Key Processes for Integrating Sustainability

We believe that integrating sustainability considerations into our existing systems and processes – rather than creating new systems and processes – is the most effective way to embed sustainability into our business. The following are some examples of how we are doing this.

• Business Plan Development, Business Plan Review and Compensation: As part of the annual business planning process, Ford's business units develop scorecards to track their performance. Metrics from these scorecards are part of the performance assessment of managers at various levels of the Company and affect their compensation. Executive compensation is affected by the Company's performance in a range of areas, including sustainability. Sustainability issues are a formal part of Ford's Business Plan Review (BPR) meetings, one of the key management processes used within the Company. At these regular, frequent meetings, convened by Ford's CEO, members of the Company's top leadership team review sales, financial, manufacturing and other information to help them manage global operations and identify issues that are critical to the future of the Company. Each unit also provides an update on performance relative to their individual scorecards. To help us manage corporate-wide sustainability issues, Ford has developed a sustainability scorecard, which is reviewed alongside other units' scorecards at the BPR meetings. Also, functions including Manufacturing, Product Development and Purchasing have integrated sustainability-specific indicators into their overall scorecards.
• Special Attention Review Meetings: Ford's CEO also convenes regular Special Attention Review meetings to look in depth at issues identified as potential concerns on any unit's scorecard. Sustainability issues have been covered at these meetings. During 2007, the reviews covered several sustainability topics, including Ford's approach to human rights, the product fuel economy and CO2 strategy, the corporate sustainability strategy and the 2006/7 Sustainability Report.
• Corporate Policy Letters and Directives: Ford maintains a comprehensive set of Policy Letters, Directives and other corporate standards that govern all Company activities. Several of these relate to aspects of sustainability. For example, in 2003 Ford adopted a Code of Basic Working Conditions, the implementation of which is supported by a robust assessment and training process. The Code of Basic Working Conditions was updated in 2006, and in 2007 it was approved and formally adopted as a corporate Policy Letter.
• Management Systems: Ford uses a variety of systems and processes to manage the different aspects of our business, several of which govern or incorporate sustainability issues. For example, all Ford manufacturing facilities and our product-development function are certified to ISO 14001, the leading global system standard for managing environmental issues. We have also asked our preferred "Q1" suppliers of production parts to certify their facilities to ISO 14001. In another example, Ford's Purchasing function has integrated assessments of working conditions into its broader process for certifying suppliers on issues such as quality, cost and delivery (see Working Conditions in Ford Plants).