The EU Taxonomy and Sustainability Performance: A qualitative study on how the EU taxonomy affects a multinational enterprise operating in the automotive industry

Abstract

The EU taxonomy plays an important role in implementing the European Green Deal, meeting the EU’s energy and climate targets for 2030, and increasing green investments. The aim of the taxonomy is to shift economic investments toward environmentally perdurable projects and provide the market with substantial data with regard to sustainability. Since the EU taxonomy operates in an emerging field of research, as the legislation is new and implementation within multinational enterprises is an ongoing action, a gap in knowledge was identified. This study aimed to evaluate how a multinational enterprise operating in the automotive industry is affected by and approaches the EU taxonomy. The focus was to comprehend the sustainability management of the chosen enterprise and in-depth understand the opportunities and challenges the company perceived. To be able to provide a balanced thesis with various viewpoints, the legislative side of the taxonomy was added. The thesis was performed with a qualitative approach and with semi-structured interviews. In addition, a literature review was conducted to present relevant background information and a theoretical framework. The in-depth interviews were performed with nine employees at Volvo Cars and two employees at Swedish authorities. As Volvo Cars is situated within the automotive industry, an industry traditionally characterised by high CO2 emissions, was the interpretation that the enterprise could contribute beneficial information to the research. This research determined that Volvo Cars prior to the taxonomy had strong sustainable commitments and that changes with regard to sustainable activities after the implementation of the taxonomy have been few. Volvo Cars was evaluated as being benefited from high taxonomy requirements since the enterprise was stated as being in the front of sustainable economic activities. Opportunities with the EU taxonomy were argued to refer to increased legitimacy related to stakeholders and the implementation of a tool supportive of increasing data on environmentally sustainable activities. The increased data was evaluated as substantial for comparativeness between market actors. The challenges for Volvo Cars referred to a need for clarification, as the classification system is still being developed. For further research, it would be of significance to comprehend the effects of the EU taxonomy, as well as the effects of the European Green Deal and Agenda 2030.