The Volvo Group announced the launch of a series of sustainability-related announcements today, including the launch of a green finance framework, enabling the company to issue green bonds and other sustainability-linked financial instruments. The company also announced that it has committed to set science-based emissions reduction targets.
Martin Lundstedt, President and CEO of the Volvo Group, said:
“Sustainability is a part of our DNA, ranging from safety, operations, purchasing, durability and quality in our products to constant fuel-efficiency improvements in our vehicles and machines. We take a holistic view on sustainability and are very pleased to show that we are supporting this transition with every part of our organization.”
According to Volvo Group, the company’s new green finance framework will enable it to issue securities including green bonds, green commercial papers and green loans, in order to finance projects in areas such as research and development and manufacturing of electric vehicles, machines and engines with zero tailpipe emissions. Additionally, funds may be used by Volvo Financial Services to offer green loans to customers who buy the Group’s electric products.
The Green Finance Framework has been subject to an independent external assessment by CICERO Shades of Green, which has classified the green financing framework as Dark Green, the highest grade possible.
Jan Ytterberg, Volvo Group CFO, said:
“Launching the green financing framework is a way of acknowledging that the debt market will play an important role in achieving the goals of the Paris Agreement by channeling funds towards projects that will have profound impact on reducing CO2 emissions.”
Volvo also announced that it is committing to the Science-Based Targets initiative (SBTi), pledging to establish science-based targets regarding its emission reduction plans in 2021. According to the company, committing to SBTi will enable it to provide transparency on efforts to reach net zero emissions by 2050. Volvo Group also supports the Task Force on Climate-Related Financial Disclosures (TCFD).
SBTi was formed as a collaboration between CDP, World Resources Institute (WRI), the World Wide Fund for Nature (WWF), and the United Nations Global Compact (UNGC), with the goal to establish science-based environmental target setting as a standard corporate practice. Achieving approval of targets by SBTi is a significant milestone for companies’ sustainability efforts.
To date, over 1,000 companies globally have pledged to align their decarbonization plans with the Paris Agreement by adopting science-based greenhouse gas reduction targets, and slightly over 450 companies have had their targets approved by SBTi.
“Our commitment to future generations is well-known and the Volvo Group is doing its part in achieving the goals of the Paris Agreement. Being the leader in sustainable transport and infrastructure solutions is good for the company and its stakeholders, but even better for the world. With our transformation comes a responsibility to openly and transparently report our progress, now we take the next step and commit to set Science Based Targets.”