Case study: How Ford reduces emissions from logistics operations
As a leading global automaker, with 166,000 people working in plants and offices in over 100 countries around the globe, Ford’s logistics operations, from receiving parts and components from suppliers to delivering finished vehicles to dealerships, represent an important opportunity to reduce Ford’s environmental impacts, especially with regard to emissions.
This case study is based on the 2017/18 Sustainability Report by Ford that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Abstract
Abstract
Ford seeks to achieve emissions reductions in its logistics operations by, among others, improving the efficiency of processes Tweet This!, adopting new technology and using alternative modes of transport. In order to reduce emissions from logistics operations Ford took action to:
- improve the efficiency of its network
- update vehicle fleets and optimise packaging
- collaborate to improve measurement and reporting
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With this case study you will see:
- Which are the most important impacts (material issues) Ford has identified;
- How Ford proceeded with stakeholder engagement, and
- What actions were taken by Ford to reduce emissions from logistics operations
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What are the material issues the company has identified?
In its 2017/18 Sustainability Report Ford identified a range of material issues, such as product carbon footprint and fuel economy, ethical business practices, supply chain management, assessment, capacity building and performance, human rights, customer satisfaction, product quality and safety. Among these, reducing emissions from logistics operations stands out as a key material issue for Ford.
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:
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 engages with:
| Stakeholder Group | Method of engagement |
| Communities | · Community Relations Committees · Interactions with governments · Membership of associations · Dialogue with nongovernmental organisations · Ford Fund · Driving Skills for Life program |
| Customers | · Consumer Insight process · Market research · Customer care programs · Dealer interactions · Ford.com website · Ford Owners magazine |
| Dealers | · Intranet communications · Brand sales and service representatives · Brand Dealer Councils · Dealer roundtables · President’s Circle · Salute to Dealers · Advertising and public service announcements · U.S. NADA Dealer Attitude Survey |
| Employees
| · Intranet site · Sustainability Report and executive summary · Social media applications · Union representatives · Joint labor–management committees · Webcasts, videos, blogs and executive Q&A sessions with senior management · “Town Hall” meetings · Employee surveys · Employee Resource Group initiatives · Test drive and product reveal events |
| Investors | · Investment community forums · Quarterly earnings communications · Annual shareholders’ meeting · Annual report · Proxy statement · SEC filings (e.g., 10-K, 10-Q, 8-K) · Ratings and rankings |
| Suppliers | · Top Supplier meetings · Ford Partnership for a Cleaner Environment (PACE) · Aligned Business Framework supplier dialogue sessions · Supplier quality roundtables · Supplier Diversity Development Networking · External supplier organisations · Coalitions including EICC |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Ford carried out interviews with both internal and external stakeholders, who were asked to rate issues according to importance.
What actions were taken by Ford to reduce emissions from logistics operations?
In its 2017/18 Sustainability Report Ford reports that it took the following actions for reducing emissions from logistics operations:
- Improving the efficiency of Ford’s network
- To minimise the impacts of its inbound and outbound freight, Ford examines every opportunity to reduce the number of miles travelled and explore more fuel-efficient and lower-carbon modes of transport. Ford’s network efficiency initiatives include improved route planning, regional distribution centres to coordinate deliveries and “Milk run” routes with several collection points, along with driver training in fuel-efficient driving techniques. In addition, Ford uses rail, sea and river transport to reduce emissions and road miles, as well as multimodal solutions (e.g., “SWAP bodies”: road trailers that can also be used for rail).
- Updating vehicle fleets and optimising packaging
- Ford constantly updates its fleets to ensure it complies with the latest requirements of ISO 14001 and other regulatory standards. Accordingly, Ford seeks to utilise latest engine technologies and equipment modifications (for example, deflectors and speed limiters), as well as new packaging designs that carry extra loads. Ford also tries to achieve greater load density, for fewer trips and lower fuel consumption.
- Collaborating to improve measurement and reporting
- Quantifying and reporting freight emissions helps Ford minimise its total life cycle carbon emissions and reduce its overall environmental footprint. Accordingly, Ford works with industry bodies and standards agencies to improve reporting methods, such as the Scope 3 GHG Emissions Standard, developed by the World Resources Institute (WRI) and World Business Council for Sustainable Development (WBCSD). Ford is also actively collaborating with a team of students from the University of Michigan School for Environment and Sustainability (UM-SEAS) to evaluate its current CDP Scope 3 submission. In addition, through the Automotive Industry Action Group (AIAG) in North America, the U.K. Department for Transport and Odette International in Europe, Ford encourages others in its industry to improve their measurement and reporting of GHG emissions.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standards addressed in this case are:
1) Disclosure 305-3 Other indirect (Scope 3) GHG emissions
2) Disclosure 305-5 Reduction of GHG emissions
Disclosure 305-3 Other indirect (Scope 3) GHG emissions corresponds to:
- Sustainable Development Goal (SDG) 3: Ensure healthy lives and promote wellbeing for all at all ages
- Business theme: Air quality
- Sustainable Development Goal (SDG) 12: Ensure sustainable consumption and production patterns
- Business theme: Air quality, Transport
- Sustainable Development Goal (SDG) 13: Take urgent action to combat climate change and its impacts
- Business theme: GHG emissions
- Sustainable Development Goal (SDG) 14: Conserve and sustainably use the oceans, seas and marine resources for sustainable development
- Business theme: Ocean acidification
- Sustainable Development Goal (SDG) 15: Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
- Business theme: Forest degradation
Disclosure 305-5 Reduction of GHG emissions corresponds to:
- Sustainable Development Goal (SDG) 13: Take urgent action to combat climate change and its impacts
- Business theme: GHG emissions
- Sustainable Development Goal (SDG) 14: Conserve and sustainably use the oceans, seas and marine resources for sustainable development
- Business theme: Ocean acidification
- Sustainable Development Goal (SDG) 15: Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
- Business theme: Forest degradation
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References:
1) This case study is based on published information by Ford, 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 at the link:
https://corporate.ford.com/microsites/sustainability-report-2017-18/doc/sr17.pdf
2) https://www.globalreporting.org/standards/gri-standards-download-center/
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