Energy was the best performing sector in USD over the full year while EUR Energy offered lower volatility. USD Energy names on the back of record cashflow windfall tightened the most of any group (10bps). The Energy sector ranked low on transition.
Utilities behaved similarly, yet the sector has a far larger share of Green, Sustainability, Sustainability-Linked, Transition (GSST) issuance (51% of European IG, 13.7% of US IG), giving it a more transition-aligned profile at instrument level.
In Chemicals, tighter spreads were associated with worse transition scores. In Autos the opposite held, with the highest-scoring issuers underperforming by 6bps. Regional disparities are emerging in Autos.
On valuations, the greenium is not broad-based. Restated to a common five-year duration, green bonds trade wider than conventional instruments in seven of the ten sectors covered. The only clear greenium is in Utilities - 5.1bps tighter on 174 green issuers; green discounts are available in few sectors.
Technicals reinforce the picture. Sovereign volatility has run at roughly 2.6 times that of corporate spreads, credit curves have steepened in every USD BBB sector led by Technology, and US labelled issuance fell to 0.85% of USD corporate supply in H1 2026 from 1.99% a year earlier, even as total corporate supply reached USD1,328bn.
