Insight Investment

Under section 414 of the UK 2006 Companies Act (the “Act”), the Company is required to include a section 172 statement, describing how the directors have had due regard to those matters set out in section 172 of the Act during the period in question.  In addressing these matters, we would like to expand on the following:

Our Mission Statement

Insight's mission is to offer investors a different approach to achieving their investment goals; one that prioritises the certainty of meeting their chosen objectives in contrast to the traditional focus on maximising return and minimising volatility. We believe that our emphasis on certainty, a dimension largely neglected by the industry, provides investors with an improved investment experience, resulting in a more secure retirement or more confidence in their ability to acquire specific assets in the future. Furthermore, we tailor portfolios directly to clients' desired outcome rather than investing in generic products that benefit the manager more than the investor, further enhancing the chances of success.

We are committed to prioritising our clients' interests above all else in the conduct of our business and to delivering high quality investment solutions and service. Our business model rests on a simple equation: high quality leads to client advocacy which translates into business success. We, therefore, focus our efforts on delivering quality and are always prepared to forego business opportunities that conflict or weaken our ability to do so.

Focusing only on what we are good at rather than being everything for everyone is a key requirement for achieving that, so is working in partnership with our clients and their advisors. This allows us to better understand their needs and provide them with the tools and professional education they need for their investment journey. We also pledge to engage with relevant official and regulatory bodies to represent their interest and help find solutions that balance their benefits with those of society at large.

Aligning all stakeholders' interests is essential for the long-term success of any organisation. We align the interests of our clients and shareholders by taking a long-term view of the success of the business, allowing us to focus our energies on delivering to our clients. A significant portion of our staff's compensation is deferred and held in company shares. By giving our employees an economic stake in the business we help align their interest with those of the other stakeholders.

As responsible stewards of society’s savings, we also view the communities in which we operate as stakeholders in our business and believe we have responsibilities to them and the world more broadly. This starts with ensuring that our investment processes effectively consider financially material environmental, social, and governance (ESG) risks and opportunities within relevant strategies. We also manage portfolios that go beyond this for clients who have asked us to support their sustainability outcomes.

None of this would be possible without the ability to attract and motivate the right employees. We do not believe that any gender, race, or group of any kind has a monopoly on the talent that we need to succeed. We also believe that diverse groups make more informed and balanced decisions. We are therefore committed to looking for talent everywhere and ensuring that every individual has the opportunity and support to succeed at Insight.

We strive to create an ego free and collaborative environment where everyone is held accountable, but success is shared collectively. An environment where employees can speak up to share their views or challenge others’ views. We encourage continuous improvement at the individual level as well as the business level and make it a point to learn from our mistakes. Much of this boils down to putting the principle of "doing the right thing" at the heart of all our decisions.

The examples provided below show positive outcomes following consideration by the Insight Board of matters set out in section 172 of the Act during 2023.

 

Business relationships with key stakeholders

Clients

Clients are Insight’s key stakeholders. Over the past year, we have advocated on behalf of our UK defined benefit (DB) pension scheme clients, engaging with policymakers and industry bodies through dialogue and consultation submissions. UK DB schemes are for the most part better funded and healthier than ever. The UK government’s Autumn Statement in November 2023 enables many UK schemes to consider running-on and treating their surplus as an asset.

Insight continued to attract new LDI clients, with our approach during the LDI crisis serving to enhance our competitive standing with clients and their advisers. We have also received industry recognition, with Insight confirmed in February 2023 as a Quality Leader for UK Investment Management Service in 2022 by Coalition Greenwich. Insight is now rated in the top decile for Service Quality by UK Institutional Clients in eight of the last 10 years.

Insight also maintains strong relationships with consultants, as evidenced in the Coalition Greenwich UK Investment Consultant Research 2023. This ranked Insight in first place for both Overall LDI Quality and Overall Fixed Income Quality.  Insight has now been ranked in first place for Overall LDI Quality for 13 consecutive years and has ranked in first place for Overall Fixed Income Quality in 8 of the last 10 years.

The Board continues to constructively challenge the business to maintain this high level of advocacy, including a review of overall investment performance delivered for clients.

 

Employees

Insight’s employees are critical stakeholders and the Board seeks to ensure that a culture which values client focus, accountability, continuous improvement, teamwork and collaboration is maintained. Insight employs external expertise to assess employee sentiment, communicating the outcomes back to the Board. Management directs attention to areas requiring improvement. Examples of activities to support inclusion and employee engagement include the employee affinity groups, maintaining a flat management structure to allow for efficient escalation of issues and awareness-raising around Insight’s Speaking Up Policy. Offices are designed to be inclusive spaces that promote teamwork.

