MODERN SLAVERY STATEMENT 2019

VFS Financial Services Limited

Structure, business and supply chain Thailand, the United Kingdom and the United States. VFS Financial Services Limited is a Scottish registered company operating in the United The Group has around 51,000 Tier 1 Kingdom. VFS Financial Services is a single site suppliers, of which 6,000 supply automotive enterprise with its business premises in product components. In 2019, the Volvo Group Warwick, England, with in excess of 84 made purchases of goods and services totalling employees. VFS Financial Services Limited is a SEK 299,6 billion (EUR 28,3 billion). Purchases provider of financial solutions to customers of were made from suppliers in Europe (64%), the Volvo Group. North America (21%), South America (7%) and Asia-Pacific (8%). The supply chain is complex VFS Financial Services Limited is a member of and there are in general several tiers of the Volvo Group. The Volvo Group is a publicly suppliers between the manufacturing entities held company headquartered in Gothenburg, and the supplier of raw material. Sweden. The Volvo Group is one of the world’s leading manufacturers of trucks, buses, Human Rights Governance construction equipment and marine and The Volvo Group’s mission is to drive prosperity industrial engines and also provides complete financing solutions. In 2019, the Volvo Group’s through transport solutions. Hence, respect for sales amounted to about SEK 432 billion (EUR human rights is fundamental for the Volvo Group and the Volvo Group is committed to 40,8 billion). The Volvo Group brands include , Volvo Construction Equipment, respect human rights. This applies not only in , , UD Trucks, Renault relation to our own operations, but also in relation to our supply chain, our business Trucks, , Terex Trucks, Prevost, Novabus and Arquus. Volvo is in the process of partners and in relation to others potentially transferring it ownership in UD Trucks to Isuzu impacted by our operations or the use of our products and solutions. Motors and the intention is to form a strategic alliance within commercial vehicles with Isuzu The Volvo Group has been a signatory of the Motors. The Volvo Group also has a number of UN Global Compact since 2001 and we strive to strategic partnerships and joint ventures, align our human rights related work to the UN including Dong Feng, Eicher and Shandong Guiding Principles on Business and Human Lingong Construction Machinery (SDLG). Rights (“UNGP”). This is a continuous journey The Volvo Group employs 104,000 people and we have adopted a risk-based approach where we prioritize and focus on the areas worldwide, has production facilities in 18 countries and its products are sold in more where we consider that we have the highest than 190 countries. The major production risks for adverse human rights impacts. facilities are located in Australia, China, Belgium, Brazil, France, Germany, India, Japan, Mexico, Poland, Russia, South Africa, Sweden,

MODERN SLAVERY STATEMENT 2019

VFS Financial Services Limited

To further strengthen our human rights new Supplier Code of Conduct was launched governance we have established a Human and suppliers should commit contractually to Rights Board, composed of relevant members comply with the Supplier Code of Conduct. The of our Executive Board. The Human Rights Supplier Code of Conduct sets out that the Board is supported by a cross-functional Volvo Group adopts a zero tolerance approach reference group and a working group with to all forms of modern slavery in its supply members from relevant Group functions, truck chain, including but not limited to forced, divisions and business areas. It is our firm belief bonded or compulsory labor and human that responsible governance of human rights trafficking. It is further stated that suppliers related matters is key to the long-term and their recruitment agencies may not engage business success of the Volvo Group. in or tolerate, restrictions of movement, excessive recruitment fees, confiscation of Policies including statements relating to identity documents and/or passports, modern slavery withholding of wages, abusive working Volvo Group Code of Conduct conditions, debt bondage, violence or any other kind of exploitation or abuse. Zero tolerance against forced labor and child labor has been part of the Volvo Group Code of Suppliers are required by the Supplier Code of Conduct since 2003. The current version of the Conduct to ensure that their own organization Volvo Group Code of Conduct, sets out our zero and its direct suppliers comply with the tolerance approach to all forms of modern Supplier Code of Conduct’s minimum slavery. Practices that constitute forced labor, requirements. It is further stated that suppliers including debt bondage, human trafficking and are expected to perform human rights due other forms of modern slavery, are not diligence of their supply chains and suppliers accepted in any part of the Volvo Group. The are encouraged to work proactively in their Code of Conduct includes examples of modern supply chains beyond direct suppliers to slavery related practices such as confiscation of implement standards that correspond to the identity papers or passports, withholding of standards of the Supplier Code of Conduct. The wages, not conferring an official employment Supplier Code of Conduct is publicly available status, subjecting someone to physical and at Volvogroup.com. sexual violence, debt bondage, imposing Risk assessment, due diligence and excessive recruitment fees, and restriction of effectiveness movement. The Volvo Group Code of Conduct is publicly available on Volvogroup.com. Modern slavery, including forced labor and human trafficking, may materialize not only in Supplier Code of Conduct our own organization and operations, but also Since 1996, our Sustainable Purchasing through our business relationships and in other Program has consistently increased supplier parts of our value chain. Modern slavery requirements on environmental performance, related risks are assessed within the business ethics and human rights. In 2019 a framework of the Human Rights reviews

