Why is an auto company talking about water?

Not surprisingly, when I am asked to participate in professional conferences, the requests center on Ford's view of the future of transportation. It's a topic central to our planning and product strategy for years to come. But several weeks ago I had the opportunity to discuss a very different strategic issue, one that may have had some people wondering: why is an auto company talking about water? After all, there are other industries including food and beverage, chemicals and mining that are far more water intensive.

The answer is simple. Water conservation has long been integral to Ford's overall sustainability strategy. Now, water issues are becoming increasingly important to our stakeholders including our investors, our business partners and our customers.
The issues surrounding water are complex ones. Global water consumption has been increasing at more than twice the rate of population growth and some suggest it could triple within the next 50 years. The Organization for Economic Cooperation and Development forecasts that without new policies, 47 percent of the world's population will be living in areas of high water stress by 2030. The rise of global populations, a rapid rate of economic growth occurring in developing countries and the uncertain impacts related to climate change all contribute to the recognition that global water scarcity is now considered an emerging risk for corporations.

A decade ago, Bill Ford announced our voluntary Global Water Management Initiative. It focused on water conservation, the reuse of storm and process water at our manufacturing facilities and management of water quality. We managed, over a nine year period, to reduce water consumption from our global manufacturing operations by more than 62 percent, the equivalent of more than 10.5 billion gallons.

We learned a lot along the way about a broad range of actions that helped us minimize our water use. For example, we implemented a reverse osmosis process to recycle water in a number of our production plants which allows us to avoid using higher quality water that is suitable for human consumption. We've learned to use innovative parts washing system to reduce wastewater and cut energy consumption. We look to new technologies to lubricate cutting tools with a fine spray of oil rather than convention wet machining that required pumping millions of gallons of metal working fluids and water to cool and lubricate tools. They are not the kinds of actions that attract headlines but they do make an impact and they do reflect our commitment to water management.

That commitment also led us to join CDP Water Disclosure as a founding responder, the first automotive company to do so. Water Disclosure is run by the non-profit Carbon Disclosure Project (CDP), which Ford is also active in. CDP first established the disclosure and reporting framework used by 2,500 of the world's largest companies to report carbon emissions. That approach is now being extended to managing the world's shrinking water resources. CDP Water Disclosure will serve as a central clearinghouse for Ford and other participating companies to report on water usage, water risks and water management plans of company operations and their supply chains.

Managing risk begins with measurement to deliver a deeper understanding of where and how much water is being used. At Ford, we have been tracking our efforts to reduce water consumption, energy use, carbon dioxide emissions and waste sent to landfills through a Global Emissions Manager (GEM) database since 2003. It is through tracking that we have learned how to set more effective environmental management targets.

We chose to become part of CDP Water Disclosure because we believe it can help companies throughout the world move toward greater understanding of water as a strategic business issue as well as offer encouragement to implement effective water management and conservation.

The end goal for all of us is sustainable water use, for our businesses, for the environment and for society with full recognition that water is the world's most critical resource.