Global Reporting Initiative

1.1 Statement from the most senior decision-maker of the organization (e.g., CEO, chair, or equivalent senior position) about the relevance of sustainability to the organization and its strategy.

Our sales volume growth was at a record during 2007, when we sold over 458 000 cars. We saw increased market shares in Russia, China and Turkey and volume growth in Sweden. Despite this positive trend in our total volume, our financial situation reflects the challenges we have faced during the year – exchange rate fluctuations, higher commodity and raw material costs and increasing competition. In light of these challenges, we have implemented major efficiency programs and achieved successful cost reductions during the year. Climate change continued to be one of the major challenges and priorities within the automotive industry in 2007. It is clear that customer awareness and expectations have increased. Countries and cities throughout the world are using new environmental incentives to encourage consumers to use greener alternatives so as to reduce emissions. Our approach to this challenge is to continue to improve today’s petrol and diesel-engine cars and to invest in innovative technologies for the future. One example of this is the Volvo Efficiency with CO2 emissions as low as 120 g/km which was launched during the year. The second approach is to offer cars that can be driven on fuels which have a lower net impact on climate. We offer a broad range of Volvo Flexifuel models with this goal in mind. Our role in the development of the sustainable alternative powertrains of the future was confirmed in 2007 when we unveiled the Volvo ReCharge Concept.

This plug-in hybrid concept has a range of 100 kilometers from a single recharge, with a Flexifuel engine to recharge the battery on the road, if required. Safety is still Volvo’s most important asset. Caring for people is the essence of our values and brand.
Our goal is to protect all people in traffic situations including the driver, passengers and pedestrians. Our goal is to make cars that will not crash. Our vision is that from 2020 no one will be killed or be injured in a Volvo. To succeed with these ambitions, we must focus on minimising the risk that our cars will get involved in a crash and to decrease the negative effect if a crash is unavoidable. During 2007 we have launched many different safety features, among them City Safety, which is a unique system to help the driver avoid collisions at low speeds. To us at Volvo Cars it is important to continue to build our brand premiumness. This means that we must realise our Scandinavian values through innovative products that appeal to today’s global customer. With this ambition in mind, our focus for 2007 has been on technological innovation to reduce environmental impact and to safeguard our top safety position. This innovative capacity is driven by the balancing act between good leadership and working together – what we call the power of we. This year the report is divided into three main sections – environment/ climate change, safety and leadership. Our belief is that continuous improvements within these areas will bring sustainability both to us as a business and to society as a whole. We are convinced that sustainability is a goal which we will achieve only if we continue to improve our ability to cooperate across borders regarding disciplines, backgrounds and cultures and if we find the most cost-effective and creative solutions to the challenges we share. In this context, let me reiterate Volvo Cars’ commitment to the ten principles of the Global Compact. I hope you enjoy reading this report. I look forward to receiving your feedback on our progress within the area of sustainability.


1.2 Description of key impacts, risks, and opportunities.

Economic
Some potential economic risks for our business are the raw material prices, the rising price of oil and currency exchange fluctuation. This will affect our profitability.

On the other hand technological innovation and development and the emerging market growth are great opportunities for our business. The emerging markets provide opportunities from a number of different aspects, both in terms of new suppliers and the potential for new and growing markets for our products.


Sustainable mobility

Climate change
Mobility is essential to economic development, and it also enhances our quality of life. Motor vehicles and other forms of transport, however, have a significant impact on the environment, not least due to the role of carbon dioxide emissions in climate change. Climate change is one of the biggest threats facing the planet. Climate change is already having an impact on society and the natural environment. It is clear that greenhouse gas emissions must be radically reduced, and that society must at the same time adapt to the impacts from these. Currently some 14 per cent of global greenhouse gas emissions can be attributed to transportation in general. About half of these come from cars and light trucks, according to the Intergovernmental Panel on Climate Change.

Given the fact that 98 per cent of all the motor vehicles sold throughout the world rely on fossil fuels, climate change is a major challenge for the automotive industry. In aLIition, the earth has only finite reserves of fossil energy such as crude oil. To be environmentally sustainable, therefore, the vehicles of the future will have to be very economical and capable of running on renewable fuels.

