1、2023SUSTAI NAB ILIT Y REPORTContentsNavigation References to chapters in the Sustainability Report References to websites6 Foreword9 About This Report12 Sustainability in the Groups DNA13 Corporate Governance 17 NEW AUTO Group Strategy 22 ESG Performance Management and Materiality Analysis25 Sustain

2、ability Management 27 Sustainability Impact of New Mobility Options 30 Stakeholder Management 33 Environmental Compliance Management42 Risk Management45 Corporate CitizenshipFocus Topics1 Decarbonization 48 Decarbonization 69 EU Taxonomy2 Circular Economy 83 Circular Economy3 People in the Transform

3、ation 90 People in the Transformation4 Diversity 104 Diversity5 Integrity and Compliance 109 Integrity and Compliance6 Supply Chain and Human Rights 117 Supply Chain and Human Rights131 Appendix132 Independent Auditors Limited Assurance Report135 Contact Information 2Volkswagen GroupSustainability C

4、ommunication2023ANNUAL REPORT2023SUSTAI NAB ILIT Y REPO RT Information Accompanying the ReportingESG KPIsIndicators along our focus topics are clearly presented in Excel.GRI indexGRI content index(with reference)SASB indexAutomobiles indexReports on Special IssuesResponsible Raw Materials ReportProg

5、ress on transparency and risk mitigation in the raw material supply chain(annual)Association Climate Review ReportOverview of climate policy positionsGreen Finance ReportImplementation of sustainable financing strategies(annual)Further ESG topicsInformation on further topics of importance for sustai

6、nability and ESG Information on the Group WebsitePoliciesVoluntary commitments and principles that apply across the GroupESG controversiesFactual information on current and ongoing controversiesInternational InitiativesUN Sustainable Development GoalsActivities and projects that help achieve the sus

7、tainability goals(annual)UN Global Compact Implementation of the Ten Principles of the UN Global Compact(annual)CDP Score Report Climate ChangeAssessment of climate-related risks,goals and measuresCDP Score Report Water SecurityAssessment of water resources Sustainability and ESG Are Part of the Gro

8、up StrategyESG PerformanceESG PerformanceThe aim is to improve performance in the capital markets ESG ratings and rankings so as to increase the ability to invest and optimize the cost of capital.As we transition from automotive manufacturer to mobility group,we are resetting our priorities with the

9、 NEW AUTO Group strategy and positioning ourselves for the future.We are keeping our aim of being a world-leading provider of sustainable mobility firmly in our sights and making the Group more focused,efficient,innovative,customer-oriented and sustainable,as well as systematically gearing it toward

10、 profitable growth.The NEW AUTO Group strategy defines the six key focus issues shown above for the area of sustainability and ESG in Group initiative 6.This Sustainability Report including nonfinancial report is structured in accordance with these.In addition,the Sustainability in the Groups DNA ch

11、apter provides a definition of sustainability for the Group andaninsight into topics such as risk management,environmental management,stakeholder management and corporate citizenship.Sustainability in the Groups DNA Decarbonization Circular Economy People in the Transformation Diversity Integrity an

12、d Compliance Supply Chain and Human RightsProgressiveCoreSport LuxuryTrucksArchitectureSoftwareBattery,Charging&EnergyVolkswagen Group Mobility06|ESG,Decarbonization and IntegrityHighlights 20231 DecarbonizationAccess to600,000 charging pointsin EuropeBy 2030,the whole dealer networks carbon footpri

13、nt is to be decreased by at least 30%.Circular EconomyMore than850,000 metric tons of COhave been saved in net terms since 2017 through the Aluminum Closed Loop.In 2023,we processed 77,090 toolsto make them suitable to return to use.People in the Transformation14.3 million training hours in theVolks

14、wagen Group72 locationsare certified in accordance with ISO 45001.Diversity94%of managers have taken part in the Diversity WinsVolkswagen program.Proportion of women in management worldwide andinternationality of top management increased.In 2023,more than 4,100 business partnerswere audited.1,551inq

15、uiries were processed at the compliance information point.Supply Chain and Human RightsIntegrity and Compliance7,791 direct suppliers worldwide were trained on sustainability.Suppliers with a positive S rating account for 79%of revenuein the total procurement volume.1 Further information on the figu

16、res on this page,such as definitions and scope,can be found in the relevant chapters.6GRI 2-22Dear stakeholders and colleagues,Values create value.We in the Volkswagen Group remain true to this principle.Its an important compass for our actions.And this stance lets us sustainably create long-term ad

17、ded value.For our staff,for our customers,for our investors and for society as a whole.As one of the worlds largest industrial groups,we carry a special responsibility.We can make a dif-ference.We want to and will seize this opportunity.We think of sustainability holistically in terms of nature,peop

18、le,society and value-adding entrepreneurship.From the supply chain through our production to the delivery and use of our products.Our goal is to help to shape nature and society positively.Thats ambitious.And it will take a great deal of work.At the same time,achieving this goal is an obligation int

19、ernally to our colleagues and externally to our customers,society and,in particular,future generations.Sustainability Strategy:Clear Goals,Clear Responsibility Sustainability is one of our top priorities.As a strategic field,we set ourselves clear goals and plans for sustainability which are binding

20、 with clear responsibilities.The focus is on implementing our strategic measures.We also leverage the synergies in the Volkswagen Group here:All goals are systematically broken down into goals for the brands and Group companies.Management has personal re-sponsibility for complying with these.Decarbo

21、nization:What Drives Us The Volkswagen Group is clearly committed to electric mobility.Inspirational product innovations of recent weeks and months such as the Audi Q6 e-tron,the VW ID.7,the Porsche Macan electric or the long wheelbase version of the ID.Buzz show that e-mobility is synonymous with e

22、motion and fascination.Our delivery figures confirm this trend too.In 2023,the Volkswagen Group delivered 771,100 all-electric vehicles.This is equivalent to a year-on-year rise of 34.7%.The share of deliveries accounted for by all-electric vehicles increased to 8.3%.Oliver Blume,Chairman of the Boa

23、rd of Management of VolkswagenAGDaniela Cavallo,Chairwoman of the General and Group Works Council of Volkswagen AG Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transformation|Diversity|Integrity and Compliance|Supply Chain and Human RightsForeword 7A key lever for

24、reducing emissions is production:Our aim is to reduce production-related CO emissions from passenger cars and light commercial vehicles by 50.4%by 2030 compared with the base year 2018.The renowned Science Based Targets initiative(SBTi)con-firmed that our Group meets the requirements for contributin

25、g to limiting global warming to 1.5 degrees Celsius with this objective for the production phase(Scope 1 and 2).SBTi has confirmed that the aim of reducing CO emissions by 30%in the use phase(Scope 3)is in line with limiting global warming to two degrees Celsius.This confirmation spurs us on.The Vol

26、kswagen Group is aiming to reduce the average CO emissions per vehicle(passenger cars and light commercial vehicles)over the entire life cycle by 30%by 2030 compared with 2018.Ramping up electric mobility and expanding renewable ener-gies go hand in hand here.Thats why we are supporting the construc

27、tion of wind farms and solar parks on an industrial scale.New wind farms and solar parks are to be constructed in several regions of Europe by 2025.In Germany,for example,Volkswagen supported the construction of a solar plant with a total capacity of 170million kWh a year.The plant in Tramm-Gthen in

28、 Mecklenburg in northeastern Germany is the largest of its kind in Germany with around 420,000 solar panels.The Team:Engine of the Transformation Employees are any companys most valuable asset.The Volkswagen Group is only as strong as the people who work for it.Particularly in times of skills shorta

29、ges,employer at-tractiveness is vital for companies future viability.Our sectors shift toward e-mobility but also toward new business models and digitalization brings with it considerable changes for many workers.Jobs are being realigned,and new fields of work are emerging,while others permanently d

30、isappear.We are managing and monitoring these changes in a sustainable and socially responsible manner in the inter-ests of our colleagues.This is also very much intended to ensure corporate success.Because employer attractiveness has long been more than a question of salary.Talented indi-viduals al

31、so assess potential employers on factors such as flexibility,work-life balance,diversity,social benefits and personal responsibility.What do these changes mean for the Volkswagen Group?The responsibility for“people in the transformation”is at the core of our current and future activities in human re

32、sources.The“Transform to Tech”Group People Strategy,which the Group Board of Management adopted in 2021,plays a key role.When it comes to training,the Volkswagen Groups focus is on training colleagues on future technologies.This includes closely supporting them in the transformation process.For exam

33、ple,Volkswagen specifically added courses on e-mo-bility to its professional training program with the aid of the Volkswagen Group Academy.Newly designed and innovative programs from our Health department look after our em-ployees psychological safety during the transformation.And where major change

34、s are planned in a factory or office,we have transformation offices on hand.They are intended to give people an outlook for the future and provide a clear direc-tion for the change process in the transformation.Job secu-rity until 2029 at Volkswagen AG gives employees the sup-port they need.Holistic

35、 Responsibility:The Supply Chain at a Glance In addition to responsibility for its own employees,the Volkswagen Group also has a global responsibility.The Ger-man Supply Chain Due Diligence Act,which has been in force in Germany for more than a year,has a special role here.Focuses include protecting

36、 human rights and minimizing environmental risks both topics the Volkswagen Group identifies with through and through.The Sustainability Pro-curement Network shares information between our brands and regions,which serves as a component in managing sus-tainability in our supply chains.More than 110 e

37、xperts from five continents work together in the network.The network allows the identification of current developments and chal-lenges in the regions of the world and enables joint solutions to be developed.This is crucial because Volkswagen has over 63,000 direct suppliers in more than 95 countries

38、.Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transformation|Diversity|Integrity and Compliance|Supply Chain and Human RightsGRI 2-22 8Technology:The True Key to Sustainability The Volkswagen Group has been a technology company for many decades.This is expertise we

39、 will also use in sustain-ability because we believe that technology is the key to prog-ress in the sustainability strategy.As the Volkswagen Group,we are one of the few companies in the world that is taking the strategic expansion of technology leadership in electric mobility fully into its own han

40、ds from cell and battery re-search to the development and production of breathtaking electric vehicles.Since PowerCo was launched in July 2022,the battery com-pany has already defined three sites(Salzgitter,Valencia and St.Thomas),introduced the concept of the unified cell,founded a joint venture wi

