Volkswagen sustainability report

Volkswagen AG is the parent company of the Volkswagen Group. It engages in the production and sale of passenger cars and light commercial vehicles for the Volkswagen Passenger Cars and Volkswagen Commercial Vehicles brands. As a parent company, Volkswagen AG holds direct or indirect interests in AUDI AG, SEAT S.A., ŠKODA AUTO a.s., Dr. Ing. h.c. F. Porsche AG, TRATON SE, Volkswagen Financial Services AG, Volkswagen Bank GmbH and a large number of other companies in Germany and abroad. It operates through the following segments: Passenger Cars, Commercial Vehicles, Power Engineering, and Financial Services are its business segments. The Passenger Automobiles and Light Commercial Vehicles section creates vehicles, engines, and vehicle software, as well as producing and selling passenger cars and related parts. The Commercial Vehicles business designs, manufactures, and sells trucks and buses, as well as providing spares and related services. Power Engineering is a division that provides large-bore diesel engines, turbomachinery, and propulsion components. Finance for dealers and customers, leasing, banking and insurance, fleet management, and mobility services are all provided by the Financial Services section. Motorcycles are also available from the firm.

The Group’s new strategy is “NEW AUTO – Mobility for Generations to Come”, in which Volkswagen Group wants to drive transformation from a vehicle manufacturer to a world-leading, software-driven mobility provider. A company, where they redefine mobility while doing business climate neutrally and conscientiously. Additionally, according to Volkswagen, the NEW AUTO world will be free of emissions, smarter and above all more sustainable with more electric cars on the road. For 2021 to be recorded as an achievement, Volkswagen is the e-mobility market leader in Europe and the number two in the USA. The company is working on expanding the charging infrastructure in Europe, China and the USA to 45,000 charging points by 2025. They also have plans to build six battery factories by 2030 together with partners and deal with entire battery cycles. And electric drives bring economic advantages in the truck segment as well.

• MSCI B = rating
• Sustainalytics 29.6 (medium risk)
• ISS ESG = C rating
• CDP Water Disclosure – A Rating

N. a.

No achievements worth mentioning in this section

Not many indicators available to track the company’s progress towards sustainability

1.New York Times (Jack Ewing on March, 2021) – How Volkswagen’s Sins Fueled Its Redemption

The article presents facts that despite Volkswagen presenting an advantage over Tesla, in terms of the price for passenger cars and a new standardised platform, The Modular Electrification Toolbox, corporate governance experts, continue to express concerns over the lack of outside oversight, that may continue to contribute to the toxic corporate culture. Considering that voting rights belong 53% to the Members of the secretive Porsche and Piëch families, 20% to the government of the state of Lower Saxony, 17% to the sovereign wealth fund of Qatar and only less than 10% to the outside shareholders, this structure will not allow to expose the company to more scrutiny. Moreover, only one out of the 20 members of the Supervisory Board, is not a representative of the three main shareholders, nor a Volkswagen employee. In this type of governance structure, one could agree that decisions at the company level will be influenced by the interest of the three main shareholders. 

2. Forbes (Georg Kell on December 2022) – From Emissions Cheater To Climate Leader: VW’s Journey From Dieselgate To Embracing E-Mobility

The article is written by Georg Kell, a member of Volkswagen’s Sustainability Council and mainly discusses the company’s journey, from an ‘emission cheater’ to a ‘climate leader’. The council, formed in 2016, after the “Dieselgate” scandal was formed to help the company’s transformation into a world-leading provider of sustainable mobility. Many challenges were encountered along the way, from the diversity of the Council’s representatives, from different backgrounds and with specific skills, to high-ranking managers that had been working with diesel engines their entire life and lastly, union workers’ concerns over job losses due to e-mobility production and digitalization. Despite all these challenges, the Council worked together to propose a set of strategic changes to Volkswagen’s management, such as a technology shift with a focus on decarbonization; a policy shift advocating for ambitious standards and a cultural shift towards a more ethical, collaborative and purpose-driven company. Positive results from focusing on these changes came in the form of re-admission to the UN Global Compact where Volkswagen committed to embrace sustainability issues. Furthermore, the company’s climate leadership was acknowledged by the Science Based target Initiative for the best practices in terms of GHG emission reductions. From a position where Volkswagen had to catch up with the transformation within the car industry, what they have accomplished, the world is now catching up. The Council’s contribution has been acknowledged by the CEO Diess, as a ‘driver and a corrective for our strategy”. Moreover, Georg Kell, mentions in the article that a spirit of innovation, motivation and collaboration, as well as continuing to see sustainability as an important driver, will still be needed to achieve the massive transformation that Volkswagen has embarked on.