MODERN SLAVERY STATEMENT 2019

VFS Financial Services Limited undertaken in relation to our own operations trainings (see below) includes various due and through our Sustainable Purchasing diligence activities in relation to our suppliers: Program (see below). In these reviews we • prioritize the countries and segments where Supplier Self-Assessments: New suppliers we believe that we have the highest risks for should conduct a self-assessment against adverse human rights impacts. the requirements in the Supplier Code of Conduct and share the results with the Own Operations - Human Rights reviews relevant Volvo Group entity. During 2019, 92% of the spend came from sustainability Based on our risk-based approach in the self-assessed suppliers. In high-risk prioritization of the Human Rights reviews of countries the figure was 98%. our own operations, we are gradually • Sustainability Audits: As part of the supplier performing Human Right reviews across our selection process, new suppliers above a own operations. These also cover on-site certain spend in high risk countries and service providers. Following each Human segments are to be assessed through on- Rights review, action plans for identified site sustainability audits. Further, improvement areas are created with clear sustainability audits of existing suppliers are ownership and anchoring with the local made of selected suppliers in connection management team. The results of the Human with the Human Rights reviews of our own Rights reviews and the action plans are shared operations and on an ad hoc basis if a with selected members of the Volvo Group specific need is identified. During Executive Board (from now on the Human sustainability audits, suppliers’ facilities are Rights Board) and followed up on a regular visited by trained Volvo Group personnel to basis. assess, among other aspects, labor rights, In 2019, we finalized a Human Rights review of working conditions, health and safety, and our operations in Mexico. No adverse findings modern slavery related risks. relating to modern slavery were identified in • Sustainable Minerals Program: In our connection with this review. We are currently Sustainable Minerals Program we perform in the process of evaluating our Human Rights supply chain mapping and due diligence of review process, with the aim of further our supply chain for conflict minerals, strengthening the process and its methodology including tin, tantalum, tungsten and and to ensure further alignment with the cobalt, with the tools provided through the UNGPs. Responsible Mining Initiative (RMI). This is an important initiative with the aim of Suppliers – Sustainable Purchasing Program mitigating human rights related risks at the bottom of our supply chain, including but During 2019 an updated and improved not limited to, modern slavery related risks. Sustainable Purchasing Program has been implemented, which in addition to the launch During 2019, 55 suppliers have been audited in of our new Supplier Code of Conduct and China, India, Mexico, South Africa, Thailand, Belarus, USA, United Arab Emirates and

MODERN SLAVERY STATEMENT 2019

VFS Financial Services Limited

Malaysia. No adverse findings relating to managers are required to lead mandatory modern slavery were identified in connection Volvo Group Code of Conduct training sessions. with these audits. The e-learning is available in 15 languages and in 2019, 50,000 employees with access to In 2018 we identified a need for improvement computers completed the Code of Conduct e- actions in relation to some of our on-site learning and 2,800 managers held face-to-face service providers employment of foreign training sessions for employees in the migrant workers in Malaysia. During 2019 we production environment or without access to have further reviewed and strengthened our computers. internal procedures and contractual terms for onsite service providers in Malaysia and have Volvo has an e-learning for all Volvo Group staff followed-up on agreed action plans. working with suppliers, outlining the concept of sustainable purchasing. Further, during Business Partners 2019, the Volvo Group has conducted various In addition to our own manufacturing entities, trainings on more detailed Sustainability topics the Volvo Group collaborates with truck connected to specific segments and connected assembly partners and bus body builders, some risks. of which are located in high risk countries from Through our membership in DRIVE a human rights perspective. In 2019, we Sustainability (see below) the Volvo Group has performed an onsite review and engaged in nominated global suppliers for sustainability dialogue focusing on the employment trainings performed by CSR Europe in Poland, conditions of workers for two truck assembly Mexico, South Africa, Malaysia and Brazil. partners in Malaysia. We identified development areas related to the employment Grievance mechanisms of foreign migrant workers. Our business partners have initiated action plans and at the The Volvo Group offers various channels to same time, we are further considering how to internal and external stakeholders to report on potential ethical concerns or violations of the strengthen our contractual terms and overall due diligence on corporate responsibility and Volvo Group policies, including our whistle- human rights at truck assembly partners and blower process, the “Volvo Whistle”, which is publicly available on Volvogroup.com. The bus body builders. Volvo Group does not tolerate any retaliation Training and capacity building against whistle-blowers. No issues relating to modern slavery were reported through the During 2019 the Volvo Group performed Volvo Whistle during 2019. several training initiatives, both for employees and suppliers. All employees with access to Partnerships computers are required to complete a Volvo During 2019, the Volvo Group continued as a Group Code of Conduct e-learning each year and for employees in the production Lead Partner in DRIVE Sustainability. DRIVE environment or without access to computers, Sustainability is a global network with the

MODERN SLAVERY STATEMENT 2019

VFS Financial Services Limited

mission to drive sustainability in the supply ------chains of the automotive industry. We believe that a joint industry approach is one of the best The statement is made in accordance with ways to drive sustainability in our supply Section 54 (1) of the UK Modern Slavery Act chains. One example is the Responsible 2015. The statement has been approved by the Trucking project, which was initiated by CSR Board of Directors of VFS Financial Services Europe/DRIVE Sustainability during 2019 and Limited and applies for the period January 1, aims to improve social standards in road 2019 to December 31, 2019. transport logistics. This is done together with Signed other OEMs, transport companies and consumer goods companies.

During 2019, Volvo Group continued its

membership with the Responsible Minerals Tabitha Carpenter Initiative (RMI), an organization which holds Director valuable knowledge within the mining industry June 2020 and provides important tools used within our Sustainable Minerals Program.

Volvo Financial Services