57 countries have made commitments to end the sale of Internal Combustion Engines (ICE) by 2050 at the latest, and so business transition is a clear strategy for auto manufacturers that want to maintain their creditworthiness, which will drive emissions reductions.
In this note, we create a regression framework to understand the drivers of bond spreads in the automobile sector. Specifically, we analyse the effects on pricing from sustainability factors, such as implied temperature rise, emissions, or a general environmental score.
