Climate Change Data

Volvo Car AB (publ.)

Climate Impact & Sustainability Data (2021, 2023)

Reporting Period: 2021

Environmental Metrics

ESG Focus Areas

  • Climate Change
  • Circular Economy
  • Ethical and Responsible Business

Environmental Achievements

  • Reduced average lifecycle CO2 emissions per car by 9.5% since 2018.
  • Torslanda (Sweden) manufacturing plant became the first climate-neutral car plant.
  • Daqing (China) plant secured a 100% climate-neutral electricity supply.

Social Achievements

  • Launched Family Bond, a global paid parental leave offer for all employees.
  • Employee engagement at 76%.

Governance Achievements

  • Successful IPO on Nasdaq Stockholm.
  • Introduced an internal carbon price of 1,000 SEK per tonne CO2.

Climate Goals & Targets

Long-term Goals:
  • Climate-neutral company by 2040.
  • Circular business by 2040.
Medium-term Goals:
  • 50% of global sales to be fully electric by mid-decade.
  • Climate-neutral manufacturing operations by 2025.
  • 60% reduction of absolute scope 1 and 2 GHG emissions (baseline 2019).
  • 52% reduction of scope 3 GHG emissions from use of sold products per vehicle kilometre (baseline 2019).
Short-term Goals:
  • Reduce total lifecycle CO2 emissions per car by 40% between 2018 and 2025.

Environmental Challenges

  • Global shortage of semiconductors leading to temporary production halts.
  • Covid-19 pandemic impacting supply chains and production.
  • Increased public expectations on corporate responsibility.
Mitigation Strategies
  • Adjusted production plans to focus on higher-margin vehicles.
  • Developed strategies to secure critical raw materials and improve supply chain oversight.
  • Implemented a strong corporate culture that focuses on ethics and responsible leadership.

Supply Chain Management

Responsible Procurement
  • Aim for 100% climate-neutral energy at Tier 1 supplier sites by 2025.
  • Focus on recycled and fossil-free production of materials.
  • Responsible sourcing of materials like cobalt, lithium, nickel, and mica using blockchain technology.

Climate-Related Risks & Opportunities

Physical Risks
  • More frequent and severe natural disasters.
Transition Risks
  • Market shift and consumer behavior in electrification transformation.
  • Stringent legislation and regulations.
  • Changes in consumer demand.
Opportunities
  • Leadership in the fast-growing premium electric segment.

Reporting Standards

Frameworks Used: GRI Standards (Core level), UN Global Compact, TCFD

Third-party Assurance: Deloitte AB (limited assurance)

Sustainable Products & Innovation

  • C40 Recharge (fully electric)
  • Concept Recharge (sustainable materials)

Awards & Recognition

  • CDP Climate Change A List
  • CDP Supplier Engagement Leader
  • S&P Global CSA Bronze
  • EcoVadis Platinum

Reporting Period: 2023

Environmental Metrics

Renewable Energy Share:98% (climate neutral electricity in own operations)

ESG Focus Areas

  • Climate Action
  • Circular Economy
  • Responsible Business

Environmental Achievements

  • Reduced average lifecycle CO2 emissions per vehicle by 20% compared to 2018 baseline.
  • Launched the EX30, designed to have the lowest carbon footprint of any Volvo car to date.
  • Introduced renewable fuel in all intercontinental ocean container transport for inbound components and spare parts to Europe, China, and the US.
  • Secured supply of climate-neutral electricity in production facilities in Kuala Lumpur and Charleston.
  • Achieved 2030 Scope 1 and 2 SBTi target, reducing emissions by 65% compared to the 60% target.

Social Achievements

  • Improved employee engagement score by +1 compared to the global benchmark.
  • Increased share of women in senior leadership to 30.1%.
  • Employee injury rate (LTCR) of 0.06.
  • Conducted enhanced human rights due diligence activities with 68 audits at directly contracted suppliers and 20 in the battery supply chain.
  • Joined the Responsible Mica Initiative.

Governance Achievements

  • Established a new business unit called Volvo Cars Energy Solutions.
  • Successfully placed an inaugural green bond transaction in the SEK market, raising SEK 1,500m.
  • Updated Green Financing Framework.
  • Transitioned the UK market to a direct model.

Climate Goals & Targets

Long-term Goals:
  • Reach net zero greenhouse gas emissions by 2040
Medium-term Goals:
  • Reduce CO2 emissions by 75% per average vehicle by 2030 (from 2018 baseline)
  • Reduce energy usage in operations by 40% per average vehicle by 2030 (from 2018 baseline)
  • Achieve 30% recycled content average across the fleet and 35% for new vehicle models by 2030
  • Reach >99% waste reused or recycled by 2030
  • Reduce water withdrawal per manufactured vehicle in own operations by 50% by 2030 (from 2018 baseline)
Short-term Goals:
  • Reduce CO2 emissions by 40% per average vehicle by 2025 (from 2018 baseline)
  • Achieve 50% fully electric vehicle sales by 2025
  • Generate SEK 1 billion from circular economy initiatives by 2025 (from 2018 baseline)
  • Reach climate neutral energy in own operations by 2025

Environmental Challenges

  • Challenges with market shift, intense competition and consumer behaviour in electrification transformation.
  • Lack of strategic competencies.
  • Geopolitical tensions and regionalisation resulting in increased tax/duties/tariffs and export controls.
  • Cybersecurity threats.
  • Business interruption.
Mitigation Strategies
  • Divestment of Aurobay (ICE legacy business), launch of fully electric vehicles.
  • Strengthen People Plan process, defining clear talent journey, establishment of Talent sourcing team, Site Strategy.
  • Global presence, building where we sell and source where we build.
  • Governance model, cybersecurity program.
  • Product strategy to provide consumer options less dependent on individual sites.

Supply Chain Management

Supplier Audits: 68 audits at directly contracted suppliers and 20 in the battery supply chain in 2023

Responsible Procurement
  • Code of Conduct for Business Partners
  • Risk-based human rights due diligence
  • Traceability of materials of concern
  • Blockchain technology for battery raw material traceability

Climate-Related Risks & Opportunities

Physical Risks
  • Flooding
  • Storms
  • Heat stress
  • Earthquakes
Transition Risks
  • Market shift and consumer behaviour in electrification transformation
  • Changes in consumer demand
  • Increased speed and scope of new legislation and policies regulating environmental impact
  • Securing fossil-free electricity throughout the value chain
Opportunities
  • Development of energy-efficient products
  • New business opportunities in sustainable energy solutions

Reporting Standards

Frameworks Used: GRI Standards

Certifications: ISO 9001

Third-party Assurance: Deloitte AB (limited assurance)

Sustainable Products & Innovation

  • EX30
  • EM90
  • EX90

Awards & Recognition

  • The Sun’s Car of the Year (EX30)
  • CDP Climate A-list