Green Financing

“Sustainability is central to our purpose and business, and key to our future success’’

 

The financial community has a critical role to play in driving sustainable development, and we plan to continue to offer sustainable financing and investment opportunities to investors in the future as we shift towards full electrification. One step in this direction, is our mid-decade ambition to have all outstanding debt in a green or sustainability-linked format.

Our Green Financing Framework lays the foundation of a broad range of Green Financing Instruments and summarises the principles under which we will utilise these in the future. It also provides an opportunity for investors to learn about our position to drive positive transformation within the automotive industry and support us in this journey.

 

Green Financing Framework

The Green Financing Framework

In May 2023, Volvo Cars published its updated Green Financing Framework to reflect its ambitious sustainability strategy and the integration of the most recent and advanced market practices and standards. The Framework defines how Green Financing Instruments are set up within Volvo Cars to financially accompany the Group’s sustainability journey towards becoming a fully electric car maker by 2030 and a climate neutral company by 2040.

Where feasible, Volvo Cars will prioritise projects that are considered to be aligned with the EU Taxonomy, with particular focus on those that meet the technical screening criteria for climate change mitigation. In assessing these projects, Volvo Cars will consider the substantial contribution, DNSH and minimum social safeguards criteria.

The Framework has been developed to align with the 2021 ICMA Green Bond Principles (including the updated Appendix I from June 2022) and the 2023 LMA, LSTA, APLMA Green Loan Principles. In addition, the Framework has been designed to be consistent with the EU Proposal for a European Green Bond Standard, when relevant and feasible.

 

Link to Framework

 

Second Party Opinion

CICERO Shades of Green, now a part of S&P Global, a leading independent expert for the research-based assessment of Green Finance Frameworks has reviewed the Framework under its “Shades of Green” methodology and assessed its alignment with the ICMA Green Bond Principles. Volvo Cars’ updated Green Finance Framework has received the highest rating from CICERO with a "Dark Green" shading, similar to the first version of the Framework from 2020. Included in the overall shading is an assessment of the Volvo Car Group’s governance structure and processes which are rated “Excellent”. This means that CICERO considers that the eligible projects will support the long-term vision of a low-carbon and climate resilient future. This includes the selection process to identify eligible projects, the management of proceeds and reporting to investors.

Link to Cicero SPO

Reporting

Volvo Cars is committed to transparent allocation and impact reporting on any relevant Green Financing Instrument. The Group will publish the Green Financing Report on an annual basis, at least until full allocation of an amount equal to the net proceeds of the outstanding Green Financing Instrument(s), and thereafter in case of any material change to the allocation of the net proceeds. The Green Financing Report will be integrated in Volvo Cars’ Annual and Sustainability Report and / or as a standalone document.

Link to 2023 Green Financing Report (pages 188-189)

 

Bonds

 

 

Archive

Green Financing Framework 2020

SPO 2020