Ford Sustainability Report Shows Important Progress on the Rights of Workers and Indigenous Peoples but Disappoints on Clean Steel and Aluminum

April 23, 2024

Ford Sustainability Report Shows Important Progress on the Rights of Workers and Indigenous Peoples but Disappoints on Clean Steel and Aluminum

Washington, D.C. - Ford Motor Company released its annual sustainability report on Monday, which demonstrates important progress on ensuring respect for the rights of Indigenous Peoples and workers in its supply chain but, disappointingly, falls short of expectations of civil society groups in the Lead the Charge network, with regards to clean steel and aluminum.

"It is commendable that Ford now has a policy that explicitly references the rights of Indigenous Peoples as prescribed by the UN Declaration of the Rights of Indigenous Peoples (UNDRIP) and ensures the right to Free, Prior and Informed Consent (FPIC). This policy commitment, including the expectation that suppliers obtain FPIC, are a good first step. With the demand for transition minerals near and on Indigenous Peoples lands ramping up, as SIRGE, we look forward to seeing how these commitments are implemented and how Ford's suppliers will begin to operationalize these expectations," said Galina Angarova, executive director of the SIRGE Coalition.

On human rights, Lead the Charge experts observed positive progress where Ford updated their human rights policywith an explicit commitment to respecting the United Nations Declaration on the Rights of Indigenous Peoples, in addition to adding a requirement in their Responsible Materials Sourcing Policy that their raw material suppliers respect Indigenous Peoples' right to Free, Prior and Informed Consent. Ford has also incorporated the living wage commitment announced in last year's report as a requirement in its supplier code of conduct so that it applies to Ford's suppliers as well as Ford itself.

"Sourcing from an IRMA-audited mine is a step in the right direction, but Ford can and should do more to leverage its influence to safeguard its supply chain from human rights and environmental harms. The next step for Ford is to publicly disclose its timeline for demanding that all mines in its supply chain undergo IRMA audits." said Vuyisile Ncube, corporate advocacy coordinator for the Making Clean Energy Clean campaign, Earthworks.

"Ford stands out as one of only a few automakers to explicitly support a living wage. While we are pleased to see Ford's support of a living wage, we would like to see more information on how the company defines living wage and on how it plans to implement it throughout its value chain. The ILO's recent living wage report provides a clear definition of living wage and a set of key principles that companies should abide by when creating and implementing a living wage policy. This can serve as a crucial starting point for Ford as it operationalizes its support for a living wage," saidAaron Acosta, program director at Investor Advocates for Social Justice.

Disappointingly, however, Ford has demonstrated almost no progress on building cleaner steel and aluminum supply chains since announcing that it had joined the First Movers' Coalition sector groups on these metals, which entails committing to ensuring at least 10% of their annual steel and aluminum procurement volumes by 2030 are near-zero emissions. In the report, Ford disclosed no new agreements with steel or aluminum suppliers to support greater investment in, and production of, clean steel and aluminum, disappointing analysts and experts who have been hoping for Ford to take more aggressive action on cleaning up these supply chainssince joining the First Movers' Coalition. The report does mention 3 MOUs with European steel makers which were previously announced.

"The report from Ford today was a missed opportunity to renew its commitment to decarbonize its steel supply chain and lead the auto industry towards fossil-free supply chains. We were encouraged to see Ford Motor Company announce three Memoranda of Understanding with European steel suppliers in 2022 for low carbon steel, but the company's progress has stalled," said Carly Oboth, senior supply chain campaigner with Public Citizen's Climate Program.

The report includes positive news detailing increased reclamation of aluminum from transmissions and engines. However, progress on expanding the company's "closed-loop recycling system" for aluminum appears stalled. Ford repeated similar figures on recycling aluminum in previous years despite increased auto sales in 2023and likely increases in production.

As the top scorer in the Lead the Charge annual leaderboard, which was highlighted in the report, including in the CEOs letter, Ford plays a key role in building clean and equitable auto supply chains, and their report offers insight into emerging trends in supply chain sustainability.

"The Ford Motor Company made significant commitments in late 2022 to increase the procurement of sustainably-manufactured aluminum. While these were accounted for in the Lead the Charge leaderboard for 2023, there was very little further progress from Ford in the last calendar year. This comes despite Ford's increased production and sales in 2023. Moreover, the new sustainability report sidestepped concerns raised in March 2023 around deforestation and environmental harms in Brazil's Amazon rainforest tied to ore mining that supports aluminum used in the Ford F-150 Lightning. We look to Ford to build on its commitments in 2022 and make substantive and ambitious agreements with aluminum producers that would provide more direction and assurance to its suppliers and metals industry at large," said Yong Kwon, senior policy advisor of the Industrial Transformation Campaign, Sierra Club.

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