Volvo Sustainability
by Volvo 29/04/2026
by Volvo 29/04/2026
This article was contributed by Volvo.
The road to climate neutral
We want to be climate neutral by 2040 – it’s the biggest challenge we’ve ever faced. We’re part of the problem. So it’s our responsibility to change what we do and how we do it. Let’s all be part of the solution. We want to provide you with the freedom to move in a personal, sustainable and safe way. To help protect the world we share, we must do more than merely electrify our cars. We’re committed to rethinking sustainability in our operations, in our cars and in society. While all care has been taken to ensure the information is correct, please note this information was last updated November, 2022.
For Volvo Cars it is important to reduce our impact on the planet and we aim for transparency and traceability in our supply chains. In our EX90 we are using FSC certified wood (FSC™ N004117) in the cabin deco panels. FSC shows that the product comes from responsible sources that are environmentally appropriate, socially beneficial and economically viable management of the world’s forests.
At Volvo Cars we evaluate the materials we use from a sustainability perspective, for example by durability and carbon footprint, as well as responsible business impact. Our Design and Engineering departments work hard at selecting the right material for the right application in order to use less. They also strive to minimize primary metals and fossil-based polymers. We produce life cycle assessments (LCAs) of all our new car models, and they can be found on our website.
Volvo Cars have guidelines, ambitions and roadmaps for our manufacturing and non-manufacturing sites on how to measure, report and reduce water withdrawal. For our own operations, we will continue to report and follow up on the pollution to water as per legal demands, and within the next two years we aim to set global pollution ambitions and remediate where needed. You can check out our Water Management report linked for more information.
The world’s natural resources are limited. So we’ve committed to become a circular business by 2040 – maximising resource efficiency across vehicles, components and materials. We’re focussed on eliminating waste, making greater use of recycled material, and remanufacturing and reusing parts. Design for circularity: Most companies (and people) still participate in a linear economy – you take raw material, make a product, use it, and in the end, throw it out as waste. A circular economy maximises resources by designing products for durability, reuse and recycling. From the start, we’re considering a vehicle’s entire life cycle and how to maximise the value delivered throughout that time. When that’s over, the dissasembly and recycling process can provide high quality and quantity raw materials. More remanufacturing: Compared to producing new parts, remanufactured parts use around 85 per cent less raw material and 80 per cent less energy. We currently remanufacture 36 different component groups, including engines, gearboxes, turbo compressors and clutches. In 2021 we saved over 4,000 tonnes of CO2 by remanufacturing over 37,000 parts. Less production waste: In 2021, 96 per cent of our global production waste was recycled – so we avoided creating additional carbon emissions and were able to keep valuable material in circulation. This also reduced the amount of virgin material needed. Recycling: Our largest waste stream is metal from car production, which amounted to 209,000 tonnes in 2021 and is entirely recycled.
The Family Bond by Volvo Cars is our all-gender global paid parental leave policy – with this, we give all Volvo Cars employees with at least one year’s service 24 weeks of parental leave at 80 per cent of their base pay by default. This global policy applies to either parent and is suited for a diverse variety of family types, as it includes adoptive, foster care and surrogate parents, as well as non-birth parents in same-sex couples. Learn more about The Family Bond at https://www.volvocars.com/au/about/family-bond/
We’re serious about wanting to reduce our impact on the planet and we know our responsibility extends beyond our own walls. The what, how and where from of our sourcing activities all must be accounted for when we calculate our impacts. We aim for transparency and traceability throughout our entire sourcing process. For example, we use Blockchain technology as part of our commitment to the responsible sourcing of batteries. Ethical batteries: We’re committed to responsible sourcing of our batteries. As part of that commitment, we’re the first car manufacturer to use blockchain technology throughout our entire cobalt supply chain, allowing us to monitor and trace the cobalt used in our batteries. Responsible cobalt sourcing: Cobalt is a vital component in the production of electric car batteries. In some cases, the extraction of cobalt can have human rights impacts. We use blockchain technology to increase transparency and traceability of our cobalt supply chain, ensuring the information about the material’s origin cannot be changed undetected. We use several other processes, in conjunction with our suppliers, including mine site inspections and GPS tracking to help ensure that the cobalt within our batteries is responsibly sourced.
We have achieved a worldwide certification complying with ISO 9001 (quality), ISO 14001 (environmental care) and ISO 45001 (occupational health and safety). This means that all of the company’s sites and functions are working in a correct and consistent manner fulfilling all requirements in these standards. The three standards align with Volvo’s core values of quality, safety and environmental care. With the achievement of the worldwide certification, we prove we are a unified organisation, under one process model, fully aligned across all sites around the world.
