Group Management Report

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Environmental strategy

As one of the largest automobile manufacturers, Volkswagen takes responsibility for the environmental impact of its activities. Based on the new Group strategy NEW AUTO, we have put further focus on our ambitious environmental targets. With our environmental mission statement goTOzero, we aspire to minimize environmental impact along the entire life cycle – from raw material extraction until end-of-life – for all our products and mobility solutions in order to keep ecosystems intact and to exert a positive influence on society. Compliance with environmental regulations, standards and voluntary commitments is a basic prerequisite of our actions.

Our focus is on four prioritized action areas:

  • Climate change. We are committed to the Paris Climate Agreement, which aims to keep the increase in global temperature by 2050 to well below two degrees Celsius. By 2025, we plan to reduce the greenhouse gas emissions of our passenger cars and light commercial vehicles by 30% over the total life cycle compared with 2015. In addition, the Company has set a target of a 30% reduction by 2030 compared with 2018, not including emissions offsetting. This decarbonization target has been validated by the Science Based Targets Initiative. We use the decarbonization index to document our progress. We intend to become a net-carbon-neutral company by 2050.
  • Resources. We intend to reduce production-related environmental impact, maximize our resource efficiency and promote circular economy approaches in the areas of materials, energy and water.
  • Air quality. We are driving e-mobility forward with the intention of improving the local air quality.
  • Environmental compliance. Where integrity is concerned, we aim to become a role model for a modern, transparent and successful enterprise by taking into account the environmental impact of our mobility solutions over all stages of the life cycle. To this end, we use effective management systems, the effectiveness of which is monitored regularly.

We have defined a strategic indicator that aligns with our existing and future strategic direction:

  • the decarbonization index (DKI). The DKI measures the emissions of CO2 and CO2 equivalents (jointly referred to as CO2e) by the passenger car- and light commercial vehicle-producing brands in the regions of Europe (EU27, United Kingdom, Norway and Iceland), China and the USA over the entire life cycle. In this index, the use phase is calculated over 200,000 km and with reference to region-specific fleet values without statutory flexibilities. The CO2e intensity of the charging current of the electric vehicles is also calculated based on region-specific electricity mixes. Our vehicle life cycle assessments, which are used as the data basis for calculating supply chain and recycling emissions, have been verified externally and independently in accordance with ISO 14040. The DKI gives us an informative measuring tool that makes our progress and interim results public and verifiable. The DKI calculation methodology is regularly adapted according to internal and external requirements, such as new test cycles for fleet emissions. Published DKI values can therefore also be adjusted to the new methodology and thus changed to facilitate the presentation of a time series that is methodologically consistent. In 2021, the methodology was adjusted to the WLTP test cycle for fleet emissions. By 2030, the DKI is to be reduced by 30 % compared with the base year 2018 (NEDC), and emissions offsetting will not be included in the figure. In the reporting year, the DKI value averaged 45.9 t CO2e/vehicle. This represents a reduction of 1.7 t CO2e/vehicle compared with the WLTP-adjusted figure for 2020.

Organization of environmental protection

Volkswagen has created an environmental policy that sets out guidelines for environmental decision-making, for the management of projects and for the Group’s environmental stewardship. Thus, parameters are set for the conduct and working methods of management and staff in five areas: management behavior, compliance, environmental protection, collaboration with stakeholders and continuous improvement.

The Board of Management of Volkswagen AG is the highest internal decision-making body for environmental issues. Both it and the brands’ boards of management take business, social and environmental criteria into account when making key company decisions. The Group-wide management of environmental protection is the responsibility of the Group Steering Committee for the Environment and Energy. Other bodies take responsibility for steering key individual aspects. They include the Group CO2 Steering Committee, the Group Steering Committee for Fleet Compliance and Exhaust Gas, and the Group Sustainability Steering Committee.

The Volkswagen Group coordinates the activities of the brands, which in turn steer the measures in the regions. The brands and companies are responsible for their own environmental organization. They base their own environmental protection activities on the targets, guidelines and principles that apply throughout the Group.

Our declared aim is to comply with legal and regulatory requirements. Furthermore, we are guided by company standards and targets. The intention of our environmental compliance management systems is to ensure that environmental aspects and obligations are taken into account in our business operations. Disregard for the rules is treated as a severe compliance violation, as are fraud and misconduct. Compliance with our Environmental Policy Statement and with other Group environmental requirements is evaluated annually and reported to the Board of Management of Volkswagen AG, the respective boards of management of the brands or the managing directors of the companies.