Article

Volvo Cars: “Climate action is essential to our future success”

PARTNER UPDATE. Eight years from now, every single vehicle manufactured by Volvo Cars will be all-electric. But that’s only one part of an ambitious climate plan, which is now transforming the whole company.
”Climate action is essential to our future success. Cleaner business is simply great business”, says Stuart Templar, Director, Global Sustainability at Volvo Cars.
”At Volvo Cars we now regard sustainability as important as safety”, says Stuart Templar, Director, Global Sustainability at Volvo Cars.
”At Volvo Cars we now regard sustainability as important as safety”, says Stuart Templar, Director, Global Sustainability at Volvo Cars.

The latest IPCC report was described as a code red for humanity. If you ask Stuart Templar at Volvo Cars, it should also be regarded as a code red for the automotive industry.
”Road transport is responsible for around ten percent of global greenhouse gas emissions. We are part of the problem. We therefore have a moral responsibility to quickly be part of the solution. There is no time for further delay”, he says in an interview with We Don’t Have Time.
Volvo Cars has a worldwide reputation for producing some of the safest cars on the market. Now the company is aiming for pole position also in terms of sustainability.
In 2019 the company launched its first fully electric vehicle, the XC40 Recharge. Today, 27 percent of Volvo Cars’ global sales are EVs or plug-in hybrids. In Europe, over 40 percent. By 2025, Volvo aims for 50 percent of its global sales to consist of fully electric cars, with the rest being hybrids. By 2030, every car it sells should be fully electric, and by 2040 the goal is to have become a climate-neutral company.
”But electrification alone is not enough”, says Stuart Templar. ”It is not a silver bullet. We need to tackle emissions across our whole value chain.”
Volvo’s own life cycle analysis, visible on the company's online product pages and lots of marketing material, shows that “the accumulated emissions from … Volvo Cars manufacturing phases of C40 Recharge are nearly 70 percent higher than for the XC40 ICE”, which is a petrol-driven car.
Over a car’s lifetime, the carbon footprint is smaller for the EV. But the point at which it becomes smaller is dependent on the energy mix. Volvo’s report revealed that if you charge your EV on renewable energy, you could reduce the life-cycle emissions by nearly 50 percent, compared to if the car is charged on the global energy mix, which contains around 60 percent fossil fuels.
”That’s why at COP26 we called on governments and energy providers to increase the accessibility to clean energy to realize the full climate potential of EVs˝, says Stuart Templar.
Stuart Templar at COP26. “I personally think businesses have as much responsibility to lead governments as governments have to lead businesses. In many industries, companies wait for regulations before taking action. We don't have time for that.”
Stuart Templar at COP26. “I personally think businesses have as much responsibility to lead governments as governments have to lead businesses. In many industries, companies wait for regulations before taking action. We don't have time for that.”

So why are emissions from EV production so high? Volvo’s Carbon footprint report shows that in the supply chain, battery production is responsible for 30 percent of the total production emissions for Volvo’s electric cars. Steel is responsible for 20 percent.
”The analysis allows us to target these carbon-impactful areas of the supply chain, and take action, which is what we are doing.”
Collaboration is the key to success in this matter, and Volvo has recently formed two important partnerships to bring the value-chain emissions down.
One is with Northvolt, a Swedish company that produces batteries with 100 percent renewable energy. The other is with the Swedish steel provider SSAB (also a We Don’t Have Time partner), which aims to be the first company in the world to produce fossil-free steel.
”We hope to be the first automotive company to have fossil-free steel in our cars. Probably around 2025-2026”, says Sturt Templar.
”We also have a requirement on our top suppliers to use 100 percent climate-neutral energy by 2025. So we are using our influence as a big manufacturing customer to influence our supply chain. The automotive industry could play a really important role in driving down emissions in multiple sectors, because our supply chain includes many different industries, such as steel, aluminium, batteries, plastics, and electronics.”
Circularity is another key factor in Volvo’s decarbonation journey. The company is re-manufacturing an increasing number of parts, and in 2020 it recycled 95 percent of its production waste, thereby avoiding the generation of 640 000 tonnes of CO2.
The goal for 2025 is for each new Volvo car to contain at least 25 percent recycled or bio-based material. One step is to remove all leather from all fully electric vehicles by 2030.
”This is partly because of animal welfare concerns in the leather supply chain, but also because of the environmental impact of the livestock industry, which is directly connected to the leather industry. The new material we have started using, Nordico, has a 74 percent lower carbon footprint than the leather we currently use. It’s made from recycled PET bottles, bio-attributed material from sustainable forests, and corks recycled from the wine industry.”
https://youtu.be/j9biYQO8S4E

