Center for Sustainable Business | Automotive Sustainability Framework

THE FRAMEWORK

What Is the ROSI™ Automotive Sustainability Framework?

Developed by the NYU Stern Center for Sustainable Business, the Return on Sustainability Investment (ROSI™) Automotive Sustainability Framework maps ten sustainability strategies across the automotive value chain, identifying the practices, financial benefits, ROSI™ value drivers, and proposed monetization methods associated with each.

Based on an academic review and interviews with automotive company executives and subject-matter experts, and sponsored by PwC, the research builds on the foundational ROSI™ methodology, which provides a systematic approach to identifying and monetizing the financial benefits of sustainability actions.

The global automotive industry - producing more than 90 million vehicles annually and generating more than $2.75 trillion in revenue - sits at the center of the energy transition.  Operating on net margins of 2–7%, with raw materials representing 50–60% of manufacturing cost, automakers have little room to absorb rising input costs, supply chain disruptions and carbon costs, including the EU's Emissions Trading System and incoming Carbon Border Adjustment Mechanism. Yet these same pressures create some of the clearest near-term opportunities for financial value creation, particularly in decarbonization and electrification, sustainable materials sourcing, and circularity.

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EXPLORE THE RESEARCH

Ten Automotive Sustainability Strategies

CSB’s research maps ten automotive sustainability strategies, each linking specific practices to financial benefits and a proposed monetization method that supports the internal business case for sustainability investment. 

Click here to explore each strategy (see the framework deck for a quick overview of the research).

Mitigate & Adapt to Climate Change	Waste  Management	Water  Management	Chemical Management	Support Electrification Ecosystem
Circularity	Cybersecurity	Sustainable Sourcing	Driver Safety	Supplier and Employee Well-being

CSB maps the automotive strategies and practices to nine ROSI™ value drivers — operational efficiency, risk management, sales and marketing, customer loyalty, innovation, supplier relations, talent management, media coverage, and stakeholder engagement — across the automotive value chain.

• The full findings are presented in the white paper Embedding Sustainability into Automotive Business Strategy Drives Transformation and Financial Value.

Case Study: Sustainable Materials Sourcing

Steel and aluminum are the dominant inputs in light-duty vehicle manufacturing, accounting for approximately 66% of vehicle weight by material and a major share of the 50–60% of total manufacturing cost attributable to raw materials. On such thin margins, getting materials strategy right, from designing and procuring to end-of-life disposal methods, is central to competitive advantage. The regulatory environment is intensifying this pressure, as the EU Emissions Trading System has pushed carbon prices from approximately €30 per ton in 2018 to roughly €65-80 per ton in 2024-2025, with the EU Carbon Border Adjustment Mechanism now converting those embedded carbon costs into direct invoiced costs on imported raw steel and aluminum.

Our research finds that for companies with high materials intensity, a phased transition to green steel and aluminum can generate 8-9 figure value depending on company size, before considering green financing benefits, potential P/E improvements associated with emissions reductions, or fleet buyer revenue premiums. The financial model developed weighs options regarding the types and characteristics of green materials, along with the timing of transitioning, to ensure companies create benefits tied to reduced input costs, direct and indirect regulatory liabilities, and price volatility. It enables companies to capture financial value, as CBAM, fleet CO₂ standards, and battery content rules create compliance deadlines that reward early movers and penalize delay.

Before counting green financing benefits, P/E multiple improvements, or fleet buyer revenue premiums.

• Download the Sustainable Materials Sourcing Case Study

MORE RESOURCES

Explore the Automotive ROSI™ Framework and Tools

Automotive Framework Overview Deck

A summary of the Automotive ROSI™ Framework, key findings, and the financial case for sustainable materials sourcing.

• Download the Framework

Interactive Automotive Framework

This interactive tool allows users to sort by their position in the automotive value chain across ten sustainability strategies and map practices and sub-practices to financial benefits, ROSI™ value drivers, and monetization methods. Practitioners can use it to scope sourcing initiatives, while investors can trace how individual practices create measurable value across the supply chain.