missing translation: fa.article-intro.reading-time – 03/19/2024
The European Union (EU) is increasing its focus on climate change mitigation. The “European Green Deal” and the goal of becoming climate-neutral by 2050 are an expression of the EU’s great ambition and provide the framework for a broad package of measures. The EU taxonomy represents the next logical step on this path and, at the same time, is one of the central measures in the aforementioned package. Its goal is to redirect capital to sustainable investments while fostering transparency and the long term in financial and economic activity.
To this end, the EU Taxonomy Regulation and the associated delegating acts define criteria to make companies’ sustainable business operations uniformly measurable and comparable. At the same time, the EU taxonomy goes beyond the climate change mitigation aspect to require additional compliance with social aspects, for example.
The Audi Group is committed to the Paris Climate Agreement and aligns its activities with the 1.5-degree goal. The company plans to be net carbon-neutral* by 2050.
The Audi Group is a fully consolidated Volkswagen Group company and is therefore not required to provide a separate report in accordance with EU taxonomy criteria.* Since fiscal year 2021, the Audi Group has been fostering transparency by publishing a voluntary report of the key figures relating to the EU taxonomy, thus reflecting the priority the brands give to ESG (Environmental, Social and Governance) criteria. Sustainability has a central role for the Audi Group and this is to be demonstrated visibly.
<ul> <li>Contribution to the environmental goal of climate change mitigation</li> <li>Manufacture of low-carbon technologies for transport </li> <li>Manufacture of automotive and mobility components</li> </ul> <p> </p> <p>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.</p> <p><br></p> <p>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.</p>
<ul> <li>Vehicle CO₂ emissions</li> <li>BEV = 0 g/km CO₂ and PHEV < 50 g/km CO₂ by 2025</li> </ul> <p>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.<br></p> <p><br></p> <p>These vehicles include the Audi Group’s fully electric vehicles (BEV): </p> <ul> <li>Audi Q4 e-tron, Audi e-tron* / Audi Q8 e-tron**, Audi e‑tron GT***</li> </ul> <p>In addition, most of the plug-in hybrids (PHEV) produced by the Audi Group also fulfill the screening criteria: <br></p> <ul> <li>Vehicles of the model lines Audi A3, Q3, A6, A7 and most of the Audi Q5 and A8 model lines</li> </ul> <p>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.</p>
* The Audi e-tron is no longer offered for sale as a new passenger car on the German market.
** Audi Q8 e-tron: electric power consumption (combined): 29.0–20.1 kWh/100 km; CO₂ emissions (combined): 0 g/km; CO₂ class: A
*** Audi e-tron GT: electric power consumption (combined): 22.1–19.6 kWh/100 km; CO₂ emissions (combined): 0 g/km; CO₂ class: A
<ul> <li>No significant harm to the other environmental objectives</li> <li>Central Volkswagen assessment: criteria fulfilled by Audi</li> </ul> <p>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.</p>
<ul> <li>Upholding human rights and meeting minimum social standards</li> <li>Central Volkswagen assessment: criteria fulfilled by Audi</li> </ul> <p>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.</p> <p><br></p> <p>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. </p> <p><br></p> <p>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.</p>
The EU taxonomy contains wording and terms which are still subject to interpretation. Their later clarification by the EU may result in reporting changes. There is a risk that key figures reported as taxonomy-aligned might need to be assessed differently. The Audi Group’s interpretation is shown below.
Revenue of the Audi Group in 2023 totaled EUR 69.9 (61.8) billion. Of this amount, EUR 59.3 (51.6) billion, or 84.9 (83.5) percent, was attributable to the economic activities “Manufacture of low-carbon technologies for transport” and “Manufacture of automotive and mobility components” and is therefore classified as taxonomy-eligible. This mainly includes the sales revenue from new and used vehicles, including motorcycles, from genuine parts, from extended warranties, and from the rental and lease business.
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Of this amount, EUR 11.4 (8.3) billion, or 16.3 (13.5) percent, fulfilled the screening criteria (see step 2). Because it satisfies the DNSH criteria and minimum safeguards, this proportion of sales revenue can be classified as taxonomy-aligned. In the case of fully electric models only, this applied to EUR 8.3 (6.1) billion or 11.9 (9.8) percent of Audi Group revenue. Revenue from the sale of PHEVs was also higher than the previous year.
In accordance with the EU taxonomy, capital expenditure covers additions to intangible assets, property, plant and equipment, leasing and rental assets, and investment property. All capital expenditure attributable to the vehicle-related business was associated with the economic activity “Manufacture of low-carbon technologies for transport.”
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No substantial capital expenditure was assigned to the other activities in the vehicle-related business (especially engines, powertrains, parts deliveries and franchises) that were initially not included.
In fiscal year 2023, additions in the Audi Group amounted to
Taxonomy-eligible capital expenditure thus totaled EUR 6.4 (5.1) billion or 100 percent. Capital expenditure relating to vehicles that meet the screening criteria amounted to EUR 2.8 (2.0) billion. Taking into account the DNSH criteria and minimum safeguards, 43.2 (39.3) percent of total capital expenditure was taxonomy-aligned in 2023. The percentage increase is largely attributable to the higher investments in fully electric vehicles. Taxonomy-aligned capital expenditure included EUR 2.6 (1.7) billion, or 40.3 (34.3) percent, for these vehicles. This year-on-year increase reflects the Audi BEV roadmap.
In accordance with the EU taxonomy, operating expenditure covers non-capitalized research and development costs, expenditure for maintenance and repair, and short-term leases. All operating expenditure attributable to the vehicle-related business is associated with the economic activity “Manufacture of low-carbon technologies for transport” and was therefore classified as taxonomy-eligible.
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Thus, of the Audi Group’s total operating expenditure:
The increase in taxonomy-aligned operating expenditure – both absolute and proportionate – is attributable to the growing number of environmentally sustainable projects in accordance with the EU taxonomy. In the case of fully electric vehicles, a total of EUR 1.2 (0.9) billion, or 39.2 (32.8) percent, is included in the taxonomy-aligned operating expenditure.
The Brand Group Progressive is continuing with its ambitious BEV roadmap. This is reflected, among other things, in the taxonomy-aligned share of revenue of 16.3 percent as well as in the capital expenditure planned for electric mobility and digitalization. To drive forward its transformation to a provider of sustainable and connected premium mobility, the brand group is earmarking investments of around EUR 29.5 billion for electrification and digitalization for the period 2024 to 2028. With a total investment of around EUR 41 billion, almost two-thirds of the upfront expenditure is going into these future-oriented topics.
Audi is presenting a large number of new models in 2024, led by the fully electric Audi Q6 e-tron based on the PPE (Premium Platform Electric) drive platform. Furthermore, the Bentley and Lamborghini brands are committed to the electrification of their fleet, while Ducati is the exclusive supplier for the electric class of the MotoGP™ World Championship.
