FULLTEXT DEL 5 AV 6
Årsredovisning 2025
Our policies
We set clear expectations for actors in our value chain through our
Code of Conduct for Business Partners. They are expected to assess
the character and context of their activities, particularly in or near
Key Biodiversity Areas (KBA), and evaluate their potential impact on
ecosystems. We require our partners to prioritise actions that avoid
and mitigate negative impacts, including those related to climate
change, pollution and land use change. They shall not procure or
finance raw materials that contribute to deforestation, habitat
destruction or deep-sea mining. In addition, we encourage active
participation in restoration efforts and the protection of natural
ecosystems and endangered species.
Business partners are also expected to have a robust risk assess -
ment in place before starting operations or engaging in activities
where the rights of indigenous people or local communities may be
adversely affected, and implement mitigating actions as required.
Our position on nature and biodiversity outlines how we aim to
reduce our impact on ecosystems and contribute to their regenera -
tion. We recognise that biodiversity loss is driven by climate change,
pollution, land-use change and unsustainable resource extraction –
issues that intersect with our operations and supply chain. We seek
to avoid and reduce negative impacts on biodiversity, restore eco -
systems and transform our business to support long-term ecologi -
cal resilience. This includes integrating biodiversity considerations
into our sourcing, product development, and operational decisions.
Policy1) Scope
Code of conduct for Business Partners Upstream, downstream
Position on nature and biodiversity Own operations, upstream,
downstream
Position on sustainable steel Own operations, upstream,
downstream
Position on sustainable plastics Own operations, upstream,
downstream
Position on sustainable materials Own operations, upstream,
downstream
Position on circular economy Own operations, upstream,
downstream
1) More information regarding Volvo Cars´ position papers can be found on page 142.
Our actions
We aim to contribute to a nature-positive future by reducing our
impact across the value chain, from sourcing and manufacturing to
operations and product use. By integrating biodiversity considera -
tions into our environmental requirements, supplier engagement
and site-level planning, we are building a more responsible and
resilient business. These efforts support our broader sustainability
ambitions and contribute to protecting ecosystems and species.
Strengthening biodiversity action through product
and material choices
During the year, we conducted scenario analyses grounded in our
annual biodiversity impact assessment to evaluate how strategic
choices, such as shifting product portfolios, advancing electrifica -
tion and increasing recycled content, may influence key biodiversity
impact drivers.
These forward-looking evaluations guide our work towards
contribution to a nature-positive future.
As tailpipe emissions are a significant driver of biodiversity loss,
our transition to electrification is reducing the impact of our prod -
ucts during the use phase. This shift directly addresses climate
change-related pressures on biodiversity by eliminating greenhouse
gas emissions from car use.
Another area of focus is our upstream value chain, where the
extraction and processing of materials can contribute to climate
change, pollution and land degradation. To address these chal -
lenges, we are actively strengthening responsible sourcing practices
and increasing the recycled content in our products. In 2025, we
reached 19 per cent recycled content in our new car models and 20
per cent recycled content across the fleet. Our new EX60, launched
in January 2026, is estimated to have at least 27 per cent recycled
content.
Driving biodiversity measures in operations
and sourcing
During the year, we implemented site-level actions at some key
sites, such as natural value assessments and measures and actions
to reduce light pollution in new buildings. We have also implemented
biodiversity monitoring and habitat restoration in connection with
our newly constructed plant in Košice, Slovakia. In addition, we aim
to eventually develop ecosystem and biodiversity action plans and
pursue building certifications to further integrate biodiversity
considerations into our operations for improved bio diversity plan-
ning and site-level impact mitigation.
We also broadened the integration of biodiversity considerations
across multiple supplier engagement processes to promote sustain -
able sourcing and mitigate our dependencies and negative impacts
on ecosystems and biodiversity. This includes requiring suppliers to
adopt approaches aligned with the Taskforce on Nature-related
Financial Disclosures (TNFD) and the Locate, Evaluate, Assess, and
Prepare (LEAP) framework where appropriate
set measurable targets for pollution and biodiversity and actively
contribute to conservation and restoration efforts.
Biodiversity requirements for business partners have been
strengthened by requesting to appropriately assess their biodiver -
sity impact, to not engage in harmful sourcing practices such as
deforestation and deep-sea mining, and encouraging restoration
efforts and protection of ecosystems and endangered species.
Looking ahead, we plan to engage suppliers of specific materials
to understand their progress in reducing and preventing negative
impacts on biodiversity.
Assesing the impacts of our operations
We annually assess the risk of our operational activities impacting
biodiversity-sensitive areas by identifying which of our sites are
located within or near KBA in combination with the type of activity
at the site. During 2025, we identified that 31 of our operational sites
are situated in or adjacent to such areas.
Biodiversity – Land use and ecological sensitivity 2025 2024
Sites in or adjacent to KBA, location of adjacent
sites 31 34
Hectares in or adjacent to KBA 1,026 977
Share of hectares in or adjacent to KBA, % 35 34
Estimated impact on biodiversity from Volvo Cars'
value chain, species.year 166 177
While we have not yet conducted detailed quantification of our
impacts on local habitats or species, we recognise that our presence
in or near these areas may contribute to pressures on biodiversity.
These could include habitat disturbance, fragmentation or other
indirect effects that could lead to the deterioration of natural habi -
tats. As such, we are taking steps to better understand these inter -
actions and to integrate biodiversity considerations more systemat -
ically into our environmental management practices.
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
171
VOLVO CAR GROUP / SUSTAINABILITY / ENVIRONMENTAL INFORMATION
===== SIDA 172 =====
Site location
Activity potentially
impacting KBA areas
Biodiversity-sensitive
area potentially
impacted
Torslanda, Sweden Manufacture of motor
vehicles
Torslandaviken
Gent, Belgium Manufacture of motor
vehicles
Gentse Kanaalzone
Daqing, China Manufacture of motor
vehicles
Longfeng Wetland Nature
Reserve
Taizhou, China Manufacture of motor
vehicles
Taizhou Wan
Košice, Slovakia Construction of buildings Košická kotlina
Assessing biodiversity risks and value chain impacts
During the year, we advanced our work on biodiversity in the supply
chain by conducting a biodiversity risk assessment for our directly
contracted direct material suppliers, using the WWF Biodiversity
Risk Filter to identify sites located in high-risk areas. This has deep -
ened our understanding of biodiversity related risks in the upstream
value chain, enabling us to take more targeted and effective actions.
Further we are using species.year as a metric to describe the bio -
diversity impact of our full value chain. The metric consists of twelve
different impact categories summarised into the five main catego -
ries of climate change, land use, pollution, water use and others.
These together give a comprehensive measure of different types of
impact on different types of ecosystems.
The species.year metric is also used to inform our scenario analy -
ses to explore how different strategic choices – such as product
portfolio composition, the transition to full electrification and
increased use of recycled content – could affect our resilience to
biodiversity and ecosystem related risks. These scenarios focus on
the most significant impact areas and look ahead to 2040 to capture
long-term risks and opportunities. The scenario work has high -
lighted the potential of various pathways for us to contribute to a
nature- positive future.
Stakeholder collaboration
We are also one of the funding partners of the Bee-Go MoU where
we collaborate with multiple external stakeholders including the
City of Gothenburg and University of Gothenburg. Together we have
carried out the first collaborative project to promote biodiversity
and sustainable areas. Looking forward we will work together on
16 ambitions aligned with the Kunming-Montreal Global Biodiversity
Framework.
When relevant, we engage with local communities to understand
context-specific considerations and to help identify appropriate
approaches. In some cases, this has included applying nature -based
solutions to mitigate potential impacts on ecosystems and sur -
rounding communities.
Our ambitions
Although specific measurable outcome-oriented ambitions related
to biodiversity and ecosystems have not yet been adopted, we have a
long-term ambition to be net positive across our value chain and to
contribute to a nature-positive future. This ambition guides our stra -
tegic approach and the development of actions to mitigate impacts
in our value chain and engage in restoration activities. When devel -
oping our long-term ambition for biodiversity, we undertook scenario
analyses to understand the effect of potential future production and
plans on biodiversity and to develop strategies and plans that bal -
ance economic stability with impact mitigation measures, aligned
with the vision of the Kunming-Montreal Global Biodiversity Frame -
work.
We track our performance towards contributing to a nature-posi -
tive future through yearly assessment of the impact from our full
value chain. This has been assessed since 2022 and is analysed per
pressure type as well as by different products, materials and by
different parts of the value chain.
Our work on biodiversity is closely linked with other environmen -
tal topics, such as climate change, water management and resource
use for which we have clear ambitions. See pages 160, 169 and 176
for more information.
Species.year Upstream Own operations Downstream
Climate Change
Land Use
Pollution
Water Use
Others1)
1) Includes photochemical ozone formation.
Species.year
>100 10–99 0.1–9.99 <0.1
Definitions and methodology
Species.year
Estimated biodiversity impact that indicates relative pressures on
biodiversity throughout the value chain. Calculated using the ReCiPe
2016 method to evaluate the lifecycle impact from raw material
extraction to end-of-life. Bill of Materials (BoM) and material
weights for all cars, including processing and packaging was used
for upstream impact. For our operations, a mix of generic data and
specific internal data was used focusing on activities estimated to
have the highest potential impact.
For downstream, data on water usage for car washes, replace -
ment parts, and consumables, alongside Life Cycle Assesment
(LCA) data for fuel, electricity and end-of-life treatment, were
considered.
The estimated biodiversity impact indicates relative pressures on
biodiversity through the value chain, but is not an exact measure of
species loss.
Sites and hectares in or adjacent to Key Biodiversity Areas
A year-end snapshot of all Volvo Cars owned and leased facilities
and land was used. Facilities were grouped into sites based on prox -
imity and operational relevance. For leased buildings, the total
leased floor area is used to represent the land use even though area
over multiple floors is an over-representation. These site locations
were compared against KBA using a 5 kilometre threshold to deter -
mine adjacency. Results are reported as the number of adjacent
sites and total hectares.
Net positive
The concept generally means to do more good than bad. Our
definition is that we will strive towards net positive by engaging in
decreasing negative impact from value chain activities as well as
engaging in restoration activities.
Nature positive framework
A global vision framework aimed at halting and reversing nature
loss. It focuses on two main areas, restoration of nature and
decreasing negative impact. Our definition is that we have contrib -
uted to nature positive when the impact from our full value chain is
decreasing relative to a baseline.
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
172
VOLVO CAR GROUP / SUSTAINABILITY / ENVIRONMENTAL INFORMATION
===== SIDA 173 =====
Resource use and circular economy
Our resource use and waste generation contribute to environmental impacts,
particularly through raw material extraction, linear elements of product design
and end- of-life outputs. At the same time, we face risks from limited access to
sustainable materials and increasing regulatory demands around circularity and
recycling. These impacts and risks are accelerating our shift toward circular
business models, sustainable sourcing and more efficient resource management
across the value chain.
Identified material impacts, risks and opportunities (IRO) Type of IRO Time horizon Value chain
RESOURCE INFLOWS, INCLUDING RESOURCE USE
The negative environmental impact of our resource inflow occurs primarily
in connection with extraction of raw materials and their use in our supply
chain, before reaching our operations.
Actual neg-
ative impact
Financial risk based on limited availability of sustainable materials on the
market due to supply and demand dynamics.
Risk
RESOURCE INFLOWS AND RESOURCE OUTFLOWS
Scaling and expanding circular business models can generate financial
opportunities.
Opportunity
RESOURCE OUTFLOWS RELATED TO PRODUCTS AND SERVICES
Business model dependent on volume-driven growth, leading to large
amounts of cars placed on the market, which can be associated with
negative impacts on environment and society in the product use phase
and end-of-life.
Potential
negative
impact
Increasing regulatory requirements regarding end-of-life disassembly
and recycling are driving a strong integration of circular design principles.
Failing to meet these high standards poses a non-compliance risk.
Risk
WASTE
Waste generated throughout the value chain from raw material extraction
and processing to production, packaging and end of life has a negative
impact on the environment.
Actual neg-
ative impact
UPSTREAM OWN OPERATIONS DOWNSTREAM
SH ORT-TERM
MID-TERM
LONG-TERM
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
173
VOLVO CAR GROUP / SUSTAINABILITY / ENVIRONMENTAL INFORMATION
===== SIDA 174 =====
VOLVO CARS’
CIRCULAR ECONOMY
VALUE CHAIN
RETAIL
PARTNERS
OWN
OPERATIONS
TIER-1
SUPPLIERS
TIER-N
SUPPLIERS
RAW MATERIAL
SUPPLIER
MATERIAL
RECIRCULATION
END OF LIFE
TREATMENT
USAGE AND
MAINTENANCE
REMANU F AC TU R I NG
REPA
IR
REUSE
Our policies
Our Code of Conduct for Business Partners sets expectations on
actors in our value chain to adopt circular principles and improve
resource efficiency. Business partners are requested to use
resources responsibly and actively work to improve resource effi -
ciency. In our Sustainability requirements we further require suppli -
ers to strive towards maximising recycled content in all materials
and components delivered to Volvo Cars. We use our sustainability
steering process with our suppliers to assure that all quality and
performance requirements are met, while increasing the use of
recycled content. The purpose of these efforts is to increase the
circularity of our products and minimising environmental impact.
Our position on circular economy outlines how we aim to decou -
ple financial growth and customer value from resource consumption
and environmental impact. We recognise that the extraction and
processing of natural resources is a major driver of climate change,
biodiversity loss and pollution. By transitioning to a circular busi -
ness, we aim to reduce our dependence on primary resources,
eliminate waste and generate financial value.
Our approach to waste management is guided by the waste hier -
archy, prioritising prevention and minimisation over treatment. Our
internal Resource Management Directive guides our efforts in this
direction.
Policies 1) Scope
Position on circular economy Own operations, upstream,
downstream
Position on sustainable materials Own operations, upstream,
downstream
Position on sustainable steel Own operations, upstream,
downstream
Position on sustainable plastics Own operations, upstream,
downstream
Position on responsible sourcing Own operations, Upstream
Code of conduct for Business Partners Upstream, Downstream
Resource (waste) Management Directive Own operations
1) More information regarding Volvo Cars´ position papers can be found on page 142.
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
174
VOLVO CAR GROUP / SUSTAINABILITY / ENVIRONMENTAL INFORMATION
===== SIDA 175 =====
Our actions
We aim to accelerate the transition to a circular economy by reduc -
ing resource use, extending material lifecycles and eliminating waste
across our value chain. By embedding circular principles into prod -
uct design, procurement, operations and retail, we are building a
more resource-efficient and resilient business. These efforts
support our broader sustainability ambitions and contribute to
decoupling growth from resource use and environmental impact.
Advancing circularity across materials
Circular resource efficiency in operations
The use of recycled content in our products is a significant catalyst
to reduce our environmental footprint in general, and resource use
in particular. This year we signed a new agreement with Swedish
steel firm SSAB to supply high-quality recycled steel with near-zero
emissions. This directly supports our aim to reduce reliance on virgin
materials and minimise the environmental footprint associated with
resource extraction. The recycled steel will be used in selected
components of the new Volvo EX60 launched in January 2026, as
well as other cars based on our next-generation SPA3 car architec -
ture. The EX60 is designed with the highest share of recycled con -
tent of any Volvo car to date, estimated at a minimum of 27 per cent.
Weight reduction and material utilisation degree (MUD) are
important enablers of our resource efficiency ambitions, helping to
lower the environmental footprint of our cars by reducing raw mate -
rial demand, minimising production waste and improving overall
material efficiency. We have been able to reduce the weight of
selected parts by up to 70 per cent, in one case achieving a six kilo -
gram reduction in aluminium. This is made possible through new
technology, strengthened collaboration throughout the value chain
as well as continuous optimisation of engineering and manufactur -
ing technologies.
Scrap steel accounts for around 75 per cent of the total waste
generated. To capture resource value and increase resource effi -
ciency larger stamping cut-outs are separated and flattened for
direct sale, enabling the reuse of around 10 kg of steel per car and
reducing waste per car in our stamping operations.
We have also implemented targeted reuse practices at non-
manufacturing operations. These include reusing pallets, filler
material and cardboard boxes to enable their use as material
resources.
