EU taxonomy: how sustainable the Audi Group’s business operations are

• Contribution to the environmental goal of climate change mitigation
• Manufacture of low-carbon technologies for transport 
• Manufacture of automotive and mobility components

The Audi Group’s business model covers the development, production and selling of vehicles and the associated activities. Within the meaning of the EU Taxonomy Regulation, activities in these areas are suited to making a substantial contribution to the environmental goal of climate change mitigation through the expansion of clean or climate-neutral mobility. Under the “climate change mitigation” environmental objective, the Audi Group allocates all the itemized activities to the economic activities “Manufacture of low-carbon technologies for transport” and, for the first time, “Manufacture of automotive and mobility components.” These apply to all cars and motorcycles produced, irrespective of their drive technology, and also cover genuine parts. The inclusion of the second economic activity permits the consideration of components as well because these play a key role in reducing greenhouse gas emissions. This relates in particular to the sale to third parties of produced engines and powertrains for fully electric vehicles.

In the Audi Group’s current estimation, hedging transactions and individual activities of subordinate importance, which are reported as other sales revenue in Audi’s consolidated financial statements, should not be assigned to an economic activity and are therefore not deemed in the first instance to be taxonomy-eligible. Other activities which are directly connected with the aforementioned vehicle-related business and, in Audi’s estimation, should also be assigned to these economic activities, are currently classified as not taxonomy-eligible. On the basis of the requirements published by the EU, it was not clear which economic activity they should be assigned to in accordance with the EU taxonomy. These activities particularly include the sale of other engines and powertrains, as well as parts deliveries and production under license by third parties, which are also reported as other sales revenue.

• Vehicle CO₂ emissions
• BEV = 0 g/km CO₂ and PHEV < 50 g/km CO₂ by 2025

The key performance indicator for fulfilling the screening criteria is the CO₂ emissions of the vehicles produced by the Audi Group. For this reason, CO₂ emissions in our vehicle-related business have been analyzed in accordance with WLTP by model and powertrain type. In this way, those vehicles have been identified among all of the taxonomy-eligible vehicles that meet the screening criteria and with which the substantial contribution to climate change mitigation is measured. Until December 31, 2025, a threshold value of < 50 g/km CO₂ (WLTP) will apply.

These vehicles include the Audi Group’s fully electric vehicles (BEV): 

• Audi Q4 e-tron, Audi e-tron* / Audi Q8 e-tron**, Audi e‑tron GT***

In addition, most of the plug-in hybrids (PHEV) produced by the Audi Group also fulfill the screening criteria: 

• Vehicles of the model lines Audi A3, Q3, A6, A7 and most of the Audi Q5 and A8 model lines

For fulfilling the screening criteria, a CO₂ threshold of 0 g/km already applies to motorcycles. None of the motorcycles in the Ducati product range met this requirement. At the same time, development work started on fully electric motorcycles in the 2023 fiscal year.

• No significant harm to the other environmental objectives
• Central Volkswagen assessment: criteria fulfilled by Audi

Ecologically sustainable economic activities within the meaning of the EU taxonomy must not only contribute to at least one of the defined environmental objectives but may also have no negative impact on the other environmental objectives. The DNSH (Do No Significant Harm) criteria for economic activities define the minimum requirements which must be fulfilled in order to exclude any significant harm to any of the other environmental objectives. In the year under review, the DNSH criteria for the economic activities “Manufacture of low-carbon technologies for transport” and “Manufacture of automotive and mobility components” for the Audi Group were analyzed at the higher level of the Volkswagen Group. For the vehicle-related business, the analysis was performed at the level of the individual production sites which manufacture or will in the future manufacture Audi vehicles that fulfill the screening criteria named under step 2 above or will do so in the future in accordance with the five-year plan. The Volkswagen Group’s Annual Report presents the key interpretations and analyses used by the Volkswagen Group to examine whether any substantial harm has been done to the other environmental objectives. The result of these assessments is that the Audi Group’s vehicle-producing sites fulfilled the DNSH criteria in the year under review.

• Upholding human rights and meeting minimum social standards
• Central Volkswagen assessment: criteria fulfilled by Audi

The minimum safeguards consist of the OECD Guidelines for Multinational Enterprises, the United Nations Guiding Principles on Business and Human Rights, the Fundamental Conventions of the International Labour Organization (ILO) and the International Bill of Human Rights.

The Audi Group is aware of its corporate responsibility for human rights, is committed to these conventions and declarations and affirms its acceptance of the content and principles specified therein. The Volkswagen Group has performed and concluded human rights risk assessments for all Audi Group companies, including all sites audited in accordance with DNSH criteria. This risk analysis took account of the results and risk assessments from the previous year. 

For the risks identified in the analysis, the companies received risk-specific measures which had to be implemented. The Group constantly monitors the status of implementation of these measures. The result of these assessments is that the requirements of the minimum safeguards were fulfilled in the year under review.