Ford Full 2020 Sustainability Report - Ford Motor Company

5STRATEGY AND GOVERNANCEFord Sustainability Report 2019/20HELPING IN THE FIGHTAGAINST COVID-19 Working with GE Healthcare, volunteeremployees in Michigan will produce asmany as 50,000 Model A-E ventilators, asimplified ventilator designed to operateon air pressure without the need forelectricity, within the first 100 days ofbeginning production Our design team created transparentfull-face shields, which were tested atthree hospitals in the Detroit area. Wehave since ramped up production to amaximum capacity of more than4 million a week Our Chihuahua Engine Plant in Mexicois producing 100,000 face shields forhealth care workers across CentralAmerica, while volunteers in Spain, Braziland Argentina have also been makingface shields We leveraged the 3D printing capabilityat our Advanced Manufacturing Centerto produce disposable respirator masks We collaborated with suppliers toproduce collection kits for testingpatients and make up to 300,000reusable isolation gowns a week fromairbag materialsSUPPORTING OURCOMMUNITIESOur philanthropic arm, Ford Fund, hasallocated resources worth 1.6 million tohelp communities and nonprofits on ourdoorstep and around the world to addresshunger, shelter and mobility challengesrelated to COVID-19.WE’VE BEEN AROUND 117 YEARS. WE WERE THE ARSENAL OFDEMOCRACY DURING TWO WORLD WARS, AND WE BUILT IRONLUNGS FOR POLIO VICTIMS. WHENEVER WE’RE CALLED ON,WE’RE THERE.”BILL FORD, EXECUTIVE CHAIRMANPROTECTING OUR PLANETWe have donated or loaned vehicles tocharities and medical organizations acrossthe world, supporting the distributionof food and medical supplies and thetransportation of volunteers and patients.During National Nurses Week, Lincolndelivered 1,000 meals to frontline workersat medical centers in Los Angeles andNew York, accompanied by thank-youmessages from customers.Health care professionals, firstresponders, transport workers andstore clerks are putting themselvesin harm’s way to provide essentialservices. To support them as best wecan, we have used our design expertiseand manufacturing capacity to helpproduce medical and personal protectiveequipment, joining forces with unionrepresentatives and partners from otherindustries around the world. In just 40 days, we worked with 3M todesign and develop a new PoweredAir-Purifying Respirator (PAPR), usingexisting parts including fans from FordF-150 cooled seats. Volunteers at ourVreeland facility in Flat Rock, Michigan,will produce as many as 100,000 PAPRsPUTTING PEOPLE FIRSTOur employees have shown they carethrough the COVID-19 Donation MatchProgram, a combined effort betweenFord Fund and Bill Ford that will match 500,000 in donations to communityorganizations fighting COVID-19, raisinga potential 1 million. Ford employeesare also reading children’s books for ourRead and Record project, creating anonline library for young people affected byschool closures.Read the latest coronavirus news andupdates on Ford.comCREATING TOMORROW, TOGETHEROur Holistic ApproachOur “global policy, local action”approach has been supportedby robust governance structuresand clear communication, anddirected by a cross-functional CrisisManagement team.With a global shutdown forcing arenewed focus on cost and liquidity,we reduced spending across thebusiness to ensure we emerge fromthe crisis stronger. Our recent actionsprovide the flexibility to weather thedisruption caused by COVID-19 andthe confidence to continue investingin growth opportunities. While theeffects of the coronavirus may affecttimings, we are still excited about thenew launches we have planned.

