Volkswagen Scaling up Sustainability - Future of Food · 2011. 10. 18. · Volkswagen –Scaling up ... Leadership in alternative powertrain technologies Brand implementation High

Volkswagen – Scaling up SustainabilityDr. Gerhard Prätorius Head CSR and Sustainability

28 April London

The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States of America, Canada, Japan or Australia. 22

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securities.

The information contained herein is not for distribution, directly or indirectly, in or into the

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States of America or the District of Columbia) and must not be distributed to U.S. persons (as

defined in Regulation S of the U.S. Securities Act of 1933, as amended ("Securities Act")) or

publications with a general circulation in the United States of America. This publication is not

an offer of securities for sale in the United States of America. The securities have not been

and will not be registered under the Securities Act and may not be offered or sold in the

United States of America absent registration or an exemption from registration under the

Securities Act, as amended.


Agenda

1. Global Challenges on

Sustainability

2. Volkswagen Group – Portrait

3. Creating Sustainable Value

4. Stakeholder Dialogue and

Global Responsibility

5. Reporting and Performance on

CSR and Sustainability

6. Conclusion


Global Challenges

► Environmental burdenclimate change, scarcity of resources,

water/biodiversity, natural disasters

► Social driftgrowing inequality, demography,

education, infection deceases/pandemia

► Geopolitical risksasymmetric wars, weak zones of

governance

and economic imbalances

energy- und commodity markets,

food markets, capital markets


cf WBCSD Vision 2050, p. 35












Agenda


Sustainability







6. Conclusion


1

12¹ 49.9% stake since 7 December 2009

Strategy 2018

Economic and environmental

leadership in the global automotive industry

Expansion of brand and product portfolio

Increasing global footprint and

emerging markets presence

Realisation of cost savings, toolkit modularisation

and localisation of production

Continuous improvements in internal

combustion engines

Creation of sustainable value

Economic leadership Environmental leadership

Diversified portfolio of drivetrain technologies

Leadership in alternative powertrain technologies

Brand implementation

High quality standards

Volkswagen Group: Global Automotive Leader by 2018


Volkswagen Group – Global Figures

Production per Workday

Ø 26.600 Vehicles

Group - Companies

Ca. 400

Employees

369,900

Audi of America

Škoda AutoIndia

http://www.csvw.com/csvw/english/index.shtml


VW - Group Production Sites

Anchieta

Sao Carlos

Taubaté

Curitiba

Puebla

Molsheim

Sant`Agata

Cordoba

Pacheco

Uitenhage

Ingolstadt

Neckarsulm

Györ

Brüssel

Crewe

Martorell

El Prat

Pune

Wolfsburg

Emden

Salzgitter

Braunschweig

Kassel

Zwickau

Chemnitz

Dresden

Pamplona

Setubal

Polkowice

Sarajevo

Bratislava

Martin

Kaluga

Mlada Boleslav

Aurangabad

Kvasiny

Vrchlabi

FAW-VW Changchun

VW-FAW PL Changchun

VW-FAW E Dalian

VW AT Dalian

SVW Nanjing

SVW PT Loutang

SVW Anting

VW TS Jiading

FAW-VW Chengdu

Södertälje

Hannover

Poznan

Chattanooga


2008

Commission

Diversity

Volkswagen: Milestones of Ecological and Social Innovations

1979 1982 1989 1993 2002

Introduction

Turbo diesel

(Audi A8)

Aluminum

technology

light weight

construction

CitySTROMER

and

Hybrid-Golf

3-litre-

Audi A2

Golf

Ecomatic

1994 1998 1999 2000 2001

VW Lupo FSI

First German

direct-inject-

gasoline engine VW 1-litre-

research-car

Golf Variant

Bi-Fuel

2005 2006

VW-Sicon-

Process

BlueMotion

Line

Audi Duo

Hybrid

2007 2008

Volkswagen

Community Trust

South Africa

Aids Care

Program

Brazil

Fleet

Competence

eCO2

Fundação

Volkswagen

do Brasil

Golf Twin Drive

Fleet project -

E-Mobility

Initiative

“Pro

Ehrenamt“

1988

DSG

Serial production

directly injected

diesel engine (TDI)

