From Promise to Action on Net Zero is a series of research publications, interviews, and events exploring how companies are translating net zero emissions goals into practice. This interview presents one of our discussions with senior executives responsible for delivering their companies’ climate ambitions.
Aiste Brackley, Head of Research and Insights at the SustainAbility Institute by ERM, spoke with Mary Wroten, Director, Global Sustainability & ESG at Ford Motor Company, about Ford’s commitment to reaching net zero.
Aiste Brackley: In 2020 you announced a goal to reach net zero emissions globally by 2050. What were Ford’s motivations for setting this goal?
Mary Wroten: Before announcing our net zero commitment, we were committed to reducing our CO2 emissions in line with the Paris Agreement goals. We found that people outside of the sustainability space did not know what Paris-aligned meant, but they were a lot more familiar with what it meant to become carbon neutral. With this realization, we tapped a cross-functional team to develop a method through which we could commit to Paris and communicate this commitment in a manner that resonates with our customers and key stakeholders.
It took about a year for our team to come up with an answer as it’s not as simple as just picking a commitment and date. It was important for us to understand where our emissions came from so we knew where we should start. We also benchmarked ourselves against other companies to compare and contrast our commitments and actions. From there, we considered a myriad of different factors and questions: What would energy availability look like through to 2050? If we are to go the electric vehicle (EV) route, is there enough electric capacity and related infrastructure to power our vehicles? How do we address technology concerns like battery costs and range? How do we address different consumer needs like charging requirements, range limitations, and so on?
From these considerations, we came to our net zero commitment, which is housed in three main buckets: First, our net zero by 2050 commitment. Second, we set 2035 science-based targets for our vehicles and facilities and made other mid-term announcements. Lastly, the actions we are taking now: we committed $30 billion toward EVs by 2025, we are electrifying our most iconic vehicles, and we are establishing a closed-loop battery recycling program.
AB: 2050 is very far away, so how do you go about breaking down your commitment into manageable steps and actions?
MW: When you set your long-term goal, that is your North Star. Then you have to break that goal into interim actions. Companies skip over the “act now” piece because it is hard to do some things today.
In the automotive industry, for example, EV charging infrastructure is not built out to the extent needed for the transition. At Ford, we are bypassing this whole argument by making the vehicles and partnering with electricity companies to help build all of the elements that are required to make the EV transition happen.
AB: Scope 3 emissions are a big part of Ford’s carbon footprint. What are the key challenges you face with Scope 3 emissions and how are you planning to address them?
MW: We address Scope 3 by tackling our biggest emissions categories first. Those categories are the use of our vehicles (75 percent of our Scope 3 emissions) and our suppliers’ emissions (17 percent). Everything else will be addressed over time. Would we like to address 100 percent of our emissions? Absolutely, and we will over time, but our immediate focus is to address our biggest sources first.
To address our vehicle emissions, we are electrifying our most iconic vehicles, we are shifting our entire product portfolio to clean energy, and we are considering carbon capture and sequestration. There is not a one-size-fits all solution for suppliers, but we do require suppliers to report their emissions and set science-based targets through our Supplier Code of Conduct and terms and conditions.
AB: So far in your net zero journey, what have been your biggest challenges?
MW: The last time our industry was disrupted this much was when we went from horse and buggy to the internal combustion engine. Now we are going from internal combustion engine to electrification, so we have to rebuild everything all over again and learn from the successes and failures of prior technologies.
One part that we have not really dived into yet is bringing the customer along in the transition. If the customers are not a part of this journey, the automakers will make great vehicles but no one will want to buy them. In order to change that, we need to get customers into the vehicles. When a customer experiences a vehicle and sees how easy it is to charge at their house, and how easy they fit into their lifestyle, they will want to buy one.
AB: With COP26 upcoming, what do governments need to be doing more of to encourage EV adoption? What would Ford like to see?
MW: We expect to see more companies set net zero goals globally to keep the world within 1.5°C of global warming. We are hoping to see countries contributing more financial support to those most vulnerable to climate change. We also hope to see all countries uniting and working together to achieve the net zero future that we need to have. Right now, Europe is the ideal model for government action from both the supply and demand perspectives to incentivize EV adoption.
AB: What is the role of partnerships and collaboration in achieving net zero?
MW: Partnerships and collaboration are so critical because no one company can achieve net zero by themselves. This is why Ford has collaborated and developed strategic partnerships in order to help us achieve net zero all the way down to raw material extraction.
We joined IRMA (Initiative for Responsible Mining Assurance) and the Responsible Business Alliance, and we invested in Redwood Materials (an EV battery recycling company). We are also focused on industry partnerships. In this space, we work with Drive Sustainability in Europe and the Automotive Industry Action Group in the U.S.
AB: What do you think is your biggest success so far on your journey to net zero?
MW: First is making the commitment. When we first made ours, it made people uncomfortable because we did not have every aspect figured out yet. It is okay to not have everything figured out, but it was so important to set a North Star and have the recognition from our leadership team. Just by having our leadership commit to the net zero goal without having clarity of every single step was a success. And now we are determining the steps and we know it will take time to get all of the answers, and that is okay.
AB: Do you have any advice for companies who are still trying to bring their leaders on board?
MW: Use data – not just for GHG emissions for your company but external data from the Intergovernmental Panel on Climate Change (IPCC) and data about climate change in general. You need to zoom out and look at the planet and what changes are happening.
A lot of the education for our leaders happened when we developed our scenario analysis report. In the report, we took the two words of climate change and connected them to what it might mean for Ford and our customers. Companies need to do a scenario analysis to understand the implications of climate change to the planet, to their industry, and to their business. This will help make climate change and its impacts real to their executive teams.
AB: Did you have any final thoughts you wanted to share?
Sustainability professionals are always talking about how urgent a transition to a sustainable future is. And while it is urgent, it takes time to figure everything out. You want to do things right, and you want to make sure you land on the right solution.