Transition risk is a major concern for insurers on the asset side of their balance sheets, as the societal and economic shifts associated with the move to a low-carbon economy threaten the value of their long-term investments.

Allspring Global Investments wins this year's Transition risk management excellence award for its Climate Transition Framework (CTF) that helps insurers align their fixed income investment programmes with net-zero goals.

The framework aims to rigorously assess investment opportunities and associated risks to deliver optimum outcomes for insurers, through a climate and financial lens. It combines Allspring's proprietary climate scoring with traditional credit analysis to identify transition leaders and manage climate-related risks across portfolios.

The climate scoring approach involves picking climate transition leaders, based on their performance across 14 topics. Portfolios have an emissions intensity cap from the start and a planned trajectory to reach net-zero.

Allspring's approach favours engagement over broad-based exclusions, as the firm says the latter approach may hinder sector or issuer diversification and can result in missing transition winners.

Since the CTF's launch in 2021, Allspring has grown its climate-focused credit solutions under management to more than £5.5bn ($7.4bn), across buy and maintain portfolios, investment grade portfolios of ranging duration, and high yield.