Table of Contents

1. Introduction ---------------------------------------------------------------------------1

2. Corporate Social Responsibility (CSR) & Sustainable development ---------2-3

3. Triple bottom line (TBL) ------------------------------------------------------------------4

4. Sustainability & CSR of Volkswagen -----------------------------------------------------5-6

5. Financial performance and future impact of the expectations ------------------7-9

6. Conclusion ---------------------------------------------------------------------------------------10

7. Reference ---------------------------------------------------------------------------------------11-12

8. Appendix ---------------------------------------------------------------------------------------13-14
Introduction

In the current economic development society, sustainability, corporate social

responsibility to become an indispensable business development concept. The three

elements of sustainable development include environmental, economic, and social.

CSR is an important theory in enterprise development, and CSR is also the most

valuable resource for the business. This assignment will discuss Volkswagen’s

sustainability, CSR, and financial information.

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Corporate Social Responsibility (CSR) & Sustainable
development

Corporate governance is a system that guides companies and controls companies.

Corporate governance is primarily governed by the corporate board of directors,

whose responsibilities include setting up the company's strategic objectives,

managing the business, monitoring the business schedule and reporting to

shareholders (Cadbury, 1992). And corporate governance is to guide the board of

directors to the interests of shareholders, customers, suppliers, and governments and

other stakeholders (Colley, 2003). Corporate governance determines the business

status and development prospects, but also determines the business can benefit How

much interest is provided by stakeholders.

Corporate social responsibility is a sense of corporate responsibility for the economy,

society, and the environment. It also requires companies to focus on the relationship

between business and society, government, and the position and prospects of the

business in the international economic environment (Crowther & Aras, 2008). CSR

also is the business ethics standards for the development of business. But, there are

some companies choose to ignore CSR, such as they deliberately ignore gender

equality, or reduce the production standards of the product on the social environment

have the bad effect.

Now, social responsibility is increasingly important for business development, and it is

a commitment to the internal and external of the company, including environmental

protection and responsibility for stakeholders (Husted & Allen, 2007). These can help

companies gain more advantages, save costs and additional publicity, gain more

business opportunities, and customer recognition. And when the corporate trust crisis,

CSR will encourage companies to assume more social and environmental

responsibility, which can help enterprises to regain the trust of consumers. At the

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same time, CSR is also a strategic plan for enterprise development, improve the

business in the community’s influence for enterprises to create greater value.

In 1987, the World Commission on Environment and Development developed

"sustainable development" in order to address the conflict between environment and

development(1987). Sustainable development is a resource that meets today's

development needs without compromising the needs of future generations.

Sustainable development mainly includes economics, the environment, and society

(Holmberg, 1992; Reed, 1997;). Today, the "sustainable development" development

focus is to ensure that future generation of economic development, social

development and the protection of the environment. At the same time, "sustainable

development" is also to guide people and enterprises to achieve sustainable

development methods and processes (Shaker, 2015). Sustainable development is an

indispensable part of the process of enterprise development, enterprises in the

process of sustainable development can not only get a good reputation and can for

the future development of enterprises to find a suitable direction.

There are many similarities between sustainable development and corporate social

responsibility, often used as synonyms or similar terms (Emerson, 2003; Mazon,

2004). These two principles are also an important part of the process of enterprise

development, and Raynard & Forstarter (2002) proposed a balance between

sustainable development and corporate social responsibility that requires short- and

long-term considerations, with greater stakeholder and traditional managers Between

the balance. Because sustainable development and corporate social responsibility of

the economic sector is not only the return on investment but also help to improve the

reputation of enterprises and social relations for the long-term business success

(Raynard & Forstarter, 2002).