41、th Umicore to produce cathodes and introduced activities to secure the supply of raw materials.We are also taking on the task of expanding the charging in-frastructure.By 2025,the Volkswagen Group wants to en-able more than 40,000 fast-charging points in China,North America and Europe to be put into

42、 operation.The Volkswagen Group stands for tradition and for strong brands.For advancing developments and overcoming chal-lenges.Today,we are undergoing automotive historys greatest transformation:We want to enable sustainable mo-bility for generations.Sustainability is deeply rooted in the Volkswag

43、en Groups identity.It is an integral part of our Group strategy.For 2024,we are providing important and targeted new impetus.The Volkswagen Group is aware of its role,importance and responsibility.Together,we will do ev-erything we can to make our important contribution with team spirit,fairness and

44、 passion.Daniela Cavallo and Oliver Blume Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transformation|Diversity|Integrity and Compliance|Supply Chain and Human RightsGRI 2-22 9Report StructureThis 2023 Group Sustainability Report is based on interna-tionally establ

45、ished frameworks and requirements,such as the standards of the Global Reporting Initiative(GRI,see also following section),the German CSR Directive Implementation Act(CSR-Richtlinie-Umsetzungsgesetz CSR-RUG),ESG sustainability ratings(Environmental,Social,Governance)and stakeholder expectations.The

46、report is supplemented by a detailed description of the sustainability activities of our brands and regions and of the Volkswagen Groups corpo-rate citizenship projects.Further information,particularly information relevant to ESG investors for example,ESG KPIs is available on the Groups corporate we

47、bsite and is not part of this report.www.volkswagen- ESG-Performance&ReportingFor reporting year 2023,Volkswagen AG is issuing a non-financial statement at Company level and a nonfinancial Group declaration,which are being published together as a com-bined separate nonfinancial report within the mea

48、ning of German Commercial Code(Handelsgesetzbuch HGB)sec-tions 289b para.3 and 315b para.3.The nonfinancial report is drawn up in accordance with HGB section 315c,in con-junction with sections 289c through 289e.In line with the German CSR Directive Implementation Act(CSR-RUG),this nonfinancial repor

49、t concentrates on the focus issues necessary for an understanding of the Volkswagen Groups business development,overall performance and position as well as the Volkswagen Groups impact on nonfinancial aspects.We are again reporting on our climate protection activities in line with the requirements o

50、f the Task Force on Climate-related Financial Disclosures(TCFD).Furthermore,the GRI Standards are used as the framework for drawing up the nonfinancial report.In this Sustainability Report,Volkswagen systematically uses the GRI Standards(with reference)as the underlying structure for reporting on ma

51、nagement approaches and the specific standard disclosures.The GRI Content Index has been separated from the 2023 Sustainability Report and can be found as a separate document in the Group portal:www.volkswagen- ReportingVolkswagen Group Sustainability Communicationwww.volkswagen- Press Releases www.

52、volkswagen- SustainabilityADDITIONAL COMMUNICIATIONwww.volkswagen- ESG-Performance&ReportingWEBSITE2023 SUSTAINABILITY REPORT2023 Nonfinancial Statementincluding Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transformation|Diversity|Integrity and Compliance|Supply C

53、hain and Human RightsAbout This Report 10The KPIs presented in this report build on the indicators presented in previous years.Any material changes to data collection or to measurement methods for our sustainability performance are explicitly disclosed by the respective KPIs.All figures shown in the

54、 report are rounded,so minor discrepancies may arise from addition of these amounts.Report AuditingEY GmbH&Co.KG Wirtschaftsprfungsgesellschaft con-ducted a voluntary,limited assurance engagement in accor-dance with ISAE 3000(Revised)on the combined separate nonfinancial report prepared in accordanc

55、e with HGB sections 289b para.3 and 315b para.3 to verify that its disclosures comply with the relevant statutory requirements.Further in-formation on the engagement can be found in the indepen-dent practitioners report on a limited assurance engagement on the nonfinancial reporting.Disclosures in C

56、onnection with the Annual Financial Statements No material special items in connection with the diesel issue were recognized in fiscal year 2023.To hedge the currently known legal risks related to the diesel issue,the provisions for litigation and legal risks as of De-cember 31,2023 include an amoun

57、t of around 0.9(1.4)billion,based on existing information and current assessments.I nsofar as these can be adequately measured at this stage,contingent liabilities relating to the diesel issue were dis-closed in the notes to the consolidated financial statements in an aggregate amount of 4.0(4.2)bil

58、lion,whereby 3.8(3.6)billion of this amount results from lawsuits filed by in-vestors in Germany.The provisions recognized,the contingent liabilities disclosed,and the other latent legal risks in the context of the diesel issue are in part subject to substantial estimation risks given the complexity

59、 of the individual relevant factors,the ongoing coordination with the authorities,and the fact that the fact-finding efforts have not yet been con-cluded.Should these legal or estimation risks materialize,this could result in further substantial financial charges.In particular,adjustment of the prov

60、isions recognized in light of knowledge acquired or events occurring in the future cannot be ruled out.The remaining provisions relate to a wide range of identifi-able individual risks,price risks and contingent liabilities,which are factored in in the amount of their probable occur-rence.Depending

61、on the jurisdiction concerned,risk provisions for any non-compliance with statutory emissions limits are also included.Their measurement takes into account,As a member of the United Nations Global Compact,we also continuously report how we are putting the Ten Principles into corporate practice.Our c

62、urrent progress report can be found on the UN Global Compacts website:United Nations Global CompactThe strategy chapter and the six following chapters on focus issues in the report each consist of a text section plus a con-solidated KPI table at the end of each chapter.References to disclosures outs

63、ide the nonfinancial report are supplementary information and do not form part of this report.The following passages are also not part of the non-financial report:Volkswagen Group Sustainability Communication(pp.34)Foreword(pp.68)The German Corporate Governance Code A Blueprint for Successful Corpor

64、ate Governance(p.15)Further Information;The Volkswagen Value Chain(p.16)Making the Social and Environmental Impact of Our Actions Measurable(p.24)The information in this report relates to the Volkswagen Group as a whole.Where information relates to individual Group di-visions only,this is clearly in

65、dicated in the text.Unless indi-cated otherwise,any information provided for the Group also applies to Volkswagen AG.In addition to Volkswagen AG,the Group includes all major subsidiaries inside and out-side Germany that are directly or indirectly controlled by Volkswagen AG.In the financial data,ou

66、r joint ventures in China are reported using the equity accounting method.However,they are in-cluded in full(100%)in volume-related data(sales,production and workforce)and in production-related environmentally relevant data.The management approaches described in this report(e.g.,the environmental co

67、mpliance management system)apply to all the Volkswagen Groups controlled companies.With our non-controlled companies i.e.,com-panies that are not controlled by a company of the Volkswagen Group as the majority owner we work to the extent feasible and permitted by law toward implementation of the adj

68、usted management approaches.The Chinese joint ventures are included in the information on the Volkswagen Group in the KPIs and the associated targets on the topics of reduction of the environmental impact of production(UEP),the decarbonization index(DCI),the Opinion Survey,the di-versity index,train

69、ing hours per employee,accident indices and accident figures.The risks of the Chinese market are assessed by Volkswagen China Investment Company Ltd.GRI 2-2,2-4,2-5 Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transformation|Diversity|Integrity and Compliance|Suppl

70、y Chain and Human Rights 11among other things,the respective sales volume and the legally defined fee or the cost of acquiring emission rights from other manufacturers.Advantage has been taken of synergies between individual brands of the Volkswagen Group by establishing emission pools where possibl

71、e.Addi-tional information on this matter and the valuation assump-tions and bases can be found in the Annual Report in the notes to the consolidated financial statements.Additional Reporting within the GroupBy referencing this combined separate nonfinancial report,all Group companies that are requir

72、ed by national legislation to disclose nonfinancial and diversity-related information pursuant to Directive 2014/95/EU but do not issue their own nonfinancial statement are exempted from the obligation to submit their own nonfinancial reports.Terminology Relating to Climate ProtectionThe use of the

73、term CO emissions in this report includes the consideration and identification of additional climate-dam-aging greenhouse gases such as methane(CH)and laughing gas(NO)(CO equivalents).All figures in this report on CO emissions correspond to CO equivalents,except for fleet emission figures.Net carbon

74、 neutrality is achieved when anthropogenic CO emissions are balanced worldwide through avoidance,re-duction and offsetting over a specific period of time.With regard to climate protection,in addition to CO emissions,Volkswagen also pays attention to other relevant greenhouse gases.Avoidance and redu

75、ction have priority over offsetting for the Volkswagen Group.For offsetting measures,the Group follows internationally established standards.Editorial NotesWhenever this report uses the term Sustainability Report,this expression includes the nonfinancial report each time it is mentioned,to the exten

76、t described on page 10.Reporting PracticesThe nonfinancial report is published annually.The last non-financial report was published on March 12,2023.In addi-tion to information about the Groups sustainability activities in the 2023 fiscal year(January 1 to December 31,2023),this 2023 nonfinancial re

77、port also contains selected infor-mation from the 2024 fiscal year.About This ReportThe editorial deadline was February 14,2024.The Group Sustainability Report is published in the first quarter of 2024 and is also available in the original German.In the event of any discrepancies,the German authorit

78、ative version of the document takes precedence over the English translation.Legal InformationThis sustainability report contains statements relating to the future business development of the Volkswagen Group.These statements are based on assumptions relating to the development of the economic,politi

79、cal and legal environ-ment in individual countries,economic regions and markets,and in particular for the automotive industry,which we have made on the basis of the information available to us and which we consider to be realistic as of the time of going to press.The estimates given involve a degree

80、 of risk,and the actual developments may differ from those forecast.Any changes in significant parameters relating to our key sales markets,or any significant shifts in exchange rates,energy and other commodities or the supply of parts relevant to the Volkswagen Group will have a corresponding impac

81、t on the development of our business.In addition,there may be de-partures from our expected business development if the as-sessments of the factors influencing sustainable value en-hancement,and of risks and opportunities,presented in this sustainability report develop in a way other than we expect

82、at the time of publication,or if additional risks and opportu-nities or other factors that affect the development of our business emerge.GRI 2-3 Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transformation|Diversity|Integrity and Compliance|Supply Chain and Human Ri

