Materiality Matrix

High Impact, Medium Concern

28 material issues have been identified at this level

Governance

Ethical business practices

Definition/Description	Concerns covered by codes of conduct, e.g., corruption and anti-competitive behavior
Comments	Of increasing interest to some stakeholders, especially in the context of Ford expansion in areas that historically have higher risk for corruption. This issue may continue to rise in stakeholder concern to become an “upper right, most material” issue in future analyses.
Trend (from previous analysis)	Same position
More information	Ethical Business Practices Corporate Governance – Board of Directors Sustainability Governance

Public policy

Global environmental regulation

Definition/Description	Trend toward greater regulation and the cost of compliance
Comments	Continues to be of high importance to Ford.
Trend (from previous analysis)	Same position
More information	Public Policy Climate Change Policy and Partnerships

Ford financial health

Risk and cost management

Definition/Description	Broad concerns about Ford’s financial performance, with a focus on costs and cost-related risks, including health care and retiree legacy costs; operational and regulatory costs; labor costs; commodity, energy and resource supply and costs; and access to capital
Comments	A top concern for Ford and mid-level concern for stakeholders. Added sub-issues on risks associated with raw materials regulations and supply. Also added sub-issues reflecting impact of overall global economic conditions and economic conditions in local markets on Ford’s financial health.
Trend (from previous analysis)	Lower in importance to non-Ford stakeholders
More information	Financial Health

Product competitiveness

Definition/Description	Ford’s strategy related to products and sales, including product mix, market share and meeting customer demands, including for more fuel-efficient products
Comments	A top concern for Ford and mid-level concern to stakeholders.
Trend (from previous analysis)	Lower in importance to non-Ford stakeholders
More information	Financial Health Product Competitiveness

Manufacturing efficiency

Definition/Description	Includes reducing complexity of products, lean and flexible manufacturing, flexible work rules
Comments	A key element of Ford’s ability to respond to changing markets; part of public discussion about aid to automakers.
Trend (from previous analysis)	Same position
More information	Current Financial Health Greening our Operations

Alignment of production with demand

Definition/Description	Ford’s realignment of production capacity to lower levels of demand and the shift from trucks and SUVs to cars; supply-base rationalization; managing downsizing
Comments	Same importance to stakeholders, still of highest concern to Ford, particularly because of overcapacity in Europe.
Trend (from previous analysis)	Same position
More information	Financial Health

Quality

Definition/Description	Product quality and customer service/customer relationship management
Trend (from previous analysis)	Same position
More information	Customer Satisfaction and Quality

Ford future competitiveness

Sustainable mobility

Definition/Description	Ford’s approach to the increasing challenges of urban mobility, congestion, urbanization and mega cities, as well as rural mobility and economic opportunity
Comments	Added the issue of business opportunities of green vehicles, to better represent the scope of sustainable mobility to Ford and external stakeholders. Also added the issue of viability of public transportation.
Trend (from previous analysis)	Same position
More information	Mobility Solutions Understanding Customer Needs Electrification: A Closer Look

Emerging market product and service strategy

Definition/Description	Ford’s approach to emerging markets: infrastructure development; human rights as an issue in growth markets; Ford’s impacts/contributions in emerging markets (other than products and services), including local sourcing, pollution, potential for partnerships
Comments	With projected growth in the company’s Asia Pacific operations, would have increased in importance for the Company if it was not already at the highest level. Key drivers of the issue include congestion, shifting demographics, urbanization and social equity. Added the sub-issues of increasing importance of urban customers and introduction of green products and operations technologies into emerging markets.
Trend (from previous analysis)	Same position
More information	Financial Health Product Competitiveness Mobility Solutions Ford Around the World

Water

Operational water use

Definition/Description	Includes impacts on water sources; water management, cost of water and discharges to water.
Comments	Particular concern in areas of water scarcity; issue gaining a higher public profile.
Trend (from previous analysis)	Same position
More information	Progress in Reducing Water Use Case Study: Ford Manufacturing Water Saving Technologies

Climate change

Cleaner vehicle technologies

Definition/Description	Ford’s development of low-carbon technologies, including hybrids, electric vehicles, clean diesel, fuel cells; also emerging technologies such as nanotechnology
Trend (from previous analysis)	Same position
More information	Sustainable Technologies and Alternative Fuels Plan Electrification: A Closer Look Vehicle Fuel Efficiency and CO₂ Emissions Progress and Performance

Fuel economy

Definition/Description	Increasingly global issue, but particular focus on Ford’s U.S. fleet
Comments	Increasingly driven by regulatory requirements as well as Ford’s voluntary product CO₂ goal; reduced in importance since last analysis, primarily to NGOs.
Trend (from previous analysis)	Lower in importance to non-Ford stakeholders
More information	Vehicle Fuel Efficiency and CO₂ Emissions Progress and Performance Sustainable Technologies and Alternative Fuels Plan