Introduction

Biofuel

Initiative

„One Hour

for the Future“

Volkswagen

Education and

Training Institute

South Africa

Partnership

Naturschutzbund

PPP

Wolfsburg AG

Group Global

Works Council

3-litre-Lupo

„Work2Work“

Re-integration

project

Accident research

in China

Social Charta –

“Declaration on

Social Rights

and Industrial

Relationships at

Volkswagen“

2009

Charta on

Labour Relations

http://images.google.de/imgres?imgurl=http://www.nabu-seelze.de/aktuell/NABU-Logo.jpg&imgrefurl=http://www.nabu-seelze.de/aktuell/aktuell.html&h=238&w=374&sz=17&hl=de&start=5&usg=__GqqiJgL-kKLFnQuSrEe8ZJbASbQ=&tbnid=e9MhP085dSlh_M:&tbnh=78&tbnw=122&prev=/images%3Fq%3DNABU%26gbv%3D2%26hl%3Dde

http://images.google.de/imgres?imgurl=http://www.webwombat.com.au/motoring/car-photos/vw-golf-twin-drive-3-big.jpg&imgrefurl=http://www.webwombat.com.au/motoring/news_reports/vw-golf-twin-drive-electric-car.htm&h=534&w=800&sz=142&hl=de&start=4&usg=__-hzpgR34pJYwNLvySMI1sLmdZnk=&tbnid=YoDX4SMUWy_MWM:&tbnh=95&tbnw=143&prev=/images%3Fq%3DGolf%2BTwinDrive%26gbv%3D2%26hl%3Dde%26sa%3DG


Agenda


Sustainability







6. Conclusion


Sustainability at Volkswagen Group

Sustainable Products Sustainable Production Sustainable Structural

Development


Volkswagen Addresses the Full Spectrum of Fuel and

Powertrain Technologies

SynFuel

SunFuel®

TSI®

Hybrid

TDI®

DSG®

Oil

Natural gasCNG

Renewable

Gasoline

Diesel Fuel

Hydrogen

Electricity

Electrotraction

Fuel Cell

Electrotraction

Battery


Environmentally Friendly Products and Technologies under

the BlueMotion Umbrella Brand

DSG

Recuperation

Start-Stop

BlueMotion

(Technology)Blue TDI TSI EcoFuel

Hybrid drive

Electric drive

NOx exhaust

after treatment

EcoFuel

Multifuel

Bifuel

TSI TDI

Umbrella brand encompassing all production-

ready and near-production technologies that

contribute towards saving fuel and reducing

CO2 and other emissions

Excellent products with regard to their fuel

efficiency and emissions

Additional technologies that are

exceptionally environmentally friendly

Energy efficient basic

technologies already available

on all models today


Excellent Position in Fuel Efficiency with more than 170

Model Variants ≤ 140g CO2/km

CO2 emissions–status quo Steps to reduce VW Group fleet emissions1

110

60

No. of VW Group model variants

≤ 100g

CO2/km

100–120g

CO2/km

6

120–140g

CO2/km

176 model

variants

≤ 140g CO2/km

Further optimisation of powertrain technologies

(TDI/TSI/TFSI)

Extension of new gearbox technology (DSG/S tronic)

Start/Stop system

Reduction of mechanical resistances

Broadening use of light weight construction

Optimisation of aerodynamics

120

130

140

150

160

170

180

190

1995 2000 2005 2010 2015 2020

Year

CO

2 e

mis

sio

ns (

g/k

m)

