Strategy

Focusing on the
Essentials.

We aim to be the world’s most successful, fascinating and sustainable automobile manufacturer. This is the target we set ourselves for 2018, and we have already achieved some of our aims. In a world that is undergoing ever more radical changes, however, targets can never be more than milestones: reach them and they are already out of date. With the advent of digitization, the industry and the Group are on the cusp of a new era – one we aim to play a major role in shaping.

Our Approach

For the Volkswagen Group, sustainability means that we conduct our business activities on a responsible and long-term basis and do not seek short-term success at the expense of others. Our intention is that everyone should profit from our growth – our customers and investors, society and, of course, our employees. In this way, good jobs and careful treatment of resources and the environment form the basis for generating lasting values. This applies on all continents and in all regions and throughout the entire value chain. In future, revisiting and implementing this approach in the light of digitization – and responsibly handling the digitization process itself – will be a key factor shaping the strategic issues of our sustainability management.

To ensure consistent and focused pursuit of our objectives, we aim to concentrate on essentials (see "Materiality Analysis"). The challenges are immense. They range from climate change, resource availability and demographic developments, through far-reaching changes in society’s values, to digitization, rapid urbanization and increasing social imbalances.

As one of the world’s largest industrial corporations, our Group with its twelve strong brands bears a special social responsibility and we intend to put our creative powers to good use for the benefit of people and the environment. Every year the Volkswagen Group produces more than 10 million vehicles. This gives rise to positive effects such as new jobs, regional prosperity and individual opportunities for participation, but also to emissions and resource consumption. Our most important tasks, as we see it, are therefore to ensure responsible and efficient production, and to make mobility not only as safe, convenient and environmentally compatible as possible, but at the same time affordable for large numbers of people. After all, individual mobility remains a basic human need, and fulfilling this need is the central corporate objective of our Group.

Through pioneering technologies and social competence we are making our contribution to a sustainable form of development that will give future generations the same opportunities as the present generation has. In view of digitization, we will in future be faced with new issues in the field of sustainability and responsibility – for example, what we do with our customers’ data, how we ensure that they are secure and protected at all times, and what legal and ethical problems are raised by automated driving. This also means that to some extent we need to reconsider and redefine the key aspects of our activities.

Twelve brands, each with its own unique character, sharing a common goal: mobility  – for everyone, everywhere.

Our Sustainability Strategy

We know that growth can only take place hand in hand with responsibility and environmental protection – more than that, in fact: in recent years these factors have become genuine value drivers. That is why everything we do in the interests of sustainability also serves to achieve our corporate objectives – in an accompanying, promoting and supporting capacity. The key aspects of our sustainability objectives and activities, which are subject to Group-wide control, are structured under the three headings used in this report – Economy, People and Environment. This reflects not only our Group-wide interpretation of sustainability that can be applied in all regions around the world, but also our conviction that stable, long-term business activity based on ethical criteria is a precondition for acting in an environment-friendly way and playing a responsible part in shaping the future of people within the Group and in society at large.

With almost 600,000 employees and 118 production locations on four continents, we are especially concerned to do this consistently worldwide. Our approach: to transfer tried-and-tested ideas – from brand to brand, from region to region. There are already numerous examples of how this works – from the modular transverse matrix, via the dual vocational education and training system and in-service training opportunities that we bring to the various regions, to mobility services, concepts for road safety and social responsibility, and biodiversity projects. In this way we turn our size and growth to good advantage and exercise our responsibility for our employees, the environment and society.

Managing Challengens and Trends
GRI
G4-18

Even if the major challenges are known and can be assessed, the resulting demands on the Volkswagen Group are nevertheless subject to increasingly rapid change and have to be reassessed at regular intervals and readjusted in our strategic planning. Within the Volkswagen Group we therefore have several specialized functions engaged in observing megatrends in society, analyzing the overall economic backdrop, tracking emerging customer trends and continuous benchmarking against the competition. The results are brought together in a process known as the planning round. This ensures that the important decisions for production, purchasing and sales structures are taken with a ten-year timeline. Another instrument for identifying challenges and expectations and for dealing with changing background conditions is the stakeholder dialogue, which we cultivate at both Group and market level (see "Stakeholder management“).

Growth with responsibility for employees, environment and society

In summer 2014, based on these observations and derived from the major challenges, we identified for the Volkswagen Group 16 areas in which we can and must make a special contribution – because these are fields where we have a significant impact or where we are particularly well placed to exert influence, and where consequently a great deal is also expected of us.  

Origin of the Action Areas for Our Sustainability Strategy

The Volkswagen Group is one of the leading suppliers of alternative drive systems. With 1,354 units sold by the end of 2014, the best-selling electric car to date is the e-up!.

