within the region.

Investors should be tactical and selective when re-risking

As the outlook clears, we may well start to tactically increase our allocation to lower-rated credits again. However, this is not the time to allocate to weaker CCC-rated credits; these issuers have the greatest leverage and will be most exposed to any period of low or negative growth.

This tactical shift will need to be considered in the context of broader macro conditions, including the evolving outlook for currency markets and rate curves.

Against this backdrop we expect to see a weaker US dollar and steeper yield curves. Selectivity and flexibility will be critical in credit markets. Our current positioning reflects a cautious stance, favouring high-quality issuers and defensive sectors with predictable cashflows. Yet we remain alert to opportunities – whether in resilient domestic franchises, undervalued BB-rated credits, or regions poised for fiscal-driven growth, such as Europe.

By Peter Bentley, Global Head of Fixed Income, Insight Investment

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Credit rating downgrades were scarce last year, when only six US issuers transitioned from investment grade to high yield, a record low volume of $7bn<sup<[1]. We anticipated a sharp turnaround, projecting a reversion to the annual average run-rate of $50bn. We were not alone; the median investment bank forecast is $45bn for 2025<sup<[2].

It did not take long for downgrades to materialise. In February, there were two of the three largest downgrades since the pandemic: the downgrades of Nissan and Celanese transferred $16bn to high yield indices, amounting to more than double last year’s total volume.

More downgrades could be on the way

We think a lot more downgrades could be on the way. Historically, 80% of fallen angels have been downgraded from BBB-, a rating category that currently represents a $700bn<sup<[3] market in the US. A closer look at this segment reveals warning signs.

Interest coverage ratios have started to diverge between mid-BBB issuers and their BBB- counterparts. Approximately $200bn of BBB- issuers already carry a high yield rating from one of the rating agencies, and a similar amount have two negative outlooks from them<sup<[4]. We estimate around $325bn are priced at wider credit spreads than comparable BB-rated high yield bonds.

We think this leaves several issuers potentially on the brink of a downgrade, and an increasingly uncertain economic outlook could cause rating agencies to pull the trigger on any number of them. Although this may seem like a sign of bad market health, this development could be an opportunity for investors.

Investors can turn downgrades to their advantage

When large bond issuers are downgraded from investment grade to high yield, it can trigger predictable, and potentially exploitable, volatility.

In the US, passive investment grade corporate bond strategies manage $1.5trn of assets⁴. When any of their holdings transition from investment grade to high yield, they typically become ‘forced sellers’ of the bonds as these strategies seek to track their benchmarks. This has often resulted in waves of simultaneous selling.

This can depress bond valuations to potentially unjustified levels, presenting active investors with opportunities on which to capitalise.

We analysed every US bond that was downgraded from investment grade to high yield since the launch of the Bloomberg US HY Fallen Angel 3% Issuer Capped Index. On average, we found that these bonds suffered 10% losses over the six months up to their index transition, and then recovered by 11% on average over the subsequent 12 months (see Figure 1).

The takeaway is that buying bonds immediately upon a downgrade to high yield has historically been a winning strategy. Ahead of a potential cascade of downgrades, it could be worth positioning to catch them. We think the opportunity is enhanced by a muted default outlook, given our view of fundamentals and structural high yield market changes.

A dedicated fallen angel strategy may be the best way to exploit the opportunity

In our view, a flexible active strategy that offers a manager the latitude to retain issuers in the event of a downgrade can help investors retain value in the bonds.

However, to make the most of the opportunity we believe a dedicated allocation to fallen angels is worth considering. The most effective way to do so, in our view, is via a systematic approach that aims to minimise trading costs, invest broadly across the market and target outperformance.

By Syed Zamil, Senior Investment Strategist

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Notes:
[1] Bloomberg, Insight, March 2025. Since the launch of the Bloomberg US High Yield Fallen Angel 3% Cap Index in 2005.
[2] Goldman Sachs, Barclays, Bank of America, Morgan Stanley, December 2024
[3] Bloomberg, Insight, March 2025
[4] Bloomberg, Insight, December 2024. Simple average of cumulative spread return for each securities in Fallen Angel index since 10/2004. (duration adjusted). When bond is downgraded, then upgraded within 12 months, the first downgrade is used in the analysis. Past performance is not indicative of future results. Investment in any strategy involves a risk of loss which may partly be due to exchange rate fluctuations.

