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Climate Strategy

Climate change is one of the biggest challenges of our time. The Volvo Group is determined to fulfil our commitment to the goals of the Paris Agreement and lead our industry in the transformation towards net-zero greenhouse gas emissions by 2040. This is a huge challenge for the world and for us. One of the most important things we can do is to help reduce our customers’ emissions.

Developing products and solutions that reduce the CO2 footprint is thus the first priority in our climate strategy. In accordance with this, we have set ambitious and ground-breaking targets that are in line with the latest climate science on what is deemed necessary to limit global warming to a maximum of 1.5⁰C above pre-industrial levels. 

 

Our targets with SBTi

Interim Science Based Targets - leading the way to net-zero 2040, with 2019 as baseline:

 

Scope 3 use phase:

- Lower the CO₂ emissions with 40% per vehicle km by 2030 for our trucks and buses

- Lower the CO₂ absolute emissions with 30% by 2030 for Volvo CE

- Lower the CO₂ absolute emissions with 37.5% by 2034 for Volvo Penta

 

Scope 1-2 direct and indirect emissions:

- CO₂ absolute emission reduction with -50% by 2030, with 2019 as baseline

 

Our targets and methodology are approved by the Science Based Targets initiative. We have now set our interim targets and will follow up and report on our progress continuously and in a transparent way aligning our work with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Our focus is to bring innovative and competitive solutions to the market in areas where we can make the greatest impact.

Focus to replace fossil power with sustainable energy

As we set climate targets and other environmental targets, we also consider climate impacts from our industrial activities. We strive to continuously reduce waste and emissions, optimize water use and improve our handling of solvents, oils and chemicals. One focus area of our climate strategy is to replace fossil power with sustainable energy sources such as wind, solar, biomass and biofuels.

An optimized global footprint in our supply chain will reduce lead-time for our customers and actively reduce our CO2 footprint. Through our climate strategy we aim to secure outstanding quality and technology at the best possible commercial offer when we purchase any product, service or solution. We also encourage suppliers to routinely control, minimize and if possible, eliminate greenhouse gas emissions. In this way we seek collaboration with business partners to jointly contribute to the Paris agreement and global climate goals.

Towards fossil free transport solutions

The Volvo Group target to reach net-zero greenhouse gas emissions by 2040 is an enabler to reach a rolling fleet and value chain net-zero emissions by 2050 at the latest. This is ten years earlier than the actual SBTi commitment of 2050. For the Volvo Group, this is a huge transformation. First and foremost, we will drive the transformation towards electrification with the main alternatives BEV and fuel cells. The transition to a fossil free transport system requires a range of solutions and our main focus areas are:

  • Battery electric
  • Hydrogen fuel cell electric
  • Sustainable bio-fuels
  • Solutions to optimize energy efficiency and reduce fuel consumption

Read more about fossil free transport solutions

Environmental footprint from operations

The environmental footprint from our operations is relatively small compared to that from the use phase of our products. Nevertheless, we are constantly considering climate and environmental impacts from our industrial activities through our environmental and climate strategy. In our operations, the main focus areas to reduce our footprint are energy and emissions, waste and chemicals. Our commitment to SBTi includes direct and energy indirect emissions from operations, purchased goods and services to be able to reach net-zero by 2040.

Learn more about our environmental footprint 

Climate Targets

At year-end 2020, we concluded our climate targets 2015-2020 covering production, freight transports and product use-phase. We will continue to save energy and reduce emissions from production, transports and life-cycle use of our products. The newly set interim Science Based Targets towards 2040 will lead us to reach net-zero value chain including rolling fleet by 2050 at the latest.

Production

Target

Implement energy savings that from 2020 save 150 GWh per year.

Target achieved

Since 2015, 1,260 activities have been implemented, that together save 207 GWh per year from 2020.

 

Next step

  • Implement energy savings of 150 GWh 2021-2025.
  • CO₂ absolute emission reduction with -50% by 2030, with 2019 as baseline, (SBTi approved).

Transports

Target

Reduce freight CO2 emissions per Produced unit by 20%.

Target achieved

Freight emissions per produced unit were 24% lower in 2020 compared to the baseline 2013.

 

Next step

Reduce CO2 emissions from freight transports per produced unit by 30% by 2025, with 2018 as base year.

Products

Target

Achieve life cycle CO2 emissions savings from products of at least 40 million tons cumulative.

Target achieved

An estimated 43 million tons of CO2 emissions have been saved 2015 to 2020.

