Pollution of Air, Water and Soil

Material impacts and their interaction with strategy and business model

Interaction with strategy and business model

Pollution of air

The overarching topic of minimizing air pollution is strategically anchored in the Group sustainability strategy regenerate+, the environmental mission statement goTOzero, the vision of the Zero Impact Factory and the Code of Conduct for Business Partners, among other things.

Along the value chain, compliance with the Code of Conduct for Business Partners is aimed at reducing impacts on people and the environment. The Code of Conduct requires suppliers to implement appropriate actions to reduce air pollution. Within the Volkswagen Group’s business activities, impacts of this kind are to be minimized by establishing policies (see “Policy: Pollution” section) and by pursuing the vision of the Zero Impact Factory. This includes designing production sites to ensure that as few air-polluting substances as possible are emitted. During the use phase, when vehicles are used by our customers, the environmental impact of vehicles is to be reduced, in part, by selling a higher proportion of electric vehicles. This goal is embedded in the Group sustainability strategy regenerate+.

A detailed description and explanation of the actions is provided in the “Actions and resources: Pollution” section.

Pollution of water

The overarching topic of avoiding water pollution is anchored in the environmental mission statement goTOzero and in the Group sustainability strategy regenerate+. The central element here is on minimizing the discharge of pollutants into water-bodies. In its Code of Conduct for Business Partners, the Volkswagen Group also requires its suppliers not to cause any water pollution that could substantially impair the natural basis for food and drinking water or pose risks to human health.

In its own operations, the Volkswagen Group’s processes are designed to minimize pollution, for example with the installation of processing facilities and wastewater treatment plants at its production sites.

For suppliers in the upstream and downstream supply chain, the Volkswagen Group implements the Raw Materials Due Diligence Management System (RMDDMS) to address the impact of water pollution. This system is designed to make raw materials procurement sustainable and transparent, thereby identifying negative environmental impacts such as water pollution and taking appropriate actions to mitigate them.

The Code of Conduct for Business Partners applies to direct suppliers and includes requirements for the avoidance of water pollution in accordance with applicable law and international regulations. This is intended to help mitigate negative impacts on water resources. Suppliers are also requested to pass on these requirements to their direct business partners.

The “Actions and resources: Pollution” section provides a detailed description and explanation of the actions in this area of activity.

Pollution of soil

The Volkswagen Group’s Code of Conduct for Business Partners also requires that its suppliers avoid causing any harmful soil changes.

The Group sustainability strategy regenerate+ is geared towards avoiding environmental impacts and protecting natural resources while supporting ecosystem restoration and promoting biodiversity. By promoting biodiversity, the Volkswagen Group also addresses soil quality and soil protection.

Policy on pollution of air, water and soil

Emissions from production processes and product use lead to air and water pollution. These negative impacts are addressed in the policy on pollution prevention.

Avoiding pollution is part of the goTOzero mission statement: “We reduce harmful emissions into air, soil and water bodies”. In addition, the goal of increasing unit sales of electric vehicles is anchored in regenerate+. This goal also aims to reduce air pollution when our customers use the vehicles.

Regarding the topic of pollutants, the strategic vision of the Zero Impact Factory is as follows: “We design our production facilities so that they emit as few substances as possible that are harmful to the health of humans, animals, or vegetation, or to soil, water bodies, or air”. In relation to water and soil protection, the focus is not only on the general minimization of pollutant discharge but also on equipping production facilities with technical safety devices when using water-polluting substances. Any deterioration in the ecological and chemical status of the water bodies into which wastewater is discharged must be avoided.

The issue of damage to soil, water and air is anchored in the Code of Conduct for Business Partners: Suppliers must ensure that they do not cause any harmful soil changes, water pollution, air pollution, harmful noise emissions or excessive water consumption. These could substantially impair the natural foundations for food and drinking water or pose risks to human health, and should be minimized as much as possible.

In its raw materials policy, the Volkswagen Group is committed to minimizing negative environmental impacts along the supply chain. This includes protecting biodiversity and ecosystems by rejecting deforestation and land degradation, reducing water consumption, especially in water-scarce regions, and preventing air pollution by excluding toxic substances. This is based on international environmental and biodiversity agreements such as the Convention on Biological Diversity (CBD) along with International Union for Conservation of Nature (IUCN) Convention and the Minamata, Stockholm and Basel Conventions.