At our Swedish sites, we have introduced a reuse strategy for con -
struction materials and other assets and established reuse hubs to
expand circular activities.
Circular principles in supplier and retail practices
In our Code of Conduct for Business Partners and Sustainability
Requirements, we have strengthened our requirements for business
partners to encourage the adoption of circular practices and
responsible waste management, while also increasing transparency
and quality regarding recycled content.
During the year, we have followed up with our suppliers through
annual assessments to verify targets and track waste flows, moni -
toring the percentage directed to reuse, recycling, landfill and incin -
eration. We continue to monitor our suppliers´ waste practices, and
to date, 1,039 of our directly contracted supplier sites have set a
waste reduction target. This ammounts to 89 per cent of our suppli -
ers that have completed our Environmental assesment (EA).
Downstream, we supported our global retail network with sustain-
ability toolkits and guidelines to improve recycling, material sorting
and component value retention. These efforts aim to reduce landfill
and incineration while maximising the value of materials in use.
Circular business
We have a wide range of circular business activities that deliver cost
savings and generate revenue for the business, while reducing the
need for primary materials. The main streams include remanufactur -
ing and repair, waste trading and weight reduction actions.
Our battery centres in Asia and South America help maximise
battery use through repairing and refurbishing high voltage batter -
ies. When our cars require a battery exchange this can easily be
replaced with a refurbished one. This circular initiative prolongs the
lifespan of our fully electric cars even further, helping to reduce
concerns around battery life. This helps create customer value while
enhancing value retention and reducing our environmental impact.
Looking ahead, we will continue to close material loops, scale circu -
lar business models and further embed circularity across our opera -
tions and value chain.
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
175
VOLVO CAR GROUP / SUSTAINABILITY / ENVIRONMENTAL INFORMATION
===== SIDA 176 =====
Our ambitions
Volvo Cars has defined circularity ambitions that support our
broader policy objectives of reducing environmental impact,
improving resource efficiency, and enabling a more circular business
model. These ambitions are embedded in our sustainability strategy
and reflect our commitment to responsible circular economy across
the value chain.
Recycled content in cars
To reduce reliance on primary raw materials and increase circular
material flows, we established ambitions for the amount of recycled
content in our cars. To define these ambitions, we applied the princi -
ples of ISO 14021 and aligned with the objectives of the EU Circular
Economy Action Plan, European Battery Regulation and the EU Criti -
cal Raw Materials Act (CRMA). Our ambitions are developed based
on dialogues with suppliers and material specialists, reflecting both
industrial averages and realistic advancements in incorporating
recycled materials into components. Key assumptions when devel -
oping our ambitions include achieving our fleet electrification goals
by 2030. Progress toward our ambitions is monitored and reported
internally on a quarterly basis.
One of Volvo Cars’ circular economy ambitions entails the utilisa-
tion of 25 per cent recycled and biobased content in new car models
by 2025. We achieved this ambition with an overall recycled content
share of 27 per cent for the EX60 launched in January 2026. We are
on track and remain committed to our long-term sustainability
ambitions.
Waste management in operations
We aim for a recirculation rate of more than 99 per cent from our
own operations by 2030, limiting incineration and landfill to less
than 1 per cent. This ambition supports our goal of minimising envi -
ronmental impact from waste. It is based on solid data and a deep
understanding of how the different waste streams are generated.
Internal stakeholders, along with selected business partners, have
been involved in the ambition-setting process to assess the feasibil -
ity of roadmap actions. It is supported by improved sorting, analysis
of mixed waste and closed-loop systems for production scrap.
Performance is tracked and reviewed annually.
In 2025, we increased our recirculation rate by one per cent, in line
with our expected average improvement of one per cent per year.
Circular business value creation
In 2018, we set a circular business ambition to increase revenue and
cost savings, targeting SEK 1 billion in incremental value by 2025,
compared to our 2018 base year. In 2025, our circular business value
pools generated approximately SEK 1,535 million in combined reve -
nues and cost savings.
The circular business ambition was not fully met, primarily due to
negative effects from volatile metal prices, lower stamping volumes
and business decisions, including the closure of the Volvo on
Demand service. Even so, the results provide a solid foundation for
future growth in the contribution of circular activities. Our 2025
ambition also strengthened internal processes, refined the method -
ology for recognising and tracking circular value, and raised aware -
ness of circular principles across the company. As we establish
future ambitions, the learnings from the 2025 approach – both its
strengths and shortcomings – will inform a more robust, margin-
oriented approach with improved integration into our financial
systems and clearer traceability across value pools.
Resource inflows
We rely on a wide range of resource inflows across our operations
and upstream value chain. These include materials, water, packaging
and physical assets that are essential to car production and busi -
ness operations.
Materials and critical raw materials
More than 85 per cent of our cars´ weight consists of steel, iron,
aluminium and plastic materials. In addition, our products rely on
components that contain finite and critical raw materials such as
lithium, cobalt, nickel, manganese and rare earth elements. While
the absolute quantities of these materials are low, their extraction
and processing can have significant environmental and social
impacts. These are classified as Raw Materials of Concern (RMoC)
and are subject to enhanced due diligence in the sourcing process.
Packaging
Packaging plays a crucial role in our operations, supporting the
transport of materials, components and equipment. Due to the
scale of our global operations, packaging represents a significant
resource inflow. Where viable, we use returnable packaging, which
has a lifespan of several years. We also aim to use packaging solu -
CIRCULAR ECONOMY AMBITIONS Ambition Progress
IRO Ambition Type Value chain Base year Base year unit 2030 2025 2025 2024
Extraction of raw material has a negative
impact on the environment
Increase the percentage of recycled
material on a fleet level
Per cent Own operations — 30% fleet level — 20% 20%
Increase the percentage of recycled
material in new car models
Per cent Own operations — 35% new models 25% new models 19% 18%
Waste generated throughout our value chain
has a negative environmental impact
We aim for a recirculation rate of more
than 99 per cent from our own operations
by 2030
Per cent Own operations,
downstream
— 99% recirculation
rate
— 95% 94%
Scaling and expanding circular business
models can generate financial opportunities
Generate an additional one billion SEK
through adoption and expansion of
circular business initiatives
Absolute Own operations,
Downstream
2018 1,385 million SEK — +1 billion SEK +149 m SEK +266 m SEK
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
176
VOLVO CAR GROUP / SUSTAINABILITY / ENVIRONMENTAL INFORMATION
===== SIDA 177 =====
tions that minimise material consumption. Our returnable packaging
pool amounts to a total weight of 58,726 tonnes, designed for
repeated use over several years. Additionally, the amount of standard
expendable packaging and spare part packaging used during 2025
was 55,286 tonnes. Both the standard expendable packaging and the
packaging used in our returnable packaging pool are 100 per cent
recyclable.
Property, plant and equipment
We are currently expanding our manufacturing network with the
construction of a new factory in Košice, Slovakia, while simultane -
ously ramping up megacasting capabilities. These initiatives require
substantial resource inflows and outflows, which temporarily
increase our direct environmental footprint. However, these invest -
ments are critical to enabling future efficiencies and electrification
ambitions, supporting our long-term decarbonisation and circular
economy ambitions.
Resource inflows, tonnes 2025 2024
Total weight of products and technical and
biological materials used 1,352,125 1,465,284
Weight of secondary materials 267,665 288, 659
Share of secondary materials, % 20 20
Resource outflows
Our main resource outflows include the cars we manufacture and
place on the market, spare parts, packaging materials used for logis -
tics and aftersales and production waste. We apply circular design
principles to extend product lifecycles, facilitate reuse and repair
and minimise waste.
Design and engineering for circularity
Circularity is embedded in our product development process. At the
R&D stage, we set requirements for durability, repairability, disas -
sembly and recycled content. We apply design-for-circularity and
engineering-for-sustainability principles, including material selec -
tion with recycled or renewable content, reduced part complexity
and lifecycle-based performance criteria.
Durability and lifecycle extension
Our cars are designed for long-term use and multiple ownership
cycles. We support this through extended warranty services, availa -
bility of spare parts for at least 15 years after production, and initia -
tives to reuse tools and components within our operations. The
commonly assumed lifetime driving distance of 200,000 km and 15
years is often used in passenger car Life Cycle Analysis (LCA) stud -
ies as a basis for product durability and comparability assumptions.
However, official data of scrapped cars in the Swedish market shows
that our products typically last an average of 20 years in Sweden.
Repairability
When reparations are needed, our products are made to be easily
disassembled, repaired or replaced, with the help of clear repair
instructions at our service facilities. By offering customer-focused
service and a wide range of spare parts, we strive to make it easy for
our customers to extend the lifetime of our cars, thereby increasing
resource efficiency. There is currently no industry standard or index
that can be used for comparing Volvo Cars´ product repairability
performance to other car makers.
Remanufacturing and reuse
Our aftersales organisation aims to keep components in circulation by
remanufacturing or reusing them. We are investing in regional battery
remanufacturing centres and developing capabilities to repair and
refurbish high-value components. These efforts help retain material
value and reduce the need for primary material inputs.
Component value retention 2025 2024
Total material saved due to remanufacturing
(weight of parts), tonnes 316 360
CO2
saved from reuse of aluminium, steel and
copper, tonnes 2,731 2,947
Number of remanufactured parts 31,401 22,227
Number of refurbished batteries 1) 1,788 1,133
Parts and components being recycled, tonnes 1,499 1,256
1) Battery number in this report refers to complete high voltage battery pack
(one per vehicle).
Recyclability and end-of-life compliance
All Volvo cars are designed according to the same principles: to
achieve at least 95 per cent recoverability and 85 per cent recycla -
bility, something that is verified when sold on EU markets. Ensuring
end-of-life recyclability is vital to retaining the value of materials,
and we support this through design for disassembly and material
selection.
In parallel, we implement closed-loop systems for production
scrap, such as aluminium and steel, to reduce waste and retain
material value during manufacturing.
Circular business models
We have several functioning business models within the company
including product life cycle extension services, closing material
loops with material suppliers and used car refresh and sales. We are
also exploring new circular value creation opportunities, including
energy services, as well as leveraging car data to support safer and
more efficient mobility. These business models help decouple
resource use from revenue generation.
Waste
Our main waste streams consist of metals, primarily steel and alu -
minium. Non-hazardous waste consists largely of packaging materi -
als such as plastics, cardboard and wood, as well as non-hazardous
sludge from paint shops. Hazardous waste includes sludge from
paint shops, solvents, oils and other chemical residues. To better
understand and reduce the volume of mixed waste that cannot be
recycled, we conduct sample analyses of mixed waste fractions.
These efforts support improved sorting, higher recycling rates and
the reduction of landfill waste.
Material breakdown in fleet, kilo tonnes 2025 2024
Steel and iron 697 757
Aluminium 213 227
Battery materials 1) 42 46
Plastic materials 276 298
Copper 32 35
Fluids 16 17
Glass 38 42
Natural materials 3 4
Other metals 21 23
Other materials 15 17
Total 1,352 1,465
1) Includes anode and cathode active materials.
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
177
VOLVO CAR GROUP / SUSTAINABILITY / ENVIRONMENTAL INFORMATION
===== SIDA 178 =====
Waste, tonnes 2025 2024
Hazardous waste 8,981 11,846
Directed to recycling 5,040 5,767
Directed to disposal by incineration with
energy recovery 2,605 2,965
Directed to disposal by incineration
without energy recovery 718 1,599
Directed to disposal by landfill 618 1,515
Non-hazardous waste 132,438 210,209
Directed to recycling 120,551 197,263
Directed to disposal by incineration with
energy recovery 9,253 10,993
Directed to disposal by incineration without
energy recovery 272 632
Directed to disposal by landfill 2,361 1,321
Total waste generated (excluding reuse) 141,419 222,061
whereof metal 80,325 148,308
Non recycled waste 15,827 19,025
Non recycled waste, % 11 9
Recirculation rate, % 95 94
Definitions and methodology
Recycled material ambition
Our 2025 and 2030 ambition in fleet and new models can be
reached using a combination of bio-based materials (based on the
mass balance approach) and physically and/or chemically recycled
materials. Fleet refers to the annual produced volumes of Volvo-
branded cars.
Total weight of products and technical and biological
materials
Calculation is based on the Bill of Materials (BOM) for every Volvo
Cars-branded cars produced during the reporting period. The total
weight of the car is calculated by summing the weight of all parts in
the BOM. Material composition of each part is determined using the
International Material Data System (IMDS).
Due to current limitation of data availability, production waste,
packaging, and spare parts are not included in the calculation.
Weight of secondary materials
The proportion of recycled materials is based on global average
recycled content as well as data reported by suppliers. The global
average recycled content values per material category are taken
from established industry-accepted environmental databases.
If no generic recycled content information is available for a material,
a recycled content of zero is assumed.
Waste
Waste includes the total volumes sent for recycling, incineration,
and landfill as a result of our own operations. The reported volumes
reflect the measured amounts sent to each waste -handling route.
Reused waste is not considered waste in the reporting in accord -
ance with legislation.
Non-recycled waste
The total volume of incineration and landfilling in relation to total
waste. Incineration includes processes both with and without energy
recovery.
Recirculation rate
The indicator reflects the proportion of waste that are redirected to
reuse, recycling or by-products relative to the total operational out -
put (excluding products). The numerator comprises reuse, by-prod-
ucts, and recycling derived from waste streams. The denominator
represents all waste streams, together with reuse and by-products.
Circular revenue and cost savings ambition
Our circular business ambition anchors our definition of the circular
economy as an economic system that decouples resource use from
financial performance. To ensure progress toward this decoupled
system, we apply the 9R framework and refer to ISO 59004:2024 in
shaping our approach. We also maintain an ongoing dialogue about
our ambitions with NGOs such as the Ellen MacArthur Foundation.
Revenue and, where possible, cost savings are derived from our
financial systems. In some cases cost savings are linked to decisions
that reduce costs but are not included in the financial systems.
CO2 savings from remanufacturing
The metric represent the avoided emissions achieved when restor -
ing used parts instead of producing new ones. The calculation is
based on all remanufactured articles received during the year and
the measured share of material reused for each functional group in
our reman process. The difference between emissions for producing
a new part and those for remanufacturing adjusted for actual reuse
levels constitutes the CO 2 saving.
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
178
VOLVO CAR GROUP / SUSTAINABILITY / ENVIRONMENTAL INFORMATION
===== SIDA 179 =====
Social information
Own workforce
PAGE 180–188
Workers in the value chain
PAGE 189–194
Consumers and end-users
PAGE 195–198
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
179
VOLVO CAR GROUP / SUSTAINABILITY / SOCIAL INFORMATION
===== SIDA 180 =====
Own workforce
We create an impact on our workforce – employees and non-employees – by
upholding fair labour practices, ensuring safe working conditions, and maintaining
a strong commitment to health and safety. Anchored in our strategic framework
and guided by our culture and leadership principles, we develop our people,
foster a growth mindset, and build a high-performance culture.
Identified material impacts, risks and opportunities (IRO) Type of IRO Time horizon Value chain
WORKING CONDITIONS
Health and safety
Workplace health and safety risks can impact workers leading to injuries,
illnesses and increased sick leave.
Potential
negative
impact
Work-life balance
By offering employees paid parental leave globally, gender gaps can be
narrowed and parents are supported to balance the demands of work and
family.
Potential
positive
impact
Adequate wage
By paying living or above living wage in all countries, likelihood for respect
for labour rights and decent work are strengthened.
Actual
positive
impact
Social dialogue, freedom of association, collective bargaining
Operating in countries where restrictions on freedom of association and
collective bargaining are restrained or do not exist, can impact workers by
limiting their ability to negotiate for better working conditions.
Potential
negative
impact
Working time
Undergoing significant transformation in a rapidly changing industry which
may create uncertainty in employees’ working time.
Potential
negative
impact
Secure employment
Collectively negotiated insurance, regulated working conditions, wages,
and benefits provide our employees with security.
Actual
positive
impact
Identified material impacts, risks and opportunities (IRO) Type of IRO Time horizon Value chain
EQUAL TREATMENT AND OPPORTUNITIES FOR ALL
Gender equality and equal pay for work of equal value
There is a potential negative impact of not providing equal pay for equal
work, with certain regions facing heightened risks of inequality and
discrimination in the workplace.
