Corporate Social Responsibility and Sustainability

The Volkswagen Group is committed to transparent and responsible corporate governance. Implementing this across all levels and every step of the value chain is a challenge: with twelve brands, 119 production locations and more than 610,000 employees, we are one of the world’s largest companies.

For the Volkswagen Group, sustainability means simultaneously striving for economic, social and environmental goals in a way that gives them equal priority. We want to create enduring value, provide good working conditions and handle the environment and resources with care. In conjunction with the emissions issue, Volkswagen has failed to meet its own standards in a number of respects. The irregularities in our handling of emissions figures are contrary to everything Volkswagen stands for. We deeply regret this and are aware that we disappointed our stakeholders. We are doing everything in our power to make sure that the same thing never happens again. We are working urgently to live up to our own standards again and restore our customers’ and society’s confidence. We are comprehensively revising our sustainability concept. This is aimed at ensuring that we recognize risks and development opportunities in the areas of environment, society and governance at an early stage at every step along the value chain. In this way, our corporate social responsibility (CSR) activities will contribute to permanently boosting our Company’s reputation and value again in the long term.

Management and coordination

The Volkswagen Group has created a clear management structure for coordinating sustainability and CSR. Its highest committee is the Group Board of Management (Sustainability Board). It is regularly informed by the Group CSR & Sustainability steering group on the issues of sustainability and corporate responsibility. The Group CSR & Sustainability steering group’s members include executives from central Board of Management business areas and representatives of the Group Works Council and of the brands and regions. Among other things, the steering group makes decisions on the strategic sustainability goals, monitors the extent to which they are being met using management indicators, identifies key action areas and approves the sustainability report.

The CSR & Sustainability office supports the steering group. Its duties include coordinating all sustainability activities within the Group and the brands, but also coordinating the stakeholder dialog at Group level, for example with sustainability-driven analysts and investors. CSR project teams work on topics across business areas, such as reporting, stakeholder management, or sustainability in supplier relationships. This coordination and working structure is also largely established across the brands and is constantly expanding. Since 2009, the CSR & Sustainability coordinators for all brands and regions have come together once a year to promote communication across the Group, establish consistent structures and learn from one another. This Group CSR meeting has proven itself an integral part of the Group-wide coordination structure. At the end of the reporting period, in light of the diesel issue we discussed the Group’s sustainability performance based on an analysis of strengths and weaknesses. The results are being looked at in-depth in the sustainability committees and are being incorporated in the Group’s comprehensive realignment.

CODE OF CONDUCT AND GUIDELINES

Our Code of Conduct, which is applicable throughout the Group, provides guidance for our employees in the event of legal and ethical challenges in their daily work. It embodies the Group values of customer focus, top performance, creating value, renewability, respect, responsibility and sustainability. All employees are equally responsible for adhering to these principles.

International conventions, regulations and internal rules are also key guidelines for our conduct. Through the “Declaration on Social Rights and Industrial Relationships at Volkswagen” (Volkswagen Social Charter), the Charter on Labor Relations, the Charter on Temporary Work and the Charter on Vocational Education and Training, we also profess our commitment to fundamental human rights, labor standards and principles.

Strategic stakeholder management

We cannot be successful in the long term without communicating with our stakeholders and knowing their expectations. As the complexity of the Volkswagen Group increases, so do the expectations of and our network of relationships with the various stakeholders. Our communication with stakeholders therefore covers many aspects, ranging from expectation management to innovation momentum, to identifying opportunities and risks. We are open to a constructive and equitable dialog where we learn from one another. Our goal is to agree on a common solution, but at the very least each to gain a mutual understanding of the other’s initial situation and position.

Our brands in particular hold intensive dialogs with their stakeholders. We pool this communication at Group level in order to be able to discuss Group-wide issues in detail. In this context, we are also involved in organizations that concentrate on issues related to sustainable development. On an international level, for example, we are represented in CSR Europe, a leading European business network. We are putting our involvement in some organizations on hold for the time being in light of the investigation and clarification of the diesel issue. This applies to our memberships of Biodiversity in Good Company e.V., the World Business Council for Sustainable Development (WBCSD) and the UN Global Compact, and our management board activities at econsense, the Forum for Sustainable Development of German Business.