6STRATEGY AND GOVERNANCEFord Sustainability Report 2019/20PUTTING PEOPLE FIRSTPROTECTING OUR PLANETCREATING TOMORROW, TOGETHEROUR SUSTAINABILITY STRATEGYWe are changing the way we work,how vehicles are made and theway people move. We are changinglives for the better. We are CreatingTomorrow, Together.Building on our strengths, we’re investingin our core business of designing,manufacturing, marketing, financingand servicing cars, sports utility vehicles(SUVs), trucks and commercial vehicles.And, at this pivotal moment in time in ourindustry, we are up to the challenge tomaximize new opportunities created byelectrification, self-driving technology andmobility solutions. Changing how products are made:We’re creating high-quality vehicles in anenvironmentally and socially responsibleway, and reducing the impacts of ouroperations and supply chains throughworld-class facilities, innovativemanufacturing processes and the mostsustainable materials Changing the way people move:We’re creating smart vehicles andmobility solutions for a smart world,based on our long-term vision ofincreasing access to easier, safer andcleaner journeys for all Changing the way we work:For the customer to be at the center ofall we do, employee centricity is critical.This includes empowering decisions tobe made at the lowest level, streamliningsystems and processes, and ensuringwe are developing our team for the skillsneeded today and in the future. It isimperative to have an inclusive culturewhere all voices are heard, and everyonesupporting Ford feels that they belong.We also are flexible in where and howwork is done, providing the necessarytools and technology for teams tocollaborate virtually, while providingenergizing workspaces when teams meetface to face Changing lives for the better:As a global employer, brand, purchaserand neighbor, we want to have a positiveinfluence on the future. We can do thisthrough our vehicles and services, aswell as by offering the best customerexperience, assisting disadvantagedpopulations, strengthening oursupply chain and building safe,inclusive workplacesOUR ASPIRATIONAL GOALSClimate ChangeWe aspire to achieve carbonneutrality by 2050Human RightsWe aspire to responsibly sourceall raw materials used within ourvehicles globallyDiversityWe aspire to become themost inclusive and diverseglobal companyEnergyWe will use 100 percent locallysourced renewable energy forall manufacturing lants globallyby 2035WasteWe will achieve true zero wasteto landfill across our operationsWe will eliminate single-useplastics from our operationsby 2030AccessWe aspire to drive humanprogress by providing mobilityand accessibility for allWaterWe will make zero waterwithdrawals formanufacturing processesWe will use freshwater forhuman consumption onlyAirWe aspire to achieve zero airemissions from our facilitiesMaterialsWe aspire to only use recycledand renewable plastics in ourvehicles globally

7STRATEGY AND GOVERNANCEFord Sustainability Report 2019/20OUR ISSUES-SPECIFICSTRATEGIESOur approach to sustainability involvesdoing our share to meet the collectivechallenges the world faces. To address thefull range of these material issues, we havedeveloped a number of strategies that aretargeted toward specific topics.– People Strategy– Human Rights Strategy– Climate Change Strategy– Sustainable Materials StrategyPUTTING PEOPLE FIRSTPROTECTING OUR PLANETCREATING TOMORROW, TOGETHERI n a recent study with the Erb Institute at the University of Michigan, we asked internal andexternal stakeholders “What does human progress mean?” The findings – which spannedenhancing societal economic prosperity, increasing access to transportation, preservinghuman rights, and protecting health and safety – suggest that trust and innovation are bothessential to driving human progress.– Circular Economy Strategy– Renewable Energy StrategyPRESERVEHUMAN RIGHTSENHANCESOCIETALECONOMICPROSPERITYPROTECT HUMANHEALTH, SAFETYAND WELL-BEINGINCREASEACCESS TOTRANSPORTATIONOUR LONG-TERM VISION – OF AOUR AIMS Trusted Mobility: To become the world’smost trusted company We understand that trust is earned by livingup to your commitments. Our ambitions inthis area are based on behaving ethicallyand with integrity, acknowledging where wecan improve, being transparent and open tochange, and striving to serve others.CONNECTED TRANSPORT NETWORK Driving Human Progress: To providevehicles and services that help createa better world and facilitate freedomof movementThroughout our history, our purpose hasalways been based on driving humanprogress through mobility and accessibility.We will continue to explore and developnew solutions in connectivity, automationand electrification, foster differentcapabilities within our business and usehuman-centered design to make the futurebetter for everyone. Positive Impact: To not just reduce ourfootprint but to develop innovations thatbring positive benefits We want to go beyond minimizing theimpact of our activities to having a netpositive contribution to society and theenvironment. Naturally, we want ourvehicles to use less fuel and producefewer emissions. But our long-termvision – of a connected transport networkcomprising increasingly intelligent vehiclescommunicating with each other and theworld around them – will make people’slives better in ways they may not yet realize.COMPRISING INCREASINGLY INTELLIGENTVEHICLES COMMUNICATING WITH EACHOTHER AND THE WORLD AROUND THEM– WILL MAKE PEOPLE’S LIVES BETTER INWAYS THEY MAY NOT YET REALIZE.

