Sustainability Strategy

Our sustainability strategy is embedded in our business plan and consistent with our aim to deliver Great Products, a Strong Business and a Better World. At Ford, we define sustainability as a business model that creates value consistent with the long-term preservation and enhancement of environmental, social and financial capital.

For more than a dozen years, we have built our sustainability strategy on a foundation of transparency, accountability and stakeholder engagement. We focus our efforts using a materiality analysis, which was updated early in 2013. Our public reporting has been an important part of our commitment to transparency and has helped to drive progress in our Company and across the industry.

Key components of our sustainability strategy that address our material issues include the following:

• Our climate change strategy is based on what needs to happen in the world – the stabilization of greenhouse gases in the atmosphere – and our contribution to achieving stabilization through fuel economy improvements, the use of alternative fuels and energy-efficiency improvements at our facilities. A cross-functional team called Sustainable Mobility Governance oversees the strategy. Please see the Climate Change section for details of our strategy and performance.

• We have set goals for water use and are developing a comprehensive water strategy based on an analysis of risks and opportunities in our own operations and in our supply chain. Please see the Water section for details of our strategy and performance.

• We were the first automaker to recognize that protecting human rights in our operations and our supply chain is an important sustainability issue. Our human rights strategy includes adherence to our Code of Human Rights, Basic Working Conditions and Corporate Responsibility (Policy Letter 24) (pdf, 55b), as well as assessments of alignment with the Code in our operations and by our suppliers. It also includes training and building the capabilities of our suppliers to manage sustainability issues in their operations. Please see the Governance and Supply Chain sections for more information on our human rights strategy and performance.

We take a holistic approach to these and other sustainability issues, recognizing the interconnections between them. Our Sustainability & Vehicle Environmental Matters department oversees sustainability strategy development and implementation by identifying emerging challenges and opportunities and mobilizing resources within the Company to address them and help us remain competitive in a changing world. Our philosophy is that sustainability issues should be integrated into business processes and managed by the organizational functions, just like we do for other key business issues. For example, our work on human rights and environmental sustainability in the supply chain is managed by our Procurement division and forms an important theme in our ongoing partnerships with our suppliers. Please see the Sustainability Governance and Sustainability Management sections and the letter from Robert Brown for more information on these topics.

Our business units have set a series of goals and targets related to sustainability. Our Manufacturing function, for example, develops a yearly scorecard that impacts performance evaluation and compensation for all managers who work in manufacturing. These targets cover performance areas such as safety, energy and water use, and emissions reductions.

Our sustainability strategy, and the pursuit of our related goals, have enhanced our reputation and contributed to the competitiveness of our products, operations and workforce, helping us build social, environmental and financial value.