Potential
negative
impact
Training and skills development
Volvo Cars may provide a positive impact by supporting employees
develop new skills and stay relevant in times of rapid technological shifts.
Potential
positive
impact
Measures against violence and harassment in the workplace
Violence and harassment in the workplace negatively impact employees’
well-being and damage corporate culture.
Potential
negative
impact
Diversity
By building an inclusive workplace that embraces diverse talents and
backgrounds, we create an environment where equal opportunities can
thrive.
Actual
positive
impact
OTHER WORK-RELATED RIGHTS
Child labour
Child labour within our workforce would have severe negative
consequences, with potential risk in regions employing young workers.
Potential
negative
impact
Forced labour
Forced labour within our workforce would have severe negative conse -
quences, with potential risks in regions where regulatory enforcement is
weak.
Potential
negative
impact
Privacy
Potential negative impact on workforce privacy, if a data breach takes
place, particularly given the potential risks associated with using large
volumes of employee personal data.
Potential
negative
impact
UPSTREAM OWN OPERATIONS DOWNSTREAM
SH ORT-TERM
MID-TERM
LONG-TERM
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
180
VOLVO CAR GROUP / SUSTAINABILITY / SOCIAL INFORMATION
===== SIDA 181 =====
Our workforce
Volvo Cars is a global premium car maker headquartered in Gothen -
burg, Sweden. With approximately 45,000 employees worldwide,
we maintain a strong international presence while remaining deeply
rooted in our Swedish heritage. The Gothenburg headquarter
houses core functions such as product development, marketing and
administration. Our major production facilities are in Gothenburg
(Sweden) and Ghent (Belgium), as well as in Charleston (US),
Chengdu, Daqing and Taizhou (China). Our research and design cen -
tres are located in Gothenburg and Shanghai. Our employees span a
wide range of disciplines, including automotive production, software
and electrical engineering, battery technology, information technol -
ogy and design. This diverse expertise supports our continued evo -
lution in a rapidly changing industry. Our transformation towards
electrification creates both negative and positive impact for our
workforce. Electrification, regionalisation and new ways of doing
business demand an organisation and workforce that is flexible,
adaptable and continuously improving. Engagement with employees
is essential to understanding our impacts and dependencies, and
the insights gained inform our strategy and guide our strategic
direction.
We operate in regions where there is a structural risk of labour
rights violations, such as child or forced labour. In these contexts,
the impact is not limited to isolated incidents but is a consequence
of societal conditions. Even though we do not consider any own
operations at significant risk of such incidents, we have identified
this as a potential impact also for our own operations. More infor -
mation about high-risk countries can be found on page 144.
Employing people in many different regions with different exper -
tise and competencies can also impact the employees in various
ways, e.g. related to gender equality and diversity. Some impacts are
more directly related to individual incidents, such as accidents in the
production operations. The way we operate, and where we do it, also
creates positive impact for our workforce. Our commitment to
parental leave for all and paying adequate wages in all our regions
generate work-life balance and a possibility for people to improve
their lives. We are dedicated to creating learning opportunities for
up- and reskilling, and, when needed, hire the competence required
for our business transformation towards electrification.
Own workforce characteristics
The total employee headcount for 2025 remained largely
unchanged to the previous year, totalling 44,605 employees com -
pared to 44,413 the previous year. However, this stability reflects
two offsetting factors. In 2025, the reporting scope was expanded
to include a broader scope of subsidiaries that had not been
included previously, and in 2024 these entities comprised approxi -
mately 3,000 employees and 550 non-employees. The comparative
figures for 2024 have not been adjusted. More information can be
found on page 207. Conversely, this year’s headcount decreased due
to a redundancy process initiated to simplify our organisational
structure by reducing layers and limiting the number of managerial
roles. The redundancy process was announced in April 2025 and
completed by 1 November the same year. In total, the global redun -
dancies amounted to reduction of approximately 3,000 positions,
including 2,000 positions in Sweden – of which around 1,000 were
non-employees – and 1,000 positions in the rest of the world. Con -
sequently, the employee turnover for total employees in 2025 rose
from 16 per cent to 20 per cent, primarily as a result of the initiated
redundancy process.
Own workforce 2025 2024
Total employees 44,605 44,413
Blue collar 24,458 24,574
White collar 20,147 19,839
Non-employees 4,899 5,752
Total own workforce 49,504 50,165
Number of employees per country 2025 2024
Sweden 24,245 22,848
China 6,654 8,601
Belgium 6,684 6,370
Other countries 7,022 6,594
Total employees 44,605 44,413
Employee turnover 2025 2024
Permanent employees
Employees who left the company 6,016 4,636
Turnover rate, % 14 11
Total employees
Employees who left the company 9,477 7,144
Turnover rate, % 20 16
Women Men Total
Number of employees by contract type and gender 2025 2024 2025 2024 2025 2024
Permanent employees 10,736 11,081 30,228 30,738 40,964 41,819
Temporary employees 740 815 2,901 1,779 3,641 2,594
Non-guaranteed hours employees 0 0 0 0 0 0
Total employees 11,476 11,896 33,129 32,517 44,605 44,413
Full-time employees 10,116 10,504 30,354 30,225 40,470 40,729
Part-time employees 1,360 1,392 2,775 2,292 4,135 3,684
Total employees 11,476 11,896 33,129 32,517 44,605 44,413
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
181
VOLVO CAR GROUP / SUSTAINABILITY / SOCIAL INFORMATION
===== SIDA 182 =====
Our policies
Human Rights Statement
Volvo Cars is committed to compliance with internationally recog -
nised human rights standards and guidelines. We have incorporated
safeguarding human rights into our Code of Conduct including the
People Policy, Code of Conduct for Business Partners and the Sus -
tainability Strategy. Our work with safeguarding human rights is
described in our Human Rights Statement. More information can be
found on page 143.
People Policy
The purpose of our People Policy is to provide an overview of our
company commitment connected to human rights: non-discrimina -
tion, no child labour, no forced labour, freedom of association,
health and safety, remuneration and working hours.
The People Policy covers all employees, whether working full-
time or part-time, under a permanent contract or on a temporary
basis, as well as consultants and agency personnel who work at our
premises under the direction of Volvo Cars. Our People Policy is
accessible to all employees and on-site contractors via the com -
pany intranet in multiple languages and forms part of the annual
Code of Conduct training. All employees are required to confirm
they have read and understood it.
Our policies related to working conditions
The People Policy covers the working conditions of our workforce.
We strive to eliminate work-related injuries and fatalities among our
employees and contractors. In addition to the People Policy, health
and safety is guided by the Health & Safety management system
and the Work Environment Directive, including items such as moni -
toring programmes for preventative actions, provisions of occupa -
tional health services and taking research and new technologies into
consideration for future work.
The working conditions and terms of employment are designed to
facilitate, as far as possible, a sound work-life balance. The Family
Bond by Volvo Cars further defines our commitment to being a
responsible and parent-friendly employer by offering the possibility
to take parental leave, without concerns about family support,
career disadvantages or any other form of discrimination.
We are committed to providing employees with working condi -
tions and working hours that comply with statutory requirements. In
countries where weekly rest is not regulated by local legislation,
internal guidelines are available on the global intranet to ensure
compliance.
As an employer, we have the responsibility for respecting workers’
rights to freedom of collective bargaining, social dialogue and free-
dom of association. The Responsible Employer Directive sets out the
principles to meet or exceed requirements in labour law legislation
and collective labour agreements in every location where we operate.
We have social protection policies that safeguard our employees.
Our Pension and Insurance Principles state that all employees shall
have insurance benefits covering long-term disability and sickness,
occupational injury, death in service and business travel, and have
the right to old-age pension benefits that are competitive in the
market and country of residence. This includes state and occupa -
tional pensions, either defined benefit or defined contribution plans.
We are committed to offering fair compensation and benefits
packages, based on transparent and objective criteria that are glob -
ally aligned. In line with our People Policy, salaries shall always be
equal to or above defined living wage. The Remunerations Directive
includes our guiding principles for our reward and remuneration pro -
grammes.
Our policies related to equal treatment
and opportunities for all
Our Diversity and Inclusion Directive and Discrimination and
Harassment Directive set out our principles for equal treatment and
opportunities for all. This reflects our commitment to having a
diverse and inclusive workplace and our zero tolerance of discrimi -
nation, harassment and bullying, including threats and physical
abuse.
At Volvo Cars, we ensure all employees have equal opportunities
for learning based on competence, in line with our People Policy. Our
goal is to enable learning through relevant, impactful and adaptive
learning experiences that empower everyone at Volvo Cars to drive
their own development and adapt to a continuous changing environ -
ment. Our Learning Strategy secures critical skills, provides relevant
learning journeys and upholds global standards, while our manda -
tory learning guideline safeguards compliance, safety and security.
Our policies related to other work-related rights
We respect and work in line with internationally proclaimed stand -
ards of human rights. Our People Policy is based on international
human rights standards such as the UN Guiding Principles on Busi -
ness and Human Rights, ILO Declaration on Fundamental Principles
and Rights at Work, the OECD Guidelines for Multinational Enter -
prises on Responsible Business Conduct and UN Global Compact’s
Ten Principles.
It is explicitly addressed in the People Policy that neither child
labour nor forced labour is accepted. We do not tolerate any form of
child or forced labour, including debt bondage, trafficking and other
forms of modern slavery. Employees shall never be required to
deposit identity papers at the start of employment and are free to
leave the employment after a notice period, as required by law and
contract.
Employee engagement
We encourage open and transparent discussions where employees
feel comfortable expressing their views without fear of retaliation.
We actively engage with our workforce and employee representa -
tives through employee surveys, union relations, and work environ -
ment committees. In line with our commitment to a Speak Up culture
in the Internal Reporting Policy, we have established communication
channels to ensure employees can raise concerns safely and confi -
dentially.
Employee surveys
The engagement survey forms a key component of our People Lis -
tening Strategy. The strategy is overseen by the People Experience
function, which is also responsible for ensuring the timely launch
and coordination of the engagement surveys.
We conduct one to two engagement surveys per year. The surveys
are designed to measure both satisfaction and engagement levels
across the organisation. Survey results are analysed at the
company -wide, organisational, and team levels. This process pro -
vides valuable insights that support the development of a motivated
and engaged workforce, which in turn drives improved business out -
comes. The insights gained are utilised to facilitate meaningful dis -
cussions, enhance clarity and inform targeted actions that
strengthen efficiency and effectiveness among people leaders and
across the business.
This structured approach to employee engagement is closely
aligned with our culture and values. By fostering higher levels of
engagement, we aim to enhance overall performance and maintain
our position as an attractive employer within the industry.
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
182
VOLVO CAR GROUP / SUSTAINABILITY / SOCIAL INFORMATION
===== SIDA 183 =====
In 2025, our engagement survey achieved a response rate of
81 per cent, surpassing the engagement survey platform benchmark
of 75 per cent. The engagement survey platform benchmark figure
refers to a global average result, across companies in all industries.
The overall engagement index reached 75, exceeding the bench -
mark of 74, though below by one point compared with our ambition
of being two points above the benchmark.
As part of our commitment to diversity, equity and inclusion, the
survey also incorporates an inclusion index, derived from the ques -
tions ‘speak my mind’ and ‘respectful treatment’. The inclusion
index helps to identify gaps and gain insights where employees may
not feel safe or valued and where appropriate action plans need to
be addressed.
Union relations
As an employer in more than 35 countries, we engage with a wide
range of unions. We have a dialogue with union representatives
through our Volvo Cars European Dialogue Forum, the equivalent to
a European Works Council. In addition, we have union representa -
tives in Volvo Cars’ Board of Directors.
Where no collective agreements are in place, we maintain close
dialogue with employee representatives on health and safety and
other employment topics. To ensure employee involvement, our
merit review process includes dialogues with employees in personal
meetings. Within our policy on freedom of association, collective
bargaining and social dialogue, we safeguard the right to join a trade
union, or not, without fear of prejudicial treatment.
Grievance channels
We encourage a Speak Up culture that allows everyone to ask ques -
tions and raise concerns without fear of retaliation. Employees who
notice conduct that may result in a violation of the Code of Conduct
are expected and encouraged to report issues in our whistleblowing
channel, Tell Us, which is available to the entire workforce and is
part of the annual Code of Conduct training. Awareness and trust of
processes for raising concerns is measured both through the
engagement surveys, which assess factors such as ‘ethics’ and
‘speak my mind’, and through specific surveys gathering feedback
on employee trust in the whistleblowing channel. Actions taken to
provide or enable remedy for actual material impacts on our work -
force are managed as part of our remediation process. More infor -
mation on reporting channels and remediation for our workforce can
be found on page 202.
Our actions
Our actions related to working conditions
Safety and well-being
Health and safety is, and has always been, a core priority for Volvo
Cars. It is a continuous effort that demands daily attention and
commitment. Our global Health & Safety team, with representatives
at our major production sites, is responsible for driving our actions
within health and safety. We use our Health & Safety management
system to describe safe ways of working for all health and safety
related topics such as working at heights, occupational medical
health checks, risk assessments, work environment inspections, lift -
ing and rigging. It is systematically reviewed to share best practices
and adapt to new technologies and legislative change. Safety and
well-being is monitored and regularly followed up through our man -
agement system routines.
We offer a wide range of health and safety trainings to our
employees and supervised contractors, customised to their specific
roles and legal requirements to make our workplace safer. All our
on-site contractors are required to undergo a mandatory safety
training programme before entering our premises.
Our Health & Safety teams support managers and the organisa -
tion across all regions, while global process owners ensure a strate -
gic approach in areas such as machine safety, electrified vehicle
safety, chemical safety, ergonomics, incident and accident manage -
ment, personal protective equipment, and legal compliance.
Occupational health services maintain compliance with local leg -
islation on various factors, including work-related medical checks
and employee advice. The main focus is on proactive health initia -
tives for our workforce.
Employees coverage by occupational Health and
Safety management system 1) 2025 2024
Employees, % 100 100
Non-employees, % 100 100
1) Percentage of employees covered by an externally certified occupational Health
and Safety management system 15 (19) per cent. China is covered to 100 per
cent, no other regions are certified.
Proactive risk and incident management
Before changes to the work environment are made, risk assess -
ments are conducted to evaluate the impact on our workforce and
to take necessary preventive safety and well-being measures. All
workplaces within our manufacturing facilities are risk assessed and
updated when changes are made to the process. The assessment is
posted at each workstation. Our global incident reporting system is
used to analyse data, respond to reported risks and work environ -
ment related incidents and support risk assessments for organisa -
tional and physical changes in daily operations.
All identified risks are systematically reported, with up to 98,000
incidents recorded annually. The goal is to proactively address and
close each risk as promptly as possible. Risks are continuously
resolved as they are identified, and typically, approximately 93 per
cent of the risks reported in the previous month are closed within
the first week of the following month. On a daily basis, manufactur -
ing management meets to review health and safety incidents from
the previous day and determine whether any corrective or preven -
tive actions are required. In the event of a significant health and
safety incident, a safety alert is issued within 48 hours. Safety
alerts and best practice sharing are issued throughout the company
to raise awareness about specific risks and initiate mitigation
measures.
As a result of proactive and systematic safety efforts, our injury
rate (Lost Time Case Rate, LTCR based on 200,000 hours) in 2025
was 0.06. This represented one of our lowest results ever since we
started measuring, ranking us among the best in the industry. For
2030, we have set an ambition to achieve an injury rate of no more
than 0.02. This ambition reflects our commitment to creating a safe
working environment for all our people.
