This section reports on the environmental impacts of our operations, including those from our products, our manufacturing processes and our facilities and properties. For a high-level view of impacts throughout our value chain, please see Our Value Chain and Its Impacts.

As part of our commitment to comprehensive environmental management using the ISO 14001 framework, we have analyzed both our environmental aspects and potential environmental impacts. Environmental aspects is a term used in the ISO 14001 framework to denote elements of an organization's activities, products and services that can interact with the environment. Potential environmental impacts include any change to the environment, whether adverse or beneficial, wholly or partially resulting from an organization's activities, products or services. Local Ford facilities use corporate lists of environmental aspects and potential impacts to identify and amplify those aspects that apply to their operations. We have incorporated ISO 14001 aspects into our overall Environmental Operating System, which is in place at our U.S. and Canadian manufacturing plants and is currently being rolled out globally.

Precautionary Principle

The precautionary principle is the idea that if the consequences of an action are unknown, but are judged to have some potential for major or irreversible negative consequences, then it is better to avoid that action. We do not formally apply the precautionary principle to decision making across all of our activities. However, it has influenced our thinking. For example, in addressing climate change as a business issue, we have employed the precautionary principle.

Assessing Materiality

The materiality analysis conducted for our 2006/7 report and used to plan this report identified six environment-related issues as among the most material:

• Low-carbon strategy
• Vehicle greenhouse gas (GHG) emissions
• Fuel economy
• Cleaner technologies
• Clean/alternative fuels
• Public policy: GHG/fuel economy regulation

The analysis also revealed an overall global theme of increasing expectations regarding, and regulation of, a range of environmental issues associated with our products and manufacturing facilities. These issues include energy and water use (due to rising costs and concerns about long-term availability); tailpipe emissions and end-of-life management (due to increasing regulation) and product materials use (due to opportunities to improve the environmental performance of vehicles and cut costs through "cradle-to-cradle" solutions).