Sustainability Report 2017 VOLKSWAGEN GROUP SUSTAINABILITY REPORT 2017 VOLKSWAGEN GROUP SUSTAINABILITY REPORT 2017

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Sustainability Report 2017 VOLKSWAGEN GROUP SUSTAINABILITY REPORT 2017 VOLKSWAGEN GROUP SUSTAINABILITY REPORT 2017 Empowering Transformation Sustainability Report 2017 VOLKSWAGEN GROUP SUSTAINABILITY REPORT 2017 VOLKSWAGEN GROUP SUSTAINABILITY REPORT 2017 ABOUT THIS REPORT About This Report REPORT STRUCTURE gray background. The Group Sustainability Report 2017 is supplemented by a detailed description of the sustainability activities of our brands The Volkswagen Group is committed to providing transparency to and regions and of the Volkswagen Group’s CSR projects. This additional all its stakeholder groups. For the first time, this Group Sustainability information, which does not form part of the nonfinancial report, can Report 2017 includes a combined separate nonfinancial report that be found on the Volkswagen Group’s corporate website at: complies with sections 289b para. 3 and 315b para. 3 of the Handels- www.volkswagenag.com > Sustainability > Reporting gesetzbuch (HGB – German Commercial Code), hereinafter referred to as the “nonfinancial report”. The nonfinancial report serves to meet Information on conflicting sustainability objectives and the “diesel the disclosure requirements of the CSR-Richtlinie-Umsetzungsgesetz issue” may be found in our separate sustainability magazine, Shift 2017. (CSR-RUG – German CSR Directive Implementation Act). The publication is available here: www.volkswagenag.com > Sustainability > Shift. In the Group Sustainability Report, all text passages, tables and graphics that form part of the nonfinancial report are indicated by a REPORTING OTHER MAGAZINE (INCL. NONFINANCIAL REPORT) SUSTAINABILITY ACTIVITIES Strategy and Management Brands and Regions Products and Production Sustainability magazine People and Responsibility Shift 2017 Appendix CSR-Projects worldwide Volkswagen AG Shift Shift. LICHT Das Nachhaltigkeitsmagazin von Volkswagen Nachhaltigkeitsmagazinvon Das Kluge Köpfe entwickeln spannende Konzepte und bauen das Unternehmen nachhaltig um. November2017 SCHATTEN Nach zwei Jahren Dieselkrise stellen sich alte und neue Fragen. Das Nachhaltigkeitsmagazin von Volkswagen 2017 VOLKSWAGEN GROUP SUSTAINABILITY REPORT 2017 ABOUT THIS REPORT REPORTING PRINCIPLES defined by the European Federation of Financial Analysts’ Societies (EFFAS). Increasingly, shareholders and investors are calling for trans- For the first time, Volkswagen AG will issue a nonfinancial statement parency, making them an important target group for our sustainability at company level for reporting year 2017 and a nonfinancial Group reporting. statement for reporting year 2017, which will be published together as a combined separate nonfinancial report in the sense of HGB sections The KPIs presented in this report build on the indicators presented 289b para. 3 and 315b para. 3 as part of the Group Sustainability in previous years. We have made no changes in the methods used to Report 2017. The nonfinancial report is drawn up in accordance with collect and measure the data on our sustainability performance. The HGB sections 315b and 315c, in conjunction with sections 289c Volkswagen Group’s global production network comprised 120 produc- through 289e. Furthermore, the GRI Standards of the Global Reporting tion sites at the end of the reporting year. This is now the sixth time we Initiative (GRI) were used as the framework for drawing up the non- have reported our emissions in line with Scope 3 of the WBCSD/WRI financial report. In this nonfinancial report, Volkswagen has system- Greenhouse Gas Protocol (GHG). atically used the GRI Standards of the Global Reporting Initiative (GRI) as the underlying structure for the materiality analysis and reports In general, the KPIs relate to the entire Group. In addition to Volkswa- on management approaches, as well as the specific standard disclo- gen AG, the Group includes all major subsidiaries inside and outside sures also included in the GRI Content Index. As required by CSR-RUG, Germany that are directly or indirectly controlled by Volkswagen AG. this nonfinancial report concentrates on those action areas that are In the financial data, our joint ventures in China are reported using the necessary for an understanding of the Volkswagen Group’s business equity accounting method. However, they are included in full (100%) development, performance and position, as well as the Volkswagen in volume-related data (sales, production and workforce) and environ- Group’s influence on nonfinancial aspects. mentally relevant data. GRI 102-45, 102-48, 102-49 In terms of content, the Group Sustainability Report was prepared in compliance with the GRI Standards of the Global Reporting Initiative (GRI), applying the “Comprehensive” option. At the same time, the GRI Content Index shows