The insights we gain from dialog with our stakeholders are indispensable signposts and indicators of our Company’s future viability. We publish information about the stakeholder dialogs in our annual sustainability report so that our communication with stakeholders is understandable and transparent. Stakeholder management is steered and coordinated by the Group CSR & Sustainability steering committee, by the Group’s CSR project team and by the project teams of the brands and regions. For the project teams we have specifically selected representatives of the relevant specialist areas. This enables us to react quickly to the diverse requirements of stakeholders.

Our stakeholder management consists of a variety of instruments: dialogs, workshops, symposiums, public debates, social media, questionnaires, evaluations and projects. In order to systematically manage all these activities, we document them in an IT-based stakeholder management system.

In 2015, we used the results of the comprehensive stakeholder questionnaires from brands and companies to identify key issues. In order to systematically prioritize the issues identified, we evaluate them using the latest international sustainability studies and benchmark them against the guidelines and conventions that Volkswagen is committed to. Internal bodies that also involve all brands and regions discuss and evaluate the key issues. These discussions center around three main criteria:

• the expectations of stakeholders,
• the significance for the Company and
• the extent to which the Company can influence these issues.

The results give us the Volkswagen Group’s key action areas for achieving our sustainability goal.

CSR Projects

The Volkswagen group initiates and manages a variety of CSR projects around the world, which are based on the following key principles:

• The projects are compatible with the Group’s principles while at the same time addressing a specific local or regional issue.
• They demonstrate the diversity in the Group and in the social environment in which they are implemented.
• They are the result of close stakeholder dialog with the local players involved in implementation.
• Project management is the responsibility of the local units working on the project.

VOLKSWAGEN GROUP'S KEY ACTION AREAS

The Volkswagen Group supports the arts and culture, education, science, health and sport in a large number of projects; other initiatives serve to develop regional structures and conserve nature. These projects make CSR a learning platform for all brands and in all of the Company’s regions. Examples include our cooperation with the German Red Cross (DRK) and our efforts to help refugees.

Humanity, public spirit and responsibility – these are the values on which the work of the German Red Cross is based, and we in the Volkswagen Group share these values. We are promoting sound, balanced social development, in Germany and at our other international locations. As part of a strategic partnership, the Volkswagen Group helps the German Red Cross to find even more people who are willing to volunteer their time. This goal is central to the partnership, in conjunction with strengthening the Red Cross’s rescue service.

Under the motto “Helping Together”, we are joining in the collective task of receiving and integrating the refugees who come to Europe and Germany. This is accomplished through a wide variety of projects, starting with immediate aid in the initial accommodation facilities to local integration and education projects, on to providing vehicles and non-monetary resources. A newly created Internet platform serves as a volunteer database and a source of information to support active volunteer helpers. This is because we are convinced that with their help, the Volkswagen Group, its brands, locations and employees can not only make a humanitarian contribution, but thereby also contribute to the cohesion of society.

Our long-standing cooperation and consultancy agreement with the German Nature and Biodiversity Conservation Union (NABU) expired on December 31, 2015. Extension of the contract and further collaboration are suspended for the time being as a result of the diesel issue. We would like to continue our strategic partnership with NABU and are working intensively on creating the conditions required for this.

“FUTURE TRACKS”

The automotive industry is facing the greatest upheavals in its history. Alternative drive systems, the digitization of the entire value chain and rapidly changing global customer expectations of mobility will shape the coming years. In response, the Volkswagen Group has launched the “Future Tracks” program: we are developing solutions for the fundamental upheavals and challenges at Board of Management and senior executive level. “Future Tracks” brings together all topics, activities and measures that we are deploying now and will be deploying in the coming years to prepare for the major issues of the future – across all brands and regions and throughout the entire Group.

From a technical viewpoint, our work focuses on drive technologies, digitization and the networking of products and production. Added to this are new requirements for individual mobility and mobility-related services. Our efforts aim to ensure that the Volkswagen Group takes a leading role in shaping and influencing the new world of mobility.

A solid commercial basis is essential to be able to tackle these challenges successfully. For this reason, “Future Tracks” has been introduced not only as a forward-looking program – it also focuses on efficiency. Our intention is to continue to grow profitably, ensuring that we are always in the position to invest in the future of the Volkswagen Group. We are thus creating the foundations to shape the automotive transition and to ensure long-term success.