At Moody’s, we seek to incorporate social considerations, where meaningful, into our credit analysis. In this video, we define the term 'social' from a credit perspective, and discuss the associated risks and opportunities that are most relevant to the fundamentals of non-governmental private sector issuers.

John Thieroff, Vice President at Moody’s Investors Service, discusses key points from our recently published report covering the challenges facing the auto sector due to carbon transition. Carmakers will need to be adaptive as passenger vehicle electrification evolves alongside advancing autonomous vehicle technology.

Our heat map assesses the environmental risk exposure of 84 sectors globally, with $74.6 trillion in rated debt. We find that 11 sectors with $2.2 trillion in rated debt have elevated credit exposure. For these sectors, environmental risks are either already material to credit quality or could be over the next three to five years.

This edition highlights thematic research on the impact of ESG considerations on credit markets and the growth of sustainable finance globally, including the growth of the green and sustainable finance markets, as well as how social issues and governance weaknesses relate to credit analysis.