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April 15, 2008

Ford Establishes Greenhouse Gas Reduction Plan
    by Anne Moore Odell

Shareholders withdraw resolutions at Ford after the carmaker agrees to release its plans on how it will decrease greenhouse gas emissions. -- Ford (ticker: F) is first US automobile company to publicly release its plans to meet earlier published goals of reducing its greenhouse gas (GHG) emissions by at least 30% from its new vehicle fleet of light duty passenger cars and trucks by 2020. Investors concerned with climate change and a carbon constrained economy presented climate-related shareholder resolutions to Ford which were withdrawn after Ford announced it would release its GHG reduction plans.

As members of the US Climate Action Partnership, Ford, General Motors, and Chrysler, along with other US companies, have already agreed to cut CO2 emissions by 60-80% by 2050. Ford is also a member of the voluntary Chicago Climate Exchange. Between 2000 and 2007, Ford reduced global facility CO2 emissions by 39%, equaling a reduction of 3.6 million metric tons CO2.

Shareholders at the Interfaith Center on Corporate Responsibility (ICCR) and the Investor Network on Climate Risk Network (INCR) organized by Ceres withdrew resolutions at Ford after the company let investors see detailed plans on how GHG deductions will be achieved.

"A growing number of investors are concerned about climate-related business risks and CO2 reduction goals are an important gauge of a company's commitment to manage these risks," said Mindy Lubber, president of Ceres, and director of the INCR. "Given that motor vehicles are a major and fast-growing contributor to CO2 emissions in the US and abroad, automakers' handling of these issues is especially paramount."

"We have long shared productive dialogue with our shareholders on the issue of climate change," said John Viera director, Sustainable Business Strategy, Ford Motor Company. "Earlier this year, we brought them in and took them through the modeling process we have been working on for the past several years to determine CO2 targets and the steps we believe we need to take to reach those targets."

Viera continued, "The model was created to look at boundary conditions including costs, vehicle technologies, baseline fuels, biofuels and consumers. It is not intended to provide 'the answer,' but rather information on a range of possible solutions. The CO2 reduction levels we have adopted represent our contribution toward meeting 450 part per million (ppm) to 550 ppm stabilization pathways."

This announcement is important because it is the first time a US carmaker has laid out how it plans to achieve its CO2 reduction goals. The information will be release in June in Ford's Sustainability Report.

"Long term investors need to know that there is a plan in place for our company to be profitable in a carbon constrained economy," said Sister Patricia A. Daly, executive director, Tri-State Coalition for Responsible Investment, and representative for the Sisters of St. Dominic of Caldwell, NJ, the lead resolution filer.

Lubber lauds Ford's promotion of Sue Cishke to group vice president Sustainability, Environment and Safety Engineering as another example of making sustainability a high priority at Ford. Cishke will report directly to Ford's CEO.

Similar climate-change resolutions have been filed by ICCR members at General Motors (GM) as well. These resolutions, which ask GM to create GHG reduction plans and targets, are expected to be voted on later this summer. ICCR also has resolutions at Chevron, Southern, and ExxonMobil asking companies to address climate change.

"Shareholders are currently seeking CO2 reduction goals from GM," said Carol Lee Rawn, senior manager, Auto Programs at Ceres. "We hope that GM will demonstrate its commitment to managing climate risk by adopting a target as well. Chrysler has set more limited goals on a vehicle class basis; we hope that they will set overall goals as well."

Ford's Viera told, "We believe it is useful to share with our investors and our customers our plans and progress in addressing climate change and other sustainability issues. They should know where we stand. Our approach is based on our heritage of democratizing technology. Our blueprint for sustainability makes it clear our approach is based on affordable, volume related technology that can affect millions of vehicles."

A record high 54 shareholder resolutions on climate change were filed with US companies in 2008. ICCR and Ceres report that the 2007 proxy season saw an average vote of 21.6% on 43 climate change resolutions.

"But, let's not fool ourselves, these actions are only a beginning. Ford -- as well as General Motors -- need to do much more, and quickly, to reclaim their leadership role in the global marketplace," said Lubber. "It's not just a coincidence that these two corporate icons, once the embodiment of American innovation, are each worth less today in terms of their market capitalization, than First Solar, a nine-year-old solar company in Arizona."

In 2006, Ceres worked with Nissan who adopted a 40% CO2 reduction goal from its vehicles by 2016 and a 70% reduction goal from its vehicles by 2050. Honda has also adopted a CO2 product reduction goal of 10% reduction by 2012.

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