Other climate change issues

Definition/Description	Includes importance of reporting on fuel economy/climate footprint in all markets, reporting on the science of climate change, commitment to work with industry partners and policymakers on climate change issues, and climate change adaptation
Comments	This issue likely increased in importance for Ford and stakeholders in response to the addition of climate change adaptation as an element of this issue in this year’s analysis.
Trend (from previous analysis)	Increased in importance to Ford and stakeholders
More information	Climate Change

Clean/alternative fuels

Definition/Description	Includes vehicle and refueling infrastructure issues related to increased use of biofuels, and the lifecycle carbon footprint of alternative fuels.
Trend (from previous analysis)	Increased in importance to stakeholders
More information	Sustainable Technologies and Alternative Fuels Plan Electrification: A Closer Look Vehicle Fuel Efficiency and CO₂ Emissions Progress and Performance

Operations

GHG emissions

Definition/Description	Includes cost of controlling GHG emissions
Comments	Less of a concern than GHG emissions from vehicles; a mid-level concern for Ford and NGOs/stakeholders.
Trend (from previous analysis)	Same position
More information	Operational Energy and Greenhouse Gas Emissions

Waste generation and management

Definition/Description	Includes Ford’s operational waste generation, management and disposal
Comments	Increased in importance to Ford in this analysis after increasing in importance to stakeholders in the last analysis.
Trend (from previous analysis)	Higher concern for Ford
More information	Waste Management

Vehicle safety

Definition/Description	Active and passive safety; pedestrian safety; customer interest in and demand for safe vehicles; increasing regulation generally with focus on active safety; challenge of evolving in-vehicle technology
Comments	Developed and emerging market issues differ.
Trend (from previous analysis)	Lower in importance for stakeholders
More information	Vehicle Safety and Driver Assist Technologies

Product

Lifecycle assessment

Definition/Description	Includes the need for rigorous lifecycle assessment processes
Trend (from previous analysis)	Same position
More information	Design for Lifecycle Sustainability

Environmentally preferable materials

Definition/Description	Cradle-to-cradle approach: use of renewable, recycled and recyclable materials
Trend (from previous analysis)	Same position
More information	Sustainable Materials

Customer privacy

Definition/Description	Ford’s management of customer information to maintain customer privacy.
Trend (from previous analysis)	Increased in importance to Ford and stakeholders
More information	Ford Motor Credit Company Policy Letters and Directives

Marketing and communications/demand creation/advertising

Definition/Description	Includes issues associated with Ford’s marketing, communications and advertising efforts, including the issue of demand creation for different vehicle types
Trend (from previous analysis)	Increased in importance to Ford and stakeholders
More information	Customers Policy Letters and Directives

Workplace

Workplace health and safety

Definition/Description	Health and safety management systems; ergonomics
Trend (from previous analysis)	Same position
More information	Workplace Health and Safety

Employee morale and teamwork

Definition/Description	Includes issues of employee satisfaction, development, recruitment and retention as well as increasing employee interest in sustainability
Comments	New sub-issues were added in this category, including employee interest in working for a sustainable company and the need to engage employees in sustainability issues.
Trend (from previous analysis)	Increased in importance to stakeholders
More information	Employees

Employee labor practices/decent work

Definition/Description	Ford’s employment practices, including wages, wage ratios, benefits, permanent v. temporary positions; training and education; turnover; impact of aging workforce
Comments	High concern to communities and investors.
Trend (from previous analysis)	Increased in importance to Ford
More information	Working Conditions in Ford Plants Policy Letters and Directives

Diversity/equal opportunity

Definition/Description	Diversity of Ford Board and management; harassment programs and monitoring
Comments	Increased in importance to Ford and to investors. Already of high concern to communities and NGOs.
Trend (from previous analysis)	Increased in importance to Ford
More information	Diversity and Inclusion

Community engagement

Definition/Description	License to operate, NGO relationships and specific community concerns such as breast cancer, obesity, compliance
Comments	Increasing concern to Ford, lower concern to communities and NGOs in this analysis. However, community interest in specific issues of engagement like water increased in this analysis.
Trend (from previous analysis)	Same position
More information	Engaging with Communities

Community impacts and contributions

Definition/Description	Encompasses a range of direct and indirect economic impacts, including local hiring and sourcing and philanthropic donations to the community; also local environmental impacts
Comments	High concern to communities.
Trend (from previous analysis)	Increased in importance to Ford
More information	Communities Human Rights in the Supply Chain: Ford’s Global Working Conditions Program Financial Health

Supply chain sustainability

Identifying and managing sustainability-related supply chain risks

Definition/Description	Includes Ford’s approach to assessing and managing suppliers’ sustainability performance, including supplier requirements, assessments/monitoring and remediation. Also includes risks related to raw materials sourcing, such as scarcity/single source, conflict minerals and raw material regulations
Comments	New issue this year; previously embedded in other supply chain topics. This issue was separated from other supply chain topics based on increasing awareness and concern among some stakeholder groups. It may continue to rise in concern for stakeholders and move to an “upper right, most material” issue in future analyses.
Trend (from previous analysis)	NEW
More information	Creating a Sustainable Supply Chain: Ford’s Approach