Volkswagen AG

No leading practices were identified for this company.

No leading practices were identified for this company.

No leading practices were identified for this company.

No leading practices were identified for this company.

Volkswagen has not set sufficient intermediate targets. Setting regularly spaced intermediate targets will help the company incentivise near-term actions on its longer-term decarbonisation goals. Additionally, the company’s downstream scope 3 target could not be assessed as no data was found on the company’s base and reporting year emissions intensity. Its target to become net zero across scope 1, 2 and 3 emissions by 2050 could also not be assessed as it is unclear if it plans to use offsets. Reducing emissions related to its operations and products should remain the company’s priority. Furthermore, the company should disclose the proportion of each target that will be met through direct action, rather than including offsets.

Volkswagen’s low-carbon transition plan is backed by financial content. The company has implemented board-level oversight and incentives for managing the low-carbon transition. It has also conducted a scenario analysis to test its low-carbon transition plan using the 2°C scenario (2DS) and the beyond 2°C scenario (B2DS). However, the company can improve its performance by also including a 1.5°C scenario in its scenario analysis and incorporating and disclosing a carbon price that aligns with the International Energy Agency’s (IEA’s) Net Zero Emissions (NZE) Scenario expectations.

In 2023, the company’s low-carbon capital expenditure (CapEx) and research and development (R&D) spending constituted a 33% and 23% share of its overall CapEx and R&D, respectively. Yet, only 8% of Volkswagen’s total vehicle sales consisted of low-carbon vehicles and its revenue from low-carbon activities was 11%. Reducing emissions aligned with a 1.5°C pathway requires companies to continue increasing their sales of low-carbon vehicles and reducing ICE sales. Volkswagen needs to step up its ambition to meet its 1.5°C pathway, which requires 67% of automobile sales in 2030 to consist of low-carbon vehicles.

Volkswagen is one of the few companies in the benchmark with a policy to withdraw its funding and suspend its memberships from trade associations that oppose climate policies. Yet, the credibility of Volkswagen’s statements on climate change is undermined by its continued membership and board roles in trade associations that have opposed climate policy. Volkswagen is on the board of the European Automobile Manufacturers Association and the German Automotive Association. Both have advocated against key EU climate policies, standards and targets. Volkswagen can improve its credibility by rapidly ending its board and membership roles in trade associations that hold a negative stance on climate policy.

No evidence was found of the company’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders.  No evidence was found of the company undertaking low-carbon transition planning to mitigate the social impacts of the transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in its just transition planning.

The company has a commitment to create and support access to green and decent jobs as part of the low-carbon transition. However, it does not disclose the actions it takes or its measures to ensure that these jobs embed equality of opportunity for women and vulnerable groups. No relevant disclosure was found of the company’s assessment of employment dislocation risks.  The company has a commitment to reskill and upskill workers and stakeholders affected by the low-carbon transition and discloses the actions it takes in this regard. For instance, it has several training programmes targeted at advancing technical skills. No relevant disclosure was found of a process for identifying skills gaps for workers and affected stakeholders in the context of the transition. The company does not disclose the measures it takes to embed equality of opportunity for women and vulnerable groups in these actions.

The company identifies the impacts of the low-carbon transition on social protection for workers but excludes affected stakeholders and does not disclose the process used. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. Moreover, it does not disclose if it contributes to the social protection of workers and affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers. 

The company commits to respecting human rights and the ILO fundamental rights at work, and it expects its business relationships to respect the ILO fundamental rights at work. Furthermore, the company discloses a human rights due diligence process that includes the identification and assessment of salient human rights risks. The company takes action to partially mitigate these risks in its own operations and its supply chain, but it does not engage with affected stakeholders. Additionally, the company has a grievance mechanism available to workers and external stakeholders. 

The company commits to respecting the health and safety of its workers and expects the same commitment from its business relationships. However, it has not set a time-bound target for paying all workers a living wage and does not limit required working hours to 48 hours per week. The company does not disclose the proportion of its direct workforce covered by collective bargaining agreements. It discloses some indicators of workforce diversity, including the gender of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. The company has a commitment towards gender equality and women’s empowerment. 

The company commits to protecting personal data but does not disclose a privacy statement regarding the use of personal data. Additionally, it has a global tax strategy but lacks board accountability for the strategy. The company has a policy prohibiting bribery and corruption, but it does not include anti-bribery and anti-corruption clauses in its contracts with business relationships. It also does not describe the process to identify its bribery and corruption risks and impacts in its own operations. The company does not have a lobbying and political engagement policy but specifies that it does not make political contributions.