Accelerating Today for a Better Tomorrow We are changing the way the world moves to make people’s lives better Sustainability Report 2015/16 www.sustainability.ford.com Ford Motor Company Sustainability Report 2015/16 | www.sustainability.ford.com 2 SUSTAINABILITY GLOBAL PRODUCTS AND SUPPLY OUR AT FORD MOBILITY CUSTOMERS OPERATIONS CHAIN COMMUNITIES PEOPLE GOVERNANCE IN THIS SECTION • Letter from William Clay Ford Jr. and Mark Fields SUSTAINABILITY • Sustainable Business Strategy • Key Sustainability Strategies • Our Value Chain Impacts AT FORD • Prioritizing Key Issues • Performance and Reporting Transforming Ford into an automotive • Regional Reports and a mobility company. “Change is upon us. We are reinventing this company in ways • We celebrated the 10-year anniversary of the Ford Volunteer Corps that will make it incredibly relevant for the next 50 years.” with a Global Month of Caring, and launched new programs to develop our next generation of philanthropic leaders and to offer William Clay Ford Jr. employees funding for new community projects Executive Chairman With sustainability deeply embedded in our overall strategy, we remain committed to running a strong and responsible business that treats our customers, our employees, our communities and our planet with respect. William Clay Ford Jr. Mark Fields Letter from William Clay Ford Jr. Executive Chairman President and Chief Executive Officer and Mark Fields Contributing to a better world always has been a core value at Ford, and our commitment to sustainability is a key part of our company DNA. Ultimately, our vision is to Sustainable Business Strategy make people’s lives better by changing the way the world Our strategy has one foot in today and one foot in moves, just as Henry Ford did more than a century ago. tomorrow – encompassing our core business as an That’s why, in one of the most significant strategic shifts in our history, automaker and new opportunities in mobility. we are expanding our business model to be both an auto and a mobility company. Our strategy involves continually strengthening and investing Reinventing Ford: Automotive and Mobility in our core automotive business, while aggressively pursuing new emerging opportunities through Ford Smart Mobility – our plan to be a leader in connectivity, mobility, autonomous vehicles, the customer experience, and data and analytics. As we continue to produce world-class vehicles, we are using innovative thinking and advanced technology to solve tomorrow’s biggest transportation challenges today. While our industry – and the world around us – continues to evolve faster than ever, our entire team remains fully committed to keeping sustainability at the heart of our strategy. To achieve our sustainability goals, we will continue to drive innovation in every part of our business and maximize our environmental performance. For example, we continue to lead industry efforts to tackle the issue of human rights and enhance working conditions throughout our supply chain. We also know that our sustainability efforts today can bring about a better tomorrow: Ford’s vision is people working together as a lean, global enterprise to make • We are investing $4.5 billion in electrified vehicle (EV) solutions and people’s lives better through automotive and mobility leadership. will add 13 new EVs to our portfolio by 2020 • Our continued investment in lightweighting technologies is helping We are continuing to invest in and strengthen our core business of us reduce overall vehicle weight and improve fuel economy designing, manufacturing, marketing, financing and servicing cars, • Ford is the only automaker named to the World’s Most Ethical SUVs, trucks and electrified vehicles. Company® list by Ethisphere Institute, and we have made the list At the same time, we’re aggressively pursuing emerging opportunities for seven consecutive years through Ford Smart Mobility – our plan to be a leader in connectivity, • Ford also was named one of the world’s Best Global Brands in 2015 mobility, autonomous vehicles, the customer experience, and data by Interbrand and analytics. • We earned an “A” grade for our water conservation efforts from CDP In our journey to become an auto company and a mobility company, • By sharing best practices through our Partnership for a Cleaner consumers are at the heart of our approach. Through new mobility Environment (PACE) program, we are lowering the collective offerings, we’re transforming how we interact with our customers to environmental footprint of our entire supply chain provide them a great experience. Ford Motor Company Sustainability Report 2015/16 | www.sustainability.ford.com 3 SUSTAINABILITY GLOBAL PRODUCTS AND SUPPLY OUR AT FORD MOBILITY CUSTOMERS OPERATIONS CHAIN COMMUNITIES