by Jeffrey C Kadlowec, Architect
Sustainability Strategy
With a holistic approach of 1) continuous learning and adaptive capabilities, 2) flexible organization of collaboration, and 3) inclusive and diverse community, Ford has built a winning culture with a strong history transformed by passion and ambition (Ford 2020). Ford prioritizes quality and customer safety to create partnerships and opportunities. Ford also took steps to keep customers and employees safe during the pandemic by closing production sites, enabling remote work technology, implementing health programs, and producing ventilators, respirators, and personal protective equipment; amended safety requirements and restructured roles were extended during ‘return-to-work’.
Sustainable Development Goals
Ford recognizes the impact of climate change and seeks to achieve carbon neutrality by 2050 by reducing CO2 emissions (Ford 2020). Sustainability reports provide stakeholders with information about environmental, social, governance (ESG) and economic data (Bremser 2022). Reporting began in 1999 though ‘Connecting with Society’ and offers periodic updates on sustainability goals and progress with increasing recognition of resource constraints, population growth, and technological innovation that affect business. These measures are a more comprehensive look at overall value than financial statements leading to informed capital allocations. Though currently voluntary, roughly 95% of the 250 largest companies issue stand-alone sustainability reports. Ford’s long-term vision is “to improve people’s lives with the freedom to move more efficiently and sustainably.” The core focus involves emerging opportunities in electrification, autonomous vehicles, and mobility solutions in response to rapidly growing cities, changing lifestyles, and consumer aspirations.
Increasing Energy and Fuel Efficiency
With 68% of US customers in 2019 preferring trucks over cars, Ford has improved fuel economy of the F-150 by 16% and Expeditions 30% since 2012 (Ford 2020). Ford’s powertrain technologies include flex fuel (ethanol biofuel), turbo-charged direct-injection, compressed natural gas, and plug-in, hybrid and pure electric to reduce fuel expenditures. Fleet customers account for 30% of Ford’s business, purchasing hundreds or thousands of vehicles each year. These customers exhibit strong and increasing demand for greener vehicles, which must also be financially justifiable (Reich 2015). The Ford Fleet Purchase PlannerTM offers tools from simple calculators to precise optimization for strategic investment. Organizations with a large number of vehicles are in a unique position to meet significant improvements and are becoming of greater importance in developing economies. Examining usage patterns projects replacement vehicles and determines best options.
Future Sustainability Efforts
Improving operations and promoting best practices with suppliers builds on past achievements and mitigates future risks. Aspiring to reuse metals and using recycled and renewable materials, minimizes waste in efforts toward circular economy. With China, India, France, and the UK plans to phase out combustion engines by 2040, Ford is looking to deliver affordable electric vehicles at scale (Ford 2020). Self-driving vehicles could provide accessible convenience in urban settings, while sustainable transportation networks improve mobility. In a post-pandemic world, the automotive industry faces major transformation with accelerated research in intelligent and electric vehicles (Yize 2024). This presents huge challenges for traditional fuel companies and will impact future development. Ford Motor Company aims to explore these opportunities and provide objective solutions. As a world-renowned automaker, Ford has a historical advantage in manufacturing with substantial profits for research and investment.
References
Bremser, Wayne; Jermakowicz, Eva & Reinstein, Alan. (2022). Sustainability Reporting Insights: The Case of Ford Motor Company. Issues in Accounting Education. 37(1): 125-139. DOI: 10.2308/ISSUES-18-032.
Ford, Bill. (2020). What Drives Us: Sustainability Report Summary 2020. Ford Motor Company. www.sustainability.ford.com.
Reich, Daniel; Winkler, Sandra & Klampfl, Winkler. (2015). Ford Uses Analytics to Help Fleet Customers Buy More Sustainable Vehicles. Interfaces. 45(6): 543-553. dx.doi.org/10.1287/inte.2015.0808.
Yu, Yize. (2024). Market Competition Analysis and Strategic Research of Ford Motor Company. Highlights in Business, Economics and Management. 24: 1263-1273.
