Volvo: Increasing demands from customers and investors
"More and more investors are starting to see the links between CSR and other important parameters", says CSR expert Emma Sjöström.
Consumer companies that are Volvo Trucks’ customers are imposing increasingly rigorous CSR demands when they purchase vehicles for their fleets. So says Martin Bramsved, the responsible for CSR issues at Volvo Trucks.
“Consumer companies have traditionally been at the cutting edge when it comes to CSR, as they know they will lose customers if they fail to come up to expectations. So our customers are stepping up their requirements in relation to the strategies we are applying in order to contribute to sustainable development and we have customers who choose the Volvo Group because it has a good reputation when it comes to the environment, for example,” he explains.
“Surveys reveal that three-quarters of the population expect companies to take greater responsibility and not simply make a profit. This is incredibly important to students when they choose an employer,” he continues. Martin Bramsved divides CSR into three areas: “social”, which comprises the working environment and human rights, “environment” which encompasses environmental issues, and “business ethics”, which focuses on tackling corruption and bribery and promoting responsible financial management. “When it comes to the environment, we enjoy enormous confidence and we have shown what we are able to do. We are often asked for our opinion on environmentally related issues by the Swedish Government, for example.”
For the past few years, the Volvo Group has been imposing CSR requirements on procurement and purchasing. According to Martin Bramsved, imposing demands on players outside the company’s own sphere of operations is a challenge. “We have 35,000 suppliers within the entire Group. We have made some progress by conducting supplier evaluations in which we prioritise suppliers in risk sectors and risk countries.” Martin Bramsved says that the best way to run a CSR programme is to make it part of the business strategy and he gives Brazil’s traffic safety project as a good example.
He also spotlights a deal from last year in which Volvo Trucks sold 1,000 trucks to a cement plant in Addis Ababa in Ethiopia. The customer also purchased a complete haulage company operation solution – including knowledge of everything from parts orders and processes to employment systems and IT solutions.
Ethiopia is a developing country and the knowledge the company purchased from Volvo Trucks is helping to develop Ethiopia’s knowledge base and opportunity to run operations of this kind, something that will benefit the entire country’s growth and development.
“This is an example of one plus one equalling more than two. The service they sourced from Volvo Trucks is providing added value for society,” says Daniel Zackrisson, head of the soft products technology area at Volvo Technology and one of the people who have visited Ethiopia on a number of occasions to set up the business operations. “If you’re interested in social issues, it’s both tremendously enjoyable and positive to put some of the cornerstones in place and help things to move in the right direction. The skilled jobs that are created produce ripples on the water. We hope that it won’t be long before this service is available for purchase in a more standardised format on markets all over the world.”
Martin Bramsved says that he dreams of a time when the Volvo Group disseminates its CSR programmes in an even more focused, business-oriented manner. “It’s a question of finding solutions in the areas that go hand in hand with our core business. We can, for example, improve systems for passenger transport and waste management in the world’s congested and expanding major cities. In this way, we shall develop business and solve social problems at the same time.”
An active CSR programme is not simply a good way of developing business in a sustainable manner, according to Emma Sjöström, a CSR expert who has, for example, obtained a doctorate on the subject at the School of Economics in Stockholm. “More and more investors are starting to see the links between CSR and other important parameters, such as results and profitability. These topics are now being discussed far more energetically by investors.
People are interested in manifesting their business orientation by taking account of issues such as climate, water and human rights,” says Emma Sjöström. She adds that, in the longer term, companies cannot be profitable if they are not prepared to listen to and live up their stakeholders’ expectations and that a good CSR programme does not represent additional costs – quite the reverse. “By streamlining energy consumption, acquiring a new perspective and finding smart business solutions, for example, it is instead possible to increase profitability.