Governance

CSR organization

During 2011 a new organization was developed which came into effect on January 1, 2012. The new organization also impacts the governance of CSR and sustainability issues. More effective governance, faster decision making and clearer responsibility and accountability are some of the desired results.

Organization and responsibility

Members of the Volvo Group Board of Directors have good knowledge and understanding of CSR and sustainability issues. The Board of Directors regularly evaluates our performance, and considers relevant topics such as human rights, environmental matters and corruption in its annual risk analysis.

The Volvo Group’s Code of Conduct is approved by the Board of Directors, who also has formal ownership of the Code.

The Volvo Group's CEO, Olof Persson, is responsible for our vision – to become the world leader in transport solutions.

In the Group Executive Team, Jan-Eric Sundgren, Executive Vice President, is responsible for CSR issues.

The responsibility for overseeing the implementation, follow up and development of CSR and sustainability work is delegated to the Volvo Group's CSR Director, Malin Ripa.

Responsibility for CSR performance and compliance with the Code of Conduct follows the ordinary line of business responsibility.

Governance body for CSR issues

CSR issues are handled by the Core Value and Public Affairs Council, which is chaired by Jan-Eric Sundgren, Executive Vice President Environmental and Public Affairs and member of the Group's Executive Management Team. The chairman in the council is responsible for making decisions and following up the implementation of decisions throughout the organization.

The purpose of this governing body is to establish strategies and directions and to follow up on performance. This council also supports and advances the Volvo Group's business in areas related to its core values, CSR, public affairs and relevant emerging issues.  

New committee coordinates CSR issues

A CSR and Sustainability Committee has been established in accordance with the new structure. The CSR and Sustainability Committee coordinates the work as well as prepares decisions for the Core Value and Public Affairs Council, which is tasked with supporting and developing the Volvo Group’s work with CSR and sustainability.

The CSR and Sustainability Committee is chaired by the CSR Director for the Volvo Group. The committee's members comprise CSR and sustainability managers from the product companies within the Group, global process owners of relevant processes as well as representatives for corporate functions such as Human Resources and Corporate Strategy.

The CSR and Sustainability Committee coordinates and prepares issues for the Core Value and Public Affairs Council.

Coordination of supply chain CSR

The Volvo Group Purchasing CSR Supply Chain network develops and coordinates the CSR work in the sourcing process. All companies within the Volvo Group that have purchasing organizations are represented. The network reports to the CSR and Sustainability Committee as well as to a decision-making forum within the purchasing organization.

Monitoring and follow-up

The Volvo Group’s Corporate Audit Department monitors compliance with the Code of Conduct through audits and assessments.

The Volvo Group has a management control system for self-evaluation of how well critical policies such as the Code of Conduct have been implemented and enforced.

An annual survey is conducted to measure the level of implementation. Most of the managers in the Volvo Group state they have taken appropriate measures within their organization to promote our values and appropriate business behavior, and have held discussions with their teams on the risk of fraud and infringements of the Code of Conduct.

Follow-up on employee commitment

The annual Volvo Group Attitude Survey (VGAS) measures employee engagement which is critical for achieving strategic objectives and for business success. Questions on CSR, business ethics, environmental issues etc. are included and measured in the survey.

Findings from the survey are discussed in working groups, involving managers and employees. Feedback discussions result in an action plan with activities addressing areas for improvement throughout the year.

Questions on CSR, business ethics, environmental issues etc. are included in the annual Volvo Group Attitude Survey.

Measuring performance

The Volvo Group has several group-wide processes and management systems covering areas such as quality, internal control, environmental care and occupational health and safety.

There are specific KPIs to monitor and follow up on the effectiveness of processes which are reported on and followed up regularly in the Core Value and Public Affairs Council.

Environmental care, health and safety controls are integrated into the Volvo Group Production System (VPS). VPS is a toolbox containing methods to increase internal efficiency and minimize losses. Competence development is also an important part of VPS. Significant efforts are dedicated to developing employees to meet future technical areas of competence.

Performance is measured by collecting environmental, human resource and financial data. The collection process is verified by a third party.

We monitor our suppliers’ work through the quality assurance and self-assessment forms, which are part of our requirements on suppliers.

At the end of 2011, almost 99% of the employees in the industrial system worked in accordance with the quality management system ISO 9001 and in accordance with the environmental management systems ISO 14001.

At the end of 2011, almost 99% of the employees in the industrial system worked in accordance with the quality management system ISO 9001 and in accordance with the environmental management systems ISO 14001. These systems are certified by a third party auditor. In some of our operations we also have certified management systems for occupational health and safety, OHSAS 18001.