Ford expands program for measuring suppliers’ carbon footprint
16 October 2011
Ford Motor Company has more than tripled the size of its program to understand and measure suppliers’ carbon footprint. Ford is surveying the energy use and carbon emissions of 128 global suppliers, accounting for nearly 60% of the company’s $65 billion in annual purchases. The new group is an expansion of last year’s survey population, which included 35 top suppliers. It includes companies that supply vehicle production parts and components, information technology and logistics services.
Understanding the carbon footprint of our supply chain is a fundamental part of learning how to reduce the total environmental impact of our industry. By expanding our program to a cross-section of suppliers, we will significantly increase our understanding of suppliers' ability to manage their carbon impacts and further inform the creation of a broad-based carbon management system.
—Tony Brown, group vice president, Ford Global Purchasing
The suppliers in the 2010 request included companies that make commodities such as seats, steering systems, tires and metal components, which require more energy to produce and thus have a larger carbon footprint. A key finding from the 2010 responses was variability in supplier readiness to measure and report greenhouse gas emissions. The responses received provided insight into the risk management opportunities for the broader automotive supply base.
From these results, 80% of respondents indicated that they track their carbon emissions, and 50% of those companies indicated that they externally report their emissions.
The results clearly demonstrated that those high-impact suppliers that we had hoped were paying attention to greenhouse gas emissions, in fact were doing so. However, these results may not represent the broader global automotive supply base’s readiness to track, report and proactively manage carbon emissions.
—Monique Oxender, global manager of Ford’s supply chain sustainability
In addition to establishing a baseline for its own supply chain carbon footprint, Ford has led industry development of a guideline for estimating, collecting and reporting manufacturing facility-based greenhouse gas emission data. The company has helped to convene other automakers and Tier 1 suppliers at the Automotive Industry Action Group (AIAG) to develop the guidelines and streamline information requests from automakers to suppliers. This is similar to the work that the Carbon Disclosure Project (CDP) is doing with their supply chain program across multiple industries. Ford is one of two automakers (the other being Jaguar Land Rover) participating in the CDP Supply Chain Program for 2011.
Ford was also the only automotive company to participate in the roadtest of the new corporate value chain (Scope 3) greenhouse gas reporting standard developed by the World Resources Institute/World Business Council for Sustainable Development (WRI/WBCSD). The Scope 3 Greenhouse Gas Accounting and Reporting Standard, will provide a standardized method to inventory the emissions associated with corporate value chains, taking into account impacts both upstream and downstream of a company’s operations. The final Scope 3 Standard will be published by WRI/WBCSD in October.
Could this become a smart under hand way to exclude or favor certain suppliers?
Another program could be to measure the well to wheel vehicle efficiency to exclude or favor certain brand or models.
For example, a Hummer like vehicle could get -400 points while a Prius would get +300 points.
Import tariffs could use those smart programs to apply variable tariffs on all imported goods.
Other countries could do the same using other factors to exclude our products.
A great commercial war could be generated.
Posted by: HarveyD | 16 October 2011 at 08:16 AM
This could be an ABOVE board way to exclude or favor certain suppliers - namely, those with a poor or good carbon footprint.
With free entrprise they are free to exclude anyone they want for ANY reason - or none.
If they want to favor domestic suppliers, even though they are more costly, they can.
Posted by: ToppaTom | 16 October 2011 at 01:37 PM
TT...if suppliers with higher carbon foot print offer lower cost products, we all know which one will sell best.
Posted by: HarveyD | 17 October 2011 at 02:35 PM
A supplier that is competent but with higher carbon foot print will likely lower that foot print as much as he can, quickly but economically.
This close scrutiny of the real cost effectiveness comes free with enterprises that survive.
But if California or the US Gov can offer some grants quickly enough, cost effectiveness becomes secondary, at best.
Posted by: ToppaTom | 18 October 2011 at 05:33 AM