How Ford, Adidas are making climate change work in their favor

Ford’s biggest environmental impact comes from the carbon emissions emitted from its car tailpipes. When looking at how best to reduce its emissions, the company looks at four different approaches:

  • What is the competition doing?
  • What is the consumer asking for?
  • How are governments regulating us?
  • What do scientists say needs to be done to mitigate the effects of climate change?

The first three issues don’t offer long-term answers, and therefore aren’t particularly helpful when setting emissions targets, Viera said. The last element of science is the only realm that offers the most certainty about the future, he said. Ford therefore based its climate strategy on what the science says, which is about reaching a level that stabilizes the effects of climate change.

“That long-term target based on stabilization allowed [Ford] to put together product plans for 5 years from now, 10 years from now, 30 years from now,” he said.

By knowing what its emissions targets are at different points in the future, the company is able to look at what mix of vehicles it needs to sell at different points to meet those targets. For example, the company decided that for the medium term, between 2012 and 2020, it needed to produce more electric vehicles.

But the biggest improvement Ford has made regarding climate change isn’t, in fact, developing more electric vehicles, as might be expected. Rather, the company improved its internal combustion engine, which allows its cars with a small engine to have the power of a larger engine. So a six-cylinder engine will have the power of an eight-cylinder engine, a four-cylinder the power of a six-cylinder, and so on. The technology is very affordable, said Viera, which makes it possible for Ford to implement it across millions of cars.

“If I only sell a small percentage of electrified vehicles, or if I sell millions of this technology, I actually have a bigger impact doing [the latter],” he said. The improved engine has the “short-term biggest impact,” he said.

Ultimately, it’s about finding a way to make sustainability profitable, said Viera.

“[Our strategy] works so well because it made great business sense,” Viera said. “If I could have the most efficient fuel products, and that’s also going to improve my business case, then everybody in the company is going to be completely aligned with the strategy.”