Sustainable from start to finish

consistently sustainable: Genuine sustainability means looking at the big picture. That is why Audi not only continues to reduce the fuel consumption of its cars, but also optimizes every step of the value chain – from development and production to utilization and recycling. In addition, Audi has anchored sustainability criteria in its corporate management and is tackling decarbonization from a holistic perspective. This is the only way to ensure Audi achieves long-term growth.

03/19/2020 Copy: Fabian Saxinger – Photos: AUDI AG, Fritz Beck – Illustrations: André Gottschalk – Rendering: Vinzent Britz Talking Business  Reading Time: 4 min

Talking Business – Key Facts

  • Audi acts sustainably with a long-term perspective.
  • Financial figure “Return on investment after CO₂ effect” makes sustainability a basis for decision-making.
  • Electric vehicles are the lever: around 30 electric models, including around 20 all-electric models, by 2025.
  • Audi wants to become a carbon-neutral1 company on balance by 2050.

Dr. Daniel Kauer, Head of Product Strategy
Dr. Daniel Kauer is responsible for the overarching product strategy at Audi and therefore plays a decisive role in shaping the e-mobility roadmap of the future.

ESG – A new compass for change

When assessing companies, sustainability and transparency are becoming increasingly important criteria for investors. E, S, G. These three letters are the basis on which companies are evaluated: Environment, Social and Governance. They make it clear that sustainability is more than just an environmental issue. In addition to ecological factors, social aspects and the principles of good corporate governance play a decisive role. The size of the carbon footprint is just as important as the working conditions of employees and suppliers. Governance covers, among other things, transparency and compliance guidelines.

More about E, S and G

Environment (E)

Audi is committed to the Sustainable Development Goals of the United Nations and makes a valuable contribution to them, including the goals of sustainable production and climate protection. The company has defined more than 50 concrete measures to reduce CO₂ emissions along the entire supply chain.

Social (S)

Audi assumes responsibility for its employees. Under the program “Audi.Zukunft,” the company has reached a general agreement to extend its employment guarantee until 2029 and support the training and development of employees and young professionals in key fields of the future. A total of over EUR 500 million will be invested in professional development up to 2025. New agile collaboration models generate scope for developing the skills of employees and are an integral part of the sustainable and goal-oriented Audi working world.

Governance (G)

Audi stands up for its values and is committed to compliance and integrity. One of the basic principles of this is its participation in the Volkswagen Group-wide compliance and integrity program “Together4Integrity.” In its corporate management, Audi works transparently and regards the German Corporate Governance Code as the basis for its actions.

You can find an extensive overview of further ESG measures in the Financial Report.

Responsibly, transparently and with integrity

The sum of all these factors generates an overall picture according to the ESG approach, which reveals how sustainably a company operates. Audi regards sustainable conduct in line with ESG criteria as a driver for long-term economic success. Optimized processes, platform synergies and an efficient use of resources all they way to closed loops reduce the environmental impact and decrease costs. The company thinks about the future from a holistic point of view and manages its business with a clear long-term perspective – responsibly, transparently and with integrity. Audi embraces its responsibility. This is the reason why sustainability is at the heart of Audi’s vision to unleash the beauty of sustainable mobility. In the automotive industry’s transformation, Audi is dismantling old structures and regards sustainability as the new compass for change.

Dr. Daniel Kauer, Leiter Produktstrategie

CO₂ – The course is charted

One of the main causes of climate change is the increase of greenhouse gases in the atmosphere. Carbon dioxide (CO₂) in particular is a concern for the automotive industry. The focus is on the E in ESG. Audi acknowledges its responsibility and wants to become part of the solution instead of being part of the problem. The Volkswagen Group has expressly committed itself to the goals of the Paris Climate Agreement, which provides for limiting the global rise in temperature to significantly under two degrees Celsius.

“As a contribution to the two-degree goal, Audi is reducing the carbon footprint in the utilization phase. We’ll achieve this by significantly increasing vehicle efficiency, electrifying our models and expanding our product portfolio to include all-electric vehicles,” says Dr. Daniel Kauer, Head of Product Strategy.