To further increase the focus on emissions reduction, Volvo Cars is the first car company to set an internal carbon price of 1,000 SEK per ton of CO2, almost twice as high as the recommended IEA level. By evaluating future car projects according to their CO2-adjusted profitability, Volvo Cars hopes to accelerate actions to drive down emissions in the manufacturing process.
”We are also looking at new models of owning a car, with an increased focus on car-sharing and subscription services to maximize the usage of each vehicle”, says Stuart Templar.
But no matter what climate action car makers are taking, the speed of the transport industry’s transition remains dependent on many external and systemic factors, like governmental CO2 tailpipe regulations, investments in charging infrastructure and end-dates for fossil-fuel cars sales. Volvo Cars is therefore trying to push for tougher policies in society at large.
Volvo was the only car manufacturer that in April last year joined an initiative by the NGO Transport and Environment to call for an end-date for internal combustion engine sales in the EU by 2035. And at COP26 in Glasgow, the company was one of only five automotive manufacturers to sign the Glasgow declaration on zero-emissions vehicles, thereby committing to phase out ICE (internal combustion engines) sales by 2035 in leading markets, and by 2040 globally. These are science-based targets for the automotive industry so ensure the world stays on track for net zero by 2050.
“We are a relatively small player in the global automotive industry in terms of volume and size, but what we believe is that although our physical market size is small, our voice on these issues should be loud”, says Stuart Templar.
This is also one of the main reasons why Volvo Cars decided to partner with We Don't Have Time. The company now has a Climate Dialogue page on the We Don’t Have Time platform, and it is using it to communicate good climate action.
”We want to encourage greater ambition within our industry, and by highlighting why this makes sense for us a company, and what we’re doing, hopefully this will reach some of them. We strongly believe that the transition towards more sustainable mobility is key to reaching climate goals, and also to the future survival of our industry”, says Stuart Templar.
At the UN climate conference Cop26 in Glasgow, Volvo Cars was also invited to one of We Don’t Have Time’s daily live broadcasts, where the company gave a presentation of its decarbonization journey to a global audience of more than one million – and an additional 600 000 who watched the broadcast afterward.
”The reach of those broadcasts was astonishing, and I really loved taking questions from the audience in Kenya”, says Stuart Templar.
Stuart Templar taking questions from We Don't Have Time's hub in Kenya during his presentation at COP26.
Stuart Templar taking questions from We Don't Have Time's hub in Kenya during his presentation at COP26.

How are you planning to utilize the partnership going forward?
”In terms of the partner page we will continue to highlight some of the steps we are taking. We welcome both criticism and praise, and also comments. As a partner, we will commit to engaging with your followers. We want to be transparent, we want to be open to scrutiny. We also look forward to partnering with We Don’t Have Time on some of the big climate events coming up this year, not least COP27 in Sharm el-Sheikh”, says Stuart Templar.
Having read this far, some readers might get the impression that Volvo has gone full activist, putting all financial targets aside for the sake of saving the planet.
Quite the contrary, if you ask Stuart Templar.
”This makes absolute financial sense. We truly believe that those companies that do not take rapid climate action will struggle in the future, for a number of reasons. Firstly, because consumers will turn away from them. Secondly, because they will find it hard to operate in many countries as regulations tighten. And thirdly, and most importantly, because investors are increasingly focusing their investments in companies that are decarbonizing” he says.
Volvo has got first-hand experience of this.
”In 2020 we issued our first 500 million euro green bond, focused entirely on the production and development of our fully-electric vehicles. It was over-subscribed five times! I believe that automotive companies that don’t electrify quickly enough and take action across their value-chain are in danger of being 21st-century Kodaks”, says Stuart Templar.
By MARKUS LUTTEMAN

