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CORPORATE2001 CITIZENSHIP REPORT Public Affairs, 2002. Order number 501020101-02. Corporate Citizenship Report 02-04-23 08.40 Sida 2
This is the second Corporate Citizenship report from Volvo CONTENT CEO statement 4 Car Corporation. The purpose of this report is to be an open The world of Volvo Cars 6 and trustworthy document, aimed at informing both external Moving towards sustainability 8 and internal stakeholders about our progress and concerns Management and organisation 10 regarding Corporate Citizenship. It summarises the company’s Safety 12 HIGHLIGHTS: Test results, Real life safety, activities and business, environmental and social performance Safety Concept Car in the year 2001. The report is based on the GRI guidelines Quality 15 HIGHLIGHTS: Total Ownership Experience, Quality for Sustainability Reports. gates in product development and Six Sigma Environment 18 HIGHLIGHTS: ULEV and Euro 4, Lowered fuel consumption, New generation of Bi-fuel cars
Customers 21 HIGHLIGHTS: Dealers, Concept lab, Customer Clinics
Employees 24 HIGHLIGHTS: Employee Satisfaction, Health and safety, Diversity
Suppliers 27 HIGHLIGHTS: Quality through partnership, Global Compact, Environmental performance
Society 30 HIGHLIGHTS: Volvo Ocean Adventure, Last year’s Corporate Citizenship report was evaluated by nearly 100 people representing universities, companies, NGOs, Global Road Safety Partnership, Understanding employees and experts. The feedback we received was that the report was well structured, easy to read and covered many Whiplash, Nordic Partnership of the relevant issues but that people wanted to see more hard facts. As a consequence, we have maintained last year’s report structure and focused on identifying new performance indicators for inclusion in this year’s report. This report and additional information regarding Volvo Car Corporation and Corporate Citizenship can be found on our web- site at www.citizenship.volvocars.com. Catarina Paulson within the Public Affairs department is coordinating Corporate Citizen- ship at Volvo Car Corporation. Should you wish to provide feedback on the report and our performance, please email us at [email protected]. Your views and comments are valuable as they help us know if we are on-track towards meeting your expectations. The next report will be published in Spring 2003 and will cover the year 2002. Corporate Citizenship Report 02-04-23 08.40 Sida 4
Performance, not words, makes a corporate citizen
It is not easy to sum up the past year. Terrible tragedies go hand from the outset as methane-powered cars, increasing quality in hand with seemingly unnoticed encouraging steps forward. while load space remains unaffected with petrol tanks integrated People say that human memories are short-lived – just thirty underneath the floor. We see with satisfaction that several years. The images from New York last September will almost countries are now making tax changes to encourage the use certainly remain etched in many people’s memories for much of these vehicles. longer. One thing is certain – for better or for worse the world Our customers and employees are regularly asked about has become global. A couple of months before the tragic events how they perceive Volvo Cars as a supplier and an employer. of September 11, at the EU summit in Gothenburg, Sweden, Your replies are most valuable, not to say crucial, for our ability we had a preview of the rage that lies beneath the surface from to develop and become even better at satisfying and exceeding groups claiming to be opposed to globalisation. It is common your expectations. The replies we have received during the year knowledge that stone throwing and shattered shop windows show that we are moving in the right direction in the view of both receive full coverage on all the world’s TV channels and news- our customers and our employees. papers. Proposals for constructive dialogue rarely end up on A company’s social responsibility encompasses in the first the front page of the papers or in news broadcasts. place its own business, but a company that does not include its In this climate, it is all the more important to work on corporate suppliers in this responsibility sooner or later risks its credibility. citizenship. What we achieve will