8STRATEGY AND GOVERNANCEFord Sustainability Report 2019/20PUTTING PEOPLE FIRSTPROTECTING OUR PLANETCREATING TOMORROW, TOGETHERPRIORITIZING KEY ISSUESSee the GRI Content Index for the definitionsof our material issuesWe conduct materiality assessmentsevery two years and carried out our mostrecent analysis in early 2019. The resultsare reflected in the matrix opposite.We consider material information to bethat of greatest interest to, and having thepotential to affect the perception of, thosestakeholders who wish to make informeddecisions and judgments about thecompany’s commitment to environmental,social and economic progress.The analysis identified our most materialissues as: Electrification and alternative fuels Customer satisfaction, vehicle qualityand safety Vehicle carbon footprint/fuel economy Climate change/resilience strategy/energy future Supply chain management/capacitybuilding and performance/responsiblesourcing of raw materialsWe consider human capital, human rights,health and safety, and diversity andinclusion as issues of great importancefor social and economic progress. We alsoacknowledge other emerging trends andassess them for inclusion as they arise.COVID-19 has reinforced the importanceof putting people first and embracingdisruption to evolve.Our Materiality ProcessIdentificationWe created a list of potential issues,grouped into four categories: governanceand ethics, planet, people and innovation.These were identified through desk-basedresearch, which included a peer review,media scan and review of sustainabilitythought leadership from industry expertsand associations.PrioritizationAn online survey, followed by aworkshop attended by external andinternal stakeholders, helped us infurther identifying key challenges andopportunities, and prioritizing the issues.ReviewThe results of the analysis were reviewedby a range of internal and externalstakeholders. Revisions were made toensure that our process and list of issueswere comprehensive, well understoodand reflective of stakeholders’ viewsand feedback.See our GRI Content Index for more detailson our approach to materialityHigherMATERIALITY RESULTSMateriality Matrix165413182119222671217269112313810Influence on StakeholdersOur Materiality MatrixThe materiality matrix (right) plots eachissue and the ratings accorded to it.The y-axis represents the influence onstakeholders and the x-axis representsthe impact on Ford. Issues found closer tothe upper right-hand corner of the matrixare of higher influence and impact to bothFord and its stakeholders.201415242725LowerThe world is constantly changing,so conducting a formal materialityassessment helps us identify andprioritize the sustainability issues thatmatter most to our business and areof most concern to our stakeholders.The process we undertake enables usto focus our sustainability strategy,resources and reporting on these issues.Impact on FordLower1 Electrification andalternative fuels2 Customer satisfaction,vehicle quality and safety3 Vehicle carbon footprint/fuel economy4 Climate change/resiliencestrategy/energy future5 Supply chain management/capacity building andperformance/responsiblesourcing of raw materials6 Accountable andinclusive governance7 Government regulation,policy and engagementKeyPlanetPeopleHigher8Human rights18Work stoppages9Air quality19Mobility solutions10 Customer engagementand marketing20 Employee wellness, healthand safety11 Ethical business practices21Smart technology12Sustainable materials22Process chemicals13Self-driving vehicles23 Environmental management/process innovation14 Changingconsumer preferences15 Financial health, intellectualproperty protection andbrand perception16Human capital17Waste managementInnovation24 Operations/logistics energyuse and GHG emissions25Water use26 Sustainable citiesand infrastructure27 Socioeconomic contributionand community engagementGovernance and Ethics

