ESG Controversies

Status 26. March 2025

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 Group takes its responsibility for human rights very seriously in all regions of the world, including China, adhering to the UN Guiding Principles on Business and Human Rights. These principles form part of the Group’s Code of Conduct. We maintain these values throughout our supply chain and have zero tolerance for any exceptions to this policy.

While in the Group’s non-controlled Chinese joint venture facilities the relevant 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.

Our non-controlled joint ventures have an own Code of Conduct and a whistleblower system to prevent or detect possible wrongdoings or violations.

On November 27, 2024, Volkswagen Group released a statement on the extension of the contract of the joint venture with SAIC, SAIC Volkswagen Automotive Co. Ltd. (SVW). As one of the key areas identified to accelerate the transformation of the joint venture, both partners agreed on a gradual optimization of the production network with a focus on efficiency and productivity. This also applies to the production site operated by SVW’s subsidiary in Urumqi, SAIC Volkswagen (Xinjiang) Automotive Co. Ltd. (SVW Xinjiang). Due to economic reasons, all shares in SVW Xinjiang have now been sold by the joint venture as part of the realignment. The same applies to the shares in SVW’s subsidiary operating the test track in Turpan.

On December 2024, MSCI ESG Research raised the assessment of the controversy in the category Labor Management Relation to Yellow (Score 2) and status to “Concluded” to reflect the equity sale of SVW Xinjiang.

With Together4Integrity (T4I), we have pursued a common goal in the Volkswagen Group since its launch in 2018: the implementation of our holistic and comprehensive integrity and compliance management system.

• Thanks to the high level of commitment of all those involved in the Group functions, brands and companies, we successfully rolled out the T4I program and had progressed significantly more at the beginning of the 2023 reporting year than originally planned at the start of the program. This is also evident by steadily rising approval ratings regarding the question of integrity in the annual Group-wide employee survey (Stimmungsbarometer).

• Due to the great progress made in the roll-out and the high degree of maturity in the implementation, we gradually returned the further consolidation of T4I activities to the line during the course of the 2023 reporting year, thereby ending the central program control. This means that the Group brands and companies as well as the responsible Group departments are responsible for the continued implementation and sustainable anchoring of the measures.

We are pleased that they are driving forward the continued implementation and sustainable anchoring of the measures.

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

Volkswagen Group Sustainability Report: 

The Indian customs authorities have initiated investigations into the question of the application of local customs duties at ŠKODA AUTO Volkswagen India Private Limited (SAVWIPL ) and have issued a "Show Cause Notice". A final decision by the Indian authorities has not yet been made.

SAVWIPL is availing itself of all legal remedies in response to the „Show Cause Notice“ as permitted under the law. SAVWIPL is committed to operating as a responsible organisation, ensuring full compliance with all applicable global and local laws and regulations. Compliance with regulatory requirements is one of SAVWIPL’s fundamental principles, and we are cooperating fully with the authorities on this matter.

28.08.2024

Volkswagen respects its employees’ rights to freedom of association and collective bargaining and has a strong history of working productively with labor unions. We are pleased that the U.S. and Mexican authorities did not make any finding of a denial of rights after thorough reviews under the USMCA’s Rapid Response Labor Mechanism and closed the case. We reaffirm our commitment to upholding fair labor practices at our facilities everywhere we operate.

06.06.2024

We received notice that the U.S. Trade Representative is seeking Mexico’s review of claims made regarding our plant in Puebla, Mexico under the USMCA’s Rapid Response Labor Mechanism. As this is an active investigation, we cannot comment on the specifics of the case.
We’re fully cooperating with the U.S. and Mexican government entities investigating the claims. Volkswagen respects its employees’ rights to freedom of association and collective bargaining and has a strong history of working productively with labor unions globally.