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Triple bottom line

In 1994, John Elkington created a triple bottom line, it is the three bottom lines of

economic development, environmental quality, and social responsibility (Elkington &

Robins, 1994). In other words, it also means people, earth, and profit. People are

mainly social groups in life; earth refers to the environment faced by enterprises;

profits are enterprises are operating industry. This shows that the development of the

enterprise depends not only on the profits of the enterprise but also on the

environment and society (Tripathi, Kaushal & Sharma, 2013). TBL is the traditional

way of measuring people, profits and earth, and measuring the traditional way of

corporate profits (Slaper & Hall, 2011; Longoni, 2014). TBL can help corporate to take

the long-term perspective. And, people will understand the extent of an enterprise in

the economic development, business, and social environment to make more

contributions through the TBL. As well as the performance of the firm on CSR, and the

chances of success in sustainable development.

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Sustainability & CSR of Volkswagen

Volkswagen is an international group company headquartered in Germany. It is one of

the world’s leading car manufacturers, but also Europe’s largest car manufacturer.

Volkswagen in addition to the production of cars, but also operating car sales, motor

transport, car rental and so on. As the car manufacturer, Volkswagen's most famous

models are popular cars and light trucks, the most famous car brands are "Beetle",

"polo", "golf", "Audi 100", "Jetta" and so on. Volkswagen’s report of corporate social

responsibility and sustainability (Volkswagen, 2014) mentions that the company’s

strategic goal was to become the world’s most successful, attractive and sustainable

automobile by 2018. Sustainable development that enterprises should not only meet

the stakeholders but also take into account the business and society, the relationship

between the environment. In terms of CSR, the company set up a corresponding

team responsible for carrying out a large number of arts and cultural projects to

protect the environment project. And Volkswagen and German Nature and

Biodiversity Conservation Union (NABU) have a long-standing relationship with

German Red Cross (DRK) to promote social development and strengthen German

Red Cross (DRK) rescue operations. From the Volkswagen's products and the usual

social activities and business activities, everyone on the Volkswagen's evaluation and

satisfaction have been very good.

However, in 2015, Volkswagen has developed its current CSR issue. Volkswagen as

the largest German car manufacturer "Made in Germany" on behalf of, and in the

exhaust emissions to "green, green" concept. Volkswagen was hit hard on September

18, 2015, when Volkswagen’s auto pollutant emissions were exposed. On September

22, Volkswagen AG issued a statement acknowledging that the event involved a

diesel car of about 11 million. Moreover, Volkswagen was asked to recall nearly

500,000 cars in the United States. The US Environmental Protection Agency (EPA)

said Volkswagen may need to pay a fine of about $18 billion (EPA, 2015).

Volkswagen’s share price fell by about 20% for two consecutive days and the market

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value shrank by €25 billion. The incident also reduced the estimates for automobile

manufacturer in Europe and the United States, as some investors feared that the CSR

incident would involve another automobile manufacturer. For example, General

Motors shares fell 3%, Ford fell 4%. In the company also fired a lot of employees

involved, including the resignation of CEO(Martin Winterkon) on September 23rd. After

this CSR event, Volkswagen was hit not only in the economic field and internal

management but also by the community. For example, in the Chinese market,

Volkswagen sales began to decline, FAW-Volkswagen and Shanghai Volkswagen’s

sales were down 12.9% and 3.1%. And in the Chinese consumer satisfaction market

research, Volkswagen scored only 689, ranked fourth (Power, 2015). After this

incident, we can see the importance of CSR for the sustainable development of

enterprises, Volkswagen is also aware of this phenomenon, began to strive to improve

customer satisfaction in the Chinese market, they have increased the intensity of

corporate brand public relations, pay attention to consumers and Media view.

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Financial performance and future impact of the
expectations

The following table shows the Volkswagen’s main financial information from 2012 to

2016, and this table also shows the Volkswagen’s financial change on account of

CSR problem, (table 1).

Table 1: Volkswagen’s financial data.

There are some charts of financial data, its more essay to shows the changes on

account of “CSR problem”.

Chart 1: Volkswagen’s gross margin from 2012 to 2016.

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Chart 2: Volkswagen’s earning(PAT) from 2012 to 2016.

Chart 3: Volkswagen’s share price from 12/31/2011 to 12/31/2016.

