Risk & Compliance

Ford To Issue Climate-Change Report

Company bows to pressure from faith-based group and environmental activists.
Stephen TaubApril 4, 2005

Activist stockowners have struck again.

Yielding to a shareholder resolution filed by environmentally-focused investors, management at Ford Motor Co. indicated that it would issue a report on climate change by the end of the year.

The report will examine the business implications of greenhouse gas emissions, Ford’s product and manufacturing facilities actions, and advanced technology development. “We have long identified climate change as a serious environmental issue, and shareholders are increasingly asking about the risks as well as the opportunities associated with it,” said Bill Ford, chairman and CEO, in a statement. “It’s time for a broader, more inclusive public dialogue on the complex and important challenge of climate change; our report will be part of our contribution to that dialogue.”

Ford management said the company has been publicly sharing its perspective on climate change since 2000, when it published its first corporate citizenship report.

The climate change report will include details on greenhouse gas emissions from Ford products as well as its manufacturing facilities. It will also include a strategic analysis of climate change issues, including the potential impact of various policy and regulatory alternatives and their implications for technological developments.

Ford stated that it would draft its climate change report in consultation with a number of experts, as well as with the Interfaith Center on Corporate Responsibility (ICCR), a group of 275 faith-based institutional investors with over $100 billion in assets. CERES, a coalition of investors and environmental groups, will also contribute to the study.

Ford management said the automaker has been in dialogue with ICCR, Ceres, and other non-governmental organizations for several years. The primary filers of the shareholder resolution were the Sisters of St. Dominic of Caldwell, N.J., a member of ICCR and the Tri-State Coalition for Responsible Investment (CRI), and the Connecticut Retirement Plans and Trust Funds. The resolution was formally withdrawn last week.

In its own press release, CERES referred to the climate change report as a “first-of-its-kind.” It also pointed out that the report is the result of a shareholder resolution.

“We congratulate Ford for leading the U.S. auto industry in responding to shareholder concerns by addressing a variety of climate change-related policy and business scenarios,” said Sister Patricia Daly, executive director of the Tri-State CRI, a coalition of investors aligned with the ICCR, which has been encouraging more climate risk disclosure from U.S. companies.

Because motor vehicles are the fastest growing source of greenhouse emissions, an increasing number of investors are concerned that mounting consumer demand for cleaner vehicles could put the value of their investments at risk if companies get caught flat-footed, CERES notes in its press release.

Recently, the SEC informed Exxon Mobil Corp. that it must include two shareholder resolutions about global warming in the proxy for the oil company’s upcoming annual meeting.

Further, the September issue of CFO detailed the efforts of Sister Vickie Bergkamp, a member of The Adorers of the Blood of Christ, an order of Catholic women who help children of AIDS victims in Tanzania. Bergkamp is spearheading an effort at the faith-based ICCR to get large pharmaceutical companies to assess the impact of the HIV pandemic on their business models. A similar ICCR proposal in 2004 received a 98 percent yes vote at The Coca-Cola Co.

In an interview for that story, Bergkamp claimed the HIV pandemic is causing the infrastructure of society to break down in lesser developed countries. “No company should make money when this happens,” she argued.