Sustainable mobility can be defined as the ability to meet the needs of society to move freely, gain access, communicate, trade and establish relationships without sacrificing other essential human or ecological values today or in the future. For Volvo Cars, it is fundamental that personal mobility should not come at the expense of damaging the environment or other social values. We include the safety factor in our definition of sustainable mobility, and our overriding objective is to develop cars which are both safe and environmentally sound.

Limiting carbon dioxide emissions and slowing climate change is a tough challenge, not least for the automotive industry and a company like Volvo Cars. We are, however, determined to take up this challenge, and expect other key players to contribute. Our environmental improvements and efforts to reduce climate change are focused mainly on our vehicle development, but they also encompass the environmental impact of our production facilities and logistics flows. Limiting climate change and making best-possible use of the earth’s resources is going to take meticulous cooperation between all stakeholders – at the national and international levels. Climate change is thus both a major challenge and a great opportunity to generate technical development. We have a long tradition of developing systems and functions for our cars which have benefited society at large. The Lambda sensor (three-way catalytic converter) and the three-point seat belt are two examples of Volvo Cars inventions which are now standard equipment in cars built throughout the world.

Safety
Road accidents are a serious problem for society. Throughout the world, over a million people die in road accidents every year, and many times more than that are injured. Developing safer vehicles and safer traffic environments has to be a high priority. Safety is one of the most important parameters when customers are choosing which car to buy. Safety is both a great challenge as well as an opportunity for Volvo Cars. Safety is the most important of our core values. Protecting people is the very essence of Volvo Cars’ values and brand.


Human rights and labour
The key impacts and risks in relation to violation of human rights and labour rights relate to Volvo Cars’ supply chain. We believe that a combination of education and auditing is the best way to generate long lasting improvements and thereby reducing the potential risks.

For more information on how we govern our performance in relation to these risks and opportunities, please see the section management approach http://www.volvocars.com/sustainability.


2.1 Name of the organization

The report covers Volvo Car Corporation and all of its wholly-owned subsidiaries. Volvo Cars has been a wholly- owned subsidiary of Ford Motor Company since 1999.


2.2 Primary brands, products, and/or services.

Volvo Car Corporation produce premium-segment cars in four basic versions: Sedan (S40, S60 S80), Versatile (V50, V70), Cross Country (XC60, XC70, XC90) and Coupé/Convertible (C30, C70).


2.3 Operational structure of the organization, including main divisions, operating companies, subsidiaries, and joint ventures.

Volvo Cars has been a wholly-owned subsidiary of Ford Motor Company since 1999. The ‘Volvo’ name is owned by Volvo Trademark Holding AB, which is jointly owned by Ford Motor Company and AB Volvo. Our cars are marketed and sold by regional market companies and national sales companies in about 100 countries. Sales to the company’s 100-plus markets are handled by the respective national sales companies and approximately 2400 local dealers. Most of the dealerships are independent companies. Our car production plants are located in Göteborg and ULIevalla in Sweden and Ghent, Belgium. Pininfarina Sverige, ULIevalla is owned jointly by Pininfarina SpA of Italy (60%) and Volvo Cars (40%). Certain components are manufactured at our Swedish plants in Skövde, Floby and Olofström, while the company also operates small assembly plants in Malaysia and Thailand. In 2007 production of Volvo cars also started at Changan Ford Mazda Automobile Co., Ltd. (Changan Ford Mazda Automobile), Ford Motor Company's passenger-car joint venture in Chongqing, China. The Volvo Cars head office, product development, marketing and administration functions are located in Göteborg.


2.4 Location of organisation's headquarters

The Volvo Cars head office, product development, marketing and administration functions are located in Göteborg.


2.5 Number of countries where the organization operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report.

Our car production plants are located in Göteborg and ULIevalla in Sweden and Ghent, Belgium. Pininfarina Sverige, ULIevalla is owned jointly by Pininfarina SpA of Italy (60%) and Volvo Cars (40%). Certain components are manufactured at our Swedish plants in Skövde, Floby and Olofström, while the company also operates small assembly plants in Malaysia and Thailand with less than 500 employees. In 2006 production of Volvo cars also started at Changan Ford Mazda Automobile Co., Ltd. (Changan Ford Mazda Automobile), Ford Motor Company's passenger-car joint venture in Chongqing. During 2007 6313 Volvo cars were produced here and allocated to the market.


