Ranking
Comparison
Total Score
Environment
Human Rights
Summary
For the second year running, Volkswagen’s performance has been one of the strongest of the Leaderboard. The company has improved in six out of the eight Leaderboard subsections, increasing its overall score by 6 percentage points.
In the Climate and Environment section, Volkswagen notably improved in the aluminium subsection, with a score increase of 12 percentage points. VW earned additional points for disclosing a new low-carbon aluminium supply agreement and more details on its closed-loop systems for aluminium recycling. However, while the company has now signed multiple purchase agreements for low-carbon steel and aluminium, it lacks specific decarbonization targets, tailored strategies and detailed progress reporting on its efforts to decarbonize these two supply chains.
On human rights, Volkswagen’s overall score has risen by 9 percentage points, the second largest score increase, together with BYD. Having been the top improver on human rights last year, the company is clearly on an upward trajectory. This continued strong rate of progress means that, although VW remains in 5th position overall, the company has been able to climb from 5th to 3rd position in the human rights ranking, further consolidating its leadership position in this area. Particularly noteworthy is the company’s score improvement of 17 percentage points on Indigenous Peoples’ Rights, due to stronger commitments and enhanced disclosures in this area.
An important source of VW’s score improvements is the company’s detailed Responsible Raw Materials Report, providing some of the most comprehensive information out of all 18 automakers about the company’s environmental and human rights due diligence efforts across a range of supply chains and issues. This report is earning the company points across a number of indicators in both of the Leaderboard sections.
Key Findings
- Has a net carbon neutrality target for 2050, but its interim 2030 target only covers Scope 3 emissions from the use phase, excluding upstream/purchased goods.
- A leader on deforestation risk management, applying contractually binding sustainability specifications for new contracts across both leather and rubber.
- Has made notable progress in aluminum supply chain decarbonization, with Audi engaging in the ASI and Porsche partnering with Hydro to procure low-carbon aluminum. However, progress in the steel subsection has stagnated.
- Maintains a good level of transparency on due diligence efforts: is one of very few automakers to provide a good level of description regarding identified human rights risks, including in relation to conflict and transition minerals, and one of only two companies to disclose the number of suppliers assessed prior to signing contracts, including detail as to their tiers.
- Still failing to demonstrate the scale and results of supply chain monitoring efforts by disclosing data relating to supplier audits, non-performances, and Corrective Action Plans.
- Regressed on grievance disclosure, no longer providing a breakdown of supply chain grievances by type, tier, and geographical location, and information about their outcome. This was previously an area where VW was setting a best practice standard for its peers.
- Joins Mercedes and Ford as the only three automakers require IRMA auditing of mining suppliers, and to engage directly with extractive companies in this regard.
- Has made considerable progress on Indigenous Peoples’ rights: now explicitly commits to FPIC in its new Responsible Raw Materials Policy; includes risks to FPIC and other Indigenous Peoples’ rights in their risk identification process through to the extraction point; and discloses where in the supply chain risks to Indigenous Peoples’ rights occur.
- One of a few companies to describe the ways in which supply chain workers are consulted on risks to their rights.
Score Breakdown
Fossil-Free & Environmentally Sustainable Supply Chains
General
Steel
Aluminum
Batteries
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Human Rights & Responsible Resourcing
General
Minerals
Indigenous' Rights
Workers' Rights
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Supply Chain News & Progress
Latest on Volkswagen
Supply chain transformation is a risk management imperative and opportunity for a competitive edge. Leading brands are already securing a first-mover advantage and leveraging their power to transform legacy supply chains into a force for good. The revolution is underway.
Volkswagen AG and Vulcan Green Steel enter into partnership
Volkswagen AG and Vulcan Green Steel have signed a Memorandum of Understanding (MoU) for a partnership for low-carbon steel – a key element of Volkswagen’s green steel strategy.
Illegal rare earth mining in Myanmar linked to supply chain of major automakers
A new report by Global Witness has documented the harmful impacts of illegal rare earth mining in Myanmar, linked to the supply chains of major automakers – including Volkswagen, Toyota, Tesla, Nissan, Ford and Hyundai.
Ford, Tesla and VW nickel partnerships in Indonesia linked to climate rights, environmental harms
A massive, multi-billion-dollar nickel industrial complex in North Maluku and nearby nickel mining is violating the rights of local communities, including Indigenous Peoples, causing significant deforestation, air and water pollution, and emitting massive amounts of greenhouse gases from captive coal plants, Climate Rights International said in a report.
For the 124-page report, “Nickel Unearthed: The Human and Climate Costs of Indonesia’s Nickel Industry,” Climate Rights International interviewed 45 people living near smelting operations at the Indonesia Weda Bay Industrial Park (IWIP) and nearby nickel mines on the island of Halmahera. Local residents explained how companies, in coordination with Indonesian police and military personnel, have engaged in land grabbing, coercion, and intimidation of Indigenous Peoples and other communities, who are experiencing serious and potentially existential threats to their traditional ways of life.
Electric vehicle companies such as Tesla, Ford, and Volkswagen that have contracts to source nickel from Indonesia, including from companies with operations at IWIP, should immediately use their leverage to push suppliers to address harms to local communities and the environment, and if necessary, suspend sourcing nickel from companies responsible for such abuses.
Progress on battery chemistries holds potential to reduce demand for high-intensity minerals
During the first few months of 2023, several automakers have made announcements of investments and / or progress made on new battery chemistries that promise to reduce their demand of high-intensity minerals such as cobalt, nickel and lithium. In March, the JAC Group’s joint venture with Volkswagen in China made history by introducing the world’s first electric vehicle (EV) powered by a sodium-ion battery – a battery technology that, according to the IEA, “has the potential to completely avoid the use of critical metals.” BYD has also said that it plans to use sodium-ion batteries in its vehicles later in the year. In May, Stellantis announced an investment in lithium-sulphur battery developer Lyten, working on a novel three-dimensional graphene material platform that is free from nickel, cobalt, and manganese.
VW invests in resource-efficient battery design and signs agreements for “low CO2” steel and “environmentally-friendly”lithium
VW has taken a stake in 24M Technologies whose battery technology claims to require 40% less production area, is more efficient for recycling, and reduces the CO2 footprint of battery production. VW has also signed agreements for “low-CO2” steel from the end of 2025 with Salzgitter and for lithium with Vulcan Energy Resources. Their process claims to use less land, groundwater and energy.
Allegations of forced labor and human rights violations, and environmental damage in VW’s supply chains
The Business and Human Rights Resource Center has documented multiple allegations of human rights abuses against VW, including forced labor, union busting and health impacts linked to its emissions scandal. Nikkei Asia also reported on environmentally damaging nickel mining in Indonesia that identified VW as an end consumer.
Our Vision
01 — Equitably
Respecting and advancing the rights of Indigenous Peoples, workers, and local communities throughout the supply chain.
02 — Sustainably
Preserving and restoring environmental health and biodiversity across supply chains, while reducing primary resource demand through efficient resource use and increased recycled content.
03 — Fossil-free
100% electric and made with a fossil fuel-free supply chain.
