ESG Controversies

Status 18. Juli 2023 | NUR AUF ENGLISCH VERFÜGBAR

Volkswagen AG is in full transformation mode, pushing forward on our strategy with full force. 
Parallel to the transformation of our industry we are seeing the rising importance of ESG in investment decisions, which no one will argue has become mainstream and will continue to grow at a rapid pace.

The importance of ESG is also growing continuously within our organization and is fully embedded in our decision making processes. We believe we have made significant progress amongst others in the areas stated below.

Nevertheless we are fully aware that much more needs to be done.

We have learned that the area of controversies is a reoccurring concern.

This website addresses relevant current and ongoing controversies in a factual manner with the aim of increasing transparency for you our stakeholders.

We invite you to browse this content, welcome any feedback from your side, also on suggestions of further topics that require clarity, and we look forward to our increased dialogue.

The Volkswagen Group stands firmly against forced and child labor in connection with its business activities. The company takes its responsibility for human rights very seriously in all regions of the world, including China, adhering closely to the UN Guiding Principles on Business and Human Rights. These principles form part of the company’s Code of Conduct. We maintain these values throughout our supply chain and have zero tolerance for any exceptions to this policy.

While in Chinese Joint Venture facilities the Joint Venture is responsible for all employee welfare, all partners agree that basic values and legal rights must be respected and protected. Ensuring good working conditions for all employees is of top priority.

Volkswagen and its partner SAIC are also in full agreement that human rights violations will not be tolerated in the Urumqi plant, which is operated by a subsidiary of the joint venture SAIC Volkswagen.

In February 2023, Volkswagen China’s CEO Ralf Brandstätter, also a member of the Supervisory Board of the SAIC Volkswagen joint venture, visited the Urumqi plant to gain a first-hand impression of the plant and meet employees. Of the 238 employees at the plant, 41 (17 percent) belong to the Uyghur ethnic group. There is no indication of any human rights violations or wider issues around working conditions at SAIC Volkswagen (Xinjiang) Automotive Co. Ltd.

The MSCI ESG report, which contains allegations of human rights violations in Xinjiang, is factually incorrect and wholly misleading. Volkswagen is actively addressing this issue with MSCI. 

Our joint ventures have an own Code of Conduct, a whistleblower and an external ombudsmen system to prevent or detect possible wrong doings or violations.

Volkswagen has built a long history with China and will remain firmly committed to its presence in China.

Link to the Website: "Menschenrechte im Volkswagen Konzern"

Volkswagen AG successfully completed the Independent Compliance Monitorship under Agreements with U.S. Authorities. During the Monitorship, Volkswagen implemented nearly 300 new or revised internal regulations and policies in the relevant legal entities to accelerate the rollout of new processes. 

Link to website: Abschluss des Monitorships

Ethics & Compliance Initiative (ECI): https://www.ethics.org

Volkswagen Group Sustainability Report: Sustainability Report (volkswagenag.com) - 2022-03-24:

As a one of the forerunners of e-mobility, the Volkswagen Group is ensuring intends to ensure greater transparency and responsibility in its raw material supply chains for batteries. To that end, the company has entered a strategic partnership with RCS Global, an agency specializing in supply chain analysis. The focus is on auditing suppliers for conformance with human rights, safe working conditions and environmental protection along the supply chain all the way back to the mines.

The Group introduced a sustainability rating for direct suppliers and a comprehensive system developed by RCS Global also tracks adherence to sustainability criteria at sub-suppliers, refineries, smelters, mines and recyclers. New guidelines for improvements issued to suppliers make an active contribution to achieving improvements when risks and shortcomings are identified. Serious audit violations may even lead to the disqualification of suppliers from the supply chain. That applies, for example, to small-scale mining operators when child labor cannot be ruled out. The approach builds on the Due Diligence Guidelines of the Organization for Economic Co-operation and Development (OECD).

Link to the website:
E-mobility forerunner Volkswagen ensures greater transparency in procurement of battery raw materials

Volkswagen Group Joins Responsible Sourcing Network

17.03.2022: Volkswagen Group joins the Initiative for Responsible Mining Assurance (IRMA)

The brands of the Volkswagen Group have joined the Leather Working Group (LWG) on April 14 2023. The Group seeks to play a leading role in the auto industry in terms of responsible raw material procurement, and becoming a member of LWG is a further milestone on the way to achieving greater sustainability throughout the entire value chain.

Link to Press Release (14.04.2023): Volkswagen is committed to more sustainable leather sourcing 

It can be excluded that the Volkswagen Group together with all its brands is sourcing or has ever sourced leather from Paraguay.

All our leather suppliers are working at a high level of sustainability. The general sustainability requirements of the Volkswagen Code of Conduct, which apply to all suppliers, are currently being adapted to leather. In order to improve the sustainability in the supply chain, we are currently working on leather specific mandatory requirement document for sustainable purchasing. This list has a mandatory leather specific external audit , the disclosure of the sub-suppliers of the vendors as well as the exclusion of leather and other primary material related to illegal deforestation. Volkswagen is therefore proactively improving transparency and responsibility in the leather supply chain.

Volkswagen is convinced that a sustainable supplier network guarantees long term business success. All suppliers must accept the code of conduct which has been published under www.vwgroupsupply.com. The code of conduct  defines legally compliant, sustainable and responsible business behavior under environmental, social and ethical aspects. Compliance with the code of conduct is evaluated by us for every relevant supplier on the basis of self-assessment questionnaires as well as possible local on site inspections. The sustainability index is directly relevant for the contract award: when a supplier does not meet our requirement for sustainability compliance standards, they are not entitled to a contract award. Therefore, there is a direct incentive for all suppliers to improve their sustainability performance.

No matters involving Volkswagen Chattanooga are currently pending before the National Labor Relations Board (NLRB)

The UAW revoked its prior certification of a maintenance unit, filed for an election for both production and maintenance employees, and an election took place on June 12, 13, and 14, 2019. The employees voted against UAW representation, the UAW did not file any objections to the election.

The Independent EPA Auditor retained pursuant to the EPA Administrative Agreement completed his three-year term on August 13, 2022.

During the EPA Auditorship, Volkswagen further strengthened its Code of Conduct and its policies and procedures related to the Whistleblower System. In particular,

Volkswagen remains committed to the continuous improvement of its organization and culture. This mindset continues to be essential to its ambition of making safer and more intelligent zero emission vehicles for today’s customers and for generations to come.

In 2020 there was an illegal strike in the South African Volkswagen plant, which was recognized as such by the local courts. The dismissal of the shop stewards who organized the strike, remains an ongoing legal case with the local CCMA mediation organization, which cannot be commented on by the company.