Pollution

MATERIAL IMPACTS AND THEIR INTERACTION WITH STRATEGY AND BUSINESS MODEL

Pollution of air

Impacts in the area of air pollution

Air pollution can contribute to the deterioration of local air quality and affect humans and the environment.

As part of the double materiality assessment, the topic of air pollution was identified as a material actual negative impact. Negative impacts arise in particular from emissions during the use phase, i.e. when our customers use their vehicles. The statutory limits applicable upon vehicle registration are complied with.

Emissions that arise in the context of the core automotive production business are also relevant, both in the upstream and downstream value chain and in the Group’s own business operations. As a minimum, the Volkswagen Group’s production facilities comply with the statutory requirements for air pollutants associated with approval. Since air emissions are also caused along the upstream and downstream value chain, the Volkswagen Group requires its partners to work to the same high standards.

Interaction with strategy and business model 

The impact identified in the double materiality assessment in relation to air pollution has an influence on the Group’s business model, strategy and value chain. The overarching topic of minimizing air pollution is strategically anchored in the Group sustainability strategy regenerate+, the environmental mission statement goTOzero, the vision of the Zero Impact Factory and the Code of Conduct for Business Partners, among other things.

In addition, the Volkswagen Group is taking the following actions to respond to the influence of its material negative impacts on its business model, strategy and value chain in the area of air pollution:

Along the value chain, compliance with the Code of Conduct for Business Partners aims to reduce negative impacts. The Code of Conduct requires business partners to implement appropriate actions to reduce air pollution. Within the Volkswagen Group’s business activities, the aim is to minimize negative impacts of this kind by putting policies in place (see “Policy: pollution” section) and by pursuing the vision of the Zero Impact Factory. This includes designing production sites to ensure that as few air-polluting substances as possible are emitted. During the use phase, the impact of vehicles will be reduced, in part, by selling a higher proportion of battery-electric vehicles. This target is anchored in regenerate+.

A detailed description and explanation of the actions is provided in the “Actions and resources: pollution” section.

Pollution of water

Impacts in the area of water pollution

Pollutants that enter waters can negatively impact the aquatic environment and people.

The discharge of pollutants into water was classified as a material actual negative impact along the value chain in the double materiality assessment.

Water is used at various points in the value chain. Chemicals are used in particular in the upstream supply chain for the extraction of raw materials and the production of components. This can lead to the resulting wastewater being contaminated with pollutants. The use of chemicals in our own production processes and during the use phase is considered to be less relevant.

All wastewater is treated before being discharged into receiving waters (for example rivers, lakes or seas) or must be disposed of appropriately. Furthermore, maximum concentrations for certain pollutants are defined for the direct and indirect discharges of wastewater, regardless of the legal requirements at the particular site. Compliance with statutory limits is a top priority for the Volkswagen Group.

The statutory provisions allow certain pollutants to be discharged into receiving waters. However, this discharge may only take place in accordance with the statutory requirements. This aims to ensure that the impact on the aquatic environment is kept to a minimum.

Interaction with strategy and business model

The impact of the Volkswagen Group in relation to water pollution identified in the double materiality assessment has an influence on the Group’s business model, strategy and value chain. The topic of avoiding water pollution is anchored in the environmental mission statement goTOzero and regenerate+. The key elements here are minimizing the discharge of pollutants into waters and groundwater. The Volkswagen Group’s Code of Conduct for Business Partners also requires its business partners not to cause any harmful water pollution.

The Volkswagen Group is applying the following actions to respond to the influence of its material negative impact on its business model, strategy and value chain in the area of water pollution:

In its own business operations, the Volkswagen Group’s processes are designed to minimize pollution. Additionally, the Volkswagen Group reduces this impact by installing treatment and wastewater treatment plants at its production sites.

For suppliers in the upstream value chain, the Volkswagen Group implements the raw materials due diligence management system (RMDDMS) to address this impact. This system is designed to make raw materials procurement sustainable and transparent, thereby preventing negative environmental impacts such as water pollution.

Suppliers along the upstream value chain are also required to implement the Code of Conduct for Business Partners so as to mitigate the negative impacts. This calls for appropriate actions to comply with applicable laws and international rules for preventing water pollution.

