Sustainability Management Policy- For achieving medium- to long-term value creation -February 15, 2022

TOYO TIRE Sustainability Management Policy- For achieving medium- to long-term value creation -1. Our sustainability goals

2. TOYO TIRE Group’s material issues

3. Challenges based in material issues (Value creation and problem solving)

4. Sustainability promotion cycle and governance

5. The history of our transformation and sustainability

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1. Our sustainability goals◆TOYO TIRE Group Sustainability Policy
Strongly aware that every action in our business is linked to society and the future, wewill seek to fulfill our purpose by solving social issues through our corporate activities
and creating social value.

We will integrate sustainability into our business using the following five perspectives.
① Identity based on our corporate
philosophy

View all sustainability themes in connection with ourphilosophy and act in line with our corporate identity② Medium- to long-term view

Identify the company’s opportunities and important risks as
medium- to long-term material issues and address them

③ Contribution to a sustainable society

Help solve social issues through our corporate activities
based on our belief in social sustainability as a prerequisite
for business growth④ Value creation cycle

Establish a cycle of increasing product and service value andinvesting profits in sources of further value creation⑤ Stakeholder collaboration

Collaborate with our supply chain, align with relevantorganizations, and increase corporate value through dialogue

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1. Our sustainability goals◆In 2021 we established the sustainability management concept and approach,and completed preparations for its promotion
February'21

MarchAprilMay

June

July

AugustSeptember

OctoberNovember

DecemberJanuary‘22

Discussion of company goals and material issues
Sustainability
SteeringCommittee

Sustainability
Committee

ExecutiveCommittee

General managers explainedmaterial issues to employees【Board meeting in Aug.】＊Reported on identifying material issues

Medium-term ’21
Plan announced
We declared our intention
to incorporate
sustainability into
management and address
it fully.

Sustainability
Committee
establishedEstablished under the
Executive Committee,
with the President & CEOof Toyo Tire as committee
chair

Organizations in charge of eachsustainability theme discussed
action policies and plans

Sustainability Executive
Committee Committee【Board meeting in Dec.】＊Resolution on Basic Sustainability Policy＊Reported on sustainability theme targets and KPIs
Company-wide Policy Briefing Session
Sustainability Policy shared with all employees, andeach Vice Presidents communicated theircommitment with a medium- to long-term view
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1. Our sustainability goals◆By making ESG the foundation of TOYO TIRE‘s corporate activities, we aim for integrated
promotion of our business and sustainabilityCommunication
Mfg.

Sales

Increasedcorporate value

Business Srategy[Corporate perspective] [Focus on speed]

Environmental

Financial Base

Risk Management

Tec.

Mfg.

Sales

Business Strategy

Socialvalue

Risk Management

Economicvalue

Sustainability

Environmentalvalue

Communication

Human Resources

Human Resources

Financial Base

Tec.

Integrated promotion of business andsustainability by incorperating ESG into
our corporate activities

SocialGovernance[Social perspective]

Embodiment of
TOYO TIRE
philosophy

Solving social issues

Profit maximization

Creating public value

Sustainable growth[Long-term thinking]*ESG icons are included in the description of the activities on each page.

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2. TOYO TIRE Group’s material issues◆Through our corporate activities, we contribute to providing society with sustainablemobility choices for the enjoyment of all

Value creation1

Help create a society of sustainablemobility2

Support the enjoyment of mobility for all3

Support diverse talent with motivatingchallenges and job satisfaction

The base for value creation

4

Continue innovating next-generation
mobility technology

Risk management

5

Pursue decarbonization in all corporate activities

Responsible business practices that
protect the means of valuecreation

6

Promote supply chain sustainability

7

Ensure the fundamentals of manufacturing:
quality and safety

Unique value provided tocustomers and society throughour products and services

Foundation forvalue creation

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3. Challenges based in material issues (Value creation and problem solving)◆Working toward medium- to long-term value creation
Reducing the environmental
impact of mobility
Value creation scenarios➢ Enhance fuel efficiency
with every new model➢ Reduce weight➢ Create more EV-compatible
products

Safe mobility

Material issue2

Unique EV strategy

Material issue

1［A Society of Sustainable Mobility]➢ Achieve long product life andsuperior braking performanceon wet surfaces➢ Tire wear diagnostic service- Through the expanding anddiversifying EV market -Material issue