This document is for use by journalists and media professionals only. This document is not investment advice.  Unless otherwise attributed the views and opinions expressed are those of Insight Investment at the time of publication and are subject to change. Past performance is not indicative of future results. Investment in any strategy involves a risk of loss which may partly be due to exchange rate fluctuations.  This document may not be used for the purposes of an offer or solicitation to anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. Insight Investment Management (Global) Limited is exempt from the requirement to hold an Australian financial services licence under the Corporations Act 2001 in respect of the financial services provided to wholesale clients and prospects; and is authorised and regulated by the Financial Conduct Authority (FCA) under UK laws, which differ from Australian laws. Issued by Insight Investment Management (Global) Limited.  Registered office 160 Queen Victoria Street, London EC4V 4LA. Registered in England and Wales. Registered number 00827982. Authorised and regulated by the Financial Conduct Authority. FCA Firm reference number 119308.  © 2024 Insight Investment. All rights reserved.

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Emmanuel Faber

The University of Oxford has announced the winners of the ‘Insight Investment – University of Oxford Prize for Greening Finance’, the preeminent prize for this important area of research and practice.

The winners were announced at the World Forum on Enterprise & the Environment 2024, Oxford University’s flagship event on enterprise and the environment. The annual Greening Finance Prize (the ‘Prize’), established through a generous endowment provided by Insight Investment, a A$1.3trn^[1] global asset and risk manager, recognises two categories:

2024 Outstanding Service
Individuals or not-for-profit organisations who have provided outstanding support for the furtherance of sustainable finance
Winner: Emmanuel Faber, Chair of the International Sustainability Standards Board, and formerly the Chair and Chief Executive Officer of Danone.

2024 Outstanding Research
Research that helps society better understand how environmental change influences finance and investment, and how economic and financial systems can contribute to achieving global environmental sustainability.
Winner: Professor Rob Bauer, Professor of Finance (Chair of Institutional Investors) at Maastricht University and holder of the Elverding Chair on Sustainable Business, Culture and Corporate Regulation.

Emmanuel Faber said: “I am grateful to the University of Oxford’s Sustainable Finance Group for recognising how sustainability is at the core of a well-functioning economy. My experience with the incredible people at Danone showed how much leadership is a collective dynamic.

“I am honoured to accept this award on behalf of the many brilliant colleagues at the IFRS Foundation, our partners and the broader ecosystem – who are working to bring transparency on value chains and time horizons that are critical for urgently-needed more resilient economics.

“Since the ISSB was created at COP26, jurisdictions accounting for around 55% of global gross domestic product have started to introduce ISSB Standards in their regulatory frameworks. More are coming. They will future-proof capital markets and the economy they support.”

Professor Bauer said: “I am truly humbled and deeply honoured to receive this prestigious award. It is a testament to the hard work and dedication of everyone involved, including co-authors and partners in the pension and investment world. Hence, I share this recognition with those who inspired and supported me throughout the years. It motivates me to keep striving for a meaningful impact in our field.”

Abdallah Nauphal, Chief Executive Officer of Insight Investment, said: “While sustainability practices have evolved to become a significant consideration in long-term investment decision making, research linking finance and sustainability topics is still in its infancy. To better understand how decisions made by the investment industry are likely to influence the financial and environmental outcomes of tomorrow, investors need research incorporating rigorous financial analysis. The research prize recognises quality academic work but also highlights the urgent need for closer collaboration between investors and academics to provide evidence that can increase the resilience of the financial system.”

Dr Ben Caldecott, Chair of the Prize Panel and the founding Director of the Oxford Sustainable Finance Group at the University of Oxford, said: “The winners have not only advanced our understanding of how environmental challenges intersect with finance but also offered practical solutions that will shape more resilient and sustainable financial systems. At a time when the world faces unprecedented environmental and economic challenges, recognising and supporting such ground-breaking research and leadership is critical. I am deeply inspired by the contributions of all the recipients and excited to see how their work will influence the future of finance.”

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Notes:
[1] As at 30 June 2024. Assets under management (AUM) are represented by the value of cash securities and other economic exposure managed for clients. Figures shown in AUD. FX rates as per WM Reuters 4pm spot rates. Reflects the AUM of Insight, the corporate brand for certain companies operated by Insight Investment Management Limited (IIML). Insight includes, among others, Insight Investment Management (Global) Limited (IIMG), Insight Investment International Limited (IIIL), Insight Investment Management (Europe) Limited (IIMEL) and Insight North America LLC (INA), each of which provides asset management services. * Includes equities and real assets.