2008: 159

Umbrella brand encompassing all production-

ready and near-production technologies

that contribute toward saving fuel and

reducing CO2 and other emissions

Excellent products with regard to their

fuel efficiency and emissions

Additional technologies

that are exceptionally

environmentally friendly

Energy efficient basic

technologies already

available on all

models today

Source: Company information

Emissions of Volkswagen Group„s European (EU27) car fleet

¹ Selection of tools used to reduce Volkswagen Group fleet emissions


Proven Innovation Track Record

Engines: TDI/TSI/TFSI/EcoFuel

MMI (Multimedia Interface)

DSG (Direct Shift Gearbox)

PDK (Porsche Doppelkupplung1)

with Start/Stop

DFI (Direct Fuel Injection),

VarioCam

PDCC (Porsche Dynamic

Chassis Control)

PCCB (Porsche Ceramic

Composite Brake)

AVS (Audi Valvelift System)

BlueMotion

4Motion/Audi quattro

Park Assist

Audi A8 Space Frame

1 Porsche Double Clutch


Clearly Defined Path from Internal Combustion to

Electric Vehicle

Electrification strategy

Mild

hybrid

Electric

vehicle

Combustion

engine

Full

hybrid

Range

extender

Fuel

cell


Volkswagen Continues to Invest in its Global R&D Activities

VW Group R&D footprint VW Group–number of R&D employees3

Note: Volkswagen has established co-operations with Porsche, e.g. development/production of Touareg / Q7 / Cayenne1 49.9% stake since 7 December 20092 Technical Office Beijing planned3 Excluding Scania4 Represents estimates

VWGoA Chattanooga

operations

VW de

Mexico

Volkswagen

Argentina

VW do Brasil

SCANIA LAM

VW of

South Africa

VW India

Shanghai VW

VTT

FAW-VW

VTB2

VW Group RUS

SkodaVolkswagen

NutzfahrzeugeVolkswagen

SCANIA

Bentley

Bugatti

Porsche1

SEAT

Lamborghini

Audi

ERL

22.922.822.821.721.420.7

2005 2006 2007 2008 2009 2010

(„000 employees)

4.14.6

5.34.9

4.8% 4.8% 5.4% 4.8%

2005 2006 2007 2008 2009 2010

(€ billion) % of automotive sales

VW Group–R&D expense over time3

4 4

4 4


Growth market focusKey Automotive Growth Markets

19,518,1

12,7

2009 2012 2018

Source: Global Insight (2009 numbers represent actuals with exception of region “Central America”, all other figures represent estimates)

Note: Market numbers represent “Cars” and “LCVs”1 Includes Central America and Caribbean2 Includes Cyprus and Malta3 Includes Turkey

Western Europe2

Eastern Europe

North America

Total

16,715,0 15,2

2009 2012 2018

Market growth 2009–2018 (million units)

+54%

93,7

63,6

79,0

2009 2012 2018

+11%

+47%

6,0

2,8 3,7

2009 2012 2018

+114%

22,7

13,0

17,9

2009 2012 2018

China

+75%

4,54,6 5,0

2009 2012 2018

(1)%

Japan4,7

3,02,1

2009 2012 2018

India

+128%

6,24,4 5,1

2009 2012 2018

+42% 13,4

9,211,1

2009 2012 2018

+46%

Rest of World3

South America1



Regional Environmental Conferences

Regional Conference

Drafting of environmental action plan

432

Internationalenvironmental workshops

1

Kick-off

meeting

Mexico

Argentina

Brazil

South Africa

China

India

Synchronise Group objectives with regional possibilities

5

Review


Regenerative Energy – e.g. Brasil


Sustainable Value Chain

Production

Complementary

Products

Think Blue.