Avoiding air and water pollution

The strategic vision of the Zero Impact Factory focuses on minimizing pollutant discharges at production sites (see the “Targets: Air and water pollution” section). Specific requirements apply in this context, such as limits for the pollutant concentrations in wastewater and emissions into the air, compliance with which is documented in measurement reports. The design of the production sites should be geared towards ensuring that the use of local water resources does not negatively impact them.

The Volkswagen Group has implemented various processes in its business operations to ensure that the due diligence requirements of the Lieferkettensorgfaltspflichtengesetz (LkSG – German Supply Chain Due Diligence Act) with respect to harmful soil changes, water pollution, air pollution and harmful noise emission are met. The application of these processes is supported by a Group policy. This provides a framework and minimum requirements for how an Environmental Compliance Management System (ECMS) should be implemented in an organization. Each company then develops its own processes to comply with these rules. A compliance and risk management system is also integrated into the ECMS, which is designed to deal with the risks of the aforementioned environmental media both preventively and at an early stage. For example, production sites typically conduct an environmental aspects analysis that allows them to identify and assess potential environmental risks from production processes at an early stage. This in turn enables decision-makers to take preventive actions to mitigate the risks.

The environmental management requirements apply across all phases of the business activity and the entire life cycle of the products and services. Each controlled company is responsible for the detailed formulation of the processes. These companies are operationally active and are majority owned by the Volkswagen Group.

Contingency plans and hazard prevention

The Volkswagen Group requires the controlled companies to have in place contingency plans and hazard prevention actions. These are specially tailored to company-specific environmental risks and are aimed at avoiding or minimizing negative impacts on the environment. Examples of specific actions include communicating contingency plans to employees, relevant departments and contractors, and providing training on hazard prevention. Communication is a matter for the individual companies and can take place, for example, using noticeboards, instructions or training. Actions also include testing and reviewing the contingency plans and ensuring the availability of resources for expert advice in the event of an incident.

The contingency plans should be reviewed and updated in the event of substantial physical or operational changes. Experience gained from exercises or actual emergency actions are to be taken into account. The frequency of the exercises performed is at discretion of each company responsible for implementing the corresponding Group policy (see the “Overarching policies” section in the “Introduction to Environmental Management” chapter for more information on the scope of application).

Targets: Air and water pollution

Overarching targets

The overarching specific Umwelt Entlastung Produktion metric (UEP – environmental improvement production) takes into account factors including the volatile organic compound (VOC) emissions associated with the production of vehicles and components. The target for the UEP metric is therefore directly related to air pollution.

The Impact Points target for reducing the absolute environmental impacts of the production sites also includes a target for emissions into the air and water bodies. The environmental aspect of air pollutants is used to monitor air emissions of VOCs, nitrogen oxides and dust, chlorinated hydrocarbons and hydrofluorocarbons during production. In addition, the environmental aspect of wastewater takes into account the emissions of Chemical Oxygen Demand (COD), nitrogen, phosphorus, nickel and zinc into water bodies. The corresponding metrics and their targets are reported in the “Overarching targets and metrics” section of the “Introduction to Environmental Management” chapter.

The Site Checklist also covers the areas of pollutants and water. For example, it includes criteria such as the use of VOC-reduced rinsing thinners and paints, requirements for VOC emissions from paint shops, restrictions on dust emissions, avoidance of the use of heavy metals and hazardous substances, and concentration limit specifications for the wastewater parameters chloride, nickel, sulfate, zinc, manganese and COD.

The voluntary targets defined for the UEP metric, Impact Points and Site Checklist all relate to the topic of pollution. The Volkswagen Group complies with the applicable emission regulations including Directive (EU) 2024/1785 on industrial emissions (IED), and national requirements such as the Abwasserverordnung (AbwV – German Waste Water Ordinance).

Actions and resources: Pollution of air, water and soil

Prevention and control of emissions to air

The Volkswagen Group is committed to continuously reducing its air emissions in its own activities and in the supply chain. Within the Company’s own operations, in addition to the actions for compliance with legal requirements, the Impact Points target – which includes emissions to the air – provides an incentive to take action. For example, thin-film fillers and thin-film clear coating materials are used in some paint shops, where technically feasible. In addition, solvent-based rinsing thinners are being replaced by low-solvent versions. In dust-relevant areas such as paint shops, body shops, and mechanical manufacturing, filter technologies are used to reduce dust. In addition, the Site Checklist includes criteria aimed at reducing air emissions (see the “Overarching targets” section).

