Working Toward the Mobility Society of the Future
Message from
the President
The Source of Our
Value Creation:
What Makes Us Toyota
Value Creation Story:
Working toward the Mobility
Society of the Future
Business Foundations
for Value Creation
Corporate Data
Message from the CSO > Roundtable Discussion with the Outside Directors > Dialogue with Institutional Investors on Corporate Governance > Corporate Governance
Message from the CFO > Capital Strategy > The Environment > Vehicle Safety > Quality and Information Security > Intellectual Property and Privacy > Value Chain Collaboration
Human Rights Diversity and Inclusion > Human Resource Development >Health and Safety and Social Contribution Activities > Risk Management and Compliance
The Environment (Climate Change-related Financial Disclosures Based on the TCFD Recommendations)
Toyota endorsed and signed on to the recom-
mendations of the Financial Stability Board's Task
Force on Climate-related Financial Disclosures
Governance
a) The Board's Oversight of Climate-related
Risks and Opportunities
Toyota addresses climate-related issues at the
Board of Directors' meetings to ensure effective
strategy formulation and implementation in line
with latest societal trends. The Board deliberates
and oversees related strategy, major action plans,
and business plans, and important climate-related
matters are included in the Board's agenda.
The Board of Directors monitors progress
toward qualitative and quantitative targets for
addressing climate issues. As part of monitoring,
the Board considers climate-related issues,
including risks/opportunities related to products,
such as fuel efficiency/emission regulations, and
risks/opportunities related to low-carbon technol-
ogy development, as well as the financial impact
thereof. These governance mechanisms are used
in formulating long-term strategy, including the
Toyota Environmental Challenge 2050, and in
Bodies That Address Climate Change Issues
(TCFD) in April 2019 and appropriately discloses
information concerning climate change-related
risks and opportunities and its analysis thereof.
formulating and revising medium- to long-term
targets and action plans.
Examples of decisions made by the Board of
Directors in 2021 include the following.
The Board decided to invest in Toyota Green
Energy, which was established jointly by Toyota,
Chubu Electric Power Co., Inc., and Toyota Tsusho
Corporation. Toyota Green Energy is a new com-
pany that will obtain and manage renewable energy
sources in Japan with the aim of supplying electric
power to the Toyota Group in the future.
b) Management's Role in Assessing and Managing
Climate-related Risks and Opportunities
The Board of Directors is Toyota's ultimate decision-
making and oversight body for addressing climate-
related issues. The committees below are the
major bodies for assessing and managing climate-
related risks and opportunities.
Sustainability Meeting
Environmental Product Design
Assessment Committee
Frequency of reporting on
climate related issues to the
Board of Directors
Every six months
Roles
Deliberates and reports
on the formulation of
measures to solve
climate-related and
other sustainability
issues
When an important
event arises
•Manages the assess-
ment of product-related
risks and opportunities,
formulation and imple-
mentation of strategy
and plans, monitoring,
etc.
Production Environment
Committee
When an important
event arises
•Manages the assessment
of plant- and production-
related risks and
opportunities, decisions
on countermeasures,
monitoring, etc.
Strategy
a) Climate-related Risks and Opportunities
the Organization Has Identified over the
Short, Medium, and Long Term
Toyota strives to identify the various risks and
opportunities that will arise from environmental
issues, takes action while continuously confirming
the validity of strategies, such as the Toyota
Environmental Challenge 2050, and works to
enhance its competitiveness.
In particular, climate change requires measures in
a variety of areas, including the adoption of new
technology and responding to tighter government
regulations. As climate change progresses, higher
*TCFD (Task Force on Climate-related Financial Disclosures)
temperatures, rising sea levels, and increases in the
severity of such natural disasters as storms and
flooding are expected. Such developments may
have various impacts on Toyota's business fields.
These impacts may pose risks to Toyota's business.
However, we believe that responding appropriately to
the impacts of climate change can lead to enhanced
competitiveness and the acquisition of new business
opportunities. In accordance with this understanding,
we have categorized the risks relating to climate
change and identified particularly significant risks in
line with risk management processes based on the
degree of impact and stakeholder interest.
Significant Risks and Opportunities and Toyota's Measures
Tightening of reg-
ulations for fuel
efficiency and
ZEVS (acceleration
of electrification)
Expansion of
carbon pricing
Increase in fre-
quency and
severity of natu-
ral disasters
Risks
Fines for failure to meet
fuel efficiency regulations
Decrease in total vehi-
cle sales due to delays.
in complying with ZEV
regulations
Impairment of internal
combustion engine
manufacturing facilities
Increase in production
and purchasing costs
due to the introduction
of carbon taxes, etc.
Production suspension
due to damage to pro-
duction sites and sup-
ply chain disruptions
caused by natural
disasters
Opportunities
• Increase in sales of
electrified vehicles
Increase in profits
from external sales
of electrification
systems
Decrease in energy
costs due to the
introduction of energy-
saving technology
Increase in demand for
electrified vehicles due
to increased need for
supply of power from
automobiles during
emergency situations
b) Impact of Climate-related Risks and
Opportunities on the Organization's Businesses,
Strategy, and Financial Planning
Recognizing that climate-related issues may
have a substantive impact on its businesses,
strategy, and financial planning, Toyota reviews
its strategy based on the risks and opportunities
associated with climate-related issues whenever
Toyota's measures
• Maintaining top-level fuel efficiency
(currently the highest in Europe)
• Increase in investment in batteries
and shift of resources
Start of sales of electrification systems
Expansion osf electrified vehicle
lineup
Reduction of CO2 emissions from
vehicles currently in use
Comprehensive reduction of energy
use and promotion of renewable
energy and hydrogen use
• Promotion of emission reductions in
collaboration with suppliers
Continuous adaptive improvements
to business continuity plans (BCPs) in
light of disaster experiences
Reinforcement of information gather-
ing in collaboration with suppliers to
avoid purchasing delays
Scenario analysis
Stated policies 1.5 °C or less/
future
storyline
Impacts will be
in line with cur-
rent conditions
Impacts will be
in line with cur-
rent conditions
Impacts will
increase
2°C future
storyline
Impacts will
increase
Impacts will
increase
Impacts will be
in line with cur-
rent conditions
necessary. The table on page 41 describes the
specific impacts on our businesses, strategy,
and financial planning.
Toyota identifies risks, determines their degree
of significance, and sets priorities in accordance
with the Toyota Global Risk Management
Standard (TGRS). Details regarding the TGRS are
provided on page 42 under "Risk Management."
TOYOTA MOTOR CORPORATION
40
INTEGRATED REPORTView entire presentation