Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Achieved targets for all key items (CO2, waste, water) in the 6th Environmental Action Plan (FY2016-FY2020).
• Reduced CO2 emissions by 12% (vs. FY2012 levels) globally, 17% in Japan, and 15% overseas.
• Increased renewable energy use to 4% of total global electricity consumption.
• Reduced waste volume by 10% (vs. FY2012 levels) in Japan, 12% in Toyoda Gosei Co., Ltd., and 6% overseas.
• Reduced water usage by 8% (vs. FY2012 levels) in Japan, 8% in Toyoda Gosei Co., Ltd., and 8% overseas.
• Developed devulcanization technology for regenerating vulcanized rubber, reducing waste by over 40%.

Social Achievements

• Achieved zero grave or serious STOP 7 accidents globally.
• Improved employee engagement, with 56% positive evaluation in the 2021 engagement survey.
• Increased employment rate of people with disabilities to 2.47%, exceeding the legally mandated rate.
• Opened Entrio, a memorial gymnasium promoting employee well-being and community engagement.
• Implemented various measures to balance childcare, elder care, and work.

Governance Achievements

• Enhanced corporate governance by voluntarily implementing policies in accordance with Japan’s Corporate Governance Code.
• Increased the effectiveness of monitoring and auditing of corporate management by outside directors.
• Established internal control systems company-wide to ensure propriety and efficiency of work.
• Appointed three outside directors, including the company's first female director.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic significantly impacted sales in the first half of FY2020.
• Climate change poses risks to business continuity due to abnormal weather events and stricter regulations.
• Need to reduce CO2 emissions across the entire product lifecycle (Scope 3).
• Competition with local manufacturers in developing countries.

Mitigation Strategies

• Implemented emergency measures to shore up earnings in the first half of FY2020.
• Established a carbon neutrality project to reduce CO2 emissions across the entire value chain.
• Accelerated digital transformation to improve efficiency and reduce costs.
• Developed lighter-weight products and implemented energy-saving production techniques.
• Expanded sales in high-growth regions and high-value-added products.
• Strengthened supply chain management through supplier audits and sustainability guidelines.

Supply Chain Management

Supplier Audits: Annual surveys of conflict minerals and regular supplier surveys to ensure compliance with Supplier Sustainability Guidelines.

Responsible Procurement

• Green Procurement Guidelines
• Supplier Sustainability Guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Abnormal weather events (torrential rains, forest fires, floods)

Transition Risks

• Stricter regulations on CO2 emissions, carbon border taxes

Opportunities

• Development of energy-efficient products, renewable energy, hydrogen technologies

Reporting Standards

Frameworks Used: GRI Standards, TCFD recommendations

Certifications: ISO 14001, IATF 16949

Third-party Assurance: Japan Quality Assurance Organization (JQA)

UN Sustainable Development Goals

• Goal 3: Good Health and Well-being
• Goal 7: Affordable and Clean Energy
• Goal 9: Industry, Innovation and Infrastructure
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action

Toyoda Gosei's initiatives contribute to these SDGs through product development, environmental management, and social contribution activities.

Sustainable Products & Innovation

• High-pressure hydrogen tanks for FCEVs
• Lighter-weight plastic products
• UV-C LED products for disinfection
• e-Rubber applications

Awards & Recognition

• Securities Analysts Association of Japan’s Award for Excellence in Corporate Disclosure (2020, 2021)
• Development Bank of Japan’s DBJ Environmental Rating (highest rating)
• CDP A− rating for Climate change and Water security
• CDP A rating for climate change supplier engagement

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Exceeded 5% renewable energy share of total energy consumption globally by the end of FY2021.
• Reduced CO2 emissions (Scope 1 & 2) by 10.8% compared to FY2013.
• Reduced waste volume by 22% compared to FY2019.
• Reduced water intake per sales unit by 6% compared to FY2019.

Social Achievements

• Formulated Toyoda Gosei Group Human Rights Policy based on UN Guiding Principles.
• Increased employee engagement survey positive evaluation to 56%.
• Reduced average overtime hours to 12.3 h/month per person.
• Maintained annual paid leave taking rate at 97.3%.

Governance Achievements

• Established a new Sustainability Meeting.
• Established an Internal Control Committee.
• Revised Board of Directors operations in line with Japan’s Corporate Governance Code.