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Rugby Kliousis

Insight Investment, a leading global fixed income, multi asset and currency investment manager with A$1.3trn under management,1 has expanded its team in Australia with the appointment of Rugby Kliousis as Business Development Manager.

Rugby will continue to build Insight’s institutional business in Australia and deepen relationships with financial advisers and family offices. He will drive awareness of Insight’s multi asset, currency, and investment grade and high yield fixed income strategies, including an innovative High Income strategy launched in Australia in December 2022 and rated Recommended by Zenith.2 Rugby joins from Shed Enterprises where he had responsibilities across sales, investor communications and fund manager partnerships.

Angus Woolhouse, Global Head of Distribution for Insight, said: “We are pleased to welcome Rugby. Insight has been operating in Australia for more than 30 years during which time our business in this highly sophisticated market has grown to A$41.7bn. We have built strong client relationships based on a clear strategy – to help clients maximize the certainty of achieving their goals by focusing on managing investment outcomes.”

Insight operates across the globe with a presence in the US, UK, Ireland, Germany, Japan and Australia. A subsidiary of global financial services company The Bank of New York Mellon Corporation (“BNY”) (NYSE:BK), Insight employs 280 investment professionals globally and has 1,124 staff in total.

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There are three categories:

• Outstanding Research – recognising outstanding research that helps society better understand how environmental change influences finance and investment, and how economic and financial systems can contribute to achieving global environmental sustainability.
• Best Green Finance Fixed Income Paper – this category, new for 2024, is for specific research papers that examine the role environmental sustainability plays in fixed income investing. It seeks to recognise research that demonstrates rigorous financial analysis and which has practical applications for investment managers.
• Outstanding Service – recognising the individuals or not-for-profit organisations who have provided outstanding support for the furtherance of green finance.

For the Green Finance Fixed Income Paper category, the Prize Panel are encouraging submissions for research in areas including, but not limited to, the following: ESG factors that are financially material for fixed income investors; instrument versus portfolio-level financial performance; the role of labelled bond issuance; bondholder engagement; asset class distinctions (e.g. corporate versus sovereign investments); bond duration and investment time horizons and their relevance to ESG; and approaches to management of data/disclosure gaps.

Nominations

Oxford University works with nominating partner organisations, selected based on their expertise and networks. The organisations play a key role in ensuring nominations are of a high calibre and reflect the international scope of the Prize. They include:

• Carbon Disclosure Project (CDP)
• Ceres
• CFA Institute
• European Leveraged Finance Association (ELFA)
• Glasgow Financial Alliance for Net Zero (GFANZ)
• Global Research Alliance for Sustainable Finance and Investment
• Green Finance Institute
• International Capital Market Association (ICMA)
• Impact Investing Institute
• The Network of Central Banks and Supervisors for Greening the Financial System (NGFS)
• The Investment Association
• One Planet Sovereign Wealth Fund Initiative (OPSWF)
• Science-based Targets Initiative (SBTI)
• UK Sustainable Investment and Finance Association (UKSIF)
• UN Environment Programme Finance Initiative (UNEP FI)
• UN Principles for Responsible Investment (UN PRI)
• Prizes and judging

Prize money of up to £50,000 is available annually across the Prize categories, split at the discretion of the University. The Prize is only open to individuals and not-for-profit organisations.

A panel chaired by Dr Ben Caldecott, Director of the Oxford Sustainable Finance Group and Director of the UK Centre for Greening Finance & Investment, will review the nominations and award the prize. The prize will be awarded in a ceremony at the University of Oxford with the winners given the opportunity to give a public lecture at the University. Judges for 2024 include:

• Rob Bauer, Professor of Finance, Maastricht University
• Andrew Clare, Professor of Asset Management, Bayes Business School of City, University of London\
• Bob Eccles, Visiting Professor, Saïd Business School, University of Oxford
• Jessica Fries, Executive Chair, Accounting for Sustainability
• Nando van Kleeff, Senior Programme Manager, Laudes Foundation
• Mindy Lubber, CEO and President, Ceres
• Sabine Mauderer, Chair, Central banks and Supervisors Network for Greening the Financial System (NGFS)
• Mette Morsing, Director of the Smith School of Enterprise and the Environment, University of Oxford
• Colin Mayer, Emeritus Professor, Saïd Business School, University of Oxford
• Stephanie Pfeifer, CEO, Institutional Investors Group on Climate Change
• Peter Tufano, Baker Foundation Professor, Harvard Business School
• Dariusz Wójcik, Professor of Financial Geography, National University of Singapore
• Investing for the future

Abdallah Nauphal, Chief Executive of Insight Investment, said: “Investment managers urgently need a broad and deep bank of empirical evidence to support rational investment decision-making that can deliver long term sustainable outcomes for investors. Scientific scrutiny demonstrating rigorous financial analysis is crucial to separate investment realities from the rhetoric. Investment quality depends on academic work that has practical application in portfolio management.”

