volkswagen csr case study

Amanote Research

Volkswagen emission scandal and corporate social responsibility – a case study, business ethics and leadership, doi 10.21272/bel.2(1).6-13.2018.

Available in full text

March 1, 2018

Sumy State University

Related search

The issue arena of a corporate social responsibility crisis – the volkswagen case in twitter, corporate social responsibility: a case study in subsidiaries from brazil and china, sorting in the used-car market after the volkswagen emission scandal, firms and collective reputation: a study of the volkswagen emissions scandal, volkswagen emissions scandal: an empirical study about customers reaction, corporate social responsibility in asean: case study asean csr network, a corporate case study: the application of rokeach’s value system to corporate social responsibility (csr), corporate social responsibility and corporate governance, corporate social responsibility.

Volkswagen Corporate Social Responsibility

Volkswagen is one of the most interesting case stories when it comes to corporate social responsibility. Their reputation was horribly ruined because of a mega scandal. What makes this a compelling case study is their fall to a disgraceful position and attempt at an image makeover. Should we take Volkswagen corporate social responsibility seriously? Let’s find out. 

The mega  scandal ( 2008-2015)  

Volkswagen was mired in a  controversial CSR scandal  in 2015. It was the Volkswagen emissions scandal or the Dieselgate scandal. The company used defeat devices. The defeat device was essentially a mechanism to ensure two different modes of operation for their diesel engine. The device controlled the NOx output and therefore passed the emission testing with flying colors. On the other hand, it deactivated this pollution control and therefore it created 40 times higher NOx than the tests while on road.  

This was known to the highest-level executives of the Volkswagen Group. Subsequently, the  CEO as well as Audi’s R&D head , were indicted. As a short term loss, their  market value went down  by a whopping 23% by September 2015. However, the total loss incurred by the company is estimated to be much more than US dollars. 8 billion. 

Overview of Volkswagen Corporate Social Responsibility  

It is difficult to summarize the entire CSR effort by such a large firm. However, we attempt to provide key points from their annual sustainability report. 

• The company has declared that they are committed to the Paris climate agreement’s goal. The goal is to limit global warming to 2°. In order to achieve this feat, the company intends to reduce its carbon footprint. They plan to reduce greenhouse gas emissions for both passenger cars as well as commercial vehicles. Alternatively, the company is also investing in electric mobility. 
•  The second important goal mentioned in their annual report is that they want to move towards a circular economy. A circular economy ensures that we take bare minimum resources from nature and reuse the products without dumping them back. The net effect of the circular economy is reduced carbon dioxide emissions. Secondly, it also reduces the overall water, an energy requirement for production. Thirdly, it eliminates or minimizes the waste and toxic materials that are dumped. 
• Commitment to environmental compliance. This is one of the trickiest and most difficult aspects of CSR at Volkswagen Group. The company has looked at strengthening its corporate governance practices. Additionally, they have also put into place checks and balances to prevent such corrupt practices. They’re following the mantra of  Prevent, Detect and React  to act proactively on such cases. 

Current CSR philosophy  at Volkswagen  

Is it all over, or it can be fixed  .

One of the most disheartening aspects of this entire scandal was the sheer level of corporate lying that was detected in the annual report. They were rated by the Dow Jones Sustainability Index as the 2015 best company for corporate sustainability practices. Even inside their annual report, they had mentioned that they were highly committed to sustainability, Environmental Protection, and social responsibility. However, that was their public face. Privately, they were indulging in  extremely unethical malpractices  resulting in a massive amount of toxic emissions. 

It is never ‘the end’ unless we give up. For instance, Nike is an example of CSR, disaster, and turnaround. There was a massive outrage against Nike’s system of shoe manufacturing. Consumers started boycotting products of Nike when it was discovered that some of the shoes were getting made in exploitative sweatshops.  

Volkswagen can take a clue from Nike to clean up its mess. In fact, they’re doing just that. Some of the ways in which Nike has  turned around its CSR image  are: 

• Seeking professional help in auditing their production chain.  
• Establishing industry standard practices for supplier selection.  
• Becoming extremely transparent in reporting of these details in their annual report. 

The road ahead for Volkswagen Corporate Social Responsibility   

One of the first steps towards solving a problem is to accept the mistakes. Volkswagen seems to have done this step alright. The message on their  CSR page reads : 

“When it comes to the emissions issue, we have failed to live up to our own standards in several areas. The irregularities in the handling of emissions tests contradict everything we stand for.” 

The company has been releasing Group Sustainability Report from the last several years. At the same time, they are following international CSR reporting guidelines. 

Volkswagen has also teamed up with Microsoft Germany  to work together on sustainability initiatives.  Microsoft Corporate Social Responsibility  is highly regarded and this joint venture could help the Volkswagen group as well. 

Sharing is caring!

Leave a Comment Cancel reply

Save my name, email, and website in this browser for the next time I comment.

We use cookies (our own and those of third parties) to make our websites easier for you to use and to display advertisements in accordance with your browser settings. By continuing to use our websites, you consent to the use of cookies. Please see our Cookie Policy for more information on cookies and information on how you can change your browser's cookie settings: Cookie Policy Accept

The future on hand

Annual Report 2020

You are here:

• Group Management Report
• Sustainable Value Enhancement

Sustainability

Sustainability means maintaining intact environmental, social and economic systems with long-term viability at a global, regional and local level. The Volkswagen Group can influence these systems in various ways and actively takes responsibility to make a contribution to their sustainability. We have thus developed a sustainable style of company management and put in place the necessary management structures.

We have anchored our goal to sustainably shape mobility for present and future generations in our Group strategy TOGETHER 2025 + . In addition, we want to be an excellent employer and a role model for the environment, safety and integrity. Sustainability is thus at the center of our corporate actions.

A particular challenge when implementing our strategic goals on all levels of the value chain is the complexity of our Company, with its twelve brands, more than 660 thousand employees and 118 production sites. At the same time, we are guiding our Group through the furthest-reaching process of change in its history. The transformation sweeping our entire industry is dominated especially by the transition to e-mobility, digitalization and new mobility services. We want to master these challenges and become a leading company for individual mobility in this electric and connected age.

