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 CO2 Emissions Scope 1 (Direct Emissions), Scope 2 (Energy-related Indirect Emissions) and Scope 3 (Other Indirect 2) Scope 1 & 2 Emissions Reductions (million t-CO2) (b) Toyota vehicle production plants of uncon- solidated subsidiaries (production processes) Total (a) + (b) 2019 2020 2021 Emissions); Global (million t-CO2) (a) Toyota Motor Corporation and consolidat- ed subsidiaries 6.84 5.87 6.24 2019 2020 2021 Scope 1 2.94 2.45 2.56 (Direct Emissions) 0.54 0.81 0.77 7.38 6.69 7.01 Scope 2 (Energy-related 3.90 3.42 3.69 Indirect Emissions) Scope 3*1 364.34 Total 371.18 324.97 330.84*2 373.36 379.60 Scope: Toyota Motor Corporation and consolidated subsidiaries *1 The scope for the use of sold products category is Toyota Motor Corporation and Daihatsu Motor Co., Ltd.; data for the consolidated Group will be disclosed when available *2 The number of vehicles manufactured was lower in 2020 due to the COVID-19 pandemic. Progress toward Emissions Reduction Targets Validated and Approved by the Science Based Targets initiative (SBTi)*3 1) Emissions Reduction Targets SBTI validated Toyota's emissions reduction target for Scopes 1 and 2 as in line with its 1.5°C criteria in September 2022. In conjunction with this validation, SBTI also approved Toyota's emission intensity targets for Scope 3 Category 11 as in line with its well below 2°C criteria. *3 SBTI: An initiative established by CDP, the United Nations Global Compact, World Resources Institute (WRI), and the World Wide Fund for Nature (WWF) CO2 CO₂ CO2 Toyota Environmental Challenge 2050 0 Completely eliminate all CO2 emissions throughout the entire vehicle life cycle Reduce global average CO2 emissions (TtW) from new vehi- cles by 90 percent compared to Toyota's 2010 levels by 2050 Organizational Boundary: The sum of the above (a) + (b) Reduction Target: 68% reduction by 2035, compared to 2019 levels Progress: Refer to total CO2 emissions of (a) and (b) in each year shown above 3) Scope 3 Category 11 Emissions Reductions The data will be disclosed as soon as they are available. SCIENCE BASED TARGETS JANGAMOUS CORPORATE CLIMATE ACTION Cumulative CO2 Emissions Reduction Effect from Electrified Vehicles Cumulative sales** ✓ Cumulative CO₂ emissions reduction effect (million units) (million units) 20 Annual Cumulative (Cumulative) 20.3 million 3.0 15- 10- 5- 2.5 1.0 0.5 0 1997 2002 2007 2012 2017 2022 0 50- 100- 150- Annual Cumulative 200 (million t-CO₂) (Cumulative) 162 million t-CO₂ (million t-CO₂) Annual sales reduction effect Annual CO2 emissions *4 Vehicle sales figures are the total of HEV, PHEV, BEV, and FCEV sales 2030 Milestone • Reduce CO2 emissions by 25 percent or more*5 throughout the entire vehicle life cycle compared to 2013 levels Reduce global* average CO2 emissions (TtW, g/km) from new vehicles by 35 percent or more*7 compared to 2010 levels 20 Achieve zero CO2 emissions at global plants by 2050 • Reduce CO2 emissions from global plants by 35. percent compared to 2013 levels c) Targets Used by the Organization to Manage Climate-related Risks and Opportunities and Performance Against Targets Structure of Environmental Strategies Toyota is continuously monitoring social trends and customer opinions. Toyota considers which issues it should focus on, quickly anticipates future issues, and addresses environmental issues by applying new ideas and technologies. However, global environmental issues, such as climate change, water shortages, resource deple- tion, and biodiversity loss continue to spread and grow more serious every day. We formulated the Toyota Environmental Challenge 2050 in 2015 and the 2030 Milestone in 2018 so that each one of us can understand better these issues and continue to tackle chal- lenges from a long-term perspective, looking toward the world 20 and 30 years in the future. In 2020, we set the 2025 Target as the most recent target of the Toyota Environmental Action Plan, a five-year plan for achieving the above targets. Through a process of back casting from Toyota's medium- and long-term vision, we determine spe- cific activities that we implement in collaboration with our global consolidated subsidiaries and 2021 Initiatives (Results) • Reduced CO2 emissions by 13 percent throughout the entire vehicle life cycle compared to 2013 levels • In 2021, four new models were assessed, and 45 of the total 61 models available for sale (74 percent coverage) in 2021 in Japan were assessed using the Eco Vehicle Assessment System (Eco-VAS) • Reduced global* average CO2 emissions from new vehicles by 24 percent com- pared to 2010 levels by improving environmental performance and expanding vehi- cle lineups • Achieved cumulative global sales of 20.3 million electrified vehicles • Introduced innovative technologies, including a new type of paint atomizer (airless paint atomizer) that uses static electricity and promoted energy-saving through daily kaizen • Reduced CO2 emissions by 21 percent compared to 2013 levels Achieved a 13 percent introduction rate for renewable electricity • Continuously conducted various verification tests to support the utilization of hydrogen • Stationary fuel cell (FC) generators diverting on-board FCs, use of hydrogen burners for sealer drying furnaces in the battery assembly process, production of water electrolysis-based hydrogen by solar power, and use of FC forklifts *5 By promoting activities for the milestones of New Vehicle Zero CO2 Emissions Challenge and Plant Zero CO2 Emissions Challenge, and with support from stakeholders such as suppliers, energy providers, infrastructure developers, governments and customers *6 Countries and regions: Japan, the United States, Europe, China, Canada, Brazil, Saudi Arabia, India, Australia, Taiwan, Thailand, and Indonesia *7 The figures are estimates and subject to change due to market conditions business partners with the aim of realizing a sus- tainable world. Environmental Management System: Organizational Boundary and Management Steps We have built an environmental management sys- tem that covers 493 companies considered con- solidated subsidiaries on an accounting basis and nine unconsolidated vehicle production compa- nies (as of 2021). Under this system, we carry out the following three steps. We will maintain and improve this system in the future so that we can further promote environ- mental initiatives. Environmental Management Steps 1. Organize internal structures (governance system) 2. Ensure thorough risk management and compli- ance (including voluntary actions) 3. Maximize environmental performance ISO 14001/ISO 50001 As of 2021, all plants of Toyota Motor Corporation and consolidated subsidiaries (122 companies) have obtained ISO 14001 certification, and eight of these companies have also obtained ISO 50001 certification. Awards Received Selected for Two CDP A Lists In December 2021, Toyota was selected for inclu- sion in the climate change A List and water secu- rity A List the highest rankings in these categories by CDP.*8 *8 CDP: An international NGO that encourages and assesses corporate disclo- sures on environmental actions based on calls from global institutional investors with high levels of interest in environmental issues A LIST CDP CDP DISCOUNT NETION 2020 CLIMATE A LIST 2020 WATER TOYOTA MOTOR CORPORATION 43 INTEGRATED REPORT