TAILIEUCHUNG - Ford Report on the BUSINESS IMPACT OF CLIMATE CHANGE

The emergence of a corporate culture of sustainability raises a number of fundamental questions for scholars of organizations. Does the governance structure of sustainable 2 firms differ from traditional firms and, if yes, in what ways? Do sustainable firms have better stakeholder engagement and longer time horizons? How do their information collection and dissemination systems differ? Finally, but importantly, what are the performance implications? Could meeting other stakeholders’ expectations come at the cost of creating shareholder value? On the one hand, some argue that companies can ―do well by doing good‖ (Godfrey, 2005; Margolis, Elfenbein and Walsh, 2007; Porter and. | BỉỉSỉNEẩẳ IMPACT OF CLIMATE Change Ford Report on the Business Impact of Climate Change Table of Contents Foreword 1 Introduction Implications 2 Actions 2 Challenges 3 Convergent Issues 3 Commitment 3 Background The climate issue 4 Business Drivers 4 Market Share 4 Regulatory compliance 4 Shareholder value 5 Industry Considerations 5 Strategic Roadmap 6 Strategic principles 6 Strategic actions 7 Product 7 Policy 8 Plants 9 People 9 Partnerships 9 Conclusion 10 Appendix 1 Excerpt from 2004-2005 Sustainability Report 11-20 Appendix 2 California GHG regulations 21 Foreword In November 2004 Ford Motor Company received a shareholder resolution from the Interfaith Center on Corporate Responsibility ICCR and the Coalition for Environmentally Responsible Economies Ceres and others requesting we release information specific to our greenhouse gas emissions strategy. Much of the information requested is reported annually in our Sustainability Report formerly called the Corporate Citizenship Report and we have excerpted the most recent Sustainability Report as an appendix to this report. However we agreed to publish the industry s first report dedicated to the issue of climate change and its effect on our business as well as the automotive industry as a whole. While we have worked closely with ICCR Ceres and other stakeholders throughout the writing of this report the material contained here is is our view of this important global issue. This report has been reviewed and approved by senior management the Office of the Chairman and Chief Executive OCCE as well as the Environmental and Public Policy Committee of the Board of Directors. What you will read in the following pages is a snapshot of work in progress. We will continue to work on technology policy marketing and product initiatives that we expect will move the issue - and our business - forward over the near to medium term. We hope that this report will encourage other companies and other industries to join us in an .

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