2.6 Nature of ownership and legal form

Volvo Car Corporation has been wholly owned by Ford Motor Company since 1999. The Volvo brand is owned jointly by Volvo Car Corporation and AB Volvo through Volvo Trademark Holding AB.


2.7 Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries.)

Our cars are sold in over 100 countries. The USA was our biggest market in 2007, accounting for 23.2 per cent of total retail deliveries. Sweden was second (13.6 per cent), followed by Germany (7.1 per cent), the United Kingdom (6.5 per cent) and Russia (4.6 per cent.)
About 50 percent of our customers worldwide are corporate customers.


2.8 Scale of the reporting organization, including:

  • Number of employees;

  • Net sales (for private sector organizations) or net revenues (for public sector organizations);

  • Total capitalization broken down in terms of debt and equity (for private sector organizations); and

  • Quantity of products or services provided.

Volvo Cars employs a total of about 24 384 people. The company sold a total of 458 323 new Volvo cars in 2007.

Volvo Car Corporation (VCC) is a wholly-owned subsidiary of Ford Motor Company. Ford has opted not to publish separate financial information for the individual brands which form its Premier Automotive Group. For this reason, Volvo Cars does not report revenue, profits, Group contributions, interest charges or other financial items. Information regarding the financial performance of the complete Premier Automotive Group, of which Volvo Cars is a member, is available at Ford Motor Company’s web site.


2.9 Significant changes during the reporting period regarding size, structure, or ownership including:

As of Dec. 31st 2007, Volvo Cars Portugal assures the distribution of Volvo Cars in Portugal replacing previous market company.


2.10 Awards received in the reporting period.

Awards received in the reporting period are:
2007 – China Sina.com news portal. Best Power and Best Safety Car of 2007 (S40) 2007 – Philippines Executive Car of the Year Category "Car of the Year" Awards (S60)
2007 – Malaysia Safety Innovation Award NST/Maybank Car of the Year Awards
2007 - Philippines "Standard Insurance" Best Safety Package "Car of the Year" Awards
2007 - United States Volvo Car Corporation - Best Practice Leaders for Global Supply Chain Fulfillment Carlisle & Company
2007 - Sweden "Hjulklappen" (Christmas Gift-Tyre) for the Driver Alert Control Motormännens Riksförbund
2007 – Switzerland Volvo Cars – Best brand in Safety Category Auto-Illustrierte readers poll
2007 - UK Innovation Award for the unique Personal Car Communicator (PCC) The ‘British Insurance Car Security Awards’ (BICSA)
2007 - United States First prize in the Automotive Manufacturer category for the Innovative Child Booster Cushion System World Traffic Safety Symposium
2007 - United States "Best of What's New" Award for Innovative Child Booster Cushion System
Popular Science Magazine
2007 - United States Best of What's New (Two-Stage Booster Seat). Popular Science Magazine
2007 - United States Innovative Two-Stage Booster Seat World Traffic Symposium Award


3.1 Reporting period (e.g., fiscal/calendar year) for information provided.

The report deals with the period 1 January to 31 December 2007


3.2 Date of most recent previous report (if any).

The 2006 report was issued in May 2007 and is still available on our web site.


3.3 Reporting cycle (annual, biennial, etc.)

Annual


3.5 Contact point for questions regarding the report or its contents.

Catarina Munck by e-mail sustainability@volvocars.com or by telephone +46-31-59 00 00.


3.6 Process for defining report content, including:

  • Determining materiality;

  • Prioritizing topics within the report; and

  • Identifying stakeholders the organization expects to use the report.

A cross-section of our stakeholders have assisted us in identifying areas to prioritise, and these have accordingly been examined in greater depth in this report. Towards the end of 2007, we carried out a materiality analysis by consulting key external stakeholders. Those invited to comment were representatives from academia, NGOs, government agencies, interest group networks, trade unions,
fleet customers and suppliers. Our respondents are prominent individuals in their own fields, people with great expertise in the areas of sustainability and the automotive industry.

