Sustainability

Sustainability means preserving intact environmental, social and economic systems that are viable in the long term at global, regional and local level. The Volkswagen Group is able to influence these systems in a variety of ways, and actively assumes responsibility in order to contribute to their viability. This has led us to develop a sustainable style of company management and to put in place the management structures required.

Sustainability is embedded in the Volkswagen Group and is an integral part of our Group strategy as well as the underlying strategic management structure. The Group’s sustainability strategy regenerate+ provides important stimuli that are aligned with our objectives. Society requires engagement that generates positive added value in order to help our planet to regenerate and to shape a future worth living in for current and future generations. We wish to contribute to this, and in doing so take a broad and comprehensive approach to sustainability – environmentally, socially and economically. Our vision is to become a mobility provider with positive added value for nature and society. To this end, we continue to work in partnership and maintain constructive communication with our stakeholders in order to learn and further improve.

The regenerate+ sustainability strategy applies to the entire Volkswagen Group – i.e. to the Group departments, to all brands and companies. As such, it encompasses our products, services and stakeholders, including our customers. Our goal is to use regenerate+ to distinguish ourselves as the Volkswagen Group and, at the same time, enable our brands to position themselves in their specific market environment.

Together, we are pursuing a vision for the Volkswagen Group and driving sustainable value creation. Transforming ourselves into a business that operates sustainably is a process, and we are constantly in motion. We review our targets on a regular basis and continuously adapt them. Our Group sustainability strategy regenerate+ features measures in four dimensions:

• Nature, with the focus areas of climate change mitigation, resources and ecosystem
• Our people, with the focus areas of culture, workforce, occupational safety and preventive health care
• Society, with the focus areas of supply chain, customers & stakeholders and social engagement
• Business, with the focus areas of sustainability-related business areas and financing

Each focus area is linked to clear goals and milestones, KPIs and appropriate packages of measures. ESG-related KPIs such as the decarbonization index and the diversity index are already reflected in the remuneration of members of the Board of Management.

UN Global Compact

Volkswagen AG is a participant in the UN Global Compact (UNGC), the world’s largest initiative for sustainable corporate governance, and is involved in national and international initiatives together with other companies from the Group such as AUDI AG, MAN Truck & Bus SE, Porsche AG, Scania AB and TRATON SE. The capital markets view an issuer’s membership of the UNGC as an important factor when deciding to invest in its shares and bonds. ESG funds have experienced strong growth in recent years and have gained in importance as stakeholders. As part of the annual Communication on Progress, the Volkswagen Group and its brands report on their progress in implementing the ten UNGC principles and their activities to support the Sustainable Development Goals (SDGs).

Strategic stakeholder engagement

As an international company, our business activities impact the lives of many different people. Appropriately aligned stakeholder engagement is therefore essential for determining the material areas for action within the Group sustainability strategy and recognizing stakeholders’ increasing and changing expectations at an early stage. Stakeholders are individuals, groups, or organizations who have an influence on or are influenced by the course or the result of corporate decisions. The Volkswagen Group understands its obligations with regard to stakeholder engagement to include systematic and continuous interaction with our key interest and stakeholder groups within society, actively listening to them, and taking account of their input when developing our strategies. The goal is to establish an open, constructive and also critical exchange with the different stakeholder groups. We endeavor to understand their requirements and expectations of us, to discuss key topics from the Group sustainability strategy regenerate+ with them and to explain how these tie in with the Group strategy and its implementation.

The Volkswagen Group has identified ten groups as its most important stakeholder groups. Employees and customers are at the center of the stakeholder network. Based on continuous stakeholder analysis, we have also identified eight further groups. Continuous communication between internal and external stakeholder groups is important to the Volkswagen Group. In this context, the Supervisory Board and the Works Council act not only as supervisory and advisory bodies but also as interfaces between internal and external stakeholders.

Organization of Environmental Protection

As one of the largest automotive manufacturers, the Volkswagen Group takes responsibility for the environment. The Board of Management of the Volkswagen Group is the highest internal decision-making body for environmental issues. Both it and the brands’ and companies’ boards of management take not only business, but also social and environmental criteria into account when making key company decisions.

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

In addition to complying with statutory environmental and energy requirements, we endeavor to adhere to additional voluntary commitments and have tailored our processes and corporate culture in line with these. We provide the resources necessary to achieve our environmental and energy targets. Our environmental compliance management system is aimed at ensuring that environmental aspects and requirements are recognized in our business activities and given appropriate consideration when making decisions. Environmental misconduct and intentional non-compliance or fraud are treated as serious rule violations in accordance with our organizational principles. The compliance of our business activities with the requirements of our environmental and energy policy is evaluated annually and reported to the Board of Management of the Volkswagen Group.