Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Neutrality
• Circularity
• Transparency
• Inclusion

Environmental Achievements

• Decreased greenhouse gas emissions intensity by six percent compared to 2020 (40.2 tonnes CO2e per sold car in 2021 vs 42.8 in 2020)
• Chengdu plant attained Gold status in LEED ratings
• 100 percent renewable electricity contracts secured for Chengdu plant (65% hydroelectric)

Social Achievements

• Launched updated Code of Conduct and rolled out company-wide training (40% completion by year-end)
• Launched SpeakUp whistleblowing system
• No fatalities or work-related injuries in 2021

Governance Achievements

• Established a dedicated Internal Controls & Risk Management team
• Updated Polestar Code of Conduct and related policies
• Appointed an internal auditor reporting to the Audit Committee

Climate Goals & Targets

Environmental Challenges

• Increased absolute emissions across the value chain (165% increase to 1,126,224 tonnes CO2e)
• High concentration of suppliers in areas susceptible to extreme weather
• Increasing prices of sustainable raw materials
• Limited access to renewable energy for supply chains
• Changes in legislation and carbon pricing
• Shortage of supply of recycled cobalt

Mitigation Strategies

• Developed a climate roadmap with targets for five-year periods leading up to 2040
• Implemented a CO2 reduction program for Polestar 2
• Set a target to halve emissions per sold car by 2030 compared to 2020
• Working to increase the share of renewable energy in the supply chain (all Tier 1 electricity to be fossil-free by 2025)
• Exploring increased remanufacturing and reuse of parts
• Developing circularity metrics to reduce non-circular materials per lifetime vehicle mileage
• Partnering with Volvo Cars for end-of-life battery management
• Implementing a sustainability assessment program for suppliers including a Supplier Sustainability Index (SSI)

Supply Chain Management

Supplier Audits: 12 audits of high-risk suppliers in 2021

Responsible Procurement

• Code of Conduct for Business Partners
• Sustainability Self-Assessment Questionnaire (SAQ)
• Supplier Sustainability Index (SSI)
• Third-party audits for new suppliers in select regions

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events impacting supplier locations

Transition Risks

• Increasing prices of sustainable raw materials
• Limited access to renewable energy
• Changes in legislation and carbon pricing

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards: Core option, EU Non-Financial Reporting Directive, SASB’s sector guidelines for the automobile industry

Certifications: ISO 14001 (Chengdu plant and Gothenburg HQ)

Sustainable Products & Innovation

• Polestar 0 project aiming for a climate-neutral car by 2030
• Polestar 02 roadster concept using sustainable materials

Awards & Recognition

• 2021 award for best lifecycle assessment and transparency (Swedish Association of Green Motorists)
• 'Product Innovation of the Year' at the edie Sustainability Leaders Awards 2021

Environmental Metrics

ESG Focus Areas

• Climate neutrality
• Circularity
• Transparency
• Inclusion

Environmental Achievements

• Reduced relative emissions per car sold by 8% compared with 2021 and by 13% compared with 2020.
• Switched to a supplier using hydropower for aluminum in wheels.
• Increased share of single-motor cars with lower energy use.
• Reduced Polestar 2 CO2e by 1.7 tonnes per car (6%) year-over-year through sustainable upgrades (renewable energy for battery case aluminum, rims, and 100% renewable electricity at the Taizhou plant).

Social Achievements

• Increased material traceability to include cobalt, mica, lithium, nickel, leather, and wool.
• Made SEK 1 million contribution (matched by Akelius Foundation for a total of SEK 2 million) to support humanitarian efforts in Ukraine and UNICEF.
• No notifiable or lost-time accidents, fatalities, or work-related injuries in 2022.

Governance Achievements

• Launched updated Code of Conduct in December 2021.
• All relevant employees received anti-corruption training.
• Ranked first in the automotive industry in the 2022 Green Supply Chain CITI Index.

Climate Goals & Targets

Environmental Challenges

• Increasing total GHG emissions due to company growth.
• Lack of climate-neutral alternatives requiring research and collaboration.
• High share of coal power in supply chains in China.
• Maintaining material quality after recycling.
• Low recycling rate of plastics due to material complexity.
• Complexity and length of supply chains complicating risk assessment and management.
• Corruption risks in mineral extraction, vehicle distribution, and interactions with governmental actors.
• Data breaches and security incidents related to connected vehicles.

Mitigation Strategies

• Setting targets to halve GHG emissions per sold car by 2030 and reach climate neutrality across the value chain by 2040.
• Initiating Polestar 0 project to create a truly climate-neutral car by 2030.
• Collaborating with over 20 industry partners on Polestar 0.
• Increasing share of renewable energy in the supply chain (aiming for 50% by 2030 and 90-100% by 2040).
• Implementing supplier requirements on climate in sourcing tools and ESOW.
• Launching climate calculation tool for designers and engineers.
• Collaborating with Cyclic Materials for closed-loop recycling of rare earth elements.
• Collaborating with Volvo Cars for end-of-life battery management.
• Preparing for compliance with EU battery regulation.
• Using blockchain technology to trace risk materials.
• Implementing measures to reduce human error and improve technical security to mitigate data breaches.

Supply Chain Management

Supplier Audits: 18% of suppliers in high-risk regions had third-party onsite audits in 2022 (Polestar 2); 13% for Polestar 3 and 8 for Polestar 4 (before production start)

Responsible Procurement

• Code of Conduct for Business Partners
• Sustainability Self-Assessment Questionnaire (SAQ)
• Supplier Sustainability Index (SSI)
• Volvo Cars Supplier Evaluation Model (SEM)
• RBA Risk Tool
• Conflict Minerals Reporting Template (CMRT)

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of extreme weather events
• Changes in precipitation patterns
• Rising sea levels
• Rising mean temperatures

Transition Risks

• Changes in climate-related policies and legal environment
• Reduced incentives for EVs
• Economy-wide transition to electrification leading to production capacity reductions

Opportunities

• Increased market share from traditional car brands due to changes in climate-related policies
• Increased market share from competitors due to perception of sufficient contribution to lower-carbon economy

Reporting Standards

Frameworks Used: GRI Standards 2021, EU Non-Financial Reporting Directive, TCFD, SASB sector guidelines for the automobile industry

Certifications: ISO 14001 (manufacturing plants and Gothenburg headquarters)

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 9 (Industry, innovation, and infrastructure)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)

Polestar's initiatives contribute to these goals through its focus on renewable energy, sustainable materials, circular economy, and climate neutrality.

Sustainable Products & Innovation

• Polestar 0 project
• Polestar 2 sustainable upgrades
• Polestar 3 with bio-attributed MicroTech, animal welfare-compliant wool, and animal welfare-secured leather

Awards & Recognition

• RoSPA and British Safety Council awards for health and safety performance (UK R&D site)