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Case study: How the Volkswagen Group promotes compliance

The Volkswagen Group is one of the world’s leading automobile manufacturers and the largest automaker in Europe – delivering, in 2018, a total of 10,834,012 cars and commercial vehicles to customers. Compliance with national and international laws and regulations, internal rules and voluntary commitments is among the Volkswagen Group’s guiding principles  Tweet This!, along with ensuring compliant behaviour in a lasting manner.

This case study is based on the 2018 Sustainability Report by the Volkswagen Group published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

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The Volkswagen Group believes that only with lasting, dependable integrity and compliant behaviour will it gain and strengthen the trust of its staff, customers, shareholders, business partners and the general public and seeks to become a role model when it comes to integrity and compliance. In order to promote compliance the Volkswagen Group took action to:

  • implement a Code of Conduct
  • provide channels for reporting misconduct
  • encourage training and communication

What are the material issues the company has identified?

In its 2018 Sustainability Report the Volkswagen Group identified a range of material issues, such as environmentally friendly products, human rights, product and transport safety, zero-impact mobility, customer satisfaction. Among these, promoting compliance stands out as a key material issue for the Volkswagen Group.

Stakeholder engagement in accordance with the GRI Standards

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups the Volkswagen Group engages with:

Stakeholder Group                Method of engagement
Employees

 

·      “KulTour” event series

·      Together4Integrity (T4I) integrity campaign

·      Employee breakfasts with managers (Board of Management, top management)

·      “Volkswagen Inside” staff newspaper

·      “MITBESTIMMEN!” Works Council newspaper

·      “Volkswagen Portal” Intranet

·      “Group Connect” social Intranet

·      Political message service

·      Daily press review

·      Company meetings

·      Welcome days for new employees

·      Recruitment fairs

·      Group-wide “Opinion Survey” staff survey

·      Works Council dialog with employees (for example with apprentices, doctoral students)

·      Internal conferences (for example Global Sustainability Summit, Group Global Communication Conference, Global Government Affairs Meeting)

·      “Shift” sustainability magazine

Customers

 

 

·      Volkswagen magazine

·      Group fleet magazine

·      Product brochures

·      Social media (Facebook, Twitter)

·      Trade fair appearances

·      TV product advertising

·      Advertising campaigns

·      Customer surveys

·      Autostadt as an automotive world of discovery

·      “Shift” sustainability magazine

Business partners

 

 

·      Working groups

·      Expert conferences

·      Trade fair appearances

·      Workshops for suppliers

·      Concept: “Sustainability in supplier relationships”

·      “Shift” sustainability magazine

·      Group sustainability report

·      Stakeholder dialog event

·      International Suppliers Fair (IZB)

Investors and analysts

 

·      SRI roadshows

·      Discussions with investors

·      Special “Investor Relations” area on the Group homepage

·       Financial news

·      Ad-hoc releases

·      Investor conferences

·      General meeting

·      Annual press conference

·      Group annual report

·      Group sustainability report

·      Stakeholder dialog event

·      “Shift” sustainability magazine

Competitors

 

·      Working groups

·      Expert conferences

·      Cooperation projects

·      Conferences

Politics and associations

 

·      Memberships

·      Delegation visits

·      Experts talks and opinions

·      Events at Group representative offices

·      Event sponsoring (party days, summer festivals, parliamentary receptions etc.)

·      Advertisements in party publications

·      Involvement in working groups and steering committees

·      Project working groups

·      Workshops and conferences

·      Symposiums and expert meetings

·      “Street.Food.Politics” event series

·      Activities of the Global and Group Works Councils

·      Group sustainability report

·      Stakeholder dialog event

·      “Shift” sustainability magazine

Media

 

·      Discussions with journalists

·      Press releases

·      Group Media Portal

·      Online newsfeed

·      Group sustainability report

·      Group annual report

·      Annual press conference

·      “Shift” sustainability magazine

NGOs/charitable organisations

 

·      Memberships

·      Cooperations (for example DRK)

·      Event sponsoring

·      Global CC projects

·      Inquiries and statements

·      Funds for disaster relief

·      Volkswagen refugee aid (for example language development, sitting in on classes)

·      Host of the Global Social Business Summit 2018

·       Hackathon event series

·      Group sustainability report

·      Stakeholder dialog event

·      “Shift” sustainability magazine

Researchers & experts

 

·      Research subsidy programmes

·      Conference sponsoring

·      Cooperation projects

·      Expert talks and conferences

·      Research colloquiums

·      Employee lectureships

·      Audi’s “Perspective Responsibility” series of presentations

·      AutoUni Wolfsburg activities (guest presentations, institute work)

·      Group sustainability report

·      Stakeholder dialog event

·      “Shift” sustainability magazine

Residents & local authorities

 

·      Open day

·      CC projects at sites

·      Plant management discussions with residents

·      Local event sponsoring (for example fun runs, cycling tours), support for local associations