Protecting the climate is currently the greatest global challenge affecting all three sustainability dimensions. We want to provide our own highly unique answer to this and have decided on an ambitious decarbonization program. With the implementation of this program, we want to be a net-carbon-neutral company by 2050. We are assuming a pioneering role by making this voluntary commitment based on the Paris Climate Agreement. We are guided in this by the specifications of the Task Force on Climate-Related Financial Disclosures (TCFD) For more information, please see our Sustainability Report for fiscal year 2020 .

In the field of digitalization, we also want to help shape the transformation and are pressing ahead with developments in our vehicles and mobility services on the one hand and in our operating processes and management on the other. The digital transformation requires us not just to develop new technologies and be able to harness them, but also to devise a forward-looking human resources strategy that takes our employees along this path of change, trains them accordingly, and ensures that their jobs are secure.

Parameters and guiding principles

Our actions are determined by the Volkswagen Group Essentials as the foundation of values and the basis for our shared corporate culture. The Volkswagen Group Essentials support managers and employees in overcoming legal and ethical challenges that arise in their daily work. At the same time, we are guided in our activities by a large number of internal guidelines on sustainability.

On this basis, our objective is to attain that the Volkswagen Group’s actions are in line with international agreements and frameworks such as the Sustainable Development Goals (SDGs) of the United Nations (UN), the declarations of the International Labour Organization (ILO), the principles and conventions of the Organization for Economic Co-operation and Development (OECD) and the UN covenants on basic rights and freedoms.

Management and coordination

The structure and workflows of Group-wide sustainability management were expanded in the reporting period. The related structures, processes and responsibilities are codified in a separate Group policy. We view sustainability management as a continuous improvement process. The core elements include assumption of overall responsibility for sustainability by the Chairman of the Board of Management of Volkswagen AG, specification of the competence of the responsible Board members for specific sustainability management concepts and implementation of the Group Sustainability Steering Committee as a top management committee. The members of this steering committee include managers from central Board of Management positions and representatives of the brands and the Group Works Council. The steering committee defines concrete strategic goals and programs, establishes measures for uniform further development of sustainability management across divisions, brands and regions and decides on fundamental sustainability issues. It also handles the enhancement of Group-wide sustainability management. The offices of the Group Sustainability Steering Committee are the responsibility of the Group’s Sustainability function.

Strategic stakeholder management

Our stakeholders are individuals, groups, or organizations who have an influence on or are influenced by the course or the result of corporate decisions. Our customers and employees are at the center of our stakeholder network. Based on our annual stakeholder assessment, we have identified eight more stakeholder groups of equal value around this core. The Group’s supervisory and advisory bodies such as the Supervisory Board, the Works Council and the Sustainability Council act as a special interface between internal and external stakeholders. The Monitor appointed by the US Department of Justice until the termination of his duties in September 2020 was a stakeholder of the Volkswagen Group as well.

We understand stakeholder management as systematic, continuous interaction with key stakeholder groups in line with our TOGETHER 2025 + Group strategy. Stakeholder management aims to systematically record expectations and use feedback from our stakeholders to critically reflect on strategic planning processes.

To be able to systematically incorporate our stakeholders’ suggestions and recommendations, we have given our stakeholder management an organizational structure in the form of external committees. At Group level, these are the Sustainability Council and the Stakeholder Panel. The latter took a break in 2020 due to the pandemic. In addition, we offer our stakeholders a broad range of opportunities for interaction and feedback channels including regular discussion panels with stakeholders, stakeholder surveys and international cooperative projects.

THE VOLKSWAGEN GROUP'S STAKEHOLDERS

Sustainability Council

The Sustainability Council set up in 2016 provides assistance to the Volkswagen Group with important, strategic sustainability issues and is made up of internationally renowned experts from the academic world, politics and society. The Council establishes its own working methods and areas of focus independently, has far-reaching rights for the purposes of exchanging information, consultation and initiating action, and consults regularly with the Board of Management, top management and the employee representatives. In the reporting year, the Volkswagen Group extended its collaboration with the Sustainability Council by two more years.

In 2020, the agenda for the intensified dialogue between Volkswagen and the Sustainability Council included the CEO Alliance for Europe’s Recovery, Reform and Resilience, jointly initiated by the Chairman of the Board of Management of Volkswagen AG and the Council in support of the EU Green Deal, aspects of corporate governance and integrity, decarbonization, employment in times of advancing digitalization and e-mobility, and sustainable action in international markets.

The Council also launched two new projects: a research project on the distribution effects of climate-related fiscal and transport policies with the Mercator Research Institute on Global Commons and Climate Change, building on the preceding project on climate-conscious transport policies, and a study with the Fraunhofer Institut für Arbeitswirtschaft und Organisation (IAO – Fraunhofer Institute for Industrial Engineering) to examine the effects of digitalization and e-mobility on employment. The Open Source Lab on Sustainable Mobility concluded its work in 2020 with the publication of the project results.

Materiality analysis

In 2020, we forged ahead with the overhaul of our materiality analysis begun in the previous year and established a new binding sustainability strategy with the development of a sustainability narrative for the Volkswagen Group. Some 60 stakeholders were involved in this process, including decision-makers from various business areas and brands as well as representatives of the Sustainability Council.

The materiality process is used to identify and evaluate the most important sustainability issues for the Group. The decisive factors here are the impact on the environment and society, stakeholder expectations, the business model of Volkswagen AG and adherence to legal provisions and internationally established reporting standards.

The sustainability strategy developed based on the materiality analysis focuses on the key sustainability issues within the Group strategy TOGETHER 2025 + , which is supported by the vision “Shaping Mobility – for generations to come” and the seven Group principles. The sustainability narrative clearly illustrates how the Volkswagen Group intends to achieve its overarching strategic objective of sustainable growth. Not only will it lay the foundation for performance management and improvement in environmental, social and governance performance, but it will also boost confidence among stakeholders and in the financial markets.

To implement the transformation with a holistic approach and run our business responsibly along the value chain, we prioritized four focus areas that are essential for our core business.