83、ghts 12Sustainability in the Groups DNA13 Corporate Governance 17 NEW AUTO Group Strategy 22 ESG Performance Management and Materiality Analysis25 Sustainability Management 27 Sustainability Impact of New Mobility Options 30 Stakeholder Management 33 Environmental Compliance Management42 Risk Manage

84、ment45 Corporate Citizenship 13Outline of the Legal Structure of the GroupVolkswagen AG is the parent company of the Volkswagen Group.It develops vehicles and components for the Group brands,but also produces and sells vehicles,in particular pas-senger cars and light commercial vehicles for the Volk

85、swagen Passenger Cars and Volkswagen Commercial Vehicles brands.In its capacity as parent company,Volkswagen AG holds direct or indirect interests in AUDI AG,SEAT S.A.,koda Auto a.s.,Dr.Ing.h.c.F.Porsche AG,TRATON SE,Volkswagen Financial Services AG,Volkswagen Bank GmbH and a large number of other c

86、ompanies in Germany and abroad.More detailed dis-closures are contained in the list of shareholdings in accor-dance with sections 285 and 313 of the German Commercial Code(Handelsgesetzbuch HGB),which can be accessed on the website and is part of the annual financial statements.www.volkswagen- Annua

87、l Financial StatementsVolkswagenAG is a vertically integrated energy supply company as defined by section 3 no.38 of the German Energy Industry Act(Energiewirtschaftsgesetz EnWG)and is therefore subject to the provisions of the EnWG.In the elec-tricity sector,Volkswagen AG generates,sells and distri

88、butes electricity as a group together with its subsidiaries.The Volkswagen AG Board of Management has sole respon-sibility for managing the Company.The Supervisory Board appoints,monitors and advises the Board of Management;it is consulted directly on decisions of fundamental significance for the Co

89、mpany.Corporate GovernanceVolkswagen AG Shareholder Structure as of December 31,2023,in%of voting capitalEmployees by Marketas of December 31,2023,in%State of Lower SaxonyQatar Holding LLC German institutional investors Porsche Automobil Holding SE Foreign institutional investors Private shareholder

90、s/others11.810.02.231.920.024.1Asia-Pacific 16North America 7South America 5Europe(excluding Germany)/other markets 29Germany 44Organizational Structure of the GroupThe Volkswagen Group is one of the leading multi-brand groups in the automotive industry.The Groups business activities comprise the Au

91、tomotive and Financial Services divisions.Our core brands within the Automotive Division with the exception of the Volkswagen Passenger Cars and Volkswagen Commercial Vehicles brands are independent legal entities.The Automotive Division comprises the Passenger Cars,Commercial Vehicles and Power Eng

92、ineering business areas.The Passenger Cars Business Area primarily consolidates the Volkswagen Groups passenger car brands and the Volkswagen Commercial Vehicles brand.Activities focus on the develop-ment of vehicles,engines and vehicle software,the production and sale of passenger cars and light co

93、mmercial vehicles,and the genuine parts business.The product portfolio ranges from compact cars to luxury vehicles and also includes motorcycles and is supplemented by mobility solutions.The Commercial Vehicles Business Area primarily comprises the development,production and sale of trucks and buses

94、,the corresponding genuine parts business and related services.The commercial vehicles portfolio ranges from light vans toheavy trucks and buses.The collaboration between the commercial vehicle brands is coordinated within TRATONSE.GRI 2-1,2-6 Table of Contents The Groups DNA|Decarbonization|Circula

95、r Economy|People in the Transformation|Diversity|Integrity and Compliance|Supply Chain and Human Rights 14The Financial Services Divisions activities comprise dealer and customer financing,leasing,direct banking and insurance activities,fleet management and mobility services.With its brands,the Volk

96、swagen Group is present in all of the markets around the world that are relevant for the Group.The key sales markets currently include Western Europe,China,the USA,Brazil,Trkiye,Mexico,Poland and the Czech Republic.VolkswagenAG and the Volkswagen Group are managed by the VolkswagenAG Board of Manage

97、ment in accordance with the VolkswagenAG Articles of Association and the rules of procedure for VolkswagenAGs Board of Management issued by the Supervisory Board.Accordingly,responsibilities in the Board of Management are currently divided among ten Board functions.In addition to the“Chair of the Bo

98、ard of Management”function the other Board functions are“Technology”,“Finance and Operations”(formerly“Finance”),“Human Resources and Trucks brand group”(formerly“Human Resources and Truck&Bus”),“In-tegrity and Legal Affairs”,“Progressive brand group”(formerly“Premium”),“Sport Luxury brand group”(fo

99、rmerly“Sport&Luxury”),“IT”,“China”,and“Core brand group”(formerly“Volume”).The Chair of the Board of Management is also re-sponsible for the“Sport Luxury brand group”Board function.Directly attached to the Board are a number of Group Man-agement functions that act as an extension to the Board functi

100、ons.These comprise the“Group Sales”,“Group Pro-duction”,“Group Procurement”and“Group Research and Development”functions.The allocation of responsibilities on the Board of Management is based on the rules of procedure decided by the Supervisory Board.The way this is structured helps the Board of Mana

101、ge-ment to focus on key tasks such as strategy,central deci-sions on the Companys direction,capital allocation and fi-nancial requirements.The task of the extended board-level management functions is to leverage synergies in the Group and to connect the brands and divisions.Board of Management commi

102、ttees exist at Group level for the following areas:products,technologies,investments,digital transformation,integrity and compliance,risk management,human resources and management issues.In addition to the responsible members of the Board of Management,the rele-vant central departments and the relev

103、ant functions of the divisions are also represented on the committees.We are continually revising and optimizing these and other top management committees in the Group in order to verify that they still align with our corporate strategy and to further in-crease the efficiency of their decision makin

104、g.This reduces complexity and reinforces governance within the Group.As part of the“Group Steering Model”base initiative from the NEW AUTO Group strategy,a new leadership model for the Group was presented at the Capital Markets Day in June 2023 that will sharpen the focus on customer orientation,ent

105、re-preneurship and team spirit.It follows the“value over volume”principle,prioritizing sustainable value creation over volume growth.As part of this,the brand groups will receive a new steering model.In addition,the brand positioning and the product range are to be sharpened.The realignment also in-

106、cluded a renaming of the brand groups:Volume has become Core,Premium is now called Progressive,Sport&Luxury has been changed to Sport Luxury,and Truck&Bus to Trucks.The Core brand group comprises the Volkswagen Passenger Cars,koda,SEAT/CUPRA and Volkswagen Commercial Vehicles brands.The Progressive

107、brand group comprises the Audi,Lamborghini,Bentley and Ducati brands.The Sport Luxury brand group consists of the Porsche brand.The com-pany responsible for this brand,Dr.Ing.h.c.F.Porsche AG(Porsche AG),has been listed on the stock market since the end of September 2022.In the Trucks brand group,TR

108、ATON SE acts as the umbrella for the Scania,MAN,Volkswagen Truck&Bus and Navistar commercial vehicles brands.TRATON SE is also a listed company.In addition to the strengthening of the brand groups,the reorganization and expansion of new units also enabled substantial progress to be made with the“Arc

109、hitecture”,“Software”,“Battery,Charging&Energy”,and“Volkswagen Group Mobility”technology platforms in the reporting year.The structures and product processes at the software subsidiary CARIAD will be optimized further.We are convinced that our corporate structure,which effi-ciently connects not only

110、 the brand groups but also the technology platforms,will enable us to make better use of existing expertise and economies of scale,leverage synergies more systematically and accelerate decision making.Clear responsibilities and a high degree of business responsibility in the brand groups and technol

111、ogy platforms will enable comprehensive implementation of the Groups NEW AUTO strategy.GRI 2-6 Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transformation|Diversity|Integrity and Compliance|Supply Chain and Human Rights 15Legal Factors Influencing BusinessLike othe

112、r international companies,the business of Volkswagen companies is affected by numerous laws in Germany and abroad.In particular,there are legal requirements relating to services,development,products,production and distribu-tion,as well as supervisory,data protection,financial,com-pany,commercial,cap

113、ital market,anti-trust and tax regula-tions and regulations relating to labor,banking,stateaid,energy,environmental and insurance law.The German Corporate Governance Code A Blueprint for Successful Corporate GovernanceCorporate governance provides the regulatory framework for corporate management an

114、d supervision.This includes a companys organization and values and the principles and guidelines for its business policy.The German Corporate Governance Code(the Code)contains principles,recommen-dations and suggestions for corporate management and supervision.Its principles,recommendations and sugg

115、estions were prepared by a dedicated government commission on the basis of the material provisions and nationally and inter-nationally accepted standards of sound,responsible corpo-rate governance.In the interests of best practice,the govern-ment commission regularly reviews the Codes relevance in l

116、ight of current developments and updates it as necessary.The Board of Management and the Supervisory Board of Volkswagen AG base their work on the principles,recom-mendations and suggestions of the Code.We consider good corporate governance to be a key prerequisite for achieving a lasting increase i

117、n the Companys value.It helps strengthen the trust of our shareholders,customers,employ-ees,business partners and investors in our work and enables us to meet the steadily increasing demand for information from national and international interest groups.The Group Corporate Governance Declaration is

118、available in the Annual Report and is permanently accessible on our website.www.volkswagen- Declaration of ConformityEach brand within the Volkswagen Group is managed by a brand board of management,which is responsible for the brands independent and self-contained development and business operations

119、.To the extent permitted by law,the board adheres to the Group targets and requirements laid down by the Board of Management of Volkswagen AG,as well as with the agreements in the brand groups.This allows Group-wide interests to be pursued,while at the same time safeguarding and reinforcing each bra

120、nds specific charac-teristics.Matters that are of importance to the Group as a whole are submitted to the Volkswagen AG Board of Man-agement to be agreed upon,to the extent permitted by law.The rights and obligations of the statutory bodies of the relevant brand company thereby remain unaffected.The

121、 Volkswagen Group companies are managed solely by their respective managements.The management of each in-dividual company takes into account not only the interests of its own company but also the interests of the Group,the relevant brand group and the individual brands in accordance with the framewo