·      Sponsoring awards (for example Mönchehaus Museum Gosla)

·      Sponsoring cultural symposiums (for example Art X Tech in Beijing)

·      Free tickets for museum visits (for example Volkswagen ART 4 ALL at the Hamburger Bahnhof museum in Berlin)

·      Foundation partnerships (for example with the Central Academy of Fine Arts Beijing)

·      Sponsoring of local art and cultural events by Volkswagen plants

·      “Shift” sustainability magazine

·      Group sustainability report

·      Audi Summer Concerts in Ingolstadt

·      Easter Festival in Salzburg

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics the Volkswagen Group carried out a number of stakeholder surveys and, also, organised a Stakeholder Panel.

What actions were taken by the Volkswagen Group to promote compliance?

In its 2018 Sustainability Report the Volkswagen Group reports that it took the following actions for promoting compliance:

  • Implementing a Code of Conduct
  • The Volkswagen Group’s Code of Conduct is the key instrument for strengthening employees’ awareness of correct behaviour and finding the right contact persons in cases of doubt. The Code of Conduct was revised in 2017, and was established throughout the Group. The framework is available to all employees on the intranet and to third parties on the Internet at any time. The Code of Conduct is also integrated into operating processes. For example, employment contracts for employees of Volkswagen AG include a reference to the Code of Conduct and the obligation to comply with it. In addition, compliance with the Code of Conduct remained part of employees’ annual reviews in the reporting period and was thus taken into account when calculating their variable, performance-related remuneration. In addition to the Code of Conduct, there are various Group policies and guidelines regarding specific compliance issues. Organisational instructions also apply on dealing with gifts and invitations, as well as on making donations.
  • Providing channels for reporting misconduct
  • The Volkswagen Group has had a system for reporting any breaches of the law or rules since 2006. This system is optimised on an ongoing basis. Among other things, a central investigative office has been set up in the Compliance department, which is responsible for coordinating the whistleblower system within the Volkswagen Group and for processing information concerning Volkswagen AG and its subsidiaries. Information on misconduct can be submitted in any of the major languages used by the Group and is treated confidentially. The people providing the information will be protected and need not fear any sanctions for their actions. They can decide for themselves whether they wish to give their names. For this reason, a specially protected online reporting channel was set up in 2017, via which information can be sent to the investigative office anonymously. The Volkswagen Group continues to rely on established channels such as the ombudsman system, too. This system can be used to confidentially report any suspicions – in one of 11 different languages – to two independent lawyers appointed by the Group. The ombudspersons and the whistleblower system can be used by anyone, employees and people outside the Group. In addition to the existing reporting channels, since August 2018 it has also been possible to report potential breaches of rules via a 24/7 telephone hotline. By calling the relevant number, employees, business partners and customers anywhere in the world can provide information round the clock, 365 days a year. A caller who calls the global telephone number will speak to a specially trained person, who can include an interpreter in the call if necessary. In addition, a revised Group policy was passed in 2018. This has further improved the whistleblower system, by providing extra communication options. The whistleblower system was also strengthened significantly by adding more staff. In 2018, a total of 2,920 reports were registered throughout the Group. All substantiated reports have been, or will be, investigated, and any misconduct penalised.
  • Encouraging training and communication
  • The Code of Conduct, is a key component of compliance training. The training is completed by anyone, from directors to individual employees. Face-to-face and web-based or online training is used. Following a risk-based approach, mandatory compliance training is provided for specific target groups. In addition to traditional lectures and online tutorials, case studies, role-playing games and other interactive formats form part of the training provided to employees and managers. Employees can also use special e-mail addresses to solicit advice on compliance issues. All internal channels are used to communicate regulations and other compliance-related content, with a focus on further developing the whistleblower system over the course of the reporting period. Online communication takes place mainly via employees’ own posts on the Volkswagen intranet and on the internal, Group-wide communications platform “Group Connect”. There are also articles, interviews and other publications in cross-brand and specific divisions’ media. At the same time, compliance-related issues are publicised at various employee information events and company meetings held at a number of locations.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standards addressed in this case are:

1) Disclosure 205-2 Communication and training about anti-corruption policies and procedures

2) Disclosure 205-3 Confirmed incidents of corruption and actions taken

 

Disclosure 205-2 Communication and training about anti-corruption policies and procedures corresponds to:

  • Sustainable Development Goal (SDG) 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
  • Business theme: Anti-corruption

Disclosure 205-3 Confirmed incidents of corruption and actions taken corresponds to:

  • Sustainable Development Goal (SDG) 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
  • Business theme: Anti-corruption

 

80% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

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References:

1) This case study is based on published information by the Volkswagen Group, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:

http://database.globalreporting.org/

2) https://www.globalreporting.org/standards/gri-standards-download-center/

Note to the Volkswagen Group: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.

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