The “Actions and resources: pollution” section provides a detailed description and explanation of the actions in this area of activity.

Substances of very high concern

Impacts in the area of substances of very high concern

When working with substances of very high concern, there is generally a risk of harm to people and the environment due to improper handling along the value chain. This topic therefore represents a material actual negative impact as defined by the assessment logic of the materiality assessment in the upstream and downstream value chain.

Some of the substances currently on the European Chemicals Agency’s (ECHA) candidate list of substances of very high concern (SVHCs) are present in vehicle parts of the Volkswagen Group. The Volkswagen Group is committed to the responsible and appropriate handling of SVHCs and implements appropriate actions to prevent negative impacts on people and the environment. It complies with all legal requirements. As SVHCs are typically already part of the material composition of supplied vehicle parts, greater attention is paid to the release of SVHCs in the upstream and downstream value chain than in the Group’s own operations and in the use phase of the vehicles.

Interaction with strategy and business model

The impact identified in the materiality assessment in relation to substances of very high concern has an influence on the Group’s business model, strategy and value chain. The topic of substances of very high concern is anchored at an overarching level in an internal Group standard, which references the Global Automotive Declarable Substance List (GADSL) (www.gadsl.org). The Code of Conduct for Business Partners requires business partners to take appropriate actions to eliminate or avoid using substances and materials that adversely impact people and the environment (for example carcinogenic substances, mutagens or reprotoxic substances) in the context of applicable laws and taking into account the applicable requirements of the Volkswagen Group. This topic is also identified as an area of activity in the Group sustainability strategy regenerate+, where the focus is on reducing and substituting substances of concern in products. The detailed formulation of the strategic topic is currently still in the development phase and will be defined in greater detail in the course of the further strategy processes.

The Volkswagen Group is countering the material negative impact on its business model, strategy and value chain in the area of substances of very high concern with the following actions:

In its own business operations, the Volkswagen Group is reducing the impact by implementing precautionary actions for risk mitigation and control, as well as actions to avoid and replace SVHCs.

For suppliers from the upstream value chain, the Volkswagen Group is addressing the impact with the help of the Code of Conduct for Business Partners, which calls on business partners to implement actions to avoid the use of SVHCs.

The Volkswagen Group regards chemical compliance as a crosscutting issue that is integrated into and influences existing policies.

The “Actions and resources: pollution” section provides a detailed description and explanation of the actions in these two areas of activity.

Microplastics

Impacts in the area of microplastics

Microplastics enter the environment as a by-product of the decomposition of plastic and are very difficult to break down, taking an extremely long time to decompose. They can now be found in all regions and ecosystems on our planet. They have also been detected in human and animal organisms. Microplastics can have very different constituents and can negatively impact people and the environment.

The double materiality assessment identified a material actual negative impact of microplastics in the downstream value chain. Microplastics can enter the environment primarily through tire abrasion. This affects vehicles in general, including those produced by the Volkswagen Group.

Interaction with strategy and business model

The impact identified in the double materiality assessment in relation to microplastics has an influence on the Group’s business model, strategy and value chain.

Microplastics are primarily located in regenerate+ in the nature dimension, which also considers the reduction of microplastics. The detailed formulation of the topic is currently still in the development phase and will be fleshed out in the course of the further strategy processes.

POLICY: POLLUTION

Policy on pollution prevention

The topic of pollution prevention is part of the environmental mission statement goTOzero and is anchored in an associated policy. The mission statement reads: “We reduce harmful emissions in air, soil and water.”

The double materiality assessment identified material negative impacts related to pollution. Production processes and product use lead to air and water pollution due to emissions associated with financial and reputational risks.

The identified impacts are addressed in the policy on pollution prevention. For example, the topics of air and water pollution are strategically anchored in the environmental mission statement goTOzero. The main focus here is on reducing the discharge of pollutants into the air and waters. In addition, the goal of increasing unit sales of battery-electric vehicles is anchored in regenerate+. This goal aims to reduce air pollution. The Code of Conduct for Business Partners is also designed to ensure that less harmful air or water pollution is caused.

