ESG Engagement Series: Auto Manufacturer

1. You’ve had a multi-year history with a major automaker. How has the relationship evolved?

For decades, our credit analysts have met frequently with this major global automaker to discuss material fundamental credit issues. Material ESG factors have become an increasing part of the conversation over time. Initially, we met with senior finance management representatives and the investor relations team; over time, the company’s head of sustainability and other staff members joined the dialogue.

During our years of ESG engagement with this automaker, we have discussed governance practices such as the composition, qualifications, and selection of candidates to its board of directors. Our engagement has also addressed the company’s labor relations, with its massive unionized global workforce, as well as the robustness of its cybersecurity initiatives, which were designed to protect the company’s intellectual capital, facilities, and customer information. Not surprisingly, we have dedicated more time over the years to reviewing the automaker’s electric vehicle strategy as worldwide regulatory standards related to light vehicle tailpipe emissions and fuel economy tighten and consumers grow more concerned about climate change.