Fair Money & Economic Opportunity

Volkswagen Financial Services (VWFS) is exposed to compliance risks including fair lending practices, mis-selling, and repossession/foreclosure practices, which have a very low impact on its credit rating.

VWFS generally upstreams its entire annual profit to its parent, Volkswagen AG. VWFS instructs approximately 150 commercial trainees at Volkswagen AG annually on managing personal finances and was a partner in the 'My Finance Coach' initiative starting in 2013, making instruction materials available for free download. VW Bank has branches in eight European countries. McDonald Volkswagen, a dealership, aims to provide 'straightforward pricing' and make the car buying process 'clear and helpful'. The average customer debt-to-income ratio for VWFS is not provided, but around 10% of adults in Germany are over-indebted, with debts to telecommunication companies being the most common for 18-24 year olds.

Fair Pay & Worker Respect

The CEO to median employee pay ratio for the Volkswagen Group was around 195:1.

In the European Economic Area (EEA), 92.0% of employees are covered by collective bargaining agreements. The Volkswagen Group's Total Recordable Incident Rate (TRIR) was 11.7 in the reporting year. The unadjusted Gender Pay Gap at the Volkswagen Group was 13 percent, meaning women earn 87% of men's pay. The employee opinion survey in 2022 achieved a mood index of 82.4. The staff turnover rate in 2024 was 6.1%. In 2024, 257 cases related to discrimination and harassment were identified, with 22 confirmed as serious regulatory violations, and 32 employees were dismissed for breaches in this area. Brazilian labor prosecutors charged Volkswagen's local unit with subjecting farm workers to conditions akin to slavery between 1974 and 1986, seeking R$165 million in damages. The Volkswagen Group had 22,945 employees on temporary contracts.

Fair Trade & Ethical Sourcing

Volkswagen Group had zero substantiated forced or child labor incidents in the last three years

, with a grievance case on forced labor being closed after auditors did not confirm alleged supply chain connections , and no findings of denial of rights in Mexico. The Code of Conduct for Business Partners is a mandatory component of contracts with direct suppliers , and the company requires its suppliers to pass these requirements on to their direct business partners. The Responsible Raw Materials Management System covers 18 priority raw materials , and nearly 63% of the smelters identified in the supply chain were RMAP-conformant as of the end of 2023.

Honest & Fair Business

Volkswagen AG reached a USD 49 million settlement with the US SEC in 2024 for alleged misstatements and omissions related to bond and asset-backed securities.

The company operates a Group-wide whistleblower system that received 3,555 reports in 2024. This system offers anonymous reporting, multiple channels including a 24/7 international telephone hotline, an app, an online platform, and external ombudsmen. It is applicable throughout the entire value chain, covering human rights and environmental violations in the supply chain, and guarantees protection from retaliation. Volkswagen has not reported any financial restatements in its 2024 annual report. The company was downgraded and excluded from various ESG indices due to the 2015 Dieselgate scandal. MSCI assigned a 'red flag' in November 2022 due to forced labor allegations in Xinjiang, later raising it to 'yellow' and 'concluded' in December 2024 after the equity sale of SVW Xinjiang. Volkswagen has a strict zero-tolerance anti-corruption policy, anchored in its Code of Conduct and Anti-Corruption Guideline, which prohibits facilitation payments and requires transparent documentation for sponsorships and donations. The company conducts risk-based integrity checks of business partners before and during relationships, including continuous monitoring. External audits are conducted on the implementation and effectiveness of prevention measures for Group companies with high risk exposure, and independent external third parties are commissioned for investigations in individual cases.

Kind to Animals

Volkswagen has a comprehensive no-testing policy, stating it will no longer conduct any tests on animals unless legally required, and that such tests are "unnecessary and unacceptable" and contradict their ethical standards.

German ethics standards will be binding on all future research projects worldwide. This implies that alternative methods are in routine use for all internal safety screens not mandated by law. While Volkswagen previously commissioned tests involving 10 monkeys in 2014 and 10 Java monkeys in 2015, its current policy implies a current annual animal testing volume of less than 100 animals, exclusively where mandated. In wildlife conservation, Volkswagen of America donated $1.25 million in 2019 and $100,000 in 2022 to conservation initiatives, resulting in the protection of 1,500 acres adjacent to the Cherokee National Forest for species such as the black bear and Indiana bat. By 2020, over 40 acres of bio-diverse wetland were restored, creating habitats for nearly 200 bird species and various plant and animal species. The Volkswagen Group plans to establish a Biodiversity Fund with an annual allocation of up to €25 million for external projects starting in 2025.

No War, No Weapons

Volkswagen Group's 2023 Responsible Raw Materials Report details its commitment to adhering to the UN Guiding Principles on Business and Human Rights, with its Raw Materials Due Diligence Management System (RMDDMS) and Responsible Supply Chain (ReSC) System based on global normative guidelines, including the OECD Due Diligence Guidance.