probably never find its way into From 2002, we shall begin the process of formulating and the media headlines, but this doesn’t make it any less important. implementing social and ethical requirements, in cooperation I am convinced that we as a company constitute a beneficial and with our suppliers. It is my conviction that this process will be constructive force in many contexts. This applies in our role of of benefit to our suppliers in that it will enable them to demon- supplier, employer, customer and active member of society. strate their respect for human rights and working conditions Our social engagement takes place at local, national and in line with the principles of the UN and the ILO. This will also global level. As a company, we are distinguished by our strengthen them in the razor-sharp competition that exists Scandinavian values and Scandinavian design. In many ways among component and system suppliers to the motor industry. this is where we draw our strength, which leads us to favour Finally, I would like to highlight some of the projects and the our continued home base in Scandinavia. It is from here that ventures in which we are involved with a view to achieving we obtain our livelihood and are able to develop our niche in the sustainable development of society from a broader perspective. global automotive market. We also have a major responsibility As part of the Global Compact, we have initiated “Discrimination as the predominant employer in several areas of Sweden. Our is Everybody’s Business”, a project which shows how diversity international focus naturally encompasses our interest in an can strengthen companies and communities. In association with open, global market with a minimum of restrictive customs five other companies taking part in the project, Volvo Cars pre- tariffs and regulations. sented the results at the UN World Conference Against Racism During the past year, we have shown that we stand up for in Durban in September. Other projects include Volvo Ocean our values as a supplier of safe, high-quality cars. The Safety Adventure and the Nordic Partnership with the WWF. Concept Car, SCC, which was launched in January and since Through corporate citizenship, our aim is to show that it is then has toured motor shows, demonstrating an entirely new possible to create harmony between fulfilling present-day philosophy towards safety is one example. We now aim to customer demands, society’s expectations and the needs of develop cars and infrastructure together so that they can future generations. While this is not an easy equation to solve, communicate in order to give warning of and prevent accidents we are attempting each year to get closer to finding the solution. if the driver fails to heed a potential risk. The future we see This report is one way of sharing our experience. It is my hope ahead of us is an exciting one! that it will provide the reader with a lot of answers, though During the year our new ULEV engines went up from 15 to perhaps a number of questions as well. We look forward to a 31 per cent of sales. This means that one in three Volvos bought continued dialogue on www.citizenship.volvocars.com, where meet Californian legislation on exhaust emissions, which is the we will also publish more in-depth material in line with the strictest in the world. Similar standards, Euro4, will apply in the timetable at the back of this report. EU from 2005. We are the only car manufacturer currently supplying cars which conform to these standards in all markets, regardless of what is required by local legislation. All the models on the large platform and the 40 series are Cars are driven by people. now available as Bi-Fuel vehicles. Our tradition was to do what The guiding principle behind everything we make most other producers of gas-powered vehicles did, namely Hans-Olov Olsson at Volvo, therefore, is and must remain – safety.” modify and convert existing petrol vehicles. We now build them President and CEO, Volvo Car Corporation QUOTE FROM GUSTAF LARSSON (LEFT) AND ASSAR GABRIELSSON (RIGHT) 4“ ENVIRONMENT 5 Corporate Citizenship Report 02-04-23 08.40 Sida 6
PRODUCTION
MARKETS
OUR VISION To be the world’s most successful and desirable premium car brand.
OUR MISSION To create the safest and most exciting car experience for modern families.