PEOPLE GOVERNANCE Why Change? • Accelerate the development of new products, services and experiences that customers want and value Ford makes great vehicles but that’s no longer enough. To be successful • Finance our plan and maintain a strong balance sheet 50 years from now, we need to adapt and transform to meet the • Work together effectively as one team, leveraging Ford’s global challenges of a fast-changing world. assets. Technology Digital technology and the sharing economy are disrupting traditional Our Focus Areas patterns of car use and ownership One Ford Air Quality Acceleration Congestion and air quality affect millions of people every day in cities across the globe Product Excellence Delivered with Passion Emissions Vehicles and other forms of transportation emit greenhouse gases and Innovation contribute to climate change In Every Part of Our Business Ford is responding to these global trends and challenges by leveraging our core strengths in automotive while driving innovation to create Our Blueprint for Sustainability mobility solutions of the future Our Blueprint for Sustainability complements our One Ford plan. It focuses on our products and environmental footprint, and encompasses Creating Value strategies for addressing global issues linked to economic development, social sustainability, energy security and environmental sustainability. If we get it right, there are tremendous opportunities. As we continue to execute our One Ford plan, our Blueprint for Ford’s strategy is not only to create profitable growth and economic Sustainability ensures that we also deliver our pledge to create a value. The journey to become both an auto and a mobility company better world. gives us important opportunities to foster human progress and sustain the environment. Alignment around our plans and policies is key to leveraging the company’s full potential to drive value and address global sustainability For instance, as we continue to improve the fuel economy and issues. With this in mind we have initiated an engagement program to greenhouse gas emissions performance of our vehicles, our vision is integrate sustainability across the organization. to make Ford Smart Mobility solutions accessible to as many people as possible; helping individuals use different forms of transportation – not only cars and trucks – easing congestion, improving air quality and Our Creating Value Roadmap democratizing sustainable ways to move around. Our Creating Value Roadmap is an internal process and an operating philosophy. We use it to develop strategy, adapt to change and ensure that we contribute to all forms of capital: • Economic capital – delivering return on investment and creating new jobs Delivering Our Strategy • Social capital – working in our communities to increase opportunities and improve quality of life We’re challenging ourselves to transform and be • Environmental capital – developing greener products and operating prepared for the future by accelerating our One Ford plan, with environmental efficiency by implementing our Blueprint for Sustainability and by Read more about the key business processes we use to deliver our following our Creating Value Roadmap. strategy, including our Creating Value Roadmap. A Unified Approach Each plan supports the others to drive corporate goals and generate sustainable, profitable growth. Integrating Sustainability Ford Plans Developing and executing integrated sustainability • One Ford plan strategies globally means we can drive value • Blueprint for Sustainability creation consistent with the long-term preservation • Creating Value Roadmap and enhancement of environmental, social and Great Products financial capital. A full family of vehicles with best-in-class quality, fuel efficiency, safety and smart design Our Objectives Strong Business In 2015, we initiated a program to: A business well positioned for sustainable success • Enable better communication and full engagement on sustainability Better World across the enterprise Addressing global environmental and social challenges including climate • Achieve alignment on Ford’s Integrated Sustainability vision across change, water scarcity and natural resource depletion business units and functional skill teams, looking for best practices and efficiencies Our One Ford Plan • Inventory sustainability initiatives across business units and The strategic priorities of our One Ford plan are to: functional skill teams and determine where to go further • Ensure our company is structured to operate profitably at the • Establish a global integrated sustainability operating system current demand and changing model mix Ford Motor Company Sustainability Report 2015/16 | www.sustainability.ford.com 4 SUSTAINABILITY GLOBAL PRODUCTS AND SUPPLY