Goal: to become a carbon-neutral company on balance by 2050

With the carbon footprint, sustainability becomes measurable, controllable and assessable. The product portfolio is being consistently prioritized based on “return on investment (ROI) after CO₂.” In this way, CO₂ emissions will also be considered in product decisions. “With this type of governance, Audi is driving e-mobility forward and going on the offensive with its product portfolio,” says Kauer.

To achieve its CO₂ fleet targets, the company plans to have around 30 electric models by 2025, around 20 of which will be all-electric. The Audi e-tron, the e-tron Sportback and the Q2 L e-tron were the first of these. With the Audi e-tron GT as a sports car and the Audi Q4 e-tron as an SUV in the compact class, Audi will be the first premium manufacturer to offer electric cars in every core segment. The course is charted.

Return on investment after CO₂

"ROI after CO₂” is the gain or loss generated on an investment after taking CO₂ effects into account. When calculating the financial figure, CO₂ compliance measures are already taken into account. This means that sustainability is anchored in product decisions. Audi has set itself the strategic goal of increasing the return on investment (ROI) to over 21 percent.

Holistic – Where the journey is headed

“Our vision is to become a carbon-neutral company on balance by 2050.”

Dr. Daniel Kauer, Head of Product Strategy

Low CO₂ emissions during a car’s utilization phase represent just one factor. A holistic approach considers all greenhouse gas emissions from development and production through to utilization and recycling. Experts refer to this as life cycle assessment or life cycle analysis. “Our vision is to become a carbon-neutral company on balance 1 by 2050,” explains Kauer. Audi takes a holistic approach and is thus following the lead of the Volkswagen Group, which has defined the Decarbonization Index (DCI) as a strategic benchmark on the way to achieving a reduction in CO₂. The more effective the measures are, the lower the emissions throughout the entire life cycle and ultimately the lower the DCI will be.

Decarbonization

By 2025, the Volkswagen Group wants to reduce the DCI by 30 percent compared with the reference year 2015. “Audi is doing its part to help achieve the Volkswagen Group’s decarbonization target,” says Kauer. To consistently promote decarbonization at Audi, the company and its suppliers joined forces in more than 30 workshops and worked out more than 50 measures that are planned to take effect by 2025. Among these are closed material loops, a gradual increase in secondary materials, the use of recycled materials in plastic components and of green electricity. These and other efforts will result in potential savings of 1.2 metric tons of CO₂ per car.

In terms of production, Audi aims to achieve decarbonization by making all its plants carbon-neutral 1 on balance by 2025. Brussels – as the world’s first certified carbon-neutral 1 large-scale production plant in the premium segment – is just the beginning. The next planned milestone in 2020 is the Audi site in the Hungarian city of Győr, which is covering its power requirements through Europe’s largest photovoltaic roof system. In addition to measures being implemented in the supply chain and production, Audi is also working toward the expansion of the charging infrastructure necessary for the electric initiative. With the e-tron Charging Service, one of the largest public charging networks in Europe, electric car owners have access to over 135,000 charging points in 24 countries.

DCI – How is the index calculated?

The DCI measures the average emissions of CO₂ and CO₂ equivalents over the entire life cycle of the Audi passenger car portfolio and is expressed in metric tons per vehicle. It includes the direct and indirect CO₂ emissions of individual production sites (scope 1 and 2) as well as all other direct and indirect CO₂ emissions throughout the life cycle of the vehicles (scope 3).

The decarbonization cycle

The cycle for gradual decarbonization extends from material procurement and production, through the utilization phase all the way to recycling. Audi consistently implements measures at all points of the value chain. A circular economy for recycling aluminum scrap in the manufacturing process (Aluminium Closed Loop) and several other recycling measures complete the value-added cycle. A holistic approach is important if Audi is to achieve the sustainability goals and be economically successful in the long term. This is where the journey is headed – and Audi is leading the way.

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