For Volkswagen, sustainability means pursuing economic, social and ecological objectives simultaneously and with equal energy. It is our aim to create lasting values, offer good working conditions, and conserve resources and the environment. When it comes to the emissions issue, we have failed to live up to our own standards in several areas. The irregularities in the handling of emissions tests contradict everything we stand for. We regret this immensely and are aware that we have let our stakeholders down. We will do everything in our power to prevent incidents of this kind from recurring, and are fully committed to re-embracing our standards and winning back public trust. We are completely reworking our sustainability concept with the aim of ensuring that opportunities and risks associated with our environmental, social and governance activities are identified as early as possible at every stage of the value creation process. In keeping with this aim, we are determined that our corporate social responsibility (CSR) activities will have a lasting, positive impact on the Company’s value and reputation.
As one of the world’s largest industrial corporations, our Group bears a special social responsibility. We intend to put our creative powers to good use for the benefit of people and the environment. Every year we produce more than 10 million vehicles. This gives rise to positive effects such as new jobs, regional prosperity and individual opportunities for participation – but also to negative impacts such as emissions and resource consumption. In view of digitization, we will in the future be faced with new issues – for example, what we do with our customers’ data, how we ensure that they are secure and protected at all times, and what legal and ethical problems are raised by automated driving. To live up to our responsibilities in the most comprehensive and efficient manner possible, we focus on the most material aspects (see “Materiality Analysis”). Our most important tasks are to ensure responsible and efficient production, and to make mobility not only as safe, convenient and environmentally compatible as possible, but also affordable for large numbers of people. After all, individual mobility remains a basic human need, and fulfilling this need is the central corporate objective of our Group – even in light of the strategic realignment in which we are currently engaged.
In June 2016, we presented our “TOGETHER – Strategy 2025” program for tomorrow’s world. The new strategy is a response to the dramatic upheavals in our industry and changes in our customers’ mindsets. Increasing numbers of people view mobility as a standalone product. If, in the future, we start to offer not just cars, but also other, simple solutions that meet our customers’ needs, this will open up untold opportunities for us. Because we believe it is important to think and act for the long term in these times of revolutionary transformation, we deliberately developed our future program with a time horizon of 2025. The title “TOGETHER” underscores the fact that we will need to work together as a team to build success. This starts with improved cooperation within our company and extends to intensive dialog with our customers, shareholders, business partners and other stakeholders – in full awareness of our responsibility towards society and the environment. Our strategy has four cornerstones:
- Transforming our core business
- Building a cross-brand, autonomous unit for mobility solutions
- Mobilizing internal and external resources to strengthen Volkswagen’s ability to innovate
- Securing funding for future investments
We have formulated a clear vision for the next decade which goes hand-in-hand with this strategy:
“Volkswagen will become one of the world’s leading providers of sustainable mobility.”
Our new corporate strategy is the outcome of a joint effort by more than 250 Group employees working over several months. After the first public presentation of “TOGETHER” in June 2016, we embarked on the next development stage, involving a systematic breakdown of the corporate strategy so that it could be applied to individual brands and functions. We intend to complete this process by the end of 2016.
You will find further details of our corporate strategy here.
TOGETHER – Strategy 2025
We know that growth can only take place hand in hand with responsibility and environmental protection – in fact, in recent years these factors have become genuine value drivers. This is why everything we do in the interests of sustainability also serves to achieve our corporate objectives – in an accompanying, promoting and supporting capacity. Our new “TOGETHER – Strategy 2025” effectively bridges the conceptual gap between sustainability and business objectives. As our CEO Matthias Müller remarked when introducing the strategy: “TOGETHER” embodies our understanding of sustainability, which in its broadest sense will guide our future actions.”
Not only does the new strategy formulate a vision for our Company, it also signposts the ways in which Volkswagen will excel going forward.
- We will inspire our customers. This includes offering them products with above-average carbon efficiency.
- Our earnings power will be as strong as that of our top competitors.
- We will be a model of environmental compatibility, safety and integrity. Important steps in this direction include a continuous reduction of our carbon footprint and a decrease in the emissions of our vehicle fleet.
- We will continue to be an outstanding employer.
The Volkswagen Group of the Future
The key aspects of our sustainability objectives and activities, which are subject to Group-wide control, are structured under the three headings used in this report – Economy, People and Environment. This reflects not only our Group-wide interpretation of sustainability that can be applied in all regions around the world, but also our conviction that stable, long-term business based on ethical criteria is a prerequisite for acting in an environment-friendly way and playing a responsible part in shaping the future of people within the Group and in society at large.
