Environment

Building a Decarbonized Society
Basic Philosophy
In order to achieve the Paris Agreement’s goal oflimiting the global average temperature increase to
1.5°C above pre-industrial levels, greenhouse gas
emissions must be reduced to virtually zero by 2050.
At Toyoda Gosei, we are aiming to achieve thedecarbonized society set forth in the TG2050
Environmental Challenge by working throughout ourvalue chain to set targets for CO2 emissions generated
from our own production operations in 2030 (Scopes 1and 2) and from the procurement of materials andparts (Scope 3).

Endorsement of TCFD Recommendations
In May 2019, we expressed our endorsement of therecommendations of the Task Force on Climate-related
Financial Disclosures (TCFD) and conducted ascenario analysis of risks, opportunities, andresponses based on the Guide. We are accelerating
our efforts across our business activities andproactively disclosing relevant information, including
incorporating the results in our 2030 Business Planand reviewing our TG2050 Environmental Challenge
and 2030 milestones.

Carbon Neutrality Project
We are conducting initiatives to reduce CO2 emissions
throughout the entire lifecycle of our products, fromprocurement of materials and parts to productdevelopment, production, use, and disposal.

SystemWith the president at the top, the project leader is thevice president, and the core members consist ofdepartment heads and above. This is a system thatenables speedy and immediate managerial decisions
and their implementation.

Initiative

Each task is led by the head of the relevant department
to carry out the initiative.

Moved up the Timetable for Carbon Neutrality to 2030
Toyoda Gosei has established a new target to achievecarbon neutrality for CO2 emissions (Scopes 1 and 2)
generated from its production operations that is 20years earlier than the previous target by moving it up
from 2050 to 2030. This is a significantly shorter timeframe for achieving carbon neutrality that reflects ourresponsibility as a company to contribute to solving
climate change risks that are becoming more serious
in various parts of the world. We will continue toimplement initiatives to become a leading company inthe environmental field.

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Task A
Understand productlifecycle assessment(LCA) and set
reduction targets

Task B Visualization of CO 2 emissions and reductions
 Target setting items(1) Establishment of medium- tolong-term targets(2050, 2030, and 2025)(2) Subdivision of targets by category(Scope 3)(3) Setting of targets by theme

Achievingcarbon neutrality

Task C
Share carbon
neutrality (CN)relatedinformation

Prepare andimplement
reductionscenarios
 Strategic reduction approach, identification of vantage points
 Development of scenarios (mainstays of major initiatives) Identification of action themes to achieve scenarios
 Definition of environmental investments, clarification of financial
impact, and budgeting

 Gathering and sharing information on IR Gathering and sharing information on
government, customers, JAPIA, etc.

Initiatives to Achieve Carbon Neutrality
CO2 emissions Day-to-day
improvements
Develop decorative techniques that
reduce environmental impact during
the painting and plating processes

Otherareas
Painting/
platingRubber
extrusion
molding
Plastic
injection
molding

Optimize vulcanization
conditions for rubber
molding process

Production
technology
innovation

Implement electrification
and reduce pressureduring the plastic
molding process

Go beyond day-to-day
improvements and develop
production technology
innovations to accelerateenergy conservation