• Decarbonization
• Circular economy
• Responsibility in supply chains and in business
• Workforce transformation

The focus areas are each underpinned by forward-looking ambition and are developed and implemented within the framework of programs and initiatives.

Corporate citizenship

As a good corporate citizen, we aim to be a constant source of economic impetus for local structural development and equal opportunities. We have always believed in the importance of recognizing our social responsibilities toward our stakeholders. The main focus of our corporate social engagement activities is on supporting future, educational and community projects at many of our sites across the world. In 2020, the brands and companies launched or continued around 700 projects and initiatives worldwide.

CSR-PROJECTS

https://www.volkswagenag.com/en/sustainability/reporting/cc-projects.html

Sustainability drives automotive market cap

How Volkswagen is driving clarity and confidence in their sustainability strategy.

Call for change

Having a bold Environmental, Social and Governance (ESG) strategy matters to investors, employees and the public—but not if they don’t understand it. Despite having launched the most ambitious decarbonization and digitalization initiative in automotive history, the Volkswagen Group (VW), the world’s largest automaker by volume, had a market cap well below that of its rivals. VW realized they needed to better articulate their ESG strategy.

To address this, the auto major wanted to implement a more cohesive sustainability narrative—from environmental to diversity to human rights and resource efficiency—that would resonate with its culture and its individual brands. VW also wanted to sharpen its overall ESG focus, defining the initiatives, responsibilities and KPIs that would make sustainability synonymous with the corporate strategy.

Achieving this would clarify its sustainability strategy—to become an emission-free, digitally-connected leader in mobility—and drive greater awareness among stakeholders, including the investment community.

When tech meets human ingenuity

Accenture broke the project into three phases. Phase one involved determining where VW stood in relation to its peers. Since investors trust S-Ray, a machine learning platform that generates ESG ratings of companies based on millions of data points for over 7,000 listed companies, the team identified the data needed to generate an S-Ray score and ESG rating in line with VW’s industry-leading efforts.

Next, the team conducted C-level workshops to develop support for the company’s ESG vision, emphasizing decarbonization, circular business models, workforce transformation and human rights in supply chain. The third phase saw the team help articulate VW’s ESG narrative, which included key initiatives, responsibilities, KPIs and a plan to communicate all the company’s efforts.

A valuable difference

In six months, the team consolidated VW’s ESG narrative from 18 sustainability topics to just four major topics, with easily understandable ambitions and KPIs for each area so the company can measure its progress more efficiently. Targets were set in areas such as decarbonization, circular economy, human rights in business and workforce transformation.

With ESG objectives woven into its operational and functional processes, there’s now a clear connection between VW’s S-Ray score and the overall corporate strategy, integrating the NEW AUTO plan to pivot VW to a global software-driven mobility provider that powers the future of EVs and fully networked transportation.

Customers are already on board—in December 2020 VW’s electric ID.3 was the second best-selling car in Europe and by 2021, the Volkswagen Group was being seen as the market leader in e-mobility.

With ESG analysis and real-world ESG performance becoming clearer, VW is able to accelerate its sustainability strategy. Its overall growth ambitions are reflected in its market cap rise, which is becoming consistent with that of other global enterprises. VW’s roadmap is set for further growth as investors look to make smarter bets on how we’ll all get where we want to go—together, and for the planet.

Group Management Report

Sustainability.

vSustainability means maintaining intact environmental, social and economic systems with long-term viability at a global, regional and local level. The Volkswagen Group can influence these systems in various ways, and actively takes responsibility to make a contribution to their sustainability. We have thus developed a sustainable style of company management and put in place the necessary management structures.

We have also anchored our goal to sustainably shape mobility for present and future generations in our Group strategy NEW AUTO. Especially the Group’s ESG, Decarbonization and Integrity base initiative will drive this topic further.

The materiality process is used to identify and evaluate the most important sustainability issues for the Group. Based on the business model of Volkswagen AG and its social impacts, the focus is on key ESG requirements, stakeholder expectations and adherence to legal regulations and internationally established reporting standards.

We conducted another materiality analysis in the reporting period. In reviewing potentially material issues, we considered perspectives from within and outside the company and reviewed whether the focus topics of the Group’s NEW AUTO strategy are still in keeping with the times. As a result of this process, the six focus areas already defined – decarbonization, circular economy, supply chain and human rights, people & transformation, diversity, and integrity – were confirmed and classified as material by the Group Sustainability Steering Committee. The six focus areas cover most of the requirements formulated in the ESG ratings for assessment criteria applied. Wherever this is already possible, each focus area is linked to clear goals and milestones, KPIs and appropriate packages of measures. ESG-related KPIs such as the decarbonization index and the diversity index are already today reflected in the remuneration of members of the Board of Management.

Decarbonization

The decarbonization of the Group and in particular its portfolio of products is a major part of the NEW AUTO Group strategy, where it has been defined as one of the focus areas in the base initiative. We have established the decarbonization index (DKI) as a key performance indicator: the decarbonization index measures the emissions of CO 2 and CO 2 equivalents (jointly referred to as CO 2 e) by the brands that produce passenger cars and light commercial vehicles in the regions of Europe (EU27, United Kingdom, Norway and Iceland), China and the USA over the entire life cycle. In this index, the use phase is calculated over 200,000 km and with reference to region-specific fleet values without statutory flexibilities. The CO 2 e intensity of the charging current of the electric vehicles is also calculated based on region-specific electricity mixes. Our vehicle life cycle assessments, which are used as the data basis for calculating supply chain and recycling emissions, have been verified externally and independently in accordance with ISO 14040. The DKI gives us an informative measuring tool that makes our progress and interim results public and verifiable. The DKI calculation methodology is regularly adapted according to internal and external requirements, such as new test cycles for fleet emissions. Published DKI values can therefore also be adjusted to the new methodology and thus changed to facilitate the presentation of a time series that is methodologically consistent. In 2021, the methodology was adjusted to the WLTP test cycle for fleet emissions. By 2030, the DKI is to be reduced by 30% compared with the base year 2018, and emissions offsetting will not be included in the figure. In the reporting year, the DKI value averaged 48.0 t CO 2 e/vehicle. This represents a reduction of 0.4 t CO 2 e/vehicle compared with the figure adjusted for 2021 due to a change in the assumption on which the calculation is based, for example the first-time inclusion of region-specific life cycle assessments for Chinese models.