The world of Volvo Cars
Our Products, Sales and Markets Premier Automotive Group within Ford Motor Company. Volvo cars come in three different lines; Sedans, Versatiles, Volvo Car Corporation is “Centre of Excellence for Safety” including Cross Country, and Coupés & Cabriolets. Our within FMC. sales and service network covers more than 100 countries. Much of the network is composed of independent companies Financial results working with Volvo Car Corporation as a business partner. 2001 was one of the best years ever for Volvo Car The four largest markets are USA, Sweden, Germany Corporation, in terms of sales and revenues. FMC does not and UK. seperately report financial information about the different CARS PRODUCTION PER COUNTRY, 420 000 IN TOTAL
brands. Detailed information about the financial performance The Netherlands Manufacturing and headquarters of the FMC can be found in its Annual Report 2001 at
The production of all of our components, such as engines www.ford.com. Sweden and transmissions, is based in Sweden. Volvo Car Malaysia Thailand Corporation operates three major assembly plants, in South Africa
Gothenburg and Uddevalla, Sweden and in Ghent, Belgium. SALES PER MODEL 2001. 420 000 VOLVO CARS WERE INVOICED GLOBALLY. Management Team December 2001 There are also smaller assembly plants in Malaysia, Thailand 150 000 Belgium Hans-Olov Olsson, President & CEO and South Africa, serving the local markets. In Born, the Sven Eckerstein, Senior Vice President Human Resources, deputy CEO 125 000 Netherlands, an independent company, Nedcar, produces EMPLOYEES PER COUNTRY, 27 400 IN TOTAL Steven Armstrong, Senior Vice President Purchasing Volvo S40 and Volvo V40. The headquarters and all 100 000 106 079 Belgium Olle Axelson, Senior Vice President Public Affairs 90 799 Hans Folkesson, corporate functions are based in Gothenburg, Sweden. 75 000 The Netherlands Senior Vice President Research & Development 67 369 Curt Germundsson, Senior Vice President Car Manufacturing 60 830 Sales companies Volvo Car Corporation is part of Ford Motor Company 50 000 worldwide Wolff Huber, Senior Vice President Quality 45 250 Sweden Volvo Car Corporation is wholly owned by Ford Motor 40 182 Magnus Jonsson, Senior Vice President Project Management 25 000 Malaysia 9 608 Thailand Dieter Laxy, Company, FMC, since 1999. Volvo Cars together with 360 Senior Vice President Marketing, Sales&Customer Service Jaguar, Land Rover, Lincoln and Aston Martin form the 0 South Africa* Derek Morrison, Chief Financial Officer S40 S60 S80 V40 V70 C70 V70XC * In these countries Nedcar and Ford Motor Company OTHERS respectively produce Volvo Cars
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ENVIRONMENTAL KEY ISSUES AND INDICATORS DEC 31 2000 DEC 31 2001
Climate change Reduction of carbon dioxide emissions of the Volvo 11% 11% = car fleet as defined by the ACEA agreement. (see page21)
Emissions to air 15% 31% + Proportion of Volvo cars sold complying with Euro4/ULEV
Environmental Management 83% / 38% 88% / 43% + Proportion of VCC/VCC suppliers certified by ISO 14001
Transparency 16% 72% + Moving towards Proportion of Volvo models with Environmental Product Declaration
SOCIAL KEY ISSUES AND INDICATORS
sustainability Company culture 64 67 + Employee satisfaction on a 1 – 100 index Sustainability is working towards achieving harmony Diversity between present customer demands, the needs of Female representation at management levels 8% 13% + society and future generations. Working conditions Sickness leave 6,3% 6,6% – This is how we define sustainability. Have we moved any closer to this definition during the last year? There is no simple answer, of course. To define a border Human rights between what is sustainable and what is not, will lead to an interesting but end- Proportion of business partners having a policy Work in progress – on human rights and working conditions less discussion. Moving in a sustainable direction is easier and more rewarding if you have a compass to guide you through the process. With this in mind, we have created a sustainability scorecard for tracking our year-to-year progress towards sustainability. The score-card is an instrument that will require refining and ECONOMIC KEY ISSUES AND INDICATORS adjusting as we improve our understanding of what sustainability means for a Overall result business such as ours. 422 000 420 000 Sales (number of cars) – We have chosen twelve issues and key performance indicators to form a sustaina- bility score-card covering environmental, social and economic performance. For Creating jobs Number of employees 27 400 27 415 = each issue we will use the indicator that we judge to be the most appropriate and relevant at the current time. If time and experience point to a different and better Contribution to society indicator, the old indicator will be phased out and replaced with a new one. Salary taxes paid globally by Volvo Car Corporation, 360 Million EUR 396 Million EUR + 1 EUR = 9 SEK Each indicator is accorded a plus, an equal, or a minus depending on whether Knowledge sharing there has been an improvement or deterioration in the indicator over the year. Number of ongoing projects where we share 67+ Each plus is considered as a step towards sustainability. Every minus a step knowledge with external stakeholders away from sustainability. + Improvement– Deterioration= No change
According to this index, seven out of twelve key performance indicators have improved during 2001.
