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To become a world leader in sustainability, business must not only act in compliance with all laws and regulations, but see them as minimum requirements. Responsible businesses go beyond legal compliance, practising ethics and integrity throughout their organi- zation.

For the Volvo Group, responsible business behavior requires con- sistently:

• Implementing the business principles contained in our Code of Conduct

• Working according to the Volvo Way • Bringing our corporate core values to life

Our Code of Conduct details minimum requirements and sets out the Volvo Group’s principles of business ethics, human rights and social justice, and environmental responsibility. It is supported by our corporate core values, company culture and a suite of policies, giving the Volvo Group a very clear roadmap for achieving our vision. The Volvo Way defines our company culture. Our corporate core values are quality, safety and environmental care.

SUSTAINABILITY REPORT 2014 RESPONSIBLE BEHAVIOR CORPORATE TRUSTWORTHINESS

CONSISTENTLY APPLYING OUR CODE OF CONDUCT The Code of Conduct is the Volvo Group’s mandatory, Group-wide policy for appropriate business behavior and responsibility towards our stakeholders. Its content is based on international norms, including the UN Global Compact and the OECD’s guidelines for multinational companies.

The code is adopted by the AB Volvo Board of Directors and includes the business ethics, human rights, social justice and envi- ronmental principles to be applied in all our policies, decisions and activities, and outlines the Group’s principles and minimum stand- ards for conducting business in an appropriate, responsible and transparent manner.

An umbrella for best practice

The Volvo Group Code of Conduct is complemented by around 20 other policies – relating to areas such as accounting and reporting, anti-corruption, anti-discrimination and environmental care – that describe in more detail how to address the code’s minimum stand- ards.

Our Code of Conduct is reviewed annually and was updated in 2012 to reflect internal and external changes. It is publicly available on www.volvogroup.com/responsibility.

During 2014, we continued with the rollout of the Group-wide train- ing program that accompanied the code. The training is available in twelve languages as an e-learning course and a workshop with open discussions. We have adapted it for specific target groups, such as purchasers and new managers. Since November 2012, over 22,790 white-collar employees – from a total of ca 48,000 – have completed the web-based training.

Code of Conduct compliance

Compliance with our Code of Conduct is monitored through manage- ment systems, audits, assessments and the annual employee survey.

All employees are expected and encouraged to report suspected violations of our Code of Conduct to their superiors. If reporting to superiors is not feasible or possible, a whistleblower procedure is available, which gives employees recourse to the Head of Corporate Audit.

The Volvo Group does not tolerate retaliation against a person for making complaints of suspected improper behavior in good faith. All incidents are investigated and appropriate action taken.

In total, 41 cases were reported in 2014 via the Whistleblower procedure. All cases were investigated and reported to the Audit Committee of the AB Volvo Board of Directors. The cases cover different issues such as human resource matters and conflicts of interest.

Up to today, four cases are still under investigation, the rest were closed.

Compliance with our Code of Conduct is included in the annual Management Control Self-Assessment. Results are consolidated and analyzed. The 2014 assessment concluded that the Volvo Group’s management teams have promoted and ensured compli- ance with the Code of Conduct through training and information. Where needed, necessary action has been planned for, or taken. THE VOLVO WAY AND CORPORATE CORE VALUES The Volvo Way expresses the culture, behaviors and corporate core values shared across the Volvo Group. It shows what we stand for and aspire to, and it lays the foundation for realizing our vision. • The Volvo Way is a fundamental Volvo Group policy that defines

our company culture. It addresses business critical issues, includ- ing value creation, customer focus, and the way we work. Its pur- pose is to set a standard of excellence and build high commitment and performance across our organization. The values and princi- ples it contains guide everyone’s daily efforts to effectively realize the Group’s business strategies. Every manager within the Volvo Group is responsible for sharing the Volvo Way with their team and discussing how our values and principles affect their daily work. The Volvo Way is publicly avaliable at: www.volvogroup.com/ responsibility

• Operational Development and Volvo Production System are complementary and reinforce each other as a complete con- tinuous improvement system. Operational Development (OD) is a system with clear steps that is used by management and employ- ees to formulate a future position, set objectives, deploy targets and define an action plan. In times of crisis, OD helps teams react quickly and can shift the focus and activities of an entire organiza- tion. Volvo Production System is an improvement system based on lean principles. It was initially used to improve the production flow of the assembly line, but is now also used for many business pro- cesses throughout the organization, such as product develop- ment, business services, logistics flows, and dealerships. Acting on our corporate core values

When Volvo was founded in 1927, quality and safety were our core values. In 1972 we added care for the environment. In doing this, we put ourselves in the absolute forefront of our industry. It showed we took a holistic view of the world and the impact that our products and production processes have on society.

Our corporate core values are key to supporting the development of sustainable transport solutions, in the following ways.

SUSTAINABILITY REPORT 2014 RESPONSIBLE BEHAVIOR CORPORATE TRUSTWORTHINESS

Environmental care expresses our commit- ment to reducing the environmental impact of our operations and products.

Safety is about protecting the wellbeing of anyone coming into contact with our products, as expressed in our commitment to achieve zero accidents with the Volvo Group products.

Quality equals customer satisfaction and reflects our promise to deliver reliable products and services that add economic value to our customers.

Our corporate core values are at the heart of our business and in 2014, we developed a new Long Term Corporate Core Value Plan with short and long term activities.

Our policies state that the Volvo Group shall be a leader in the areas of quality, safety and environmental care to achieve our vision of becoming the world leader in sustainable transport solutions.