Rating agency ISS ESG assesses Audi: good ESG performance

For Audi, ESG (Environmental, Social and Corporate Governance) is already a core component of the “Vorsprung 2030” corporate strategy and a clear guide for decision-making. For example, the company is working continuously to use resources as carefully as possible, to increase equal opportunities in the company and to improve working conditions in the supply chain.

To create transparency, to determine where it stands regarding its ESG targets and for comparability with the automotive competition, Audi underwent the internationally respected ESG rating process of independent rating agency ISS ESG ¹ . “This rating makes our ESG performance transparent and comparable,” says CFO Jürgen Rittersberger.

The result shows that, compared with other companies in the automotive sector, Audi is among the best-rated manufacturers. On a scale from A+ (excellent performance) to D- (poor performance), ISS ESG gave AUDI AG a rating of C+.

Jürgen Rittersberger: „That is a solid result and, at the same time, a motivation. It gives us a neutral assessment of the areas where we have room for improvement. Now we have to keep working.” The detailed rating from ISS ESG can help with just that. “We want to tap the potential at Audi, with the goal of improving our rating to B or better.” And not only so that we can be assessed by analysts and investors on the basis of sustainability criteria. Other stakeholders are now also placing increasing importance on good sustainability performance: for example, customers who want to buy vehicles with a clear conscience. Partner companies, applicants, employees and local residents also expect an innovative company like Audi to fulfill its responsibilities.

Sixty percent of the overall ESG rating is derived from results from the E (Environmental) area, with the other 40 percent coming from the S (Social) and G (Corporate Governance) areas. The rating agency ISS ESG analyzed the performance in the fields important for the automotive sector: fleet fuel consumption and vehicle life cycle analyses, sustainability standards in the supply chain, alternative drive systems and mobility concepts as well as product safety and automotive cybersecurity. The result: ISS ESG rated the performance of AUDI AG significantly above the industry average in each case. The average is determined on the basis of 48 companies in total.

In light of its environmental performance (E), Audi scored points in particular with its environmental management system (grade: A-). Among other things, this reflects its decarbonization strategies and measures: by 2030, the aim is to reduce the CO₂ footprint per Audi model on a fleet basis over the entire life cycle by 40 percent compared with the 2018 base year². The clear strategy to convert to electric mobility should also further improve the performance of Audi in subsequent ratings: in the course of 2026, the company will flip the switch and launch only electric models on the global market from this time on. At the same time, Audi will expand its electric range within the next five years: by 2027, the Four Rings want to include one fully electric vehicle in the portfolio in all core segments. According to current production planning, Audi will then have more than 20 electric models in its portfolio.

The partial result of the ISS ESG rating for the S (Social) and G (Corporate Governance) areas (grade: B-) also demonstrates the effectiveness of the efforts of Audi. For example, measures for occupational health and safety, ensuring human rights, equal opportunities at the company, product safety and stakeholder management were taken into account. Despite the positive results, Audi would like to improve in these areas as well. Audi thus works continuously on improving the working conditions for people in the supply chain. In addition, more and more employees are empowered to competently shape the mobility of tomorrow through qualification and training programs.

ISS ESG is the responsible investment division of Institutional Shareholder Services, Inc., and is among the well-known providers of corporate governance and responsible investment services for investors, asset managers, hedge funds and wealth services providers. Since 2021, Deutsche Börse Group has held an 80 percent share in the company. ISS ESG has internationally recognized expertise in all matters involving sustainable and responsible investment. For its rating, it takes into account what companies are doing to combat climate change, implement the Sustainable Development Goals (SDGs) of the United Nations, promote biodiversity, protect human rights and maintain occupational standards and fight corruption.

Publicly accessible information such as the Audi Report is the primary component of the ISS ESG rating. This combined annual and sustainability report brings together the financial perspective with sustainability criteria related to ESG. The report provides the company’s figures on sales, operating expenses and capital expenditure in accordance with the EU Taxonomy. Additionally, it contains numerous reports that explain the ESG strategy of the Four Rings and use examples to illustrate how Audi practices sustainability.