ABOUT VOLVO CARS
  • Volvo Cars was founded in Sweden in 1927.
  • In 2020 the company had about 40,000 full-time employees and sold 661,713 cars in about 100 countries.
  • Volvo Cars has been under the ownership of the Zhejiang Geely Holding since 2010. Its head office, product development, marketing, and administration functions are mainly located in Gothenburg, Sweden.
  • Volvo Cars' head office for APAC is located in Shanghai and for Americas in Mahwah, NJ.
  • The company’s main car production plants are located in Gothenburg (Sweden), Ghent (Belgium), South Carolina (US), Chengdu and Daqing (China).
  • Volvo Cars is committed to an ongoing reduction of its carbon footprint, with the ambition to be a climate-neutral company by 2040.
  • Bo

    2 w

    This is fantastic

    • Njugi Muikamba

      33 w

      Decoupling from fossil fuel economies is critical to helping the people and the planet.

      2
      • Nahashon Wanjiru

        37 w

        You will make the world a better place to stay

        4
        • Judy Holm Climate Designers

          41 w

          💯 💚💙!! Fantastic leadership in a critical sector 💫💫💫. Bravo @Volvo

          4
          • Evangeline Wanjiru

            62 w

            A step towards sustainability

            5
            • Isabel Arens

              68 w

              Choose public transportation, a bicycle, or walking instead. I don't think cars are part of the solution.

              3
              • Jane Wangui

                39 w

                @isabel_arens I support cycling. The moment you do it you keep fit and protect the environment.

                3
              • Clydell Peairs

                85 w

                ...8 years is a long time...

                4
                • D Sanan

                  92 w

                  Please start marketing minimalism in design as a positive.. Customers used to having a very comfortable ride with so many power assists, e.g. powered Tailgate, and very low NVH levels in the cabin etc. all add up to weight (scope 2) and higher embedded emmisions in your cars (scope 1). Humanity can shed some of the comforts for a bigger cause. It is a big thing for Volvo to change its image in this way, but I assume your marketing and engineering departments together should be able to pull it off!!

                  8
                  • Andy Inganni

                    96 w

                    Promote new batteries

                    3
                    • C-CUBED 🇳🇬

                      123 w

                      Turning toward sustainable business practices. Way to go @volvo

                      3
                      • Anette Nordvall

                        123 w

                        I agree - The way of growing is to be in constant shift. Volvo Cars shows this by great leadership - even how large the obstacle and corporation is, it's necessary to adept, find new innovation, and move towards that change. Excited about the partnership opportunities at We Don't Have Time - Looking for leaders that are breaking new grounds.

                        4
                        • Patrick Kiash

                          123 w

                          Great work! Keep it up! And this is another great idea you are considering... "We are also looking at new models of owning a car, with an increased focus on car-sharing and subscription services to maximize the usage of each vehicle”, says Stuart Templar"

                          4
                          • Simon Bergbom

                            123 w

                            Great article and so interesting to hear how Volvo is thinking about sustainability and especially circularity.

                            5
                            • Ingmar Rentzhog

                              123 w

                              This is great. Very impressive. Volvo also understands the power of corporate activism. I love this quote: “I personally think businesses have as much responsibility to lead governments as governments have to lead businesses. In many industries, companies wait for regulations before taking action. We don't have time for that.”

                              14
                              • Judy Holm Climate Designers

                                41 w

                                @Rentzhog 💯!!

                                3
                              • Sweta Chakraborty

                                123 w

                                This is huge! Well done, Volvo.

                                4
                                • Johannes Luiga

                                  123 w

                                  Great interview with an important message!

                                  3
                                  • Denise Salmon

                                    123 w

                                    Awesome, I like to see good climate plans, I am changing the way children learn about going green by doing stories filled with eco-friendly tips

                                    4
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