 

Next step

Interim Science Based Targets to reach net-zero GHG emissions by 2040, with 2019 as baseline:

  • Lower the CO₂ emissions with 40% per vehicle km by 2030 for our trucks and buses
  • Lower the CO₂ absolute emissions with 30% by 2030 for Volvo CE
  • Lower the CO₂ absolute emissions with 37.5% by 2034 for Volvo Penta

Energy and CO2 emissions

Third party assurance

Our emissions and energy data are part of our Annual and Sustainability Report and have been subject to third party assurance.

Collaboration for climate action

During 2010-2020, we were part of the WWF Climate Savers. In 2021 we take the next step and enter the Science Based Targets initiative. The SBTi is a partnership between CDP (Carbon Disclosure Project), the United Nations Global Compact, World Resources Institute (WRI) and the World Wildlife Fund (WWF). 

Science Based Targets initiative (SBTi)

The SBTi is designed for organizations to set targets aligned with UN Paris agreement on climate change. The Volvo Group target to reach net-zero greenhouse gas emissions by 2040 is an enabler to reach a rolling fleet and value chain net-zero emissions by 2050 at the latest. On our way to achieve this we have now set ambitious interim science-based targets aiming towards scenario 1.5oC.

Since SBTi measurements are set towards well-below 2.0oC (B2DS), the Volvo Group has adopted 1.5oC transport SDA pathway, applying the same methodology to reach “absolute contraction approach” by 2040 instead of 2050.

Previous achievement – Climate Targets 2015-2020

Now we raise the ambition with our science-based targets and go for net-zero emission by 2040. But our work and commitment to climate action is not new. At year-end 2020, we concluded our climate targets 2015-2020 covering production, freight transports and product use-phase.

WWF’s Climate Savers program

We were the first company in our industry to enter the WWF’s Climate Savers program in 2010.

Climate Savers is WWF’s leadership program with the objective to recognize corporate leadership on climate solutions. It includes WWF's partners with ambitious strategies to develop net-zero business models and demonstrate that reductions in greenhouse gas emissions can go hand in hand with economic growth.

Read more on www.climatesavers.org

Our magnifiers

As part of the WWF Climate Savers, we also set out to magnify our commitment by advocating and driving solutions for net-zero emissions in our industry and throughout the value chain. During 2015-2020, we drove 14 initiatives – magnifiers - to promote energy efficiency, reduced carbon emissions, and positively influence the value chain. At year-end 2020, we concluded that all have been finalized.

 Summary of our 14 magnifiers for climate action:

  • Co-chaired the Advisory Group on Sustainable Transport together with the United Nations Secretary-General.  In 2014, the UN announced the membership of a High-level Advisory Group on Sustainable Transport to provide recommendations on sustainable transport actionable at global, national, local and sector levels. 
  • ElectriCity – started a bus line in Gothenburg operating with fully electric buses and electric hybrid buses.
  • Hosted the Construction Climate Challenge (CCC) that aims to promote sustainability throughout the entire construction industry value chain and provide funding for environmental research.
  • Optimized customer site by developing a supporting tool to improve efficiency for a whole construction site. See Electric Site.
  • Industry Standardization leadership; Participated in the International Standardization Organization’s work to develop a standard for machine fuel efficiency within the construction equipment industry.
  • Developed advanced technology development and through field-tests demonstrated technologies with considerably better fuel efficiency improvements.
  • Supplier Environmental Awareness through cooperation with suppliers to improve their climate change strategy.
  • Use of renewable energy. Volvo Group has participated in two of WWF initiatives; Corporate renewable energy buyer principle and Biofuels roundtable. In 2020, 52% of the energy sourced to Volvo Group globally comes from renewable sources.
  • We are continuously investigating roadmaps towards renewable energy in Asia and switched a significant share of our energy usage at our sites in Hoskote and Peenya outside Bengaluru, India to solar.
  • Demonstrated new advanced technology for trucks in prototypes. Now we electrify our entire European range of trucks in all segment.
  • Volvo Group has increased sales of fuel saving devices. The new I-Save can help customers to improve fuel efficiency by up to 10%.
  • Developed a prototype engine application with hybrid technology for off-road applications.
  • Increased use of IPS for Marine Commercial applications. Developed IPS technology so it can be used for more applications which will save fuel.
  • Started up a City Mobility concept in at least five cities.

Learn more

Fossil free transport solutions

Read more about our products environmental footprint and performance.

 

Learn more

Environmental footprint from operations

Read more about our operations environmental footprint and performance.
 

Learn more

GRI Report

Sustainability reporting is included in our Annual and Sustainability Report. In our GRI Index we disclose the specific economic, environmental and social sustainability topics that are material to the Volvo Group.