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Volvo Group's Climate Policy Pushback Despite Paris Pledge

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New analysis released in advance of the company’s investor meeting shows how the truck maker is fighting climate regulations in major markets

Volvo Group is opposing ambitious climate regulations in both the United States and the European Union, despite claiming to be engaging with public policy “in line with the Paris Climate Agreement”.

Analysis by climate think tank InfluenceMap prepared ahead of the company’s annual general meeting (AGM) in April highlights the gap between its green PR efforts and its policy engagement strategy.

Ben Youriev, InfluenceMap Transport Program Manager, said: “Volvo Group clearly believes that promoting a green image is good for business. Yet its strategic, negative climate policy engagement should be a clear risk indicator for investors ahead of the company’s AGM.”

Volvo Group’s AGM comes on the back of the latest IPCC report, which warned that emissions will need to be cut by almost half by 2030 if warming is to be limited to 1.5°C.

In the United States, Volvo Group has directly lobbied US lawmakers across multiple states as part of a coordinated campaign against the Advanced Clean Truck (ACT) rule, which would mandate an increasing percentage of medium and heavy-duty vehicle sales be zero-emission vehicles.

The US-focused research showed:

    • Volvo Group lobbied to oppose the adoption of the ACT rule in California, Colorado, New Jersey and Oregon. This engagement was revealed by documents obtained via multiple freedom of information requests.

    • Volvo Group is a founding member of a campaign group – ?Partners for a Zero Emission Vehicle Future’ – which publicly declares that it supports the rollout of zero emissions trucks, while simultaneously warning state lawmakers against adopting the ACT rule.

    • Volvo Group is a key member of the Truck and Engine Manufacturers Association (EMA), which has spearheaded the campaign against the ACT rule, by directly lobbying policymakers in at least eight states: California, Colorado, Maine, Massachusetts, New Jersey, New York, Oregon and Washington.

In the European Union, Volvo Group’s CEO, Martin Lundstedt, is currently chair of the Commercial Vehicle Board of the European Automobile Manufacturers Association (ACEA), the main automotive lobbying group in Europe.

InfluenceMap’s ongoing monitoring of Volvo Group in the EU, with evidence detailed on the think tank’s Europe platform, shows:

    • Martin Lundstedt, as Chair of ACEA, signed a public letter in December 2022 urging EU Climate Chief, Frans Timmermans, to consider not adopting a “general ICE [internal combustion engine] phase-out date” or a “100%” CO2 reduction target for heavy-duty vehicles in the EU. Furthermore, ACEA in February 2023 put out a joint statement opposing a 100% CO2 reduction target for the EU and general ICE phase-out date for heavy-duty vehicles.

    • Following this, in February 2023, the EU Commission announced proposals to introduce only a 90% CO2 reduction target for heavy-duty vehicles in 2040 with no date for a full phase-out. This is despite the Commission initially considering a 100% target.

This policy engagement in the EU appears to sit uncomfortably alongside Volvo Group's target to “offer a net-zero emission product range by 2040” as well as its membership of the Platform for Electromobility, which advocates for an ambitious 2035 ICE phase-out for trucks.

“This data highlights significant issues regarding the misalignment between the company’s decarbonization strategy and its policy advocacy,” continued Youriev.

“The company’s lobbying effort, directed at both US and EU officials, doesn’t appear to match its pro-climate PR strategy.

“Even though Volvo Group has the potential to be a climate leader, its current efforts risk undermining the EU and US climate targets. This is particularly the case when it comes to the company’s industry associations.”

In the EU, heavy-duty vehicles are alone responsible for over 6% of total greenhouse gas emissions.

In the US, the transport sector accounts for 27% of greenhouse gas emissions – a quarter of which were generated by medium and heavy-duty vehicles in 2020.

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About InfluenceMap
InfluenceMap is a London-based think tank with offices in Tokyo, Seoul, and New York. It provides data-driven analysis on issues related to energy and climate change. Our metrics for measuring corporate influence over climate policy are used by investors, including the global Climate Action 100+ investor engagement process.