Volvo Cars - The Growing Importance of ESG Reporting: A Case Study of Volvo Cars and Their Performance in the Automotive Industry

Emil Harbo Falkenhard

Student thesis: Master thesis

Abstract

This thesis aims to explain and analyze the growing importance of ESG reporting for Volvo in the European automotive industry. Volvo will be used as a single case study. With a presentation to Volvo’s six ESG focus areas mentioned in their annual report (Volvo, 2020), each identified stakeholder will be linked to the ESG focus areas they are pushing for. This will be done to better understand how stakeholders are pushing for ESG reporting within Volvo. The findings reveal that all stakeholders push for ESG reporting in their own unique way, and that four stakeholders can be linked to all six ESG focus areas. The identified stakeholders will afterward be linked to neo-institutional theory to explain the type of isomorphic pressure they put on Volvo. The findings of the stakeholder and neo-institutional analysis will be used to explain why ESG reporting is becoming more important with the use of Carroll’s CSR pyramid. It can be concluded that ESG reporting is moving from being an ethical responsibility towards a legal responsibility. The paper will afterward describe how Volvo has been focusing on ESG in the past. This will be followed up with an analysis of how well Volvo and its European competitors perform on ESG reporting by comparing the performance of 2020 to a five-year average score. The findings will help the researcher better understand if ESG reporting is becoming more important for Volvo and if they are good at it. The findings revealed that Volvo has the third best ESG score and the best combined ESG score in 2020. ESG reporting is furthermore becoming more important for Volvo since they are performing better in 2020 than the five-year average. The limitations and challenges of ESG reporting will furthermore be explained. The last section of the paper will have a focus on the importance of ESG reporting in the future. The paper will analyze the advantages of doing ESG reporting and the consequences of not adapting to the requirements of the environment. The overall conclusion is that Volvo focuses on ESG reporting and performs well. They focus on ESG reporting to satisfy their stakeholders and hereby gain legitimacy. If Volvo wants to stay competitive in the future, ESG reporting will be important for them since it is becoming a mandatory legal responsibility.

EducationsMSc in International Business, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2021
Number of pages102