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VCC MANAGEMENT TEAM CORPORATE CITIZENSHIP REPORT
MANAGEMENT TEAMS
CORPORATE CITIZENSHIP Managing corporate STEERING COMITTE CORPORATE CITIZENSHIP COORDINATOR citizenship DEPARTMENTS
Our Corporate Citizenship Vision Corporate Policies It is our belief that constructive contribution to society is a To guide our managers in their work of interpreting and realising CORPORATE CITIZENSHIP prerequisite for the company to become premium à la Volvo. Corporate Citizenship we use the Volvo Cars Company CONTACT PERSONS Volvo Car Corporation is a pro-active partner in society in line Philosophy, our core values and Volvo Cars corporate policies. with our core values and the Company Philosophy as summed up in the tagline Volvo. for life. All business decisions take into • Safety policy EMPLOYEES account their impact on society • ADOPTED IN 2000-10-17 BY THE CEO Quality Policy CORPORATE CITIZENSHIP • Environmental Policy NETWORKS Our Corporate Citizenship Mission • Work Environment Policy • We will actively engage our stakeholders and society as a • Policy Against Harassment at Work strategy to reach our business targets and to safeguard our MANAGING • Alcohol Policy brand image. REPORTING • • We shall act proactively in an open, caring and responsive way. Policy for Equal Opportunities • It is the responsibility of all managers to take into account the • Policy on bribery and corruption impact on society in all decisions. Our commitment to con- • Policy on information and openness Management Approach • Stakeholder dialogues, in real life or on line, bringing tribute to society has a long-term perspective and includes • Purchase policy We are a values driven company, managing issues by sharing customers and other stakeholders closer to critical all operations at all levels of the company. The policies are available on the intranet. common values and monitoring and reporting on results. business decisions. • The company should support its employees to actively work Although we do employ targets in order to drive certain issues, • Transparency, accountability and communication to minimise the company’s and its products’ negative impact we normally rely on values and employee involvement together through reporting and other public activities. on society and proactively develop new solutions. Management and reporting with team work and a modern leadership. Volvo Car • Appropriate measurables are to be identified and are to be Corporate Citizenship revolves around our three core values, Corporation will apply for a single umbrella certificate for Volvo Car Corporation voluntarily agrees with; used for target setting and evaluation. The parameters are to safety, quality and environment, and our four core relationships ISO 9000 and ISO 14001 during 2002. The Global Compact, the nine principles on human rights, be included in the Business Management System. with customers, employees, suppliers and the society. working conditions and environmental care. • Our commitment will be expressed through the actions of the Corporate Citizenship is the responsibility of all managers and This approach results in ACEA, the agreement with the EU commission to reduce company as well as in an annual Corporate Citizenship report. employees. There is, therefore, no separate or parallel • Specific tasks carried though in cross-functional teams. CO2 emissions by 25 percent between 1995 and 2008. • Each unit manager is expected to allocate the resources organisation managing corporate citizenship. There is a reporting • Identification of key performance indicators for tracking and EU Commission, we strongly support the proposed nego- needed to create an action plan and targets, which supports organisation responsible for monitoring the progress and in- monitoring Volvo Car’s social, environmental, and business tiated agreement on pedestrian safety. the Corporate Citizenship mission. The actions are to be forming the Corporate Citizenship Steering Committee chaired performance. reported to the Corporate Citizenship Steering Committee, by the CEO on how corporate citizenship is developing within • Ensuring that each employee is equipped with the knowledge headed by the CEO. the company. When necessary, the steering commitee will alert and means to act correctly, to identify and to make the best ADOPTED IN 2000-10-17 BY THE CEO Volvo Cars management team and focus on certain issues in use of perfomance improvement and business growth order to ensure the progress of the process. opportunities.