how we are implementing the requirements REPORTING PRACTICES of the United Nations Global Compact (UN GC) and have committed ourselves to the United Nations Sustainable Development Goals (SDGs), The nonfinancial report and Group Sustainability Report are published as well as the criteria of the German Sustainability Code (DNK). annually. In addition to information about the Group’s sustainability activities in the 2017 fiscal year (1 January to 31 December 2017), the Important ideas for the report’s content were provided by the ques- sustainability report also contains selected information from the 2018 tionnaires and appraisals of sustainability-oriented rating agencies. fiscal year. The editorial deadline was 6 February 2018, and both re- We also took our lead from Stakeholder Engagement Standard AA1000. ports appear in German and English. The next nonfinancial report will be published in the second quarter (Q2) of 2019, and we anticipate that To validate issues of material significance for the Volkswagen Group the next Group Sustainability Report will also appear in Q2 2019. resulting from various global challenges, we drew upon the findings of the Volkswagen Group’s Stakeholder Panel, which has been in place for many years now, as well as the results of the latest comprehensive stakeholder surveys conducted by Group companies Audi, MAN, REPORT AUDIT Porsche and Volkswagen Financial Services. The combined separate nonfinancial report prepared in accordance This sustainability report also takes account of the recommendations with HGB sections 289b para. 3 and 315b para. 3 was subjected to a made by the previous Stakeholder Panel following the latter’s evalua- voluntary, limited assurance audit by PricewaterhouseCoopers GmbH tion of the Group Sustainability Report. Wirtschaftsprüfungsgesellschaft (PwC) in accordance with ISAE 3000 (Revised), to verify that its disclosures comply with the principles of To manage its sustainability performance, the Volkswagen Group re- the Sustainability Reporting Standards of the Global Reporting Initia- cords strategic key performance indicators (KPIs) in accordance with tive and the relevant statutory requirements. the requirements of the Global Reporting Initiative (GRI) and the framework for ESG (environment, social and governance) indicators Further information on the audit can be found in the independent auditor’s remarks on nonfinancial reporting in the Independent Assurance Report. 4 VOLKSWAGEN GROUP SUSTAINABILITY REPORT 2017 ABOUT THIS REPORT ABOUT THIS REPORT ADDITIONAL REPORTING WITHIN THE GROUP shifts in exchange rates of relevance to the Volkswagen Group, will have a corresponding impact on the development of our business. The nonfinancial report was drawn up in compliance with HGB In addition, there may be departures from our expected business section 315c in conjunction with sections 289c through 289e. By development if the assessments of factors influencing sustainable referencing this combined separate nonfinancial report, all Group value enhancement, and of risks and opportunities, presented in companies required by national legislation to disclose nonfinancial this sustainability report develop in a way other than we expect at and diversity-related information pursuant to Directive 2014/95/EU the time of publication, or if additional risks and opportunities or are exempted from the obligation to submit their own nonfinancial other factors emerge that affect the development of our business. reports. More detailed insights into our environmental management approach can be found in the environmental statements published by numer- CALCULATION OF FLEET EMISSIONS IN EUROPE ous Group locations as part of their voluntary participation in the European Eco-Management and Audit Scheme (EMAS). The sustain- The figure for Group fleet CO₂ emissions is the figure annually record- ability reports published by the Audi, MAN, Porsche, Scania and ed in the course of official monitoring pursuant to “Regulation (EC) ŠKODA brands also bear testimony to the Group’s commitment to 443/2009 of the European Parliament and of the Council of 23 April sustainability. 2009 setting emission performance standards for new passenger cars as part of the Community’s integrated approach to reduce CO₂ emis- sions from light-duty vehicles” by the European Environment Agency (EEA) on behalf of the European Commission for the brands belong- ADDITIONAL INFORMATION ing to the group of connected manufacturers “VW Group PC”. This figure is the volume-weighted average of all specific CO₂ emissions A list of links is provided under “Supplementary Information”, so that from new passenger cars registered for the first time in the respective readers can rapidly access documents covering the selected content in calendar year, based on the calculation logic defined in EU Regula- more detail. This list can be found online at:
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