Participants were asked to rank 45 aspects of sustainability in terms of how important they thought they were for Volvo Car Corporation. They were also asked to identify the sustainability issues they considered most important to the company. Once processed, the opinions of these external respondents were set out alongside Volvo Cars’ internal prioritisations. The materiality analysis has been used in identifying and allocating space to content in this year’s sustainability report. Climate change, safety, fuel efficiency, exhaust emissions and product development were given the highest priority, internally and externally, and have therefore been given extra space in this report. Quality plus “management’s knowledge of and engagement in sustainability issues”, alternative fuels and brand also received very high rankings. This materiality analysis also reveals that our stakeholders do not regard any aspect of sustainability as unimportant. The overall conclusion is, therefore, that the entire issue of sustainability matters a great deal to Volvo Cars’ stakeholders.


3.7 Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers).

This is the eighth sustainability report to be published by Volvo Car Corporation, and it deals with the company and all of the operations which were wholly owned by Volvo Cars for all of 2007. We report only direct environmental impact, except in the case of carbon dioxide from energy production, in which case we also report indirect emissions of carbon dioxide from electrical production and district heating. Financial issues are dealt with only in brief since we are a wholly-owned subsidiary of Ford Motor Company.


3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organizations.

The report deals with wholly-owned operations of Volvo Car Corporation. These comprise research and development in Sweden, manufacturing in Sweden, Belgium, Malaysia and Thailand, China, as well as sales companies worldwide. Volvo cars are also produced by Ford Motor Company in China.


3.9 Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to the compilation of the indicators and other information in the report. Explain any decisions not to apply, or to substantially diverge from, the GRI Indicator Protocols.

For all Key Performance Indicators, definitions are provided.


3.10 Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement (e.g., mergers/acquisitions, change of base years/periods, nature of business, measurement methods).

No re-statements of information necessary for 2007.


3.11 Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report.

In general, our measurements and calculations are based on the same methods as last year. In other words, the figures for the two years are comparable unless otherwise clearly indicated. Any minor differences in calculating indicators on the scorecard are described in each individual case. The calculation of CO2 emissions for different types of fuel has been changed to be in accordance with automotive industry practice, and the figures reported represent emissions from production facilities only.


3.12 GRI Content Index - Table identifying the location of the Standard Disclosures in the report. Identify the page numbers or web links where the following can be found:

  • Strategy and Analysis 1.1 – 1.2;

  • Organizational Profile 2.1 – 2.10;

  • Report Parameters 3.1 – 3.13;

  • Governance, Commitments, and Engagement 4.1 – 4.17;

  • Disclosure of Management Approach, per
    category;

  • Core Performance Indicators;

  • Any GRI ALIitional Indicators that were
    included; and

  • Any GRI Sector Supplement Indicators included in the report.


GRI Content Index


3.13 Policy and current practice with regard to seeking external assurance for the report. If not included in the assurance report accompanying the sustainability report, explain the scope and basis of any external assurance provided. Also explain the relationship between the reporting organization and the assurance provider(s).

The Volvo Cars Sustainability Report 2007 has not been verified by a third party. Although we regard third-party verification of sustainability reports as an important step towards transparency, we continue to seek an approach that suits Volvo Cars. To us, it is important that third-party verification should reinforce our legitimacy and preserve our owner’s integrity, while reflecting the values that our brand represents. We are working to achieve progress in this vital area of transparency.


4.1 Governance structure of the organization, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organizational oversight. Describe the mandate and composition (including number of independent members and/or nonexecutive members) of such committees and indicate any direct responsibility for economic, social, and environmental performance.

Needs and expectations regarding corporate behaviour vary with time, thus we need to be operational in our approach to Sustainability. A coordinator is responsible for Sustainability Strategies and communication, progress is reported to the Sustainability Steering Commitee. The Sustainability Steering Committee, is directed by the CEO and another five members of executive management, representing Personnel, Purchasing (CFO), Marketing, Brand and Product Strategy and Public Affairs. The committee meets two to three times per year and deals with strategic issues and development, and reports progress on objectives within the field of sustainability. The development of our working procedures is also discussed in this forum, together with ways and means of ensuring that sustainability is integrated in our business plan. The area responsible at operational level (for example Health and Safety Director, Diversity Vice President, etc) is responsible for ensuring that the issues in question are discussed at that level within the company at which decisions on strategies, goals and action can be taken.

