Annual Report 2023

Group Management Report

Minimum safeguards

The minimum safeguards consist of the OECD Guidelines for Multinational Enterprises, the United Nations Guiding Principles on Business and Human Rights, the Fundamental Conventions of the International Labour Organization (ILO) and the International Bill of Human Rights. The assessments confirm that we meet the requirements of the minimum safeguards in the reporting year.

As a business with a global presence, the Volkswagen Group accepts its corporate responsibility for human rights, fully recognizes these conventions and declarations and reaffirms its agreement with the contents and principles stated therein. In 2022, the Volkswagen Group appointed a Human Rights Officer, whose duties relate primarily to monitoring, checking and advising within the meaning of the Lieferkettensorgfaltspflichtengesetz (LkSG – German Supply Chain Due Diligence Act).

The LkSG imposes certain due diligence obligations designed to avoid risks associated with human rights and the environment. These obligations include the performance of risk analyses, the integration of preventive measures, remedial measures and the provision of a complaints mechanism. The due diligence obligations apply both to the Volkswagen Group’s own business area and to the Group’s supply chain. In the reporting year, the departments responsible performed a risk analysis using questionnaire-based surveys of the Group companies of the Volkswagen Group’s own business area; this included all sites that were also examined under the DNSH criteria. The companies were given risk-specific measures to counteract the risks identified in the analysis, and were required to implement these. For risks that are already known, we have begun to revise and initiate preventive measures and to supplement these with other measures where appropriate. The status of implementation of the respective measures is continuously monitored by the Group. If infringements of the frameworks are identified, remedial measures must be initiated and checked for their effectiveness.

Relationships with our business partners are based on agreements such as the Code of Conduct for Business Partners. We review compliance by the relevant suppliers with the binding requirements defined in the Code using sustainability ratings. We address existing sustainability risks and violations of sustainability principles by systematically defining and allocating packages of measures to correct the violations; we also apply this approach to the upstream supply chain. In addition, we also conducted training for suppliers and on-site audits at suppliers with a high risk exposure in the reporting period. We implemented a Human-Rights-Focus-System in 2022 to comply with international frameworks and requirements and specifically the LkSG. The system aims to identify particularly high risks in our supply chain in connection with human rights violations and the environment and to manage these appropriately.

Systematic assessment of companies in terms of their credit quality. Ratings are expressed by means of rating classes, which are defined differently by the individual rating agencies.
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