Regarding the topic of pollutants, the strategic vision of the Zero Impact Factory is as follows: “We design our production facilities so that they emit as few substances as possible that are harmful to the health of humans, animals or vegetation, or to soil, waters or air”. In relation to water protection, the focus is on general minimization of pollutant discharge, and also on soil and groundwater protection when using water-polluting substances. Any deterioration in the ecological and chemical status of the waters into which wastewater is discharged must be avoided.

The issue of damage to soil, water and air is anchored in the Code of Conduct for Business Partners: Business partners must ensure that they do not cause any harmful soil changes, water pollution, air pollution, harmful noise emissions or excessive water consumption that could lead to significant harm to the natural basis for food and drinking water or human health, or to minimize this to the greatest extent possible.

In turn, the topic of SVHC is strategically anchored in the Group standard Environmental standard on material and chemical conformity of products. The Code of Conduct for Business Partners also requires the registration, evaluation and restriction of substances and raw materials. This includes compliance with international agreements (Minamata Convention, Stockholm Convention) and legal instruments on the production, use, handling, and disposal of certain substances. It also includes taking actions to avoid the use of substances that are hazardous to the environment or people, in accordance with applicable laws and regulations and Group requirements.

The Group also has plans to further improve the management of chemical substances in order to realize this strategic anchoring. As a world-leading automotive manufacturer and provider of mobility services, the Volkswagen Group is aware of the increasing importance of the sustainable management of chemical substances. The legal and regulatory requirements of chemicals management are complex and vary in the global markets where the Group operates. The Volkswagen Group is committed to complying with existing regulations and to responsibly handling chemical substances that are required for its products, activities and services.

In addition, the Volkswagen Group regards chemical compliance as a crosscutting issue. The necessary processes have already been integrated into existing management systems to ensure compliance. A further step is to implement chemical compliance in existing policies, defining specific roles and process requirements.

In addition, the Volkswagen Group engages in needs-based exchanges with its employees, suppliers, industry associations and regulatory authorities in order to reduce the use of hazardous chemicals. This ranges from Research and Development, through Design, Production, Distribution and Logistics, to the reuse and recycling of products.

Registration, evaluation and restriction of substances and raw materials are also emphasized in the Code of Conduct for Business Partners. Business partners are expected to take appropriate actions to eliminate or avoid the use of substances and materials that have adverse environmental or health impacts, such as carcinogens, mutagens or reprotoxic substances. When doing so, they must comply with applicable laws and the applicable requirements of the Volkswagen Group.

Avoiding air and water pollution

In order to avoid pollution of air and water, the environmental mission statement goTOzero and the ECMS play a key role in the policy on pollution prevention. The strategic vision of the Zero Impact Factory focuses on minimizing pollutant discharges at production sites. There are specific requirements for this, such as limits for the concentration of pollutants in wastewater, which must be documented in measurement reports. The design of the production sites should be geared towards ensuring that the use of local water resources does not negatively impact them. No substances should be discharged into waters that could impair their natural condition.

The Volkswagen Group has installed various processes in its business operations to ensure that the due diligence requirements of the Lieferkettensorgfaltspflichtengesetz (LkSG – German Supply Chain Due Diligence Act) with respect to harmful soil changes, water pollution, air pollution and harmful noise emission are met. The introduction of these processes is supported by a Group policy. This provides a framework and minimum requirements for how an ECMS should be implemented in an organization. Each company then develops its own processes to comply with these rules. A compliance and risk management system is also integrated into the ECMS, which is designed to deal with the risks of the aforementioned environmental media preventively at an early stage. For example, production sites typically conduct an environmental aspects analysis that allows them to identify and assess potential environmental risks from production processes at an early stage. As a result, the decision-makers can take preventive actions to mitigate the risks.

The environmental management requirements apply across all phases of the business activity and the entire life cycle of the products and services. Each controlled company is responsible for the detailed formulation of the processes. These are operationally active and belong mostly to the Volkswagen Group and are therefore responsible and accountable for implementing this Group policy. The Federal Office of Economic Affairs and Export Control (BAFA) report on compliance with due diligence obligations in accordance with the LkSG comments on the aforementioned processes in relation to the LkSG.