Circular economy

The finite nature of natural resources and the social and environmental consequences of mining raw materials make decoupling economic growth from resource consumption and the development of a circular economy key sustainability topics. Policymakers at both international and national level have addressed these challenges and made it their mission to regulate markets more aggressively in the future in an effort to speed up the transformation towards resource efficiency and a circular economy. Recognizing the importance of the topic, Volkswagen anchored the topic of circular economy in the NEW AUTO Group strategy through its ESG, Decarbonization and Integrity base initiative.

The Volkswagen Group created and implemented concepts for the reconditioning and recycling of vehicle components from an early stage. Going forward, we plan to intensify our efforts for a transition to a loop-oriented and resource-conserving approach to doing business by pooling expertise within the Group and working on projects and measures on a cross-brand basis.

We are stepping up efforts to use recyclable materials in our vehicle projects. These currently include raw materials from production residues as well as renewable raw materials or natural fibers such as flax, cotton, wood and cellulose, provided they comply with all the technical requirements. In the future, the use of raw materials from end-of-life vehicles will be increasingly taken into account and simplified.

To preserve circular materials from electric vehicles, Volkswagen Group Components opened the Group’s first pilot facility for recycling high-voltage vehicle batteries at the Salzgitter site in early 2021. The objective is industrialized recovery of valuable raw materials such as lithium, nickel, manganese and cobalt.

More information on the focus areas can be found in the sections on integrity and compliance, procurement and employees, as well as in our Sustainability Report for fiscal year 2022 .

Parameters and guiding principles

Our actions are determined by the Volkswagen Group Essentials as the foundation of values and the basis for our shared corporate culture. The Volkswagen Group Essentials support managers and employees in overcoming legal and ethical challenges that arise in their daily work. At the same time, we are guided in our activities by several internal guidelines on sustainability.

On this basis, we seek to align the Volkswagen Group’s actions with international agreements and frameworks such as the Sustainable Development Goals (SDGs) of the United Nations (UN), the declarations of the International Labour Organization (ILO), the principles and conventions of the Organisation for Economic Co-operation and Development (OECD) and the UN covenants on basic rights and freedoms.

UN Global Compact

Since 2021, after a five-year hiatus, the Volkswagen Group has officially been reinstated as a participant of the UN Global Compact (UNGC), the world’s largest corporate sustainability initiative, and participates in national and international initiatives together with Audi, Porsche, TRATON, MAN Truck & Bus and Scania. Investors and asset managers in the capital markets view membership of the UNGC as an important factor when deciding to invest in shares and bonds of Volkswagen AG. ESG funds have become very popular in recent years and indispensable for stakeholders.

Management and coordination

The Volkswagen Group has established a Group-wide sustainability management. The related structures, processes and responsibilities are codified in a specific Group policy. We view sustainability management as a continuous improvement process. The core elements include assumption of cross-functional overall responsibility for sustainability by the Chair of the Board of Management of Volkswagen AG, specification of the competence of the responsible Board members for specific sustainability management concepts and implementation of the Group Sustainability Steering Committee as a top management committee. The members of this steering committee include managers from central Board of Management business areas and Group divisions as well as representatives from the brands and the Group Works Council. The steering committee defines concrete strategic goals and programs, establishes measures for uniform further development of sustainability management across divisions, brands and regions and decides on fundamental sustainability issues. The office of the Group Sustainability Steering Committee is the responsibility of the Group’s Sustainability function.

Strategic stakeholder management

Our stakeholders are individuals, groups, or organizations who have an influence on or are influenced by the course or the result of corporate decisions. Our customers and employees are at the center of our stakeholder network. Based on continuous stakeholder analysis, we have also identified eight more stakeholder groups. The Group’s supervisory and advisory bodies – i.e. the Supervisory Board, the Works Council and the Sustainability Council – act as interfaces between internal and external stakeholder groups.

We understand stakeholder management as systematic interaction with key interest and stakeholder groups in line with our NEW AUTO Group strategy. Our goal is an open, constructive and also critical exchange with the stakeholder groups shown in the following chart. We aim to actively shape and promote implementation of their requirements and expectations, as well as central strategic issues.

THE VOLKSWAGEN GROUP’S STAKEHOLDERS

To be able to continuously incorporate our stakeholders’ suggestions and recommendations, we have given our stakeholder management an organizational structure that also includes external committees. At Group level, this is the Sustainability Council. In addition, we offer our stakeholders a broad range of opportunities for interaction including regular discussion panels and surveys. Following the pandemic-related interruption, we were able to resume the exchange in the reporting period.

Sustainability Council

The Sustainability Council provides assistance to the Volkswagen Group with important, strategic sustainability issues and is made up of internationally renowned experts from the academic world, politics and society. This advisory body establishes its own working methods and areas of focus independently, has far-reaching rights for the purposes of exchanging information, consultation and initiating action, and consults regularly with the Board of Management, top management and the employee representatives.

Dialogue between Volkswagen and the Sustainability Council in 2022 focused specifically on the Lieferkettensorgfaltspflichtengesetz (German Supply Chain Due Diligence Act), the use of digital technologies for sustainable development, the Zero Impact Factory concept, promotion of transformation and training, Volkswagen’s further decarbonization, and the future alignment of mobility solutions with the NEW AUTO Group strategy. The Sustainability Council also discussed the impact of the Russia-Ukraine conflict on the Group.

Furthermore, the projects launched by the Council to examine the importance of digitalization for sustainability, the transformative potential of employment and training and the inclusivity and effecttiveness of climate legislation in the transport sector were completed in the reporting period. Further links to the letters of recommendation to the Group Board of Management and the results of the Council projects are provided on the Sustainability Council internet page.

