The Volkswagen Group fulfils its corporate responsibility for human rights and the environment through its Responsible Supply Chain System (ReSC). We systematically identify and address human rights, social and environmental risks throughout the supply chain.
Our goal is to use a systematic risk analysis as a basis for minimizing or preventing human rights, social, or environmental risks throughout the Volkswagen Group’s supply chain. We aim to address any violations of our sustainability requirements and continuously improve our suppliers’ compliance with our environmental and human rights standards.
Our Responsible Supply Chain System (ReSC) comprises the following interrelated elements:
Regular risk analysis is used to proactively identify risks in the Volkswagen Group supply chain. The analysis is based on the supplier’s business model and takes account of external and internal data on human rights and environmental risks. Based on the risk assessment, each supplier is assigned a low, medium or high sustainability risk rating.
These proactive and reactive measures include the Code of Conduct for Business Partners, the Supply Chain Grievance Mechanism, media screening, the Sustainability Rating, and training for 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 approach to sustainability in the supply chain.
Our aim is to understand and address material human rights, social, integrity and environmental risks in our supply chain.
A key measure introduced in 2019 was the Sustainability Rating (S-Rating), which applies to all relevant Group companies and suppliers with a high sustainability risk. The S-Rating assesses suppliers’ compliance with defined environmental, social and integrity requirements while also identifying opportunities for continuous improvement. For our direct suppliers, the S-Rating is a contract award criterion. As a general rule, suppliers that do not meet our sustainability standards are not eligible for the award of contracts. This creates a direct incentive for suppliers to continuously improve their sustainability performance.
An important element of our supply chain management approach is the Supply Chain Grievance Mechanism, which enables us to investigate indications of potential breaches of our sustainability requirements as they arise. The mechanism is accessible through the Volkswagen Group whistleblower system and is open to all potentially affected stakeholders.
As a global group, the Volkswagen Group aligns its corporate responsibility for human rights with the UN Guiding Principles on Business and Human Rights.
We believe that sustainability risks in our supply chains can only be addressed and effectively mitigated in collaboration with all relevant stakeholders and business partners throughout the supply chain. We therefore expect our suppliers to work towards the same standards we set for ourselves and to pass due diligence requirements on to their sub-suppliers throughout the supply chain.
To promote the responsible sourcing of raw materials, the Volkswagen Group implements the five-step framework of the Due Diligence Guidance for Responsible Business Conduct issued by the Organization for Economic Cooperation and Development (OECD) as well as 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 aligned with the OECD guidelines. We report annually on the progress and status of our activities in the Responsible Raw Materials Report.
Environmental protection is centred on two key focus areas: decarbonisation and the circular economy. Our environmental sustainability requirements are set out in our Code of Conduct for Business Partners and cover greenhouse gas emissions, resource efficiency, the registration, evaluation and restriction of substances and raw materials, circular economy and waste management, water, biodiversity and animal welfare.
The Volkswagen Group measures and manages greenhouse gas emissions across the entire vehicle life cycle. The vehicle life cycle comprises three phases: supply chain, production and use.