Minimizing the use of substances of very high concern

To enable compliance in all markets, the Volkswagen Group and its suppliers must comply with the regulations, laws and regulatory requirements in the target markets. In addition, compliance with standards, including the Group standards for Environmental standard on material and chemical conformity of products and Evidential and approval requirements for delivery of chemicals, is a mandatory contractual requirement for suppliers. This ensures compliance with all applicable material regulations and restrictions.

The Group standard Evidential and approval requirements for delivery of chemicals addresses the registration, evaluation and restriction of chemical substances. Chemicals classified as carcinogenic, mutagenic or reproductive toxic (reprotoxic) in categories 1A or 1B are generally prohibited from use (terminology used in Regulation (EC) No. 1272/2008 – CLP). Decisions to use them may be made in justified exceptional cases only with due consideration of the principle of substitution. Substances of very high concern, such as those referred to in Regulation (EC) No 1907/2006 (REACH), Article 57 (2), are largely to be avoided and may be refused on a case-by-case basis following assessment of their longer-term usability.

The regulation Vorschriftenkoordinator/Vorschriftenexperten (VKO/VEX – coordinator/regulation expert) process was implemented in Technical Development to navigate the approximately 240 laws on harmful substances worldwide, including end-of-life vehicle, battery, chemical and biocide laws, and requirements on interior emissions. This is defined in a separate Group process standard. Implementation and internal/external communication are carried out in accordance with Group standard Environmental standard on material and chemical conformity of products which references the GADSL. Since 2000, compliance has been verified by participating in the international material data system (IMDS) (www.imdsystem.com) and by consistently requiring supplier data on the chemical composition of components and materials in vehicles. All IMDS data is assessed in line with relevant applicable legislation.

The Group standard Environmental standard on material and chemical conformity of products requires avoidance of the use of SVHCs within the meaning of the EU REACH Regulation No. 1907/2006 that are included on the ECHA candidate list. Outside of the law, the Volkswagen Group requires substances subject to authorization pursuant to Annex XIV of the REACH Regulation (EC) No 1907/2006 to no longer be used in new developments as a rule, even if the authorization requirement does not enter into effect until after series production.

In addition, an alternative test for the use of substances (within the scope of Appendix C of Annex I to Commission Delegated Regulation (EU) 2021/2139) for deliverables that are relevant for reporting under the EU Taxonomy Regulation is carried out by the supplier with professional and technical support. Among other things, this scope includes SVHCs. In its vehicle-related business, the Volkswagen Group has defined existing specifications and processes in greater detail with the aim of avoiding and replacing the substances relevant for reporting under the EU Taxonomy Regulation. On this basis, the Group’s analyses look at vehicle-related materials and components of all-electric vehicles in order to assess whether the SVHCs and other substances of relevance under the EU Taxonomy can be substituted, taking into account factors such as technical and economic criteria.

Furthermore, we impose an obligation on our business partners to comply with the requirements based on international conventions and other legal instruments regarding the production, use, handling and disposal of certain substances. In particular the requirements of the Minamata Convention on Mercury of October 10, 2013 and the Stockholm Convention on Persistent Organic Pollutants (POPs) of May 23, 2001, as well as the corresponding applicable implementing regulations at national and supranational level, must be complied with.

Avoiding incidents and emergency situations

The Volkswagen Group requires the controlled companies to have in place contingency plans and hazard prevention actions that are specially tailored to company-specific environmental risks, and that are aimed at avoiding or minimizing negative effects on the environment. Examples of specific actions include communicating contingency plans to employees, relevant departments and contractors and training them in hazard prevention. Communication is a matter for the individual companies and can take place, for example, using noticeboards, instructions or training. They also include testing and reviewing the contingency plans and ensuring the availability of resources for expert advice in the event of an incident.

The contingency plans should be reviewed and updated in the event of significant physical or operational changes. This also incorporates experience from exercises or actual emergency actions. The frequency of the exercises performed is left to the discretion of each company, which is responsible and accountable for implementing the corresponding Group policy (see the “Overarching policies” section in the “Introduction to environmental management” chapter for more information on the scope).

TARGETS: POLLUTION

Overarching targets

The overarching specific UEP metric takes into account factors including the VOC emissions associated with vehicle and components production. The target for the UEP metric is therefore directly related to air pollution.

