"Sustainability is a huge
opportunity for Volkswagen Financial Services"

Volkswagen Financial Services is setting ambitious goals with its new sustainability strategy. Frank Fiedler, Board Member for Risk, Tax, and Legal Affairs of Volkswagen Financial Services AG, explains the strategic importance of the new sustainability strategy for our business model and its key pillars in an interview with corporate communications.

Volkswagen Financial Services has developed a new sustainability strategy. Why?

Fiedler: One thing is clear: As a leading provider of financial and mobility solutions in Europe, we must fulfill our responsibility to future generations. After all, we aim to help shape the future of mobility in the long term. This includes the transformation to emission-free mobility. At the same time, we see a huge opportunity in the field of sustainability for our company, especially as a differentiating factor in the competitive landscape. With our new sustainability strategy, we are intertwining these two elements: We want to contribute to a livable future and leverage the resulting opportunities for our business model.

So, our future business success also depends on our sustainable practices?

Fiedler: Absolutely. Even today, investors and rating agencies are already looking at a multitude of sustainability criteria. The fact is, we will be able to refinance more favorably in the future if we perform well in sustainability ratings. This has a direct effect on the terms we can offer our customers. Our fleet customers also expect us to operate sustainably and support them in their decarbonization efforts as part of their supply chain management. Additionally, there are regulatory requirements to consider. All of this shows that sustainability is now highly relevant to the success of our business.

Let's take a closer look at the specific contents of the strategy. Which areas are in focus?

Fiedler: We have defined four focus areas: Nature, Employees, Society, and Business. In the Nature area, reducing CO₂ emissions plays a key role. Overall, Volkswagen Financial Services aims to make both our business operations and vehicle portfolio net-carbon-neutral by 2030. This includes considering both the direct emissions we generate through electricity consumption, heating, cooling, business travel, or our company car fleet, as well as the direct emissions of the vehicles we finance or lease. With this goal, we are pursuing a very ambitious path.

What exactly do you mean by "net-carbon-neutral"?

Fiedler: We want our business operations to have as minimal an impact on the climate as possible, aiming for a balanced carbon footprint as a company. We follow the principle: Avoid, Reduce, Compensate. This means we are committed to reducing our own CO₂ emissions in business operations as much as possible while also supporting the market's transition to e-mobility. However, this transformation takes time and progresses at different speeds in different markets. Nonetheless, we want to contribute already today. Therefore, we have decided to offset the currently unavoidable CO₂ emissions from the use of financed and leased vehicles through quality-assured climate protection projects.

Can you give us a clearer picture of these climate protection projects?

Fiedler: A good example is our long-standing collaboration with NABU, which we are scaling up this year as part of a major European project. The focus here is on protecting peatlands. Additionally, we are working closely with Volkswagen ClimatePartner. This joint venture, founded in 2023, develops and finances climate protection projects that meet strict standards and demonstrably offset emissions. Our first two flagship projects are in Brazil and South Africa. All our climate protection projects share common characteristics: They are independently verified, long-term, and implemented in close cooperation with local communities, experts, and employees.

What about the other focus areas? Are they equally important?

Fiedler: Absolutely. Our employees are the heart of our company. That's why we foster a culture of appreciation, trust, and continuous development. We will invest even more in the training and education of our team. Additionally, we are committed to diversity, inclusion, and above all, equality. In the Society area, we aim to strengthen our role as a corporate citizen. We are already well-positioned at our Braunschweig location, and our international subsidiaries are implementing fantastic projects. Moreover, we take our social responsibility seriously through a robust cybersecurity strategy. Protecting sensitive data and defending against cyber threats also contribute to the stability of our economic system and society.

Another dimension is the Business area. How can our business contribute sustainably here?

Fiedler: We are a subsidiary and sales promoter of Volkswagen AG. We firmly believe that the future will be electric. Therefore, we are resolutely advancing the mobility transition. Together with the brands of the Group, we develop attractive offers to make electromobility affordable. This is and will remain our core business. We also support our fleet customers in electrifying their fleets. Our strong leasing business gives us a significant leverage here. Additionally, in our role as an automotive bank, we contribute by increasing the share of sustainable refinancing in the capital market.

Where do we currently stand?

Fiedler: All our defined goals are set for the year 2030. However, we have set a clear interim target for reducing our business operations' CO₂ emissions by 2025. We aim to reduce our emissions by 50 percent compared to the reference year 2021. But, based on our forecasts, we can already see that we will not achieve this goal – we need to be honest about that. A significant reason is the still low proportion of electric vehicles in our company car fleet and business travel. In addition, we still lack products with a CO₂ compensation option for our customers. This shows that we still have a long way to go and will need to take a closer look at these issues.

What are the next steps?

Despite the mentioned challenges, sustainability is an integral part of our MOBILITY2030 strategy and now backed by clear goals. It is important to us to regularly report on our progress. This way, we aim to ensure transparency, build trust, and most importantly, motivate. We are committed to getting all employees on board and generating enthusiasm for the topic.

Thank you for the interview!