122、rk laid down by law.Material Changes in Equity InvestmentsIn May 2023,the Volkswagen Group completed the sale of its shares in OOO Volkswagen Group Rus(Volkswagen Group Rus),Kaluga/Russia and its local subsidiaries(OOO Volkswagen Components and Services,Kaluga/Russia,OOO Scania Leasing,Moscow/Russia

123、,OOO Scania Finance,Moscow/Russia,OOO Scania Insurance,Moscow/Russia)to OOO ART-FINANCE,Moscow/Russia,which is supported by the Russian automotive dealer AO Avilon Automotive Group,Moscow/Russia.On registration of the transaction also in May 2023 ownership of the shares in Volkswagen Group Rus was t

124、ransferred from the seller to the buyer.The trans-action includes the production facilities in Kaluga,the im-porter structure of the Group brands Volkswagen Passenger Cars,Volkswagen Commercial Vehicles,Audi,koda,Bentley,Lamborghini and Ducati for potential after-sales business and the warehousing a

125、ctivities as well as Scania financial services activities with all associated employees.GRI 2-6 Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transformation|Diversity|Integrity and Compliance|Supply Chain and Human Rights 16Further Information Explanations of the co

126、mposition,working methods and diver-sity concept of the Board of Management and the Supervisory Board and information on voting rights are available in the Corporate Governance chapter in the 2023 Annual Report.2023 Annual Report Corporate GovernanceExtensive explanations of the remuneration system

127、and the individual remuneration of the members of the Board of Management and Supervisory Board can be found in the Re-muneration Report for fiscal year 2023,which forms part of the 2023 Annual Report,in the notes to Volkswagens 2023 consolidated financial statements and in the notes to the 2023 ann

128、ual financial statements of Volkswagen AG.www.volkswagen- RemunerationThe Volkswagen AG Group Board of Management has adopted an update of the tax strategy principles,which has been published on Volkswagen AGs website.Each year,Volkswagen AG sends the German Federal Central Tax Office a country-by-c

129、ountry report,which includes infor-mation on tax payments and tax expenses/income by country.The Volkswagen Group has the ambition of implementing its marketing and communication activities transparently and responsibly.This includes attentiveness toward our environ-ment and requires us to treat all

130、 individuals with respect and honesty and as equals.This applies internally and externally,online and off.To this end,the Group has developed principles that serve as a compass for implementing the Volkswagen Groups values with regard to marketing and communication activities.www.volkswagen- Policie

131、sGRI 2-6,207-4The Volkswagen Value ChainResearch&DevelopmentThe Automotive Divisions research and development costs in the reporting year totaled 21.7 billion and were thus 14.8%higher than in the previous year.In addition to new models,our activities focused above all on the electrification of our

132、vehicle portfolio,digitalization,new technologies and enhancements of our modular and all-electric toolkits and platforms.ProcurementEvery year,the Volkswagen Group purchases a wide range of raw materials,components and other goods.A sustainable supply chain and environmentally compatible transporta

133、tion are important for fully assuming responsibility for human rights,environmental protection and the battle against corruption.ProductionThe Volkswagen Group manufactured an average of more than 26,660vehicles globally every working day in 2023.Efficient production ranks alongside environmental pr

134、otection and employee health and safety as one of our core goals.Marketing&SalesBusiness relationships with fleet customers are often long-term and stable partnerships.The Volkswagen Groups share of commercial fleet customers is 47.0%in Germany and 27.6%in the rest of Europe.After Sales&Financial Se

135、rvicesOur service includes supporting dealerships to ensure they can provide quality advice and maintenance,managing our original parts business,and providing vehicle-related financial services.RecyclingIn addition to recycling vehicles at the end of their useful life,we pay close attention during t

136、he new-vehicle development stage to the recyclability of the required materials,the use of high-quality recycled materials,and the avoidance of pollutants.Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transformation|Diversity|Integrity and Compliance|Supply Chain an

137、d Human Rights 17In the context of the fast-changing environment and the challenges resulting from it,the Group Board of Management adopted the Group strategy“NEW AUTO Mobility for gener-ations to come”in May 2021 with the approval of the Super-visory Board.The strategys focus is the world of mobili

138、ty in 2030.As technology advances,the automotive industry is rapidly forging ahead with its transformation toward e-mobility and digitalization.We therefore expect the market for electric vehicles to continue to grow in the next few years,meaning that the cost-efficient and sustainable production of

139、 battery systems and the expansion of the charging infrastructure will be crucial to success.The shift to connected,intelligent and eventually self-driving vehicles,will,however,bring more wide-reaching changes for the automotive industry.Autonomous driving will change the customers mobility experie

140、nce forever and lay the ground for new business models.Sources of revenue will gradually shift and will expand beyond the core product of the auto-mobile.Increasing software development capabilities in order to excite customers with constantly improving digital func-tionality is the prerequisite for

141、 this.In equal measure to technological trends,the global eco-nomic and geopolitical environment is also posing increased challenges for the automotive industry.These include,forexample,the economic influence of the largest mobility markets,China,the USA and Europe,and their diverging development.Su

142、stainability will continue to be a recurring theme in the business world and will gain further pertinence,driven by the increasingly noticeable consequences of climate change,a greater consciousness of sustainable lifestyles on the part of the customer and,not least,underlying factors such as the Pa

143、ris Climate Agreement.As we transition from automotive manufacturer to mobility group,we have reset our priorities with NEW AUTO and are positioning ourselves for the future.We are keeping our aim of being a world-leading provider of sustainable mobility firmly in our sights and making the Group mor

144、e focused,efficient,innovative,customer-oriented and sustainable,as well as systematically gearing it toward profitable growth.To this end,we have established clearly defined Group initia-tives across the brand groups,with a focus on our central technology platforms:“Architecture”,“Software”,“Batter

145、y,Charging&Energy”,and“Volkswagen Group Mobil ity”.Furthermore,base initiatives form the foundation for the Volkswagen Groups strategic realignment.These are“ESG,Decarbonization&Integrity”,“Business Model 2.0”,“North America(NAR)Region”,“China Region”,“Group Steering Model”,“People&Transformation”an

146、d“Financing the Trans-formation”,which are described below.The most important targets for each calendar year are de-fined,and a Top 10 program is developed at Group level so that the strategy can be implemented in operations throughout the year.Priorities in the Groups Top 10 program for 2023 were f

147、inancial robustness and planning,products,the China and North America regions,software,technologies,battery and charging,mobility solutions,sustainability,and capital markets.This Top 10 program methodology has been adopted by many business units in their functional area strategies,and it is being u

148、sed to accelerate the implementation of the strategy with a high level of focus.NEW AUTO Group Strategy Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transformation|Diversity|Integrity and Compliance|Supply Chain and Human Rights 18To make the progress in our focus

149、topics consisting of the initiatives of the NEW AUTO strategy and the objectives of the Groups Top 10 program applicable to the fiscal year as transparent as possible for management and employees,the Group Board of Management decided to structure and regu-larly measure the strategic objectives and m

150、ilestones using the OKR(Objectives and Key Results)method.Accordingly,strategic objectives and envisaged key results are defined for all focus topics.These are to be realized largely through time-limited projects and work packages,each of which is measured by specific key performance indicators.The

151、degree of achievement is usually presented to the Board of Manage-ment three times a year.As such,the relevance of the focus topics,and their objectives,milestones,projects and work packages,are regularly reviewed at Group level.Their focus is continuously monitored and adjusted as necessary or inte

152、-grated into standard operations.We report on the main targets achieved and key results in the fiscal year in the“Management and Key Figures”,“Structure and Business Activities”and“Sustainable Value Enhancement”chapters of the Annual Report.2023 Annual Report Group Management ReportArchitecture A fu

153、ture-oriented mechatronics platform will form the back-bone for innovations,technology and lasting competitiveness at Volkswagen.With the Scalable Systems Platform(SSP),we are creating the next generation of an all-electric,fully digital and highly scalable mechatronics platform on the basis of a st

154、andardized software architecture.With this standard-ized platform,which can be scaled from the smallest vehicles all the way up to the premium segment,the Volkswagen Group aims to rapidly and efficiently provide its customers with in-novative functions and technologies in their vehicles,across all b

155、rands.By reducing complexity and the number of versions,the SSP will offer us maximum synergy effects and make fast,regular technology updates possible,while lowering in-vestment costs and ensuring the necessary differentiation between the products of the individual brands in the Groups portfolio.NE

156、W AUTO with Focus on Technology Platforms ProgressiveCoreSport LuxuryTrucksArchitectureSoftwareBattery,Charging&EnergyVolkswagen Group Mobility Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transformation|Diversity|Integrity and Compliance|Supply Chain and Human Rig

157、hts 19Software The purpose of the Groups own software and technology company CARIAD is to create the technical basis for data-based business models,new mobility services and automated driving(Level 4)and to leverage cross-brand synergies.Here we are pursuing the following strategy:We intend to devel

158、op software for central control points in the vehicle either in-house or together with third parties in strategic partnerships.CARIAD is collaborating with leading technology companies to integrate further innovative solutions.Together with the Porsche and Audi brands,CARIAD is working to introduce

159、the new E3 1.2 platform,which optimizes the interaction between the hardware and the vehicle software and is also intended to serve as a key lever for data-driven development and for the introduction of new services even after vehicle produc-tion has begun.In the long term,the standardized E3 2.0 so

160、ftware architecture is to form the basis of a complete digital ecosystem,offering customers a wide range of software-based services through-out the entire product life cycle.The software-centric ap-proach of the E 2.0 architecture constitutes a paradigm shift in vehicle development.This is to form t

161、he basis for the Volkswagen Groups software-defined vehicles.The aim is for every function that is needed or requested,and for every service,to be customized for the customers in the various markets and to be available for download at any time.This will also open up new sources of revenue for us.App

162、lications at various levels of automated driving(up to Level 4)are to be gradually introduced to the new vehicle models in the Group brands.In this context,CARIAD is responsible for developing software and a tech nology stack for automated driving.Battery,Charging&Energy Cell and Battery StrategyThe

163、 battery is a key component in an electric vehicle and an important cost factor.The appeal and market success of e-mobility is determined not only by the price,but also by the vehicles range and its charging speed.In order to achieve our objective of transforming into a world-leading provider of sus

