Case study: How Ford Otosan promotes sustainability among its suppliers

What are the material issues the company has identified?

In its 2019 Sustainability Report Ford Otosan identified a range of material issues, such as vehicle fuel consumption and emission levels, customer satisfaction, vehicle and traffic safety, innovation and digitalisation. Among these, promoting sustainability among its suppliers stands out as a key material issue for Ford Otosan.

Stakeholder engagement in accordance with the GRI Standards              

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups Ford Otosan engages with:

To identify and prioritise material topics Ford Otosan engaged with its stakeholders through the following channels:

What actions were taken by Ford Otosan to promote sustainability among its suppliers?

In its 2019 Sustainability Report Ford Otosan reports that it took the following actions for promoting sustainability among its suppliers:

• Monitoring suppliers’ compliance
• Ford Otosan monitors the compliance of its suppliers with quality and operational standards through comprehensive audits. Ford Otosan contributes to the development of its suppliers with five different audits and field visits. In 2019, Manufacturing Site Assessment (MSA) audits were performed on 110 of Ford Otosan’s vehicle parts suppliers:
  • Q1 audits: Ford Otosan carries out its main audits through the Q1 – Number One in Quality certification system.
  • Capacity audits: Ford Otosan carries out audits within the scope of Ford Motor Company global capacity audits.
  • Production issues: Ford Otosan conducts field visits to resolve any problems and challenges suppliers face during production.
  • Performance development: Ford Otosan works on auditing and performance development based on certain criteria by identifying suppliers that are open to improvement through the Ford Motor Company global system.
  • Risk management: Ford Otosan takes actions to prevent possible risks in areas such as natural disasters, fire and union-related risks by visiting suppliers. In addition to the supplier risk management application, Ford Otosan also conducts a separate supplier risk assessment, where the criteria of shipment, quality performance, capacity adequacy and financial status are taken into account.

• Providing training
• In order to support the development of suppliers, Ford Otosan provides various trainings in the environmental, social, economic and ethical fields. In 2019, Ford Otosan provided a total of 4,952 person hour training to suppliers. Ford Otosan offers supplier trainings through the Ford Otosan Supplier Network (FOSN) – a classroom and online conference channel. Ford Otosan organises class trainings every month, where it gives priority to suppliers who are open to development. Together with its suppliers, Ford Otosan donates to non-governmental organisations in return for their training, to create social benefits. With all these efforts in 2019, Ford Otosan provided TL 120,000 of education support to the Turkish Education Foundation (TEV) and Darüşşafaka Society. In 2019, Ford Otosan supported the improvement of the shipment performance of suppliers by launching eight different online training modules via FOSN. In addition, Ford Otosan Supplier Development team completed the content of the MMOG LE V5 Supplier Trainings for the development of MMOG/ LE (Material Management Operations Guideline Logistics Evaluation) – an international logistics standard. Ford Otosan also launched the Material Capacity Confirmation Letter (MCCL) with online supplier trainings at FOSN. The suppliers prospectively follow the material programmes updated weekly and provide information about their status.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standards addressed in this case are:

1) Disclosure 308-1 New suppliers that were screened using environmental criteria

2) Disclosure 414-1 New suppliers that were screened using social criteria

Disclosure 308-1 New suppliers that were screened using environmental criteria does not correspond to any SDG.

Disclosure 414-1 New suppliers that were screened using social criteria corresponds to:

• Sustainable Development Goal (SDG) 5: Gender Equality
• Targets: 5.2
• Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
• Targets: 8.8
• Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
• Targets: 16.1

78% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.

7 GRI sustainability disclosures get you started

Any size business can start taking sustainability action

GRI, ISEP, CPD Certified Sustainability courses (2-5 days): Live Online or Classroom  (venue: London School of Economics)

• Exclusive FBRH template to begin reporting from day one
• Identify your most important impacts on the Environment, Economy and People
• Formulate in group exercises your plan for action. Begin taking solid, focused, all-round sustainability action ASAP. 
• Benchmarking methodology to set you on a path of continuous improvement

See upcoming training dates.
References:

1) This case study is based on published information by Ford Otosan, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:

http://database.globalreporting.org/

2) https://www.globalreporting.org/standards/gri-standards-download-center/

Note to Ford Otosan: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.