Sustainability

OUR ROUTE TO SUSTAINABILITY CONNECTING WITH SOCIETY – FORD SUSTAINABILITY REPORT 2004/5 OUR ROUTE TO SUSTAINABILITY CONNECTING WITH SOCIETY – FORD SUSTAINABILITY REPORT 2004/5 About this report This is the sixth formal nonfinancial report of Ford Motor Company. Our first, “Connecting with Society,” appeared in the spring of 2000 and marked the start of an important journey for both our reporting and our business. Six years later, our reports continue to serve as a scorecard of our progress and performance against our social and environmental strategies to provide insight into our challenges and successes. Our industry, the business environment and societal expectations continue to evolve, and so does our reporting. This year’s printed report is shorter than in previous advise us formally on our report. On Page 47, you data record of key indicators is included in the print years. It is more tightly focused on the most material will find the Report Review Committee’s unedited report. Additional data are available on the Web. issues, and on our overall vision, strategy, challenges opinion of how well this report meets their The data cover all of Ford Motor Company’s wholly and opportunities. Users will continue to find an expectations. Also for the first time, we conducted and majority-owned operations globally, unless extensive set of data and information in the full Web a review to identify the most material issues to otherwise noted. Changes in the basis for reporting report at www.ford.com/go/sustainability. include in the print report (see Pages 8 to 9). or reclassifications of data previously reported are noted in the data charts. Much of the data in this We have changed the name of this report from This report covers the year 2004 and early 2005. report have been reported to government agencies the Ford Corporate Citizenship Report to the Ford It was prepared in accordance with the 2002 Global and verified internally or externally. However, we Sustainability Report, reflecting an evolution in our Reporting Initiative Sustainability Reporting have not sought third-party verification of all data. thinking that we discuss in the first sections of Guidelines. A complete index of GRI indicators is this report. available at www.ford.com/go/sustainability. This Sustainability Report was prepared by Company management and presented to the Environmental This year, for the first time, we engaged a committee The data are primarily for 2004 (for operations) and and Public Policy Committee of the Board of of stakeholders, the Report Review Committee, to for the 2005 model year (for vehicles). A five-year Directors.I Letter from Bill Ford Chairman and CEO 2 Letter from Jim Padilla President and COO 4 Our value chain and its impacts 6 Materiality analysis 8 Mobility 10 Climate change 16 Human rights 26 Ford Forum 36 Measuring our progress – 2004 at a glance 38 Performance data 39 Corporate profile 44 Letter from Niel Golightly Director, Sustainable Business Strategies 45 Report Review Committee 46 Report Review Committee letter 47 Glossary and acronyms 48 Closing the loop... more information and feedback 49 1 Setting the vision Bill Ford. Chairman and CEO At Ford Motor Company, we have made sustainability a long-term strategic business priority. The reason is simple: we are a 100-year-old company, and I want us to become a 200-year-old company. Sustainability is about ensuring that our business is innovative, competitive and profitable in a world that is facing major environmental and social changes. Our Company faces urgent short-term challenges Put another way, tackling environmental and social less fossil fuel and emit fewer greenhouse gases. that we have described in our Annual Report and will issues is not something a company does after it is The issue will become even more challenging as discuss in this document. We’re addressing these profitable; it must be something we do to be more growing markets like India and China expand their challenges by accelerating our business plans to profitable. In part, that’s because these issues touch own needs for energy. As a business we’re developing strengthen our balance sheet, optimize our global every aspect of the economies in which we operate. strategies – led by a vice-presidential task force and in footprint and deliver more great products faster. cooperation with companies like BP – to compete in That includes eliminating excess capacity, reducing the Global climate change is one of the most urgent this increasingly carbon-constrained economy. size of our workforce while improving its capability, examples. At Ford, we have long acknowledged the increasing our investments in fast-growing markets importance of climate change. We recognize its Climate change is also an example of a complex and speeding up our product development process. potential impact on economic as well as environmental 21st-century challenge that requires a systemic and social systems. Customers, investors and policy social, political, technological and business solution. Our success as a business in the near term is a pre- makers are