Sustainability Report 2023
Dear Reader,
Thank you for joining us in our journey to a more sustainable future at Škoda Auto. I believe you will find in this Sustainability Report for 2023 that we are taking important steps on a clearly defined path, anchored in our overarching Next Level Škoda Strategy 2030.
We are committed to transparency and open communication with our stakeholders and the wider world. Therefore, we have made a significant evolution in our reporting. For the first time, this year, we will present our sustainability report in parallel with the annual financial report. This shift exemplifies our dedication to align and communicate sustainability together with our financial information.
Our sustainability strategy, updated in April 2023, sets a trajectory for Škoda Auto to be the best in class in Environmental, Social, and Governance (ESG) areas. Sustainability is not merely a corporate initiative; it is embedded in our ethos, our products, and our actions.
With the updated sustainability strategy, Škoda Auto is focused on eight key areas designed to make sustainability more visible to our customers and other stakeholders. This approach signifies our commitment to making sustainability integral to our operations and processes.
In our pursuit of decarbonization, we‘ve taken notable steps in production by installing photovoltaics and starting the transformation of our heat-production plant in Mladá Boleslav from coal to 100% biomass. Since 2021, we have also been cooperating with other Volkswagen Group brands as part of the “goTOzero Retail” project to decarbonize the sales and service network. The goal is to offer our partners practical tools that will help effectively reduce their carbon footprint. In 2023, this project was piloted in selected markets, and others will follow from 2024. Moreover, our new Superb and Kodiaq models are now available as plug-in hybrids with a purely electric range of more than 100 km.
We’ve restructured our purchasing process to incorporate 40 kg of recycled plastics in our new Battery Electric Vehicle (BEV) models starting from 2025.
Our commitment to local ecosystems is embodied in the Krakonos Gardens program, which is realized by the Škoda Endowment Fund. It invests CZK 2 million annually to support biodiversity elements, connecting environmental and social activities.
Social sustainability plays a key role in our Company in building long-term prosperity and creating a positive social impact. To be better prepared for the challenges we collectively face, we have continued to focus on a range of activities in five strategic areas in 2023. Škoda Social Week was an example of a project that connected our employees with the external environment and became an important initiative to raise awareness of social issues. This event successfully linked employee care with social and health service providers and helped to raise several important and challenging topics.
The Škoda Auto Endowment Fund successfully builds on the Company‘s activities, further deepening our social responsibility. That is why, as a Škoda Auto company, we decided to share the good economic result of 2023 and put CZK 103.8 million into the Endowment Fund to ensure long-term financing of key activities. Together with our partners, we aim to revitalise public spaces and help connect local communities. In addition to these metaphorical bridges, I can also mention an example of real ones in the form of the Gateway to Bohemian Paradise project - the footbridge from Mnichovo Hradiště to Horka Hill – as well as footbridges over the Jizera River at Česana (Mladá Boleslav) and “U Kofoly” (Mnichovo Hradiště).
In diversity and inclusion, we exceeded our target with 18.3% women in management. The Škoda Enyaq Respectline, a unique vehicle showcasing respect as a core value, exemplifies our commitment to fostering an inclusive workplace.
The Together for Integrity (T4I) project, completed in 2023, has fortified our commitment to integrity and compliance. The project was based on recommendations of the US Monitor and the standards of the Volkswagen Group and includes measures for the protection of human rights and the environment. Škoda Auto also established a new internal system for submitting notifications of possible illegal conduct, based on new legislation.
Sustainable business relations are an integral part of our sustainability strategy. One of the key performance indicators is the proportion of turnover realized with suppliers with an A rating for sustainability. For the year 2023, this share amounts to 90%.
We continue to work on sustainability targets that will propel Škoda Auto toward our goal of “Best-in-class ESG”. I want to extend my gratitude to every stakeholder who is part of our sustainability path. Together, we are creating values that will make a difference in our shared world.
The Company Škoda Auto a.s. (hereinafter referred to as the “Company” or “Škoda Auto”) considers it important that its stakeholders are regularly and transparently informed of all important aspects of its business. Since 2005, the Company has regularly published a report on sustainable development. The primary aim is to share experience, information, and new trends in sustainable business, as well as examples of good practice in this area. The data in the report relate to Škoda Auto a.s. and not to its subsidiaries. There is also a chapter devoted to the Škoda Auto Endowment Fund (hereinafter referred to as the “Endowment Fund” or “Fund”), through which selected activities are carried out as part of the social sustainability strategy. The Company exercises managerial control over the Endowment Fund through the involvement of employees in the Fund‘s management board and supervisory board.
Until now, the Sustainability Report has been published as a separate document. Taking into consideration Group reporting and legislative obligations, the Company plans to incorporate information about sustainability into its future Annual Reports.
One preparatory step is to transition away from the two-year reporting cycle in place at Škoda Auto from 2005 to 2022. Starting with 2023, the Sustainability Report will be published every year alongside the Annual Report.
Further steps on the path to fulfilling the future obligations the Company will have as of 2025 in relation to the requirements of the Corporate Sustainability Reporting Directive (CSRD) involve the gradual transition from reporting in line with the Global Reporting Initiative (GRI) to European Sustainability Reporting Standards (ESRS).
Until 2020, the Company prepared the report on sustainable development according to GRI standards. The most recent Report on Sustainable Development, for the years 2021–2022, reflected the provisional version of ESRS available at that time. Preparation of the report for 2023 took account of the final, approved version of ESRS, from 31 July 2023; however, the Company will add reported information according to the broadened requirements over time, and this report is therefore not yet fully in line with ESRS in all aspects of the individual requirements for publication. The Company will gradually work on covering them in the coming year, when reporting at Škoda Auto will remain voluntary.
In the time remaining until the reporting obligations are established, Škoda Auto will concentrate on the timely fulfilment of the key requirements of CSRD and ESRS. For example, determining the issues reported according to the principles of double materiality.
The preceding and subsequent parts of the value chain are taken into consideration in the chapters which concern the main issues of sustainability where there are or could be impacts, risks, or opportunities, in particular when it comes to electing and evaluating suppliers, the circular economy, workers in supply chains, and measures to combat corruption. These issues will also be expanded on.
Given the voluntary nature of reporting, there is currently no obligation to have the report verified from outside by an independent auditor. However, the indicators for Škoda Auto are projected in reporting at the Volkswagen Group, which is verified on a consolidated basis with limited assurance.
The consolidated sustainability report is available here.
