This guide is intended to help familiarize you with Volvo Cars' position concerning 
Sustainability and Climate Commitment.

Validity is always restricted to three months after print date (9/29/20)

Q: You aim to be climate-neutral by 2040. We have heard many similar vows from many of your competitors. What makes this one of the most ambitious climate strategies in the industry? 
A: The liming as well as the scope of this strategy is very ambitious. In addition to our long-term ambition to be climate-neutral by 2040, we also have a number of short-term targets to immediately reduce our CO2 footprint per vehicle by 40 percent by 2025. These reductions also take into account our entire operations and address CO2 emissions across the value chain. 
Long-term visions, as well as detailed short-term ambitions, including: 
50 percent reduction in fleet tailpipe carbon emissions
25 percent reduction per vehicle in supply chain carbon emissions
25 percent reduction per vehicle in operational carbon emissions, including from manufacturing and logistics

Q: What do you mean by climate-neutral? 
A: We mean reaching net-zero emissions. Our greenhouse gas emissions across our value chain will be reduced to as close to zero as possible. Any unavoidable emissions will be addressed through various forms of offsetting. 

Q: What do you mean by offsetting? 
A: To reach climate neutrality, or net-zero emissions, emissions need to either be brought to zero completely, or any remaining emissions need to be "offset." This involves the funding of activities or projects that will result in an equal amount of GHG emissions not being released into the atmosphere. 

Q: What forms of offsetting will you be investigating? 
A: We are investigating a range of options, including funding projects supporting renewable energy, reforestation and the prevention of deforestation. 

Q: What is your approach to offsetting? 
A: We will focus all our efforts on reducing emissions that we control, including through energy efficiency and use of renewable energy. We regard offsetting as a last resort. We will also influence our suppliers to adopt the same approach. 

Q: Volvo Cars is a car company. Your products are big contributors to global warming. Isn't this just greenwashing? 
A: As a car company, we are indeed part of the problem of global warming. So we recognize that we need to be part of the solution. We need to make a meaningful contribution to global efforts to limit warming to 1.5 degrees to avoid significant harm to the planet and society, as set out in the October 2018 IPCC report. With this announcement, and our long-term visions and short-term ambitions, we are making it clear that carbon reduction will be a top priority for us as a company, as well as for those who work with us. And we will be fully transparent about the progress we are making. 

Q: What does climate-neutral across the whole value chain mean? 
A: We need to take responsibility for the emissions our business generates. Climate neutrality across the value chain means that we will aim to reduce emissions to net zero not only across the areas we can control, including our operations and product usage phase, but also across those areas we can influence, such as our supply chain. We will offset any remaining unavoidable emissions. 

Q: How will customers know that you really deliver on these promises? 
A: In terms of our climate neutral vision, we will be fully transparent about the progress we are making. We will report progress both in our annual report, and in ongoing communications. And we will be open about any challenges we face, and how we intend to address them. Consumers will also see the continued electrification of our product range over the coming years. We will launch a new fully electric vehicle every year for the next five years. Already, all our models include a plug-in hybrid variant - Volvo is the first automaker to offer this. 

Q: What concrete measures are you implementing at this stage to bring down CO2 emissions in your supply chain? 
A: We have already taken some steps to reduce emissions in our supply chain. This includes a greater use of sustainable materials in our vehicles, such as recycled plastics. We are also putting requirements on some of our direct suppliers to use renewable energy in their production, as we have with two of our battery suppliers, LG Chem and CATL. However, we need to do much more, which is why we have set the ambitious goal of reducing our supply chain emissions by 25 percent per vehicle by 2025. 

Q: How close are you to reaching your goal of CO2-neutral manufacturing in 2025? 
A: We're making good progress toward reaching our target. Currently, our plants are powered by 80 percent renewable electricity. Last year, we reduced our manufacturing carbon emissions by 16 percent, with a 40 percent reduction per vehicle in Asia alone. We reached a milestone in January 2018, with our engine plant in Skovde, Sweden qecoming our first climate-neutral site. However, we still have work to do, particularly in our plants in China and the US. We will continue to tackle this through energy efficiency, generating our own renewable energy, and purchasing renewable energy. 

Q: What concrete measures are you implementing at this stage to bring down CO2 emissions in your supply chain? 
A: Making sustainability a core element of the sourcing and decision-making process is absolutely key. This can be seen, for example, in the actions we have taken with our new battery suppliers, where we have made sustainability parameters clear at the start of our dialog. As a result, we achieved commitment on the use renewable energy in their production and full transparency of the supply chain. We are also working with increased recycled content, and design for reuse. However, we need to do more, which is why we've set the ambitious goal of reducing our supply chain emissions by 25% per car by 2025. 

Q: You clearly must have done extensive mapping of your carbon footprint across your value chain. What is Volvo's total annual footprint? 
A: In 2018, our estimated total carbon footprint across our value chain was 34M metric tons. This equates to 53 metric tons (58 US tons) per car. This includes our operational and supply chain emissions, as well as lifetime tailpipe emissions from vehicles sold in that year. 

Q: How was this footprint calculated? 
A: We used the internationally recognized accounting standard - the Greenhouse Gas Protocol. 

