Background: In recent years, interest towards Corporate Social Responsibility (CSR) has increased, more specifically, the economic, environmental, and social impacts large corporations have on society. This has led to the increase in transparency of practices in CSR disclosure, and number of sustainability reports published in general. In particular, the automotive industry has proved to be quite unsustainable, and is heavily focusing on its sustainable impacts.

Purpose: The purpose of the study is to answer why practices in CSR disclosure are an increasingly important phenomena, and more specifically, why companies engage in them. This is done by having Volvo Cars as a case study and analyzing its annual and sustainability reports for the years from 2018 to 2020.

Method: The framework used to analyze the results is Carroll’s pyramid of CSR, and thus, examining four dimensions of CSR: economic, legal, ethical, and philanthropic. The results were further analyzed through stakeholder theory, in order to distinguish which practices in CSR disclosure were aimed at affecting the company’s primary, secondary, and both primary and secondary stakeholders, respectively, and conclude why companies in the automotive industry engage in CSR.

Conclusion: The conclusions of the study are that Volvo Cars is a company, which heavily emphasizes on its sustainable activities and aims at achieving a competitive advantage via its practices in CSR disclosure, by affecting all stakeholder groups. Thus, the reason practices in CSR disclosure are becoming increasingly important is because companies see it as a means of positioning themselves in today’s highly competitive environment, and thus, achieving a competitive advantage.