Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainable mobility society
• Rich, mobile life
• Decarbonization in all corporate activities
• Supply chain sustainability
• Quality and safety
• Creating challenges and job satisfaction for various human resources
• Continue to promote the next-generation mobile technology

Environmental Achievements

• Reduced power consumption by 8% at Toyo Tire Zhangjiagang Co., Ltd. (China) through equipment conversion.
• Reduced CO2 emissions by approximately 655 tons at Toyo Tire (Zhucheng) Co., Ltd. (China) by changing cooling water circulator temperature settings and recycling exhaust steam for heating.
• Developed a fuel-efficient tire using Nano Balance Technology, reducing fuel consumption while maintaining high wear resistance.

Social Achievements

• Launched a tire safety awareness campaign reaching nearly 500 drivers.
• Showa Estate Co., Ltd. participated in the Hyogo Disabled Persons Employment Forum 2020.
• Provided scholarships and financial assistance to students in Malaysia.

Governance Achievements

• Established the Sustainability Committee.
• Organized e-learning sessions on the prevention of bribery for employees.
• Established internal and external reporting hotlines.

Climate Goals & Targets

Environmental Challenges

• Resource depletion due to climate change and increased demand.
• Climate change transition risks (emission regulation, etc.).
• Risks of resource depletion due to climate change and increased demand in the supply chain.
• Maintaining the workforce and improving productivity.
• Prevention of increased accidents due to increased traffic demand.
• Market stabilization and sustainable growth by promoting the mainstreaming of SDGs.
• Geopolitical risks, decoupling trend, economic disparities.
• Changes in consumer behavior in the post-COVID-19 era.
• Securing a stable supply of natural rubber.
• Social issues in the natural rubber industry (deforestation, human rights violations).

Mitigation Strategies

• Developing new materials and improving product design and production processes to make more efficient use of materials.
• Developing next-generation mobility to replace engine vehicles.
• Improving technology for fuel efficiency and low emissions.
• Building a sustainable supply chain through cooperation with stakeholders.
• Implementing safety awareness and supporting for improving maintenance skills.
• Developing human resources to support sustainable development of the world.
• Strengthening global network to promote local employment and stabilize the local economy.
• Conducting thorough investigations to trace the supply chain for conflict minerals.
• Collaborating with international initiatives and stakeholders to build a sustainable natural rubber supply chain.
• Distributing CSR Self Checklist to suppliers to report on the status of their activities.
• Conducting due diligence to analyze risks in the supply chain.

Supply Chain Management

Supplier Audits: Distributed CSR Self Checklist to about 350 suppliers.

Responsible Procurement

• Toyo Tire Group CSR Procurement Guidelines
• Sustainable Natural Rubber Procurement Policy
• Sustainable Natural Rubber Initiatives (SNR-i)
• Sustainable Nature (Tire Industry Project)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather phenomena

Transition Risks

• Emission regulations
• Shift to electric vehicles

Opportunities

• Development and sales of fuel-efficient products

Reporting Standards

Frameworks Used: GRI Standards

Certifications: ISO 9001, IATF 16949

Third-party Assurance: SGS Japan Inc.

UN Sustainable Development Goals

• Goal 7
• Goal 9
• Goal 12
• Goal 13

Contribution to sustainable mobility, decarbonization, resource efficiency, and climate change mitigation.

Sustainable Products & Innovation

• Fuel-efficient tires
• Airless concept tire (noair)

Awards & Recognition

• Commendation from Kawanishi City Fire Prevention and Safety Association

Environmental Metrics

ESG Focus Areas

• Sustainable mobility
• Human resources
• Technology
• Decarbonization
• Supply chain sustainability
• Quality and safety

Environmental Achievements

• Reduced CO2 emissions per tire by 20% by 2030 (vs. FY2019)
• Aim to reduce CO2 emissions by 46% by 2030 (vs. FY2019). Carbon neutrality by 2050
• Increased use of renewable energy sources
• Reduced water withdrawal at Japanese manufacturing bases by 10% compared to 2018 levels over the five-year period (2019-2023)

Social Achievements

• Launched a self-development platform for employee training
• Updated training system to boost talent development
• Improved work-life balance initiatives
• Increased awareness of human rights through e-learning and training
• Tire safety awareness activities with nearly 700 participants

Governance Achievements

• Established the Sustainability Committee
• Established the Decarbonization Task Force
• Established the Supply Chain Task Force
• Established the Global Anti-corruption and Anti-bribery Policy
• Annual compliance awareness surveys

Climate Goals & Targets

Environmental Challenges

• Climate change risks and opportunities
• Supply chain sustainability issues (natural rubber, conflict minerals)
• Maintaining quality and safety standards
• Responding to evolving environmental regulations
• Securing diverse talent

Mitigation Strategies

• Developing fuel-efficient tires and technologies
• Sustainable natural rubber procurement policy
• Supplier engagement and due diligence
• Investing in quality assurance systems
• Talent development programs and initiatives to promote diversity

Supply Chain Management

Supplier Audits: Approximately 350 existing suppliers worldwide were surveyed in 2021 to promote decarbonization activities.