Corporate citizenship

As a good corporate citizen, we aim to be a source of economic impetus for local structural development and equal opportunities. We have always believed in the importance of recognizing our social responsibilities toward our stakeholders. The main focus of our corporate social engagement activities is on supporting future, environmental, educational and community projects at many of our sites across the world. In 2022, the brands and companies supported around 800 projects and initiatives worldwide.

Environmental Strategy

As one of the largest automobile manufacturers, Volkswagen takes responsibility for the environmental impact of its activities. Based on the NEW AUTO Group strategy, we have put greater focus on our ambitious environmental targets. With our environmental mission statement goTOzero, we aspire to reduce environmental impact along the entire life cycle – from raw material extraction until end-of-life – for all our products and mobility solutions in order to keep ecosystems intact. Compliance with environmental regulations, standards and voluntary commitments is a basic prerequisite of our actions.

Our focus is on four prioritized action areas:

• Climate action. We are committed to the Paris Climate Agreement and align our activities with the 1.5 degree goal. We consistently focus on the electrification of our products, decarbonization of our entire value chain and expansion of renewable energy generation to supply our sites and customers. We intend to be a net-carbon-neutral company by 2050 at the latest.
• Conservation of resources. We reduce the volumes of primary raw materials needed by using recycled material and renewable raw materials. We maximize our energy and resource efficiency and establish loops for materials and water. Together with our business partners we cut down on the amount of natural resources utilized throughout our supply chain.
• Conservation of ecosystems. We reduce harmful emissions in air, soil and water. We mitigate the impact of our business operations on biodiversity and ecosystems and support projects to conserve these.
• Environmental compliance. Where integrity and compliance are concerned, we aim to be a role model for a modern, transparent, successful enterprise. With this in mind, we use environmental compliance management systems to identify and manage environmental risks and opportunities throughout the lifetime of our mobility solutions. We conduct open dialog with our stakeholders and incorporate their expectations into our decisions.

Organization of environmental protection

Volkswagen has created an environmental policy that sets out guidelines for environmental decision-making, for the management of projects and for the Group’s environmental stewardship. Thus, parameters are set for the conduct and working methods of management and staff in five areas: management behavior, compliance, environmental protection, collaboration with stakeholders and continuous improvement.

The Board of Management of Volkswagen AG is the highest internal decision-making body for environmental issues. Both it and the brands’ boards of management take not only business, but also social and environmental criteria into account when making key company decisions. The Group-wide management of environmental protection is the responsibility of the Group Steering Committee for the Environment and Energy. Other bodies take responsibility for steering key individual aspects. They include the Group CO 2 Steering Committee, the Group Steering Committee for Fleet Compliance and Exhaust Gas, and the Group Sustainability Steering Committee.

The Volkswagen Group coordinates the activities of the brands, which in turn steer the measures in the regions. The brands and companies are responsible for their own environmental organization. They base their own environmental protection activities on the targets, guidelines and principles that apply throughout the Group.

Our declared aim is to comply with legal and regulatory requirements. Furthermore, we are guided by Company standards and targets. The intention of our environmental compliance management systems is to ensure that environmental aspects and obligations are given appropriate consideration in our business operations. Disregard for the rules is treated as a severe compliance violation, as are fraud and deliberate misconduct. Compliance with our Environmental Policy Statement and with other Group environmental requirements is evaluated annually and reported to the Board of Management of Volkswagen AG, and the respective brand boards of management or the managing directors of the companies.

• Compare to last year
• Interactive comparison

SustainCase – Sustainability Magazine

• trending News
• Climate News
• Collections
• case studies

Case study: How the Volkswagen Group promotes compliance

The Volkswagen Group is one of the world’s leading automobile manufacturers and the largest automaker in Europe – delivering, in 2018, a total of 10,834,012 cars and commercial vehicles to customers. Compliance with national and international laws and regulations, internal rules and voluntary commitments is among the Volkswagen Group’s guiding principles     Tweet This! , along with ensuring compliant behaviour in a lasting manner.

This case study is based on the 2018 Sustainability Report b y the Volkswagen Group published on the Global Reporting Initiative Sustainability Disclosure Database  that can be found at this link . Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

The Volkswagen Group believes that only with lasting, dependable integrity and compliant behaviour will it gain and strengthen the trust of its staff, customers, shareholders, business partners and the general public and seeks to become a role model when it comes to integrity and compliance. In order to promote compliance the Volkswagen Group took action to:

• implement a Code of Conduct
• provide channels for reporting misconduct
• encourage training and communication

Subscribe for free and read the rest of this case study

Please subscribe to the SustainCase Newsletter to keep up to date with the latest sustainability news and gain access to over 2000 case studies. These case studies demonstrate how companies are dealing responsibly with their most important impacts, building trust with their stakeholders (Identify > Measure > Manage > Change).

With this case study you will see:

• Which are the most important impacts (material issues) the Volkswagen Group has identified;
• How the Volkswagen Group proceeded with stakeholder engagement , and
• What actions were taken by the Volkswagen Group to promote compliance

Already Subscribed? Type your email below and click submit

What are the material issues the company has identified?

In its 2018 Sustainability Report the Volkswagen Group identified a range of material issues, such as environmentally friendly products, human rights, product and transport safety, zero-impact mobility, customer satisfaction. Among these, promoting compliance stands out as a key material issue for the Volkswagen Group.

Stakeholder engagement in accordance with the GRI Standards

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups the Volkswagen Group engages with:

To identify and prioritise material topics the Volkswagen Group carried out a number of stakeholder surveys and, also, organised a Stakeholder Panel.

What actions were taken by the Volkswagen Group to promote compliance ?