164、tainable mobility,we intend to become a profit-generating expert across the entire battery life cycle.To this end,the Cell and Battery Strategy tech initiative pools expertise across the Group and is driving the transfor-mation process in cooperation with our strategic partners.The aspects covered i

165、nclude battery development,cell pro-duction,vertical integration,large-scale storage systems,and recycling.Our primary aim is to develop battery cell tech-nology into a core competence in the Group,and we are also working with partners to achieve this.At the heart of this strategy is the unified cel

166、l,which can contain differing chemistries and is to be used in up to 80%of Group models by 2030.The economies of scale this generates are expected to reduce costs by up to 50%and put us in a leading cost po-sition.To cover the high demand for battery cells,Volkswagen plans to build its own gigafacto

167、ries around the world.The cornerstone for these activities was laid in Salzgitter/Germany.Using the standard factory concept to optimize investment,further factories are to follow swiftly in Valencia/Spain and St.Thomas/Canada.The aim is to meet about half of the rapidly growing need for battery cel

168、ls ourselves by 2030.Battery,Charging&Energy Charging and Energy ServicesA sustainable,stable charging and energy infrastructure is a key prerequisite for accelerating the transformation to the battery-electric mobility of the future.It is therefore our in-tention to also become a comprehensive char

169、ging and energy service provider in future,and we are investing heavily in the worldwide development of an open,fast-charging network.By 2025,we and our partners plan to create around 45,000 high-power charging points in Europe,China and the USA.The product portfolio also includes the full range of

170、charging solutions for private customers and companies.In addition to our own wall box and flexible fast-charging station(Flex-pole),the focus is particularly on contract-based charging services and smart green electricity tariffs.The aim is for charging processes to be controlled in such a way that

171、 they tap into renewable energy,thus reducing the pressure on the power grids.In a next step,Volkswagen intends to use the electric vehicle as a mobile power bank,and thus help to enable electric vehicles to act as additional storage units and become an active part of the energy system in the future

172、.In this way,Volkswagen wishes to make its customers part of the smart-charging and energy ecosystem for decarbon-ized mobility.Our goal here is farsighted use of scarce re-sources in the electric power industry.Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transfor

173、mation|Diversity|Integrity and Compliance|Supply Chain and Human Rights 20Volkswagen Group Mobility In keeping with its mission statement,“Mobility for genera-tions to come”,the Volkswagen Group is developing mobility solutions for the future,taking into account global trends and changes in customer

174、 needs.The Group plans to bring together all of its brands mobility services on one mobility platform over the coming years.Autonomous driving combined with new mobility solutions is expected to mark Volkswagens transformation into a leading provider of sustainable mobility.A vehicle fleet covering

175、all of the many services,from vehicle rental to car subscription and ride pooling,is to ensure high availability,usage and profitability.With these solutions,we plan to gain market shares and generate long-term competi-tive and attractive margins.ESG,Decarbonization and IntegrityESG(Environmental,So

176、cial,and Governance)refers to the basic principles of doing business sustainably.The Groups stakeholders(e.g.,investors,employees,customers and non-government organizations)have high expectations of the Companys ESG performance,including in areas such as decarbonization,circular economy and integrit

177、y,and also of its conduct as an employer and as part of society.The Groups ESG performance therefore directly affects its market capitalization,cost of capital and investing activities.We aim for a top position relative to our competitors in sustainability ratings.We are committed to the Paris Clima

178、te Agreement and align our own activities with the 1.5 degree target.We aim to achieve net carbon neutrality by 2050.By 2030,we have also set ourselves the target of reducing CO emissions from passenger cars and light commercial vehicles over the total life cycle by 30%compared with 2018.As part of

179、this effort,we are looking for ways to increase the proportion of renewable energy sources used in the product emergence process and the proportion of recyclable materials in our vehicles.We also wish to be perceived as a benchmark for ethical corporate conduct.Volkswagen sees itself as an equal opp

180、ortunities employer.The intention is therefore for at least a fifth of Group management positions to be held bywomen by 2025,and for at least a quarter to be held by international managers.Business Model 2.0The Business Model 2.0 base initiative is developing a Group-wide portfolio of services,the p

181、urpose of which is to create a seamless and innovative product experience to connect brands,customers,dealerships,our partners and whole markets.The aim is for the key technologies needed for this to be integrated into a majority of theplatform-based vehicles by 2030.Using connected vehicles,the Gro

182、ups brands are to be able in the future to remain in contact with their cus-tomers throughout the entire vehicle life cycle and thus to offer them services and functions for their individual needs.This will allow us to build a competitive,data-driven service portfolio that also maintains our strong

183、position in the auto-motive market in future.North America(NAR)RegionFor the Volkswagen Group,the North America region,and particularly the USA,has a great growth potential,especially where e-mobility is concerned.We intend North America to become our third core region alongside Europe and China by

184、2030.Our aim there is to achieve a very strong increase in total market share for the Volkswagen Group by then.We aspire to further expand our presence in the region with strong brands and prepare ourselves for the future with market-specific products.We also wish to participate to a disproportionat

185、ely high extent in the growth of the increasingly electrified markets in the USA and Canada.We will therefore substantially expand our range of all-electric models across the Group and develop models specifically for these markets.With our new vehicle brand Scout,we intend to address the core segmen

186、ts of the North American electric vehicle market with tailor-made products.The proportion of battery-electric vehicles in our sales in the USA and Canada is to increase to 55%by 2030.In addition,we wish to maximize the potential for synergies in the region and build more expertise,industrial capacit

187、y and vertical value chains in the North America region.Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transformation|Diversity|Integrity and Compliance|Supply Chain and Human Rights 21China RegionChina is of major strategic significance to the Volkswagen Group as it

188、s largest single market.All key measures are therefore brought together in this strategic base initiative in order to continue Volkswagens success story in China.These include localized development activities that are tailored to the market(the in China for China approach),competitive products,the d

189、eepening of our existing partnerships and forging of new ones,and a comprehensive program of mea-sures for achieving a permanent reduction of costs to safe-guard long-term profitability.Our aim for 2030 is to take a leading role in China as an in-ternational mobility provider and manufacturer of ful

190、ly con-nected vehicles.As part of our localization strategy(in China for China),we therefore want to pool and expand our local development capacity to a greater extent in the coming years.In so doing,we want to considerably speed up the develop-ment of intelligent connected vehicles(ICVs)and be in a

191、 position to offer tailor-made products to our Chinese custom-ers faster.In the market for vehicles with conventional drive systems,we want to further strengthen our share of the market with new vehicles and secure it for the long term,as these vehicles high unit sales will also make a correspond-in

192、g contribution to profitability in future.Group Steering ModelTo achieve the objectives of the Group strategy and thereby safeguard the Volkswagen Groups long-term success,we are extensively optimizing our Group Steering Model.It is es-sential that we establish a consistently high level of mecha-nis

193、ms that facilitate swift decision-making,the development and use of platform technologies and the exploitation of syn-ergies,and that we constantly enhance these.The updated Group Steering Model places the brand groups and technol-ogy platforms center stage in order to scale up the latter while maxi

194、mizing synergies across the entire Group product portfolio.A new strategy and product planning process that has been optimized for efficiency is being developed on the basis of this approach.The package of measures for this initiative hones the definition of roles and responsibilities in the Group a

195、nd improves transparency in this respect both inside and outside the Company.It also promotes the entre-preneurship of the independent units and brands and at the same time strengthens collaboration across the Group.People&TransformationAs it becomes a global tech company,the Volkswagen Group will s

196、ee the biggest transformation of its workforce in its corporate history.To ensure the Group remains competitive in the future,we need to attract top talent and support ex-isting employees by providing extensive training where re-quired.Our aim is to retain staff for the long term.It is there-fore fu

197、ndamental that we address the changing needs of our employees and offer them an outstanding employee experi-ence.To achieve our Groups ambitious objectives,we must also create and promote an environment for productive teams,resulting in a strong,sustainable and socially respon-sible corporate cultur

198、e that fosters a sense of belonging and loyalty to the Company.A further focus is on aligning the Company with society and the environment.Financing the Transformation The transformation being driven by digitalization and elec-trification will require extensive investment.To meet this need for finan

199、cing,the Financing the Transformation base initiative aims to leverage even more Group-wide synergies across all functional areas along the value chain,focusing on costs and efficiency.The Group has therefore set itself the objective of lasting improvements to its fixed-cost structure,plant producti

200、vity,procurement costs,distribution expenses and working capital management.Strategic Financial Performance Indicators20222030 targetOperating return on sales8.1%9 to 11%Automotive investment ratio 13.6%9%Cash conversion rate in the Automotive Division129.2%60%Net liquidity in the Automotive Divisio

201、n 43.0 billion2 15.4%10%of consolidated sales revenue Return on investment(ROI)in the Automotive Division 12.0%18%1 Net cash flow as a percentage of the operating result in the Automotive Division.2 Including cash inflows from the IPO of Dr.Ing.h.c.F.Porsche AG.Table of Contents The Groups DNA|Decar

202、bonization|Circular Economy|People in the Transformation|Diversity|Integrity and Compliance|Supply Chain and Human Rights 22Materiality Analysis Linked with Group Strategy and ESG PerformanceThe materiality process is used to identify and evaluate the most important sustainability issues for the Gro

203、up.Based on the business model and its impact on society,the focus is on key ESG requirements,stakeholder expectations,and com-pliance with legal requirements and internationally established reporting standards.The Group conducted a materiality analysis in 2022.In review-ing a large number of potent

204、ially material issues,we consid-ered both external and internal company perspectives.For the external side,80 topic clusters were derived from 700 topics and weighted along 330 criteria.This was based on:Results of dialog processes with the Sustainability Council and the Stakeholder Panel Reputation

205、 surveys Requirements of relevant international and national frame-works such as the EU Taxonomy,the German Commercial Code(Handelsgesetzbuch HGB),the UN Global Compact,the Sustainability Accounting Standards Board(SASB),the Global Reporting Initiative(GRI)or the Sustainable Development Goals(SDGs)K

206、ey ESG ratings AI-supported trend analyses and management studiesFor the internal dimension,we primarily took account of all Group policies on sustainability management,materiality analyses of the Group brands and country-specific risk ana-lyses of Volkswagen Group production sites.The focus topics

