Climate Change Governance

Because the climate change issue is so important to us at Ford, it is managed through governance systems at all levels of the Company, and we discuss it here in its own section. The Sustainability Committee of our Board of Directors regularly reviews Ford’s actions related to climate change.

Substantive changes to our plans for addressing climate change – whether relating to our products, facilities or policies – are highlighted and agreed to at the highest levels of Ford’s executive management through the Business Plan Review process. Related emerging issues are reviewed as needed in Special Attention Review meetings.

In addition, strategic product direction related to climate change goals is provided by a senior executive committee, made up of vice president and executive stakeholders, who guide the development of the vision, policy and business goals. (See Governance and Management Structures.)

Related executive planning teams are responsible for developing detailed and specific policy, product and technical analyses to meet objectives. These teams base their plans on scientific data and promote actions that will help achieve the Company’s environmental ambitions, recognizing the need to use a holistic approach to effectively protect the environment. Metrics have been established and are reviewed regularly to ensure satisfactory progress. We have also developed strategic principles to guide our approach.

Climate Change Strategic Principles

Our approach to greenhouse gas (GHG) stabilization is aligned around the following key strategic principles:

1. Technical, economic and policy approaches to climate change need to recognize that all carbon dioxide (CO₂) molecules (or GHG equivalents) produced by human activities make the same contribution to the atmosphere’s concentration of greenhouse gases. Once those molecules reach the atmosphere, they contribute to the greenhouse effect, regardless of the source. However, the cost of reducing those emissions varies significantly depending on their source, and we should attempt to achieve the most economically efficient solutions possible.
2. The transportation sector represents a closely interdependent system, characterized by the equation: “GHG Emissions = (Vehicle + Fuel + Driver).” Each link in this chain depends on the others. For example, vehicle manufacturers can bring to market flexible-fuel vehicles, but successfully reducing GHG emissions with them will depend on fuel companies providing renewable biofuels, as well as consumer demand for the vehicles and fuels, and even driver style/behavior.
3. Future developments in technologies, ever-changing markets, consumer demand and political uncertainties require flexible solutions. The business strategies that Ford implements, and the public policies that we encourage, must have the flexibility to succeed in a range of potential scenarios.
4. Early affordable steps to reduce GHG emissions from our products and processes may delay the need for drastic and costly reductions later. Lack of agreement on long-term solutions cannot be used as an excuse to avoid near-term actions.