Volvo Motors today announced that it will join industry and government leaders in signing the Glasgow Declaration on Zero Emissions Cars and Vans at the UN climate change conference, COP26.
The company is among several automakers, such as GM, Ford, Mercedes, to sign the accord, which aims to accelerate the shrinking of transportation-related carbon emissions around the world. The world’s top two automakers, Toyota and Volkswagen, however, did not sign onto the Glasgow Declaration, per Reuters.
Along with its commitment to reducing its carbon footprint, Volvo further announced today that it would introduce an internal carbon price of 1,000 SEK ($115.29 USD) per metric ton of carbon emissions from across its entire business.
“A global and fair price on CO2 is critical for the world to meet its climate ambitions, and we all need to do more,” said Björn Annwall, Volvo’s CFO. “We strongly believe progressive companies should take the lead by setting an internal carbon price. By evaluating future cars on their CO2-adjusted profitability, we expect to accelerate actions that will help us identify and reduce carbon emissions already today.”
Volvo is the first to implement a carbon cost like this, and will see it attempt to make vehicles that would be profitable even if a carbon cost of $115 per ton were introduced. That’s a more aggressive price than is being recommended by organizations such as the International Energy Agency, but the company says it aims to future-proof its organization and be “ahead of the regulatory curve.”
The automaker anticipates that several governments will start implementing carbon pricing in the coming years and is therefore preparing itself. To do that, every future vehicle project will undergo a “sustainability sense-check” and it will impose a carbon cost for every anticipated ton of emissions throughout the car’s lifecycle, looking at sourcing, manufacturing, and other areas that might emit CO2.
“Our plan to be a pure electric car maker by 2030 is one of the most ambitious in the industry, but we can’t realize zero-emission transport by ourselves,” said CEO Håkan Samuelsson. “So I am pleased to stand side by side here in Glasgow with industry colleagues and government representatives in signing the declaration. The time for climate action is now.”
Starting in 2022, the automaker also plans to increase financial transparency by disclosing the individual financial performance figures for its electric and non-electric businesses with every quarterly report.