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Corporate Social Responsibility
and Sustainability

Thanks to its corporate culture, Volkswagen is better suited than almost any other company to combine a modern understanding of responsibility and sustainability with the traditional values of running a business to form an integrated CSR approach.

In the traditional sense, corporate social responsibility (CSR) means that a company actively contributes to charitable measures and social welfare, in the form of donations or corporate volunteering. Although such a contribution is expected of a company, it is a voluntary service in recognition of its social responsibility. Today, CSR is considered to be an integrated component of a company’s core competency. CSR is therefore oriented on Volkswagen’s strategic goals and comprises a concept of corporate responsibility along the entire value chain. While under the traditional definition of CSR, various stakeholders ask how funds are used, the question posed under the new definition is how a company generates its funds. This relates both to responsibility for social and ecological standards at the company’s own production sites and along the supply chain, and for the product itself.

Sustainability means simultaneously striving for economic, social and environmental goals in a way that gives them equal priority. Consequently, to us this means creating enduring value, facilitating good work, and using the environment and resources with care. Our integrated CSR concept is aimed at ensuring that we recognize and manage at an early stage risks and development opportunities in the areas of environment, society and governance at every step along the value chain, and further improve our reputation. This is how CSR contributes to increasing our Company’s value in a long-term and sustainable way.

Management and coordination

Our integrated CSR management concept is closely linked with the functional areas at all levels of the Company. The Group Board of Management is also the supreme sustainability board in the Company. It regularly receives information on the issues of responsibility and sustainability from the Group CSR & Sustainability steering group, whose members include senior executives from central Board of Management business areas in addition to the Group Works Council and representatives of the brands and regions. This steering group is responsible for our sustainability strategy, on the basis of which the Group aims to become the most sustainable automaker in the world by 2018. The steering group formulates the strategic goals and statements on CSR and sustainability, establishes and monitors the Company-wide CSR management indicators, and makes decisions about sustainability reporting.

Since 2006, our CSR & Sustainability office has coordinated all CSR activities within the Group and the brands, using standardized structures, processes and reports. It strategically aligns the CSR activities and guides internal management processes and stakeholder relationships. The CSR project teams in the Group as well as the brands and regions work on current topics across business areas, such as sustainability in supplier relationships and stakeholder management. Since 2009, the international CSR coordinators of all brands and regions have exchanged information each year.

With our IT-based sustainability management system and the integration of key performance indicator systems, we have created the basis for comprehensive and timely CSR and sustainability reporting in the Group. This increases transparency and the quality of the data, so that we can monitor CSR risks more easily and identify opportunities.

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 closeness to customers, maximum 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. We also acknowledge our commitment to the “Declaration on Social Rights and Industrial Relationships at Volkswagen” (Volkswagen Social Charter), the Charter on Labor Relations and the Temporary Work Charter, all of which address fundamental human rights, labor standards and principles.

Strategic stakeholder management

Volkswagen continually exchanges information and views with its stakeholders, whose diverse demands and expectations directly affect the Group’s economic success and therefore flow into the Company’s knowledge management processes at an early stage. In order to meet such requirements in a targeted way, we developed a stakeholder management concept, which analyzes economic, ecological and social challenges in a systematic process along our value chain. We communicate with the various stakeholders openly, constructively and equitably. We use many instruments to do this: dialogs, workshops, symposiums, public debates, social media, questionnaires, evaluations and projects.

We document stakeholder dialogs in an IT-based stakeholder management system that is customized for the Volkswagen Group, and publish them in our annual sustainability report to make our interaction with stakeholders transparent and understandable. Stakeholder management is steered and coordinated by the Group CSR & Sustainability steering group, the Group’s project team, and the brands and regions. Since we selectively choose relevant departments for the project teams, we are also able to respond to the many requirements of the stakeholders concerned within a short time.

A key component of external stakeholder management is the ability to help shape national and international corporate networks: we are represented on the board of the leading European business network for corporate social responsibility, CSR Europe, for example. Within Germany, we are represented on the board of econsense, the Forum for Sustainable Development of German Business. Along with numerous other companies, we have signed the “Code of Responsible Conduct for Business” initiative.

Since 2002, we have also been committed to the UN Global Compact, the largest and most important CSR initiative in the world. Over 10,000 companies and other stakeholders from more than 130 countries work together to shape a more sustainable and equitable world economy. The Volkswagen Group and its brands make a significant contribution to this initiative. Scania reinforced this by signing the Global Compact in 2013.

The values of the Global Compact comprise ten principles governing human rights, labor standards, environmental protection and the fight against corruption. We achieved the “Global Compact Advanced Level” in 2013 again due to our progress report on implementing these principles at our locations. Furthermore, we use our expertise to help other companies in the Global Compact to embrace their global responsibility, for example through our active participation as a standing member of the advisory board for the “Sustainable Supplier Chain” project.

In 2013, Volkswagen became the first automotive company in the world to sign the CEO Water Mandate. This sub-initiative of the UN Global Compact is a multi-stakeholder organization that tackles the many problems related to water worldwide with the cooperation of companies, the UN Secretariat, nongovernmental organizations and governments, and develops long-term solutions.

Materiality matrix

We learn which issues are important for the security of the Company’s future from our comprehensive dialog with our stakeholders. We systematically evaluate these issues using the latest international sustainability studies and benchmark them against the guidelines and conventions that Volkswagen is committed to. Internal bodies discuss and weight the issues identified as part of a continual materiality analysis process. We discuss these important challenges for our Company and the automotive industry in detail at both brand and Group level. The result is the map for our sustainability strategy: a matrix of the key issues.

MATERIALITY ANALYSIS: TOPICS FOR THE VOLKSWAGEN GROUP
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Materiality analysis: Topics for the Volkswagen Group (graphic)

CSR Projects

The many and varied CSR projects initiated and managed by the Volkswagen Group around the world are based on the following key principles:

  • They 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 the projects 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.

The Volkswagen Group supports a large number of projects that promote the arts and culture, education, science, health and sport, or that 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. Our extensive cooperation with the German Red Cross and the German Nature and Biodiversity Conservation Union (NABU) are good examples of this.

The German Red Cross represents an idea that is just as topical today as it was 150 years ago: people helping fellow people in need. Humanity, public spirit and responsibility – these are the values on which Germany’s largest mass movement with the richest tradition is based, and which we also share in the Volkswagen Group. That is

why we are promoting sound, balanced social development, in Germany and at our other international locations. As part of its strategic partnership, the Volkswagen Group thus 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.

NABU has worked with Volkswagen AG for many years and, since the end of 2012, this alliance has been based on a new, expanded cooperation and advisory agreement. NABU is a strategic partner for Volkswagen on the Group’s path to becoming the most environmentally friendly automobile manufacturer in the world.