According to the data table, Volkswagen’s performance is better, the annual growth

rate is also ideal before 2015. But, in 2015, the data have the big gap, after the VW

CSR event, the financial data has declined. For example, Volkswagen’s gross

margin(chart 1) remained at 18% from 2012 to 2014, but, it fell to 16% in 2015;

Earning (chart 2), in 2012, its earning (€21,881m) is good, but earning has fallen to

€-1,361m in 2015. And in 2015, the share price(chart 3) has reached its lowest level

for nearly five years, the rate of change in the year is relatively slow. After this,

Volkswagen has also made some remedial measures, such as issuing a detailed

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report on the incident on the official website and deciding to evaluate and test vehicle

emissions by an independent third party in the future.

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Conclusion

This paper analyzes several important corporate concepts, and Volkswagen Group’s

CSR and Sustainability, and the impact of Volkswagen Group’s CSR issues on VW.

Volkswagen Group’s CSR events illustrate the importance of CSR in business

development and social attention to CSR. In the highly competitive market, VW is a

world-oriented international company, sustainable development of enterprises. It has

a lot of opportunities to fulfill its own social responsibility. And according to VW

financial data over the past five years, as long as VW grasp every opportunity, not to

violate their social responsibility, its development prospects will be getting better and

better, and its position will be higher and higher in the international market.

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Reference

Colley,J. (2003). Corporate governance (1st ed). New York: McGraw-Hill.

Cadbury, A. (1992). Report of the committee on the financial aspects of corporate

governance (Vol. 1). Gee.

Crowther, D. & Aras, G. (2008). Corporate social responsibility. Retrieved from

http://mdos.si/Files/defining-corporate-social-responsibility.pdf

Curitiba, B. (2010). Integrating Sustainability into Business Practices: Learning from

Brazilian Firms. 7(4), 362-378. Retrieved from http://www.anpad.org.br/bar

Elkington, J. & Robins, N. (1994). Company environment reporting (1st ed.). Paris,

France: United Nations Environment Programme, Industry and Environment.

Emerson, J. (2003). The blended value proposition: integrating social and financial

returns. California Management Review, 45(4), 35-51.

Husted, B. & Allen, D. (2007). Strategic Corporate Social Responsibility and Value

Creation among Large Firms. Long Range Planning, 40(6), 594-610.

http://dx.doi.org/10.1016/j.lrp.2007.07.001

Holmberg, Johan. (1992). Making Development Sustainable: Redefining Institutions,

Policy, and Economics. Island Press.

Longoni, A. (2014). Sustainable operations strategic (1st ed.). London: springer cham

heidelberg New York Dordrecht London.

Mazon, R. (2004). Uma abordagem conceitual aos negócios sustentáveis: manual de

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negócios sustentáveis. São Paulo: FGV-EAESP.

Raynard, P., & Forstarter, M. (2002). Corporate social responsibility: implications for

small and medium enterprises in developing countries. Retrieved from

http://www.unido.org/doc/5162

Reed, D. (1997). Structural Adjustment, the Environment and Sustainable

Development. London: Earthscan Publications.

Shaker, R.R. (2015). The spatial distribution of development in Europe and its

underlying sustainability correlations. Applied Geography, 63,

304-314. doi.org/10.1016/j.apgeog.2015.07.009pg305

Slaper, T. & Hall, T. (2011). The Triple Bottom Line: What Is It and How Does It Work?.

lbrc.indiana.edu. Retrieved from http://lbrc.indiana.edu/ibr/2011/spring/article2.html

Tripathi, D,K., Kaushal, A. & Sharma, V. (2013). Reality of Triple Bottom Line. Global

Journal of Management and Business Studies, 3(2), 153-158. Retrieved from

http://www.ripublication.com/gjmbs.htm

Volkswagen, annual report, financial report, CSR and sustainability report. Retrieved

from https://www.volkswagen.com/en.html

World Commission on Environment and Development (1987), Our Common Future.

New York: Oxford University Press.

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Appendix

VW’s additional financial information.

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