The impact points target for reducing the absolute environmental impacts of the production sites also includes a target for emissions into the air and water. The environmental aspect of air pollutants is used to monitor air emissions of VOCs, nitrogen oxides and dust, CHCs and HFCs during production. In addition, the environmental aspect of wastewater is used to monitor emissions of chemical oxygen demand (COD), nitrogen, phosphorus, nickel and zinc into waters.

The site checklist also covers the areas of pollutants and water. For example, it includes criteria such as the use of VOC-reduced rinsing thinners and paints, requirements for VOC emissions from paint shops, restrictions on dust emissions, avoidance of the use of heavy metals and hazardous substances, and limits for the discharge of chloride, sulfate, nickel, zinc, manganese and COD into wastewater.

Prevention and control of substances of very high concern

No measurable outcome-oriented targets within the meaning of the ESRS have been defined for the production sites in relation to the prevention and control of SVHCs. Systematic data collection is currently being worked on to enable end-to-end quantitative reporting. The large number of substances, as well as the concentration data of SVHCs in chemical mixtures, which are often only specified by suppliers within concentration ranges, pose a challenge in terms of data collection and quantification.

The Volkswagen Group and the operators at the sites of the individual brands always act in accordance with the applicable legal requirements. If SVHCs are used during vehicle production or are present in the vehicle, they are recorded, verified and approved in advance by internal chemical management processes and systems. In addition, the Volkswagen Group implements processes to generally avoid SVHCs and to review them for substitutability. One example is the verification of substitutability and associated reduction of SVHCs during vehicle production and in components of all-electric vehicles in accordance with the EU Taxonomy Regulation.

Information on target drivers

The voluntary targets defined for the UEP metric, impact points and site checklist all relate to the topic of pollution. The Volkswagen Group generally complies with the applicable emission regulations, including EU Directive 2010/75/EU on industrial emissions (IED), and national requirements such as the Abwasserverordnung (AbwV – German Waste Water Ordinance).

ACTIONS AND RESOURCES: POLLUTION

Compliance with legal requirements with regard to chemicals and substances of very high concern

There is no separate management system for chemical compliance requirements. These requirements are already being met continually by the operating organizations and suppliers and are expected to be integrated into existing management systems in the future. The aim is to manage the risk associated with the handling of chemicals and SVHC in the Volkswagen Group within the structures of the Three Lines Model of the Institute of Internal Auditors (IIA). The first line comprises operational risk management in the business operations, the second line Group-wide risk management and the third line Internal Audit, which reviews the effectiveness of the first two lines. The tools for identifying and implementing the specific requirements are supplied by the management systems used. In addition to the management system tools, regulatory requirements are also identified by the second line of the VKO/VEX and distributed within the organization as needed. To verify material-related requirements, the second line accesses the data from the internal material information system (MISS). The data used is the supplier data from the IMDS.

In addition to continuous risk management using the Three Lines Model, the Volkswagen Group has established specifications and processes for managing regulatory requirements (VKO/VEX) and internal requirements (for example by means of the Group standards Environmental standard on material and chemical conformity of products, Evidential and approval requirements for delivery of chemicals) in the vehicle-related business, which generally stipulate that SVHCs must be avoided and substituted. On this basis, vehicle-related chemicals and components of all-electric vehicles are analyzed in accordance with the requirements of the EU Taxonomy Regulation and the substitutability of SVHCs in these products is reviewed together with suppliers, taking into account technical and economic criteria. The “EU Taxonomy” chapter provides a specific overview of the components considered in the Volkswagen Group.

Prevention and control of emissions to water

In the interests of water protection, the Volkswagen Group does not discharge untreated wastewater resulting from the Group’s activities into receiving waters. Pretreatment plants are usually used to remove pollutants from wastewater that cannot be removed in a biological wastewater treatment plant. For example, light liquid and grease separators, evaporators and oil skimmers are installed to remove fat, oil and emulsions. By contrast, metals are removed by means of the physico-chemical precipitation process. COD is practically eliminated through adsorption, filtration or flotation processes. The final step before discharge is biological treatment of the pretreated wastewater using a membrane bioreactor to remove potential pollutants such as phosphorus and nitrogen. If the wastewater is not treated at the production site itself, it is treated in an external treatment plant or disposed of appropriately as waste.

