Impacts, Risks and Opportunities

Water scarcity can have a sizeable impact on our manufacturing operations. Although we do not use as much water as some other industries, we consume water in many key manufacturing phases in our plants. We cannot be certain that we will always have access to water.

Global climate change also has the potential to impact the availability and quality of water.

Water services are the most capital-intensive of all utilities provided, requiring more infrastructure for the delivery of water than the delivery of electricity, for example. According to the World Bank, a $400 billion to $600 billion investment will be needed in global water infrastructure in the next two decades. Meanwhile, the United Nations Educational Scientific and Cultural Organization (UNESCO) estimates that between $111 billion and $180 billion will be needed per year to meet Millennium Development Goals for sanitation by 2015.1

In the U.S., the Environmental Protection Agency estimates the country will need to invest $202.5 billion over the next 20 years in wastewater facilities, and an additional $122 billion will be needed to ensure safe drinking water supplies.

Given these anticipated expenditures, the cost of using water is expected to continue to increase in the coming decades. For a manufacturing company like ours, this would mean higher operating costs. Already, in some locations, rate increases from 2000 to 2009 outpaced water reductions, and our costs will continue to rise if we don’t make further improvements.

Increasing water scarcity means industrial needs can be at odds with community and environmental needs for water to deploy. Industrial facilities in water-stressed areas will have reduced access to water and/or may endure rising water costs. Suppliers within water-stressed areas will also be affected.

Another possible risk for Ford is the water intensity of alternative fuels, such as biofuels and electricity, which require greater amounts of water. We are assessing the consequences for water quality and availability that may result from the increased production of electric and battery–electric vehicles, including the use of lithium.

Tracking and reporting our water usage helps us to manage water-related risks and, as a result, allows us to play a significant role in developing and implementing solutions to the water challenge going forward. We see opportunities for:

• Reduced manufacturing costs through process improvements and new technologies that better track our water usage and enable us to target resource use improvements
• Improved water efficiency, leading to reduced energy consumption (and emissions) as a byproduct of increased water efficiency

Water availability is a local issue with global implications. Working on solutions helps us to secure a “license to operate” in diverse global locations and can enhance our reputation in local communities.