207、prioritized for the NEW AUTO Group strategy were confirmed with the 2022 materiality analysis and classified as material by the Group Sustainability Steering Committee.The five nonfinancial matters arising from the German CSR Directive Implementation Act(CSR-Richtlinie-Umsetzungsgesetz CSR-RUG)are c

208、overed by the six focus issues.In addition,these six focus areas,in turn,cover a significant part of the assessment criteria of ESG ratings:Decarbonization Circular economy People in the transformation Diversity Integrity and compliance Supply chain and human rightsThe focus topics identified were r

209、eviewed in 2023,taking into account the requirements of the German Supply Chain Due Diligence Act(Lieferkettensorgfaltspflichten gesetz LkSG)and changes in the material ESG ratings.Ultimately,the six focus topics were reconfirmed.A comprehensive ma-teriality analysis in accordance with the requireme

210、nts of the European Corporate Sustainability Reporting Directive(CSRD)and European Sustainability Reporting Standards(ESRS)is being conducted in a separate process to prepare for the 2024 reporting.Each focus issue is to the extent currently possible linked with clear targets and milestones and with

211、 KPIs and packages of measures.ESG-related KPIs such as the decarbonization index(DCI),the diversity index,and the governance factor are already reflected in the remuneration of members of the Board of Management.2023 Annual Report Remuneration ReportThe topics classified as material also provide th

212、e foundation for the structure of this sustainability report and serve as thebasis for managing the Volkswagen Groups sustainability program.ESG Performance Management and Materiality AnalysisGRI 2-19,3-1,3-2 Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transformat

213、ion|Diversity|Integrity and Compliance|Supply Chain and Human Rights ESG rating scales MSCI:CCCAAA;Sustainalytics:1000;ISS:D-A+1 Disclaimer:https:/ 2022 2023B B B29.6(medium risk)26.1(medium risk)26.4(medium risk)C C C+23Action Program for Optimized ESG PerformanceThe NEW AUTO Group strategy focuses

214、 not only on techno-logical and product-related initiatives but also on improving the Groups ESG performance.This is because this directly and indirectly impacts Volkswagens market capitalization,costs of capital and attractiveness to investors.This is partly due to increasing density of regulations

215、 on sustainability as a result of frameworks such as the EU Taxonomy,CSRD,or regulations on the responsible shaping of supply chains.More-over,capital market players such as institutional investors not only expect transparency on the Groups sustainability performance but also an effectively implemen

216、ted strategy that leads to continuous improvement in sustainability per-formance.A significant share of globally managed assets is already oriented toward ESG criteria.In the past reporting year,we significantly expanded our action program that targets improvement of our results in ESG ratings by 20

217、25.It consists of four pillars:1.ESG performance management:We close existing gaps in ESG performance and create additional transparency by disclosing our measures and key performance indicators.2.ESG engagement:We are intensifying our communication on ESG and sustainability in the capital market by

218、 com-municating our messages and results in roadshows,in-vestor conferences and other formats.In this way,we ex-plain our current performance and at the same time benefit from the learning effects and knowledge transfer that this dialog makes possible.www.volkswagen- Financial Calendar3.Management o

219、f controversies:We aim to reduce the neg-ative impact of legal or media controversies regarding the Volkswagen Group on our rating results.Our own web-based information on existing ESG controversies around Volkswagen makes a contribution to clarification and ob-jectivization.www.volkswagen- ESG Cont

220、roversies4.Internal ESG data infrastructure:We are working on es-tablishing comprehensive ESG data reporting tools for better data-supported infrastructure and aim to create comprehensive ESG information offerings for relevant stakeholders in the future.Compared with prior years,the Groups score in

221、the ESG rating from ISS improved from C to C+.The Volkswagen Groups Sustainalytics rating remained stable in 2023 at a rating level of“medium risk”(2022:26.1;2023:26.4).In fiscal year 2023,Volkswagen continued to have a score of B from MSCI and had a climate rating of A from CDP.Volkswagen reported

222、material content in the Water Disclosure Project(WDP)but was not assessed in fiscal year 2023.A change in valuation methods meant that,at the end of 2022,financial services provider MSCI ESG Research gave Volkswagen AG a red flag in its ESG Controversies report for alleged human rights violations in

223、 a plant in rmqi inthe Xinjiang region that is operated by a subsidiary of Volkswagens Chinese joint venture SAIC Volkswagen Auto-motive Co.Ltd.No signs of human rights violations were found either during the visit by the member of the Board of Management of Volkswagen AG for China,Ralf Brandsttter,

224、in February 2023 or after Loening Human Rights&Re-sponsible Business GmbH conducted an independent audit of the plant in November 2023.On December 11,2023,MSCI ESG Research raised Volkswagen AGs rating from red flag(score 0)to orange flag(score 1).Table of Contents The Groups DNA|Decarbonization|Cir

225、cular Economy|People in the Transformation|Diversity|Integrity and Compliance|Supply Chain and Human Rights 24Making the Social and Environmental Impact of Our Actions MeasurableThe Volkswagen Group wants to measure the impact of its actions even more comprehensively in quantitative terms in the fut

226、ure and,if possible and reasonable,to monetize this.This involves assessing positive and negative effects on,among other things,the environmental and social systems for the purpose of the inside-out perspective.This impact relates to the Groups entire business,including its supply chains and its pro

227、ducts and services.This means we are not only taking on board impetus from regulatory developments as it emanates from the requirements of the CSRD or the EU Green Bond Standard,but also impetus from international initiatives and organizations such as the Organisation for Economic Co-operation and D

228、evelopment(OECD)and the World Business Council for Sustainable Development(WBCSD).At the same time,like other global companies,we are en-deavoring to make even greater use of an impact assessment in our decision-making and management processes,risk management,reporting and communication with our sta

229、ke-holders.Impact assessments already represent tried-and-tested tools at Volkswagen,particularly for the assessment of mobility concepts.Here,new options are continuously investigated for their sustainability impact and readjusted as necessary.Sustainability Impact of New Mobility OptionsWe are cur

230、rently developing a Group-wide concept for valuing impact with the name of“Impact Valuation Volkswagen Group.”The concept is based on the successful implementa-tion of two pilot projects at site and brand level.In order to advance the topic of impact valuation and develop comparable concepts,the Vol

231、kswagen Group is a member of the Value Balancing Alliance(VBA)together with the Porsche brand.This initiative champions the development of uniform assessment standards for impact valuation and the financial balancing of sustainability impacts on an interna-tional level across sectors.In addition to

232、the Volkswagen Group,the VBAs members include numerous global companies,such as Bosch,BASF,BMW,Michelin and SAP.Value Balancing Alliance Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transformation|Diversity|Integrity and Compliance|Supply Chain and Human Rights 25S

233、tructure and Tasks of the Sustainability OrganizationSustainability means maintaining intact environmental,social and economic systems with long-term viability at global,regional and local level.The Volkswagen Group can influence these systems in various ways and actively takes responsi-bility to ma

234、ke a contribution to preserving their sustainability.An extensive sustainability management system was set up for this purpose.The related structures,processes and re-sponsibilities are codified in a specific Group policy.We view sustainability management as a continuous improvement process.The Chai

235、rman of the Board of Management of Volkswagen AG has cross-functional overall responsibility for sustainability.Additional responsibility is taken by members of the Board of Management with their responsibility for specific manage-ment systems relating to sustainability and by the newly appointed Ch

236、ief Sustainability Officer at Group level.Sustainability is part of the Top 10 program and is managed through the NEW AUTO strategys strategic management structure.The content is regularly evaluated and reported in the Board of Management.Furthermore,the Groups sustainability function(Group Sus-tain

237、ability)coordinates all sustainability-related activities and the Group-wide and cross-functional network for sus-tainability.Communication with Group functions,brands and companies is structured via defined core processes.They serve to create transparency on external requirements and translate thes

238、e into corporate action.The core processes include the sustainability strategy and materiality analysis,stakeholder management,ESG ratings and rankings,sus-tainability policies and sustainability reporting.Group Sus-tainability is allocated to Group and Product Strategy and to the Office of the Corp

239、orate Secretary in order to ensure that sustainability is closely linked with the strategic corporate goals and the core business.In the reporting period,the Volkswagen Group began revising its structure and workflows in light of new and upcoming regulatory requirements and is expected to complete t

240、his process in 2024.Sustainability ManagementGRI 2-9,2-12,2-13,2-14Board of Management levelGroup levelGroup levelRegion levelBoard of ManagementChairman of the Board of Management(CEO)Members of the Board of ManagementGroupfunctionsGroup Sustainability(CSO)Group strategy and Office of the Corporate

241、 SecretaryGroup ProductionGroup HRBrand functionsProductionHRBrand Sustainability Manager(Audi,Porsche.)Region/siteCEO=Chief Executive OfficerCSO=Chief Sustainability OfficerManagement of cross-functional topicsManagement of function-specific topicsGroup function sustainability managersDiscussion of

242、 core sustainability processesDiscussion of function-specific topicsSustainability Embedded in the Volkswagen Group Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transformation|Diversity|Integrity and Compliance|Supply Chain and Human Rights 26At brand level,the bra

243、nd sustainability managers carry out the cross-functional coordination of sustainability topics,develop the sustainability strategy,are responsible for content and reporting on sustainability topics within the brand,represent the brand on sustainability topics externally and coordinate with Group Su

244、stainability.The Sustainability Committee as an Independent Driving Force and PartnerAt Group level,the Sustainability Council has a prominent position.This advisory committee,which was created in 2016,supports the Volkswagen Group with important strategic sustainability topics and is made up of int

245、ernationally re-nowned experts from the academic world,politics and society.The committee establishes its own working methods and areas of focus independently,has extensive rights for the purposes of exchanging information,consultation and initi-ating action,and consults regularly with the Board of

246、Manage-ment,top management and the employee representatives.The previous Sustainability Councils mandate ended at the end of 2022.In the reporting period,we began to reorganize its strategy and composition.Further information is available on the Sustainability Committees website:www.volkswagen- Sust

247、ainability CouncilUN Global CompactVolkswagen AG is a participant in the UN Global Compact,the worlds largest corporate sustainability initiative,and participates in national and international initiatives together with other Group companies,including AUDI AG,MAN Truck&Bus SE,Dr.Ing.h.c.F.Porsche AG,

248、Scania AB and TRATON SE.Fund managers in the capital markets view membership of the UNGC as an important factor when deciding to invest in shares and bonds of Volkswagen.Sustainability-oriented funds have grown in recent years and have become indispens-able as stakeholders.As part of the annual Comm

249、unication on Progress,the Volkswagen Group and its brands report on their progress in implementing the ten UNGC principles and their activities to support the Sustainable Development Goals(SDGs).The progress reports of Volkswagen AG,AUDI AG,Dr.Ing.h.c.F.Porsche AG and TRATON SE,which comprise all ot

250、her participants in the Group,can be viewed on the UN Global Compact website.UN Global Compact VolkswagenGreen Finance Framework for Investments in SustainabilityMassive investment is needed to transform the Volkswagen Group.At the same time,investors are looking for sustain-able investment options.