Innovative

ProductsFleet Management

Fuel Efficiency

Block Heating Works


Agenda


Sustainability







6. Conclusion


Sustainability and Supply Chain Management

Supplier Requirements

Risk Management

Monitoring and

Development

Communication

• Environmental standards

• Social standards

• Anti-corruption

• Plausibility check by quality management

• Spot test

• Self assessment and training

• Information and communication via B2B platform:

• Early detection system of risks

• International issue screening

• Expert team: investigation of problem cases


Sustainability and Supply Chain Management

Risk Management

Monitoring and Development

Communication

Programme „Priority A“

Environmental Protection

1. Creation and application of

environmental management systems

2. Active dealing with ecological

challenges

3. Prevention of environmental damage

and injuries to health

4. Products and processes with low

resource consumption

5. Waste and recycling

6. Training employees

Rights of Employees

1. Freedom of association

2. No discrimination

3. No forced labour

4. No child labour

5. Payment

6. Working hours

7. Health and Safety

Supplier Requirements of Sustainability

Costs, Quality and sustainability

Inclusion of anti-corruption requirements


The Leasing-Catalyzer – A Project by VW and NABU

Cooperation on a contractual basis as enhancement

of Volkswagen‟s long lasting partnership with NABU

NABU-involvement in the product-design of “CO2-

Leasing“ (FleetCompetence eCO2), which aims at

rapid market penetration with highly fuel-efficient

vehicles (BlueMotion, EcoFuel). The project is

supposed to have a strong impact as fleet vehicles

represent 60% of the market

Sponsoring for biodiversity-/moor-project,

depending on the product‟s success

Product launch FleetCompetence eCO2 by 1/1/09


Volkswagen‟s Biodiversity Initiative

Environment- and Species-Protection-Projects

Germany

• “Welcome Wolf“ (in cooperation with NABU)

• Renaturation of Lower Aller (in cooperation with city of

Wolfsburg)

• “Ways for the Wildcat” (in cooperation with BUND Lower

Saxony)

Czech, Spain, USA

• Tree plantings

Mexico

• Seepage-/ Renaturation-Project Popocatepetl

• Support for research “Out of Love for the Planet“

Brazil

• Wildlife breeding project Sao Carlos

• Reforestation

China

• Panda breeding


Cooperation with:

Tongji-University Shanghai,

Local authorities,

Police,

Hospitals

Volkswagen China: Accident Research


Volkswagen Brazil: The Fundacao Volkswagen

Practiced human-rights policies in the

context of the objectives set out by the

Global Compact help to protect and

promote the individual and are thus an

effective contribution to a country‟s social

and economic development. At its sites in

Brazil, the Volkswagen Group actively

supports people‟s rights to healthcare and

school education.

Schools in a total of 139 communities

in the states of São Paulo and Rio de

Janeiro are currently profiting from

programmes to provide advanced

training for teaching staff, to promote

the culture of reading and to integrate

socially disadvantaged pupils.


“VWSA HIV“ and „AIDS Workplace Programme”

Programme

Volkswagens HIV/AIDS program

launched in 2002 has the objective of

helping infected employees and

preventing further HIV infections

among employees and their

dependents.

Services

Educational

Advertising

HIV Testing

Consultancy

Medication

Awards

Global Business

Coalition on

HIV/AIDS

Professional

Management

Review Africa:

Corporate Care

Award

Volkswagen South Africa

http://images.google.de/imgres?imgurl=http://www.bayer.com/img/nachhaltigkeit/gesundheit_aids.jpg&imgrefurl=http://www.bayer.com/en/aids.aspx&h=67&w=140&sz=5&hl=de&start=11&um=1&tbnid=BXTnFe_ziP-EbM:&tbnh=45&tbnw=93&prev=/images%3Fq%3DGlobal%2BBusiness%2BCoalition%2Bon%2BHIV%2Band%2BAIDS%26um%3D1%26hl%3Dde


International Commitment – Stakeholder Dialogue

Global Compact

International

Europa

National

CSR Laboratories

- Supply Chain (Leader)

