Insight’s advocacy on systemic and industry issues | Insight Investment

Climate change requires our attention as we seek to navigate the issues to fulfil our fiduciary obligation to our clients. To protect our clients' interests, we need to consider how climate change could impact their investments, and to ensure portfolios remain resilient. However, stating the exact quantum and timings of the potential impacts with any accuracy remains a huge challenge.

• We participate in industry groups as part of our work managing systemic climate risks.
• We developed our first climate risk ratings in 2017 as a comprehensive ranking of fixed income corporate bond issuers that enabled better engagement activity with companies. In 2020, to improve understanding of the key risks that climate change poses and further develop our offering in sustainable strategies, we expanded the scope of the ratings to create two scores for each company; one for its transitional risks and one for its physical risks. Our proprietary Prime climate risk ratings include data for 15 climate-related issues. For more information click here.
• Since 2022 Insight has published a climate change report aligned to the recommendations from the Task Force on Climate-Related Disclosures (TCFD). The report includes information on how Insight views climate change and takes it into account, and also how these views are applied within clients’ investment strategies as well as initial scenario analysis looking at the potential impact of climate change on portfolios that Insight manages on behalf of clients. The report reflects extensive work internally on this key issue.
• We became a signatory to the Net Zero Asset Managers Initiative in early 2021. The initiative issued an update to its approach in October 2025, and Insight is assessing this. Our focus remains on delivering the best outcomes for our clients in the investment mandates we manage on their behalf, reflecting any applicable individual requirements.  Please visit this page for more details of Insight’s net-zero ambition.
• Beyond considering climate risks as part of their core investment approach, some clients are looking to pursue net-zero targets. To help these clients invest in line with their net-zero goals, Insight has created ratings to categorise corporate and sovereign issuers according to the extent of their commitment to and alignment with achieving net zero by 2050. For more information click here.

Bank capital rules can have indirect negative impacts that present risks to our clients and other stakeholders. Issues include leverage ratio rules not recognising high-quality liquid government bonds posted as variation margin for non-cleared OTC derivatives, which strongly incentivises banks to require pension schemes to post variation margin in cash instead of in government bonds; the standardised approach for counterparty credit risk (SA-CCR) results in calculating exposure to OTC derivatives that can be highly punitive for directional portfolios of pension schemes; and new credit valuation adjustment (CVA) and Basel III revision rules do not recognise the high creditworthiness of pension schemes.

We led an initial collaborative engagement with the European Commission on these issues, given how they could each undermine the prudent risk management of pension scheme portfolios or incur disproportionate costs for them.

A selection of our responses to consultations are available here.

New regulations are being proposed encouraging greater transparency on ESG issues, including but not limited to climate change-related factors. In recent years we have responded to proposals and consultations including initiatives in the UK, EU, US and globally.

A selection of our responses to consultations are available here.

Insight has worked with other market participants to help create a set of best practice principles for dealing in the FX market, known as the FX Global Code. The FX market is global and lacks central regulation. Signatories to this voluntary code agree to adhere to principles of best practice. Insight now trades exclusively with signatories of the code when possible. This initiative has increased market transparency, fairness and robustness. We believe this will ultimately lead to a reduction in systematic risk and better outcomes for all our clients whose portfolios have foreign currency exposure.

A selection of our responses to consultations are available here.

Insight played a very active role in the interest-rate benchmark reform process, which had implications for financial markets worldwide as well as for our clients. In 2018 we were invited to join the UK Sterling Risk-Free Reference Rates (RFR) Working Group as it was expanded to include a broader group of participants, including investment management firms. The LIBOR transition completed in October 2024, ending a multi-year project to replace the benchmark rate across a range of countries.

Alongside EMIR (see above), we are engaging on a wide range of industry issues relating to regulation from Europe, each of which could have significant implications for markets and our clients, potentially introducing risks or affecting how investments are managed.

• AIFMD review: In late 2020, the European Commission launched a consultation on the Alternative Investment Fund Managers Directive (AIFMD), which included questions relating to harmonisation of the AIFMD and UCITS (Undertakings for the Collective Investment in Transferable Securities) regimes. We submitted a response in early 2021, and worked closely with trade associations on collective responses.
• Central Securities Depository Regulation (CSDR): We have been working closely with the European Fund and Asset Management Association (EFAMA) to engage on this topic including letters to EU policymakers. We have been working with trade bodies to highlight that mandatory buy-in provision is expected to negatively impact liquidity in the bond markets. We supported the European Fund and Asset Management Association (EFAMA) engagement on this topic including letters to EU policymakers, its response to the ESMA survey and the European Commission consultation. In the UK, the Treasury has announced it will not be adopting these EU rules post-Brexit.
• EU securitisation review: The EU opened a consultation on its securitisation framework in July 2021. Insight submitted a response to this consultation, highlighting similar issues as in the section focusing on the UK securitisation regulation.
• Securities financing transaction regulation (SFTR). The re-use reporting of SFTR rules do not contemplate a client having more than one manager managing assets for underlying bond collateral. Practically, due to difficulties in being able to report accurately, it could lead to asset managers having to stop trading repos in a worst-case scenario. We are working with regulators to try to avoid this scenario. The FCA has acknowledged the issue exists and we continue to work on a solution.
• European Securities and Markets Authority (ESMA) launched a consultation on potential reforms of the EU Money Market Funds Regulation, in light of the “stress experienced by money market funds (MMFs) during the March 2020 crisis.
• MMFs and cleared repo haircut issue: The success of EU-domiciled MMFs depends on the depth and breadth of the funding market to which they have access to. As part of this, many EU MMFs enter into government bond reverse repo transactions, including cleared reverse repo transactions, to earn a return on the cash they have available. This is an important role that EU MMFs provide in their capacity as cash and liquidity providers, particularly in times of stress. However, post Brexit, EU MMFs can no longer enter into cleared gilt reverse repo transactions with UK clearing house LCH Ltd without a haircut being applied – because the EU securitisation regulation requires EU MMFs to apply a haircut to assets received under a cleared reverse repo transaction, unless the central counterparty is ‘authorised’ under EMIR.

A selection of our responses to consultations are available here.

The introduction and implementation of central clearing for derivatives under the European Market Infrastructure Regulation (EMIR) has significant implications, particularly for pension schemes in the UK and Europe.

A significant implication of central clearing would be the need for pension schemes to provide cash to collateralise cleared derivatives. European pension schemes have been granted a temporary exemption from clearing for some years, but regulators and policymakers continue to explore solutions to resolve these issues. Included in this discussion has been the role that repo markets should play, and whether they can always be relied upon in stressed conditions.

We advocated for the original exemption for pension scheme arrangements from clearing, to prevent market dislocations and ensure the needs of pension schemes are met and have continued to participate in the European Commission’s pension fund stakeholder group meeting. Insight proactively highlighted that the EU pension fund exemption must be extended before the exemption expired in June 2021. The European Commission adopted a fast-track approach to ensure this took place.

A selection of our responses to consultations are available here.