In the upstream and downstream supply chain, compliance with the Code of Conduct for Business Partners is intended to reduce the emission of air pollutants by requiring direct suppliers to implement appropriate actions to reduce air pollution.

By transforming its portfolio towards e-mobility, the Volkswagen Group is also making a contribution to improving local air quality, in particular by reducing emissions of nitrogen oxide and particulate matter (for more information see the “Actions and resources: Climate change” section of the “Climate Change” chapter).

Prevention and control of emissions to water

In the interests of protection of water bodies, the Volkswagen Group does not discharge untreated wastewater resulting from the Group’s activities into receiving waters bodies. Pretreatment systems are usually used to remove pollutants from wastewater that cannot be removed in a biological wastewater treatment plant. For example, light liquid and grease separators, evaporation systems and oil skimmers are installed to remove fats, oils and emulsions. By contrast, heavy metals are removed by means of the physico-chemical precipitation process. COD contamination is largely eliminated through adsorption, filtration or flotation processes. The final step before discharge is biological treatment of the pretreated wastewater using, for example, a membrane bioreactor (MBR) to remove potential organic pollutants such as phosphorus and nitrogen. If the wastewater is not treated at the production site itself, it is treated in an external treatment plant or disposed of appropriately as waste.

In line with the Zero Impact Factory strategic vision, further actions are being considered in production when using substances potentially polluting water: In the interests of preventive soil and water protection, for example, continuous care should be taken to ensure that the relevant containers are fitted with a secondary barrier for retention in the event of damage.

Compliance with measurement obligations is ensured by regular wastewater analysis, the frequency of which varies depending on the pollutant, and is based on the legal and internal requirements.

Prevention and control of soil pollution

Volkswagen actively avoids soil pollution by issuing guidelines for the safe storage and disposal of hazardous and non-hazardous waste, for avoiding toxic substances and for minimizing soil erosion. In conducting their activities, suppliers should avoid causing harmful soil changes that could adversely affect the natural basis for food and drinking water or pose a risk to human health.

Engagement and reporting in the upstream and downstream supply chain for raw materials

The extraction and processing of certain raw materials for the automotive industry is associated with environmental risks including pollution of air, water and soil. The Volkswagen Group addresses these risks in its Raw Materials Due Diligence Management System (RMDDMS), which is covered in detail in the section “Raw Materials Due Diligence Management System (RMDDMS)” in the “Sustainability in the Supply Chain” chapter.

To promote transparency, the Group regularly publishes its Responsible Raw Materials Report. This documents the methodology and actions of the RMDDMS and shows how the Group fulfills its human rights and environmental due diligence obligations in high-risk raw material chains.

The RMDDMS focuses particularly on indirect supply chains where the risk analysis has identified increased exposure to environmental and social risks. In-depth assessments are carried out for particularly risky raw materials, enabling targeted risk mitigation actions and effectiveness tracking. The RMDDMS currently covers 18 priority raw materials. These are the battery raw materials cobalt, lithium, nickel and graphite; the conflict minerals tin, tungsten, tantalum and gold (3 TG); and aluminum, copper, leather, mica, steel, natural rubber, platinum group metals, rare earths, magnesium and cotton. As part of its environmental management, the Volkswagen Group has also taken actions to exclude raw materials from deep-sea mining from its supply chains. As a precautionary measure, the Group does not engage in financing such activities until their ecological and social impacts have been comprehensively investigated and assessed. The aim is to avoid potential negative impacts on marine ecosystems and biodiversity.

Audits are a key tool for assessing and managing risks in the lower tiers of the supply chain. They complement the other elements of the RMDDMS and promote transparency, compliance and continuous improvement. Further actions and their impact on workers in the supply chain are presented in the “Sustainability in the Supply Chain” chapter.

