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 Corporate Data for Value Creation 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 Value Chain Collaboration Fundamental Approach We are promoting activities based on our Customer First policy through collaboration with our business partners, including suppliers and dealers. Toyota promotes open and fair business prac- tices and steadily implements initiatives to pro- mote sustainability. At the same time, we work closely with suppliers and dealers to improve quality and provide safety and peace of mind to our customers as we strive to achieve a high level of customer satisfaction. Supply Chains Since its establishment, Toyota has worked close- ly with suppliers in its manufacturing operations. As part of these efforts, Toyota has globally imple- mented its Basic Purchasing Policies in accor- dance with the spirit of mutual benefit based on mutual trust between suppliers and Toyota. We strive to maintain close relationships with existing and new suppliers as we work together to Safety and Peace of Mind Enriching Lives Customers Better products at lower prices in a timely manner Suppliers Toyota Dealers/ Distributors Production Sales After-sales service Mutual trust/Mutual benefit promote our Customer First policy. When conducting business transactions, we conclude contracts that clearly stipulate legal compliance, respect for human rights, and con- siderations for local and global environments. Internally, we work to raise the awareness of all our employees, including buyers, through semi- nars and training. Organizational Structure The Purchasing Group, supervised by the chief officer and deputy chief officer for purchasing, takes the lead in promoting value chain collabora- tion activities in close cooperation with relevant departments, including those responsible for the environment, human resources, and compliance, as well as the Sustainability Management Department. The direction and challenges of sus- tainability initiatives are reported to and discussed by the Sustainability Subcommittee. Key issues are then reported to the Sustainability Meeting for consideration and decision making to ensure proper supervision. Toyota Supplier Sustainability Guidelines Toyota established the Toyota Supplier Sustainability Guidelines in 2009 to share the importance of sustainability initiatives with suppli- ers and request that they carry out business activ- ities in line with the Guidelines. In 2021, sections related to the environment and human rights were revised and expanded to reflect the increasing importance of environmental and human rights issues. As of July 2022, more than 90 percent of Toyota's domestic suppliers have endorsed the principles of the Guidelines. Furthermore, the Guidelines stipulate that tier 1 suppliers must expand the implementation of the Guidelines to tier 2 suppliers and beyond to ensure that these principles are disseminated and implemented throughout the supply chain. The Guidelines are also shared globally, as regional purchasing divisions apply them to over- seas suppliers. Toyota Supplier Sustainability Guidelines ▸ Toyota's Basic Purchasing Policies 1. Fair Competition Based on an Open-door Policy Toyota is open and fair to any and all suppliers, regardless of nationality, size, or whether they have done business with us before. We evaluate suppliers by quality, technological capabilities, and reliability in delivering the required quantities on time, and their efforts in addressing social responsibilities, such as environmental issues. 2. Mutual Benefit Based on Mutual Trust We develop mutual benefit in long-term relationships. To foster trust, we engage in close communication with suppliers. 3. Localization with Good Corporate Citizenship We actively procure from local suppliers, including parts, materials, tools, equipment and other materials. In this way, we aim to contribute to the local society and be a good corporate citizen. Compliance with and Implementation of the Guidelines Checks Using Self-inspection Sheets To ensure understanding and implementation of the Guidelines, all domestic Toyota suppliers are requested to periodically check the status of their implementation using a self-inspection sheet. In October 2020, around 350 tier 1 suppliers, which account for over 90 percent of our pur- chase volume in Japan, submitted the results of their self-inspections, indicating their status of implementation. Self-inspections based on the latest version of the Guidelines, following November 2021 revisions, are scheduled for the near future. Responses When Problems Are Identified When a problem is identified, we communicate with the supplier concerned and ask them to make improvements. Our stance is always that the business relationship may be reconsidered if no improvements are made. In addition, to pre- vent reoccurrences at other suppliers, we send notices explaining the issue to suppliers and ask them to ensure thorough prevention. In 2020, for example, we asked suppliers to pro- vide better assistance to foreign technical intern- ship trainees who were unable to return to their home countries during the COVID-19 pandemic. Tier 1 suppliers are requested to work with tier 2 suppliers in the same way. Preventing Bribery In response to the global expansion of its business and societal demands, Toyota has adopted the Anti- bribery Guidelines to ensure the thorough prevention of bribery and corruption. Toyota is strengthening its preventive measures by promoting awareness of the guidelines among its suppliers. Anti-bribery Guidelines TOYOTA MOTOR CORPORATION 47 INTEGRATED REPORT

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