Responsible raw material supplies: the Volkswagen Group's commitment

 Responsible raw material supplies: the Volkswagen Group's commitment

The brands of the Volkswagen Group have joined the Leather Working Group, an organization that ensures transparency and uniform environmental and social standards for leather supply chains worldwide.

The Volkswagen Group's commitment to issues such as sustainability and environmental protection includes a 360-degree approach to all aspects of company operations. This is why all Group brands have joined the Leather Working Group (LWG), with the aim of playing a leading role in the automotive industry in terms of responsible procurement of raw materials. In this sense, becoming a member of the LWG is a further milestone on the way to improving sustainability along the entire value chain.

International standards

"The Volkswagen Group is assuming responsibility for sustainable and transparent supply chains. Joining the LWG is an important step: the organization's expertise will help us become even more sustainable in our use of leather", explains Dirk Große-Loheide, Volkswagen Group Board Member responsible for Procurement and member of the Extended Executive Committee.

"Together with our suppliers, we are committed to internationally accepted standards. The facilities in which the leather we use is manufactured are also important in this regard and will receive certification from LWG", adds Barbara Frenkel, Executive Board Member for Procurement at Porsche AG, which within the Volkswagen Group is responsible for evaluating sustainability risks in leather sourcing.

Leather Working Group

"Traceability in supply chains is at the core of our efforts and is one of the most important ways in which companies can ensure that they are sourcing leather responsibly", says Christina Trautmann, Head of the Leather Working Group. "We very much appreciate the active involvement of the Volkswagen Group: with its support we intend to drive forward the development of tools and methods that will have a positive impact on the leather industry".

LWG is a non-profit organization headquartered in Milton Keynes, UK. Its mission is to ensure transparency and uniform environmental and social standards for leather supply chains worldwide.

Sustainability strategy

LWG also certifies leather manufacturers and has about 2,000 member companies, representing more than one-quarter of global finished leather production. Members include companies from all along the leather supply chain, from tanneries to leather processing industries and associations to traders and buyers.

Joining the Leather Working Group underpins the Volkswagen Group's sustainability goals. In 2021, the Group published its first dedicated Responsible Raw Materials report dedicated to raw materials: the publication details methodology and activities as part of a newly established management system for raw material procurement. The report covers 16 high-risk raw materials, including battery materials such as lithium and cobalt, but also leather.

Environmental Protection

Achieving full supply chain transparency and implementing international standards is particularly challenging: the greatest risk to human rights and environmental protection is often at a level of the supply chain in which the Volkswagen Group itself does not have direct contractual relationships.

Therefore, material-specific tender specifications for leather were introduced in early 2022; since April 2022, suppliers must comply with them for all new contracts awarded. These specifications require both the country of origin of the raw material to be declared and its sustainability to be certified by a body such as LWG. In this way, the Group requires its suppliers to respect animal welfare and be responsible in the production and processing of leather. Strict criteria for the use of water and the prevention of its pollution in the tanning process must be adhered to. As a matter of principle, all Group brands do not use leather whose supply contributes to illegal deforestation.

Source: Volkswagen Newsroom

VGI | Responsible OU: VP | Creation date: article date | Class 9.1

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