Responsible Procurement

• Toyo Tire Group CSR Procurement Guidelines
• Sustainable Natural Rubber Procurement Policy
• Global Platform for Sustainable Natural Rubber (GPSNR) principles

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Stronger environmental regulations

Opportunities

• Development of fuel-efficient products

Reporting Standards

Frameworks Used: GRI Standards

Certifications: IATF 16949, ISO 9001, ISO/IEC 17025

Third-party Assurance: SGS Japan Inc.

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Fuel-efficient tires
• Airless tires
• Materials with high wearability and recycled raw materials

Awards & Recognition

• Good Design Award 2021 (PROXES CL1 SUV)

Environmental Metrics

ESG Focus Areas

• Sustainable Mobility
• Enjoyment of Mobility
• Diverse Talent and Job Satisfaction
• Next-Generation Mobility Technology Innovation
• Decarbonization
• Supply Chain Sustainability
• Quality and Safety

Environmental Achievements

• CO2 emissions reduction achieved (against 2019): Scope 1, 2: 35.6%, Scope 3: 1.5%
• Percentage of electricity from renewable sources used at production sites: 71.1%
• Percentage of sustainable raw materials used in products: 26% (by weight in products produced at the end of 2023)
• Development of a concept tire made from 90% sustainable raw materials

Social Achievements

• Second employee opinion survey and action to improve organizational culture
• Training to empower women and unconscious bias training to promote diversity and inclusion
• Open Country R/T receives Minkara PARTS OF THE YEAR 2023 Hall of Fame Award (SUV/4X4 tire category)
• Annual leave utilization rate stood at 64.8%, an increase of seven points over the past three years

Governance Achievements

• Introduction of internal carbon pricing (ICP) program (for investment decision-making)
• Human rights risk assessment carried out across value chain.
• Percentage of suppliers assessed for environmental and social risks: 70% of total transaction amount of raw materials for tires

Climate Goals & Targets

Environmental Challenges

• Securing a stable human resource base
• Ensuring quality, including environmental compliance, throughout the value chain
• Climate change risks (changes in climate patterns, extreme weather, carbon pricing)
• Supply chain disruptions
• Maintaining profitability amidst fluctuating raw material prices and exchange rates
• Meeting increasingly sophisticated tire performance requirements with the shift to EVs

Mitigation Strategies

• Optimizing business management structure by maximizing resources
• Strengthening governance base and risk management
• Implementing a market supply strategy for high value-added products
• Improving energy efficiency and expanding use of renewable energy
• Reducing the amount of natural rubber used in each tire
• Increasing the usage of sustainable raw materials
• Introducing internal carbon pricing (ICP)
• Strengthening coordinated functions centered on marketing
• Strengthening relationships with suppliers
• Developing EV-compatible tires
• Strengthening quality throughout the value chain (process assurance, tire safety awareness, individual management systems in the market)

Supply Chain Management

Supplier Audits: 70% of total transaction amount of raw materials for tires by end of 2023; Aiming for 95% by 2025

Responsible Procurement

• Toyo Tire Group Basic Purchasing Policies
• Toyo Tire Group CSR Procurement Guidelines
• Sustainable Natural Rubber Procurement Policy

Climate-Related Risks & Opportunities

Physical Risks

• Changes in climate patterns
• Increased demand for crude oil, natural gas, etc.
• Increase in extreme weather
• Frequent and severe heavy rainfall
• Increase and intensification of tropical cyclones

Transition Risks

• Introduction of carbon pricing
• Introduction of carbon border tax
• Introduction of environmental taxes

Opportunities

• Greater eco-conscious behavior by stakeholders
• Expansion of low-carbon product market
• Growth of EVs/ next-generation vehicles

Reporting Standards

Frameworks Used: IIRC Integrated Reporting Framework, Japan’s Ministry of Economy, Trade and Industry, Guidance for Collaborative Value Creation 2.0, GRI Standards

Certifications: ISO 9001, IATF 16949

Third-party Assurance: KPMG AZSA LLC

Sustainable Products & Innovation

• Concept tire made from 90% sustainable raw materials
• OPEN COUNTRY A/T III EV tire

Awards & Recognition

• Open Country R/T receives Minkara PARTS OF THE YEAR 2023 Hall of Fame Award