Ford Issues Climate Change Report

Ford Issues Climate Change Report

In an industry first, Ford Motor Company has issued a report addressing the business implications of climate change, carbon dioxide emissions and global energy concerns.

"I am proud to say that Ford Motor Company is one of the first companies to have open discussions about climate change," said Bill Ford, chairman and CEO. "We see climate change as a business issue as well as an environmental issue and we're accelerating our efforts to find solutions. Addressing this issue will require collaborative action across all sectors of our society and I'm committing Ford Motor Company to do its part."

The report addresses how concerns about emissions of greenhouse gases, including CO2, are linked to other factors affecting the business; the steps the company is taking to manage the risks and capture opportunities associated with climate change; and the market, policy, social and technological enablers required to achieve significant changes in the industry's carbon footprint.

Ford's report recognizes the importance of precautionary, prudent and early actions to stabilize greenhouse gas concentrations in the atmosphere. It also highlights the need for integrated approaches by fuel companies, vehicle manufacturers, consumers and policy makers.

For its part, Ford Motor Company is pursuing a three-pronged strategy:
  1. Continuously reducing the greenhouse gas emissions and energy use of company operations.

  2. Enhancing the flexibility and capability to market lower-greenhouse gas-emissions products that will attract consumers.

  3. Working with industry partners, oil companies and policy makers to establish an effective and more certain market, policy and technological framework for reducing road transport greenhouse gas emissions.
"Climate change and energy security affect our operations, our customers, our investors and our communities," said Niel Golightly, director, Sustainable Business Strategies. "So you can be sure we see these issues as important to our long term business competitiveness. Some view these challenges as yet another burden on an already stressed industry; but we see potential for innovative business opportunities in solving them.

"This report is a snap shot of work we've been doing for over five years," said Golightly. "And it points to where we're going. It challenges some assumptions about what our industry can do by itself; but it also suggests some paths toward collaborative solutions that make economic sense."

A shareholder resolution filed in November 2004 by the Interfaith Center on Corporate Responsibility (ICCR), Ceres (a coalition of investors and environmental groups and founder of the Investor Network on Climate Risk) and others was subsequently withdrawn in March 2005 when Ford announced it would publish this report. The report was drafted under the direction of the company's cross-functional, vice-presidential task force and was reviewed by the Environmental and Public Policy Committee of the Board of Directors.

In addition to ICCR and Ceres, Ford considered views from other external stakeholders and experts in developing this report, among them the Massachusetts Institute of Technology, Princeton University's Carbon Mitigation Initiative, the Union of Concerned Scientists (UCS) and the Natural Resources Defense Council (NRDC).

"Ford leads the industry in this vital service to investors, the auto industry itself, and U.S. citizens as this report considers the realities of global warming in their business plan, and in their commitment to engage policy solutions," said Caldwell Dominican Sister Patricia Daly, OP executive director of the Tri-State Coalition for Responsible Investment and lead filer for the ICCR members. "Ford clearly understands that global warming is a serious environmental and financial issue, and that climate-friendly vehicles must be part of the solution," said Mindy S. Lubber, president of Ceres and director of the Investor Network on Climate Risk, an alliance of investors with nearly $3 trillion of assets. "Investors see Ford's actions to analyze the business and competitive implications of climate change as an important step. This, coupled with strong leadership from the company to develop meaningful climate policy solutions in Washington, would be a winning recipe that would allow all U.S. companies to move full-throttle into the clean energy economy."

The report highlights company commitments that address the industry's greenhouse gas footprint. These include:
  • Producing up to 250,000 hybrid vehicles annually by 2010.

  • Expanding the production of flexible fuel vehicles (FFVs) which can use blends of up to 85% ethanol (E85). Ford will also support the expansion of the E85 infrastructure and promote the advantages of FFVs to consumers.

  • Committing to reduce the greenhouse gas emissions from its North American plants by 6% by 2010 as part of the Chicago Climate Exchange.

  • Reducing greenhouse gas emissions by 5% over five years in Ford plants subject to the U.K. Emissions Trading Scheme.

  • Offsetting the CO2 emitted from the production of its hybrid vehicles -beginning with the Ford Escape Hybrid. For every ton of carbon emitted in the creation of the vehicle, the company will purchase an offset. Ford will also develop materials for consumer education that will create a level of understanding of what an offset is and how customers can act on further offset opportunities.

  • Introducing an "Eco-Driving" Web-based program to all U.S. salaried employees during the first half of 2006. The program is designed to heighten awareness of driving behaviors and their relationship with emissions and fuel economy. Ford will look to make this program available to the global company workforce as well as agency support and suppliers.
With the report's release, Ford hopes to contribute to the larger public dialogue on the decisions, tradeoffs and actions required to address climate change concerns.

Ford's Climate Change Report is available online.