How Ford Motor Company acknowledges the Climate Sustainability as a risk and thier improvements

by Ankit Kumar
4 months ago

The  CDP or “Carbon Disclosure Project” is a major source of company carbon emission data for more than 800 investors managing assets of over $100 trillion. It tracks corporations’ environmental behavior, including their transparency, philosophies, and actions. The non-profit organization also measures companies’ efforts to protect water and forests. Over 6,200 companies disclose environmental data to the CDP.

In 2014, U.S. car company Ford has undertaken a range of programs to reduce its footprint via Partnership for a Cleaner Environment (PACE). The company inaugurated a system between Ford and it’s Tier 1 suppliers for reporting their water use and adopting water saving initiatives in multi-year phases. Suppliers are encouraged to learn from each other, establishing best practices, and implementing PACE across their own supplier networks.

The Two Major Environment Related Policy steps taken by the Ford Motor Company were:

01. Using Reducing Vehicle CO2 Emissions & using Sustainable  Materials: They acknowledge that climate change is real and that They share the responsibility for reducing greenhouse gas (GHG) emissions in our products. The company realized there is no single way to improve fuel efficiency and/or vehicle CO2 emissions. They had to take three different approaches and across the three areas of vehicles, fuels, and customers to achieve the same.

  • Smart Vehicle Choices:  Smart Vehicles are offering an affordable and accessible lower carbon option. These are improved electrified vehicles with new engine & transmission technologies. They have aerodynamic movements with reduced weight. They have an advanced mechanism that transmits the drive from the engine of a vehicle to its axle (powertrain) options.
  • Smart Fuel Choice: It involves the evaluation, development, and introduction of the vehicle in that use lower-carbon fuels – Electricity, Biofuels, Compressed natural gas (CNG) and Liquefied petroleum gas (LPG).
  • Smart Driving Choices: It refers admits to giving customers the choice of which vehicles and fuels to purchase and how those vehicles will be driven and maintained. And also Promoting “eco-driving” through training, information, and vehicle technology to help customers minimize fuel consumption and emissions.

$11 billion investment in electrified vehicle development, some of which was deferred from the traditional internal combustion engine (ICE) investment and keeping the above solutions in mind, they have an agenda of launching 40 new electrified vehicles to be launched by 2022. This makes their combined fleet fuel economy has improved by 9% compared to 2009.

02. Environmental Impact of our suppliers:  To understand their suppliers’ greenhouse gas (GHG) emissions, water use, and address the risks and opportunities associated with them, they surveyed 249 suppliers with Supply chain questionnaires and 209 suppliers with a selection of their supply base every year, using the CDP Supply Chain program’s Climate Change and Water Security questionnaires. 81% of suppliers reported integrating climate change into their business strategy in 2017 while 69% of suppliers reported having a water-related target or goal in 2017 which was 64% in 2016. 81% of suppliers reported having an emissions reduction target or goal in 2017, which was 64% in 2016. The two surveys provided then with qualitative and quantitative information about how their suppliers manage environmental risks and impacts, helping them to identify “hotspots” for GHG emissions and water use.

The automotive supply chain is complex, with many tiers of suppliers and sub-suppliers between the original source of the materials used in the manufacturing process and the likes of Ford. Their supply chain includes suppliers of parts and components for vehicle production, as well as indirect suppliers of facilities, equipment, materials, and services. The Ford Motor Company rely on thousands of suppliers to provide them with the materials, parts, and services they need to make their products. By sharing best practices among themselves, they can help the suppliers to lower their costs, improve the quality of their products and services, and meet their own sustainability targets.

Referring to the sustainability report 2017-18, The Ford Motor look at climate change as part of risk management because according to the survey by leading agencies, Instead of falling, the global emissions are set to rise in 2018. The source released that the Intergovernmental Panel on Climate Change (IPCC) report released says that to keep global average temperatures from rising above 1.5°C, the world needs to reach net-zero greenhouse-gas emissions as soon as 2050. Emissions must not only drop; they must do so rapidly. Ford’s identifies that Climate change is one of the nine major salient issues as a risk of the most severe negative impact through Ford’s activities and business relationships. Their climate change strategy is base on their commitment to do their share in limiting the global temperature increase to less than 2°C. Which according to many scientists, businesses and government agencies have concluded, will help to forestall or substantially delay the most serious consequences of climate change. This is extremely challenging and requires a major effort globally to stabilize carbon dioxide (CO2) concentrations in the atmosphere. They have developed their approach based on the research and modeling by the recognized authorities such as International Energy Agency. They have calculated the 2°C stabilization emission reduction levels for LDVs over time, resulting in “CO2 glide paths” for the global and light-duty vehicle (LDV) CO2 emissions taking into account the different regions, vehicle sizes, fuel consumptions, and biofuel availability. They also applied the methodology to determine CO2 reduction targets for our facilities. They review their glide path model every year and carry out major updates every five years to ensure alignment with the latest scientific knowledge. Their CO2 model is not intended to provide “the answer,” but a portfolio of possible vehicle and fuel solutions, as well as insights into cost-effective mobility choices, in a carbon-constrained world.

 You may refer to the full detailed report here.

1 Comment

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