Stock Profile: Borg Warner

Socially responsible investing (SRI) is the foundation of Clean Yield’s investment strategy. Our SRI strategy includes negative screening, to avoid investments in industries or companies that conflict with our clients’ values, and positive screening, to actively seek out companies making a positive impact. Below is an example of the companies we include in our customized client investment portfolios, with a snapshot of the considerations we review. Stock profiles are not investment recommendations. Learn more about our investment strategy and services.

Borg Warner (BWA) is a 130-year-old auto components manufacturer and supplier to nearly every global car company. Its components are found in electric, hybrid, and internal combustion engines, with a focus on increasing efficiency and reducing emissions. Borg Warner derives significant revenue from sales of components for electric vehicles and the bulk of the rest of its sales improve efficiency and reduce tailpipe emissions from internal combustion engines.  

The company is poised to support the growing EV and hybrid vehicle markets, with a diverse, global customer base. With only a reported 10% of its electric vehicle products business in North America and a strong market in Asia, Borg Warner is poised to withstand tariff uncertainty in the U.S. and continue to grow its global market presence.

Current Snapshot: Borg Warner Is ‘Driving Progress’

Borg Warner has 63 global manufacturing locations, and roughly a third of its employees in Asia, including China, India, and Japan. The company’s products include “eProducts,” developed for electric vehicles, and “foundational products,” which are parts used on internal combustion engines in traditional and hybrid vehicles. Borg Warner’s turbochargers, which increase fuel efficiency by up to 9% in internal combustion engines, have historically been and remain an important product for the company. 

Borg Warner reported that 87% of its 2024 revenue derived from EV and emissions-reducing products. The company has formally announced a 2027 strategy to increase eProduct sales to $10 billion, five times the 2023 sales of $2 billion. To achieve this, the company has reported taking several steps, including:

• Spending 66% of its 2023 research and development dollars on eProduct projects
• Spinning out its legacy Fuel Systems and Aftermarket division into a separate public company, Phinia
• Closing on acquisitions with a charging business from Hubei Surpass Sun Electric (SEE) and the electric hybrid systems business from Eldor in 2023
• Entering into partnerships with China’s BYD subsidiary FinDreams Battery and Shaanzi Fast, a subsidiary of Weichei, in 2024

The rate at which Borg Warner’s eProducts revenues grow will depend on market adoption of EVs broadly. Despite uncertainty for EV sales in the U.S., consulting firm Rho Motion reported that global EV and hybrid vehicle sales rose 25% globally in 2024, led by China. Consulting firm Gartner estimates that global EV shipments will grow more than 17% globally in 2025 and S&P Global estimates more than 30%. This expected demand increase combined with Borg Warner’s long history and global presence indicates the company will continue to drive progress on vehicle fuel efficiency and emissions reduction.

Social and Environmental Impact Review

Through Borg Warner’s research investments, partnerships, and acquisitions, the company has demonstrated a commitment to the low-carbon economy transition. The company is also making progress on its goals for Scope 1 and Scope 2 emissions of 85% absolute reduction by 2030 (versus its 2021 baseline) and carbon neutrality by 2035. By the end of 2024, Borg Warner had achieved a 36% absolute reduction in Scope 1 and Scope 2 emissions versus the 2021 baseline, while its renewable energy use from on-site and purchased sources soared from 3% of energy consumed to 28%. Additionally, at the end of 2023, 10 of the company’s sites were Leadership in Energy and Environmental Design or “LEED” certified for building design and construction.

Borg Warners’s ESG reporting follows recognized best practices and the company has assigned board level responsibility for overseeing ESG issues. The company reports on its employee benefits and leadership development, including its goal to prioritize internal promotions and employee sustainability training.

According to its impact report, the company regularly updates its Supplier Code of Conduct, its standard Purchase Order Terms and Conditions, and other relevant policies, to strengthen and make its sustainability standards and requirements for compliance explicit. Borg Warner seeks suppliers that are certified to ISO 14001:2015 standard, or equivalent, and its Conflict Minerals Statement has been updated and sets forth its requirements for supplier due diligence, risk assessment exposure, and compliance. Borg Warner is also a member of the Responsible Minerals Initiative.

Central to Clean Yield’s investment approach is seeking resilient companies aligned with sustainability and innovation; therefore, we are energized to include Borg Warner in our portfolio. 

Learn more about Borg Warner.