Volvo’s report is well structured, but lacks hard-hitting data and analysis
Readers cosying up to Volvo’s latest sustainability report on a cold winter’s night may find themselves falling into a deep slumber. The report is well organised, but poorly written: loaded with trite clichés, heavy with dense narrative, and mostly absent of text-lightening charts or graphics. Volvo would benefit from a strong editorial hand to banish platitudes and focus reporting on concise discussion of company operations, with deeper dives into material issues.
This is a curious failure for a company with nearly two decades of disclosure under its belt, especially as Volvo headlines the 2011 report with a newly established company vision: “to become the world leader in sustainable transport solutions”. A lofty ideal, yet one that Volvo doesn’t adequately map to actions, targets and goals.
For example, although Volvo outlines “wanted positions” for 2020, these objectives are quite vague, such as “to capture growth opportunities”, and “to maintain a global team of high-performing people”. The only Volvo-unique objective is to become a proven innovator of energy-efficient transport and infrastructure solutions. The report further lacks specific, quantified goals and targets. Volvo carefully describes a new CSR and sustainability board-level committee and various management oversight roles and responsibilities, so perhaps goals will be forthcoming.
Another surprise is Volvo’s questionable adherence to the Global Reporting Initiative (GRI) guidelines. Volvo self-declares a GRI B application level, yet a rudimentary scan of the GRI index reveals Volvo’s inattention to some requirements. For example, Volvo declares several indicators as “fully reported” that are missing checklist-specific supporting data. For indicator LA7 (occupational health and safety), Volvo reports a fatality, yet does not provide other required safety statistics such as days away, lost time and absenteeism. For indicator SO1 (managing impacts of operations on communities), Volvo cites text related to political neutrality – an unrelated topic.
The report is also very short on data, with the notable and impressive exception of Volvo’s environmental data supplement. This 31-page annex provides environmental data for the company and individually for Volvo’s 71 majority-owned production, parts, and logistics facilities. It summarises Volvo’s environmental management approach and discusses data gathering and calculation methods. While Volvo’s core set of 40 indicators has been gathered since 1994, the annex provides the past 10 years of data in both absolute and production-related figures.
Sustainable transport
Volvo emphasises that sustainable transport will require cooperation among many actors and is predicated on timeframes linked to infrastructure development. Volvo lists various challenges to progress, including climate change, resource scarcity, and access to skilled employees. It is unclear whether these are the company’s material issues, as there is no formal materiality assessment description, and neither does Volvo link up challenges to the risks catalogued in the risk management section. Future reporting would benefit from a harmonised discussion of risks and challenges, with an explicit definition of Volvo’s material issues.
Volvo does take pains to describe its supply chain, numbering nearly 40,000 suppliers, each of which is asked to complete a self-assessment. The company discusses how many of its suppliers lack the ability to pass on requirements to their own suppliers, thus scoring poorly on the self-assessment. This titbit provides insight into how supply chain accountability requires a slow build and long-term focus. It also implies that Volvo’s supply chain risk is mostly procedural, but that fact is difficult to elucidate.
Volvo further states that “we prefer to work with business partners who share our values”, implying that the group will tolerate non-aligned partners. The report does not delve into on-the-ground practices in areas of the world where bribery and corruption are endemic. Readers are thus left puzzling over whether the company is sufficiently invested in addressing bribery and corruption equally across its global operations.
In the report’s environmental and social sections, Volvo finally begins to dig into specifics, describing, among others, the company’s “anti-greenwash” directive, evaluation of alternative fuels via a decision grid, provision of lifecycle analysis information to customers, training programmes to enhance road safety, and the challenges of increasing gender diversity. Future reports would do well to lead with this type of information, tying narratives explicitly to the company’s new vision with goals and targets. Volvo could then hope to better engage readers and vividly illustrate the implementation of company policies and management systems.
Snapshot
Follows GRI? Self-declared GRI B application level; Volvo does not address many required GRI Checklist questions for “fully reported” indicators.
Assurance? No
Materiality analysis? Not evident, though Volvo identifies key risks and challenges .
Goals? Yes: high-level and non-specific.
Targets? Some; mostly buried in the text.
Stakeholder input? Yes
Seeks feedback? Yes
Key strength: Extent of environmental data disclosure .
Chief weakness: Dense narratives and clichéd text.
Pleasant surprise: Discussion about attracting long-term shareholders via sustainability performance.
Aleksandra Dobkowski-Joy is a principal at Framework LLC.