Organization Sustainability Volvo Cars


4.2 Indicate whether the Chair of the highest governance body is also an executive officer (and, if so, their function within the organization’s management and the reasons for this arrangement).

No


4.3 For organizations that have a unitary board structure, state the number of members of the highest governance body that are independent and/or non-executive members. State how the organization defines ‘independent’ and ‘non-executive’. This element applies only for organizations that have unitary board structures. See the glossary for a definition of ‘independent’.

Volvo Car Corporation is a wholly-owned subsidiary of Ford Motor Company, and is managed by a subsidiary board of directors comprised of representatives of Ford, Volvo Cars and the employee organisations, as well as two independent members. Meeting four times per year, the board’s main task is to provide a forum for the company’s strategies, business orientation, product plan, major investment plans and budget.

Board of Volvo Car Corporation, as per December 2007:
Lewis Booth, Chairman of the Board
Fredrik Arp, President & CEO
Anders Narvinger, Independent*
Bernt Magnusson, Independent*

Employee representatives:
Thomas Ivonen, Swedish Union of Clerical and Technical Employees in Industry (SIF)
Mikael Sällström, Swedish Metalworkers' Union
Marko Peltonen, Swedish Metalworkers' Union

Deputy employee representatives:
Raid Olsson, Swedish Metalworkers' Union
Magnus Sundemo, The Swedish Association of Graduate Engineers

*independent means not part of the owner or the executive/top management team.


4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body.

Unions are represented in the board for Volvo Car Corporation. This is one way to ensure that employees’ interests are raised to the highest governance body.


4.5 Linkage between compensation for members of the highest governance body, senior managers, and executives (including departure arrangements), and the organization’s performance (including social and environmental performance).

Executive compensation at Volvo Cars consists of four components: fixed salary, bonus and stock options, company car and other benefits (e.g. health care insurance and pension benefits). FMC apply global bonus and stock options programs. These are based on FMC financial performance and individual performance. Executive compensation at Volvo Cars is based on a system called “360 grader” (“360 degrees”). This aims at evaluating managers from different employee perspectives. The evaluation criteria includes how well managers live up to corporate governance and corporate citizenship.


4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided.

Volvo Car Corporation’s Policy letter number 3 regulates how conflicts of interest are handled. It also describes that incidents have to be reported to the Legal department. Every employee has to sign this letter to agree on following these procedures.


4.7 Process for determining the qualifications and expertise of the members of the highest governance body for guiding the organization’s strategy on economic, environmental, and social topics.

Volvo Car Corporation is a wholly-owned subsidiary of Ford Motor Company. Click here for information on Ford Motor Company's GRI report (see corresponding indicator).ZOOMA


4.8 Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and social performance and the status of their implementation. Explain the degree to which these

  • Are applied across the organization in different regions and department/units; and

  • Relate to internationally agreed standards.

For information on our internally developed codes of conduct and principles, please visit the section management approach on www.volvocars.com/sustainability


4.9 Procedures of the highest governance body for overseeing the organization’s identification and management of economic, environmental, and social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and principles. Include frequency with which the highest governance body assesses sustainability performance.

As environment and safety are part of our company philosophy and our core values these aspects of our products are a part of our strategic direction and discussed as such. Working conditions, health and safety, diversity issues are part of our daily operational meetings and brought up on a case by case basis.

Processes for follow up of working conditions, environmental, product safety, legal compliance issues are part of our business management system.


4.10 Processes for evaluating the highest governance body’s own performance, particularly with respect to economic, environmental, and social performance.

There is no expressed process for evaluating the highest governance body’s work with respect to environmental and social performance. However, managers are evaluated according to criteria that include corporate governance and corporate citizenship.


4.11 Explanation of whether and how the precautionary approach or principle is aLIressed by the organization. Article 15 of the Rio Principles introduced the precautionary approach.

As a signatory to the UN Global Compact, Volvo Cars supports the precautionary principle. However, this principle has no documented primacy over the other principles which guide the company’s decision-making processes. Our decisions are taken on the basis of the information available at the particular time; however, lack of information or unreliability of the information which is available is often a good indication that caution is advisable, both from a business perspective and in a broader, societal context.