Renewableenergy utilization

2030

2050

Achieve Scopes 1 and 2
carbon neutrality

2030

2050

Scopes 1and 2

Carbon neutrality

Carbon neutrality

Scope 3

27.5% reduction
compared to 2019

Carbon neutrality

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

DataReducing CO2 Emissions
To achieve our 2030 target, we are reducing CO2 emissions throughout the entire product lifecycle by improving
productivity and efficiency of logistics, in addition to more lightweight designs for products leading to even highervehicle fuel efficiency.
Product Development Stage: Environmentally-Friendly Product Development Materials Design
In the product development stage, we are making
or rubber to plastic), reduce the number ofheadway in providing products for environmentallycomponents, integrate functions, and use morefriendly, next-generation vehicles and developing
lightweight designs while ensuring quality for theproducts with lighter weight for greater fuel efficiency
strength and other properties of instrument panel
and lower energy consumption and CO2 emissions
peripherals and other interior and exterior components
across the areas of materials technology, productand of functional parts such as hoses. We are also
design, and production technology. Examples include
actively working with suppliers to develop materials
the development of high-pressure hydrogen tanks forwith low CO2 emissions, such as bio-materials andrecycled materials.
FCEVs and efforts to switch materials (e.g., from metal
Production Stage: Emission Reduction through Development of New Manufacturing Methods and Day-to-Day
Improvements Manufacturing
We have set a 2030 milestone for achieving zero CO2of utilities, expansion of renewable energy, and more.
emissions at our plants, and are working to achieve
In particular, renewable energy initiatives are underway
this goal through day-to-day improvements at plants,
with the goal of converting all electricity to renewable
innovations in production technology, higher efficiency
energy by FY2030.
Logistics Stage: Improving Loading Efficiency
DesignMaterials and Parts Procurement Stage: Emission
Reduction through Collaboration with Suppliers

Manufacturing

Materials Manufacturing

In collaboration with logistics companies, we arereducing CO2 emissions by improving truck loading
capacity and logistics efficiency through the use of AIand other means.
Initiatives to Reduce CO2 Emissions in the Value Chain

We implement CO2 reduction by sharing goodpractices with suppliers through the Energy Saving
Dojo and supporting actual data measurements.
Toward Carbon Neutrality in the Value Chain by 2050

Product Lifecycle
Procurement of materials and parts

Scope 3*1

Procurement ofmaterials and parts

Transport

Initiatives
Minimizing CO 2 emissions Reducing CO 2 emissions
from materials and parts from logistics
In collaboration with material
manufacturers

In collaboration with logistics
companies Development and utilization of Improved loading efficiency andrecycled materials and bio-materials
operating route efficiency
 Adoption of electrically powered
In collaboration with parts
trucksmanufacturers

Our company (manufacturing)

Use and disposal (recycling)

Scope 1*2, Scope 2*3

Scope 3

Commuting andbusiness travel

Parts manufacturing

Minimizing CO 2 emissions
from commuting andbusiness trips

Achieving zero CO 2
emissions from plants

Minimizing CO 2 emissions
at the usage stage

 Day-to-day improvements: Comprehensive
energy-saving initiatives
 Utility updates: Higher equipment efficiency
 Innovations in production technology:
Development of innovative manufacturingmethods
 Adoption of renewable energy:Installation of solar panels, purchaseof green electricity

 More lightweight products Development of products for BEVs and FCEVs
 Development of technology for power devices

 Promote use of BEVs and FCEVs
 Encourage web conferencing
and telecommuting

 Reduction of CO 2 emissions

TransportUse

Disposal

Minimization of waste Easily-disassembled designs
 Collection of waste materials andimplementation of recycling*1 GHG emissions in the supply chain indirectly emitted by the company (e.g., raw material production, transportation, business trips, commuting) *2 GHG emissions directly emitted by the company itself (e.g., fossil fuels, natural gas)
*3 GHG emissions indirectly emitted by the company (e.g., purchased electricity)

Reduction of Greenhouse Gas (6 gases)*4 Emissions
Of the six greenhouse gases, Toyoda Gosei uses three(HFC, PFC, SF6) and is conducting initiatives to reduce
all of them. By FY2015, we had completed a switch toalternative gases with a low environmental impact forthe shield gas and other gases used in the productionof steering wheel cores. We will continue these
reduction initiatives going forward.
*4 Hydrofluorocarbon (HFC), perfluorocarbon (PFC), sulfur hexafluoride(SF6), methane (CH4), nitrous oxide (N2O), nitrogen trifluoride (NF3)

T OYODA GOSEI REP OR T 20 2357