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
183
VOLVO CAR GROUP / SUSTAINABILITY / SOCIAL INFORMATION
===== SIDA 184 =====
Health and safety metrics 2025 2024
Work-related fatalities
Employees 0 —
Non-employees 0 —
Work-related injuries
Employees 24 —
Non-employees 1 —
Rate of work-related injuries
Employees 0.28 —
Non-employees 0.22 —
Injury rate - Lost Time Case Rate (LTCR)
Employees 0.06 0.05
Recordable work-related injuries
Employees 319 —
Non-employees 76 —
Rate of recordable work-related injuries
Employees 3.73 —
Non-employees 16.77 —
Number of days lost
Employees 1,547 —
Well-being and health promotion
Our Health & Safety management programme focuses on enhancing
physical, mental and social well-being. We take a proactive approach
to employee well-being by implementing initiatives that address
physical, mental, and social health needs. We actively promote
preventive care, provide access to well-being initiatives, and create
a supportive work environment that empowers employees to thrive.
Examples of initiatives based on our Well-being Strategy:
• Mental Well-being tool – identifies employees’ risk of burnout and
offers support before they become ill
• Health Talk tool – supports managers to promote health, prevent
ill-health among employees by facilitating the dialogue about
their work life situation and general health
• Global Heart Health Awareness campaign – blood pressure moni -
toring, online CPR courses and global health walk ‘one lap around
the globe‘
• World Mental Health Day – activities to raise awareness around
mental health
Work-life balance
We support parents to balance the demands of work and family by
promoting gender equality and facilitating career advancement for
all our employees. Our Family Bond Policy offers all permanent
employees 24 weeks of parental leave at 80 per cent of their base
salary. This applies to all genders and covers adoptive, foster, and
surrogate care, including non-birth parents in same-sex relation -
ships.
Family-related leave 2025 2024
Employees entitled to family-related leave, in % 100 100
Women 100 100
Men 100 100
Entitled employees that took family-related leave,
in % 14 14
Women 17 17
Men 13 13
Working time
We manage working time in line with collective agreements, national
legislation and international labour standards, ensuring compliance
with ILO conventions and EU requirements. Our approach focuses on
preventing excessive overtime and promoting work-life balance.
Through our labour law trainings for managers and follow up in Peo -
ple Policy Assessments, we secure adequate rest periods and leave.
Our systems for time measurement, combined with a high rate of
collective agreements and initiatives supporting employee well-be -
ing and work-life balance, ensure compliance. Working hours and
related indicators are monitored and reported to ensure transpar -
ency and continuous improvement.
Collective bargaining, social dialogue
and freedom of association
Our Labour Affairs team works to enforce labour laws and to pro -
mote fair and safe working conditions. To facilitate the procedures
for information and consultation with our European employees, we
have an agreement with our trade unions called the Volvo Cars Euro-
pean Dialogue (VCED), equivalent to a European Works Council. This
agreement also regulates the election process for determining the
representatives in the VCED. The purpose of VCED is to ensure that
employees are informed and consulted on issues that affect work -
force.
The VCED meetings are held annually and include representatives
from Sweden, Belgium, the Netherlands, Germany and Spain. Dis -
cussions cover the company’s financial position, business, strategic
and production outlook, as well as other employee-related matters.
The council is also convened when major changes within the com -
pany affect employees represented in the forum. In addition,
employee representatives meet independently once a year, without
employer representatives, to discuss and align on union-related
topics.
We have collective agreements with trade unions covering 74 per
cent of our global workforce and apply work environment dialogues
covering all areas in the company. In some areas, we apply social
dialogue – an open and constructive communication between
employer and employees – to strengthen trust, address workplace
matters and promote fair and sustainable working conditions.
Through the People Policy Assessment and annual follow-up, we
review outcomes and initiate actions that ensure alignment with our
standards and objectives.
Collective bargaining
coverage 2025 2024
Employees, % 74 70
Coverage rate Collective bargaining coverage Social dialogue
Coverage rate, for
countries with >50
empl. representing
>10% total empl.
Employees
– EEA
Employees
– Non-EEA
Workplace
representation
(EEA only)
0–19% — China —
20–39% — — —
40–59% — — —
60–79% — — —
80–100% Sweden
Belgium
— Sweden
Belgium
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
184
VOLVO CAR GROUP / SUSTAINABILITY / SOCIAL INFORMATION
===== SIDA 185 =====
Social protection
Volvo Cars has well-established principles for pension and insur -
ance benefits, ensuring that we provide employees with protection
and insurance. We continuously work to secure that our principles
are implemented in all our regions.
Fair compensation
As a global organisation, we conduct business in a range of labour
markets with different levels of social protection. Our Compensation
& Benefits team is responsible for actions related to achieving fair
compensation. To ensure that all employees receive equitable pay,
we monitor salaries at all levels in the organisation. If any gaps are
identified, an action plan is agreed upon and monitored. Any gaps
that cannot be justified by factors such as job complexity, individual
performance or market conditions should be rectified.
To ensure our compensation practices are both fair and compli -
ant, we regularly analyse pay levels across all countries in relation to
local minimum wage and living wage benchmarks. This allows us to
verify that our employees are not only compensated in accordance
with legal requirements but also receive a compensation that sup -
ports a decent standard of living. Our 2025 living wage benchmark
analysis found that 100 per cent of our employees were paid at or
above a living wage.
The average total compensation gender pay gap amounted to 1.7
per cent in 2025. This result falls within the five per cent pay equity
threshold, in line with our commitment to achieving gender pay
equity by 2027. The gender pay gaps are analysed at regional and
national level, and, if outside of the five per cent limit, addressed by
action plans. We regularly analyse gender pay gaps by job complex -
ity level in each country. Our analysis shows that most differences
are driven by variations in seniority and experience rather than une -
qual pay for equal work. We remain committed to gender pay equity
and will continue to focus on ensuring fair and competitive compen -
sation for all employees.
Remuneration metrics 2025 2024
Gender pay gap, % 1.7 1.5
Total remuneration ratio 96 to 1 75 to 1
Our actions related to equal treatment and
opportunities for all
Learning and development
It is essential to meet the need for skilled people to deliver on our
business goals, and this year’s implementation of our new global
learning management system My Learning further supports this
pathway. As of this year, 84 per cent of our employees are now
onboarded to the platform. Our course offering has been expanded
by integrating LinkedIn Learning, giving our employees access to a
broad and diverse content library. Furthermore, by mapping every
employee to relevant skills and competencies, we established the
foundation for personalised learning journeys to develop the skills
needed.
In 2025, we focused on upskilling, reskilling and competence
development programmes in strategically important areas, including
maintenance technicians, electrification, megacasting, software
development, female leadership mentoring and digital skills.
Our performance process, Continuous Dialogue, involves regular
meetings between employees and managers to discuss perfor -
mance, progress, development, learning and well-being. We foster
a feedback culture through continuous feedback and one-on-one
dialogues across all levels, extending beyond manager-team
interactions.
Performance and development reviews 2025 2024
Employees that participated in regular performance
and development reviews, %
White collars, % 90 96
Women, % 91 95
Men, % 89 96
Training hours 2025 2024
Average number of training hours per employee 18 21
Employees that participated in training, % 93 91
Inclusion and belonging
We strive to build a culture of belonging where the freedom to be is
embedded in our work – creating safe spaces for all dimensions of
diversity, fostering deeper engagement and enhancing organisa -
tional performance, enabled by the global Talent & Culture team. We
have also introduced an inclusion index for measuring inclusion and
belonging. This year, the inclusion index stood at 77, outperforming
the benchmark of 76 and meeting our 2025 ambition of a score at
least one point above the benchmark. This result reflects our ongo -
ing efforts to enable an inclusive workplace where all employees
feel valued and respected. Our ambition is to achieve an inclusion
index score 3 points above the benchmark by 2030.
Breakdown of employees by
gender and age group, absolute
numbers and (%)
Executive Managemen t Team1) Senior leaders1) Total employees
Women Men Total Women Men Total Women Men Total
2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024
<30 —
(—%)
—
(—%)
—
(—%)
—
(—%)
—
(—%
—
(—%)
—
(—%
—
(—%)
2
(—%)
—
(—%)
2
(—%
—
(—%)
2,469
(6%)
2,886
(6%)
7,237
(16%)
7,038
(16%)
9,706
(22%)
9,924
(22%)
30–50 2
(25%)
3
(38%)
2
(25%)
3
(38%)
4
(50%)
6
(75%)
78
(18%)
71
(18%)
156
(36%)
140
(36%)
234
(53%)
211
(55%)
6,781
(15%)
6,867
(15%)
17,913
(40%)
17,809
(40%)
24,694
(55%)
24,676
(56%)
>50 1
(13%)
1
(13%)
3
(38%)
1
(13%)
4
(50%)
2
(25%)
50
(11%)
44
(11%)
154
(35%)
132
(34%)
204
(46%)
176
(45%)
2,226
(5%)
2,143
(5%)
7,979
(18%)
7,670
(17%)
10,205
(23%)
9,813
(22%)
Total share 3
(38%)
4
(50%)
5
(63%)
4
(50%)
8
(100%)
8
(100%)
128
(29%)
115
(30%)
312
(71%)
272
(70%)
440
(100%)
387
(100%)
11,476
(26%)
11,896
(27%)
33,129
(74%)
32,517
(73%)
44,605
(100%)
44,413
(100%)
1) In the categories ‘Executive Management Team’, ‘Senior Leaders’ an individual might be counted more than once. This is because each of these populations is considered separately, and thus overlap can occur.
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
185
VOLVO CAR GROUP / SUSTAINABILITY / SOCIAL INFORMATION
===== SIDA 186 =====
All employees are encouraged to express themselves freely and
share ideas in the workplace. During Pride Month, we made efforts
to raise awareness and supported the theme ’Freedom To Be’. We
also launched a global e-learning course on gender identity, intro -
duced safe travel guidelines for LGBTQ+ employees and supported
local initiatives to foster inclusion.
We are committed to continue improving the share of women in
senior leadership and remain committed to our gender diversity
ambition. For 2025, our ambition was to achieve a year-over-year
increase in the share of women in senior leadership. The restructur -
ing process during the year had an impact on the share of women in
senior leadership positions. Our 2030 ambition for women to hold
34 per cent of senior leadership positions remains unchanged, and
we continue to work towards this ambition. Sustained efforts are
ongoing to attract, support, engage, and develop female employees
to increase representation. Several initiatives and employee devel -
opment programmes have been launched to support this ambition.
Our partnership with initiatives such as Girls Who Code further
demonstrates our dedication to fostering the next generation of
female leaders in technology and innovation. Volvo Cars is also a
proud sponsor of Women in Tech, a community with the mission of
increasing women’s participation in the tech industry.
Women in management 2025 2024
Women in senior leadership, % 29.1 29.7
Women in leading positions, % 29.6 30.8
Women in external recruitment and internal
promotion for leading positions, % 30.9 33.3
Threats and violence
Our Corporate Security team is responsible for guiding all security
related work carried out within the company and plays a vital part in
ensuring Volvo Cars is a secure place to work. Through our corpo -
rate security training, we inform managers about preventing work -
place violence and other forms of disruptive behaviour.
Our Corporate Security Incident Report channel encourages
employees to anonymously report incidents of violent or threaten -
ing behaviour. Corporate Security independently investigates all
incidents that are reported. By reviewing incident reports, we can
identify the potential causes of violence or threatening behaviour
and implement prevention and mitigation measures. During 2025,
our incident framework did not record any cases of severe threats
or/and abuse of violence.
Our actions related to other work-related rights
Labour rights
Human rights – People Policy Assessment
The Labour Affairs team is responsible for actions within labour
rights. To further strengthen our commitment to the People Policy
and ensure compliance with human rights standards, we carry out
People Policy Assessments – a practice that began as a project in
2017 and continues today. The process is in line with the UN Guiding
Principles on Business and Human Rights. It assesses both potential
and actual human rights impacts. The assessment involves desktop
research, interviews with key internal and external stakeholders and
on-site verification where 5-10 per cent of the workforce is inter -
viewed. The result of the assessment is an action plan detailing pro -
posed actions to prevent, mitigate and remediate negative risks and
impacts. The action plan is followed up in a timely manner.
In close collaboration with local management teams, awareness
training activities have been carried out in prioritised markets. Man -
agers are trained to maintain responsible business, based on desk -
top analysis and information from NGOs. Training topics include
legal requirements, stakeholder consultation, vulnerable groups and
risk identification in a local context. Furthermore, short- and long-
term action plans are prepared and the results of preventive meas -
ures monitored.
In line with our human rights priorities, we conducted four People
Policy Assessment risk workshops in 2025. These workshops
defined actions to strengthen human rights awareness, including a
planned and structured follow-up. We also carried out a comprehen -
sive People Policy Assessment at our factory in Floby, Sweden, with
no critical findings identified.
At Volvo Cars, we do not tolerate child labour and forced labour
and through our People Policy Assessment, yearly follow-up and
systematic age validations we secure compliance. We take swift and
appropriate measures to address and remediate any negative impact
caused by child or forced labour connected to our operations.
During 2025, our records present zero instances of child or forced
labour.
Work-related incidents and complaints 2025 2024
Work-related complaints filed through channels for
own workers to raise concerns 170 134
of which number of reported incidents of discrimi -
nation or harassment 57 48
Fines, penalties and compensation paid as result of
incidents and complaints, SEK — —
Complaints filed to National Contact Points for OECD
Multinational Enterprises — —
Our ambitions
To meet our workforce goals, we have established clear short- and
long-term performance metrics such as inclusion index score, share
of women in senior leadership and injury rate. Some ambitions, such
as our gender diversity ambition, are also linked to our long-term
incentive programme for senior management – emphasising its link
to desired outcome and importance for the company. Corporate
ambitions are approved and monitored by the Board of Directors,
including employee representatives. The employee representatives
in the Board bring workplace perspectives into decision-making and
ensure that employee interests are represented. We inform our
employees about performance in connection to union and work -
force representative sessions, management and employee meet -
ings. For disclosure of our ambitions and their timelines, we refer to
each section respectively.
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
186
VOLVO CAR GROUP / SUSTAINABILITY / SOCIAL INFORMATION
===== SIDA 187 =====
Definitions and methodology
Headcount
Headcount refers to counting each individual as one, irrespective
of contracted working hours, employment type (e.g. temporary
employees) or employee status (e.g. leave of absence).
Employees
Employees are defined as individuals who have an employment
relationship with Volvo Cars. The reported figures include both
permanent and temporary employees who are active and on leave
of absence.
Employee data is retrieved from the HR system and manually
collected for the legal entities not included in the system. The data
is then aggregated to generate the required metrics. Employee
numbers are presented in headcount and reported at end of the
reporting period. The figures differ from the number of employees
presented in Note 8 to the Consolidated Financial Statement, due to
these numbers are reported as average full-time equivalents. Cur -
rently, Volvo Cars does not have details on employees identifying as
other genders than female or male.
During 2025, the employee data reporting scope has changed.
More information can be found on page 207.
Non-employees
Non-employees are consultants who are not employed by Volvo
Cars but whose work is supervised under the direction of Volvo Cars.
Employee turnover rate
Employee turnover rate is the number of employees leaving divided
by average headcount as a denominator. The average headcount
is the sum of number of employees on the last day each month over
a year divided by twelve months.
Family-related leave
Family-related leave metric includes maternity, paternity and paren -
tal leave (not carers’ leave) for all employees with a fixed pay on a
permanent or part-time employment. Family related leave (regard -
less of duration of absence) is based on a 12-month reporting period
from 1 October to 30 September. The share of entitled employees
that take family-related leave is calculated by dividing the number
of employees that used the benefit with the total number of entitled
employees.
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
187
VOLVO CAR GROUP / SUSTAINABILITY / SOCIAL INFORMATION
===== SIDA 188 =====
Training hours
Training hours data is compiled using consolidated reports from
multiple learning systems globally. The average number of training
hours per employee is calculated by dividing the total number of
training hours recorded during the reporting year by the headcount
number of employees. Gender-specific data is currently unavailable
due to system limitations in 2025. However, it is our ambition to
improve transparency and inclusivity by integrating this capability
with our new learning management system in 2026.
Performance and development reviews
Performance and development review is interpreted as Volvo Cars’
performance process Continuous Dialogue. It is a year-long process
with interim check-ins. There is no agreed number of check-ins since
the number differs based on employee type and individual needs.
Only active employees are considered eligible. Blue collar perfor -
mance process and gender-specific data for blue collars are cur -
rently unavailable due to system limitations in 2025. However, we
intend to achieve standardisation and inclusivity in our processes.