Materiality Analysis
GRI
G4-18, G4-25, G4-26

In 2014, two mutually independent developments played a role in a detailed analysis of the topics of material importance to the Volkswagen Group. One particular issue was the question of the Group’s strategy for the period after 2018, which has sparked lively discussions. Important sustainability topics that impact on the Company’s performance are covered by risk management (see Risk Management). The findings of the discussions were also taken into account when defining the key action areas. In addition, there were the GRI’s new requirements (GRI-G4), which pay greater attention to the process of materiality analysis. In practice, our approach to the analysis and identification of significant issues was as follows:

  1. From global challenges we derived a list of 16 central action areas in which we need to provide answers. We did this on the basis of the following sources: external studies, industry analyses and our brands’ stakeholder surveys, and also internal guidelines such as the Strategy 2018, the Group Environmental Strategy, or key factors identified by the Corporate Strategy Group.
  2. To obtain an additional assessment of the importance of these action areas for the Company, we conducted an online analysis of international media for the period September 2013 to August 2014. This revealed that eco-friendly products in the context of the automotive industry, and especially in connection with the Volkswagen Group, were by far the most widely discussed issues, followed by intelligent mobility, customer satisfaction, quality and employment.
  3. On the basis of the assessments obtained in the first two steps, the action areas were then discussed and defined in two further steps. The following served as our central criteria: stakeholder expectations, the potential contribution to the Group’s strategic objectives, and the difference between these two criteria. This analysis was first performed in the Group CSR Meeting with representatives of the brands and regions, and finally in the Corporate CSR & Sustainability Steering Group.
  4. Detailed discussions in each case led to the realization that in view of the Group’s size, its potential influence and the associated responsibility, all the issues in the GRI list of sustainability aspects can and must be regarded as “significant” for the Volkswagen Group.

MATERIALITY ANALYSIS: PROCEDURE IN THE Volkswagen GROUP
GRI
G4-18, G4-20

Volkswagen Group’s Key Action Areas

This representation of the 16 central action areas, broken down into the three dimensions Economy, People and Environment, is intended to illustrate the aspects that we focus on in order to become the world’s most sustainable automaker. In view of our broad international standing, we have deliberately avoided any prioritization of our action areas. On the one hand, the relevance of the individual areas may vary depending on the region; on the other hand, we do not want to judge, for example, whether the health of nearly 600,000 employees worldwide is more important than resource conservation throughout the vehicle life cycle – or vice versa. As we understand it, sustainable development means taking equal account of economic, environmental and social interests and maintaining an appropriate balance between them. In other words, the 16 action areas that apply across the Group stand side by side, even if current developments place a greater short- or medium-term focus on individual topics. In the interests of the future success of our business, taking a long-term view is of decisive importance for us.

Volkswagen Group’s Key Action Areas
GRI
G4-19, G4-20, G4-21

Show table
Action Areas   Corresponding GRI aspects   page  
 
Economy
Stability and profitability Economic Performance 34, 135
Quality Customer Health and Safety 35, 134
Vehicle safety Customer Health and Safety 38 – 39, 135
Customer satisfaction Product and Service Labeling, Customer Privacy 39, 134
Supplier relationships Procurement Practices, Supplier Environmental Assessment, Supplier Assessment for ­Labor Practices, Freedom of Association and Collective Bargaining, Child Labor, Forced or Compulsory Labor, Supplier Human Rights Assessment, Supplier Assessment for Impacts on Society 42 – 46, 135
Compliance, risk management, corporate ­governance Supplier Assessment for Labor Practices, Grievance Mechanisms (Labor Practices, Environmental, Human Rights and Impacts on Society), Investment, Non-discrimination, Freedom of Association and Collective Bargaining, Child Labor, Forced or Compulsory Labor, Assessment, Anti-corruption, Anti-competitive Behavior, Compliance (Product Responsibility, Society, ­Environment), Marketing Communications, Public Policy, Security Practices 22 – 23, 46 – 48, 135
 
People
Attractiveness as an employer Employment, Market Presence 56 – 57, 136
Training Training and Education 57 – 62, 136
Participation Employment, Equal Remuneration for Women and Men, Market Presence, Labor/Management Relations 62 – 66, 136
Health Occupational Health and Safety 66 – 69, 136
Diversity and equality Diversity and Equal Opportunity, Non-discrimination 69 – 72, 136
Corporate responsibility Indirect Economic Impacts, Local Communities, Indigenous Rights 73 – 75, 136
 
Environment
Resource conservation across the lifecycle Materials, Energy, Water, Emissions, Effluents and Waste, Products and Services, Overall 86, 100 – 107, 137
Environmentally friendly products/
electrification
Energy, Emissions, Products and Services, Overall 86, 94 – 100, 137
Climate and environmental protection Energy, Water, Biodiversity, Emissions, Effluents and Waste, Transport, Overall 90 – 93, 106 – 107, 137
Intelligent mobility and networking Products and Services, Customer Privacy 86, 110, 137

The extended range of alternative drives is an integral component of the CO2 prevention strategy of the Volkswagen Group. 01: Golf GTE (Volkswagen), 02: Panamera S E-Hybrid (Porsche), 03: Mii Ecofuel (SEAT), 04: A3 Sportback e-tron (Audi), 05: Lion’s City GL CNG (MAN), 06: Caddy EcoFuel (Volkswagen Commercial Vehicles).