Insight offers hybrid and remote working programmes to provide flexibility to colleagues and to attract and retain diverse talent. These are:

• A hybrid working model of three days working in the office and two days working from home
• An Extended Remote Working Programme which allows colleagues to work remotely from home or another location for up to two weeks annually.
• A Parent Leave Policy, available globally, providing extended paid time off to all parents, regardless of gender.
• Global caregiver leave providing 10 paid days for all to help manage planned and unplanned family care circumstances.

Highlights of the most recent (June 2023) external assessment of employee sentiment follow below:

• 86% of colleagues agree that managers are good at promoting teamwork and collaboration
• 82% of colleagues believe Insight sets high standards of performance
• 76% of colleagues are proud to tell others they work for Insight
• 77% of colleagues would recommend Insight as a place to work

 

Diversity, Equity & Inclusion (DEI)

Insight’s core belief is that a commitment to DEI is simply the right thing to do. Diversity of thought, talent and experience are critical to the long-term success of the business and to wider society. DEI is championed at the highest level within Insight, with the firm’s DEI Committee reporting directly into the Board’s Executive Management Committee. Insight’s approach to DEI is guided by a belief that a culture of belonging supports high performance. The DEI Committee includes executives appointed from across the business. They have set a firmwide strategy which has established:

• A clear DEI Policy
• A network of six affinity groups with which all colleagues are encouraged to participate
• Enhanced employee data and analytics
• Realistic DEI targets
• Improved recruitment processes
• DEI objectives and training for all colleagues
• Employee awareness and engagement activities
• A series of external partnerships with partners such as the Diversity Project
• Culture clubs for new starters
• Requirement that recruitment partners produce balanced shortlists including underrepresented groups.
• Inclusion of DEI-led questions within Insight’s annual employee engagement survey, creating a means of measuring progress.

The Insight affinity groups are:

• Women at Insight
• Multicultural Insight
• InsightABILITY
• Outsight (for LGBT+)
• Veterans
• Multigenerational Insight

Insight colleagues can also join similar groups operated by Insight’s parent, BNY Mellon.

The Board is kept informed of the Company’s efforts in addressing DEI issues and monitors Insight’s progress. 

 

Impact on the Community and Environment

Insight has a Corporate Social and Responsibility programme which focuses on three key pillars:

• Our markets: We seek to protect clients’ interests and operate our business with integrity and resilience.
• Our people: We seek to encourage effective leadership, wellbeing, diversity and inclusion for our staff.
• Our world: We seek to invest and act responsibly to protect the wider world and to support the communities that we operate in.

Insight runs a Community Impact Programme which encompasses colleague donation and community volunteering. All employees are entitled to take two volunteering days a year, partnering interests or skills with a broad selection of charities. 

In 2023, Insight partnered with the charity RedSTART, through which colleagues can volunteer to help develop the financial literacy of young people from disadvantaged backgrounds.

Insight has supported the charity Make-A-Wish since 2019. Make-A-Wish is a global initiative which grants wishes to children with life-limiting or life-threatening conditions.

 

High Standards of Business Conduct

Insight has an unwavering commitment to stewardship

Insight has an unwavering commitment to stewardship. In 2023 Insight has:

• Added an ESG focused e-learning programme into the objectives of all permanent employees to enhance ESG literacy, with extra modules added for investment and client facing roles.
• Aligned Mellon transitioned assets to Insight’s RI process with Efficient Beta and Municipal bond strategies moving to an Article 8 framework.
• Enhanced TCFD reporting to add climate stress tests for gilts/LDI, delivered through the Insight Climate Change 2023 annual report.
• Evolved proprietary tools: Prime Sovereign ratings were expanded, Muni ESG risk ratings introduced and portfolio-level climate metrics enhanced (corporate, ABS, sovereigns).
• Enhanced oversight of engagement activity by building escalation stage ratings into the engagement template.
• Partnered with The University of Oxford to establish an international prize to recognise the research work produced by those in the not-for-profit sector. It is designed to recognise and encourage world leading academic research which demonstrates rigorous financial analysis and has practical applications for investment managers. The ‘Insight Investment – University of Oxford Prize for Greening Finance’ aims to encourage 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. 

