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Responsible Sourcing of Raw Materials
With approximately 1,200 Tier 1 production suppliers providing up to 40,000 parts per vehicle, and 1,000 different materials in those parts, Ford recognizes that our material supply chain is complex. Nevertheless, we are committed to ensuring that the materials that go into our vehicles have been sourced responsibly.
Ford is working on multiple initiatives to increase transparency and responsibility in raw material sourcing because we recognize the importance of raw materials in the automotive supply chain. Ford participates in studies, workgroups and both industry and cross-industry collaborative discussions to identify key ethical, environmental and labor issues impacting the raw material supply chain.
We conduct ongoing investigations of raw materials to determine the appropriate level of action that must be taken internally and externally with the supply base. As we identify materials of concern, such as tin, tantalum, tungsten, gold, cobalt, mica, rubber and others, suppliers may be requested to support initiatives to improve due diligence and increase transparency. They may also be requested to provide information to verify that the materials in the products supplied to Ford have been sourced responsibly.
The U.S. conflict minerals legislation is designed to reduce funding to armed groups benefiting from mineral trade in the Democratic Republic of the Congo (DRC) or adjoining countries. Ford is required to investigate the origin of the conflict minerals in our products. Our goal is to use only responsibly sourced tin, tungsten, tantalum and gold. We file an annual report disclosing the status of conflict minerals in our products.
What Are Conflict Minerals?
Tin, tungsten, tantalum and gold (3TG) are used in many auto parts and components, from engine assemblies to airbags. We work tirelessly to ensure the minerals we use in our vehicles are sourced responsibly.
Conflict minerals: Gold, as well as columbite-tantalite (coltan), cassiterite, wolframite or their derivatives, which are limited to tantalum, tin and tungsten.
Disclosure and Reporting
In August 2012, the U.S. Securities and Exchange Commission (SEC) adopted the final rule to implement reporting and disclosure requirements concerning conflict minerals. Since 2014, under the U.S. Dodd-Frank Act 2010, public companies have been required to conduct due diligence to determine the origin of the conflict minerals in their products and report annually to the SEC in the hope of ending violent conflict in the DRC and adjoining countries.
We are one of several automotive manufacturers obliged to report on conflict minerals in our supply chains in a Specialized Disclosure Report, filed annually with the SEC. Ford’s Conflict Minerals Report was ranked as the highest-scoring by any auto manufacturer in the Mining the Disclosures 2017 report produced by the Responsible Sourcing Network.
To enable compliance with this disclosure rule, suppliers that provide us with components containing 3TG are expected to conduct due diligence to understand the origins of such minerals, source them responsibly and not knowingly provide parts containing minerals that may contribute to conflict. We encourage suppliers to use the Due Diligence Guidance compiled by the Organisation for Economic Co-operation and Development (OECD) to assess the chain of custody of these minerals. Ford requests its suppliers obtain 3TG from smelters that have been validated as conformant to a third-party responsible minerals sourcing validation program.
Suppliers are required to submit an annual Conflict Minerals Reporting Template (CMRT) to Ford. For the past three years, we have met our goal to achieve a 100 percent response rate from in-scope suppliers.
In 2018, we will continue to work with our suppliers to improve the quality of their reports.
Read our 2017 Conflict Minerals Disclosure filing and download our Conflict Minerals Policy for more information.
As we continue on our conflict minerals journey, we have set the following goals:
- 100 percent response rate from in-scope suppliers for annual reporting
- Year-over-year improvement in the percentage of suppliers providing smelter lists
- Year-over-year improvement in the percentage of suppliers using Responsible Minerals Initiative (RMI)-conformant smelters
- Participate in smelter outreach efforts to encourage participation in the RMI audit process
Going Beyond Conflict Minerals
As our vehicle technologies and part designs continue to change, so will the materials we require in our products. Through Ford’s ongoing raw material investigations and collaborative workgroups, we work hard to identify materials of concern that fall outside the U.S. Dodd-Frank Conflict Minerals legislation. Through enhanced contractual requirements, reporting requests and transparent dialogue, we work with our suppliers to ensure the raw materials that end up in our products have been sourced ethically and responsibly.
Some of the actions Ford has undertaken to improve sustainability in the raw material supply chain, beyond conflict minerals, are as follows:
- Enhance the Ford Motor Company Supplier Social Responsibility and Anti-Corruption Requirements Web Guide to expand responsible sourcing requirements for suppliers from conflict minerals to conflict minerals and additional materials of concern
- Increase buyer awareness for materials of concern and highlight the ways in which buyers sourcing parts with materials of concern can have a positive impact. At a special purchasing event, a vice president from the Responsible Business Alliance’s RMI initiative stressed the importance of responsible mineral sourcing, including key concerns and opportunities, due diligence expectations and recent engagements with investors and NGOs. Find out more about how we are embedding sustainable sourcing decisions
- Participate in RMI, AIAG and Drive Sustainability multi-stakeholder initiatives
- Ford is participating in the RMI cobalt pilot project. We are surveying relevant suppliers to gain a better understanding of the source and due diligence practices associated with the cobalt in our products
- A supplemental request for quotation (RFQ) section has been added for all future battery products. The supplement includes several due diligence questions specific to cobalt, to ensure that potential suppliers understand the importance of responsible cobalt supply and the compliance required of them before sourcing is awarded
- Supplier meetings are conducted with leading battery suppliers to increase transparency in the supply chain and ensure sustainable and ethical practices are supported in the product supplied to Ford
- Supplier meetings are conducted with key coating suppliers to monitor their performance and due diligence to source mica responsibly
- Mica due diligence activities include mapping the supply chain with Tier 1 suppliers, reviewing third-party audits of mica mines and participating in cross-industry investigations on mica
- Ford is participating in new multi-stakeholder initiatives focused on increasing the supply chain for sustainable natural rubber
- Contributions to third-party consultant research were provided to understand the needs for sustainable natural rubber in the automotive industry and requirements for tire manufacturers
- We continue to work with OEMs, tire manufacturers, civil society and consultants to encourage and structure a sustainable rubber framework for the automotive supply chain
Industry and Cross-Industry Leadership
Our leadership position among our industry peers, across other sectors and in multi-stakeholder initiatives extends to developing solutions and sharing best practices to ensure responsible sourcing in our supply chain.
Our memberships and leadership positions include the following:
- In recognition of our efforts, Ford was included in the Top 100 Conflict Minerals Influence Leaders by Assent in 2017 for the third consecutive year
- Automotive Industry Action Group (AIAG) – Ford’s active role on the Smelter Engagement and Best Practices teams supports the development of processes and tools to educate suppliers and improve supply chain reporting transparency
- Responsible Minerals Initiative (RMI) – Ford is a member of the RMI Steering Committee and an active member of the RMI Smelter Engagement Team (SET). In addition, Ford is a member of the RMI Multi-Stakeholder Group and the RMI Due Diligence Practice team
- Public-Private Alliance for Responsible Minerals Trade (PPA) – Ford is an active member of the PPA, contributing to in-region solutions for responsibly sourced minerals