In 2019, Volvo Cars was recognised as a World’s Most Ethical Company® by the Ethisphere Institute for the third consecutive year. Ethisphere Institute is a global leader in defining and advancing the standards of ethical business practices. Our past participation in the Ethisphere Institute survey was part of our continuous improvement initiatives. This award was a welcomed acknowledgement of our comprehensive Compliance and Ethics Programme, which aims to ensure that our employees and our business partners act responsibly and ethically. Volvo Cars is committed to fostering a culture of Ethical Leadership.
The financial community has a vital role to play in accelerating the transition to a low carbon economy. We want to support their growing focus on sustainable investment. Our Green Financing Framework aligns our sustainability strategy with financing opportunities that lead to a positive impact on our shared environment and society. The Framework is aligned with both the ICMA Green Bond Principles (GBP) and the LMA Green Loan Principles (GLP). We use the proceeds for strategic projects in clean transportation: increasing our fully electric cars production capacity and battery assembly; and for research and development of zero emissions vehicles, new electric powertrains and platform technology.
Our sustainability strategy is fully integrated into our corporate strategy and is challenged frequently by regular analysis, including climate-related risks and opportunities. We have a governance structure in place to monitor the progress of our sustainability strategy, ambitions and initiatives. Our sustainability governance structure is organised according to the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). This means we conduct frequent sustainability reviews at each management level including Board of Directors. The global sustainability team oversees the development and progress of the sustainability strategy across the company. ESG reporting: We believe in external third-party validation of our sustainability performance. It’s essential to gaining credibility. It’s reassurance to our people and external stakeholders that our sustainability strategy and our ambitions support global goals, such as the UN SDGs and the Paris Agreement.
Over the last 200 years, more than half of the vibrant marine habitats in Sydney Harbour has been replaced with flat man-made seawalls, which support lower biodiversity and drives creatures from their natural habitats. The “Living Seawall” initiative saw Volvo partner with the Sydney Institute of Marine Science to create one of the world’s largest Living Seawalls, which saw the return of 91 distinct species and has transformed the previously bare seawalls into a flourishing habitat that will help clean our oceans for decades to come.
As part of an ongoing ambition towards being fully electric by 2026 in Australia, we decided that diesel engines have no place in our future as a sustainable company.
C40 Recharge – the first Volvo designed as pure electric only
Volvo Cars is launching the world’s first EV battery passport recording the origins of raw materials, components, recycled content and carbon footprint for its flagship EX90 SUV. This is several years ahead of the industry as European regulations will make this mandatory in 2027 for all automakers.
Tailpipe emissions account for a significant part of our carbon footprint. That is why every new Volvo car launched from 2019 onwards has an electric motor. Our aim is that 50 per cent of our annual car sales should be all-electric by 2025, with the remainder consisting of hybrids.
Reducing emissions in our supply chain is critical to reaching our climate target. We are encouraging our top suppliers to use 100 per cent renewable energy by 2025 and to develop a more circular approach to materials.
We aim to have climate-neutral manufacturing operations by 2025. Already today our global plants are powered by over 80 per cent climate-neutral electricity. Since 2008, all our European plants have been running on hydro-electric power.
One of our circular economy ambitions is to significantly increase the share of sustainable recycled and bio-based materials in our cars by 2025. Our ambitions for our materials in 2025 include 25% recycled or bio-based plastics, 40% recycled aluminium, and 25% recycled steel.
As an interim step towards our climate neutral by 2040 target, we’re aiming to reduce the lifecycle carbon footprint per vehicle by 40 per cent between 2018 and 2025. This will include a 50% reduction in tailpipe emissions, a 25% reduction in supply chain emissions, and a 25% reduction in operational emissions (incl. logistics), for a 40% total reduction per vehicle.
In recognition of the fact that finance plays a critical role in advancing sustainable development, we’re aiming to achieve 100% green debt or sustainability-linked financing of assets by 2025.
Plan: every new Volvo model to be either a fully electric or a plug-in hybrid vehicle by 2030 globally.
The Science Based Targets initiative (SBTi)* has approved our ambitious plan to become a climate-neutral company by 2040. According to SBTi, our emissions reduction targets are in line with the goals of the Paris Agreement to limit global warming to well below 2°C compared to pre-industrial levels. We’re committed to reducing our impact on the planet and we know it’ll take a global effort. So it’s important to collaborate with other like-minded companies, suppliers and organisations, to drive our own sustainability performance and change within our industry. *SBTi is a collaboration between the Carbon Disclosure Project (CDP), the United Nations Global Compact, the World Resources Institute (WRI) and the World Wide Fund for Nature (WWF).
At Volvo, we now aim to reach net 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.
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