Dr Ben Caldecott said: “Academic research is essential for the proper functioning of financial markets. Researchers play an important role not only in innovation, but also in providing accountability and transparency within financial markets. The second iteration of the prize will be an opportunity to celebrate outstanding contributions made by individuals and not-for-profit organisations to greening finance and the financial system.”

​Applications for the 2024/5 prize close on Friday, 24th May 2024 and judging takes place in the second quarter.

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2024: Navigating a complex landscape

Complexity and volatility are key elements of the 2024 investment landscape. The most important thing to look out for in 2024 is the next step of the interest rate cycle. Markets are anticipating a considerable amount of easing in 2024 and 2025 following an extremely aggressive hiking cycle through 2022 and 2023.

Thus far, interest-rate cycles have been relatively uniform across the developed world, but we see greater divergence ahead. Australian households have historically been more sensitive to movements in interest rates than some developed counterparts, for example the US. This will become increasingly apparent as the long and variable lags from changes in monetary policy begin to fully impact these economies.

Rate cut predictions: Are markets overly optimistic?

Insight expects inflation to remain above target levels and therefore that the neutral interest rate will remain higher in coming decades. Markets may be overly optimistic in expectations of rate cuts, and some are likely to face disappointment, but bond markets don’t need aggressive rate cuts to perform well.

In this economic environment characterised by high interest rates, government bonds are once again being recognised for their diversification properties. It is possible that central banks may ease later and more gradually than is currently being priced in by markets and shorter-duration positions could leave a

portfolio exposed to pricing risks. However, in our view, bonds in longer maturities appear close to fair value and offer attractive absolute yields, which can be further enhanced by investments in investment grade credit.

Bond markets: Asia is the place to watch

The economies of China and Japan are likely to play a role in the direction of global bond markets in the years ahead. China has been a key exporter of disinflation and with a producer price index in negative territory, investors will be watching for a potential further disinflationary pulse from China, albeit the impact of this exported disinflation is likely to be much smaller than it has been in the past. In Japan, if the central bank hike rates the yield curve will likely steepen, potentially attracting the attention of domestic investors who have deployed considerable capital around the world in the search for yield. Global fixed income markets have done little to price the risk of a significant return of capital to Japan and may therefore be impacted by this shift. This could become a key theme in 2024.

Global credit: Opportunities for alpha in a volatile world

Credit cycles have turned. We are now living in a more supportive environment for credit spreads, leaving behind below-trend growth, above-target inflation, and tight monetary policy. Volatility is presenting an opportunity for alpha in active strategies, making risk assets, and by extension credit markets, more attractive. Although spreads are no longer cheap, the absolute level of yields have risen dramatically over recent years, while the risks needed to generate target returns have fallen substantially.

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“Insight’s mission is to prioritise its clients’ certainty of meeting their investment objectives,” said Bruce Murphy, Director – Australia and New Zealand at Insight Investment. “We aim to provide investment solutions that deliver quality and excellence by managing financial and, where mandated to, non-financial risks and opportunities, while operating to high ethical and professional standards. We believe that environmental, social and governance (ESG) factors can be important drivers of investment risk and so must be understood when managing portfolios.”

Insight undertook 1,178 engagements in 2022 with debt issuers across 78 countries, including 38 emerging markets. There were 140 dedicated ESG engagements, including a focus on climate change, water management and diversity and inclusion, and Insight further expanded its water risk research, aimed at identifying companies in the relevant Insight portfolios that have high water dependencies.

The report gives case studies of engagements, such as discussions where Insight has held a company accountable for its treatment of employees, a long-term engagement with a Singaporean investment company on climate disclosures and another engagement highlighting the governance issues driving a beverage company’s poor ESG score.

A summary of how Insight engages in active dialogue with companies and governments is also available in this this short video presented by Rhona Cormack, Senior Stewardship Analyst at Insight.

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[1] Responsible Stewardship at Insight: 2023 Report,

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Abdallah Nauphal

The University of Oxford has announced a new research prize for greening finance, established with an endowment from Insight Investment, a A$1.2trn1 global asset and risk manager.