Severe human right incidents connected to own workforce
Severe human rights incidents are defined in line with the UN Guid -
ing Principles on Business and Human Rights and the UNGP Report -
ing Framework. These incidents may occur within our own opera -
tions or anywhere across our value chain, and relate to our salient
human rights risks – those most likely to result in the most signifi -
cant negative impacts on people through our activities, products,
and business relationships.
Severe incidents may include, but are not limited to, child labour,
modern slavery and forced labour, serious health and safety viola -
tions, and threats or occurrences of harassment, abuse, or violence.
All cases are assessed individually, considering the scale, scope,
and irremediability. These assessments apply across all tiers of our
value chain and take into account the specific nature of the work,
location, and vulnerability of affected individuals or groups.
In accordance with ESRS S1, only incidents confirmed through our
due diligence and investigation processes are reported in our annual
Sustainability Statement. Cases still under assessment or not yet
substantiated are not classified as confirmed incidents.
Adequate wage
For adequate wage, we apply a benchmark that exceeds the mini -
mum requirements set out by the ESRS to ensure all employees earn
a true living wage. Adequate wage is defined as the living wage for
a standard typical family (family with two adults and two children).
We utilised WageIndicator Foundation’s data to assess our wages
against living wage benchmarks. If living wage is not defined for a
country, the stipulated minimum wage for the relevant country is
used. Internal base salary and fixed allowances are compared to the
living wage in each country to ensure compliance.
Gender pay gap
Gender pay gap is the difference of average gross monthly pay
between women and men, in relation to the average gross monthly
pay for men, presented as a percentage. Gross pay is defined as the
full-time base salary, fixed allowances, and annual bonus at target
level. Pension is not included in gross pay. The variable components
excluded from gross pay includes overtime, shift allowances and
non-guaranteed allowances.
Total remuneration ratio
Total remuneration ratio is defined as annual total remuneration
ratio of the highest paid individual to the median annual total remu -
neration for all employees (excluding the highest paid). Annual total
remuneration includes base salary, fixed allowances, variable com -
ponents, benefits, pensions and incentives. The variable compo -
nents excluded from gross pay includes overtime, shift allowances
and non-guaranteed allowances.
Senior leaders
Senior leaders refer to an employee population which are leaders on
job levels executive professional, executive manager and members
of EMT. The percentage of women among senior leaders is calcu -
lated by dividing the number of female senior leaders by the total
number of senior leaders.
Leading positions
Leaders in leading positions are defined as people leaders who have
direct reports. The metric women in leading positions refer to
females within this group.
Work-related fatalities
Work-related fatalities include all employees, supervised contractors
and independent contractors at our sites. Independent contractors are
defined as contractors involved in the construction/reconstruction of
Volvo Cars’ factories. Fatalities among contractors are only reported
for projects in which Volvo Cars is the developer.
Work-related injuries
Work-related injuries include accidents requiring professional medical
care with absence for at least one day beyond the day of the accident
and where occupational health care or equivalent considers that there
is no residual work capacity for the injured person.
Rate of work-related injuries
Rate of work-related injuries is defined as the number of work and occu-
pational accidents reported with at least one day sick leave, divided by
the total number of hours worked and multiplied by 1,000,000.
Injury rate (Lost Time Case Rate, LTCR)
Injury rate is an entity-specific disclosure related to our corporate ambi-
tion of work-related injuries. This metric is calculated based on 200,000
hours worked and applies to a defined scope of the employees included
in the central health and safety incident reporting system, representing
approximately 94 per cent of the total headcount.
Recordable work-related injuries
A work-related injury is considered recordable if it results in any of the
following: death, days away from work, restricted work or transfer to
another job, medical treatment beyond first aid, or loss of conscious -
ness; or significant injury or ill health diagnosed by a physician or other
licensed healthcare professional, even if it does not result in death,
days away from work, restricted work or job transfer, medical treat -
ment beyond first aid, or loss of consciousness.
Rate of recordable work-related injuries
The rate of recordable work-related injuries represents the number of
recordable injuries per standard base of work hours. The rate of recorda-
ble work-related injuries is calculated per 1,000,000 hours worked.
Number of days lost
Number of days lost refers to the total number of calendar days that
employees were unable to work due to work-related injuries, starting
from the day after the incident occurred.
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
188
VOLVO CAR GROUP / SUSTAINABILITY / SOCIAL INFORMATION
===== SIDA 189 =====
Workers in the value chain
Identified material impacts, risks and opportunities (IRO) Type of IRO Time horizon Value chain
WORKING CONDITIONS
Secure employment
In response to fluctuating production demands and new model launches,
temporary contracts can be used throughout the value chain. While providing
flexibility, it can lead to several negative impacts, including job insecurity.
Potential
negative
impact
Working time
Workers in the value chain are impacted by risks associated with working
excessive overtime.
Actual
negative
impact
Adequate wages
Throughout value chain, especially for suppliers in countries associated
with poor legislations to protect adequate wages, there may be a lack of
fulfilling adequate wages.
Actual
negative
impact
Social dialogue, freedom of association, collective bargaining
Operating in countries where restrictions on freedom of association and
collective bargaining are restrained or do not exist, can impact workers by
limiting their ability to negotiate for better working conditions.
Actual
negative
impact
Work-life balance
Being in a transformative and competitive industry, might be a challenge to
achieving good work-life balance, especially during development and
launch phases.
Potential
negative
impact
Health and safety
Workers in our value chain are exposed to risks in occupational health and
safety, e.g. in plants and at mine sites.
Actual
negative
impact
Identified material impacts, risks and opportunities (IRO) Type of IRO Time horizon Value chain
EQUAL TREATMENT AND OPPORTUNITIES FOR ALL
Gender equality and equal pay for work of equal value
Potential negative impact on the gender equality in the value chain,
including right to equal pay.
Potential
negative
impact
Measures against violence and harassment in the workplace
In some of the countries in which we have suppliers, sub-suppliers and
retailers, there is a heightened risk of violence and harassment in the
workplace.
Potential
negative
impact
OTHER WORK-RELATED RIGHTS
Child labour
In some countries in across our value chain, there is a risk of child labour.
Extraction of certain raw material is associated with an increased risk.
Potential
negative
impact
Forced labour
Risk for forced labour taking place within value chain, including vulner -
ability to exploitation and human trafficking, especially in countries that
have weak protection against such practices.
Potential
negative
impact
Privacy
Negative consequences for individuals, if we fail to protect the reporting
individual who file whistleblower reports.
Potential
negative
impact
Child labour
Failure of proactively discover potential child labour in our value chain and
proactively adapt to new human rights legislations pose a financial and
reputational risk.
Risk
Forced labour
Failure to proactively discover forced labour in our value chain and
proactively adapt to new human rights legislations pose a financial and
reputational risk.
Risk
We impact workers throughout our complete value chain, from the extractions of
raw material to the end-of-life treatment of our products. Protecting and improving
lives throughout our value chain is central to our sustainability strategy, which
underpins our commitment to respecting and promoting human rights.
UPSTREAM OWN OPERATIONS DOWNSTREAM
SH ORT-TERM
MID-TERM
LONG-TERM
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
189
VOLVO CAR GROUP / SUSTAINABILITY / SOCIAL INFORMATION
===== SIDA 190 =====
Workers in the value chain
Volvo Cars is a car maker with a global value chain, including many
directly contracted suppliers and sub-suppliers, as well as retailers.
In 2025, we purchased goods and services from approximately
12,000 directly contracted suppliers. Most of these supplier sites
are based in China and Europe. Our retailer network spans 89 coun -
tries with nearly 2,200 outlets. Our 33 largest markets have national
sales companies that manage local retailer relations, while distribu -
tion and service in smaller markets is handled by import companies
and our global importer offices. Most of our retailers are located in
Europe, US, Canada and China. Our global retail network employs
approximately 60,000 people.
As a result of our strategy and business model, workers in our
value chain, upstream and downstream, are impacted. This includes
suppliers and sub-suppliers of components and raw materials for
automotive production, machinery and tools, as well as providers of
services such as logistic, IT and cleaning. Our analysis concludes
that potential material negative impact exists particularly in regions
which are identified as high-risk from a human rights perspective
(more information can be found on page 144) and in the context of
certain raw materials (more information can be found on page 192).
Furthermore, high-risk operations have been identified, including
mine sites, smelters and refiners. In our downstream value chain,
blue collar workers (e.g. those working in workshops) are associated
with a heightened risk of negative impacts. Additionally, our assess -
ment concludes that the risk of child and forced labour is particu -
larly high in regions with weaker regulatory enforcement and in
areas with widespread extraction of certain raw materials, such as
cobalt, mica, tin, tungsten, tantalum and gold.
Through our due diligence process we have identified groups of
workers that are particularly vulnerable. These groups of workers
include women, migrant workers and indigenous peoples. Women
face a heightened risk of negative impacts, such as gender-based
discrimination, harassment and unequal pay, while migrant workers
are more at risk of negative impacts due to language barriers and
limited legal protections. The risks for human rights violations
affecting vulnerable groups are heightened in certain geographies,
particularly where conflict, weak governance and/or economic ine -
quality are present.
We set sustainability requirements – including human rights – on our
business partners, such as suppliers, sub-suppliers and retailers.
Combined with the due diligence we conduct, these efforts aim to
contribute to improving working conditions for workers in our value
chain.
Our policies
Our Code of Conduct for Business Partners lists the human rights
risks most relevant to our value chain, including material impacts
such as forced and child labour. Our retailers, suppliers and subcon -
tractors throughout our value chain are obliged to comply with the
Code of Conduct for Business Partners or similar principles. It does
specifically point out that Business Partners shall take particular
consideration for vulnerable groups.
The Code of Conduct for Business Partners outlines that business
partners shall provide access to effective grievance channels and
remedial mechanisms for employees and other stakeholders poten -
tially affected by its activities. This includes local communities and
vulnerable groups, enabling them to raise legitimate concerns
related to any area covered by the Code of Conduct for Business
Partners. Furthermore, it is conveyed that business partners must
take measures to prevent similar occurrences in the future, including
implementing appropriate and timely corrective actions. Lack of
cooperation, failure to address violations, or delays in taking correc -
tive action can result in claims, loss of business and ultimately ter -
mination of the business relationship with Volvo Cars.
Our purchasing agreements and contract templates for suppliers
include commitment to comply with the Code of Conduct for Busi -
ness Partners. This obligation requires suppliers to conduct human
rights due diligence and cascade these requirements to both direct
and indirect business partners.
The Volvo Cars Sustainability Requirements address specific
focus areas of sustainability within the company’s supply chain and
is part of the Volvo Cars Purchasing agreement.
Volvo Cars’ position paper on responsible sourcing applies to sup -
pliers of components containing Raw Materials of Concern (RMoC).
The purpose of the document is to convey the company’s due dili -
gence efforts relating to RMoC (more information can be found on
page 192) and outlay our high-level requirements on our suppliers in
this area.
Engaging with workers in our value chain
To understand our impact on workers in our value chain, we conduct
interviews with selected workers during on-site audits. Such selec -
tion aims at securing a broad range of perspectives, including those
from vulnerable groups. When auditing mine sites in the battery
supply chain, representatives of surrounding communities – includ -
ing indigenous people, where applicable – are also interviewed. If
non-compliance is identified, corrective action plans are established
for the suppliers to implement. We monitor the status of the correc -
tive action plans to verify that identified issues are resolved and
improvements for the affected individuals are implemented.
The audit results also serve as valuable input to our continuous
improvement of human rights due diligence, aimed at identifying,
preventing and addressing human rights impacts in our supply chain.
Furthermore, we strive to have dialogues with NGOs about responsi -
ble business practices in global supply chains. Insights from such
dialogues serve as input in our due diligence efforts, including build -
ing an understanding of how rightsholders in our value chain may be
impacted by our direct and indirect operations, and what actions we
can undertake to drive improvement. We are working to enhance our
processes for gathering input from workers and rightsholder proxies
across our upstream and downstream value chain, and integrating
these insights into our broader human rights due diligence efforts
and business decision-making.
The Head of Procurement is operationally responsible for ensur -
ing engagement with workers takes place and that the resulting
insights are factored into our business decision-making.
Grievance reporting channel
We encourage employees and other stakeholders to report illegal
activity or violation of our Code of Conduct and Code of Conduct for
Business Partners. Reports can be submitted via our Tell Us report -
ing channel, more information can be found on page 202.
Our Code of Conduct for Business Partners requires that business
partners provide access to grievance channels and remedial mecha -
nisms. We monitor compliance among suppliers through various
supplier assessments, such as on-site audits. Deviations are tracked
through corrective action plans to ensure they are being effectively
addressed.
In 2025, we started to explore how Tell Us can be supplemented
to increase the reporting opportunities for workers in our value
chain and related communities. To manage this in an effective
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
190
VOLVO CAR GROUP / SUSTAINABILITY / SOCIAL INFORMATION
===== SIDA 191 =====
manner, we are investigating different collaboration platforms. We
are also exploring ways to ensure that rightsholders, or their proxies,
are meaningfully involved throughout the grievance process.
Our actions in the supply chain
Our Procurement department is responsible for the implementation
of human rights due diligence, including compliance with our Code of
Conduct for Business Partners and wider sustainability require -
ments. Additionally, representatives from the Procurement depart -
ment are part of the cross-functional Human Rights Core team,
working to ensure consistency of our human rights due diligence
efforts in our value chain.
Human rights due diligence in our supply chain
Our due diligence activities form an ongoing, proactive and reactive
process that aims to identify and address risks and impacts on
workers in our value chain. It is continuously improved through
engagement with suppliers and other stakeholders, as well as
insights from previous due diligence efforts and emerging risks.
In line with international guidelines, we take a risk-based
approach to human rights. This means we focus on human rights at
greatest risk of the most severe negative impact on people – our
salient human rights issues (SHRIs)– which also are identified as
material impacts. A s part of this risk-based approach, we have iden -
tified a list of high-risk countries, activities and operations, along
with a set of raw materials associated with heightened risk of nega -
tive human rights impacts. They serve as key guidance when defin -
ing our annual human rights due diligence plan for our upstream and
downstream value chains. In addition, risk alerts from media, NGOs,
and stakeholders regularly lead to updates to our due diligence plan.
In addition to the annual plan – which includes enhanced due dili -
gence activities such as audits of high-risk suppliers – we perform
basic due diligence on our suppliers, regardless of risk-level, to
identify risks related to potential material impacts. Both basic and
enhanced assessments are based on the human rights due diligence
procedures (more information can be found on page 143) and aim to
identify and assess risks and impacts, while implementing actions to
cease, prevent and mitigate them.
Assessments are carried out before agreements are finalised and
periodically thereafter. Meeting our sustainability requirements is a
prerequisite for supplier selection.
Through our due diligence processes, including the operation of
our grievance mechanism, we identified various instances of
non-compliance with our Code of Conduct for Business Partners.
In response, we have implemented targeted corrective action plans
and are closely monitoring their execution to ensure that all required
measures are completed in a timely and effective manner.
Basic due diligence
Basic due diligence applies for directly contracted suppliers and
includes assessments such as the Sustainability Assessment Ques -
tionnaire (SAQ), risk screenings and on-site visits. These serve as a
base for identifying and assessing risks related to material impacts.
Areas reviewed include whether the supplier has policies and man -
agement systems covering health and safety, child and forced
labour, wages and benefits, women’s rights, non-discrimination and
harassment. If suppliers fail to meet our requirements, they must
take corrective actions, which our teams follow up on to verify com -
pliance. If risks remain, we may conduct enhanced due diligence,
such as an audit, to better understand the potential impact and plan
actions to cease, prevent or mitigate it.
Sustainability Assessment Questionnaire
The SAQ was developed by Drive Sustainability, a collaborative initi -
ative within the automotive industry. All responses are validated by
an external assessor. The SAQ response indicates the extent to
which suppliers meet our sustainability requirements and has been
mandatory in our sourcing process since 2019. Existing suppliers are
required to complete the SAQ every two years, along with improve -
ment recommendations based on their results. In 2025, 1,350 sup -
pliers (82 per cent) submitted a SAQ, of whom 96 per cent were
compliant with our requirements.