The Volkswagen Group aims to ensure the responsible procurement of raw materials and is guided by the five steps of the Organization for Economic Cooperation and Development’s (OECD) Due Diligence Guidance for Responsible Business Conduct and the requirements of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. Accordingly, suppliers may only use raw materials in smelting works or material refineries that meet the requirements of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. They must also have been audited by the Responsible Mineral Initiative (RMI) or similar organizations. The Volkswagen Group expects its suppliers to avoid all minerals from conflict-affected smelting works. However, the aim is not to prohibit the procurement of conflict minerals or other products originating from conflict-affected and high-risk areas, but to encourage procurement from responsible sources within these regions. The identification of the 3TG smelters and refineries used by suppliers or sub-suppliers must be disclosed annually. In line with international best practices, the Volkswagen Group also expects its suppliers to complete Conflict Mineral Reporting Templates (CMRTs). As well as identifying the smelting works and refineries, this template also allows the countries of origin of the mined materials to be specified. Compliance with the OECD guidance is assessed using the RMI’s Responsible Minerals Assurance Process (RMAP). The RMAP is an independent third-party assessment of the management systems and procurement practices of smelting works/refineries and is used to certify compliance. To underscore its commitment to responsible supply chains for conflict minerals, the Volkswagen Group voluntarily publishes a CMRT to ensure full transparency.

Volkswagen’s RMDDMS addresses impacts on soil pollution. The system integrates environmental and human rights matters into the raw materials supply chain, indirectly taking into account impacts such as land degradation and improper disposal of raw material residues. International standards such as the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal are mandatory. In addition, our requirements address the avoidance of deforestation and land degradation.

Metrics: Air and water pollution

Air and water pollution

Metrics on emissions into air and water

The metrics collected across the Group are shown in the following. If thresholds for other air or water emissions as defined by the European Pollutant Release and Transfer Register (E-PRTR) are exceeded at European production sites, the sites report this to the competent authorities as part of their annual reporting obligations.

Description of measurement methodologies

Group standard 98000 defines indicators for emissions to enable the uniform collection of emissions data at Volkswagen Group sites. They include the recording of pollutants discharged into wastewater such as zinc, nickel, COD, total organic carbon (TOC), dissolved fluoride, nitrogen and phosphorus as well as air emissions such as dust, VOCs, nitrogen oxides (NO_x), and sulfur dioxide (SO₂). The recording hierarchy in accordance with Group standard 98000 applies in conjunction with the permitted measurement methods described in the standard. These are parameter-specific and based on the current state of the art.

Context information on pollution of air

The Volkswagen Group’s production sites record a range of environmentally relevant air emissions, irrespective of national legislation or regulatory requirements. Emissions from combustion processes, such as carbon monoxide (CO) and sulfur dioxide, are calculated by multiplying the quantities of fuel used by country-specific emission factors, unless more precise, site-specific emission factors are available. In addition, VOC emissions, which are mainly released during painting processes, are also recorded. The emissions required by national legislation or plant permits are recorded as a minimum requirement. VOC emissions from painting facilities must be calculated for all vehicle paint shops. If VOC emissions are combusted through thermal post-combustion or regenerative post-combustion, the CO₂ emissions released must also be recorded. With regard to recording particulate matter (PM) with a diameter of 10 µm or less (PM10), it is permitted to record the total dust quantity and then convert it into PM10 using conversion factors.

Context information on pollution of water

The data collection intervals and analytical methods for the pollutant concentrations contained in wastewater are based on the requirements of the site permits and/or relevant laws, varying from quarterly to daily measurement obligations, depending on the pollutant. In addition, Group standard 98000 sets minimum standards for specific pollutants, which are to be sampled at least quarterly and based on relevant ISO standards. The reported annual emission quantities into wastewater are typically calculated by multiplying the measured wastewater volumes by the concentrations of the respective pollutants.

Collection and accounting processes

Each site is responsible for collecting the environmental indicators. The environmental indicators are recorded in the EIS in accordance with Group standard 98000 and validated at Group level. The sites must work towards ensuring that the environmental indicators are determined for each specified recording interval using the same system. Year-on-year changes in excess of a predefined tolerance level must be justified.

Sources of information

Permitted measurement methods are generally based on national and international laws and regulations (for example the German Federal Emission Control Act, the European F-Gas Regulation), internationally recognized standards and norms (for example GHG Protocol and the ISO standards), industry-specific requirements (for example, emission factors from the German Association of the Automotive Industry, VDA) and scientific findings (for example, assessment reports from the International Panel for Climate Change, IPCC).

Reasons for choosing an alternative methodology to quantify emissions

Group standard 98000 sets out a measurement hierarchy for the collection of environmental data at sites (see the “Uniform collection of environmental data” section in the “Introduction to Environmental Management” chapter).