Climate Goals & Targets

Environmental Challenges

• Global semiconductor shortage and opaque production fluctuations.
• Soaring prices and tight market for raw materials, rising energy and transportation costs.
• Worsening materials market conditions in the Americas.
• Lack of flexible response to production fluctuations.

Mitigation Strategies

• Implemented continuous improvements through regular discussions on BCP.
• Enhanced ability to supply customers even during material shortages by utilizing global network.
• Reviewed organization to strengthen global information collaboration and internal controls.
• Developed regulations and systems to ensure investment decisions and fund procurement.

Supply Chain Management

Responsible Procurement

• Supplier Sustainability Guidelines
• Green Procurement Guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Water risks

Transition Risks

• Regulations/assessments
• Shift to BEVs

Opportunities

• Development of energy-efficient products
• Renewable energy
• Hydrogen tank technology

Reporting Standards

Frameworks Used: International Integrated Reporting Framework (IIRC), GRI Standards

Certifications: ISO 14001, ISO 9001, IATF 16949

Sustainable Products & Innovation

• UV-C LED products
• e-Rubber products
• GaN power devices
• High-pressure hydrogen tanks
• Recycled material products (Re-S brand)

Awards & Recognition

• Health & Productivity Management Sports Yell Company 2022
• Energy Conservation Grand Prize (Best Practices category) 2022
• 2021 Nikkei SDGs Management Survey ★★★★☆
• CDP Climate Change 2021 Score: A−
• Supplier Engagement 2021 Rating: A
• Water Security 2021 Score: A−

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Formulated its 1st Environmental Action Plan in 1993; Announced TG 2050 Environmental Challenge in February 2016, setting targets for 2030; Brought forward carbon neutrality (Scope 1 and 2) target to 2030 from 2050; Formulated 5-year Environmental Action Plans.
• Development of energy-saving LED technology contributing to hygiene.
• Development of FCEV products (hydrogen tanks) contributing to a hydrogen society.

Social Achievements

• Mass production of driver-side airbags in 1989, followed by other airbag advancements, achieving 360-degree airbag coverage; Development of pop-up hood actuators and pedestrian protection airbags.
• Initiatives in corporate culture and talent development to transition to a dynamic organization; Supporting employee wellbeing; Developing talent capable of questioning societal value and executing business strategically; Promoting problem-solving methods and the PDCA cycle; Creating workplaces where people with diverse values can shine.
• Creation of Supplier Sustainability Guidelines (Version 2) promoting sustainability among suppliers; Stipulating items relating to human rights and labor, environment, and compliance.

Governance Achievements

• Established the Sustainability Meeting in November 2021, composed of all Directors and Audit & Supervisory Board Members; Implemented a chief officer system in June 2023; Established the Executive Appointment Committee and Executive Compensation Committee.

Climate Goals & Targets

Environmental Challenges

• Increasing traffic fatalities in regions lacking airbags and safety devices; Negative impacts from the transition from ICE to electric vehicles (e.g., loss of positive impact on flourishing MSMEs).
• Need to enhance the alignment of talent strategy with management strategy.

Mitigation Strategies

• Pursuit of higher-performance safety devices and their delivery in many regions; Counteracting negative impacts through initiatives related to creating new businesses that utilize core technologies and creating new value by utilizing connections with players in the supply chain expanding with electrification.
• Enhancing the alignment with management strategy and promoting new initiatives in addition to existing efforts in FY2023.

Supply Chain Management

Responsible Procurement

• Supplier Sustainability Guidelines (Version 2); Green Procurement Guidelines demanding reduction of CO2, recycling of waste, resource circularity, and control of chemical substances; Measures against conflict minerals.

Climate-Related Risks & Opportunities

Transition Risks

• Structural transformation of the automobile industry

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: UNEP FI Principles for Positive Impact Finance (PIF), ICMA Green Bond Principles (GBP), ICMA Social Bond Principles (SBP), ICMA Sustainability Bond Guidelines (SBG), Ministry of the Environment Green Bond Guidelines, Financial Services Agency Social Bond Guidelines, LMA, APLMA, and LSTA Green Loan Principles, LMA, APLMA, and LSTA Social Loan Principles, GRI Standards

Third-party Assurance: Rating and Investment Information, Inc. (R&I)

Sustainable Products & Innovation

• Cooling pipes for BEVs, battery packs, charge port doors, hydrogen tanks, interior/exterior products unique to BEVs, recycled/biomass materials, energy-saving technologies for painting, printing, and surface engineering, waste recycling technologies.