The Volkswagen Group takes its corporate responsibility for human rights and the environment very seriously. Our goal is to create responsible supply chains for future generations.
Based on a systematic risk analysis, we pursue the aim of avoiding and minimizing human rights, social and environmental risks along the Volkswagen Group's supply chain. Violations of our sustainability requirements are to be eliminated and the sustainability performance of our suppliers is to be continuously improved.
Our Responsible Supply Chain System (ReSC for short) includes the following elements, which build on each other:
The ReSC system includes the following elements that build on each other:
A regular risk analysis is used to identify risks in the Volkswagen Group's supply chain in a forward-looking manner. The analysis is based on the supplier's business models and takes into account external and internal data on human rights and environmental risks. Based on the assessment of the risks, each supplier is assigned a low, medium or high sustainability risk.
These proactive and reactive measures include the Code of Conduct for Business Partners, the “Supply Chain Grievance Mechanism”, media screenings, the Sustainability Rating and the qualification of suppliers and employees.
These include the Human Rights Focus System in the supply chain, the Raw Materials Due Diligence Management System, and collaboration with external partners to further develop the concept of sustainability in the supply chain.
Our goal is to identify sustainability risks in our supply chain and to address them effectively.
As a key measure, a Sustainability Rating (S-Rating) was introduced in 2019 for all relevant companies and suppliers with a high sustainability risk. The S-Rating examines the sustainability performance of relevant suppliers and identifies opportunities for continuous improvement. It evaluates the environmental performance of suppliers as well as their social sustainability and integrity. The S-Rating is immediately relevant for our direct suppliers: If a supplier does not meet our requirements for compliance with sustainability standards, they are generally not eligible for awarding. Thus, there is a direct incentive for suppliers to improve their sustainability performance.
An important component of sustainable supply chain management is our “Supply Chain Grievance Mechanism”, which we use to investigate sudden suspicions of a breach of our sustainability requirements. It is accessible via the channels of the Volkswagen Group's whistleblower system and is open to all potentially affected stakeholders.
As a global player, the Volkswagen Group takes its corporate responsibility for human rights in all regions of the world very seriously and adheres closely to the UN Guiding Principles on Business and Human Rights. We are aware that with the size of our corporate footprint, we have a significant direct and indirect impact on the environment, society and even individuals around the world. Our commitment goes beyond legal requirements and societal expectations. We believe that long-term success and responsible business practices are mutually dependent.
We believe that we can only address and successfully mitigate sustainability risks in our supply chains together with all relevant stakeholders and business partners along the supply chain. In this respect, we expect our suppliers to strive for the same standards that we impose on ourselves and that due diligence obligations are passed on to subcontractors along the supply chain.
With regard to responsible sourcing of raw materials, the Volkswagen Group implements the five steps of the OECD's “Due Diligence Guidance for Responsible Business Conduct” and the requirements of the “OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.” In 2020, we introduced a Raw Materials Due Diligence Management System based on the OECD guidelines. We report annually on the status of our activities in our “Responsible Raw Materials Report.”
In environmental protection, decarbonization and circular economy are the focus issues. Our sustainability requirements for the protection of the environment are listed in our Code of Conduct for Business Partners and cover the topics of greenhouse gas emissions, efficient use of resources, the registration, evaluation and restriction of substances and raw materials, circular economy and waste management, water, biodiversity and ethical treatment of animals.
The Volkswagen Group is aware of the urgency of climate change and is therefore committed to contributing to achieving the goals set out in the Paris Agreement. We want our entire Group to become net carbon neutral by 2050. To achieve this goal, the Volkswagen Group is pursuing the goal of continuously avoiding or reducing greenhouse gas emissions over the entire life cycle of a vehicle. As far as the life cycle is concerned, we must distinguish between the three phases of supply chain, production and use of a vehicle. In purchasing, we focus on reducing emissions in the supply chain. The supply chain is becoming increasingly important, as the shift to electric mobility shifts emissions from the use phase to production and the supply chain.