In its 2018 Sustainability Report the Volkswagen Group reports that it took the following actions for promoting compliance:

• Implementing a Code of Conduct
• The Volkswagen Group’s Code of Conduct is the key instrument for strengthening employees’ awareness of correct behaviour and finding the right contact persons in cases of doubt. The Code of Conduct was revised in 2017, and was established throughout the Group. The framework is available to all employees on the intranet and to third parties on the Internet at any time. The Code of Conduct is also integrated into operating processes. For example, employment contracts for employees of Volkswagen AG include a reference to the Code of Conduct and the obligation to comply with it. In addition, compliance with the Code of Conduct remained part of employees’ annual reviews in the reporting period and was thus taken into account when calculating their variable, performance-related remuneration. In addition to the Code of Conduct, there are various Group policies and guidelines regarding specific compliance issues. Organisational instructions also apply on dealing with gifts and invitations, as well as on making donations.
• Providing channels for reporting misconduct
• The Volkswagen Group has had a system for reporting any breaches of the law or rules since 2006. This system is optimised on an ongoing basis. Among other things, a central investigative office has been set up in the Compliance department, which is responsible for coordinating the whistleblower system within the Volkswagen Group and for processing information concerning Volkswagen AG and its subsidiaries. Information on misconduct can be submitted in any of the major languages used by the Group and is treated confidentially. The people providing the information will be protected and need not fear any sanctions for their actions. They can decide for themselves whether they wish to give their names. For this reason, a specially protected online reporting channel was set up in 2017, via which information can be sent to the investigative office anonymously. The Volkswagen Group continues to rely on established channels such as the ombudsman system, too. This system can be used to confidentially report any suspicions – in one of 11 different languages – to two independent lawyers appointed by the Group. The ombudspersons and the whistleblower system can be used by anyone, employees and people outside the Group. In addition to the existing reporting channels, since August 2018 it has also been possible to report potential breaches of rules via a 24/7 telephone hotline. By calling the relevant number, employees, business partners and customers anywhere in the world can provide information round the clock, 365 days a year. A caller who calls the global telephone number will speak to a specially trained person, who can include an interpreter in the call if necessary. In addition, a revised Group policy was passed in 2018. This has further improved the whistleblower system, by providing extra communication options. The whistleblower system was also strengthened significantly by adding more staff. In 2018, a total of 2,920 reports were registered throughout the Group. All substantiated reports have been, or will be, investigated, and any misconduct penalised.
• Encouraging training and communication
• The Code of Conduct, is a key component of compliance training. The training is completed by anyone, from directors to individual employees. Face-to-face and web-based or online training is used. Following a risk-based approach, mandatory compliance training is provided for specific target groups. In addition to traditional lectures and online tutorials, case studies, role-playing games and other interactive formats form part of the training provided to employees and managers. Employees can also use special e-mail addresses to solicit advice on compliance issues. All internal channels are used to communicate regulations and other compliance-related content, with a focus on further developing the whistleblower system over the course of the reporting period. Online communication takes place mainly via employees’ own posts on the Volkswagen intranet and on the internal, Group-wide communications platform “Group Connect”. There are also articles, interviews and other publications in cross-brand and specific divisions’ media. At the same time, compliance-related issues are publicised at various employee information events and company meetings held at a number of locations.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standards addressed in this case are:

1)  Disclosure 205-2 Communication and training about anti-corruption policies and procedures

2)  Disclosure 205-3 Confirmed incidents of corruption and actions taken

Disclosure 205-2  Communication and training about anti-corruption policies and procedures corresponds to:

• Sustainable Development Goal (SDG) 16 : Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
• Business theme:  Anti-corruption

Disclosure 205-3  Confirmed incidents of corruption and actions taken corresponds to:

78% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism .

7 GRI sustainability disclosures get you started

Any size business can start taking sustainability action

GRI, IEMA, CPD Certified Sustainability courses (2-5 days): Live Online or Classroom  (venue: London School of Economics)

• Exclusive FBRH template to begin reporting from day one
• Identify your most important impacts on the Environment, Economy and People
• Formulate in group exercises your plan for action. Begin taking solid, focused, all-round sustainability action ASAP. 
• Benchmarking methodology to set you on a path of continuous improvement

See upcoming training dates.

References:

1) This case study is based on published information by the Volkswagen Group, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:

http://database.globalreporting.org/

2)  https://www.globalreporting.org/standards/gri-standards-download-center/

Note to the Volkswagen Group: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us .

Privacy Overview

• Company / Strategy

Five years ago, we launched the transformation of the Volkswagen brand: With the TRANSFORM 2025+ strategy, the company has completely realigned itself. We have renewed our model range from the ground up. Volkswagen has made a clear commitment to e-drive vehicles. We are already on our way to CO₂-neutral mobility for all!

With our enhanced “ACCELERATE” strategy, we are initiating the next phase of this transformation. The fight against climate change, the increasing pace of innovation in our industry and new competitors present us with major challenges. That is why we are increasing the speed and changing Volkswagen more radically than ever before.

Until 2030, we want to increase the share of all-electric cars in Europe to 70 percent of our sales. In this way, we aim to significantly exceed the planned EU regulation. In the U.S. and China, we want to increase the share of e-cars to 50 percent by 2030. We are accelerating our pace, producing large volumes and covering all segments. In this way, we are positioning the Volkswagen brand as the global market leader for climate-neutral e-mobility.

But anyone who believes that the e-car alone will take us into the future is mistaken. The real gamechanger is digitalization. Electrification, software-defined products, new business models and autonomous driving – these four major forces are driving the future development of vehicles. The Volkswagen brand is driving change by developing software and the digital customer experience into core competencies, tapping into additional revenues through data-based services in the use phase of cars, and making autonomous driving more widespread between now and 2030. Because autonomous driving must not become the privilege of a few.

Just as we have boldly moved forward on the topic of e-mobility, we are also taking a bold approach to the other issues of the future.

The Volkswagen brand is investing around 18 billion euros in e-mobility, hybridization and digitalization by 2026. To manage these investments, we aim to achieve a sustainable operating margin of at least 6 percent by 2023.

Volkswagen will change from the ground up. The brand will stand for climate-friendly e-mobility like no other, for fascinating digital customer experiences, for new business models and for autonomous driving across the board. Over the past few years, we have built a strong starting point. With “ACCELERATE”, we are now giving the digitalization of the brand a further boost.

Press releases

Volkswagen brand trims Board of Management: established processes from “New Mobility” division to be integrated into Technical Development

Volkswagen brand’s biggest performance program on track, with earnings contribution of up to four billion euros expected for 2024

Volkswagen Passenger Cars readies plants for the future

Volkswagen brand invests one billion euros for growth in South America

Performance program: Volkswagen brand aims to become more efficient and more profitable

Volkswagen accelerating transformation of Wolfsburg plant

All-green electric: The ID. Family goes carbon-neutral

Strategy update at Volkswagen: “The transformation to electromobility was only the beginning”.

