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April 15, 2008
Ford Establishes Greenhouse Gas Reduction Plan
by Anne Moore Odell
Shareholders withdraw resolutions at Ford after the carmaker agrees to release its plans on how it
will decrease greenhouse gas emissions.
Ford (ticker: F) is first US automobile company
to publicly release its plans to meet earlier published goals of reducing its greenhouse gas (GHG)
emissions by at least 30% from its new vehicle fleet of light duty passenger cars and trucks by
2020. Investors concerned with climate change and a carbon constrained economy presented
climate-related shareholder resolutions to Ford which were withdrawn after Ford announced it would
release its GHG reduction plans.
As members of the US Climate Action Partnership, Ford, General Motors, and
Chrysler, along with other US companies, have already agreed to cut CO2 emissions by 60-80% by
2050. Ford is also a member of the voluntary Chicago Climate Exchange. Between 2000 and 2007, Ford
reduced global facility CO2 emissions by 39%, equaling a reduction of 3.6 million metric tons CO2.
Shareholders at the Interfaith Center on Corporate Responsibility (ICCR) and the Investor Network on Climate Risk Network (INCR) organized by Ceres withdrew resolutions at Ford after the company let investors
see detailed plans on how GHG deductions will be achieved.
"A growing number of investors
are concerned about climate-related business risks and CO2 reduction goals are an important gauge
of a company's commitment to manage these risks," said Mindy Lubber, president of Ceres, and
director of the INCR. "Given that motor vehicles are a major and fast-growing contributor to CO2
emissions in the US and abroad, automakers' handling of these issues is especially paramount."
"We have long shared productive dialogue with our shareholders on the issue of climate change,"
said John Viera director, Sustainable Business Strategy, Ford Motor Company. "Earlier this year,
we brought them in and took them through the modeling process we have been working on for the past
several years to determine CO2 targets and the steps we believe we need to take to reach those
Viera continued, "The model was created to look at boundary conditions including
costs, vehicle technologies, baseline fuels, biofuels and consumers. It is not intended to provide
'the answer,' but rather information on a range of possible solutions. The CO2 reduction levels we
have adopted represent our contribution toward meeting 450 part per million (ppm) to 550 ppm
This announcement is important because it is the first time a US
carmaker has laid out how it plans to achieve its CO2 reduction goals. The information will be
release in June in Ford's Sustainability Report.
"Long term investors need to know that
there is a plan in place for our company to be profitable in a carbon constrained economy," said
Sister Patricia A. Daly, executive director, Tri-State Coalition for Responsible Investment, and
representative for the Sisters of St. Dominic of Caldwell, NJ, the lead resolution filer.
Lubber lauds Ford's promotion of Sue Cishke to group vice president Sustainability, Environment
and Safety Engineering as another example of making sustainability a high priority at Ford. Cishke
will report directly to Ford's CEO.
Similar climate-change resolutions have been filed by
ICCR members at General Motors (GM) as well. These resolutions, which ask GM to create GHG
reduction plans and targets, are expected to be voted on later this summer. ICCR also has
resolutions at Chevron, Southern, and ExxonMobil asking companies to address climate change.
"Shareholders are currently seeking CO2 reduction goals from GM," said Carol Lee Rawn, senior
manager, Auto Programs at Ceres. "We hope that GM will demonstrate its commitment to managing
climate risk by adopting a target as well. Chrysler has set more limited goals on a vehicle class
basis; we hope that they will set overall goals as well."
Ford's Viera told
SocialFunds.com, "We believe it is useful to share with our investors and our customers our plans
and progress in addressing climate change and other sustainability issues. They should know where
we stand. Our approach is based on our heritage of democratizing technology. Our blueprint for
sustainability makes it clear our approach is based on affordable, volume related technology that
can affect millions of vehicles."
A record high 54 shareholder resolutions on climate
change were filed with US companies in 2008. ICCR and Ceres report that the 2007 proxy season saw
an average vote of 21.6% on 43 climate change resolutions.
"But, let's not fool ourselves,
these actions are only a beginning. Ford -- as well as General Motors -- need to do much more, and
quickly, to reclaim their leadership role in the global marketplace," said Lubber. "It's not just a
coincidence that these two corporate icons, once the embodiment of American innovation, are each
worth less today in terms of their market capitalization, than First Solar, a nine-year-old solar
company in Arizona."
In 2006, Ceres worked with Nissan who adopted a 40% CO2 reduction
goal from its vehicles by 2016 and a 70% reduction goal from its vehicles by 2050. Honda has also
adopted a CO2 product reduction goal of 10% reduction by 2012.
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