Engaging in public policy

Volvo Group's advocacy efforts, direct or indirect, related to public policy are based on the following guiding principles, set by the Volvo Group Executive Board.

Guiding principles

In line with the Paris Climate Agreement
Fair and free trade
Level playing field
Technology neutrality
Global standards
Long-term prerequisites
Clarity and predictability

Reducing climate impact

In all our actions, we need to consider how to reduce climate impact. Volvo Group supports a science-based approach to climate change mitigation. We have committed to the Science Based Target initiative “Business Ambition for 1.5ºC”, and our ambition is to reach net-zero value chain greenhouse gas emissions by 2040. This is needed to reach the ambitions of the Paris Agreement and net zero emissions in the industry by 2050.

As illustrated below, there will be a gradual shift into electrification, both battery and fuel cell electric, and the share of the Internal Combustion Engine (ICE) will decrease over time.

Illustrative scenario for 1.5 degrees C

Trade associations

Volvo Group is also a member of several trade associations around the world. We believe these memberships are important and that they can provide significant benefits for our business and industry. Most of these associations cover a much broader agenda than that of climate change mitigation but we seek to use our memberships to support the higher ambitions of the Paris Agreement’s goal to limit the global warming to 1.5 degrees Celsius, compared to pre-industrial levels.

As part of our commitment to deliver on the Paris Climate Agreement we take an active role in trade associations to assure that they contribute positively towards meeting the goals of the Paris Agreement. We have therefore reviewed and updated our way of working in relation to trade associations. A new governance model has been developed, including regular assessments, escalation structure and communication.

With our Annual Report, we provide a list of memberships(PDF, 180 KB) held by Volvo Group’s Business Areas or country Management Teams in the Group’s main markets of operations.

Review of trade associations

During 2021 we performed an assessment of trade associations in relation to our positions on climate change and energy transition. The selection of associations was based on;

a) their importance for Volvo Group, our business and industry,

b) that they operate in regions or countries where Volvo Group has significant business, and

c) the possibility for Volvo Group to influence the positions of the association.

Our review included 14 trade associations. Seven of the associations are based in Europe, three in Asia, three in North America and one in South America. They have different focus areas e.g. trucks, construction equipment and technology development. Some are regional and cover several countries, others are country specific.

High-level positions on climate change

The following Volvo Group high-level positions on climate change and energy transition were the basis for the assessment.

Paris Agreement - The Volvo Group is committed to the goals of the 2015 Paris Agreement on climate change and a 1.5 degree C ambition. The goals of the Paris Agreement are the overarching goals. To meet these, we believe that actions are required also in other areas:

Greenhouse gas emissions reduction - Cutting greenhouse gas emissions is critical to meet the ambitions of the Paris Agreement, and the Volvo Group’s sustainability aspirations. One of the most important things we can do is to help reduce our customers’ emissions.
Climate science - Volvo Group supports a science-based approach to climate change mitigation.
Technology neutrality/ energy mix - there is not one single solution to reduce emissions, but different segments and markets will need to use a range of technical solutions to decarbonize.
Carbon pricing - new technology vehicles will have to become the better option, the preferred choice of transport operators. For this to happen, we need comprehensive carbon pricing.
Energy efficiency - we focus on increased fuel and energy efficiency, electrification and alternative fuels.

Assessment of the trade associations

Current and recent policy positions

The associations’ current and recent policy positions were assessed in comparison with the Volvo Group’s positions. Information was gathered with support from Volvo Group representatives active in the associations, from the associations’ own public information and positions, as well as from a third party specializing in public policy on climate matters.

The governance model and the outcome of the assessment has been reported to the Volvo Group Executive Board.

The outcome of the review gave that out of the 14 assessed trade associations, seven were found to be aligned with the Volvo Group’s climate positions on climate change and energy transition, whereas the remaining seven of the associations were found to be partially aligned.

Governance and escalation process

In cases where a trade association deviates from Volvo Group’s positions, the first step is to initiate a dialogue with the trade association to make sure available information is correct and correctly understood. We expect the partially aligned trade associations to over time either develop a position or change their position if needed. In case where a trade association would deviate significantly from Volvo Group’s positions, we will evaluate whether to end our membership.

For each of our memberships there is a responsible Volvo Group contact person. The assessment has been made with support of these persons. In addition, members of the Executive Board may be engaged in the relation with trade associations, depending on size and purpose of the association.

Outcome of the assessment

The assessment performed during 2021 has for example shown that some trade associations do not have a clear position on carbon pricing. In these cases, the respective association has been contacted to emphasize the importance of clarity and that there is an expectation that any position on the matter is in alignment with the Volvo Group position on carbon pricing. Another example is where a trade association is about to develop its positions in different areas. Also in such situations, the associations have been contacted to further clarify and emphasize that any position is in alignment with the Volvo Group positions.

In addition to dialogues with trade associations there have been internal communication sessions for relevant groups to share the outcome of the assessment and to underline the responsibility of our commitments.

Next steps

The evaluation of memberships in trade associations will continue. The outcome of the review will be followed up through close collaboration with the associations partly aligned, and an assessment of additional associations is planned.