SAQ compliant suppliers 2025 2024
Directly contracted suppliers with completed SAQ 1,350 1,417
Directly contracted suppliers with completed SAQ, % 82 88
Directly contracted suppliers SAQ compliant, % 96 95
Risk screenings
Suppliers undergo screenings to identify and mitigate risks in the areas
of anti-corruption, trade sanctions and human rights. The screenings
are done prior to sourcing and during ongoing business. The screening
helps to inform need of potential additional due diligence.
Enhanced due diligence
Enhanced due diligence applies for suppliers associated with an
increased risk of material impacts:
• Directly contracted suppliers identified as high-risk in our basic
due diligence, in our human rights risk assessment or through
alerts from stakeholders.
• Suppliers delivering components containing RMoC, including the
battery supply chain.
Enhanced due diligence includes auditing, training and consultation.
It aims to provide a deeper understanding of the supplier’s responsi -
ble sourcing practices – both generally and in relation to our material
impacts – and to drive improvements where needed. It provides
extensive data on several potential material impacts, including, but
not limited to, child labour and young workers, forced labour, har -
assment and verbal/physical abuse, health and safety, access to
grievance mechanism and freedom of association. It also includes
corrective actions for suppliers to cease, prevent and mitigate iden -
tified risks and impacts. We work closely with our assigned external
organisations (more information can be found on page 139) to set
processes and well-established standards for audit execution and
verification of corrective actions, in our continuous efforts to
improve working conditions for workers in our value chain.
Audits of directly contracted suppliers
Directly contracted suppliers identified as high-risk – e.g. in the
human rights risk assessment and new suppliers located in high-risk
countries, undergo comprehensive on-site auditing according to the
Responsible Business Alliance Validated Assessment Program (RBA
VAP) or equivalent standard. These audits are carried out by accred -
ited third-party auditors over two to five days. They evaluate several
material impact areas, including labour rights (such as forced and
child labour, discrimination, working hours, wages and benefits,
humane treatment, freedom of association, harassment and worker
rights) health and safety, as well as environmental practices and
business ethics.
Since May 2021, 334 suppliers have been in scope for this audit
requirement, with 35 added in 2025. During 2025, 22 audits were
conducted out of the 35 planned. The RBA VAP audits were per -
formed in China, Mexico, India, Turkey, Malaysia, Vietnam, Philip -
pines, USA, Romania, Hungary and Sweden. Since 2018, 394 RBA
audits have been carried out on our directly contracted suppliers,
64 of these were conducted in 2025.
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
191
VOLVO CAR GROUP / SUSTAINABILITY / SOCIAL INFORMATION
===== SIDA 192 =====
In 2025, most audit findings are found in the areas of labour, health
and safety. Findings relating to labour include e.g. exceeding work -
ing hours (workers not receiving a day off according to legal require -
ments and working too many consecutive days) as well as wage
related issues. Health and safety findings mainly relate to emer -
gency preparedness e.g. lack of exit signs and emergency lights,
block of emergency exits and no fire drills performed during night
shift as well as occupational health and safety e.g. insufficient usage
of personal protection equipment and inadequate number of trained
first aid personnel.
Audit findings are summarised in a report that includes non-
conformities and a list of agreed corrective actions for supplier to
implement within set timeframes. Examples of corrective actions for
suppliers to take include revising shift arrangement procedure to
control the working time, work out reasonable and practical produc -
tion plans and update company working hours policy as well as
conduct special personal protective equipment inspections every
month and set up a process to ensure fire drills are performed dur -
ing night shifts. We monitor progress on these action plans to ensure
measures are taken. If a supplier fails to take the agreed actions,
we initiate discussions to identify root causes and explore ways to
support the supplier in meeting audit requirements and our Code of
Conduct for Business Partners. 85 per cent of corrective measures
agreed with suppliers in 2024 have been addressed. If suppliers do
not meet our requirements – such as accepting an audit or imple -
menting corrective action plans – the case is escalated according to
our process. By supporting the supplier and using our leverage, we
strive to bring the supplier into compliance with our requirements,
with contract termination as a last resort.
Raw Materials of Concern (RMoC)
We define 20 minerals, metals and bio-based materials: aluminium/
bauxite, cobalt, copper, gold, graphite (natural), lead, leather, lithium,
magnesium, manganese, mica, nickel, phosphorus, rare earth ele -
ments, rubber (natural), steel/iron, tantalum, tin, tungsten, wool as
RMoC due to their high risk of material impact on people and planet
during their extraction, processing, trade and transportation. We aim
to increase transparency, enhance traceability and mitigate environ -
mental, social and governance risks in these supply chains. To date,
we have mainly focused on battery raw materials, including cobalt,
nickel, lithium, graphite and mica as well as tin, tungsten, tantalum
and gold.
BASIC AND ENHANCED DUE DILIGENCE – A RISK-BASED APPROACH
Chain of custody of cobalt, lithium, nickel
and graphite used for the batteries and
mica used in battery isolation sheets.
1) Responsible Business Alliance (RBA) Validated Assessment Program (VAP)
2) OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk
Areas. Initiative for Responsible Mining Assurance, Standard for Responsible Mining Critical Requirements (IRMA)
3) OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk
Areas. Environmental, Social, Governance module aligned with the EU Battery Regulation
4) Responsible Minerals Assurance Process (RMAP)
Directly contracted
suppliers
BASIC DUE DILIGENCE
• Assessments to review
conformance with Code of
Conduct for Business Part -
ners and ESG performance
• Risk screenings
HIGH-RISK COUNTRIES:
• New directly contracted suppliers
located in high-risk countries
HUMAN RIGHTS RISK ASSESSMENT:
• Suppliers identified in our human
rights risk assessment.
ALERTS:
• Suppliers identified based on input
from internal and external stakeholders
as well as from basic due diligence.
ENHANCED DUE DILIGENCE
AUDIT
(RBA VAP)1)
AUDIT
(RBA VAP)1)
AUDIT
(RBA VAP)1)
PRIORITISED RAW MATERIALS OF CONCERN:
CHOKE POINT/SMELTER
VALIDATED BY A THIRD PARTY
TO BE RMAP4) CONFORMANT
CONFLICT MINERAL
REPORTING TEMPLATE
TIER-1 SUPPLIERSTIER-N SUPPLIERSRAW MATERIAL SUPPLIER
BUSINESS
CONDUCT
BUSINESS
CONDUCT
• Suppliers in the battery
supply chain ( cobalt,
lithium, nickel, graphite
and mica )
• Suppliers of components
containing conflict
minerals (3TG)
AUDIT
(OECD DDG AND ESG)3)
AUDIT
(OECD DDG AND ESG)3)
AUDIT
(OECD DDG AND IRMA)2)
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
192
VOLVO CAR GROUP / SUSTAINABILITY / SOCIAL INFORMATION
===== SIDA 193 =====
Hence, in addition to identifying high-risk suppliers based on loca -
tion and activity, suppliers of components containing RMoC are
considered high-risk in relation to our identified material impacts,
and are therefore prioritised for enhanced due diligence.
Audits of suppliers in the battery supply chain
We recognise that battery supply chains are complex, and the raw
materials used in batteries carry significant environmental, social
and governance risks, including potential material impacts. There -
fore, effective traceability is vital, from raw material extraction
through each tier of material processing. Since 2019, we collaborate
with the blockchain technology firm Circulor in tracing the battery
raw materials using blockchain. Our chain of custody program cur -
rently covers cobalt, lithium, nickel, graphite (for batteries) and mica
(for battery insulation).
We have commissioned independent audits of suppliers in our bat-
tery supply chain from SLR Consulting (previously RCS Global) since
2019. The purpose of the audits is to assess supplier conformance
and to help ensure continuous improvement of responsible sourcing
performance across our battery supply chain by monitoring the
implementation of corrective action plans. Our audit standards
include modules aligned with the EU Battery Regulation and OECD
Due Diligence Guidance for Responsible Supply Chains of Minerals
from Conflict-Affected and High-Risk Areas. Mine site audits are con-
ducted against the Initiative for Responsible Mining Assurance (IRMA)
Standard for Responsible Mining Critical Requirements or equivalent
schemes. The audit scopes allow us to gain a broad understanding of
our identified risks and potential material impacts. Furthermore, it
enables us to drive improvements where needed and meet stake -
holder expectations for due diligence in the battery supply chain.
In 2025, we conducted 23 audits in our battery supply chain.
These included four battery suppliers, three anode/cathode produc -
ers, nine refiners, one treatment unit, four mine sites and two suppli -
ers in the mica (battery insulation) supply chain. The audits were
conducted in China, Indonesia and Zimbabwe.
The 2025 audit results in the battery supply chain show that most
findings relate to deficiencies in management systems (e.g. poor
responsible sourcing policy, lack of supplier engagement and insuffi-
cient grievance mechanism). Other common findings relate to risk
management such as poor risk assessments and procedures for eval-
uating identified risks as well as labour and working conditions,
including excessive overtime, no emergency response kit easily avail-
able, lack of safety exit signs and insufficient fire drills.
We work closely with our suppliers and audit partner to ensure
that corrective measures are implemented within agreed time -
frames. To help suppliers in the battery supply chain fulfil their com -
mitments, we invite selected suppliers to participate in trainings
about the concerned audit standards. Over the past year we have
noted a positive trend among suppliers that have participated in this
training. The audit performance has proven to improve after staff
members have attended the training.
Other activities relating to the battery supply chain
In 2025, we continued to build on our work with traceability in the
battery supply chain by extending the battery passport to additional
car models beyond the Volvo EX90 which was released with a pass -
port in 2024. In December 2025, the following countries of origin
were present for models with battery passports:
Raw Materials of Concern Country of Origin
Cobalt China, Democratic Republic of the Congo
Lithium Brazil, China
Nickel Australia, China, Indonesia
Natural graphite China
Moreover, in 2025 we assigned an external party to assess our readi-
ness for the EU Battery Regulation, with a focus on the due diligence
requirements. The assessment covered areas such as processes, gov-
ernance, grievance mechanism and chain of custody. The assessment
guides us in our continuous preparations ahead of the legislation.
Reporting of Conflict Minerals
Our ambition is to source all components containing tin, tungsten,
tantalum and gold (commonly referred to as 3TG or conflict miner -
als) from supply chains where every smelter and refinery has under -
gone third-party assurance. We annually request our suppliers of
such components to disclose their due diligence practices and
provide detailed information on the smelters they use, using the
Conflict Minerals Reporting Template (CMRT) developed by the
Responsible Minerals Initiative (RMI). By tracing the origin of these
minerals and encouraging the use of smelters validated through the
Responsible Minerals Assurance Process (RMAP), we aim to
advance responsible sourcing in alignment with global standards.
While the current reporting period is still underway, in the previ -
ous full CMRT reporting period (2024), 63 per cent of 3TG smelters
and refiners in our supply chain have achieved RMAP compliance.
We continue to refine our due diligence efforts by strengthening
supplier engagement, expanding internal review processes and
addressing challenges related to traceability and geopolitical risks.
RMAP compliant smelters 2025 2024
RMAP compliant smelters in the 3TG supply chain1), % 63 63
1) Figures disclosed for the RMAP reporting period 1 October to 31 May.
Audits 2025 2024
Audits of directly contracted suppliers (RBA VAP) 42 43
Audits of new directly contracted suppliers located in
risk countries (RBA VAP) 22 25
Audits in the battery supply chain 23 28
Total number of audits 87 96
Share of addressed RBA VAP audit improvement
findings, % 85 92
VOLVO
CARSREFINER BATTERY
PRODUCERTREATMENT UNIT ANODE/CATHODE
PRODUCERMINE
BATTERY SUPPLY CHAIN
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
193
VOLVO CAR GROUP / SUSTAINABILITY / SOCIAL INFORMATION
===== SIDA 194 =====
Training
In 2025, we trained suppliers and key staff in our procurement
department on responsible sourcing practices with the overall aim
of improving the conditions for people in our supply chain and
related communities.
All procurement leaders globally participated in a human rights
training aiming at increasing the understanding of SHRIs, identified
material impacts, as well as of the due diligence process. The train -
ing also clarified the role of leaders in the human rights due diligence
work. Furthermore, all procurement leaders globally also took part
in a compliance training covering areas such as export control, trade
sanctions and anti-corruption.
Additionally, buyers received training on the updated Code of
Conduct for Business Partners and in the RBA VAP audit standard
and its content. Furthermore, buyers of batteries received training
on the requirements in the EU Battery Regulation and an extensive
e-learning about Volvo Cars RMoC was launched for employees in
Procurement, Engineering and other relevant functions with the
overall aim to increase awareness of the issues related to these
materials and driving positive change. Buyers and other relevant
staff also participated in trainings about CO 2 target setting and the
buyers in the Sustainability Champions network was given training in
topics such as circular economy, water, trade sanctions and
anti-corruption.
Suppliers in the battery supply chain received training on applica -
ble audit standards, covering several of our material impacts. Also,
selected suppliers in high-risk countries were given training on our
sustainability strategy and requirements as well as our RBA VAP
audit program.
Our actions in the retail network
Volvo Cars’ retail partners are required to follow our Retailer Stand -
ards for compliance with the Code of Conduct for Business Partners
and specific requirements on health and safety. The Retailer Stand -
ards are audited annually. Additionally, due diligence and screening
are conducted for retail partners in countries identified as high-risk
for sanctions and corruption, both prior to initiating a contract and
at regular intervals during the business relationship. In 2024, we
performed a gap analysis to further improve our human rights due
diligence, mitigate potential violations of our Code of Conduct for
Business Partners and identify areas of improvement. This resulted
in introducing more stringent Retailer Standards in 2025. Also in
2025, training on human rights and the availability of grievance
mechanisms was made available to all retailer employees globally.
Our ambitions
Our current framework does not yet include outcome-oriented
targets to assess the efficiency of our actions. Nevertheless, we
have established processes to follow up with our business partners
and ensure that agreed corrective actions are implemented in a
timely manner upon identification of non-conformities with our
requirements. The results of audits, along with evolving business
and geopolitical contexts, are pivotal in refining our methodology,
identifying priority areas, and addressing process gaps to prevent
recurrence among business partners. These measures enhance our
capacity to mitigate and prevent adverse impacts on workers
throughout the value chain.
Furthermore, we monitor the number of audits conducted and
track the closure rate of corrective action plans arising from these
audits. Our aim is to achieve continuous year-over-year improve -
ment in the number of audited sites within the value chain. We are
continuously improving our risk-based approach to human rights
due diligence, including our methods for assessing the efficiency of
our actions.
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
194
VOLVO CAR GROUP / SUSTAINABILITY / SOCIAL INFORMATION
===== SIDA 195 =====
Consumers and end-users
We impact customers by shaping their daily lives and experiences through our
products. Safety is an integral part of our purpose, to provide freedom to move in
a personal, sustainable and safe way. We stay committed to leadership in safety
and a higher quality of life for people, safeguarding personal information and
upholding data protection standards.
Identified material impacts, risks and opportunities (IRO) Type of IRO Time horizon Value chain
PRIVACY
Potential negative impact in consumer and end-user data privacy if there
are data misuses, or insufficient data security and handling practices,
including how information is collected and stored through its services.
Potential
negative
impact
A potential financial risk if consumer and end-user privacy is overlooked or
inadequately protected, which could result in costs for the company and
diminished consumer trust.
Risk
PERSONAL SAFETY
Consumers may be involved in an accident that will harm themselves or
others.
Potential
negative
impact
UPSTREAM OWN OPERATIONS DOWNSTREAM
SH ORT-TERM
MID-TERM
LONG-TERM
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
195
VOLVO CAR GROUP / SUSTAINABILITY / SOCIAL INFORMATION
===== SIDA 196 =====
Our customers
Safety is part of our DNA. For us, it is about helping to protect peo -
ple in and around our cars. Since the early 1970s, we have been col -
lecting and analysing data from over 50,000 real-world traffic acci -
dents, involving over 80,000 people in Volvo cars. This is done while
safeguarding data privacy as we see data safety as part of our safety
strategy. The information we collect inform and guide our continu -
ous work toward our zero collision vision, as part of our overall strat -
egy and business model.
