Climate Change Data

Environmental Metrics

ESG Focus Areas

• Safety, Environment, and Comfort
• People and Organizations
• Climate Change
• Carbon Neutrality
• Circular Economy
• Diversity and Inclusion
• Human Rights
• Governance

Environmental Achievements

• Amended target to reduce CO2 emissions by 50% from the 2013 level by 2030 to achieve carbon neutrality by 2050.
• Launched initiatives to produce renewable energy from food waste using biogas power generation.
• Started a project to upcycle waste materials from automobile seat covers into new products (Doala Seat Cushion).

Social Achievements

• Certified as an Excellent Enterprise of Health and Productivity Management 2022 (White 500).
• Implemented the Sakura Full Bloom Activity and Nanohana Process to improve workplace environment and communication.
• Developed an original sign language at the Sanage Plant to facilitate communication among hearing-impaired employees.
• Launched initiatives to produce, process, and sell agricultural products using biotechnology.

Governance Achievements

• Formulated the Toyota Boshoku Group Human Rights Policy.
• Revised the Toyota Boshoku Group Supplier Sustainability Guidelines.
• Increased the number of proposals brought before the Board of Directors, including ESG and DX related themes.
• Acquired DX certified company status.

Climate Goals & Targets

Environmental Challenges

• Soaring cost of materials and logistics disruptions.
• Shortages of components such as semiconductors.
• Fluctuations in production volumes caused by natural disasters and the coronavirus pandemic.
• Language barriers in global operations.
• Need to strengthen TQM activities globally.
• Need to reduce CO2 emissions throughout the supply chain (Scope 3).

Mitigation Strategies

• Enhanced cost planning activities and simulated production processes using digital tools.
• Promoted local procurement and shifted to multiple sites for stable supply of parts.
• Implemented cross-regional, multi-factory parallel production (bridge production).
• Centralized management of skill evaluations.
• Expanded diversity processes at production sites.
• Implemented TQM activities at Kariya Plant and Unit Production Engineering Center.
• Actively utilizing open innovation to generate synergies between our technologies and technologies outside the company.

Supply Chain Management

Responsible Procurement

• Revised Toyota Boshoku Group Supplier Sustainability Guidelines to help build a sustainable supply chain and prevent human rights violations.

Climate-Related Risks & Opportunities

Physical Risks

• Worsening extreme weather, including heavy rain and flooding

Transition Risks

• Enhancement of climate change policies, including carbon pricing
• Enhancement of efforts to promote automobile electrification
• Change in evaluation by customers and the consumer value standard

Opportunities

• Increase in demand for electrified products
• Expansion of business in new fields through collaboration
• Increase in sales by developing low-carbon products

Reporting Standards

Frameworks Used: VRF International Integrated Reporting Framework, Ministry of Economy, Trade and Industry’s Guidance for Integrated Corporate Disclosure, GRI Sustainability Reporting Standards, ISO 26000, Environmental Reporting Guidelines 2018, TCFD

Certifications: DX-Excellent company

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 9 (Industry, innovation, and infrastructure)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)

Initiatives contribute to these goals through reduction of CO2 emissions, promotion of renewable energy, development of sustainable products, and responsible supply chain management.

Sustainable Products & Innovation

• Biodegradable plastic from seaweed
• Upcycled products from waste materials
• Electrified products (motor cores, fuel cell separators, high-rate batteries)

Awards & Recognition

• Deming Prize (Kariya Plant and Unit Production Engineering Center)
• Recognition of TQM Achievement (Kariya and Sanage plants)

Environmental Metrics

ESG Focus Areas

• Safety
• Environment
• Comfort
• People
• Organizations

Environmental Achievements

• Named an A List Company by CDP for both Climate Change and Water Security categories
• Submitted a letter of commitment for SBT certification
• Initiated a human rights due diligence process
• Achieved -24% reduction in production CO2 emissions (compared to FY2020)
• Achieved 23% renewable energy installation ratio
• Achieved -30% CO2 emissions ratio in logistics (compared to FY2012)
• Achieved -20% waste emissions reduction ratio (compared to FY2012)
• Achieved -35% water consumption reduction ratio (compared to FY2014)
• Planted 650k trees cumulatively

Social Achievements

• Launched “Re:act,” a program for developing innovative human resources
• Launched “We:ave,” an open application-based practical education program
• Launched the Employee Network Resource Group (ENRG)
• Certified as an Excellent Enterprise of Health and Productivity Management 2023 (White 500)
• Conducted biodiversity education in Argentina for over 190 children
• Established a Model Dojo for developing members’ skills in the US
• Received 8 external awards from customers

Governance Achievements

• Appointed a female outside director
• Introduced a medium- to long-term incentive system to reflect ESG-related evaluations in compensation
• Renamed CSR Promotion Meeting to CSV Promotion Meeting
• Obtained DX certification
• Implemented thorough risk management

Climate Goals & Targets

Environmental Challenges

• Large fluctuations in production volume
• High material and logistics costs
• Slowing economy
• Russia-Ukraine crisis
• Faster-than-expected progress in CASE, especially electrification
• Shortage of parts
• Intensifying competition in the Chinese market
• Chronic shortage of human resources
• Personnel turnover in China
• Major flooding in South Africa and major earthquake in Türkiye

