Sustainability Management
Sustainability means maintaining intact environmental, social and economic systems with long-term viability at global, regional and local level. The Volkswagen Group can influence these systems in various ways and actively takes responsibility to help preserve their sustainability. The vision is to become a mobility provider with positive added value for nature and society. Our sustainability management is an important pillar for the continuous improvement of our sustainability performance. The related structures, processes, and responsibilities are codified in a dedicated Group policy on sustainability management.
The Chairman of the Board of Management of Volkswagen AG has cross-functional overall responsibility for sustainability. Members of the Board of Management take on additional responsibilities in line with their responsibility for specific management systems relating to sustainability, and further responsibility is also taken on at Group level by the Chief Sustainability Officer. The Group Sustainability department is part of Group and Product Strategy and the Office of the Corporate Secretary, which belongs to the board-level management function of the CEO. Strategically anchoring sustainability in the company in this way will help improve its resilience because it creates solid foundations for sustainable development and resistance to external influences.
Sustainability and the newly created Group sustainability strategy regenerate+ are part of the Group’s TOP 10 program and are managed through the strategic management structure of the Group strategy. In order to make progress on our dimensions and focus topics as transparent as possible – in line with the Group strategy and the objectives of the Group’s TOP 10 program valid for the fiscal year – the strategic goals/targets and milestones are structured and regularly measured using the OKR (Objectives and Key Results) method. Accordingly, strategic objectives and targeted key results are defined for all regenerate+ dimensions and focus topics. These are to be realized largely through time-limited projects and work packages, each of which is measured by the metrics and other key performance indicators. The level of achievement is monitored on an ongoing basis, and the overall situation presented three times a year (bi-annually from 2025) to the Board of Management, among others. In this way, the relevance of the focus topics, and their objectives, milestones, projects and work packages, are regularly reviewed at Group level. Their focus is continuously monitored and adjusted as necessary.
Metrics have been defined for regenerate+ to aid its systematic implementation and to make progress transparent. The metrics and targets of the Group sustainability strategy are not only used for internal management but are also repeatedly discussed with partners, society, and the capital market.
Furthermore, the Group Sustainability department coordinates all sustainability-related activities and the Group-wide, cross-functional network for sustainability. Communication with Group functions, brands and companies is structured via clearly defined core processes. The objective is to create transparency regarding external requirements and translate these into corporate action with the aim of continual improvement of the Group’s sustainability performance.
The central core processes include development of the Group sustainability strategy and materiality assessment, stakeholder management, ESG ratings, sustainability policies and reporting on sustainability matters.
In addition, the individual board-level management functions are responsible for and manage the function-specific sustainability topics. The relevant Group function is responsible for implementing policies in order to address impacts, risks, and opportunities. If resolutions on topics relevant to sustainability are recommended to the Board of Management, their impact on sustainability strategy issues must be assessed and agreed in advance with the Chief Sustainability Officer.
The Supervisory Board of Volkswagen AG supervises and advises the Board of Management in the management of the company and is directly involved in the decision-making process, in particular in decisions of fundamental importance to the enterprise, by virtue of the fact that its consent is required. Supervision and advice by the Supervisory Board also cover sustainability topics. For example, the Audit Committee deals with matters such as the audit of the sustainability report and the monitoring of processes relating to the sustainability report. The Supervisory Board also considers the sustainability report within the scope of its examination of the management report, based on the prior examination by the Audit Committee and the findings of the audit of the sustainability report by the auditor commissioned for the purpose. In addition, the Supervisory Board has appointed an ESG officer. This role is currently performed by Mr. Hans Dieter Pötsch. Ms. Marianne Heiß, Mr. Mansoor Al-Mahmoud, Mr. Hans Dieter Pötsch and Mr. Ferdinand Oliver Porsche track and monitor the latest developments in the area of sustainability reporting and the auditing and assurance thereof, and bring this expertise to the work of the Supervisory Board and Audit Committee of Volkswagen AG. Regular status reports in accordance with the statutory requirements of the Board of Management, as well as the requirements stipulated by the Supervisory Board, ensure that the Supervisory Board is informed at all times about all developments and changes relevant for its duties. When necessary, the Supervisory Board consults renowned external experts who support the Supervisory Board with their specialized knowledge and objective assessments.
At brand and company level, the brand sustainability managers carry out the cross-functional coordination of sustainability topics. They refine the brand-specific sustainability strategy and are solely responsible for its content, implementation and management, as well as for reporting on sustainability matters within the brand. In addition, they are outward representatives for their brand on the subject of sustainability and liaise with the Group Sustainability department.
The Board of Management of Volkswagen AG regularly concerns itself with the results of the interdisciplinary core sustainability processes to obtain an overview of the company’s sustainability performance. In the 2024 reporting year, for example, the results of the double materiality assessment were confirmed by the Group Board of Management in this context. The Audit Committee of the Supervisory Board also considered the results of the materiality assessment.
In addition, these results were compared with the objectives of the Group sustainability strategy regenerate+, where they served as input for reviewing the general resilience of the strategy and ensuring that identified impacts, risks and opportunities are adequately taken into account.
The review initially focused on a quantitative assessment of the coverage of the identified impacts, risks and opportunities related to regenerate+. With their time horizon of 10 years and more, the strategic targets and ambitions of regenerate+ are consistent with the definition of a long-term time horizon pursuant to the ESRS. In addition, the realization of short and medium-term (intermediate) targets and actions is the responsibility of the respective specialist functions and is reported in the topical standards.
This comparison demonstrated that regenerate+ covers all sustainability-specific topics in the long term that are of relevance for the strategic development of holistic sustainability performance. The only exceptions are a small number of topic-specific impacts, risks and opportunities, for example in the customers and end-users, and political engagement and lobbying activities topic areas, which are covered by the specific activities in the relevant departments or brands. The identified risks are also considered indirectly in the review process in accordance with the core process. Risks are mitigated in this context via the policies in the Group functions. Established management tools, such as the risk management system, are available to identify potential risks at an early stage.
In addition to the analysis described above of the coverage with respect to regenerate+, a resilience analysis was carried out in the reporting year regarding the material impacts, risks, and opportunities in the areas Climate change (ESRS E1) and Biodiversity and ecosystems (ESRS E4). These analyses deem the business and operating models to be resilient in the short, medium and long term. Details on the approach and findings of the respective resilience analysis are provided in the “Climate change” and “Biodiversity and ecosystems” chapters.