 

The Insight Responsibility Oversight Committee (IROC)

IROC is regarded as a key internal forum which provides oversight and accountability for ESG related activities and their application across all business lines and investment activities.  One of the objectives is to set strategic priorities and apply appropriate oversight to ensure that responsible investment performance aligns with Insight’s organisational objectives. The IROC is chaired by Insight’s CEO and oversees a range of committees which focus on various aspects of the Firm’s commitments to responsible investment on behalf of clients. 

IROC’s focus includes oversight and accountability for climate strategy and policy, as well as overseeing investment and operational activities. Work done by IROC around climate change is relayed back to the Board via the Climate Change Resiliency Committee (a sub-committee to IROC).

 

Regulatory Bodies & Suppliers

The Directors recognise that as part of the objective to promote the long-term success of the business, maintaining a high standard of business conduct when dealing with stakeholders such as regulatory bodies and vendors is vital.  Insight’s interactions with these stakeholders throughout 2023 are set out below.

 

Regulators

Insight regularly collaborates with regulators and other market participants in order to contribute to fair, transparent and robust markets. The Board encourages management to maintain effective engagements with bodies such as the Financial Conduct Authority (FCA), Central Bank of Ireland, (CBI), ESMA, European Commission, the Bank of England (BoE) as well as the UK Treasury.  The Board also requires to be kept informed on any material regulatory changes which could impact the long-term success of the business.

Insight regularly engages with regulators on many different topics and issues as and when they arise, the board is kept fully informed by Insight Compliance on key regulatory engagement & communication as part of the Board Reporting process.  This is with a view to ensuring there is appropriate Board challenge and discussion on the key regulatory engagements applicable to the firm.  Additionally, the Board is fully supportive of Insight participating in various engagements with regulators on potential new guidance and regulations.  Examples of regulatory development topics that Insight has engaged on with regulators during the period include the, UK EMIR pension fund clearing exemption, numerous European ESG consultations (including ESMA SFDR Review, European Commission SFDR Review, ESMA labelling consultations), UK ESG consultations (FCA’s sustainability disclosure regulation and investment labels, numerous consultations from TPT on net zero transition plans), international ESG consultations (including ASCOR consultation on methodology for assessing sovereign debt issuers, and the TNFD framework on nature-related risk management and disclosures), and numerous consultations and discussions with the UK government and policymakers on the future of the UK defined benefit markets (including the DB funding code consultation, Work and Pensions Committee consultation and oral hearing on both the 2022 gilt crisis and also the DB pension schemes generally, Options for DB pension scheme consultation as part of Mansion House reforms).

 

Suppliers

Vendors play an instrumental role in Insight’s overall operations. In addressing deficiencies experienced around collateral management during the gilt crisis, Insight continues to work effectively with its key vendor by way of having regular meetings with the vendor’s senior management team and executive members of the Board.  To date, notable improvements have already been made to the collateral management process but there is still ongoing collaboration with the vendor to further enhance service levels.  The Board is fully supportive of the enhanced collaboration with key suppliers and is kept informed of key progress made resulting from effective engagement with this group of stakeholders. 

Insight upholds BNY Mellon’s Supplier Code of Conduct which describes certain basic expectations and requirements for suppliers. As a practising advocate of health and safety, labour and human rights, environmental sustainability, diversity and inclusion, ethics, and other responsible business practices, Insight strive to hold suppliers to the same standards. Insight expects its suppliers to understand and act in accordance with BNY Mellon’s Supplier Code of Conduct, including where feasible aligning guidelines, policies and practices and encouraging the enforcement of the Code provisions throughout their organization and across their own supply chains.

 

Business Transition

The transitioning of colleagues, clients and assets from BNY Mellon’s Fixed Income business has now been completed. Focus is now on the structuring of key teams such as Distribution and Client Solutions in order to create greater efficiency and cohesion. Management had completed the development of risk management solutions designed specifically to the need of key areas of US specific operations and management is also keen to keep endorsing key Insight values for US colleagues.  Insight’s activities within the US space are closely monitored by the Board as directors see the US market as one of the key geographical regions that would help to deliver on long-term strategies. 

One key area of challenge in operating in the US space is managing the views and expectations of various stakeholders on topics such as sustainable investment.  Balancing the expectations of the investor base in the US against the expectations and interests of stakeholders elsewhere has been key areas of board discussions throughout the period.

 

Shareholder Relationship

Insight is a wholly owned subsidiary within the BNY Mellon group. The Company maintains an open relationship with BNY Mellon, where ideas and strategic objectives are exchanged, ensuring that board members remain aligned with the strategic objectives and corporate values of its shareholder whenever appropriate. The Insight Board is committed to ensuring that due regard to the interests of its stakeholders is taken into account.