We sell cars to customers through a combination of global dealer -
ships and online sales. Our product offering also includes accesso -
ries, charging solutions, spare parts and services. We have a strong
global presence, with key markets in China, Europe and Americas.
Our customers include customers who own a Volvo car or who have
signed service agreements with us, including both private and busi -
ness customers. Business customers include a variety of buyer
types, such as fleet buyers and company car buyers.
Our philosophy is to design cars to be equally safe for everyone,
regardless of gender, age, height, shape or weight, including the
youngest passengers. Child safety is one of our top priorities and
has been at the heart of what we do since 1972, when we became
the first car manufacturer to launch a rear-facing child seat. We also
care deeply about other vulnerable road users, including pedestri -
ans and cyclists.
The topics we have identified as potentially having negative
impact on customers and end-users relate to personal safety and
privacy. These potential negative impacts of private safety are
mainly linked to isolated incidents, such as accidents, while data
breaches of consumer data can affect individuals or occur on a
much wider scale. While such events would impact our customers,
it may also pose a financial risk if personal data is misused or inade -
quately handled. That is why our digital landscape and architecture
is designed to respect privacy and protect the personal data we
hold.
Safety – Customer engagement
Engagement with customers on safety
Throughout the process of designing and building a Volvo, we put
people first, making the perspective of our customers ours. We
engage with customers to enhance the safety of our cars and the
communication plays a crucial role in continuously improving them.
During the development phase, we use real-world data from our
customers. This data is gathered from actual accidents and inci -
dents to guide our safety approach. Crash tests are only as valuable
as the real-world data behind them. We turn this data and its
insights into new safety innovations, helping cars better understand
and respond to the world around them. We carefully analyse the
insights we collect from our customer engagement, and they guide
how we continuously improve customer satisfaction and safety
aspects, for example, with the new multi -adaptive safety belt,
further described below.
During the car ownership stage, we interact with the customers
on safety aspects through various touchpoints. Customers can con -
tact us around safety aspects through various channels such as cus -
tomer care, the Volvo app and the vulnerability reporting line. How -
ever, the communication is not limited to only customer-initiated
communication. Proactive communication, such as safety updates,
service reminders and other valuable information is provided to cus -
tomers and demonstrate our commitment to safety. Despite our
extensive quality control programmes, safety issues may still occur
and affect customer safety. In these rare cases, our quality function
is involved to investigate and if needed make a recall, to have the
issue corrected even if there are no reports of incidents.
We believe that safety learnings should be shared, but privacy
must always be protected. We never share our crash database, only
the life-saving insights we have gained from it. No identifiable infor -
mation about those involved is ever disclosed. We use this data for
safety research only, in full compliance with data protection laws. In
conclusion, all these insights in customer experience can guide us
further in our safety work, helping us prioritise areas that need
improvement.
Customers’ grievance
Furthermore, our grievance channel, Tell Us, is available to all cus -
tomers and end-users for reporting cases of suspected non-compli -
ance. Actions taken to provide or enable remedy for actual material
impacts on our customers are managed as part of our remediation
process. More information on reporting channels and remediation
can be found on page 202. During 2025, we received no alerts of
non-compliance with international human rights principles or severe
human rights issues and incidents related to customers and end-
users.
Safety – Our guiding principles
Five guiding principles to safety design
Safety is at the core of our purpose, culture and vision. In protecting
what is most important to our customers, we always strive to
develop our cars with safe, intelligent technology designed around
the human being. While not a standalone policy, our Guiding Princi -
ples for Safety serve as a foundational framework that steers our
daily operations and safety initiatives. These principles work in
conjunction with our Code of Conduct for Business Partners, more
information can be found on page 142. We apply five guiding princi -
ples to design and build cars safe for our customers and those
around the car. These principles are applied in our operation and are
embedded in our requirements with business partners to safeguard
safety in our products. Safety is always in focus and part of our
strategy, and EMT is responsible for making sure safety principles
are applied throughout the organisation.
Safety-first
For us, safety should not be an add-on or a choice. Drawing on dec -
ades of real-world accident research, we use our extensive safety
data and expertise to guide fundamental design principles. The
benefits of this research are built into every detail of our cars from
the earliest stages of development.
Equal safety for all
We apply our safety principles to everyone, regardless of gender,
age, height or weight. Over the years, these principles have led to
innovations such as WHIPS (Whiplash Injury Protection System),
SIPS (Side Impact Protection System), the safety belt and numerous
child safety features.
The Volvo Cars Safety standard – lead and exceed
industry standards
Based on extensive data and knowledge from real-world accidents,
we developed the Volvo Cars Safety Standard to help protect peo -
ple in real situations, often going beyond standardised test proce -
dures, legislation, and rating metrics. We test and validate our cars in
a wide range of test scenarios, for helping to prevent collisions and if
a collision occurs, how to reduce injury risk. In addition, we use
advanced human body models – virtual representations of people of
different gender, age and body shapes – to better reflect real-world
diversity in our development process.
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
196
VOLVO CAR GROUP / SUSTAINABILITY / SOCIAL INFORMATION
===== SIDA 197 =====
Our system safety process for using software and electronics in
advanced safety-related functionalities are based both on ISO
26262 (Road vehicles - Functional safety) and ISO 21448 (Safety of
the intended functionality).
Life-centric innovation
Cars are driven by people living busy lives and providing them with a
safe space is the basis for our Safe Space technology. Through inno -
vative technology, we aim to improve safety for everyone, both
inside and outside our cars. Our next generation cars feature our
sharpest set of sensors ever. Combined with core computing and our
Driver Understanding System, we can further help improve collision
avoidance and driver assist functions. We have also introduced
occupant sensors using interior radars to help prevent children or
pets from being left unattended.
All for safety
Safety knowledge and innovation is far too important to keep to our-
selves. We have a long-standing tradition of sharing our research with
the automotive industry making it freely available on our website. Our
commitment to safety is part of a collective responsibility that bene -
fits all road users.
Safety – Our actions
Safety beyond the stars
We support our vision of zero collisions by investing in various activi -
ties and striving to exceed standard safety requirements. Our safety
actions combine proactive accident prevention, research and col -
laborations. This is managed by several functions within Volvo Cars
with different roles and responsibilities within safety, to cater for
R&D activities, construction and safety testing.
Our Product Development Process
The Volvo Cars Product Development Process structures the evalu -
ation of product development and compliance with our Volvo Cars
Safety Standard. Safety status is reported and monitored at pro -
gramme gates and must be approved before car programmes are
allowed to proceed.
During product development, we use advanced computer simula -
tion to evaluate safety status and improve our designs. From pro -
ducing prototypes to starting production of a completely new car
on a new platform, we conduct more than one hundred complete
vehicle crash tests and numerous system and subsystem tests in our
crash lab to evaluate safety performance.
Safety research
Since 1970, our Traffic Accident Research Team has gathered com -
prehensive data from real-world accidents. These accidents help us
research more complex factors behind accidents. Our long-term
focus on safety research, grounded in real-world data, has proven to
be successful – leading to several safety world-first safety innova -
tions that have saved countless lives. Additionally, we collaborate
with academia and insurance institutes to help drive research in the
field of automotive safety. In 2025, we unveiled the new multi-adap -
tive safety belt that is included in our EX60. This is a major safety
improvement designed to better protect people by adapting to traf -
fic variations and the person using it, thanks to real-time data from
the car’s advanced sensors. The capabilities are designed to contin -
uously improve as we gather more data and insights, improving the
car’s understanding of occupants, new scenarios and response
strategies.
Awards and safety ratings
Volvo Cars has been a leader in automotive safety for decades. In
addition to the benefits of our real-world research, many of our
models have earned top ratings in official safety assessments such
as Euro NCAP, IIHS and US NCAP. Many of our innovations have
become industry-standard features. The Volvo EX90 earned a maxi-
mum five-star rating in the most recent EU NCAP safety testing and
scored particularly high both in adult and child protection catego -
ries. We were honoured by the World Car Awards as “World Luxury
Car”, recognising our advanced safety technology. In 2025, we
received the Sandy Myhre Award by Women’s Worldwide Car of
the Year for being the most committed car brand for women –
a recognition partly driven by our long-standing commitment to
safety and our pioneering work in female crash test dummies.
Safety – Our ambitions
Volvo Cars’ safety vision is to prevent anyone from being killed or
seriously injured in a new Volvo car, aiming for a future with zero col-
lisions. However, there is no specific, measurable outcome-oriented
ambitions derived from safety objectives. We constantly investigate
real-world accidents with personal injuries to learn more about their
origin and how we can help prevent them.
Quality – Customer engagement
We value our customers’ opinions and actively seek their feedback.
The voice of the customer gives important insights to our quality
work and shapes our customer-focused way of working. By interact -
ing with customers at various touchpoints during the customer jour -
ney, we collect valuable insights on customer satisfaction – covering
both product issues (car and app) and difficult-to-use aspects. We
also ask customers about their satisfaction with sales and service
experiences. We engage with customers mainly through channels
like surveys, customer care, social media and our dealer network. To
ensure customers’ trust, we inform on the purpose and objective
from the data we collect as well as our Data Protection Policy. The
customer data we receive is carefully analysed and guides us to con -
tinuously develop customer satisfaction. Our customer -focused way
of working is described by the quality wheel. Closing the loop is the
final step of the voice of the customer cycle, and its efficiency is
ensured by making iterative improvements.
Quality – Our approach
Our quality work is driven by customer satisfaction. For us, quality is
not just about the product – it is about the entire customer experi -
ence and journey. Our definition of quality encompasses the car and
the app as well as the sales and service experience. Quality is inte -
grated into our entire business and affects all our employees. We
always act in the best interests of our customers, ensuring high
quality at every step to deliver customer satisfaction. Our approach
to quality is defined in our Commitment to Quality and in our Code
of Conduct.
We collaborate across organisational boundaries and in a global
quality governance structure. By integrating actions across various
areas, we can swiftly address customer issues and enhance satis -
faction, delivering a seamless and comprehensive customer
experience.
We comply with relevant regulatory requirements to which our
products and services need to conform. Any potential quality issues
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
197
VOLVO CAR GROUP / SUSTAINABILITY / SOCIAL INFORMATION
===== SIDA 198 =====
must be addressed without delay, ensuring strict quality assurance
at every stage and supported by continuous learning.
We follow globally recognised industry standards such as the
Automotive Industry Action Group (AIAG) standards. This helps
strengthen our position as a quality-driven car maker and our part -
nerships throughout the supply chain. In addition, by integrating
Advanced Product Quality Planning (APQP) into our quality pro -
cesses, we improve supplier engagement, reduce launch risks and
drive continuous improvement in a structured manner, ensuring
product quality and customer satisfaction.
By conducting thorough quality risk assessments and minimising
risk exposure through internal audits of our quality management
system, we ensure the highest standards of quality and reliability.
As an ISO 9001 certified company, we adhere to recognised stand -
ards for quality management and apply a customer-focused
approach, with annual external audits performed by a third-party
agency.
Voice of the
customer
Built-in
quality
THE INPUT
Customer
satisfaction
Early
detection &
resolution
THE OUTPUT
Continuous learning
Outflow prevention
Quality – Our actions
With a dedicated customer-focused work throughout the entire
company, we strengthen the quality aspect and increase our cus -
tomers’ satisfaction. Our way of working with quality is an iterative
process placing the customer in focus. We apply a proactive and
structured way of working with quality by following five steps that
results in improved customer satisfaction.
1. Voice of the customer – We actively listen to feedback across car,
app, sales and service to guide decisions that enhance the
customer experience.
2. Built-in quality – Quality is designed into every step, ensuring a
seamless and premium experience for customers.
3. Outflow prevention – We validate before launch to prevent issues
and ensure standards are met, including the customer’s perceived
expectations of quality.
4. Early detection and resolution – If problems occur, we respond
quickly and effectively to minimise impact on customer experi -
ence.
5. Continuous learning – We learn from every issue to improve how
we work internally, so the result is a better and more seamless
customer journey.
Quality – Our ambitions
During the reporting year, we have united around a company-wide
quality ambition: to be number one in Customer Satisfaction by
2029. This ambition resonates strongly with all employees, fosters a
culture of customer centricity, and ensures that our customers
remain our number one focus in everything we do.
We measure progress towards Customer Satisfaction number one
through a consolidated global index that captures satisfaction
across every stage of the customer journey: car, app, sales and
service – based on leading external studies such as J.D. Power
covering the majority of our sales volume.
To complement this, we set targets and monitor progress on
customers’ satisfaction with the car, app, sales and service through
internal studies that correlates with the external ones. These are
conducted on a more frequent basis giving us early indications of
satisfaction levels and the opportunity to act quickly if we detect a
trend break in the satisfaction curve. This is our operational meas -
urement system which operates at a more detailed level. We link
annual ambitions to it, and its results are regularly and carefully
monitored. Ambitions are set from an outside-in perspective to
ensure competitiveness against global benchmarks. Our internal
surveys are conducted continuously, generating results, that provide
us with insights on customer satisfaction.
Our cross-functional governance structure ensures accountabil -
ity and continuous improvement. Monthly executive and functional
forums review performance, guide priorities, and drive actions to
achieve our ambition. The Quality and Customer Satisfaction
Executive Meeting, including EMT members, meets with the purpose
to provide guidance and govern, but also to review progress and
discuss actions for continuously improvement. In the Quality and
Customer Satisfaction Matters Meeting, EMTe meets with the aim of
focusing on achieving ambitions.
Looking ahead, we are investing in advanced analytics, digital
tools and proactive engagement to anticipate customer needs and
deliver experiences that set new standards for the industry.
Privacy
Our work on data protection and privacy follows our general
approach to managing both the impacts on individuals and the
potential risks to Volvo Cars. More information on our policies and
the actions we take to manage these impacts and risks can be found
on page 203.
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
198
VOLVO CAR GROUP / SUSTAINABILITY / SOCIAL INFORMATION
===== SIDA 199 =====
Governance information
Business conduct
PAGE 200–205
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
199
VOLVO CAR GROUP / SUSTAINABILITY / GOVERNANCE INFORMATION
===== SIDA 200 =====
Business conduct
We conduct business responsibly and foster a strong ethical culture. Acting ethically
is not only the right thing to do – it is the foundation for creating sustainable and long
lasting value. Guidance from our Code of Conduct together with our culture and
leadership principles, shapes how we work as one team and how leaders lead every
day to create long-term value.
Identified material impacts, risks and opportunities (IRO) Type of IRO Time horizon Value chain
CORPORATE CULTURE
Failure to act in line with our corporate culture and to adequately address
unwanted behaviours can result in regulatory violations, reduced morale.
Potential
negative
impact
PROTECTION OF WHISTLEBLOWERS
Failing to protect whistleblowers could have serious consequences for the
individuals involved and may discourage others from speaking up, allowing
potential misconduct to go undetected.
Potential
negative
impact
POLITICAL ENGAGEMENT AND LOBBYING ACTIVITIES
By lobbying and working for electrification of mobility and infrastructure
development, among other things, Volvo Cars may have a positive impact
on societal development.
Actual
positive
impact
MANAGEMENT OF RELATIONSHIPS WITH SUPPLIERS
Positive impact on people and the environment by upholding high ethical
standards wherever we conduct business and by setting requirements on
environmental and social aspects in purchasing and procurement.
Actual
positive
impact
Extended payment terms or delayed payments can affect supplier’s
financial situation and strain supplier relationships.
Actual
negative
impact
CORRUPTION AND BRIBERY
Business operations in high-risk areas may contribute to an increased risk
of incidents and corruption.
Potential
negative
impact
Risks of unethical behaviour may arise from operating in a global and com -
plex value chain, particularly when conducting business in high-risk coun -
tries with elevated corruption levels and weak regulatory enforcement.