An example of action which we have taken in accordance with the intentions of the precautionary principle is provided by our ’Clean Compartment’ work, whose purpose is to reduce the health risk to car occupants suffering from asthma and other allergies by systematically replacing the interior trim with cabin materials complying with much stricter standards than current legislation. Another example is the process used in our paint shops, which affords much lower emissions of solvents than required by legislation.


4.12 Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses.

Volvo Cars was one of the first companies to heed the appeal of UN Secretary-General Kofi Annan to become a signatory to the principles of the UN Global Compact in 1999. Volvo Cars also contributed to the formulation of the Global Compact’s tenth principle (on corruption) and was represented in New York by its CEO when the principle was formally adopted.

A clear link exists between the ten principles of the Global Compact and the Global Reporting Initiative’s core indicators. Volvo Cars Sustainability Reports are, since a number of years, produced inspired by the GRI Sustainability Reporting Guidelines.
Volvo Cars contributes to the new ISO standard for social responsibility by working with the industry group in the Swedish Committee and by actively working with dissemination of information on this standard. This offers us an opportunity to contribute to social responsibility by being part of the development of guidelines for use by various and numerous players in society. The new standard – ISO 26000 – will be ready in 2009.


4.13 Memberships in associations (such as industry associations) and/or national/international advocacy organizations in which the organization:

  • Has positions in governance bodies;

  • Participates in projects or committees;

  • Provides substantive funding beyond routine membership dues; or

  • Views membership as strategic.

This refers primarily to memberships maintained at the organizational level.
Volvo Cars is a member of the Swedish employers’ body, Svenskt Näringsliv (Swedish Business) and of ACEA, the representative body of the European automotive industry. Volvo Cars is also a member of Teknikföretagen and Bil Sweden.


4.14 List of stakeholder groups engaged by the organization.

Volvo Cars has relationships with various stakeholders that influence, or are influenced by, our operations – from customers and employees to business partners and the communities in which we operate. Each of these groups presents a special responsibility and our aim is to be, and to be perceived as, a responsible player in all of our relationships. Our most important stakeholders are our customers, employees, suppliers and dealers, Ford Motor Company, and the communities in which we operate. Public agencies, non governmental organisations (NGOs) and other interests that influence market structures are also important in this context.


4.15 Basis for identification and selection of stakeholders with whom to engage. This includes the organization’s process for defining its stakeholder groups, and for determining the groups with which to engage and not to engage.

Our most important stakeholders are our customers, employees, suppliers and dealers, Ford Motor Company, and the communities in which we operate. Public agencies, non governmental organisations (NGOs) and other interests that influence market structures are also important in this context.
Volvo Cars believes in openess and transparency and thus does not deliberately choose not to engage with certain groups, however, certain stakeholder groups are prioritized based on the extent to which the company'and its products' influence them or vice versa.


4.16 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group. This could include surveys, focus groups, community panels, corporate advisory panels, written communication, management/union structures, and other vehicles. The organization should indicate whether any of the engagement was undertaken specifically as part of the report preparation process.

Knowing what our most important stakeholders think and expect of their relationships with Volvo Cars is the key to our progress as a company. Our aim is to establish open channels and regular meetings with all of our major stakeholders.
Customers
What our customers think of their cars and their dealers is the subject of about 20 independent surveys carried out in our most important markets. Regular customer clinics are held with various customer groups to obtain feedback on our cars and services, present and future. Every year, we conduct a hundred or so clinics all over the world to ascertain what our customers think of our various products and services. These clinics can be likened to laboratory tests in which we ask selected customers from different customer categories to express their opinions of our products and services. The findings are used as a basis for decisions concerning product development and marketing.

Employees
Good relations between managers and subordinates are fundamental to good relations between the workforce and the company. Regular development meetings between employees and their immediate superiors should be used to develop a personal development plan for the individual employee, which can then be monitored and evaluated. We carry out a regular Attitude Survey to measure what our employees are satisfied and dissatisfied with in their jobs. The survey is conducted among the workforce as a whole and is anonymous. The results are compiled and reported at different levels. The results from a working group are raised and discussed with the employees’ immediate superior, who is also responsible for developing action plans in the areas which need to be improved according to the survey. The overall result is expressed in terms of an Employee Satisfaction Index, which is recorded as a key performance indicator on the scorecard.

