Q&A on Ford's Sustainability Strategy

DEARBORN - Ford's Director of Sustainable Business Strategies, John Viera, sat down with Ford's employee communications network, @Ford Online, to discuss Ford's sustainability strategy and the recently published 12th Annual Corporate Sustainability Report.

12th Annual Sustainability Report

Q: Why is sustainability so important to Ford?

A: Sustainability represents the intersection of the environmental, social and economic actions that we take on as a company. The environmental element of sustainability revolves around how we provide vehicles and produce those vehicles in an environmentally friendly way, and we take many different actions to make that happen.

From a social standpoint, we want to ensure that the working conditions for our employees in our facilities – and also the people working in our supplier plants – are at a level that we feel is more than just acceptable. It’s about delivering products with processes in an environment that is respectful and one that we can be proud of moving forward.

The economic aspect of sustainability is of course making sure that there is a good business case for everything that we do. The good news is that we can deliver the environmental and the social side and have a great business case on top of it.

Q: How would you sum up how Ford has advanced its sustainability strategy in 2010/11?

A: From an economic standpoint, I think the results that we’re all very familiar with from 2010 speak for themselves. We had the highest net income in over a decade, and we’re very pleased about that.

On the environmental side, we talk about what we’ve done with our vehicles and what we’ve done at our manufacturing facilities. From a vehicle standpoint, we made a commitment that we would be best in class or among the best in class in fuel economy in every vehicle segment we participate in – cars, SUVs and trucks. We began planning and implementing that strategy several years ago and this year we’re seeing the strategy come to fruition. We have 12 vehicles that offer best-in-class in fuel economy and four models that offer 40 mpg or better. That is a claim that no other automaker can make.

From a manufacturing perspective – and I think manufacturing really deserves a lot of credit – we reduced our global carbon dioxide emissions at our facilities by 5.6 percent, and that’s on a per-vehicle basis compared to 2009. And we’ve committed to reducing our C02 emissions by 30 percent by 2025 on a per-vehicle basis in our manufacturing facilities. So we’re very excited not only about what we’ve delivered so far but what we’re going to delivering in the future.

On the social front, we have many efforts going on with our supply base. We’re translating the great code of working conditions that we employ in our facilities here at Ford to our suppliers. So it’s not just a matter of trying to find suppliers who operate the same way that we do. It’s actually taking the suppliers that we have, educating them and making a positive impact.

Q: What is the difference between this year’s report and last year’s report in terms of material issues?

A: Water is a great example. In this year’s report we focus on what our water strategy is going to be. Since 2000, we’ve reduced the amount of water that we use to produce a vehicle by 49 percent, and we’re looking to improve that by an additional 5 percent moving forward. We realize that fresh water is increasingly becoming a very scarce resource, and as we expand our operations throughout the world – particularly in areas that are water-constrained – we recognize that we really need to have a solid overall strategy that focuses not just on water reduction but ensuring that we are accessing the water in the most responsible way.

Q: Another critical global issue is vehicle electrification. What is our strategy there?

A: Electrification is an important piece of Ford’s overall product sustainability strategy. Ford’s aggressive strategy includes five new electrified vehicles in North America by 2012 and Europe by 2013. Ford launched the Transit Connect Electric small commercial van in 2010 and in addition to Focus Electric in late 2011, will introduce C-MAX Hybrid, a second next-generation lithium-ion battery hybrid and the C-MAX Energi plug-in hybrid in 2012.

Q: What is Ford doing with respect to the environmental impact of C02 emissions?

A: We are doing our share in terms of C02 reduction in the atmosphere as it relates to what we call climate stabilization. We set a goal a couple of years ago that we would reduce the amount of carbon dioxide coming from our fleet of vehicles by 30 percent by the year 2020 – and that’s from a 2006 baseline. The good news is that we’re on track to exceed that amount, which is fantastic. On the facilities side, we set a similar target of a 30 percent improvement in C02 on a per-vehicle basis by 2025.

Q: How is Ford addressing human rights within our operations and our supply base?

A: Internally at Ford, human rights is all about having the right working conditions. And we’ve extended that code of conduct to our suppliers. Last year, Ford trained suppliers in systemic solutions to working condition challenges and assessed 130 supplier factories around the world for compliance with Ford and legal requirements. Ford global totals now exceed 1,649 suppliers trained and 709 assessed. The suppliers then reach out to their suppliers and so forth. So we can really have a cascading effect in terms of the good actions that we’ve taken on and spread that to the community at large.

We’re very proud of the fact that we’re identified as a global leader in human rights. We do what we do because it’s the right thing, and I think that’s an area that Ford employees should feel very proud about.

Q: As you look over the entire report, does anything stand out as a really notable accomplishment?

A: I think it’s really the delivery of the fantastic fuel economy that we’re seeing from our products because when we talk about fuel economy what a lot of people I think aren’t completely clear on is as you deliver great fuel economy you’re also significantly reducing carbon dioxide. This is the greatest impact that we have on the environment as a company and we’re demonstrating leadership in this area.