Topic

The transport sector is responsible for about a quarter of global greenhouse gas emissions and faces a range of environmental and social challenges.

September 2, 2021

ISS ESG InFocus: Automotive

Each month ISS ESG’s team of specialist analysts releases an update on the ESG risks associated with a specific industry sector. The InFocus reports focus on the ISS ESG Corporate Rating for companies within each sector, and also provides headline results from other ISS ESG product lines. This month, the InFocus is on: Automotive

KEY TAKEAWAYS

ESG Ratings Results

Companies from the Automobile and Auto Components industries display moderate contributions towards social and environmental objectives, with only a modest percentage of companies performing in the prime range (C+ and above).

  • The transport sector is responsible for about a quarter of global greenhouse gas emissions and faces a range of environmental and social challenges.
  • The industry is undergoing a disruptive transitional period, moving away from the internal combustion engine (ICE) and towards alternative drives.
  • This transition is creating new market opportunities that are attracting new players, some of which are electric vehicle (EV) pure plays ready to bring in new solutions.
  • Approximately 12% of companies in the Automobile and Auto Components industries achieve the ISS ESG Prime-rating, slightly lower than the percentage of Prime rated companies in the broader universe.
  • The emissions scandal that aired in 2017 remains one of the biggest scandals in the history of the industry, and its effects are still visible on company ratings in the sector.

Explore ISS ESG solutions mentioned in this report:

  • Identify ESG risks and seize investment opportunities with the ISS ESG Corporate Rating.
  • Use ISS ESG Climate Solutions to help you gain a better understanding of your exposure to climate-related risks and use the insights to safeguard your investment portfolios.
  • Assess companies’ adherence to international norms on human rights, labor standards, environmental protection and anti-corruption using ISS ESG Norm-Based Research.
  • Understand the impacts of your investments and how they support the UN Sustainable Development Goals with the ISS ESG SDG Solutions Assessment and SDG Impact Rating.
  • Understand the F in ESGF using the ISS EVA solution.
  • Use ISS ESG Sector-Based Screening to assess companies’ involvement in a wide range of products and services such as alcohol, animal welfare, cannabis, for-profit correctional facilities, gambling, pornography, tobacco and more.

By Feliz Sumangil, Analyst, ISS ESG Ibrahim Sánchez, Analyst, ISS ESG. Lea Schwenker, Junior Analyst, ISS ESG. Reinhold Windorfer, Associate Vice President, ISS ESG.

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