To ensure good relations between the company and its employees, we hold regular discussion with the employee organisations representing the workforce. These discussions are conducted both at a local and central level. The board of the company includes three employee representatives whose role is to ensure that their members’ interests and experiences are represented at the highest level within the company. Engineering and economics undergraduates at Swedish universities and third-level institutes take part in an annual survey to measure their perception of Volvo Cars as a future employer.

Dealers
The national sales companies (NSCs) represent the main interface between the dealer network and Volvo Cars. Dealers and sales companies exchange views and information on an ongoing basis, providing us with valuable information on the dealers’ situation, and also on the specific needs and conditions of the local market. In many markets the dealer network is also represented by a dealer council – a dealer/NSC forum in which dealers have an opportunity of presenting their views to the NSC on key issues, such as dealer agreements and standards. Most of the issues raised are dealt with by the NSC, with involvement by HQ depending on the issue. HQ functions are also involved indirectly in many issues such as standards. We participate in a syndicated study known as the Dealer Satisfaction Survey, which reports independent information on dealers’ opinions regarding manufacturers, and on the support they provide. The results of the study cannot be disseminated outside the participating companies.

Suppliers
We have over 440 major suppliers of direct materials. All of these are important to us and we are anxious to maintain good relations with them. At present, much of our product development is carried out in cooperation with our suppliers in the form of joint projects. Daily liaison is an essential element of these projects if we are to understand our suppliers’ expectations of us, and vice versa. The negotiations which precede every new agreement between Volvo Cars and a supplier also provide a major opportunity of exchanging information and feedback. The company’s open days for suppliers, to which all suppliers are invited as an opportunity for exchanging information and establishing contacts with other suppliers, represent another important interface. Volvo Cars has been in existence since 1927 and some companies have been suppliers to it since then. We value long-standing relationships and apply the principle of using one main supplier for each component area.

Ford Motor Company. As sole owner of Volvo Cars, Ford Motor Company is a major influence on the company. Many interfaces exist between the parties in terms of overall strategic issues and in the context of concrete joint projects in areas such as car platforms and dealer matters. Ford Motor Company evaluates Volvo Cars’ performance in both financial and non-financial terms through the Volvo Cars board, on which FMC has five representatives. Ford Motor Company’s corporate governance rules apply to Volvo Cars, and our work is subject to ongoing evaluation by the parent company to ensure our capacity to contribute competence to the Group and, as required, avail of the combined resources of the Premier Automotive Group and Ford Motor Company. Click here for more information ZOOMA – länk till FMC site

Local community
In communities in which we are major employers, we hold regular meetings with local representatives to inform them of our plans, and to obtain information on how the community wishes to develop and to assess our opportunities for cooperation.

Global community
We believe in good relations and mutual understanding between all our stakeholders. For this reason, we participate in various networks, seminars and conferences to hear the views of others and to inform them about our work. We also encourage interested parties to contact us, for example through our web site at sustainability@volvocars.com

We believe our stakeholder dialogues provide us with:
- Better understanding of how stakeholders in a given region see sustainability issues evolving over the next 15 years, and how this is likely to impact the auto sector in general and Volvo Cars.
- Opportunities to build new relationships between Volvo Car Corporation and leading opinion-makers. Through the dialogues, we gained a comprehensive overview of stakeholder perspectives on sustainability issues.
Volvo Cars is represented in a large number of groups and organisations which pursue or monitor various issues at local, regional and national level. We also monitor developments within the EU through a joint presence with Ford Europe in Brussels. To Volvo Cars, sustainability reporting is a way of demonstrating transparency and engaging in dialogue with our stakeholders. The reporting process also provides an opportunity for discussion, evaluation and reflection on an annual basis, supporting our efforts to develop our business in line with the aspiration of sustainable development.


4.17 Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting.

Climate change, safety, fuel efficiency, exhaust emissions and product development were given the highest priority, internally and externally, and have therefore been given extra space in the Volvo Cars Sustainability report 2007. Quality plus “management’s knowledge of and engagement in sustainability issues”, alternative fuels and brand also received very high rankings. The 2007 materiality analysis also reveals that our stakeholders do not regard any aspect of sustainability as unimportant. The overall conclusion is, therefore, that the entire issue of sustainability matters a great deal to Volvo Cars’ stakeholders.