Q: What's your view on offsetting emissions you can't mitigate? How do you intend to do this? 
A: Our primary focus is on reducing the emissions within our control and influence. However, we recognize that we are unlikely to be able to reduce all these emissions to absolute zero. Offsetting emissions that can't be mitigated will therefore be necessary. We are currently investigating a range of offsetting options, including investing in renewable energy and reforestation projects. 

Q: It's great that you're electrifying your fleet to reduce tailpipe emissions, but how has this gone in recent years? 
A: Between 2010 and 2018, we reduced.our EU fleet tailpipe carbon emissions by 16%. 

Q: How do you actually intend to reduce emissions in your supply chain and operations? Can you give me some specific examples? 
A: We intend to address emissions in our supply chain by working with our suppliers to increase energy efficiency within their own operations and by increasing the share of renewables in our energy portfolio. We will also use less virgin material and more sustainable material within our vehicles, such as recycled plastic, aluminum and steel. 

Q: What is the general breakdown in percent of total emissions for focus areas? 
A: Operations: 4.6 percent
Raw materials and supply chain: 36.4 percent
Products/usage: 59 percent


Q: Volvo is clearly an SUV company. Don't you think this focus is incompatible with your stated sustainability and climate ambitions? 
A: It's true to say that we are responding to the market demand for SUVs. However, what is important is that we work hard within our own operations, as well as with our suppliers. to reduce the environmental impact of the production and the usage of these vehicles. This is why we've announced our ambitious vision to reduce the carbon emissions per vehicle by 40% between 2018 and 2025 -and why we have committed to the electrification of our fleet. 

XC40 Recharge 

Q: You say that one of the ways you will reduce emissions within your supply chain is through greater use of sustainable materials. How much sustainable material does the XC40 Recharge contain? 
A: The XC40 Recharge contains around 11 % recycled material (by weight). including plastics, steel and aluminum. Examples of components containing recycled materials include the carpet, door inserts and tunnel console, which are made from 97% recycled PET bottles. 

Batteries: end of 1st life 

Q: Volvo is clearly going to need a lot of electric batteries. What do you intend to do with these at the end of their life? 
A: We have a three-pronged approach for batteries at the end of their 1st life. First, we look into remanufacturing them so they can be used again in our vehicles. Second, we look into giving them a "second life," for example as an energy storage unit. Finally, we are working with recycling partners to recycle the batteries to ensure that the valuable metals and minerals within them can be used again. 

Q: What do you currently do with your end-of-life PHEV batteries? 
A: The post-1st life PH EV batteries that we have collected follow the three-pronged approach mentioned above, i.e. remanufacture, second-life application and recycling. 

CO2 emissions from battery production process 

Q: Are electric vehicles really cleaner than conventional cars, when you take into account the production of batteries? 
A: Over their lifetime, we believe they are, especially if they are charged using renewable energy. The production of components for electric vehicles, particularly batteries, is currently carbon-intensive. We are working together with our battery suppliers to improve their energy efficiency and use more renewable energy in their production. 

Q: What sort of energy will your suppliers use in their battery production? 
A: Together with our suppliers, we aim to maximize the use of renewable energy. In this instance, we have secured CO2-neutral production in Europe and the US and across China, both through the use of renewable energy, such as from solar panels, and with certificates where necessary and applicable. 

Supply chain sustainability 

Q: A lot of the minerals that go into batteries are extracted in countries that don't respect human rights or labor rights. Are you confident that your new battery suppliers have adequate transparency in their supply chain? 
A: We have worked closely with both of our two main battery suppliers, CATL and LG Chem, on the sustainability criteria, where we have full transparency of their entire supply chain down to the mine, and no changes can be made to this chain without prior approval by Volvo. 

Q: How can I know that the car's battery has been produced in an environmentally and socially responsible way? 
A: We are committed to the responsible sourcing of minerals and metals, and fully support the OECD Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. In this respect, we require our battery suppliers to support our commitment to have full transparency of our cobalt supply chain by 2020, and to work towards full traceability. 
Sustainability performance is a key consideration when assessing and selecting our suppliers. We monitor the performance of existing suppliers and follow up with third-party audits. We also put requirements on our battery suppliers to minimize carbon emissions during the production processes, including through the use of renewable energy. All our suppliers have to agree to the Volvo Car's Code of Conduct for Business Partners, which includes the observation of human rights, including labor rights. 

Q: How do you make sure your suppliers are compliant? 
A: We monitor the performance of our suppliers and follow up with third-party audits. We have a full team of sustainability experts who work closely with our suppliers on how to ensure sustainable supply chains across all tiers, including on-site visits in mines with our suppliers in DRC. 

Q: How can you be sure that no Volvo car contains any conflict minerals or material extracted using child labor? 
A: No Volvo car should include any material from suppliers not complying with our Code of Conduct for Business Partners. We are very clear and tough with our suppliers that they need to meet our sustainability criteria, which includes respecting human rights and labor rights, as well as supporting our transparency and traceability objectives. We will not do business with non-compliant suppliers. 

Q: What is blockchain technology in the context of supply chain management? 
A: A blockchain is a digital ledger containing a list of records linked to each other via cryptography. Within supply chains, the technology creates records of transactions that cannot be changed, while also enforcing a common set of rules for what data can be recorded. This allows participants to verify and audit transactions independently. 


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