Sustainability 2011/12

Our Blueprint for Sustainability

Materiality Analysis

We update our materiality analysis every two years. Ford conducted an update of its materiality analysis for the 2010/11 Sustainability report, adding key inputs, replacing outdated inputs and gathering feedback from internal experts. In addition, a Ceres Stakeholder Committee reviewed the analysis and provided comments. The analysis will be updated again for out 2012/13 report.

Not surprisingly, in the interval since we conducted the analysis for the 2008/09 Sustainability Report, some new issues emerged some dropped out and others were recast or reorganized.

In general, there was less concern about Ford’s financial viability among non-Company stakeholders, likely reflecting Ford’s improved financial performance. Water emerged as a material issue – in particular, the need for a water strategy that varies by risk and region. Supply chain issues also rose in importance for Ford and other stakeholders, including issues related to the sustainability of raw materials and the environmental and human rights performance of suppliers. These topics are now at the highest level of importance under the new issue category of “supply chain sustainability.”

In addition to these major trends, changes to the most material issues (upper right part of the materiality matrix) included the following:

  • Financial issues were reorganized into two primary categories: Ford’s financial health and Ford’s future competitiveness. Some issues that were formerly in the upper-right segment – including health care legacy costs, labor costs and access to capital – declined in importance, likely because of actions Ford has taken to manage them. As a result, many financial issues were reorganized into a more general “costs and risks” category. This category and “product competitiveness” issues remained at the highest level of importance for Ford and stakeholders. Labor costs, access to capital, the threat of competitor bankruptcy and dealer and supplier viability – new issues that were added in the last analysis – were less important than in the last analysis.
  • Mobility issues – including urban mobility, mega-cities and urban-to-rural migration – were included under the category of “Ford’s future competitiveness,” as they present challenges for traditional models of personal mobility and opportunities to develop new products and services. Also in the future competitiveness category are emerging markets products and services strategy, an issue of increasing importance as Ford continues to grow globally.
  • Ford’s climate change strategy remains of the highest importance to the Company and stakeholders alike, but the issues comprising the grouping have shifted. For example, as anticipated global carbon markets failed to emerge, emissions trading/cost of carbon decreased in importance to Ford and its stakeholders. Climate change policy remains of high concern.