Volvo Cars has established a Green Finance Framework, allowing the company to fund its ambitious climate plan and electrification strategy by issuing green bonds or obtaining green loans.
Funds raised under this framework are earmarked for climate-related and environmental projects. The Green Finance Framework specifies how these projects are identified, selected and managed, providing transparency for investors.
The company’s framework paves the way for Volvo Cars to issue its first green bond. The proceeds of such a bond will be used to fund new electric car models, new vehicle platforms and powertrain technology, as well as increased production capacity for batteries and electric cars.
Volvo’s Green Finance Framework has been reviewed by Cicero, a leading provider of independent, research-based evaluations of green bond investment frameworks, and received its highest possible rating, Dark Green.
“Volvo Cars has one of the most ambitious climate plans in the auto industry,” said Håkan Samuelsson, Volvo Cars Chief Executive. “Our Green Finance Framework allows investors to participate in the transformation of Volvo Cars into an electric car maker.”
Last year, Volvo Cars launched a comprehensive climate plan which addresses carbon emissions across all its operations and products, as it strives to become climate neutral by 2040.
The plan goes beyond addressing tailpipe emissions through electrification; the company will also tackle carbon emissions in its manufacturing network and wider operations, its supply chain and through recycling and reuse of materials.
As a first, tangible step towards its 2040 vision, the company aims to reduce its lifecycle carbon footprint per car by 40 per cent between 2018 and 2025.
This includes a 50 per cent reduction in tailpipe emissions per car, a 25 per cent reduction per car in operational carbon emissions (including from manufacturing and logistics) and a 25 per cent reduction per car in supply chain carbon emissions.
“We have ambitious investment plans in the coming years to turn our climate objectives into reality,” said Carla de Geyseleer, Volvo Cars Chief Financial Officer. “I am happy we can now offer an opportunity to the financial community to make sustainability-focused investments in Volvo Cars, as the financial industry plays a pivotal role in stimulating and supporting sustainable development.”
Volvo Cars was the first established car maker to commit to all-out electrification and is the only brand to offer a plug-in hybrid variant on every model in its line-up. It will also introduce a range of fully electric models in the coming years, starting with the XC40 Recharge Pure Electric, deliveries of which will start later this year.
Sales of its plug-in hybrid cars amounted to almost a quarter of sales in Europe during the first half of 2020. During the period, Volvo Cars was the number one plug-in hybrid premium brand in Europe as measured by IHS, and by 2025 Volvo Cars aims for its global sales volume to consist of 50 per cent fully electric cars, with the rest hybrids.
Full details on Volvo Cars’ Green Finance Framework can be found HERE.
Volvo Car Group in 2019
For the 2019 financial year, Volvo Car Group recorded an operating profit of 14.3 BSEK (14.2 BSEK in 2018). Revenue over the period amounted to 274.1 BSEK (252.7 BSEK). For the full year 2019, global sales reached a record 705,452 (642,253) cars, an increase of 9.8 per cent versus 2018. The results underline the comprehensive transformation of Volvo Cars’ finances and operations in recent years, positioning the company for its next growth phase.
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 of 705,452 cars in 2019 in about 100 countries. Volvo Cars has been under the ownership of the Zhejiang Geely Holding since 2010.
In 2019, Volvo Cars employed on average approximately 41,500 (41,500) full-time employees. Volvo Cars’ head office, product development, marketing and administration functions are mainly located in Gothenburg, Sweden. Volvo Cars’ head office for APAC is located in Shanghai. The company’s main car production plants are located in Gothenburg (Sweden), Ghent (Belgium), South Carolina (US), Chengdu and Daqing (China), while engines are manufactured in Skövde (Sweden) and Zhangjiakou (China), and body components in Olofström (Sweden).
Under its new company purpose, Volvo Cars aims to provide customers with the Freedom to Move in a personal, sustainable and safe way. This purpose is reflected in a number of business ambitions: for example, by the middle of this decade it aims for half of its global sales to be fully electric cars and to establish five million direct consumer relationships. Volvo Cars is also committed to an ongoing reduction of its carbon footprint, with the ambition to be a climate-neutral company by 2040.