„The efficiency of pure battery-electric vehicles is much higher” (Frank Welsch)

• Terms of Service
• Cookie Policy
• Third Party Licence Notes
• Volkswagen AG
• Cookie Settings
• Press Releases
• Basic Infos
• Media Documents
• Media Contacts

The Volkswagen Newsroom is an open platform and offers comprehensive search options to all users.

If you would like to be kept informed about our press releases you can also subscribe to our media information newsletter.

The specified fuel consumption and emission data are determined in accordance with the measurement procedures prescribed by law. 1 January 2022, the WLTP test cycle completely replaced the NEDC test cycle and therefore no NEDC values are available for new type approved vehicles after that date.

This information does not refer to a single vehicle and is not part of the offer but is only intended for comparison between different types of vehicles. Additional equipment and accessories (additional components, tyre formats, etc.) can alter relevant vehicle parameters such as weight, rolling resistance and aerodynamics, affecting the vehicle's fuel consumption, power consumption, CO 2 emissions and driving performance values in addition to weather and traffic conditions and individual driving behavior.

Due to more realistic testing conditions, fuel consumption and CO 2 emissions measured according to WLTP will in many cases be higher than the values measured according to NEDC. As a result, the taxation of vehicles may change accordingly as of 1 September 2018. For further information on the differences between WLTP and NEDC, please visit www.volkswagen.de/wltp .

Further information on official fuel consumption data and official specific CO 2 emissions for new passenger cars can be found in the "Guide to fuel economy, CO 2 emissions and power consumption for new passenger car models", which is available free of charge from all sales dealerships and from DAT Deutsche Automobil Treuhand GmbH, Hellmuth-Hirth-Str. 1, D-73760 Ostfildern, Germany and at www.dat.de/co2 .

Academia.edu no longer supports Internet Explorer.

To browse Academia.edu and the wider internet faster and more securely, please take a few seconds to  upgrade your browser .

Enter the email address you signed up with and we'll email you a reset link.

• We're Hiring!
• Help Center

Volkswagen Emission Scandal and Corporate Social Responsibility – A Case Study

2018, Business ethics and leadership

Related Papers

Ladislav Blažek

Corporate Social Responsibility (CSR) is an important factor of the positive image of corporations and their competitiveness. However, in some cases, serious misconduct occurs in this area. The article summarizes the results of qualitative research into the failure of the Volkswagen Group’s corporate social responsibility system. The purpose of this research, conducted in the form of a case study, was to elucidate the causes and consequences of fraudulent behavior of falsifying the results of exhaust emission tests for diesel-powered cars. It was found that the main cause was the Group’s organizational culture characterized by very strong elements of competition where the strategic goal had to be met at any cost. If necessary, it would include ways that are contrary to the ethical code. The whole sophisticated CSR system of the Volkswagen Group fatally failed in this case. The consequences became evident mainly in a significant reduction in the market value of the Group and a decrea...

Laura Maria Dindire

This paper aims to determine the trend of the relationship between corporate environmental responsibility and corporate reputation by focusing on a study of the European automotive sector. The starting point of our research is content analysis of the sustainability or social responsibility reports published in 2010, 2011, and 2012 by 13 businesses operating in the European automotive industry. Content analysis was carried out in order to identify the indicators used to assess corporate environmental responsibility. The methodology aimed to produce an evaluation model for corporate environmental responsibility based on the following variables reported by companies: carbon dioxide emissions, water consumption, energy consumption, and amount of waste. Corporate reputation of sampled organizations was assessed based on content analysis of the 2010, 2011, and 2012 reports of the Reputation Institute. We applied the correlation of panel data and emphasised the fact that high levels of corporate environmental responsibility sustain high levels of corporate reputation. The study highlights the theoretical considerations that support this relationship. As companies become increasingly accountable, the methodology described in our study can be developed in further research by using other variables to measure corporate environmental responsibility.

Samuel Babatunji Adedeji

The rationale for reputational risk management is to help companies put in place strategies to manage their reputation. This paper examines factors affecting corporate concerns about reputation and its impact on profitability and growth of the companies. Eight manufacturing companies whose historical data were available in Nigerian Capital Market for the period 20002006 were purposively selected for the study. The automated SPSS was used to test the simple regression models. However, it was discovered that Corporate Social Responsibility is not appropriate to predict both profitability and growth of Nigerian manufacturing firms though it indicates lack of commitment by companies to activities of social responsibility. It was recommended among others that government should therefore improve on the state of infrastructures to enhance growth of the manufacturing industry which will lead to increased activities of social responsibility.

Management:Journal of Sustainable Business and Management Solutions in Emerging Economies

Biljana Chroneos Krasavac

Research question: This paper examines some aspects of corporate social responsibility (CSR) and company reputation (CR) in the Serbian business environment during the COVID-19 pandemic. Motivation: The survival, growth and development of companies in the current business environment are conditioned by their capability to reach socially responsible decisions and carry out activities that meet the expectations of different stakeholders. The main motive for this research has stemmed from the current global corona virus pandemic and the way this state of affairs has affected socially responsible behaviour of companies. The research of activities Serbian companies carried out in the time of crisis prompted us to explore the possible relationship between corporate social responsibility and its effects on corporate reputation, and consequently business results. Research idea: An empirical research has been conducted with the view to investigate the position of the public on the importance...

International Journal of Environmental, Sustainability, and Social Science

Moeljadi Moeljadi

This research aims to examine and analyze the direct and indirect effects of the variables of Corporate Social Responsibility (CSR), Corporate Reputation, and Financial Performance on Firm Value. This type of research is explanatory research with quantitative methods. The sampling technique used by the researcher is the non-probability sampling method. The research sample comprised 18 companies listed on the Indonesia Stock Exchange from 2017 to 2019. This research uses secondary data. The data analysis method used Path Analysis with SPSS software. The study's results to examine the direct effect show that CSR has a significant positive impact on corporate reputation. CSR, corporate reputation, and financial performance have a significant positive impact on firm value. CSR has no significant effect on financial performance. The results of the indirect effect test show that CSR on firm value through financial performance has no significant impact. The influence of CSR on the firm...

