Audi Sustainability Report 2 0 17 Audi Sustainability Report 2 017 2 Foreword 03 Brief Portrait 04 Strategy and Organization 05 Sustainability Program 16 Operation and Integrity 25 Products and Services 33 Value Creation and Production 43 Employees and Society 55 Appendix 69 Sustainability Key Figures 70 Independent Practitioner’s Report 78 GRI Content Index 80 Publication Details 87 The fuel consumption and emission figures of the models mentioned in the report can be found on page 77. Audi Sustainability Report 2 017 3 FOREWORD FOREWORD Dear Readers, There is no way to turn back time. This is true for both our personal lives as well as for the way in which human- kind deals with this planet. That is what makes conduct- ing ourselves responsibly so important. And it therefore means learning from our mistakes following setbacks. Today we are pleased to present you with our latest Sustainability Report. Sustainability has a lot to do with adaptability. Of course, change can be unsettling and sometimes frightening. Change requires courage – those who have this courage develop enormous strength and can tackle an issue with motivation and enthusiasm. First and foremost, having this mindset makes new things pos- sible. The Board of Management in the new We have been dealing with the diesel crisis for more than With its range and its many digital products and ser- Audi Design Center at the Ingolstadt site. two years now. It represents a clear break in our Com- vices, our fully electric SUV is a strong statement for the pany’s history and has triggered an important discussion future of electric mobility. The Audi e-tron comes from at Audi about culture and values. We have learned from Audi’s first certified carbon-neutral plant. The electric car With best regards, these events and have implemented various internal is equipped with electric motors from our competence The Board of Management of AUDI AG mechanisms to prevent something like this from happen- center in Győr. It heralds the series of many more electric ing again. We are now focusing all the more on conduct- cars that we will be bringing to the market in the coming ing ourselves with integrity and on a sustainable future. years: The Audi e-tron Sportback in 2019, for instance, We sense the willingness of our employees for change – a and the Audi e-tron GT in 2020. By 2025, we will have genuine longing for it. And that gives us great confidence. around 20 electrified models on offer across the entire Rupert Stadler portfolio. Without a doubt, we have some hard times behind us – and those ahead of us will not be any easier. The auto- Sustainability is much more than fulfilling environmental motive industry is currently undergoing the greatest laws; it is a social objective. The customer’s decision transformation in its history. In our view, great challenges to buy also depends on how authentically and sustainably Wendelin Göbel Peter Kössler Bernd Martens always present great opportunities, and we are tackling a brand conducts itself. We invite you to read our Sustain- them strategically and consistently. Indeed, 2018 is a ability Report to see for yourself what Audi is doing in year of major upheavals and at the same time a year of terms of sustainability and where we stand today. new beginnings for Audi. This year we will be bringing the Audi e-tron onto the market. Peter Mertens Bram Schot Alexander Seitz Audi Sustainability Report 2 017 4 BRIEF PORTRAIT BRIEF PORTRAIT The Audi Group, with its brands Audi, Ducati and Lam- borghini, is one of the most successful manufacturers of automobiles and motorcycles in the premium segment. In 2017, the Audi Group delivered to customers 1,878,105 (2016: 1,867,738) cars of the Audi brand, 3,815 (2016: 3,457) sports cars of the Lamborghini brand and 55,871 (2016: 55,451) motorcycles of the Ducati brand. With sales of EUR 60.1 billion (2016: EUR 59.3 billion), the pre- mium manufacturer achieved an operating profit of EUR 4.7 billion (2016: EUR 3.1 billion). At present, approx- imately 90,000 people currently work for the Company all over the world, more than 60,000 of them in Germany. Volkswagen AG is the major shareholder of AUDI AG and controls approximately 99.55 percent of the share capital. The Audi Group, headquartered in Ingolstadt, is present in more than 100 markets worldwide and produces at 16 locations in twelve countries. KEY FIGURE HIGHLIGHTS 2017 [1] Including deliveries of vehicles EUR million EUR million tons built locally by the associated com- 60,128 1,878,105 20.6 13 , 571 pany FAW-Volkswagen Automotive Company, Ltd., Changchun (China). revenue vehicles of the Audi brand expended for corporate carbon emissions in logistics delivered [1] citizenship activities reduced Audi Sustainability Report 2017 5 STRATEGY AND ORGANIZATION Audi Sustainability Report 2 017 6 STRATEGY AND ORGANIZATION In dialogue For Audi, sustainable action means considering the immediate “RETHINKING and long-term consequences of its decisions. Economic