Ford Issues 2022 Integrated Sustainability and Financial Report

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Ford Motor Corp. (NYSE: F) released  its sustainability report this morning. Supplementing the report is a standalone human rights report, a first for Ford and the U.S. auto industry, as well as a combined task force on climate-related financial disclosures and climate risk scenario report. Ford said it has committed to achieve carbon neutrality no later than 2050, backed by interim targets it will meet by 2035.

The problem with all such reports is that saying something doesn’t mean that other areas of the company are actually supporting the stated goals. “Combining sustainability and financial performance in a single report,” Ford said, “is significant.” Well, given this, Ford has actively opposed attempts by stockholders at the last few annual meetings to reveal its PAC contributions. Is Ford dispensing shareholder money to politicians or companies that are actively opposed to its stated goals? Given the vast complexity of Ford’s, Democracies’ and the globe’s survival threats, it’s a key measurable in AutoInformed’s view.

 “Is this still the case? If so, what assurances can employees, stockholders and people have that you are not pursuing different anti-environmental policies out of public view under the Capital Dome by the politicians you are supporting?” is how I put it last year as a stockholder to T.R. Reid Director, Corporate and Public Policy Communications. There  was no response, and still is no response.

The new report has voluntary disclosures on climate-related information and details Ford’s progress to reduce emissions per vehicle by 50% from a 2019 base year and emissions from its operations by 76% from a 2017 base. (Not all  of the data tables are publicly available yet.) Last year, the company achieved a 35% reduction in its absolute manufacturing greenhouse gas footprint from 2017 levels, Ford said. Ford also is now looking at how materials are sourced, where our products are manufactured and how its labor standards compare. (See sustainability.ford.com; AutoInformed: Ford – EVs Present Environmental, Human Rights Issues; Ford Manufacturing Executives from General Pacheco Plant Sentenced for Crimes Against Humanity in Argentina; Ford First Automaker to Outline UN Human Rights Issues)

However, the new report is a giant step toward transparency, a variant of “Sunshine is the Best Disinfectant,” with a nod toward former Supreme Court Justice Lewis Brandeis.  (AutoInformed: Ford Proxy – Shareholders Want Political Spending Info; Ford Sets New Interim Carbon-Neutral Targets. Greenwash?)

The Sustainable Development Goals (SDGs), aka the Global Goals, were adopted by the United Nations in 2015 as a call to action to end poverty, protect the planet, and ensure that by 2030 all people enjoy peace and prosperity. The 17 SDGs are integrated: they recognize that action in one area affect outcomes in others, and that development must balance social, economic and environmental sustainability. Countries have committed to prioritize progress for those who are furthest behind. The SDGs are designed to end poverty, hunger, AIDS, and discrimination against women and girls.

“The truest mark of success is whether we leave the world a better place for the next generation. Each year, our integrated report reminds me of our commitment to our values, and our drive to move the needle on the issues that matter. This has been true since we launched the report 23 years ago, a first for the industry. And it could not be truer today,” said Ford Executive Chair Bill Ford.

Ford said it set new diversity, equity and inclusion (DEI) goal to increase gender and racial diversity in its senior leadership, tracking this quarterly as Ford (the 15-member board has only four women) makes headway to build the workforce of the future. Ford expanded its U.S. diversity, equity and inclusion audit to seven additional major markets in 2021, and advances pay equity. Only seven of its 39 corporate officers are women. Women make up less than one in four managers in its global workforce.

Ford’s Highlights of the Integrated Report

• Ford joined RouteZero, a global coalition to curb global warming by working toward making sales of all new cars and vans zero-emissions by 2040 globally, and no later than 2035 in leading markets
• The company introduced a sustainable financing framework to guide investments in social and environmental projects, paving the way for Ford’s inaugural green bond, which raised $2.5 billion via a 10-year issuance to help fund the company’s new portfolio of electric vehicles
• Ford and SK Innovation announced a planned joint investment of $11.4 billion in BlueOval City and three BlueOval SK joint-venture battery plants in Kentucky and Tennessee – mega-sites (in the anti-union South) that will create nearly 11,000 new jobs and contribute to generating a sustainable manufacturing ecosystem. Ford is investing more than $525 million over the next five years on professional development and training for auto technicians to service electric and connected vehicles
• Ford is collaborating with Redwood Materials, a leading battery materials company, to make electric vehicles more sustainable and affordable for Americans, localizing the supply chain network to create recycling options for scrap and end-of-life batteries and ramping up recycling of lithium-ion batteries. Ford also plans to open a global battery center in southeast Michigan, Ford Ion Park, with new investments to develop, test and build battery cells and cell arrays focusing on lithium-ion while looking at solid-state battery technology
• The company joined the U.S. Department of Energy’s Better Climate Challenge to reduce greenhouse gas emissions from its facilities by at least half by 2030 – in line with Ford’s commitment to power its facilities with 100% carbon-free electricity by 2035
• Ford has reduced its annual water consumption by more than 78% from 2000 levels and established 89 zero-waste-to-landfill sites globally while reducing its global manufacturing carbon footprint by more than 35% from 2017 levels.