Leif Johansson’s speech at the CEO round table – CSR. April 14, Beijing
Your Excellencies, Ladies and Gentlemen.
It is a great honour for me to be allowed this opportunity to give you my and Volvo Group view on Corporate Social Responsibility (CSR). Let my start by saying that we are living in exciting times! Technology has brought people from all over the world closer together, our ability and willingness to learn from other cultures have never been as great as today and there is increasing awareness that we share a common future. These factors create great opportunities for all nations around the globe. But it is at the same time true that the world is also facing new challenges, not least as regards the climate issue and social development.
There is a long tradition of commercial links between China and Sweden, something we were aptly reminded of last year when we welcomed the 18th century ship the East Indiaman “Götheborg” back to Sweden following its long voyage to China. The ship was received in the port of Göteborg by the heads of state of both our countries, His Majesty King Carl XVI Gustaf and His Excellency President Hu Jintao. We were delighted and very proud of the fact that President Hu Jintao graced Volvo with a visit during his stay in Sweden.
Allow me to start off by saying a few words about the Volvo Group. Today we manufacture trucks, buses and construction equipment as well as marine and industrial engines. We are also a leading producer of high-tech components for the aerospace industry. All this makes the Volvo Group one of the world’s largest providers of commercial transport solutions and Sweden’s largest company.
The Volvo Group has grown steadily and is today established all over the world, not least here in Asia where we have about 15 percent of our total sales. We did our first business with China back in the 1930s, and today we have almost 4000 employees here. Our position in China is today very strong and we can produce tailored products to suit your needs. We have of course monitored your astonishing industrial development. For us, China is no longer an export market. Rather, we regard China as one of our domestic markets and a market with immense potential. Over the years we have learned to appreciate the considerable competence that our Chinese colleagues have at their command, and their strong energy and determination to develop further.
I am convinced that our company’s long-term commercial success and competitiveness are both reinforced when we develop competitive products, show respect for our employees, offer a good working environment and behave as good corporate citizens. Working in a socially responsible way is an inherent part of the Volvo soul and our history. The fact that we focuses on CSR is also a precondition for my survival every morning at the breakfast table when the members of my own family ask difficult questions!
Volvo’s founders had a clear vision when they started the company 80 years ago. Since Volvo’s products were to be used by people, our founders insisted that safety and quality characterise everything we did. This care for the human being was expanded during the 1970s to encompass the environment too. So with safety, quality and the environment as our core values, it is a logical consequence that we should also behave in a socially responsible manner. Allow me to give you a few practical examples of what I mean.
To begin, we naturally follow the laws of the land in which we operate. Over and above this, we have a code of conduct that applies to all our more than 100,000 employees world wide. Our code of conduct describes principles that apply in the relationships between the company and our employees, customers and other parties.
We stand fully behind the principles of human rights such as they are defined in the UN’s Declaration of Human Rights. The Volvo Group recruits and treats its employees in a way that is not discriminatory as regards, for instance, gender, religion and nationality. The freedom to engage in trade union activities and the right to sign collective wage agreements are respected throughout the Volvo Group. We do not tolerate child labour or work carried out under force or the threat of violence. The minimum age of employment used by us is the age at which compulsory education ends in each respective country.
Volvo has operations in 180 countries and production facilities in 18 countries. One thing that has significantly enriched my personal life has been the opportunity to learn from the immense diversity that is to be found throughout the Volvo Group. It’s why it is always such a pleasure to go to work every morning! I encourage diversity at all levels of the company. Diversity generates creativity, which in turn promotes innovation, which itself is a precondition for success. Volvo has staff from all nationalities, women and men, young and old, representing various religions and different areas of competence and expertise. All this is an immense asset. One of our strategic goals is to increase awareness about the benefits diversity bring throughout our organisation.
We constantly strive towards open communication and the active exchange of information with the world in which we live and with the people with whom we work. We present an open account of our work on sustainability and CSR in a special report that can be accessed on the Internet at volvo.com. The report follows the guidelines laid out in the procedures by the Global Reporting Initiative.
Every year, we conduct a Group-wide survey called the Volvo Group Attitude Survey. In this survey our employees are encouraged to offer their views on their work situation what they feel needs to be improved.
The economy, the environment and social development all tie in together. The environmental issue has extremely high priority in the company. Volvo is well aware that we are part of the environmental problem, but we are also part of the solution. Global warming and the threat to the climate are the biggest environmental problems of our time. As one of the world’s largest vehicle manufacturers, we have a responsibility for reducing the environmental imprint of our production and our products. If we succeed in this venture, we will strengthen our own and our customers’ competitiveness, while at the same time making a positive contribution to society’s development in general.
In 2007 we unveiled seven trucks each optimised for carbon dioxide-neutral operation. They were developed to run on seven different fuels sourced from renewable raw materials. We have made immense progress in the development of energy-efficient products, one example of which is the very latest fuel-saving hybrid technology. At the same time, we are focusing on reducing the environmental imprint of our own production process, not least by reducing energy consumption. In 2007, for instance, we inaugurated the world’s first carbon dioxide-neutral vehicle factory – the Volvo Trucks plant in Ghent, Belgium. Thanks to investments in wind-power and biofuels, it uses electricity and heating that do not make any net carbon dioxide contribution to the atmosphere. Our aim is that all our factories should be carbon dioxide-neutral in the years to come.
The environment and the efficient transportation of people and goods are coming into ever-sharper focus in an increasingly urbanised world. Volvo is involved in the development of high-efficiency bus systems in many major cities – our system is called Bus Rapid Transit (BRT). It can be likened to a metro or light railway system. A BRT system has the same properties as a rail-bound system when it comes to passenger capacity and average speed. It includes dedicated bus lanes and high-capacity buses. The main benefits of BRT are that the environment improves since emissions are reduced and more passengers can travel by public transport. Not least important: BRT is much cheaper than any rail-bound alternative.
Working with Corporate Social Responsibility is a task that never ends and there will always be areas that we can improve. We believe, however, that we have made considerable progress and that we are heading in the right direction. We are strengthened in this belief by the positive comments that our CSR work has generated in several independent reviews. Allow me to give you an example:
- For the sixth consecutive year, the Volvo Group has been noted in Dow Jones Sustainability Index thanks to the Group’s sustainability drive in the areas of economy, environment and social issues. This means that Volvo is assessed as being among the 10% best companies in the world when it comes to combining economic profitability with environmental care and social consideration. We were awarded a particularly high mark for our handling of environment-related issues and for our corporate governance. I am very proud of this.
It is my perception that a proactive approach to CSR promotes enhanced diversity, more satisfied customers, more loyal employees, stronger brands, risk minimisation, and a better environment. We have a long tradition of corporate social responsibility and we intend to continue to lead developments in this important arena in the future. Active CSR dedication is an integrated part of the Volvo Group’s competitiveness and it is crucial to our ability to create value for our customers, employees and shareholders. Moreover, this work contributes to a development process that creates value for future generations too.
We are open to an exchange of thoughts and ideas and we warmly welcome a dialogue with various sections of Chinese society.
Thank you for giving me this opportunity to speak here today, and allow me to conclude by saying that I am looking forward to continued discussion!