Ford Motor Company and its financing subsidiary, Ford Motor Credit Company, introduced the North America auto industry’s first sustainable financing framework, focusing on and paying for ambitious plans in vehicle electrification and other environmental and social areas.

Separately, Ford today also announced a cash tender offer to repurchase up to $5 billion of the company’s higher-cost debt. Actions such as the debt tender offer and the issuance of 0% convertible notes earlier this year, together with anticipated broader access to capital from the new sustainable financing framework, are consistent with Ford’s objectives to further strengthen its balance sheet and financial flexibility and return its credit ratings to investment grade.

Among other expected benefits, initiatives outlined in Ford’s sustainable financing framework are intended to help the company become carbon-neutral no later than 2050, in line with its commitment to the Paris Agreement. Ford was one of the first full-line US automakers to pledge to reduce greenhouse gas emissions from its vehicles, operations and supply chain in alignment with goals of the accord. This pledge is backed by science-based interim targets the automaker intends to achieve by 2035.

The potential positive environmental and social influence of projects described in Ford’s sustainable financing framework earned an “advanced” rating—the highest possible—from Vigeo Eiris. Vigeo Eiris, an arm of Moody’s Corp., makes independent assessments of organizations’ goals and performance against environmental, social and governance matters.

A significant portion of related financing will go toward accelerating Ford’s leadership in electric vehicles. Objectives include expanding EV technology and charging infrastructure to remove obstacles to adoption and improve the customer experience, and EV and battery manufacturing to reduce emissions.

The framework will cover a variety of both unsecured and securitization funding transactions, including ESG bonds issued by Ford and Ford Credit to finance environmental and social projects, and how Ford’s electrification and mobility projects will be evaluated and selected. The framework will also govern how the proceeds will be managed and how Ford and Ford Credit will report results. Funds will be fully allocated within 24 months of each sustainable financing issuance.

Net proceeds from sustainable financing will be invested and expended in four areas:

• Clean Transportation – Designing, developing and manufacturing zero-emissions transportation, focusing on battery-electric vehicles and the batteries that power them across the full range of design, development, manufacturing and end-of-life. Examples include Ford’s recent announcement of the largest US investment in electric vehicles at one time by an automotive manufacturer, together with SK Innovation, in new Tennessee and Kentucky mega-sites; collaborating with Redwood Materials on recycling options for scrap and end-of-life EVs and lithium-ion batteries; and offering financing products and wholesale loans to establish or improve the EV charging infrastructure.

• Clean Manufacturing – Further reducing the environmental footprint of Ford’s operations through renewable energy, sustainable water and wastewater management, waste management, and energy-efficient buildings. As examples, Ford’s new advanced campuses in Tennessee and Kentucky will be designed to have as minimal an impact as possible—and even to generate beneficial effects—on the surrounding environment.

• Making Lives Better – Advancing economic opportunity and equity for underrepresented and/or disadvantaged populations through projects to help widen Ford’s supplier and dealer diversity networks. The goal is to create programs and opportunities for businesses owned by minorities, women, military veterans and disabled people, and for women-focused community ventures and social enterprises that promote better health, develop critical skills, and support child and maternal health, education and disability support services.

• Community Revitalization – Supporting and lifting disadvantaged communities by creating and renovating spaces to provide employment opportunities and access to essential services. One such project is Ford’s investment in redeveloping the historic Michigan Central Station and surrounding area to create a new mobility innovation district in Detroit’s Corktown neighborhood. Ford

In addition to external verification, a new sustainable financing committee established within Ford will assure that funded projects comply with Ford’s corporate social responsibility strategic plan and otherwise meet eligibility criteria. The committee comprises senior representatives from Treasury, Sustainability, Corporate Finance, Investor Relations, Ford Credit and Legal.