- RSCM Portal

- Science in Schools

CSR Collaborative Venture

- Enterprise 2020

- Member of steering committee

- CSR-Memorandum

- company ratings

- workshops

- cooperation contract Volkswagen NABU

- fuel efficient driving

- projects (biodiversity) / dialogue

- Publication „Communications on

Progress“ and „Case Stories“

- Publishing of GC-related brochures

- Focal Point for New York and german

GC-network

- Advisory Group Supply Chain Sustainability

http://members.aol.com/nabuheinsberg/bilder/nabulogo.gif

http://www.econsense.de/de/index.html

http://www.vlerick.be/ido/Foto's Forum/CSR Europe.jpg

http://www.corpwatch.org/upload/misc/UNGC.jpg


Corporate Citizenship as a Global Responsibility

Regional Development

Occupation

Education

Culture and Arts

Research and Investigation

Health and Safety

Employee Volunteering

Historic Responsibility

Volkswagen Community

TrustVW AIDS

Care Project

AutoVision

Auto 5000

Work2Work

Ready4work

„One hour for

the future“Fair Trade

Tsunami-

Emergency

AidVolkswagen

Foundation

Brasil

Education

Center Mlada

Boleslav

Auschwitz

Memorial Work

Education

Environment

VW Training

Program

Volunteering

Accident Research

Sound

Foundation

Traffic training

for Kids

Demographic

Change


Agenda


Sustainability



4. Stakeholder Dialogue



6. Conclusion


Reputation

Day-to-day Business

Volkswagen‟s CSR Pyramid


CSR-Ratings – the Annual Performance Test

“Without any doubt, Volkswagen belongs to the top

companies in terms of sustainability in the sector.” (SAM)

http://images.google.de/imgres?imgurl=http://www.ethibel.org/images/logo_vigeo%2520x.gif&imgrefurl=http://www.ethibel.org/subs_e/11_links/main.html&h=91&w=170&sz=3&hl=de&start=1&usg=__fRwSCS1bsBnuhmL386FiXR381AI=&tbnid=DKs74V-dq97CCM:&tbnh=53&tbnw=99&prev=/images%3Fq%3DVigeo%26gbv%3D2%26hl%3Dde%26sa%3DG

http://images.google.de/imgres?imgurl=http://sustainability.sanofi-aventis.com/images/Logo_ASPI_tcm52-19929.gif&imgrefurl=http://sustainability.sanofi-aventis.com/vision/notation.asp&h=91&w=200&sz=4&hl=de&start=4&usg=__yn_OcP8aYJUFdhvm3yJRJ2rcZYM=&tbnid=mxMHahpBHq6ZlM:&tbnh=47&tbnw=104&prev=/images%3Fq%3DAdvanced%2BSustainable%2BPerformance%2BIndeces%26gbv%3D2%26hl%3Dde%26sa%3DG

http://www.globalreporting.org/

http://images.google.de/imgres?imgurl=http://www.petitsriens.be/images/Ethibel_logo.jpg&imgrefurl=http://www.petitsriens.be/liens.htm&h=184&w=203&sz=6&hl=de&start=3&tbnid=f6nIS11SWhKzoM:&tbnh=95&tbnw=105&prev=/images%3Fq%3DEthibel%26gbv%3D2%26svnum%3D10%26hl%3Dde%26sa%3DG

http://images.google.de/imgres?imgurl=http://www.eni.it/en_IT/attachments/investor-relations/eni-borsa/indici-sostenibilita/ECPI.gif&imgrefurl=http://www.eni.it/en_IT/investor-relation/eni-stock-markets/sustainability-indexes/sustainability-indexes.shtml&usg=__ZrrayHl-9ovt92J3TYgNEHDvFsc=&h=47&w=150&sz=3&hl=de&start=10&um=1&tbnid=2PT-h0ZxsifTJM:&tbnh=30&tbnw=96&prev=/images%3Fq%3Decpi%2Bethical%2Bindex%2Beuro%26hl%3Dde%26sa%3DN%26um%3D1


CSR Performance – e.g. Dow Jones Sustainability Index 2009

“Academic research identifies a positive link between ESG factors and

investment performance” (Unicredit)

( in %)

