Assurance

Highlight progress against goals. Given the large quantity of information presented in the report, some of which does not change from year to year, stakeholders recommend opening each section of the report with highlights that describe “what’s new” relative to the previous year’s report and where specific progress has been made. Ford should use the report for “storytelling” as a means to provide context at the global and business unit levels, highlight its most innovative and cutting-edge programs, candidly discuss key success and challenges, and demonstrate recent impact.

In this year’s Sustainability Report we have designed the landing page of each material issue section to include a summary of key progress points. Also new since the last report, these landing pages will highlight our most innovative programs. We continue to provide a “Map of Our Year” and use case studies throughout the report to provide context and additional detail related to our most innovative programs, as well as our challenges.

Enhance financial reporting disclosures. Stakeholders appreciate that Ford has highlighted “green” and the emphasis on sustainability as a pillar of Ford’s business strategy in financial reports, but expect to see additional discussion of key risks and opportunities, as well as realized business value, associated with material issues in Ford’s investor communications as well as in the Sustainability Report. Ford should be moving toward demonstrating to investors and capital market players, through its reporting, how sustainability is creating business value.

This Sustainability Report is our main vehicle for communicating the business value of our sustainability strategy and performance. We have included a section on financial performance in our Sustainability Report for the past nine years and outline the business benefits of addressing each of our material issues. We also discuss climate-related risks and opportunities in the Climate Change section of this report. The 2013 Ford Annual Report includes a section on “Better World,” which highlights several of our key areas of sustainability focus again this year. For the launch of our 2012/13 report, our chief financial officer and our global director, Sustainability and Vehicle Environmental Matters, conducted a briefing on highlights of the report for investors and other interested stakeholders. Ford’s executive vice president, Global Manufacturing and global director, Sustainability and Vehicle Environmental Matters conducted a similar briefing about this report.

Commit to existing 2022–2025 fuel efficiency/GHG standards. In light of the reality that some automakers might push for a weakening of the 54.5 mpg fuel efficiency standard for model years 2022–2025 when the standard undergoes a mandatory midterm review, stakeholders encourage Ford to demonstrate its commitment to the current standard and to remaining on the 450 ppm glide paths, based on the fact that the goal is readily achievable using existing technology.

Ford continues to be committed to contributing our share toward stabilization on the 450 ppm glide path, and our actions and positions are consistent in delivering to those levels. Ford continues to support the One National Program for greenhouse gas (GHG) emissions and fuel economy. Given the timeframe of the regulation, the midterm review is the focal point to assess the feasibility of the 2022–2025 standards and ensure that there is alignment with market and business realities. Ford believes a range of fuel-efficient vehicles is the best way to reduce carbon dioxide emissions consistent with delivering our share to the 450 ppm glide path, while still meeting the various needs of our customers.

Support the CA Low Carbon Fuel Standard. Stakeholders urge Ford to join General Motors in publicly expressing its support for the California Low Carbon Fuel Standard (LCFS). The LCFS is an important policy that will help lead the nation toward greater reductions in the carbon footprint of the transportation sector, while also creating significant economic opportunities. Support for this standard is a natural fit with Ford’s interest in reducing the carbon profile of its vehicles.

We are committed to working with all key stakeholders to promote climate change policy that helps to match vehicle technology, fuel technology and availability, and consumer demand to effectively reduce transportation sector emissions and reach climate stabilization goals. The LCFS is one way to address the fossil carbon content of transportation fuels. We welcome, and have worked to promote, comprehensive market-based policy approaches, rooted in science, that provide a coherent and effective framework for GHG emission reductions and improved and low-carbon fuels, and that give companies a clear understanding of their integral role in achieving overall societal transportation sustainability goals.

Reconsider position on zero emission vehicle (ZEV) policy. Stakeholders ask Ford to reconsider its support for the Alliance of Automobile Manufacturers position regarding ZEV policy in California and elsewhere in light of the Alliance’s efforts to impede program implementation in California and potential adoption elsewhere. Endorsing the Alliance’s position seems to be at odds with Ford’s statements that electric vehicles are a core element of the company’s Sustainable Technologies and Alternative Fuels Plan.