success, environmental compatibility and social SUSTAINABILITY” responsibility are equally important. he diesel crisis marks a watershed Chief Strategy Officer & Chief Digital Officer at Audi; it contradicts everything at Audi, and Peter F. Tropschuh, Head of the Sustainability was a key issue for Audi the Company stands for. Processing “Sustainability Strategy” department, talk well before Strategy 2025 was pub- T lished. Has its position within the new what has happened and restoring custom- about new goals and placing sustainability ers’ trust is a key task. Roland Villinger, at the heart of the business. strategy raised it to a higher level? Peter F. Tropschuh: Yes, definitely. To In 2016, Audi announced its provide fresh inspiration for customers and “Audi. Vorsprung. 2025.” strategy. employees alike, and to shape the future Where does the Company want together with them, we need to and want to be in 2025? to rethink sustainability. Not simply be- Roland Villinger: Audi’s goal is to become cause of the diesel crisis. To us, sustainabil- the leading provider of sustainable pre- ity means future viability. Developing cars mium mobility. The needs of customers, that are greener and cleaner, and making employees, stakeholders and society take improvements along the entire value chain center stage in this respect. Our envi- right from production is the key task for ronment poses new challenges that are Audi. The transformation of our corporate complex and interrelated. Digitalization is culture is equally important. We believe in changing entire industries and consumer trust-based relationships with employees, behavior. Worldwide, resources are becom- customers, partners and society. Our aim ing scarcer while commodity prices are is also to make individual mobility sustain- rising. Many cities face daily gridlock while able. This way we add value for everyone. city residents insist on the right to cleaner air. All of which calls for a multidimension- You talk about sustainable mobility. al strategy. Our strategy therefore focuses How far can the transformation extend? on three elements: digitalization, sustain- Is mobility without cars conceivable? ability and urbanization. We have set clear Roland Villinger: We believe that indi- goals for all three action areas. They are vidual mobility is and will remain a basic Peter F. Tropschuh (Head of “Sustainability Strategy”) and Roland Villinger managed centrally through the Board of human need. In the premium segment, (Chief Strategy Officer & Chief Digital Officer) talking to Lisa Schwörer and Management and affect all divisions and this desire is even more firmly anchored. Susanne Haas (“Sustainability Strategy” department). production locations. The car must become part of the solu- tion: for intelligent and livable cities with Audi Sustainability Report 2 017 7 STRATEGY AND ORGANIZATION zero emissions and an integrated trans- than 20 electrified models, more than half port concept. We focus greatly on digital, of them with a fully electric drivetrain. connected products and services to make mobility attractive for our customers and We are adopting a holistic approach. After to reduce the impact on cities. all, electric mobility can only be sustain- able if the energy comes from renewable Peter F. Tropschuh: We also intend to as- sources. We are therefore working on a sume responsibility for the entire prod- system offering for electric mobility that uct life cycle of our cars, and not just for combines charging from the private and emissions during use. Our long-term goal public infrastructure with renewable ener- is a closed circular economy. Enormous gies. improvement potential for recycling still exists with rare commodities in particular. Peter F. Tropschuh: Electric mobility is a We are facing up to this challenge. key element in our strategy. Developing other alternative forms of propulsion and We also share responsibility for the up- fine-tuning our existing product port- stream value chain. As a premium carmak- folio are nonetheless just as important. er that sources products from thousands of With our gas-powered models, we have Audi e-tron prototype: preview of the first purely electrically suppliers, our duty is to ensure they comply launched cars that are suitable for every- powered model from the brand Audi. with basic standards. So we introduced day use and which combine a long range a sustainability rating for suppliers. The ob- with low emissions. Combustion engines jective is that in the future, orders will only also still have a long life ahead of them. Participation and codetermination also be placed with suppliers that obtain a posi- With alternative fuels we are future- play a vital role. This culture of integrity tive rating. Onsite checks before awarding proofing them and will electrify at least a will only take root internally if we embrace Participation and any contracts, for example, help us verify mild hybrid in all core model lines through it to the full.