With over 610,000 employees and 119 production locations on four continents, we are particularly concerned to do this consistently worldwide. Our approach: to transfer tried-and-tested ideas from brand to brand, and from region to region. There are already numerous examples of how this works – from the modular transverse matrix, via the dual vocational education and training system and the in-service training opportunities we deploy across the regions, to mobility services, concepts for road safety and social responsibility, and biodiversity projects. In this way, we are turning our size and growth to good advantage and exercising our responsibility to our employees, the environment and society.
How our industry is changing
The key trends in the automotive world at a glance
Managing Challenges and TrendsGRI G4-18, G4-21
Even if the major challenges are known and can be assessed, the resulting demands on the Volkswagen Group are nevertheless subject to increasingly rapid change and must be reassessed at regular intervals, necessitating ongoing adjustments to our strategic planning. Consequently, within the Volkswagen Group we have several specialized functions engaged in observing megatrends in society, analyzing the overall economic backdrop, tracking emerging customer trends and continuously benchmarking our offerings against the competition. The results are brought together in a process known as the planning round. This ensures that the important decisions for production, purchasing and sales structures are taken on the basis of a 10-year timeline. Another instrument for identifying challenges and expectations and for dealing with changing background conditions is the stakeholder dialog, which we cultivate at both Group and market level (see “Stakeholder Management”).
In mid-2015, based on these observations and in light of the major challenges we face, we reviewed 15 areas in which Volkswagen Group can and must make a special contribution – because these are fields where we have a significant impact or where we are particularly well placed to exert influence, and where consequently a great deal is also expected of us.
Materiality Analysis GRI G4-18, G4-19, G4-20, G4-25, G4-26, G4-27
In 2015, two developments played a role in a detailed analysis of the topics of material importance to the Volkswagen Group. Specifically, these were the question of the strategic realignment of the Company under our Strategy 2025, and the handling of repercussions from the emissions issue.
In practice, our approach to the analysis and identification of significant issues was as follows:
- From global challenges, we derived a list of 15 central action areas in which we need to provide answers. We did this on the basis of the following sources: external studies, industry analyses and our brands’ stakeholder surveys, and internal guidelines such as our corporate strategy, the Group Environmental Strategy, and key factors identified by the Corporate Strategy Group.
- In 2015 we invited experts to three workshops addressing Economy, Environment and People with the aim of re-assessing the relevance of these action areas to society. The workshops largely corroborated the importance of the action areas. The only significant change was the decision to move the “vehicle safety” action area from Environment to Economy and merge it with “quality”. However, no changes were made to the actual content.
- In light of the diesel issue, at the 2015 Group CSR Meeting in October, we discussed the Group’s sustainability performance with representatives of the brands and regions, based on an analysis of our strengths and weaknesses. The results were examined in depth by the various sustainability committees and have been incorporated into the Group’s comprehensive realignment process. As a follow-up measure, workshops have been set up to address the strategic realignment of the Group with those responsible for the brands and specialist areas.
- In each case, detailed discussions led to the realization that in view of the Group’s size, its potential influence and the associated responsibility, all the issues in the GRI list of sustainability aspects can and must be regarded as “significant” for the Volkswagen Group. Specific measures within the various action areas are still being fleshed out in accordance with the objectives, values and indicators of our Strategy 2025. As a globally active corporation, going forward we will also take into consideration ways we can influence and shape the implementation of the United Nations’ Sustainable Development Goals (SDGs).
Origin of the Action Areas for our Sustainability Strategy
Materiality Analysis: Procedure in the Volkswagen Group GRI G4-18, G4-19
Volkswagen Group's Key Action Areas GRI G4-19, G4-20, G4-21
This representation of the 15 key action areas, broken down into the three dimensions Economy, People and Environment, is intended to illustrate the factors we focus on in order to be the world’s most sustainable automaker. In view of our broad international standing, we have deliberately avoided any prioritization of our action areas. On the one hand, the relevance of the individual areas may vary depending on the region; on the other hand, we do not want to judge, for example, whether the health of more than 610,000 employees worldwide is more important than resource conservation throughout the vehicle life cycle – or vice versa. As we understand it, sustainable development means taking equal account of economic, environmental and social interests and maintaining an appropriate balance between them.
Throughout the reporting period, there was much discussion of the deterioration in air quality – especially in conurbations – caused by nitrogen oxides and particulates emitted by motorized private transport. The whole debate became significantly more intense following the diesel emissions issue sparked by Volkswagen. In a series of expert workshops, we explored the whole issue of nitrogen oxides in depth as part of our focus on “Resource conservation throughout the product lifecycle”, and also spent more time in these workshops discussing alternative drives and new kinds of mobility services.