In line with the Zero Impact Factory strategic vision, further actions are being considered in production with regard to pollutants in wastewater: In the interests of preventive water protection, for example, when working with substances that are potentially hazardous to water, it is important to ensure that the relevant containers are fitted with a secondary barrier for retention in the event of an accident. Additionally, the site checklist for wastewater discharge specifies maximum concentrations for the discharge of certain pollutants into wastewater, irrespective of the legal requirements at the site in question.

Compliance with measurement obligations is ensured by regular wastewater analysis, the frequency of which varies depending on the pollutant, and is based on the legal and internal requirements (in certain cases, samples are taken several times a day).

Prevention and control of emissions to air

The Volkswagen Group is committed to continuously reducing its air emissions in its own activities and in the supply chain. Within the company’s own operations, in addition to the actions for compliance with all legal requirements, the impact points target serves to reduce the absolute environmental impacts of the production sites, and also takes air emissions into account.

In addition, the site checklist defines criteria including the use of VOC-reduced rinsing thinners and paints, requirements for VOC emissions from paint shops and restrictions on dust emissions.

In the upstream and downstream value chain, compliance with the Code of Conduct for Business Partners is intended to reduce the emission of air pollutants by requiring business partners to implement appropriate actions to reduce air pollution.

By transforming its portfolio towards e-mobility, the Volkswagen Group is also making a contribution to improving local air quality by reducing nitrogen oxide and particulate matter emissions (for more information see the “Actions and resources: climate change” section of the “Climate change” chapter).

Engagement in the upstream and downstream value chains for raw materials

The Volkswagen Group is aware that its suppliers’ business activities can have a significant impact on people and the environment. The extraction and processing of some of raw materials for the automotive industry is associated with environmental risks, such as air and water pollution, as well as deforestation. To enable greater transparency, the Group publishes a Responsible Raw Materials Report. This provides detailed information on the Volkswagen Group’s methodologies and activities in the context of the RMDDMS for sustainable raw material procurement.

The RMDDMS includes continuous risk-based due diligence reviews to identify and assess actual and potential negative impacts as well as potential human rights risks in the supply chain. The supply chains for sustainable raw materials sourcing require a particular focus, as the Volkswagen Group’s risk analysis reveals a high exposure to human and environmental risks that occur more frequently among indirect suppliers. The RMDDMS provides additional assessments for high-risk raw materials, which enable risk mitigation and actions to prevent systematic risks and reviews of their effectiveness. At present, 18 raw materials are identified as particularly risky. These include the battery raw materials cobalt, lithium, nickel and graphite, the conflict minerals tin, tungsten, tantalum and gold (3TG), and aluminum, copper, leather, mica, steel, natural rubber, platinum group metals, rare earths, magnesium and cotton.

Audits are one of the main tools of the RMDDMS, serving to assess risks in the Volkswagen Group’s lower supply chains and derive risk mitigation actions. They supplement other raw material due diligence tools and promote transparency, compliance and a culture of continual improvement and dialog throughout the upstream supply chain. Further actions that can be derived from the RMDDMS are described in the “Workers in the value chain” chapter.

The Volkswagen Group includes the responsibility of its business partners in its commitment to improving the supply chain. For this reason, the Code of Conduct for Business Partners requires business partners to implement appropriate actions to eliminate or avoid using substances and materials that adversely impact people and the environment (for example carcinogenic substances, mutagens or reprotoxic substances).

The Volkswagen Group aims to procure responsible sourcing of raw materials and is guided by the five steps of the Organization for Economic Cooperation and Development’s (OECD) Due Diligence Guidance for Responsible Business Conduct and the requirements of the OECD’s Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. Accordingly, business partners may only use raw materials in smelting works or refineries of materials that meet the requirements of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. They must also have been verified by the Responsible Mineral Initiative (RMI) or similar organizations. The Volkswagen Group expects its suppliers to avoid all minerals from conflict-affected smelting works. However, the aim is not to prohibit the procurement of conflict minerals or other products originating from conflict-affected and high-risk areas, but to encourage the procurement from responsible sources within these regions. The identification of the 3TG smelting works and refiners used by suppliers or their sub-suppliers must be disclosed annually. In line with international best practices, the Volkswagen Group also expects its suppliers to complete Conflict Mineral Reporting Templates (CMRT). As well as identifying the smelting works and refiners, this template also allows the countries of origin of the mined materials to be specified. Compliance with the OECD guidance is assessed using the RMI’s Responsible Minerals Assurance Process (RMAP). The RMAP is an independent third-party assessment of the management systems and sourcing practices of smelting works/refineries to confirm compliance. To underscore its commitment to responsible supply chains for conflict minerals, the Volkswagen Group voluntarily publishes a CMRT to ensure end-to-end transparency.