251、Volkswagen AG has had a Green Finance Framework for various forms of financing such as green bonds since 2020.This document defines the frame-work for financial instruments geared to sustainability.In the reporting year,we refinanced fiscal year 2022 capital expenditure aligned with the EU Taxonomy

252、on the basis of the Green Finance Framework newly published in 2022 by issuing 3.5 billion in green bonds.The Volkswagen Group has thus issued a total of 9.5 billion in green bonds to refi-nance capital expenditure for all-electric vehicles(BEVs)since 2020.In 2022,the Volkswagen Group published a ne

253、w Green Finance Framework that was further developed in particular through the integration of the EU Taxonomy.As was the case in the previous Green Finance Framework,the Volkswagen Group continues to focus on the exclusive in-clusion of BEVs in sustainable financing.Under the new Green Finance Frame

254、work,the only investments that will be con-sidered are investments for BEVs produced by the Volkswagen Group that are aligned with the EU Taxonomy.This system-atically links our corporate objective of net carbon neutrality by 2050 with our financing strategy.The funds raised under the Green Finance

255、Framework are specifically used to refi-nance environmentally friendly projects such as e-mobility.This both fulfills the clean transportation category of the Green Bond Principles of the International Capital Market Association(ICMA)and is in line with the goals of the United Nations and the Europe

256、an Union for sustainable development.Sustainalytics has confirmed again for the new Green Finance Framework that the framework complies with the ICMAs Green Bond Principles and the Green Loan Principles of the Loan Market Association(LMA).Volkswagen published its third Green Finance Report,which con

257、tains the Allocation Report and the Impact Report,during the reporting year.More information is available on our corpo-rate website.www.volkswagen- Green FinanceGRI 2-12,2-13 Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transformation|Diversity|Integrity and Compli

258、ance|Supply Chain and Human Rights 27Mobility Solutions with Measurable Benefits for People and the EnvironmentOur global society today faces the major challenge of find-ing the right balance when shaping mobility.The pressures of noise,traffic jams,accidents,traffic areas or air quality need to be

259、reduced in many areas.At the same time,many people do not have sufficient,affordable and accessible transportation,limiting their participation in society.This is not only the case in economically weaker regions but also in rural areas and suburbs.The Volkswagen Group offers both innovative vehicle

260、technol-ogies and forward-looking mobility services.Through these,the Group wants not only to meet its customers requirements but also to help to solve local environmental and traffic prob-lems and protect the climate.The global cooperation with partners outside the Group plays an important role.We

261、are guided here by the“Mobility for generations to come”vision that our NEW AUTO Group strategy describes.NEW AUTO Group Strategy Our expectation is that most people will still prefer individual mobility by 2030,but their focus will be more on using vehicles than on owning them.In light of this,Volk

262、swagen Financial Services AG is developing a platform for the Volkswagen Group and its brands that covers customers different mobility needs from using a vehicle for a few minutes to a subscrip-tion for multiple years.The Europcar Mobility Group will be an important element of this platform.Assessin

263、g the Sustainability of Mobility Services Using SimulationsIt has been shown many times that new mobility concepts increase the range of options in urban areas but are not auto-matically sustainable.Creating a basis of assessment is there-fore important so that mobility solutions can be assessed for

264、 their sustainability impact and also influenced.This is be-cause determining the right framework conditions and regu-lations is of decisive importance to make substantial contri-butions to sustainable cities and tap into business models for the Group.Political players and cities are also increasing

265、ly requiring early proof that mobility solutions actually have sustainability effects,and operating licenses may be condi-tional on this proof.Against this background,the Volkswagen Group is continu-ously developing the mobility simulation framework.Its focus is on impact assessments that digitally

266、replicate mobility on the basis of real data.Technologies such as data analytics and machine learning help us to virtually pilot certain services in advance on a large scale in what is known as a digital twin.This means that possible improvements and also any unde-sirable side effects can be discove

267、red early and taken into account when developing mobility solutions.We also developed the Mobility Impact Analyzer(MIA)in the reporting year to present the complex effects of a solution such as ride pooling over time and geographically for cities or public transportation operators.This data-supporte

268、d cloud application shows how a mobility solution can be integrated into a citys mobility system and what effects certain scenarios have.MOIA,our on-demand ride pooling provider,presented MIA to an expert audience at the UITP Global Public Transport Summit in Barcelona in June 2023.Sustainability Im

269、pact ofNew Mobility Options Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transformation|Diversity|Integrity and Compliance|Supply Chain and Human Rights 28We endeavor to regularly communicate with stakeholders on mobility solutions and analyze trends on an ongoing

270、basis so that we can update targets and criteria as needed.The methods and models for mobility simulation are also being continuously developed.For example,in the reporting year we developed a new method that reduces a simulations lengthy computing times.It was presented at the meeting of the Transp

271、ortation Research Board in the USA.In addition,we aim to steadily improve the quality of our results by compar-ing these with mobility providers real data and experience.We use various key figures that are scientifically recognized and also reflect the requirements of various players to evaluate mob

272、ility services.Customers value short and reliable journey times,while access for citizens and the reduction of CO emissions is important for society.Towns and cities for their part want traffic to occupy as little space as possible and to improve air quality,while good utilization of its services is

273、 essential to the mobility provider.MOIA:Recognizing and Serving Mobility NeedsMeasures for increasing efficiency and better capacity utiliza-tion continue to be important steps on the path to sustainable mobility.In the case of ride pooling services such as MOIA,the transport needs of various custo

274、mers must be linked as optimally as possible in order to balance detours and waiting times with high utilization of capacity.Modeling and impact assessments provide valuable services here in order to represent the high level of complexity.It should be noted that these analyses always take an overarc

275、hing view of traffic.This is because users take other options into account when making decisions.Central to the sustainability assessment is what users of new services for example,ride pooling,e-scooters or car sharing would otherwise use or have pre-viously used.For example,there is a much debated

276、question about whether ride pooling might ever overtake public trans-portation.Initial fears are,however,proving wrong.MOIAs accompanying research instead proved the opposite:The research showed that the mobility network and especially public transportation would benefit from the expansion of ride p

277、ooling.MOIA expanded its revenue model in the reporting year.The company has introduced a licensing model for ride pooling and established a new business unit Mobility Analytics.Asa result,MOIA will no longer operate exclusively in the customer market but also offers cities,public transportation ope

278、rators and local authorities all the services necessary toimplement ride pooling within the framework of public transportation.In addition to service design and consulting,the new licensing model includes operating models,the fully integrated ride-pooling and operating software required for this and

279、,where applicable,the use of the MOIA brand.In Hamburg,MOIA has been providing its ride pooling service in close partnership with the transportation company Ham-burger Hochbahn since 2019.Since the start of 2023,the company has been integrated in Hamburgs local public transportation system as a self

280、-sustaining on-demand ride pooling service licensed under the amended Passenger Transportation Act.MOIA has carried more than 8.9 million passengers in Hamburg to date.Achieving More with Comprehensive Solutions The intermodal impact assessments and analyses provide important pointers to which lever

281、s can be used to improve the sustainability impact of new mobility solutions.One factor that impacts the effectiveness of an individual solution is its integration into the transportation and energy system.A good example of this is an e-car sharing pilot project in southern Germany,in which AUDI AG

282、is involved as a partner.The project is being run in our rural area where,for the most part,private vehicles predominate and car sharing has so far barely gained acceptance.It aims to close mobility gaps in public transportation services and contribute to reliable mobility.In addition to electric ve

283、hicles,other partners from the Group are also contributing solutions for charging infra-structure(Elli)and booking systems(SEAT:Code).The value of solutions that do not isolate the energy and mobility systems but take a holistic view of them was also evident in another context.As a long-standing mem

284、ber of the World Business Council for Sustainable Development(WBCSD),in 2023 the Volkswagen Group continued its in-volvement in the“Transport and Mobility Pathway”one of the new action areas in the WBCSDs Vision 2050.The energy sector focal issue of charging infrastructure was considered together wi

285、th mobility behavior here.The result was that the location and power of public charging points should also take account of the real routes taken by e-vehicle drivers so that they can charge their e-vehicles without unnecessary detours and as close to the destination as possible.During the vehicles i

286、dle time,charging or feedback of power into the grid should be synchronized with the availability of renew-able energy.Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transformation|Diversity|Integrity and Compliance|Supply Chain and Human Rights 29Improving Participa

287、tion in Society In addition to environmental and economic objectives,social aspects,such as access to and participation in society,also play an important role for mobility solutions.This includes attractive public transport,especially in urban areas.Our MAN brand,for example,makes a contribution tha

288、t benefits the population as a whole with electric,efficient,digital,and,in the future,also automated transportation solutions.In addition,for example,Volkswagen Passenger Cars and Volkswagen Commercial Vehicles provide people with disabilities with barrier-free access to their own vehicle for examp

289、le,through hand controls.So that passengers with mobility restrictions such as wheelchair users can also spontaneously and con-veniently get from A to B,MOIA has been operating 15 acces-sible vehicles in Hamburg with appropriately trained drivers since the start of 2023.And like in Hamburg public tr

290、ans-portation,people with severe disabilities also travel for free with MOIA.AUDI AGs electric car-sharing project described above goes a step further when it comes to inclusion.The plan is to found an inclusion company together with partners to help people with impairments to find their way into pe

291、r-manent employment.Astypalea:Transformation to a Smart and Green IslandAstypalea is a living lab for smart and sustainable mobility solutions in Europe.The Greek island is located in the Aegean Sea,has 1,300 inhabitants and is similar in size to the German island of Sylt.In addition,36,000 tourists

