Volvo Car AB (publ.)
Climate Impact & Sustainability Data (2022)
Reporting Period: 2022
Environmental Metrics
Renewable Energy Share:66% (manufacturing)
ESG Focus Areas
- Climate Action
- Circular Economy
- Ethical and Responsible Business
Environmental Achievements
- Reduced average lifecycle CO2 emissions per vehicle by 14.8% compared to 2018 baseline.
- Reduced tailpipe emissions per average vehicle by 31.5% compared to 2018 baseline.
- 66% of manufacturing operations powered by climate-neutral energy.
- Volvo EX90 includes the highest quantity of recycled and bio-based plastics of any Volvo to date (48 kg –15 per cent).
- Volvo EX90 contains around 15 per cent recycled steel and 25 per cent recycled aluminum.
Social Achievements
- Employee engagement score of 76 (above benchmark).
- 29.6% women in senior leadership.
- Injury rate (LTCR) for employees: 0.07.
- Supported children and families fleeing the war in Ukraine through financial support and vehicle provision.
Governance Achievements
- Implemented a new organisation with a smaller Executive Management Team and a broader Group Management Team.
- Issued a second €500M Green Bond.
- Divested its holding in Aurobay to Geely Holding.
- Took full ownership of Zenseact.
Climate Goals & Targets
Long-term Goals:
- Sell only fully electric cars by 2030.
- Become a climate-neutral company by 2040.
Medium-term Goals:
- 50% fully electric sales by mid-decade.
- Achieve cost parity with ICE cars in third-generation electric cars by mid-decade.
- Reduce annual CO2 emissions by 2.5 million tonnes by mid-decade.
- 40% reduction in production waste per vehicle by mid-decade.
- 40% reduction in production water usage per vehicle by mid-decade.
- 25% recycled and bio-based materials in new car models by 2025.
Short-term Goals:
- Reduce CO2 emissions per average vehicle by 40% by 2025 (from 2018 baseline).
- 50% of global sales from fully electric vehicles by 2025.
- 100% climate neutrality in own operations by 2025.
- 25% reduction in supply chain emissions by 2025.
- 25% reduction in operational emissions by 2025.
- 34% women in Senior Leadership positions by 2025.
- 50% reduction of retailer emissions by 2025.
Environmental Challenges
- Rising inflation and higher interest rates.
- Supply chain disruptions and logistics issues.
- Increased prices of battery materials (especially lithium).
- The war in Ukraine.
- Global shortage of semiconductors.
- Cybersecurity threats.
- Potential human rights violations in the supply chain.
Mitigation Strategies
- Divesture of Aurobay (ICE legacy business).
- Launch of the Volvo EX90 fully electric vehicle.
- Collaboration and strategic alliances.
- Comprehensive cost and efficiency optimization plan.
- Supplier Risk Management.
- Securing critical raw materials.
- Improved supply chain oversight.
- Joint venture with Northvolt.
- Enhanced Due Diligence Design program (DDD).
- Expanding the battery supply chain audit programme.
Supply Chain Management
Responsible Procurement
- Responsible sourcing practices.
- Code of Conduct for Business Partners.
- Supplier sustainability requirements.
- Blockchain technology for supply chain transparency.
- Monitoring mining conditions through the Better Mining initiative.
Climate-Related Risks & Opportunities
Physical Risks
- Extreme weather
- Flooding
- Storms
- Heat stress
- Earthquakes
Transition Risks
- Regulatory changes (ICE bans)
- Market shifts (consumer preferences)
- Increased energy prices
- Securing fossil-free electricity
Opportunities
- Development of energy-efficient products
- Bi-directional charging capabilities
Reporting Standards
Frameworks Used: GRI Standards
Certifications: ISO 14001
Third-party Assurance: Limited assurance
Sustainable Products & Innovation
- Volvo EX90 (fully electric SUV)
- Next-generation fully electric cars