The ‘Insight Investment – University of Oxford Prize for Greening Finance’ will become the preeminent prize in a vital new area of research and practice. The prize will have two categories, both open to distinguished individuals and not-for-profit researchers or research teams.

The first category is for outstanding research contributions that help society better understand how environmental change influences finance and investment, and how economic and financial systems can contribute to achieving global environmental sustainability.

The second is to recognise outstanding service from individuals or not-for-profit organisations who have made a special contribution to the furtherance of greening finance.

Nominations

Oxford University is now receiving nominations for each category. Nominating partner organisations, selected based on their expertise and networks, will play a key role in ensuring that nominations are of a high calibre and reflect the international scope of the Prize. Nominating partner organisations include:

• Carbon Disclosure Project (CDP)
• Ceres
• CFA Institute
• European Leveraged Finance Association (ELFA)
• Glasgow Financial Alliance for Net Zero (GFANZ)
• Global Research Alliance for Sustainable Finance and Investment
• Green Finance Institute
• International Capital Market Association (ICMA)
• Impact Investing Institute
• The Network of Central Banks and Supervisors for Greening the Financial System (NGFS)
• One Planet Sovereign Wealth Fund Initiative (OPSWF)
• Science-based Targets Initiative (SBTI)
• UK Sustainable Investment and Finance Association (UKSIF)
• UN Environment Programme Finance Initiative (UNEP FI)
• Principles for Responsible Investment (UN PRI)

Prizes and judging

Up to £50,000 will be awarded annually, with the option of a research residency at Oxford for the winners. The permanent Insight endowment has been established to support the running of the prize in perpetuity.

The prize will be awarded in a ceremony at Oxford University with the winners given the opportunity to give a public lecture at the University.

A judging panel will review nominations and select the winners. The panel will be chaired by Dr Ben Caldecott, Director of the Oxford Sustainable Finance Group and Director of the UK Centre for Greening Finance & Investment. Judges for the inaugural year include:

• Rob Bauer, Professor of Finance, Maastricht University
• Andrew Clare, Professor of Asset Management, Bayes Business School of City, University of London
• Bob Eccles, Visiting Professor, Saïd Business School, University of Oxford
• Jessica Fries, Executive Chair, Accounting for Sustainability
• Nando van Kleef, Senior Programme Manager, Laudes Foundation
• Mindy Lubber, CEO and President, Ceres
• Sabine Mauderer, Vice Chair, Central Banks and Supervisors Network for Greening the Financial System (NGFS)
• Mette Morsing, Head of the Principles for Responsible Management Education, UN Global Compact
• Colin Mayer, Emeritus Professor, Saïd Business School, University of Oxford
• Stephanie Pfeiffer, CEO, Institutional Investors Group on Climate Change
• Peter Tufano, Baker Foundation Professor, Harvard Business School
• Dariusz Wójcik, Professor of Economic Geography, University of Oxford

Investing for the future

Abdallah Nauphal, Chief Executive of Insight Investment, said: “It is crucial to advance collective understanding of the relationship between commercial activity and environmental change. We have forged this partnership with the University of Oxford to encourage more academic research to be done on the effects of incorporating environmental considerations into investment solutions. To support the goal of greening the global financial system, more academic research is needed across asset classes. The industry needs novel ideas with practical applications for the finance industry, such as exploring the development of new financial instruments and ways in which markets should evolve to protect the environment.”

Dr Ben Caldecott said: “Green finance is a necessary condition for tackling climate change and meeting the other UN Sustainable Development Goals. This prize will be an important way to both recognise and support outstanding contributions to furthering the goal of greening the global financial system. By celebrating, showcasing, and financially rewarding world-leading research, we can help to drive its adoption and use across the financial system. The prize is endowed in perpetuity, and so we expect the prize’s significance and reputation to grow even further over time. We are proud to be custodians of the prize.”

Mindy Lubber, President and CEO of Ceres, a US-based sustainability non-profit, and prize judge, notes: “Science and economic realities have converged.  Every financial actor around the globe must address the world’s most pressing issues — climate change, water scarcity and quality, biodiversity loss and human rights.  This prize will highlight and support those bold academic thought leaders and financial innovators who are paving the way for the entire finance sector to raise ambition and accelerate action. Ceres is proud to be a partner of this prestigious award and looks forward to working together to build a sustainable future.”

The University of Oxford is inviting nominations for 2023. Click here to enter. Applications for the 2023/24 prize close on Sunday 21st May 2023 and judging takes place in the second quarter. Prizes will be announced during Oxford University’s Sustainable Finance Summit on 19th and 20th July 2023.

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