METRICS: POLLUTION

Air and water pollution

Metrics on emissions into air and water

The metrics recorded across the Group are shown in the following. If thresholds for other air or water emissions as defined by the European Pollutant Release and Transfer Register (E-PRTR) are exceeded at European production sites, the sites report this to the competent authorities as part of their annual reporting obligations.

Description of measurement methodologies

Group standard 98000 defines indicators for emissions to enable their consistent collection at Volkswagen Group sites. They include the recording of pollutants discharged into wastewater such as zinc, nickel, COD, total organic carbon (TOC) and dissolved fluoride as well as air emissions such as dust, VOCs, nitrogen oxides (NO_x), sulfur dioxide (SO₂), CFCs and HFCs. The recording hierarchy in accordance with Group standard 98000 applies in conjunction with the permitted measurement methods described in the standard. These are parameter-specific and based on the state of the art.

Context information on pollution of air

The Volkswagen Group’s production sites record a range of environmentally relevant air emissions, irrespective of national legislation or regulatory requirements. These include refrigerants containing climate-relevant CFCs or HFCs, for which the quantities emitted from stationary facilities are recorded. Emissions from combustion processes, such as nitrogen oxides, carbon monoxide (CO) and sulfur dioxide, are calculated by multiplying the quantities of fuel used by country-specific emission factors, unless more precise, site-specific emission factors are available. In addition, the VOC emissions, which are mainly released during painting processes, are recorded. When calculating VOC emissions, as a minimum those emissions required by national legislation or plant permits are recorded. VOC emissions from painting facilities must be calculated for all vehicle paint shops. If VOC emissions are combusted through thermal post-combustion or regenerative post-combustion, the CO₂ emissions released must also be recorded. With regard to recording particulate matter with a diameter of 10 µm or less (particulate matter 10 – PM10), it is permitted to record the total dust quantity and then convert it into PM10 using conversion factors.

Context information on pollution of water

The data collection interval and analytical methods for the pollutant concentrations contained in the wastewater are based on the requirements of the site approvals and/or relevant laws (in Germany, for example the AbwV) and vary from quarterly measurements to daily measurements, depending on the pollutant. In addition, Group standard VW 98000 sets certain minimum standards for specific pollutants, which are to be sampled at least quarterly and based on relevant ISO standards. Additionally, the scope of the analysis should represent at least 80% of the total volume of a site’s wastewater. DIN EN ISO 10304-1 is used to measure dissolved fluoride in wastewater. The specifications of DIN EN 1484 are used to measure TOC. Alternatively, the COD can be measured and converted into TOC. The specifications of DIN EN ISO 11885 are used for zinc and nickel emissions. The reported annual emission quantities into wastewater typically result from multiplying the measured wastewater volumes and the averaged, analytically determined concentrations of the relevant pollutants.

Processes for recording and accounting

Each site is responsible for providing the environmental indicators. The environmental indicators are recorded in the EIS in accordance with Group standard 98000 and validated at Group level. The sites must work towards ensuring that the environmental indicators are determined for each specified recording interval using the same system. Year-on-year changes in excess of a predefined tolerance level must be justified.

Information sources

Permitted measurement methods are generally based on national and international laws and regulations (for example German Federal Emission Control Act, EU F-Gas Regulation), internationally recognized standards and norms (for example GHG, ISO standards), industry-specific requirements (for example VDA emission factors) and scientific findings (for example IPCC assessment reports).

