When Volvo was founded in 1927, quality and safety were our core values, because the founders knew that our vehicles would be operated by humans. In 1972, we added care for the environment as a core value. By doing this we put ourselves at the absolute forefront of our industry. It showed that we took a holistic view of the world and the impact that our products have on society. Now we are taking the next logical step, to become the world leader in sustainable transport solutions.
Today, several of the global challenges the world faces are directly or indirectly related to the infrastructure and the transport sector. They include climate change, population growth, urbanization and the shortage of natural resources and raw materials. Sustainable products and services will be essential for the world in addressing these challenges and provide us with a competitive edge if we can continue to succeed within this field. Striving to reach our vision we will drive product and service development; advance our position and capture market share, while helping to change the world and enabling it to move in a more sustainable direction.
Traditionally, sustainability in the transport industry has first and foremost involved reducing environmental impacts. Naturally, the environmental dimension is still very important, but the Volvo Group has a broader focus and we pay equal attention to economic and social sustainability.
Environmental sustainability drives us to utilize resources more effectively, improve the reliability and lifecycle of our products and reduce their impact on the environment. In this context, I see no contradiction between meeting our customers’ needs and environmentally sustainable development. For example, reducing fuel consumption in our products benefits both our customers and the environment through lower fuel costs and fewer emissions.
With economic sustainability, we are referring to our ability to create economic value for our customers, our shareholders and for society as a whole. In delivering quality, we help our customers improve their efficiency and profitability. By understanding our customers’ business models and contributing to their success, we secure our own long-term profitability. By developing infrastructure solutions and effective transport systems we create growth, job opportunities and benefits for society as a whole.
When we talk about social sustainability, we are referring to the Volvo Group’s role and impact on society. We want to be a good corporate citizen and in order to contribute to positive societal development we collaborate with different stakeholders – from international organizations and universities to local authorities and individual citizens. A society or business that suffers losses – whether due to accidents, injuries, fatalities, damage to goods or vehicles, or congestion and standstills – is not sustainable over time. By using our knowledge of traffic safety, we can create shared value for society and business.
Being the world leader in sustainable transport solutions means that we have a profound influence on the world around us, and our products and services contribute to sustainable development. We will reach our vision by meeting our customers’ needs, because only a profitable company can make the investments needed for the future. To this end, we are in the midst of an intense period of transformation which began in 2012 and will take us through 2015.
In 2012, we established a new organization and new strategies aiming to increase the Group's profitability. During 2013, we carried out the most extensive product renewal in the Group's history. Over the course of 2014, our focus will be on improving the Group's efficiency through an extensive strategy-linked efficiency program. We still have some way to go before reaching our strategic objectives but we have made good progress over the past year and there is no doubt we will reach our targets.
I believe that only a sustainable company can provide sustainable solutions. Our 2013 materiality assessment underlined the importance of continuing to focus on the environmental, economic and social dimensions of sustainability and I would like to highlight a few of the initiatives carried out over the past year.
During 2013, we strengthened labor relations with our new Volvo Global Dialogue forum; we reinforced governance with our new CSR Supply Chain Steering Committee, and we introduced new responsible sourcing procedures and training.
When our factory in Braås, Sweden, was certified carbon neutral, it clearly demonstrated our corporate core value of environmental care. It is the world’s first construction equipment plant and the Group’s fourth manufacturing site to become carbon neutral. As the world’s first automotive manufacturer to be approved by WWF to participate in its Climate Savers program another of our objectives is to reduce the total lifetime carbon emissions for trucks, construction equipment and buses manufactured between 2009 and 2014 by 30 million tons of CO2, compared to vehicles manufactured in our 2008 baseline year. Between 2009 and 2012, we reduced emissions from these products by 28 million tons – 93 percent of our goal.
One of many new products launched during 2013 was the new UD Quester range, designed specifically to meet the needs of customers in growing economies and thereby contributing to economically sustainable development. The trucks are developed in Asia, produced in Asia and will provide jobs and livelihoods for families in Thailand, India and China where production takes place.
Moving our business towards sustainable transport solutions also influences our thinking about ways to help move society forward. Today the Volvo Group produces trucks in South Africa and we have a presence in more than 50 African countries. We have a clear strategy for how we want to grow further in Africa, but we also have great respect for the many challenges faced by the countries where we want to grow.
Our CSR agenda for Africa aims to support our growth objectives by solving some of the obstacles that exist in these markets. One such obstacle is the severe shortage of trained drivers, technicians and operators. Our joint project with the Swedish International Development Cooperation Agency (Sida) and the US Agency for International Development (USAID) will introduce vocational training in 10 African countries that are business-critical for the Volvo Group and eligible for development grants from both Sida and USAID. This exemplifies the benefits of our new strategy to engage in community activities related to our core business. Taking another example, in India we have trained more than 110,000 drivers on driver responsibility, fuel efficient driving and traffic safety, and thereby created shared value by addressing a societal challenge using our unique knowledge.
During 2013, we took many innovative steps towards realizing our vision, not only with pioneering product technology, but through collaborative programs that are rethinking infrastructure and changing driver behavior. For example, results of the latest electromobility trials show a positive reduction in fuel consumption and emissions. The launch of our City Mobility Program is another milestone in field testing products with alternative fuels and smart technology.
All these initiatives simultaneously move our business forward and create value for the societies where we operate while opening up opportunities for the future. You can read more about our initiatives in this report as well as how we apply the principles in UN Global Compact in our daily business in order to become a sustainable company.
2014 is going to be the year when we see our strategies and hard work beginning to bear fruit. We have our new organization in place, we have a product range that is extremely competitive and we have co-workers who are engaged and professional. I believe we are now very well equipped to implement the next two years of our 2012-2015 strategies, aiming for improved efficiency, growth and profitability. This will put us on the right track to fulfill our long-term vision to become the world leader in sustainable transport solutions.
President and CEO