A crystal white Volvo XC40 dangles from a crane 100 feet above a frozen Arctic landscape, prepared to address a pressing question: “What is the ultimate safety test?”

Suddenly, a crackling roar fills the air as a nearby ice shelf collapses, sending tons of ice plummeting into the water below.

This dramatic scene is the centerpiece of a recent Volvo ad campaign announcing the company’s plan to convert to all-electric cars. With the backdrop of crumbling ice, Volvo’s answer to the safety question appears starkly on the screen: “Climate change is the ultimate safety test.”

The striking ad coincides with increasing urgency for drastic cuts in greenhouse gas emissions to prevent the worst impacts of climate change. That point has been underscored by the Intergovernmental Panel on Climate Change’s 2021 report, which calls for strong and sustained reductions in carbon dioxide (CO2) to help stabilize the climate. Meanwhile, intensifying storms, flooding, and wildfires around the world have provided further evidence of the need for decisive action.

For automakers, this is a moment of self-reflection, and an opportunity to chart a new course.

“Transport is responsible for 25% of global CO2 emissions,” says Stuart Templar, director of global sustainability for Volvo Cars. “As a mobility provider, we are part of the problem of climate change, and we need to be part of the solution.”

To that end, Volvo has unveiled an ambitious climate action plan, shifting toward fully electric cars and striving to become a climate neutral company by 2040.

However, the drive toward sustainability is not new for Volvo. The Swedish vehicle manufacturer’s efforts to reduce its environmental impact can be traced back more than 75 years.


A History of Sustainability


Volvo has long been recognized as a leader in automotive safety, from the introduction of three-point seat belts in 1959 to today’s crash avoidance and mitigation technologies. At the same time, the company has been working to offset its environmental impact.

For example, Volvo has been offering remanufactured exchange parts since 1945, when the company began renovating gearboxes in the Swedish town of Köping. That novel idea has blossomed into one of the most extensive remanufactured parts programs in the industry, the Volvo Cars Exchange System.

Other company milestones in sustainability over the decades have included:

  • 1972 — Volvo made its first environmental declaration at the UN’s first Environment Conference in Stockholm.
  • 1976 — Volvo introduced its three-way catalytic converter with the Lambda sensor, reducing harmful emissions by up to 90%.
  • 1991 — Volvo launched the first car with no ozone-depleting chlorofluorocarbons (CFCs), and then eliminated CFCs entirely from its product line in 1993.
  • 1996 — Volvo began setting environmental requirements for its suppliers.
  • 2008 — All of Volvo’s European manufacturing plants have been running on hydro-electric power since 2008.
  • 2018 — Volvo’s engine plant in Skövde, Sweden, became climate-neutral — the first in the company’s global manufacturing network to achieve that milestone.

While Volvo has been taking steps to reduce its environmental impact for more than 75 years, now the company is working toward the most ambitious sustainability goals in its history.


Electric Vehicle Revolution


For Volvo, the future is electric. One of the company’s key goals is to become a fully electric car manufacturer by 2030 — just over eight years from now.

Of course, such a fundamental change doesn’t happen overnight. Volvo’s EV revolution is already underway.

In 2019, the company introduced its first fully electric SUV, the Volvo XC40 Recharge pure electric, which could travel about 250 miles per charge.

Volvo hit another electrification milestone in 2019: Every new Volvo car launched from that year onward has an electric motor. The company’s lineup now includes mild hybrids, plug-in hybrids, and pure electric vehicles.

On the path to full electrification by 2030, the company has an incremental target for its car sales to comprise about 50% pure electric and 50% hybrid by 2025.

Volvo’s EV initiative will ultimately eliminate tailpipe emissions from its new cars, but that only accounts for part of the company’s carbon footprint. To truly become climate neutral, Volvo is making changes across its entire value chain.


Comprehensive Emission Cuts

For all automakers, emissions come not only from their vehicles’ tailpipes, but also from the full gamut of producing and delivering the vehicles to market.

For Volvo, another step on the way to climate neutrality is to cut the lifecycle carbon footprint of its vehicles by 40% from 2018 to 2025. The overall reduction per vehicle will consist of:

  • 50% from tailpipe emissions
  • 25% from raw materials and suppliers
  • 25% from total operations, including logistics

For the supply chain factor, Volvo is encouraging its top suppliers to use 100% renewable energy by 2025, and to reuse and recycle more materials. As for its own operations, Volvo is targeting climate-neutral manufacturing in all its plants by 2025.

The company is also adopting a circular economy approach — recovering parts and materials at the end of a car’s useful lifespan and reusing them in the production of new vehicles. This ties in with another sustainability-related goal for Volvo: to become a circular business by 2040.

On that front, Volvo is boosting its use of recycled and bio-based materials. By 2025, the company plans to compose its new cars of:

  • 25% recycled or bio-based plastic
  • 40% recycled aluminum
  • 25% recycled steel

One of Volvo’s circular economy initiatives is a new leather-free material for its next-generation cars. The material consists of textiles made from recycled material such as PET bottles, bio-attributed material from sustainable forests in Sweden and Finland, and corks recycled from the wine industry.


Reusing and recycling materials not only contributes to the company’s sustainability goals — it also makes good business sense.

“Our adoption of the circular economy will help support our profitability,” Templar says. “We estimate that from 2025, adoption of circular economic principles, including remanufacturing, recycling, and reuse, will generate savings of over $100 million annually — as well as reduce carbon emissions by 2.5 million tonnes [about 2.75 million U.S. tons] each year.”


Sustainability Is Key to Survival


For Volvo, the safety of drivers and passengers remains a top priority. At the same time, the company is stressing that sustainability is just as important, as it impacts the future survival of the whole world.

 “Volvo Cars has always cared about people, not least through our commitment to safety,” Templar says. “As a responsible business, we now need to show the same level of care for the world around us.”

There are other compelling reasons for companies and fleets to prioritize sustainability. As Templar explains, a focus on sustainability can help heighten brand appeal and attract more customers, employees, and investors. Public concern about climate change is growing, and more stakeholders are looking to align themselves with environmentally responsible companies.

In other words, when it comes to sustainability, the stakes are high for automakers as well as for the planet.

“Automotive manufacturers that do not decarbonize at the rate required to limit global warming under the Paris Agreement will struggle to survive,” Templar says, “and they will be far less attractive to consumers, employees, and investors.”