9STRATEGY AND GOVERNANCEFord Sustainability Report 2019/20STAKEHOLDER REVIEW OFOUR REPORTDialogue with our stakeholders fosterstrust, helps us identify new trends andemerging issues, and consolidate thepartnerships we have established to helpus achieve our aspirational goals.Investors and AnalystsThrough face-to-face meetings,telephone calls, roadshows andconferences, Ford regularly engages withinvestors and analysts, who increasinglyfactor in environmental, social andgovernance (ESG) aspects in theirinvestment decisions.Sustainability andInnovation CommitteeAs part of their responsibilities, themembers of our Sustainability andInnovation Committee of the Boardof Directors review the summarySustainability Report.Ceres Stakeholder CommitteeAs in recent years, a stakeholderteam selected by Ceres providedrecommendations for this report.Representing a range of constituencies andexpertise, including investors, academia,small- and medium-sized enterprises(SMEs) and suppliers, theCeres Stakeholder Committeeconvened in April 2020.Ford’s responses to theirrecommendations aresummarized as follows:PUTTING PEOPLE FIRSTPROTECTING OUR PLANETRecommendationAddressing Specific Climate ChangeGoals and Leadership Initiativespriority non-conformances by offering RBAe-learning modules, developing correctiveaction plans and monitoring progress.Ford responseAspiring to achieve carbon neutralityglobally by 2050, we focus on vehicleuse, suppliers and factories, whichtogether represent 95 percent of ouremissions. We also need to address manyexternal factors, including governmentpolicies, technical solutions, energy pricefluctuations and changes in consumerdemand. We will advocate for keyenablers that support our aspirationalgoal and encourage collaborationbetween stakeholders.RecommendationImproving Diversity and InclusionRecommendationFocusing on the Positive Impact ofHuman Rights Systems Throughout theSupply ChainFord responseWe rely on the skills of thousands ofemployees and people in our supply chain.Everything we make – or that othersmake for us – needs to be consistentwith local laws and our own commitmentto protecting human rights, which weidentify through our salient human rightsassessment process. We serve on theBoard of Directors of the ResponsibleBusiness Alliance (RBA), activelyparticipate in several workgroups anduse its Validated Audit Protocol to assesslabor, health and safety, managementsystems, ethics and environmental issues.In addition, we assist suppliers withFORD MOTOR COMPANY UNDERSTANDS THE IMPORTANCE, ANDTHE VALUE, OF REGULARLY INVITING REPRESENTATIVES OF KEYSTAKEHOLDER INTERESTS TO OFFER SPECIFIC, ACTIONABLERECOMMENDATIONS FOR IMPROVING THE COMPANY’S SUSTAINABILITYPERFORMANCE. THROUGH OUR ENGAGEMENT WE CONSTRUCTIVELY CHALLENGE THECOMPANY’S LEADERSHIP TO THINK BIGGER, BOLDER AND FASTER IN PURSUIT OF THEIRMOST MATERIAL, AND MOST URGENT, OBJECTIVES.”JOHN WEISS, SENIOR DIRECTOR, CERES COMPANY NETWORKFord responseLeveraging the diversity of our peoplemakes our business stronger and helps usreflect the communities in which we liveand work. We have embedded diversityand inclusion in our People Strategyto create a culture that enables us toattract, retain and develop top talent.We have many teams and EmployeeResource Groups focused on inclusion,supported by partnerships fosteringdiversity among suppliers, communitiesand customers. Jim Hackett, our Presidentand Chief Executive Officer (CEO),committed to the CEO Action for Diversity& InclusionTM pledge and we became asignatory to the United Nations Women’sEmpowerment Principles.For the second year in a row, Ford wasincluded in the 2020 GEI in recognition ofits commitment to transparent genderreporting and workplace equality. Andto support our aspiration to becomethe world’s most trusted company, wepublished our GEI survey responsesalong with our Sustainability Report.We also received a perfect score of 100on the Disability Equality Index BestPlaces to Work list. For more details, seethe 2019 Diversity Performance Metricsreport section.RecommendationMaintaining an Adaptive WorkforceEquipped to Manufacture NewVehicle TypesFord responseHelping employees stay up to speedwith the latest technologies required bythe automotive industry, we researchnew techniques, explore alternativedigital strategies, and offer learningopportunities in the skills and capabilitiesrequired by the “Factory of Tomorrow.”CREATING TOMORROW, TOGETHERThe renovated UAW-Ford TechnicalTraining Center reopened in 2019 withnew courses in Advanced ManufacturingEngineering and emerging skills likedrone piloting, 3D printing, robotics andnetworking technology.We are also committed to identifyingand engaging with the next generationby working with high schools, collegesand universities. Students can undertakepractical assignments at Ford, whileresearch can be directed toward theanticipated needs of our business.RecommendationIdentifying and Incorporating ESG Risksinto Our Overall Risk ManagementFord responseWith a heightened focus on ESG-relatedreporting, we are continuously workingtoward improving our transparencythrough the disclosure of all ESG riskfactors. Among the risk factors includedin our Annual Report on Form 10-K forthe year ended December 31, 2019, werespecific ESG-related risks, includingclimate-related physical risk andemployee recruitment and retention– ensuring that we attract and retaintalented and diverse employees.

10STRATEGY AND GOVERNANCEFord Sustainability Report 2019/20PUTTING PEOPLE FIRSTPROTECTING OUR PLANETCREATING TOMORROW, TOGETHEROUR GOALS AND PROGRESSOur goals, commitments and targets are aligned with our material issues. Below,we have summarized our progress and provided examples of how we’re makinga positive contribution to society as we work toward them. All our initiatives arein progress.ASPIRATIONTOPIC AREAGOALS2019/2020 PROGRESS EXAMPLESImprove fuel economy across our global vehiclelineup, consistent with regulatory requirements andclimate stabilizationWe aspire to achieve carbon neutrality by 2050CLIMATE CHANGE/ENERGY/AIR/MATERIALSClimate Change: We aspireto achieve carbon neutralityby 2050.Reducing OurVehicle FootprintCombined car and truck fuel economy fell by 0.3 percent in 2019Award-winning EcoBoost and EcoBlue technology now used in 8 milli

Jun 24, 2020 · on the contents of this report, as well as our approach to reporting, at sustaina@ford.com. ABOUT OUR REPORTING SUITE This Sustainability Report details our sustainability performance for 2019 and early 2020. To supplement this report, we publish summary information online, at sustainability.ford.com , and in an eight-page summary.