Integrity and compliance management system (ICMS)

Integrity and compliance are major priorities in the Volkswagen Group. We firmly believe that, for long-term commercial success, it is important that each and every individual complies with laws, regulations and commitments. Compliant behavior is a matter of course for all Group employees, which is why integrity and compliance are elements of our Group strategy and are anchored in our regenerate+ sustainability strategy.

Our objective is to be a role model and deepen the trust of our employees, customers, investors and partners in our Company. Our regulations, processes and corporate culture provide guidance for all employees on acting with integrity and complying with the rules at all times. As performance indicators, integrity and compliance must have the same strategic and operational priority in our Company as sales revenue, profit, product quality and employer attractiveness.

The Group Integrity & Compliance organization provides the Group-wide framework for a comprehensive integrity and compliance management system with corresponding programs, guidelines, processes and practical advice on integrity and compliance. The overarching goal here is to ensure uniform standards in the Group and brand companies, supporting the companies worldwide in conducting their respective business activities in an independently responsible and compliant manner and complying with the relevant laws and internal regulations.

Focus areas

Focus areas in relation to the ICMS include tackling corruption and preventing embezzlement, fraud, bribery and money laundering.

The starting point for this is the Internal Compliance Risk Assessment (ICRA). It determines the compliance risks in the Group. Compliance measures are defined for each controlled company on the basis of the risk profiles derived from the ICRA, which are implemented by the companies. The ICRA also makes reference to Group-wide minimum standards for the Code of Conduct (CoC), the whistleblower system, integrity and compliance training; and communication.

HR (Human Resources) Compliance Policies and Procedures

Integrity and compliance are incorporated into the standard HR processes such as recruitment, training and people development. In terms of remuneration, misconduct can adversely affect the size of an employee’s bonus. Integrity and compliance are part of annual employee appraisals and a component of the training measures for employees across all levels of the Company.

Awareness Raising and Communication

The Code of Conduct (CoC) sets out the shared underlying values for integrity and compliance in the Volkswagen Group for all brands and companies. It serves as the main tool for reinforcing awareness of responsible conduct and decision-making and can be used as an aid and as a way of finding the right contact persons. The CoC is binding for all employees, and the obligation to comply with the CoC as amended is written into their employment contract. We and our employees undergo regular mandatory training on the contents of the CoC.

Events in the departments round off the offerings of the Group Integrity & Compliance organization. The communication team regularly examines practical compliance tasks and case studies. Awareness raising on integrity and compliance topics is supported by information and communication activities such as awareness campaigns, film and dialogue formats, newsletters and interactive games.

The Integrity & Compliance information point has established itself as a central advisory office. The team there answers compliance-related questions and gives advice on internal company guidelines and policies.

REPORTING CHANNELS IN THE WHISTLEBLOWER SYSTEM

Training Courses and Standards

With the ICMS, the Group Integrity & Compliance organization sets uniform standards for integrity and compliance training across the Group. This is to enable brands and companies to provide their employees with a consistent quality of risk-based and target group-specific training that includes predetermined core content. The training courses address the key topics: the CoC, anti-corruption, money laundering and the whistleblower system.

Anti-Corruption

The Volkswagen Group has a zero-tolerance policy on active or passive corruption. This is anchored in both our internal Code of Conduct and our Code of Conduct for Business Partners. Tackling corruption includes developing and implementing mandatory training for employees in companies with a high compliance risk exposure.

Whistleblower System

The whistleblower system is the central point of contact for reporting cases of rule-breaking by employees of the Volkswagen Group or by suppliers. Employees, business partners and other third parties can report misconduct at any time and in many languages. A wide range of channels is available for this purpose, and the information can be lodged completely anonymously, if preferred. An investigation is only initiated after a thorough review and in the event of concrete indications of rule-breaking. Appropriate sanctions are applied where misconduct is proven. The overarching aim is to use binding principles and a clearly governed process to avert harm to the Company and its employees.

M&A and NCS Compliance

In the event of planned mergers and acquisitions (M&A transactions), we audit the relevant companies for commercial risks such as corruption, breaches of trust or fraud, and for human rights risks. This also applies to joint ventures and to industrialization and cooperation projects with external partners. The analyses provide recommendations for the mitigation of the risks identified. The Group Integrity & Compliance organization also supports compliance management in non-controlled shareholdings (NCS), i.e. companies that are not controlled by a Volkswagen Group company as the majority shareholder, as needed. These companies also include the Chinese joint ventures.

Business Partner Due Diligence

In the Business Partner Due Diligence (BPDD) process, our business partners are reviewed with regard to their integrity, possible corruption risks and compliance with ethical standards. The BPDD reviews must be carried out in accordance with a policy for certain business partners using a risk-based approach. The aim is to identify possible business partner risks at an early stage, to avoid any dishonest business partners, to define measures to minimize risk and to implement these measures with the business partner. If this is not possible, the business relationship is not entered into or is terminated as the law allows.

Product Compliance

The product compliance management system helps our products comply with the legal and regulatory requirements of the exporting and importing country, internal and external standards, contractually agreed customer requirements and externally communicated voluntary commitments over their life cycle.

Environmental Compliance

Statutory environmental regulations and voluntary commitments are binding at all locations and in all business fields. The Group’s environmental policy and the environmental compliance management system stipulate the relevant requirements and responsibilities. They apply to all strategy, planning and decision-making processes in the Group brands and companies. This includes a system of key indicators to determine progress in meeting environmental targets in the fields of renewable energy, CO₂ emissions and resource efficiency.