increasingly focused on the need to burn Stabilizing the concentration of greenhouse gases in requisite to any strategy for future growth. However, our atmosphere while maintaining economic growth our responsibility to our customers, shareholders, demands corporate and political leadership and employees and communities includes preparing dialogue across traditional boundaries. It requires for the future without delay. While nobody can global coordination of technologies, government confidently predict what the world will look like a policies, markets and infrastructures. few decades from now, it is clear that strong, profitable companies going forward will be the Within our Company, climate change, and the ones that strive for sustainable use of environmental underlying issue of fuel economy, pose a particular and social capital in a rapidly growing global challenge. In North America, the fuel economy of our economy. The business case is clear: vehicles is competitive and in some cases even best-in-class within their respective segments. • Reduced use of non-renewable resources will However, the market-leading popularity of our trucks help us cut material and operating cost and avoid and SUVs results in a low average fuel economy the growing volatility of commodity prices. from our fleet as a whole. Across the industry, fuel • Society’s growing concern for environmental efficiency improvements compete for investment issues is creating growth markets for innovative with other product features and innovations, overall “green” products and technologies that generate affordability and pressing obligations like safety, new sources of revenue. health care and pension costs. Because of its • Increasingly stringent government regulations importance, we have devoted a major section of this around the world will favor companies that are report to climate change and will issue a stand- best positioned to address underlying alone report on the subject late in 2005. environmental and social priorities. • Research confirms that consumers assign Even as we grapple with this issue, we continue to increased brand value to companies that set the pace in our industry on important demonstrate a strong commitment to environmental and social priorities, such as reducing environmental and social responsibility. water consumption, conserving energy, recycling and • Sustainable companies are better able to reusing non-renewable materials, eliminating toxic attract and retain talented employees. materials, establishing codes of working conditions 2 and safety in our plants and supply chain, and rich and the economically and socially disadvantaged increase mutual understanding are usually more addressing public health issues from HIV/AIDS to as critical issues on the road to sustainable mobility. productive than an adversarial defense of special cancer to juvenile diabetes. You will find all these interests. That’s why engagement with policy issues and more addressed in this report. These issues become even more acute as hundreds makers, advocacy groups, consumers, investors, of millions of people around the world join the global business partners and employees is a cornerstone of Looming on the horizon are additional challenges as economic marketplace and claim access to the our drive to realize our vision. Already, in developing well as opportunities. The sheer scale of our industry lifestyle, including personal mobility, long enjoyed by our approaches to human rights and climate change, is enormous. In the United States, the auto industry the populations of developed markets. we have seen the value of listening, learning and is responsible for 6.6 million jobs, which is about acting in concert with thoughtful advocates. We will We know that smart competitors are racing to be 5 percent of all private-sector jobs and nearly put these lessons into practice as we develop our first with solutions for the 21st century, and we want 4 percent of Gross Domestic Product. No other strategy for the future. single industry is more linked to U.S. manufacturing to lead that race. strength or generates more retail business and I’m proud of the steps we have taken so far – most Our work is, therefore, urgent, and it is proceeding employment. The U.S. auto industry purchases notably the introduction of the Escape Hybrid, the along three paths: 60 percent of all the rubber and about 30 percent world’s first hybrid SUV; the reinvention of the Rouge of all the aluminum, iron and stainless steel used in Integrated strategy facilities as a model of 21st-century sustainable the United States. Since we see sustainability as core to our business manufacturing; our industry-leading actions in success, we are working to develop metrics, targets human rights; and the response of our employees The 61 million new cars and trucks sold globally and milestones to be explicitly integrated into our to human needs – notably in Southeast Asia after last year provide personal mobility and economic business plan, alongside the fundamentals of the December 26 tsunami and in the U.S.

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