Volvo strengthens sustainability commitment by signing Glasgow Declaration at COP26

MANILA: Volvo Cars Chief Executive Officer Hakan Samuelsson, together with industry and government leaders, signed the Glasgow Declaration on Zero Emission Cars and Vans yesterday, November 10, at the United Nations (UN) climate change conference COP26.

Volvo Cars has also announced the implementation of an internal carbon price of 1,000 SEK per ton of carbon emissions throughout its entire business, in line with its goal of becoming a climate-neutral company by 2040.

The Glasgow Declaration, which was introduced at COP26 as part of World Transport Day, represents a commitment by industry leaders and governments to phase out fossil-fuel automobiles in key markets by 2035 and globally by 2040.

In addition to the pledges made in yesterday’s declaration, Volvo Car also has its own climate action goals. It anticipates that fully electric vehicles will account for more than half of its global sales by 2025. It also targets to be a fully electric car manufacturer by 2030, selling solely pure electric vehicles.

The signing of the declaration reflects the company’s endorsements of the Race to Zero ambitions, as well as the optimism that industry and governments can work together to achieve a faster phase-out of fossil-fuel cars that is more closely aligned with Volvo’s own timeframe.

In a statement, Samuelsson said, “Our plan to be a pure electric car maker by 2030 is one of the most ambitious in the industry, but we can’t realize zero-emission transport by ourselves, so I am pleased to stand side by side here in Glasgow with industry colleagues and government representatives in signing the declaration. The time for climate action is now.”

In terms of internal carbon price, Volvo Cars in the first car manufacturer to go beyond words and implement such a carbon pricing mechanism across its entire operations. The price is also set at a substantially higher level than what organizations like the International Energy Agency recommend.

The company aims to future-proof its organization and be ahead of the regulatory curve as it anticipates and supports more countries implementing carbon pricing in the coming years.

Every future car project will be subjected to a “sustainability sense-check,” with a CO₂ fee imposed for every ton of carbon emissions expected over the car’s life cycle. The goal is to ensure that each model is profitable even under a strict carbon pricing scheme, steering project-, sourcing-, and manufacturing-related decisions toward the most sustainable option available.

“A global and fair price on CO₂ is critical for the world to meet its climate ambitions, and we all need to do more. We strongly believe that progressive companies should take the lead by setting an internal carbon price. By evaluating future cars on their CO₂-adjusted profitability, we expect to accelerate actions that will help us identify and reduce carbon emissions already today,” Volvo Cars Chief Financial Officer Bjorn Annwall stated.

The company has also decided to significantly improve financial transparency, providing the financial community with more information about the effectiveness of its electrification strategy and overall transformation. In 2022, Volvo Cars will begin disclosing individual financial performance numbers for its electric and non-electric businesses with every quarterly report.

Photos from Volvo Cars

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