Risk
UPSTREAM OWN OPERATIONS DOWNSTREAM
SH ORT-TERM
MID-TERM
LONG-TERM
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
200
VOLVO CAR GROUP / SUSTAINABILITY / GOVERNANCE INFORMATION
===== SIDA 201 =====
Business conduct governance
The Compliance & Ethics (C&E) Office supports Volvo Cars to con-
duct our business responsibly, ethically and in accordance with all
relevant laws and regulations and our Code of Conduct. The C&E
Office is led by the Global Head of C&E, who serves as the Chief
Compliance & Ethics Officer for Volvo Cars. The Global Head of C&E
reports to the General Counsel and Chief Corporate Affairs Officer
and, to ensure independence, also has direct access to, and regu -
larly reports to, the Audit Committee. The Global Head of C&E also
ensures that compliance training is provided to the Board of Direc -
tors. Annual compliance reporting is submitted to the Board of
Directors, including the number of compliance cases and action
taken. Cases that may cause severe impact to the company are
highlighted for special attention.
The Global Head of C&E reports on a quarterly basis, or more fre -
quently if necessary, to the Compliance Committee, which consists
of EMT and Head of Global Audit Office (GAO). This reporting
includes implementation status and effectiveness of the C&E Pro -
gram, key compliance risks, compliance cases and investigations,
and progress on implementation and corrective actions plans. In
addition, a China Compliance Committee has been established to
serve as a governance body supporting effective implementation,
oversight, and continuous improvement of the C&E Program in
China.
The C&E Office is comprised o f compliance officers, specialists
and lawyer s responsible for all C&E risk areas. The teams
are supported by a compliance champions network, which provides
coordination, monitoring and support across the company. Regional
C&E roles oversee the regional implementation and management of
the C&E Program. The Data Protection Officer (DPO) is the desig -
nated contact for all inquiries related to our data protection prac -
tices. More information about our corporate governance can be
found on page 43 and 140.
Compliance & Ethics Program
Our C&E Office supports responsible and ethical operations by
developing and implementing the C&E Program. The program covers
the compliance risk areas anti-corruption and bribery (including
conflicts of interest), trade sanctions and export control, data pro -
tection (including privacy and AI compliance governance), human
rights, and competition law. The program demonstrates our
commitment to ethical conduct, legal compliance and responsible
business practices. Built on globally recognised principles, the pro -
gram is structured around ten program elements and is continuously
reviewed, updated and strengthened to address emerging risks and
evolving stakeholder expectations.
Our policies related to business conduct
and corporate culture
Our Code of Conduct reflects our values and culture, guiding how
we achieve results in an ethical and responsible way. Our Code of
Conduct and its twelve Corporate Policies reflect our dedication to
responsible business practices. More information on the governance
of the Code of Conduct and Corporate Policies can be found on
page 142.
Key policies in relation to Compliance & Ethics program
Out of the twelve Corporate Policies, the following six key policies
form a core component of our C&E Program and address our identi -
fied impacts and risks related to corporate culture, including corrup -
tion and bribery and how we protect whistleblowers. They reflect
our dedication to responsible business practices and are further
operationalised through corporate directives and guidelines, which
provide clear and practical instructions for day-to-day implementa -
tion. All policies and supporting materials are accessible internally
through our intranet.
• The Anti-Corruption Policy outlines our zero-tolerance stance on
corruption and provides guidance on handling gifts and hospital -
ity, lobbying and relationships with government officials.
• The Conflict of Interest Policy reinforces our commitment to act
with integrity and safeguard the company’s reputation at all
times.
COMPLIANCE & ETHICS – TEN PROGRAM ELEMENTS
1. TONE FROM THE TOP
AND CULTURE
2. COMPLIANCE & ETHICS
ORGANISATION
3. COMPLIANCE &
ETHICS FRAMEWORK
4. TRAINING,
AWARENESS AND
COMMUNICATION
5. RISK ASSESSMENT
Our leadership sets a
strong ethical tone and
actively fosters a culture of
integrity, accountability,
and transparency through -
out the organisation.
A dedicated function
ensures effective govern -
ance and oversees program
implementation, supported
by cross- functional collab -
oration and senior leader -
ship engagement.
Our framework includes
clear policies, directives,
procedures, and controls
designed to prevent,
detect, and respond to
compliance risks.
Regular training and tar -
geted communications
ensure employees and
business partners under -
stand our standards and
how to apply them in
practice.
We conduct regular com -
pliance risk assessments to
identify, evaluate, and pri -
oritise risks, ensuring that
our program is tailored to
address key areas of
exposure.
6. DUE DILIGENCE
& DUE CARE
7. MONITORING
AND AUDIT
8. INTERNAL REPORTING
AND INVESTIGATIONS
9. ENFORCEMENT,
DISCIPLINARY ACTIONS
AND INCENTIVES
10. PROGRAM
ASSESSMENT AND CON -
TINUOUS IMPROVEMENT
Risk-based due diligence is
conducted on third parties
and business partners, with
ongoing due care applied
to maintain ethical stand -
ards and compliance over
time.
Continuous monitoring and
periodic audits assess the
effectiveness of our con -
trols and ensure adherence
to compliance require -
ments.
Confidential channels are
available for employees
and stakeholders to report
concerns. All reports are
promptly reviewed and, as
appropriate, addressed
through fair and independ -
ent investigations.
We enforce our standards
consistently, maintaining a
zero tolerance for retalia -
tion, applying disciplinary
measures for violations and
encouraging ethical behav -
iour through positive rein -
forcement .
We regularly review and
enhance our program to
adapt to evolving risks,
stakeholder expectations,
and regulatory develop -
ments.
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
201
VOLVO CAR GROUP / SUSTAINABILITY / GOVERNANCE INFORMATION
===== SIDA 202 =====
• The Data Protection Policy summarises the principles governing
our processing of personal data.
• The Competition Law Policy includes requirements related to
situations that could impair fair competition.
• The Trade Sanctions and Export Control Policy outlines the main
principles and corresponding requirements for managing trade
sanctions and export control risks.
• The Internal Reporting Policy emphasises Volvo Cars’ zero-
tolerance stance against retaliation against anyone who raises
concerns in good faith.
Our goals for ethical and responsible business are further cascaded
to our business partners through our Code of Conduct for Business
Partners.
Corporate culture
Culture is a shared responsibility for everyone at Volvo Cars. In order
to fulfil our strategy of long-term value creation we need to think,
act and lead differently together. Our culture principles: we keep it
simple, we stay curious, and we are all-in, guide how we work as one
team, while we keep learning and reduce complexity. It shapes how
we fulfil our commitment to ethical and responsible business con -
duct, and how we foster openness by encouraging employees to
raise concerns through established channels, including our annual
engagement survey. Insights from these interactions drives continu -
ous improvement. Our ethical standards extend across our value
chain through our Code of Conduct for Business Partners.
Leadership culture
Leadership is not built in frameworks or presentations, it is built in
conversations, choices and everyday actions. Our leadership princi-
ples: create clarity, lead with courage and take full ownership guides
how leaders lead every day. It shapes how they act responsibly, step
forward in uncertainty, and communicate clearly, to help create
long-term value and fulfil our commitment to ethical and responsi -
ble business conduct.
Speak Up culture
We encourage employees to speak up and address any unaccept -
able behaviour or improper demands. Employees are expected to
promptly raise compliance and ethical concerns, including any
observed or suspected misconduct. We also encourage employees
to report concerns to their line manager, local People Experience
Cases reported to the C&E Office 2025 2024
Total number of cases reported to the C&E Office 274 227
of which transferred to other departments 151 117
of which remained at C&E Office 123 110
of which lack sufficient information 47 53
of which were substantiated 24 29
substantiated cases with disciplinary actions 10 22
substantiated cases related to corruption 4 9
Compliance & Ethics program risk
management
Working with the C&E Program, Volvo Cars adopts a risk-based
approach to identify, assess, prioritise, and manage risks across
anti-corruption, competition law, human rights, trade sanctions and
export control, and data, privacy & AI compliance governance.
Risk assessments are conducted and documented in accordance
with the C&E framework. Depending on the maturity, prioritisation
and nature of each risk area, we apply different assessment meth -
odologies based on what is most appropriate at the time of review.
Continuous monitoring is carried out to address risks identified
during the assessment process, in investigations or in the handling
of matters – driving ongoing improvements to compliance controls
and processes.
The key compliance risks, along with corresponding mitigation
measures, are presented in the annual C&E Risk Report. The report
is submitted to the Compliance Committee and the most significant
compliance risks are also reported to the Board of Directors.
To ensure alignment with broader enterprise risk governance, the
key compliance risks are also reported to the ERM function. This
supports enterprise-wide risk visibility, strategic decision-making
and enables executive management to implement timely and appro -
priate countermeasures. Further details on the ERM framework can
be found in the Enterprise Risk Management section on page 37.
Compliance & Ethics risk areas
Anti-corruption including Conflict of interest
Our commitment to responsible business is anchored in strong com -
pany values and a culture of integrity. We believe that transparency,
fairness and ethical conduct are fundamental to a sustainable econ -
omy and a healthy society. Dishonest business practices contribute
to inequality, weaken trust in systems of governance and hinder
function, another senior manager, the Legal department or the C&E
Office. Additionally, employees can raise concerns or seek guidance
confidentially via our dedicated whistleblowing channel, the Tell Us
reporting line. Tell Us is operated by an independent third-party
provider in accordance with the EU Whistleblowing Directive. We are
committed to open communication, and, where permitted by local
law, individuals also have the option to report concerns anony -
mously.
External stakeholders, such as customers and business partners
across our value chain, can also use the Tell Us reporting line to raise
concerns and submit reports. Rightsholders (such as indigenous
people) or organisations representing them can use Tell Us to anony-
mously report potential human rights abuses. Tell Us is available
globally, in over 75 languages.
Protection of whistleblowers
We are committed to fostering a culture where whistleblowers feel
confident and empowered to ask questions and raise concerns with -
out fear of retaliation. This is key to preventing issues and ensuring
they are addressed appropriately when they arise. We take all
reports seriously and are committed to maintaining confidentiality
throughout the investigation process. Volvo Cars does not tolerate
any form of retaliation against individuals who report their concerns
in good faith. Failing to protect whistleblowers could have serious
consequences for the individuals involved and may discourage
others from speaking up, allowing potential misconduct to go
undetected.
Investigations and disciplinary action
All reports made via the Tell Us reporting line are received by the
Compliance Investigations teams in the C&E Office. The team
consists of a few highly qualified professionals and treat all the
information they receive confidentially and handle reports promptly,
independently and objectively, in accordance with our compliance
investigation procedure and relevant regulatory requirements.
Additionally, in 2025 we developed a remediation process to provide
a structured approach for delivering or contributing to remedies
when we have directly or indirectly caused or contributed to
material negative impacts within the human rights area. The table
provides a summary of cases reported to the C&E Office in 2025.
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
202
VOLVO CAR GROUP / SUSTAINABILITY / GOVERNANCE INFORMATION
===== SIDA 203 =====
economic development. It can also compromise democratic systems
and expose Volvo Cars to legal, financial and reputational risks.
Therefore, we uphold a strict zero-tolerance policy toward corrup -
tion in all its forms and actively promote a culture of honesty,
accountability and ethical behaviour across our operations and
value chain.
Conflicts of interest may affect our ability to make objective and
transparent decisions, potentially impacting Volvo Cars’ reputation
and performance. We are committed to acting with integrity and
safeguarding our reputation at all times. Employees are expected to
ensure that all professional decisions related to our business are
made in the best interests of the company. Our Conflict of Interest
Policy sets out the requirements and provides guidance to help
employees identify, disclose and appropriately manage potential
conflicts of interest.
Competition law
Volvo Cars is committed to fair competition and compliance with
applicable competition laws. Employees who engage with business
partners or competitors in the course of their work are expected to
follow the principles outlined in our Competition Law Policy and
related directives. These provide clear guidance and targeted train -
ing to help employees understand their obligations and act appro -
priately when interacting with business partners and competitors.
Human rights
We seek to safeguard human rights throughout our value chain. Our
human rights compliance program aims to prevent, identify and
mitigate adverse impacts on human rights. The C&E Office supports
our whole value chain with guidelines and processes, risk assess -
ments, trainings and monitoring. More information about our human
rights due diligence can be found on page 143 and 191.
Trade sanctions and export control compliance
Volvo Cars is committed to comply with all applicable trade sanc -
tions and export control laws and regulations and maintains policies
designed and reasonably expected to continue to ensure compli -
ance with those laws and regulations. These policies summarise
applicable principles and provide specific instructions and guidance
regarding compliance, including risk-based due diligence of third
parties and contractual safeguards, and are periodically reviewed
and updated to enhance their effectiveness.
Data, privacy & AI compliance governance
At Volvo Cars, protecting personal data is not just a legal requirement
– it is a core element of our responsible business conduct, which in
turn is a key part of how we build trust with our stakeholders. We
apply our Data Protection Policy, directives, controls and training to
uphold the integrity, security and transparency of personal data
belonging to our stakeholders. These measures are overseen by ded-
icated governance structures that monitor compliance, mitigate risks
and drive continuous improvement across our value chain.
In the same way, we recognise the importance of responsible
innovation in emerging technologies such as AI. Our AI compliance
governance framework embeds ethical principles, compliance
requirements and accountability to ensure our AI systems promote
explainable, personal, sustainable and safe use of AI while minimis -
ing potential harm. Through this commitment, we reinforce our role
as a responsible and trusted partner.
We are committed to transparency and accountability in the way
we manage personal data. Our privacy notices explain the types of
information we collect, the purposes for which it is used, and the
period for which it is retained.
Cybersecurity
At Volvo Cars, cybersecurity is a cornerstone of our commitment to
safety, innovation and trust. As our cars and operations become
increasingly connected and data-driven, protecting our digital
assets, systems and people from cyber threats is more critical than
ever.
To safeguard the company against internal and external threats, our
international team of cybersecurity specialists operates 24/7 across
geographies and disciplines. We continuously monitor, assess and
respond to evolving threats and risks, to ensure that our digital
infrastructure remains resilient, secure and aligned with global best
practices.
We believe that cybersecurity is not just a technical challenge, it is
a cultural one. Through targeted training programmes, simulations
and continuous communication, we empower our workforce to rec -
ognise and respond to potential threats. Guided by our cybersecu -
rity framework, these initiatives foster a proactive security mindset
and help embed cybersecurity into everyday decision-making
across the organisation.
Cybersecurity is integrated into our development lifecycle, ensur -
ing that our cars and digital services are designed with security in
mind from the outset. This includes secure software development
practices, rigorous testing, and compliance with industry standards
and regulations.
We recognise the importance of collaborative cybersecurity
across our supply chain. As part of our sourcing and procurement
processes, we require our business partners to adhere to stringent
best industry cybersecurity standards and practices. These require -
ments are designed with a balanced, risk-based approach to ensure
that our extended ecosystem is resilient to disruptions. Regular
assessments and dialogue with suppliers help us identify vulnerabil -
ities early and promote continuous improvement.
DATA PRIVACY
CUSTOMERS EMPLOYEES VALUE CHAIN
As digitalisation continues to transform our
industry, we aim to combine data-driven innova -
tion with respect for the fundamental right to
privacy. Data helps us better understand con -
sumer needs, enhance services, and develop
new products. At the same time, we remain
committed in safeguarding personal information
and upholding data protection standards.
Our commitment to protecting personal data
extends to our employees. We collect and pro -
cess employee information with care and in
compliance with applicable privacy, data pro -
tection, and labour laws.
Our Code of Conduct for Business Partners
requires suppliers to comply with relevant data
protection legislation. (More information on our
Code of Conduct for Business Partners can be
found on page 142).
OVERVIEW 3
MARKET 15
OUR STRATEGIC FRAMEWORK 18
DIRECTORS’ REPORT 29
RISK 36
CORPORATE GOVERNANCE 42
FINANCIALS 61
SUSTAINABILITY
GENERAL INFORMATION
ENVIRONMENTAL INFORMATION
EU Taxonomy Report
Climate change
Pollution
Water
Biodiversity and ecosystems
Resource use and circular economy
SOCIAL INFORMATION
Own workforce
Workers in the value chain
Consumers and end-users
GOVERNANCE INFORMATION
Business conduct
OTHER INFORMATION
THE SHARE 220
OUR HERITAGE 222
203
VOLVO CAR GROUP / SUSTAINABILITY / GOVERNANCE INFORMATION
===== SIDA 204 =====