volvo car group | sustainability report 2014

volvo car group sustainability report 2014

ceo comment TA B L E O F C O N T E N T S 1 INTRODUCTION 1 CEO comment 2 Sustainability score card 4 This is Volvo Cars 6 Corporate strategy 8 Sustainability management 10 Sustainability governance 12 Stakeholder engagement 14 ECONOMIC DIMENSION 14 Economic performance

16 ENVIRONMENTAL DIMENSION 16 Managing environmental performance 20 Environmental performance – products 28 Environmental performance – operations

38 PEOPLE DIMENSION 38 People vision and strategy 44 Health and safety of employees 48 Diversity and inclusion 52 Respecting labour rights 54 Ethics and integrity

58 SOCIETAL DIMENSION 58 Product responsibility 66 Future mobility 68 Value chain management 72 Societal engagement

76 GRI index 79 Appendix 1 80 About the report 81 Information and contact

Dear Stakeholder, Our vision is to be the world’s most progressive and desired premium car brand. To reach this vision, a firm commitment to sustainability is a prerequisite. We started making cars in 1927 because we believed that nobody else was making them safe enough, and ever since we have strived to protect what´s important to people and to make their lives less complicated. Volvo Cars has defined a number of strategic change themes that will lead us towards our vision and our corporate objectives. In each of these strategic change themes, sustainability is a core element. For example, to reinforce our product strengths, we aim to increase the share of hybrid drivetrains in our model range. Ever-stricter emission regulations in all major automotive markets mean that manufacturers have to constantly improve the fuel efficiency and emission levels of their cars and engines. And for Volvo Cars things are happening quickly. With all present cars to be replaced in the next four years, Volvo Cars stands at the beginning of an unprecedented revitalisation of its product portfolio. The first milestone on this endeavour was reached with the presentation of the all new XC90 in August 2014. By offering a twin-engine powertrain, combining electric and petrol power, unprecedented low carbon emissions were reached. For Volvo Cars, the constant changes in the surrounding world are to be seen as possibilities rather than challenges. By understanding why and how the world around us is changing, we can not only adapt but use new challenges as drivers for our continued business success. For example, research shows that attitudes among young consumers towards owning a car are changing. Consumers are also showing us that connectivity options are becoming more and more important when they make their purchase decisions. Increased connectivity between our cars and surrounding infrastructure and vehicles can also bring improvements in terms of safety, fuel economy and avoiding congestion. I am therefore proud to say that Volvo Cars is spearheading the development of autonomous driving technologies. The Drive Me pilot project, arguably the most ambitious autonomous drive project in the world will have 100 self-driving cars on public roads in 2017, driven by normal customers. Being able to define the challenges and opportunities depends on our success in having the right talent and competence in our team.

LORUM IPSUM

“To reach our vision, a firm commitment to sustainability is a prerequisite.”

As cars become increasingly connected and packed with technology, we are in direct competition with large technology players in finding and recruiting digital engineering talent. The market for traditional engineering talent is also highly competitive. This issue has been of particular relevance in 2014 as we grew worldwide in terms of employees. In order to attract the right employees and create a high-performance organisation, Volvo Cars has made a strategic decision to integrate health in all aspects of our global operations. This includes building an attractive and stimulating organisation and work environment for our employees. I believe that by having this human-centric focus we have an advantage in securing the competence needs of tomorrow. During 2014 we made efforts to strengthen our commitments to sustainability and take these future trends into consideration by starting the development of our new Sustainability Framework. It defines our responsibilities, focus areas and goals in three dimensions: our direct impact as a company, the impact of our vehicles, and our role in society. It is our conviction that we need to

have sustainability in mind in order to achieve long-term business success. We will continue to develop the framework in 2015 and set objectives within various focus areas. A clear example of this is our vision that no one should be killed or seriously injured in a new Volvo car by 2020. Volvo Cars works in collaboration with a wide range of partners and stakeholders and we will continue to do so. Collaboration and a strong commitment towards sustainability have guided Volvo Cars since 1927 and is an important part of our heritage. In this report, you can read all about our achievements in more detail; achievements that have been created by our dedicated employees and of which I am incredibly proud.

Håkan Samuelsson President and Chief Executive Officer

SUSTAINABILITY REPORT 2014 | VOLVO CAR GROUP

1

INTRODUCTION

sustainability score card KEY SUSTAINABILITY DATA

2007

2008

2009

2010

2014 TREND1)

2011

2012

2013

373,525 449,255

421,951

427,840

465,866

CREATING VALUE Total Sales (retail deliveries)

458,323

374,297 334,808

ASSUMING SOCIAL RESPONSIBILITY PRODUCT RESPONSIBILITY

Safety test results Share of independent tests where Volvo Cars received the highest rank (%)

69

70

85 2)

832)

95 2)

95

95 2)

95

5.50

5.00

4.70

4.50

4.40

4.40

4.50

4.50

1.5

0.90

0.50

0.70

0.70

0.55

0.62

0.34

18.00

18.50

18.70

19.60

21.00

21.30

22.90

24.50

n/a

0.97

0.99

0.97

0.97

0.97

0.96

0.98

n/a

1.03

1.03

1.01

0.99

0.99

1.01

1.00

24,384

22,732

19,650

19,494

21,512

22,715

23,579

26,080

9.10

9.20

12.80

4.90

3.20

3.00

3.80

3.70

190

182

173

157

151

143

131

125

916,669

816,581

713,079

837,785

815,301 798,487

776,587

745,557

126,735

68,367

5,898

67,585

62,922

59,729

49,918

NOx emissions (tonnes)

101

90

71

85

80

72

76

77

SOx emissions (tonnes)

1