292、 on average visit the island every year.Astypalea is now to be transformed into a smart and green island by 2026.To this end,the Volkswagen Group has joined forces with the Hellenic Republic.Traffic on Astypalea will be converted to e-mobility.This in-cludes the public transport system,local authori

293、ty vehicles(e.g.,police),company vehicles and the private vehicles of the inhabitants.All new vehicles registered here are now ex-clusively electric vehicles.At the same time,an extensive network of private and public charging stations is being set up.The all-electric vehicle-sharing service astyGO

294、and the ride-sharing service ASTYBUS have been launched.Unlike the previous bus system,ASTYBUS operates the whole year and can call at all the hot spots on the island.In the first year of operation since June 2022,it has completed more than 200,000 customer kilometers,and a fourth of the inhabitants

295、 use the service regularly.E-cars,e-scooters and e-bikes make up the vehicle-sharing service.Bookings are made by smart phone using the integrated astyMOVE app.The results of an independent,accompanying scientific study show a high level of approval from the people of Astypalea:In general,80%see the

296、 transformation positively and ASTYBUS even has an approval rating of 97%.The energy system of Astypalea will also be gradually converted to solar and wind energy under the leadership of the Hellenic Republic:In 2024,the existing solar park will be expanded to an output of 3.5 MW and a storage batte

297、ry will be added to not just supply the e-vehicles with green energy but also cover up to 60%of the islands entire energy needs with renewable energy.Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transformation|Diversity|Integrity and Compliance|Supply Chain and Hum

298、an Rights 30Strategic Stakeholder ManagementOur stakeholders are individuals,groups or organizations who have a material influence on or are materially influenced by the way in which the Group reaches its corporate decisions and the implications of those decisions.Our employees and customers are at

299、the center of our stakeholder network.Inaddition,we have identified eight further groups.Continuous communication between internal and external stakeholder groups is important to us.In this context,the Supervisory Board and the Works Council act not only as supervisory and advisory bodies but also a

300、s interfaces between internal and external stakeholders.Stakeholder ManagementVolkswagen Group StakeholdersGRI 2-29 Policymakers and associationsBusiness partners and suppliersCompetitorsAcademics and expertsResidents and local authoritiesNGOs/non-profit organizationsVolkswagen GroupWORKS COUNCILSUP

301、ER VISORY BOARDCUSTOMERSEMPLOYEES123MediaOwners,investors and analysts Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transformation|Diversity|Integrity and Compliance|Supply Chain and Human Rights 31For us,stakeholder management means interacting with the Companys k

302、ey stakeholder groups systematically and con-tinuously as part of the Group initiative with the focus topics of ESG performance,decarbonization and integrity,which is part of the NEW AUTO Group strategy.Our aim is open,con-structive and also critical communication with the stakeholder groups listed

303、in the diagram about their requirements and ex-pectations of us,as well as central issues of our Group strategy and its implementation.Our brands and regions have their own stakeholder management strategies.The Groups task is to bring together and orchestrate these activities in an inte-grated frame

304、work.This framework includes:Stakeholder engagement on a Group level with specific committees,formats and a focus on stakeholders relevant across the Group Advising and coordinating the brands and regions on the implementation of their stakeholder engagement activities Carrying out regular stakehold

305、er analyses and stakeholder surveysStakeholder management is one of the core processes of sus-tainability management in the Group.Tasks,responsibilities and organization are set out in the Group policy on sustain-ability management.Sustainability ManagementAs an international group,our business acti

306、vities impact the lives of a large number of different people.Appropriately aligned stakeholder management is essential so as to determine the sustainability strategys material areas for action and become aware of stakeholders changing expectations of us at an early stage.It also involves continuous

307、ly informing andregularly communicating with all business areas.This communication not only helps us to identify our stakeholders requirements,it also plays a key role in achieving corporate goals and complying with reporting standards and legal requirements.The transformation of the Volkswagen Grou

308、p from a vehicle manufacturer to a world-leading,software-driven mobility provider is being expanded through new areas of expertise such as autonomous driving,battery technology,charging in-frastructure and energy services.This changes the range of relevant stakeholder groups and their expectations

309、and re-quirements of the Group.Here,too,our aim is to take all stake-holders into consideration equally.We want to inform them in a way appropriate to the target audience,actively involve them in the transformation process by requesting and encouraging their feedback and suggestions for the sustaina

310、ble develop-ment of our Group and society.Our aim is to position our Group robustly for the future amid ever faster and more strongly changing economic,environmental and social framework conditions and sustainably improve its acceptance and repu-tation.The Volkswagen Group is a player in numerous ne

311、tworks of experts and decision-makers who have a significant influence on our business and the agenda in the sociopolitical environ-ment.An overview of the Groups most important member-ships is available online.www.volkswagen- MembershipsReputation KPI Measures Stakeholder TrustThe reputation key pe

312、rformance indicator(KPI)makes a decisive contribution to anchoring stakeholder management in the sustainability strategy.The indicator reflects the degree to which external stakeholders trust the Volkswagen Group.Since 2017,we have asked annually for an assessment of the Volkswagen Groups reputation

313、.Eliciting this KPI enables a holistic view of attitudes and opinions on the Group and allows us to identify whether and how evaluations change over the course of time.The Audi,Porsche and Volkswagen Passenger Cars brands are consistently represented in the survey.The survey data are based on person

314、al telephone interviews conducted with rep-resentatives of importance to the Volkswagen Group from the fields of politics and associations,media,academia,NGOs,investors and analysts and also business partners.Fundamen-tally,representatives of the highest possible decision-making level are surveyed i

315、n all the stakeholder groups.In Germany,the 2023 reputation KPI for the Volkswagen Group is 83%.GRI 2-28,2-29 Table of Contents The Groups DNA|Decarbonization|Circular Economy|People in the Transformation|Diversity|Integrity and Compliance|Supply Chain and Human Rights 32From 2017 through 2022,the s

316、urvey was conducted in the three markets of Germany,China and the USA.Due to the homogeneous competitive environment,there were no sig-nificant changes in the results in the USA or China in the past few years from which we were able to derive important impetus for action for the markets.This particu

317、larly applies to China,where,since the start of the study,the Volkswagen Group has gained and held the top position.The situation is different in Germany,where the competitive environment is becoming increasingly varied and thus more challenging due to international competitors.As one of the Groups

318、most important and sensitive core markets,closely monitoring the market is vital here for future decisions and activities.For this reason,the 2023 survey was only conducted in Germany.Additional open questions were added to the reputation study in 2023.The aim was to proactively obtain individual fe

319、edback from stakeholders by these means in order to be able to identify and validate requirements and expectations even more specifically and include these in future decision-making processes.The Group obtained the following results in 2023:83%of stakeholders in Germany stated that they trust the Vo

320、lkswagen Group(2022:78%).The reputation KPI thus improved sig-nificantly compared with 2022.In contrast to the previous years results,this is not in line with the overall competitive environment in Germany and is partly due to stable business performance despite the economically and politically chal

321、-lenging situation.A fundamental revision and realignment of the study is planned for 2024 in line with the changing eco-nomic,social and regulatory framework conditions.Stakeholder Panel as a Critical CompanionThe Volkswagen Group has also established a Stakeholder Panel,which has now overseen the

322、Group sustainability ac-tivities for over 20 years.The whole panel(Germany/Austria/Switzerland;EU)currently comprises more than 200 institu-tions and organizations.In 2023,the Volkswagen Group started to develop a systematic analysis process for stake-holders,which is to be implemented in 2024.Follo

323、wing the interruption caused by the pandemic in 2020 and 2021 and the resumption of our communication activities in 2022,we started to restructure and redesign our stakeholder manage-ment in the reporting year.We want to incorporate our stakeholders suggestions and recommendations even better in the

324、 future through the introduction of new formats in-tended to create the opportunity for even more interactive and transparent communication on important sustainability issues relevant to corporate strategy and society.GRI 2-29 Table of Contents The Groups DNA|Decarbonization|Circular Economy|People

325、in the Transformation|Diversity|Integrity and Compliance|Supply Chain and Human Rights 33Consistent Compliance with Environmental RequirementsCompliance with environmental laws and requirements at all our sites is a high priority for Volkswagen.Our effective environmental compliance management is in

326、tended to ensure that we not only meet legal requirements but also the re-quirements of other internal or external stakeholders.At the same time,it allows us to live up to our binding commitments on environmental matters and compliant behavior.The envi-ronmental compliance management system is,in pa

327、rticular,a risk provision against breaches of regulations that may be associated with damage to the environment,our Group and society.It helps us to continuously improve our environmental performance and reduce our environmental impact.One of the focuses of the NEW AUTO Group strategy is the Groups

328、ESG performance.In environmental protection,de-carbonization and circular economy are the focus issues.At the same time,the environmental compatibility of our prod-ucts,services and processes is one of our Group Essentials.With electric drives,digital connectivity and autonomous driving,we want to m

329、ake the car cleaner,more intelligent,quieter and safer.We use our innovative power in order to reduce our environmental footprint over the entire life cycle Environmental Compliance Managementof our products and mobility solutions.Our innovations are at the same time intended to help our customers t

330、o be more environmentally friendly.The goTOzero Mission Statement:Minimization of Negative Effects on the EnvironmentThe goTOzero environmental mission statement serves as the framework for all the Volkswagen Groups environmental activities.With this mission statement,we aspire to reduce environment

331、al impact along the entire life cycle from raw material extraction until end-of-life for all our products and mobility solutions in order to keep ecosystems intact.Compliance with environmental regulations,standards and voluntary commitments is a basic prerequisite of our actions.The Group mission s

332、tatement combines all strategic and compliance-related aspects of the Groups environmental activities and forms the basis for linking targets,key perfor-mance indicators,programs and measures.The mission statement is continuously reviewed,and its objectives are adjusted to new requirements and chang

333、es in conditions.The mission statement puts the Groups focus on the four fields for action presented in the diagram below and their underlying objectives.goTOzero Environmental Mission Statement:Action AreasPROTECTINGthe climateWe are committed to the Paris Climate Agreement and aim for an ambition level of 1.5 degrees Celsius.We systematically focus on the electrification of our products,decarbon