Volvo Cars is expanding its sustainability strategy, setting new ambitious goals for 2030 and 2040. The company is also boosting its focus on biodiversity, and by 2025, the company aims to have 100 per cent of its debt linked to its Green Financing Framework or in a sustainability-linked format.
“Taking actions to combat climate change is non-negotiable and going fully electric is an important step on our pioneering journey,” says Jim Rowan, CEO of Volvo Cars. “As we move to further reduce emissions throughout our value chain, we have a responsibility to do more and address our biodiversity footprint as well as help improve people’s lives. Our updated strategy has been designed to help us do just that.”
Volvo Cars’ new sustainability ambitions for 2030 in short:
Since the release of the sustainability strategy in 2019, Volvo Cars has made progress towards its climate action targets. For example, 69 per cent of company operations are now powered by climate-neutral energy compared to 55 per cent in 2019, and 100 per cent climate neutral electricity is now used across its manufacturing plants globally, compared to 80 per cent in 2019. Additionally, Volvo Cars has reduced its CO2 emissions per car by 19 per cent since 2018.
Net zero greenhouse gas emissions by 2040
Volvo Cars’ aim now is to reach zero greenhouse gas emissions by 2040. This expands upon our previous ambitions of being climate neutral by 2040, and clarifies the company’s intention to use carbon removals only to mitigate any unavoidable emissions. The company’s first priority remains to reduce real emissions before turning to carbon removals, and encourages its suppliers to do the same.
This will be underpinned by an ambition to achieve 100 per cent green debt or sustainability-linked financing of assets by 2025 – in recognition of the fact that finance plays a critical role in advancing sustainable development.
2030 is a milestone year for the company. By then it plans to be a fully electric car company while also aiming to reduce CO2 emissions per car by 75 per cent compared to its 2018 baseline. The company believes that through a combination of only selling fully electric cars and reducing emissions by 30 per cent from both its supply chain and operations, it will be on track to meet the CO2 reduction goals.
Working towards becoming a circular business by 2040
At Volvo Cars, embracing the circular economy has been in focus since 2019. Recycled material already comprises a larger proportion of materials in newer Volvo cars than ever before. For example, nearly 25 per cent of all aluminium in the Volvo EX30 is recycled while approximately 17 per cent of all steel and plastic in the car comes from recycled sources as well.
Volvo Cars aims to use 30 per cent average recycled content across its fleet by 2030, and for new car models released from 2030 to contain at least 35 per cent recycled content. The company is also striving to ensure that by 2030, 99 per cent of all its waste is either reused or recycled compared to recycling 94 per cent of global production waste in 2022.
Striving to be net positive and to contribute to a nature positive future
Volvo Cars believes in taking a complete value chain approach to its impact on biodiversity. In addition to taking action to reduce impact, it will also pursue restorative actions.
To uncover how Volvo Cars’ actions affect biodiversity, the company conducted an impact assessment using production and sales data from 2021, to estimate its annual biodiversity footprint using the ReCiPe model. Using the findings as a baseline, Volvo Cars is now setting a long-term ambition to strive to be net positive across its value chain and to contribute to a nature positive future.
This will require a mixture of short-term and long-term measures that Volvo Cars is currently developing, such as avoiding and reducing the impacts of its value chain, designing a programme for restoration and conservation activities within ecosystems where it operates / sources from, and working together with supply chain partners to establish awareness on biodiversity issues.
Help protect people’s lives within and beyond the value chain
Volvo Cars wants to have a positive impact on society. The company has for example taken steps to help protect people by focusing on its injury rate (LTCR). The current injury rate (LTCR) is 0.07, an industry-leading effort, but the goal is to further reduce the workplace injury rate to 0.02 by 2030. Throughout its value chain, Volvo Cars is also working hard to help safeguard human rights through risk-based due diligence processes to trace, identify, assess and address human rights risks.
Together with like-minded partners, Volvo Cars looks forward to unveiling new social and environmental initiatives in the year ahead, aimed towards helping protect people and the planet.
The small print
Volvo Cars in 2022
For the full year 2022, Volvo Car Group recorded an operating profit of SEK 22.3 billion. Revenue in 2022 amounted to SEK 330.1 billion, while global sales reached 615,121 cars.
About Volvo Car Group
Volvo Cars was founded in 1927. Today, it is one of the most well-known and respected car brands in the world with sales to customers in more than 100 countries. Volvo Cars is listed on the Nasdaq Stockholm exchange, where it is traded under the ticker "VOLCAR B".
"For life. To give people the freedom to move in a personal, sustainable and safe way." This purpose is reflected in Volvo Cars' ambition to become a fully electric car maker by 2030 and in its commitment to an ongoing reduction of its carbon footprint, with the ambition to be a climate-neutral company by 2040.
As of December 2022, Volvo Cars employed approximately 43,200 full-time employees. Volvo Cars' head office, product development, marketing and administration functions are mainly located in Gothenburg, Sweden. Volvo Cars' production plants are located in Gothenburg, Ghent (Belgium), South Carolina (US), Chengdu, Daqing and Taizhou (China). The company also has R&D and design centres in Gothenburg and Shanghai (China).