Ford continues to be committed to contributing our share toward stabilization on the 450 ppm glide path. Our planned product actions include increasing levels of electrified vehicles up to and beyond 2025, consistent with our Sustainable Technologies and Alternative Fuels plans.

Ford will support the Alliance of Automobile Manufacturers’ positions that are consistent with our plans stated above. In addition, it is a Ford priority to work collaboratively with all stakeholders in support of appropriate regulation and to foster key electrification enablers (including customer information, comprehensive policy alignment, infrastructure and market readiness planning) that will allow Ford to deliver our share to the common goal of GHG reductions that are necessary to mitigate the consequences of adverse climate change.

We discuss our policy positions related to alternative fuel vehicles in the Climate Change section of this report.

Continue active engagement on conflict minerals. Stakeholders appreciate the due diligence process graphic in last year’s report and Ford’s articulation of the actions it is taking in its direct and indirect operations. Stakeholders look forward to seeing the results of Ford’s compliance with new SEC disclosure rules while also (1) emphasizing the need for Ford to support diplomatic engagement in the Great Lakes region of Africa, and (2) strongly encouraging Ford to comment positively on the forthcoming European Union directive that would establish a certification scheme to prevent the sale of conflict minerals in Europe.

In this year’s Sustainability Report we have continued to expand coverage of our work with suppliers to ensure responsible sourcing of raw materials, including conflict minerals. This year’s report also includes an interview with our in-house expert on our work addressing conflict minerals.

Set expectations for supply chain GHG goals. Ford notes that it encourages suppliers to set their own GHG reduction goals. However, most of the supplier targets remain intensity based, rather than absolute. Stakeholders strongly encourage Ford to set a time-bound goal, such as 2020, for shifting from encouragement to requirement, at least among ABF suppliers, with an expectation that the goals will be in absolute terms and that they, along with Ford, will push similar expectations down the supply chain. Stakeholders also encourage Ford to expand requirements beyond GHG reduction goals to include other key issues such as water use and energy efficiency.

In this year’s Sustainability Report we discuss how we expanded our survey of supplier GHG emissions in 2013 to 145 suppliers, which accounted for approximately 50 percent of our 2012 purchases of $90 billion. We also expanded the GHG survey to include non-production as well as production suppliers. We will continue to expand the number of suppliers we survey in 2014. We also began to survey our suppliers on water use in 2014, using the CDP Water program.

Expand and disclose employee engagement goals. Ford refers to its employees as its most valuable resource, but this does not come through clearly in the People section of the report. Stakeholders know that Ford is doing good work to engage with its employees; now is the time to back that up with firm, time-bound goals and related key performance indicators that go beyond health and safety measures. This is an opportunity for Ford to leverage employee engagement to drive sustainability initiatives and innovation, and to leverage its sustainability initiatives to engage employees as key partners and innovators.

A current priority of the sustainability group at Ford is developing a network of employees involved in sustainability, aimed at further integrating sustainability into the global organization. We do not have specific goals and metrics related to employee engagement but have worked to expand the employee data provided in this report.

This report also includes commentary from the President of the Ford Motor Company Fund and Community Services, who discusses the importance of employee engagement in our work in the community.

Expand and disclose human rights-related measures. Stakeholders thank Ford for its disclosure of information related to global working conditions training and assessments. As next steps, stakeholders would like to see Ford provide additional, narrative information describing common violations and the specific strategies employed to address them, and set time-bound goals for the number of training sessions and participants (including managers), by region.

In this year’s Sustainability Report we continued to report on common findings from the supplier assessments we undertook in 2013. We also report our process for dealing with any violations we find. Going forward, we set a goal to expand supplier audits to at least 25 percent of our production suppliers for high-priority countries in each of our major operating regions.