Mitigation Strategies

• Created a system of collaboration among plants and timely communication with suppliers
• Accelerated decision-making
• Reviewed global production and supply system
• Revised organizational structure and meeting bodies
• Transferred commercial rights and development/production functions
• Aggressively pursued orders from strategic OEMs
• Expanded new business, especially in Asia
• Implemented cost reduction activities in Tianjin Intex
• Established a Model Dojo for skills development
• Implemented robust risk management
• Developed a business continuity plan (BCP)

Supply Chain Management

Responsible Procurement

• Fair and equitable procurement practices
• Survey of suppliers (CO2 emissions, efforts to reduce CO2 emissions, etc.)
• Support for suppliers (Sharing of energy saving cases, joint development of new materials and new methods, joint purchase of renewable energy, etc.)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather, flooding

Transition Risks

• Enhancement of climate change policies, including carbon pricing
• Change in evaluation by customers and the consumer value standard

Opportunities

• Expansion of business in new fields through collaboration between Toyota group companies
• Increase in demand for electrified products

Reporting Standards

Frameworks Used: IFRS Foundation’s IFRS Sustainability Disclosure Standards, VRF International Integrated Reporting Framework, Ministry of Economy, Trade and Industry’s Guidance for Integrated Corporate Disclosure, GRI Sustainability Reporting Standards, ISO 26000, TCFD, Environmental Reporting Guidelines 2018

UN Sustainable Development Goals

• Goal 2
• Goal 3
• Goal 7
• Goal 9
• Goal 11
• Goal 12
• Goal 13

The report mentions alignment with several SDGs, but doesn't provide a detailed explanation of how initiatives contribute to each goal.

Sustainable Products & Innovation

• Thin seats
• Recyclable seat pads
• Plant-derived materials
• Easy-to-dissemble structure
• Mono-materials
• Kenaf door trim
• High impact-resistant plastic
• Clean Air Filter Premium
• Heatless magnet molding process

Awards & Recognition

• CDP A List Company (Climate Change and Water Security)
• CDP Supplier Engagement Leader
• Award for Science and Technology (Development Category) of the Commendation for Science and Technology
• Eco-China Contribution Award
• Best Contributing Corporation Award
• Ecological Civilization Award
• China Automobile Enterprise CSR Excellence Award
• Great Place To Work certification (Türkiye)

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• 38% reduction in production CO2 emissions ratio (compared to FY2020)
• 34% renewable energy installation ratio
• 29% CO2 emissions reduction ratio in logistics (compared to FY2012)
• 36% waste emissions reduction ratio (compared to FY2012)
• 36% water consumption reduction ratio (compared to FY2014)
• 44,000 trees planted (cumulative 640,000 by 2024)

Social Achievements

• Established Employee Network Resource Group (ENRG) with five subgroups focusing on diversity and inclusion
• Increased number of men taking childcare leave
• Improved company member satisfaction (KPI on vibrant work environment)

Governance Achievements

• Established ESG KPIs and monitors progress at the CSV Promotion Meeting
• Endorsed the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)
• Implemented Code of Conduct with 87.6% implementation rate

Climate Goals & Targets

Environmental Challenges

• Increase in procurement costs by introducing carbon prices
• Increase in operating costs due to the direct impact of the introduction of carbon prices or its indirect impact on energy prices
• Increase in cost due to investment in energy saving and renewable energy for decarbonization
• Decrease in sales due to lower demand for products with insufficient low-carbon technology
• Decrease in sales due to the impact of supply chain disruption on production
• Decrease in sales due to factory shutdown
• Intensifying price competition due to the entry of a large number of manufacturers and a slowdown in the growth rate of BEV in Europe and the United States

Mitigation Strategies

• Survey of suppliers (CO2 emissions, efforts to reduce CO2 emissions, etc.) Promotion of activities for setting CO2 emission reduction targets
• Support for suppliers (Sharing of energy saving cases, joint development of new materials and new methods, joint purchase of renewable energy, etc.)
• Introduction of highly efficient equipment to promote further energy saving and promotion of the development of new methods
• Promotion of the introduction of renewable energy
• Optimization of logistics (Reduction of CO2 emissions associated with transportation through the promotion of local production for local consumption)
• Optimization of investment by introducing ICP (Internal Carbon Pricing)
• Expansion of business in new fields through collaboration between Toyota group companies
• Further planning and development of electrified products
• Increase in sales by developing low-carbon products
• Risk management using a system to manage the range of supplier impact
• Selection of logistics routes that minimize the impact of disaster
• Enhancement of the BCP system (Creation of manuals and establishment of an information collection/sharing system)
• Planning and development of products to further reduce carbon emissions
• Planning and development of plant-derived products and lightweight products
• Improvement of recyclability and promotion of simple disassembly design

Supply Chain Management

Responsible Procurement

• Support for suppliers (Sharing of energy saving cases, joint development of new materials and new methods, joint purchase of renewable energy, etc.)
• Risk management using a system to manage the range of supplier impact

Climate-Related Risks & Opportunities

Physical Risks

• Worsening of extreme weather, including heavy rain and subsequent flooding

Transition Risks

• Enhancement of climate change policies, including carbon pricing
• Change in evaluation by customers and the consumer value standard (raised environmental awareness, etc.)

Opportunities

• Expansion of business in new fields through collaboration between Toyota group companies
• Increase in demand for electrified products
• Expansion of demand for plant-derived products and lightweight products
• Enhancement of competitiveness by developing technology to improve recyclability

Reporting Standards

Frameworks Used: TCFD

Third-party Assurance: KPMG AZSA Sustainability Co., Ltd.

Sustainable Products & Innovation

• Electrified products
• Plant-derived products
• Lightweight products
• Products with improved recyclability