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SAFETY
Preventing and protecting
Since we first began building cars in 1927, Volvo Car LATEST TEST RESULTS OF VOLVO CAR MODELS
Corporation has been an industry leader in car accident TESTING BODY TEST METHOD S80 S70 V70 S60 S40 V40
prevention and driver/passenger protection. EuroNCAP Crash test 1* 1* 2** 1*
Human behaviour has evolved during millions of years; cars Crash test frontal 1 1 2 have only been around for the last century. We need support US-NCAP Crash test side 1 2 1 to make good decisions in all traffic situations, whether we are inside or outside of a car. IIHS Crash test 1 1 1 Therefore, car safety today, is much more than the construc- IIHS-HLDI Fatality statistics 1 tion of a crash-worthy car. It is about making the driver and the HLDI Insurance injury claims 1 2 1 3 car interact safer and quicker to help prevent accidents from Folksam Fatality and injury statistics 1 1 2 2 happening in the first place. Which? Expert assessments 1 1 1 1 1 1
It is also about making cars that interact with the surroun- On the rating scale, dings in a smarter, safer way. Infrastructure design is therefore “1” represents the highest grade awarded by the relevant testing organisation. very important when improving road safety. We play an active “2” represents the second highest grade and so on. The scales may consist of four to twelve grades depending on the method. role in a number of projects aimed at improving car and road * 4 of 4 stars. safety in this broader sense, as stated in our Safety Policy. ** 4 of 5 stars (scale changed from four to five grades in year 2000)
Safety tests and rankings Crash safety is ranked using three different methods; crash Real Life Safety test, accident statistics and expert assessments. These ran- To find out whether people in Volvo cars are actually less likely kings are very valuable to car buyers and producers. However, to die or get severely hurt in car accidents, we studied all police real accidents do not always coincide with the situations reported accidents in Sweden during the year 2000. All cars tested in a laboratory. For instance, no crash test method in the study were produced between 1981 and 1999. ranks protection in rear-end impact, a type of accident that One in four cars in Sweden is a Volvo, which makes the has a high risk of long-term disabling injuries. That is why real Swedish statistics reliable when judging Volvo cars’ perfor- life safety, more than only test results, is our ultimate goal mance. All data are provided by the Swedish National Road when developing car safety. Administration and processed by Volvo Car Corporation. Safety for Volvo Cars is about making cars that interact with road users and the surroundings in a smarter, safer way.
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CLAES TINGVALL, January 2002 Professor and Director of Traffic Safety, Swedish National Road Administration QUALITY Our vision is a transport system where ultimately nobody will be killed or severely injured, the “Vision Zero”. To reach that, we need to develop all components of the road transport system, the humans, the vehicles and the infrastructure, from a systems approach. Volvo Cars is a company that has done far more than required by legislation to make their cars safe. In the future we will need Volvo Cars to help us co-develop cars and infrastructure to create a supporting system that allows for humans to be human. Humans make mistakes, the “Vision Zero” makes sure they don’t become fatal.”
“STEFAN NILSSON, January 2002 Director of Volvo Cars Safety Centre We will see intelligent vehicles in the near future that will change our perception of what a car is and how it interacts with the driver and the surrounding infrastructure. The driver will still be in command but the car will alert, interact and act if a collision is unavoidable. Safety is high technology and we are further pursuing partnerships with universities and other parties to develop new technological solutions. We aim at taking a leading role in “developing and promoting these solutions.”
VOLVO CARS SAFETY ADVICE From design to THE D ALL OF AT YOU AN SURE TH E CAR’S MAKE S USE TH • SSENGER CAR’S PA TS SEATBEL R DRUGS LCOHOL O OMBINE A DO NOT C customer satisfaction • VING WITH DRI IMITS SPEED L PECT THE RES AFETY • OTHER S AKES AND SURE BR NDITION Quality is about fulfilling promises and expectations. Volvo company’s CEO. This is a new organisation, launched during MAKE GOOD CO • NT ARE IN EQUIPME Cars’ customers have high expectations and rightly so. All 2001, to help us focus even more effectively on quality. quality assurance is aimed at making our customers satis- Dealers and repair workshops can monitor the results fied. Our goal is to reach “Customer satisfaction no 1” by on-line using a web-based system. Each dealer or workshop 2004, compared to the competitors in our segment of the can compare its results against the average performance at automotive industry. a national, regional or district level.