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Volkswagen

Known for Volkswagen, Porsche, SEAT, Audi, Bentley, Skoda, Bugatti, Lamborghini

Volkswagen is a publicly listed auto manufacturer headquartered in Wolfsburg, Germany. In 2019 it had US$282.7 billion in revenue and sales of over 10 million vehicles. Volkswagen’s two primary sales regions are Europe and China. In China, the company sells vehicles through its joint ventures with SAIC and FAW – two other keystone companies included in this assessment.

Summary

Volkswagen (VW) has a performance score of 13.2 out of 20 against a well below 2-degree pathway. This is higher than VW’s 2019 performance score of 12.1, when it was assessed against the less ambitious 2-degree pathway.

The biggest improvement in VW’s performance is in its target setting. In September 2020, VW announced two Science Based Target Initiative-validated targets that are fully aligned with the company’s well below 2-degree pathway – one for vehicle in-use emissions and the other for manufacturing emissions. VW also has strong climate governance and a comprehensive and ambitious transition plan. Alongside its two new science-based targets, VW aims for carbon neutrality by 2050 and 40 percent low-carbon vehicle share by 2030. VW’s planning considers the upstream emissions of its increasing battery usage.

However, VW has fallen behind on its decarbonisation pathway for vehicle in-use emissions, which are the largest source of emissions for auto manufacturers. This is due to an increase in VW’s average vehicle in-use emissions intensity in the US and Europe over the past two years combined with the higher ambition of this 2020 assessment’s pathway. Furthermore, the company’s low-carbon vehicle sales share has only grown by 0.6 percent in the last two years, compared to the 3.9 percent growth required by the company’s well below 2-degree pathway.

Assessment Note: Volkswagen received a full ACT assessment in 2019.

Performance module name	Performance module score	Rank (0-30)
Targets	2.9 /3	#1
Material Investment	0.4 /0.4	#1
Intangible Investment	2.4 /2.4	#1
Sold product performance	3.3 /7	#16
Management	1.8 /2.2	#1
Supplier	0.6 /1.2	#4
Client	0.6 /0.8	#3
Policy Engagement	0.3 /1.2	#15
Business Model	0.9 /1.8	#3

VW has an opportunity to leverage its climate governance leadership by improving its policy engagement approach. At present, VW has a process to review the climate positions of trade associations it engages with but lacks an affirmative policy on what action to take if positions diverge from its own. This is concerning given VW engages with some associations, including the Association of the German Automotive Industry (VDA), that have been seen to oppose pro-climate policies in the past.

Ultimately, VW must start delivering on its low-carbon vehicle share and emissions reduction goals rapidly if it is to get back on track with its well below 2-degree pathway.

See results for

2019
2021

More about the company

Headquarters: Germany
Ownership structure: Publicly listed
Revenue (2019): US$282.7 billion
Number of vehicles sold (2019): 10,094,323
Website: https://www.vw.com/en.html