International Journal of Economics and Business Research

Neda Vitezic

This paper aims to explore the relationship between corporate reputation and social responsibility (CSR) in selected large Croatian companies. The research is based on the theoretical framework that supports a thesis of their positive relationship. CSR is measured through economic, environmental and social aspects and primarily is based on testing the relationship between CSR and financial performance to determine whether the relationship is positive, neutral or negative. Many researchers have concluded that it is generally positive depending on which measures of financial performance are used. At the same time corporate reputation is considered as a key mediator in the relationship between a firm's CSR and financial performance. In this concept of CSR, reputation is a «global perception» of a group of stakeholders, its «assessment of the credibility of the organization's projection». Company reputations may vary from one stakeholder to another depending of their expectation...

mustfa hussain

Rashedul Hasan

In today's corporate world, Corporate Social Responsibility (CSR) is becoming a significant field of study for all businesses as its notion has increased attention of both academics and practitioners. Secondary sources of data are utilized using document analysis method to understand the relationship between Corporate Social Responsibility (CSR) and corporate reputation (CR). Five papers are selected from Science Direct which covers the time frame of 2012 until 2017. Evidence indicates that there is a positive, direct and significant relationship between CSR and CR. This paper contributes to the understanding of interrelations between CSR and CR. Practitioners can use the result of this study as a foothold to strengthen the integration of CSR and take advantage of synergies between CSR and CR. The value of paper resides in making this rather under-researched literature on the relationship between CSR and CR be more accessible for both scholars and practitioners.

Jurnal Magister Akuntansi Trisakti

Juniati Gunawan

Margaretta Sirait

In addition to being responsible for their owners, economic enterprises are required to fulfill their social responsibilities for public health as well. Social responsibility, on the one hand, leads to the consistency of economic benefits with environment and on the other hand, leads to the growth and sustainability of the company's business. The purpose of this study is to investigate the impact of social responsibility on corporate performance. The sample of the study consists of (92) companies that are active in the Stock Exchange during the period of (2002-2011). Designing a new pattern of social responsibility is done using DEA method and corporate performance measures include (return on assets, return on equity, real stock returns, Q-Tobin ratio, the market value of equity, economic value added, and cost of common stock). Models were tested using linear regression method in Eviews software. Results showed a significant relationship between social responsibility and corporate performance.

RELATED PAPERS

Czas Kultury

Czas Kultury , Waldemar Kuligowski

Process Biochemistry

M. Farzadkia

Journal of the National Cancer Institute

Andrew Rudczynski

Archives of Dermatology

Mark Pittelkow

Prema Pragya

Sunan Kalijaga international journal on islamic educational research

Abdul Munip

Forum for Health Economics & Policy

Sonya Huffman

Aldo Paviani

Jornal Brasileiro de Patologia e Medicina Laboratorial

Santiago Barbosa

Tural Babayev

Pichitra Lekdamrongkul

Archives de Pédiatrie

Nguyen Phuong Tien

huda ibrahim

Educação & Realidade

Anne Carolina Ramos

Chemischer Informationsdienst

Comunicata Scientiae

Matheus M Debastiani

Saeema Ahmed-Kristensen

Emerging Infectious Diseases

Michael Loesche

Applied Thermal Engineering

Tomás Venegas

Selfi Ardiyanti

RELATED TOPICS

•   We're Hiring!
•   Help Center
• Find new research papers in:
• Health Sciences
• Earth Sciences
• Cognitive Science
• Mathematics
• Computer Science
• Academia ©2024

Accessibility Links

• Skip to content
• Skip to search IOPscience
• Skip to Journals list
• Accessibility help
• Accessibility Help

Click here to close this panel.

Purpose-led Publishing is a coalition of three not-for-profit publishers in the field of physical sciences: AIP Publishing, the American Physical Society and IOP Publishing.

Together, as publishers that will always put purpose above profit, we have defined a set of industry standards that underpin high-quality, ethical scholarly communications.

We are proudly declaring that science is our only shareholder.

Reach sustainability through Corporate Social Responsibility (CSR)

Yunita Ismail 1

Published under licence by IOP Publishing Ltd IOP Conference Series: Earth and Environmental Science , Volume 716 , The 1st Journal of Environmental Science and Sustainable Development Symposium 28-30 September 2020, Jakarta, Indonesia Citation Yunita Ismail 2021 IOP Conf. Ser.: Earth Environ. Sci. 716 012056 DOI 10.1088/1755-1315/716/1/012056

Article metrics

341 Total downloads

Share this article

Author e-mails.

[email protected]

Author affiliations

1 Environmental Engineering Study Program, Faculty of Engineering, President University, 17550, Indonesia

Buy this article in print

The utilization of natural resources and the environment to improve the community's welfare is an unavoidable choice. The environment used should still protect the environment. This study aims to provide an overview of the company's efforts to implement its obligation to preserve the environment using a different type of Corporate Social Responsibility (CSR) program, which were community development and green marketing. The method used was a survey by taking the population at two different places, Jakarta and Pangkal Pinang. The sampling technique was done using a purposive method to obtain samples that meet the company's CSRreceiver's criteria. The number of the respondent from the first population is 44 respondents and from the second population is 100 respondents. Data analysis was done using simple and multiple linear regression. The results showed that CSR's implementation had a significant impact on education, health, and poverty reduction. CSR activity by the company was accepted by society activities directly in the form of counseling and mentoring. CSR activities conducted on marketing activities by implementing Green Marketing found that pricing and promoting an environmentally sound positive impact on consumers' willingness to buy back the product. In contrast, the product is not significantly influential.

Export citation and abstract BibTeX RIS

Content from this work may be used under the terms of the Creative Commons Attribution 3.0 licence . Any further distribution of this work must maintain attribution to the author(s) and the title of the work, journal citation and DOI.