Our Blueprint for Sustainability
Sustainability Governance and Integration
At Ford, our goal is to fully integrate sustainability issues into our core business structures and processes, rather than manage them separately. As we build capacity in this area and move toward that goal, however, we recognize that it is also important to establish some sustainability-specific structures and processes.
Structures for Managing Sustainability
The following are the primary structures we use to manage and embed accountability for sustainability within Ford.
- Board-Level and Executive-Level Responsibility: Ford’s governance of sustainability issues build on a strong foundation of Board of Director and senior management accountability for the company’s environmental, social and economic performance. At the board level, the Sustainability Committee has primary responsibility for reviewing strategic sustainability issues, though some of those issues are also addressed in other committees and by the board as a whole. Within management, the vice president of Sustainability, Environment and Safety Engineering has primary responsibility for sustainability issues and oversees the Sustainability & Vehicle Environmental Matters group, the Environmental Quality Office, the Vehicle Homologation & Compliance group and the Automotive Safety Office.
- Dedicated Sustainability Function: Ford’s Sustainability & Vehicle Environmental Matters organization coordinates corporate-wide sustainability strategy and activities, including leading the company’s corporate-level sustainability reporting and stakeholder engagement and integrating sustainability throughout the company. In 2013, this organization took steps to build a network of individuals from across the company – in a broad array of functions – who have sustainability-related responsibilities. Participants in this network will share information about best practices, policies, metrics, targets and other sustainability issues.
- Integration into Core Functions: Numerous functions within the company have responsibility for some or multiple aspects of sustainability. For example, the Workplace Health and Safety Office, the Environmental Quality Office and the Human Resources Department each manage specific issues that fall under the umbrella of sustainability. Also, Product Development is taking the lead on the company’s sustainable mobility efforts; Global Purchasing is addressing supply chain sustainability issues such as conflict minerals, water and human rights; and Ford Land and Manufacturing & Labor Affairs personnel are implementing energy-efficiency and water-reduction efforts in our buildings and plant facilities. Our Marketing function is involved via the “Go Green” Dealership Sustainability Program; our Information Technology group is implementing a PC power management program to help us decrease energy consumption; and our Communications department helped us transition to the use of office paper with post-consumer recycled content.
- Issue-Specific Structures: Ford has also developed structures to address specific global sustainability issues facing the company. For example, we have established a Sustainable Mobility Governance Forum – a senior-level team led by the vice president of Sustainability, Environment and Safety Engineering – responsible for defining our climate change strategy and delivering our sustainability strategy in the marketplace. The group’s strategic direction is provided by a senior executive forum, including vice president and executive stakeholders, which guides the development of the vision, policy and business goals.
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 and Compensation: We continue to align elements of performance and compensation to support our One Ford plan. 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. Compensation is awarded based on two basic processes. First is the achievement of individual goals and performance evaluation. Significant elements of an individual’s evaluation are based on achievement of performance targets – some with significant sustainability implications, depending on the individual’s role. Second, depending on individual performance, employees may be awarded bonuses and other compensation based on company-wide performance against annually established targets. Sustainability targets are integral to company-wide achievements and translate primarily into product and financial performance metrics.
- 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, including, for example, Policy Letter 24: the Code of Human Rights, Basic Working Conditions and Corporate Responsibility.
- 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 also require 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 evaluating suppliers on issues such as quality, cost and delivery (see our Supply Chain section for more).