0 10 20 30 40 50 60 70 80 90 100

Total Score

Social Dimension

Environmental Dimension

Economic Dimension

Volkswagen AG

Industry Average


Reporting Sustainability

Measuring

• GRI A+ Level

(GRI confirmed)

Verifying

• AccountAbilitiy 1000 Assurance Standard

(first time, trendsetting)

Online reportingwww.SustainabilityReport2009.volkswagenag.com

http://www.sustainabilityreport2009.volkswagenag.com/


Agenda


Sustainability



4. Stakeholder Dialogue



6. Conclusion


Volkswagen Group Management: Common Vision, Central

Coordination, Local Excellence

Autonomous brand

management and

market approach

Central management

functions build

foundation and

provide scale benefits

Common vision and

goals

>10 million units sold p.a. VW Group PBT margin >8%

Production

& toolkits

Global

purchasing &

local sourcing

Model

cycle planMarketing

Product

development

Financial

Services

1

Strategy

2018

targets

Note: All stated Volkswagen Group figures represent financial targets for 20181 49.9% stake since 7 December 2009


Volkswagen Group is Well on the Way to Becoming the

Leading Automotive Group Globally

All building blocks in place Execution of strategy The global automotive leader

• Strong brand portfolio

• Platform leverage

• Advanced technology

• Efficiency leadership

• Position of financial strength

• Excellent management model

• Very well positioned to capture

market share globally

• Leverage of modular toolkits

• Benefit from technology evolution

• Attractive growth

• Higher profitability

• Extensive brand and

product portfolio

• Global footprint with BRIC focus

• Unrivalled distribution

• Best-in-class manufacturing

• Technology and quality leader

Strong foundationCapitalise on strategy

implementation

Global economic and

environmental leadership

Creation of

sustainable

value

Today Medium term Strategy 2018

The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States of America, Canada, Japan or Australia.


Conclusion

Customer, the public and capital markets expect tangible efforts

in terms of sustainability and corporate responsibility.

CSR as a strategic concept is the “business case” for sustainability

as a societal goal. Robust CSR/sustainability management

coupled with CSR/sustainability reporting are a requirement for a global

company.

For the Volkswagen Group responsibility and sustainability are core

elements of the whole value chain – including the supplier relations.

Volkswagen has defined requirements for environmental and social

standards and has introduced instruments for an early detection of risk

areas

…and implemented processes to intensify its collaboration with suppliers.

Volkswagen‟s protecting nature and biodiversity initiative is an example

for corporate citizenship as a global responsibility.


Conclusion cont.

CSR means more than legal compliance,

so that CSR is necessarily voluntary in basic parts and not a matter of regulatory

fact, and is therefore competitively driven

CSR requires and promotes transparency and accountability, and thereby leads

to new internal corporate control systems and information systems

CSR is dialog-oriented internally and externally, with the systematic integration

of

stakeholder dialogues

CSR integrates the earlier philanthropic approach, while going beyond it with a

value-based and strategy-based component, and is tied up with the company's

economic core processes

CSR is not – just – the "social case", it's also a "business case"


Conclusion cont.

In the age of a globalized economy companies are required to operate more and

more in a political space. Just because there are no global regulatory

frameworks, the challenges for the companies become more "political": The

environment and climatic change, demographic trends and diversity, human

rights and civic duties are just a few of the key concepts compelling companies

to enter the political arena. The more convincing their responses and deeds are

perceived, the greater will be their acceptance as players.

Corporate action needs an ethical basis. Economic activity is a problem-

solving activity for the sake of higher-order purposes and not for its own sake.

Strategic CSR is the implementation concept for ethically based corporate action

and consequently the companies' contribution to a sustainable social market

economy.


Thank you !

Information: [email protected]

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Documents

Volkswagen Scaling up Sustainability - Future of Food · 2011. 10. 18. · Volkswagen –Scaling up ... Leadership in alternative powertrain technologies Brand implementation High