For conflict minerals, the company requires suppliers of tin, tungsten, tantalum, and gold (3TG) to report annually using the Conflict Minerals Reporting Template (CMRT) and expects compliance with the Responsible Minerals Initiative (RMI) and Responsible Minerals Assurance Process (RMAP). The report indicates that 60% of materials are verified conflict-free with third-party certification. Regarding sales to embargoed regimes, Volkswagen's contractual terms explicitly prohibit the transfer of items, intellectual property rights, and trade secrets to or for use in Russia and Belarus, effective from September 30, 2023. Contractors are required to comply with all export control laws, embargoes, and sanctions, and must not be listed on sanctions lists.

Planet-Friendly Business

Volkswagen Group's climate targets for Scope 1, 2, and 3 (use phase) have been validated by the Science Based Targets initiative (SBTi), with defined interim targets for 2030.

The Scope 3 target is aligned with a 2°C goal. The company aims for net carbon neutrality by 2050. In 2024, 66.9% of global electricity consumption was sourced from renewable sources. Offsetting projects are aligned with VCS, CCB Standards, and Gold Standard. The Group has identified material transition risks related to meeting statutory fleet emission targets, making provisions in the mid-three-digit-million euro range for 2024. Climate-related hazards have been assessed at its 200 most important sites, and the Group used the IEA's "Net Zero by 2050" scenario and the IPCC SSP5-8.5 scenario for its analysis. However, Volkswagen installed "defeat devices" in approximately 590,000 diesel vehicles (model years 2009-2016) to cheat on federal emissions tests, resulting in NOx emissions up to 40 times the standard. This led to a multi-billion dollar settlement, including a $2.8 billion criminal penalty and a $1.5 billion civil penalty.

Respect for Cultures & Communities

The provided articles outline Volkswagen Group's general commitment to social rights, human rights, and diversity. This includes a 2020 declaration on principles such as freedom of association, no forced labor, and no discrimination, with implementation through compliance management systems and risk-based site inspections.

Volkswagen Chattanooga also highlights diversity initiatives, community engagement, and a supplier diversity inclusion initiative, supporting community well-being, arts, culture, and sports, and sponsoring events. However, no specific quantitative data or concrete actions are provided to assess the company against the defined KPIs for Respect for Cultures & Communities, such as the number of formal partnerships with indigenous groups, percentage of revenue reinvested locally, or details on cultural impact assessments.

Safe & Smart Tech

Volkswagen has experienced multiple catastrophic data breaches within the past three years. A massive data leak affected over 15 million enrolled vehicles, exposing 9.5TB of event data, including precise geodata coordinates and sensitive personal information.

In December 2024, 600,000 user records and 9.5 TB of telemetry data from 800,000 cars were lost. In January 2025, 800,000 EV owners had vehicle location data, email addresses, phone numbers, and home addresses exposed due to a cloud misconfiguration, with data openly accessible for months. An October 2025 attack involved the exfiltration of employee, customer, and vehicle data, including user credentials, SSO IDs, and cleartext passwords. Data in these breaches was often unencrypted, and the company did not follow Privacy by Design principles, collecting excessive data. Volkswagen was fined 1.1 million euros for GDPR violations in 2022 and faced a $3.5 million class action settlement for a 2021 breach affecting 3.3 million users. The company launched a Group Information Security Program in 2020, received UNECE CSMS recertification in May 2024, and has ISO 27001 certification for key information security processes. Volkswagen plans to invest up to one billion euros in AI by 2030 and launched the 'WE & AI' initiative in spring 2024, reaching over 130,000 employees to engage with AI responsibly. The company advocates for innovation-friendly AI frameworks and has established ethical principles for AI.

Zero Waste & Sustainable Products

Volkswagen do Brasil units hold a Lixo Zero (Zero Waste) multisite certificate, achieving an average score of 94%, with the Parts and Accessories Center (PAC) scoring 99.9%.

The company aims for an ultimate recycling rate of ≥99% and a disposal rate of ≤1%. Passenger cars and light commercial vehicles are 85% recyclable and 95% recoverable at end-of-life, in line with EU Directives. In 2024, internal combustion engine vehicles contained 12.5-24.9% recycled content, and battery electric vehicles contained 16.4-26.2% recycled content, with specific components like ArtVelours Eco seat covers containing 71% recycled content. Hazardous waste was reduced from 5,064.1 metric tons in 2021 to 3,733.9 metric tons in 2023, and the company aims to avoid generating toxic waste in production. Bi-annual critical analyses of the Environmental and Energy Compliance Management System (SGCAE) are conducted, alongside annual factory evaluations. Circular design principles are integrated, with Design for Recycling (DfR) being a key strategy, and new materials like 100% bio-based hemp-derived surfaces are being developed for future use. Waste reduction initiatives include an Aluminum Closed Loop project, in-house battery recycling facilities, reuse of production waste, recycling plastic films into waste bags, and 3D printing from packaging waste, with Audi reducing over 550 tons of plastic waste annually by 2022. The global Zero Impact Factory initiative targets production without negative environmental impact by 2050, measuring 22 quantitative environmental indicators. Environmental management certification (ISO 14001) is required for all suppliers with more than 100 employees, and a positive S-Rating (sustainability criteria) is mandatory for supplier selection.