Ford to Measure Supply Chain Emissions

by | May 21, 2010

Ford Motor Company plans to initially survey 35 top global suppliers on their energy use and estimated greenhouse gas (GHG) emissions in an effort to reduce carbon emissions in the automotive industry. These suppliers represent nearly 30 percent of Ford’s $65 billion in annual procurement spending.

The automaker will share feedback from its data collection process with World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) as part of its effort to better understand the carbon footprint of its supply chain and to create a carbon management approach for its supply base.

The initial suppliers surveyed by Ford manufacture components such as seats, steering systems, tires and metal components, which require more energy to produce and thus have a larger carbon footprint. While many of these suppliers already measure their GHG emissions, the project would drive collaboration and sharing of processes and practices that can lead to significant emissions reductions and help meet future regulatory requirements, says Ford.

“Climate change has the potential to affect all parts of our business, and is connected to other important issues — from water availability and energy security to human rights,” said Susan Cischke, group vice president, Sustainability, Environment and Safety Engineering. “Understanding the carbon footprint of our supply chain is a crucial part of our comprehensive global strategy to reduce greenhouse gases.”

The data gathered from suppliers will be evaluated using modeling software from PTC InSight. Preliminary work with PTC already has found areas where both Ford and its suppliers can reduce carbon emissions. Any reductions by suppliers would be in addition to Ford’s own goal of reducing greenhouse gases 30 percent by 2020 from the 2006 model year baseline.

Ford also is participating in the Carbon Disclosure Project Supply Chain Program and is working with the Automotive Industry Action Group to develop guidelines for measuring supplier emissions. The automaker plans to share its experience in measurement and reporting of corporate and supply chain emissions with the industry group.

Several of Ford’s top suppliers — DuPont, TRW Automotive Holdings Corp., Bosch and Johnson Controls — are already working to better understand their carbon emissions.

As an example, Johnson Controls, which supplies seats, interiors, electronics and batteries to Ford, has goals in place to reduce greenhouse gas emissions and a rating system that enables the company to measure the sustainability of its own supply base.

Ford’s announcement comes in the wake of Procter & Gamble’s recently announced sustainability scorecard and rating process to measure the environmental performance of its key suppliers.

In the retail sector, Wal-Mart has surveyed its supply chain on sustainability practices in the areas of energy and climate, material efficiency, natural resources, people and community for more than a year and believes its sustainability index could lead to a universal standard that can be applied across all retailers and suppliers.

In February, Wal-Mart announced it wants to reduce 20 million metric tons of greenhouse gas (GHG) emissions by the end of 2015 with help from its suppliers.

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