Reasons for choosing alternative methodology to quantify emissions

Pursuant to the measurement hierarchy of Group standard 98000, environmental data is to be collected primarily by measurement. If direct and complete measurements are not technologically possible or not economically justifiable, calculations substantiated by measurements or by extrapolations based on assumptions may be used. This also applies where calculations or extrapolations produce results that are equivalent to direct measurements in terms of accuracy. The decision on the data collection methodology is made at site level. The assumptions are site-specific and are verified by random sampling.

Standard, measurement uncertainty and range of estimates

Pursuant to the measurement hierarchy of Group standard 98000, direct measurement of physical amounts takes priority over calculation based on parameters. Estimates are made with the lowest priority based on transparent assumptions.

Substances of very high concern

The IMDS-SVHC list of the European Automobile Manufacturers’ Association (ACEA), which is derived from the ECHA candidate list, is used as the basis for recording substances of very high concern.

Total amount of SVHCs generated, used or procured during production

If SVHCs are used as substances or in mixtures during vehicle production, or become a component of the Automotive product during the production process, they have been checked, recorded and approved in advance by internal chemical management processes. An evaluation of substance-related quantities for SVHCs cannot currently be carried out in full at Group level. An approach for recording the quantities of all SVHCs used as substances or in mixtures (SVHC > 0.1 M%) during vehicle production is currently being developed in conjunction with Procurement. This is intended to ensure that the total quantity of SVHCs (kg/a) procured and used can be recorded in future.

If different chemical substances are combined during the production process, such as in process baths, there is a possibility of new chemical compounds forming on a small scale. Due to the small quantities involved, these are not currently recorded.

Total amount of SVHCs generated in production in the form of emissions

The Volkswagen Group and the operators at the sites of the individual brands always act in accordance with the applicable legal requirements. The sites and systems technology have been approved by the authorities in accordance with these requirements. This applies in particular to environment-relevant installations, where operations generate emissions to air and water, resulting in extensive operator obligations being outlined in their plant permits. Within the framework of such ancillary provisions, recurrent emission measurements are also conducted to ensure compliance with applicable limits.

To facilitate Group-wide compliance with all binding commitments on production-related emissions, the Volkswagen Group has implemented the Three Lines Model described in the “Actions and resources: pollution” section.

There is currently no limit that encompasses the full range of all known SVHCs. There is also no measurement method for recording the total spectrum of all SVHCs. It is therefore not possible to gather data on these emissions in accordance with the latest advancements.

Total amount of SVHCs generated in production as part of products

The total amount is calculated for each SVHC. To do this, the proportion by weight per SVHC is first determined for each component containing SVHCs (threshold of 0.1% per smallest relevant item in the component according to REACH Article 33) and added up for the corresponding reference vehicles (ID.4 and Tiguan) (for more information on the reference vehicles, see the “Metrics: resource use and circular economy” section in the “Resource use and circular economy” chapter). Calculation of the total amount of each SVHC is based on production figures for battery-electric vehicles and internal combustion engine vehicles. Lastly, the SVHCs are allocated to the reportable hazard classes. As individual substances can be allocated to multiple hazard classes, the overall total amount does not correspond to the sum of the individual hazard classes due to double entry. Nevertheless, in order to provide a total amount of the SVHCs used, the total weight per substance is allocated to only one hazard class in the following table.

In addition, the SVHC information for the Porsche AG Group and TRATON GROUP is provided below, excluding the consideration of MAN Energy Solutions. The values are determined as described above.

Total amount of SVHCs generated in production as part of products in the Porsche AG Group

The determination of SVHC volumes is based on a reference vehicle approach. One vehicle model is analyzed for each of the five vehicle segments (two-door sports car, sports utility vehicle (SUV) internal combustion engine, SUV battery-electric vehicle, saloon internal combustion engine, saloon battery-electric vehicle). The SVHC quantities of the reference vehicle are extrapolated to the vehicles produced in each segment during the reporting year based on the production quantities. Finally, overarching segment totals are calculated for each substance, and the substances are allocated to the appropriate hazard classes for substances of concern.

Total amount of SVHCs generated in production as part of products in the TRATON GROUP

To calculate the amounts (SVHCs), the TRATON GROUP uses the lead content in starter batteries, which according to a study by MAN Truck & Bus, make up 98% of all SVHCs in a typical truck. For 2024, the amount of SVHCs in the products corresponds to a total amount of 24,780 tons.