Supporting
foundation

3Mobility for all【The enjoyment of driving】

Motivating challenges and job
satisfaction for diverse talent・Workplaces where diverse talent works together
naturally to grow and flourish
・Talent development that maximizes
individuality, character and capability➢ Develop technology forelectronic SUVs andpick-up trucks➢ Develop differentiated products
for SUVs and CUVs according totrends in the North Americanmarket

Material issue

4

Technological innovation fornext-generation mobility

・Technologies established specifically for theenvironment and EVs
・Uniting eco-conscious technologies withsophisticated features
・New and sustainable materials
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3. Challenges based in material issues (Value creation and problem solving)
Material issue◆Risk management to protect value created
Scope 1, 2

5 [Decarbonization]
Reduce CO2 emissions by 46% (vs. FY2019) by 2030. Carbon
neutrality by 2050. All functions within the company work together
and with energy suppliers to promote decarbonization.

Medium- to long-term CO2emissions reduction goals（千T/CO₂E）(1,000tCO2e)

600

Production
500

・Energy management
・Energy saving
・Update of mfg. systems and equipment

400Procurement300

・Flexible energy procurement
200

DX・Effective and efficient
initiatives driven by data

Corporate/Environment

100019 20

2030年

2050年

・Environmental investment standards andinternal carbon pricing
・Renewable energy plan

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3. Challenges based in material issues (Value creation and problem solving)◆Risk management to protect value created
Scope 3

［CO2 emissions per tire］

Rawmaterial
procurement

Material issue

5 [Decarbonization]

Aim to help reduce CO2 emissions per tire by 20% (vs. FY2019) by 2030.
Promote technological innovation, product enhancement and supply chain
collaboration.

R&D

Procurement

・Promote supplier engagement
・Reduce CO2 emissions associated with raw material transport

R&D

Production

Product Planning

Sales

Use・Improve technologies and develop processes for
low fuel consumption and weight reduction
・Increase focus on fuel-efficient tires and EV tires

Strengthen
measures tocreate value

Distribution

R&D
End-of-lifeandrecycling

Production

Logistics

Sales・Improve utilization rate of recycled materials
・Increase transportation efficiency
・Help popularize retread tires

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3. Challenges based in material issues (Value creation and problem solving)◆Risk management to protect value createdMaterial issue

Material issue【Quality and safety】

6 【Supply chain sustainability】

7

Create a robust supply chain that is resilientin the face of environmental and social risks
in raw material procurement.

Enhance product quality and safety
throughout the value chain.

Procurement

Quality

Production

R&D・DX

Sales

Stronger supply chain management
・Create global centralized management of suppliers andvisualization of the supply chain

・Establish a process assurance systemthrough quality visualization at each step・Promote responsible raw material procurement
based on environmental and social risk assessmentsin the supply chain・Create an individual product management systemcapable of traceability to market end

Sustainable natural rubber procurement

・Provide more hands-on safety
awareness programs for users

・Work with suppliers to promote use of sustainable
natural rubber in accordance with GPSNR*
principles and our Sustainable Natural Rubber
Procurement Policy*GPSNR: Global Platform for Sustainable Natural Rubber
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3. Challenges based in material issues (Value creation and problem solving)◆Addressing ESG issues related to sustainability outside the scope of material issues
ESG issues

Our efforts*Conserve water and aquatic environments*Contribute to the circular economy*Prevent chemical pollution*Efficient water use in business activities*Reduction and recycling of waste*Reduction in use of chemicals that may affect the environment*Maintain physically and mentally healthy andsafe working environments for all employees
and relevant contractors*Build resilience to natural disasters,
infectious diseases and other crises*Global-standard occupational health and safety management*Respect for human rights, elimination of all forms ofdiscrimination, and promotion of diversity in the workplace*Stronger crisis management system and establishment of BCP*Engage in corporate management that meets
societal needs and has a lasting positive
reputation for value*Further establish a positive corporate culture
and business practices*Fulfillment of board of directors’ functions(election of 1/3 or more independent outside directors;
skill matrix for directors)*Development of awareness of philosophy and continuous
improvement in compliance level*Stronger information security
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4. Sustainability promotion cycle and governance◆Identifying activity themes for comprehensive
engagement centered on material issues

Setting short, medium and long-term targets
and KPIs for each theme

Domain (1) Value creation

Sustainability
themes linked tomaterial issues

Sustainability
themes outside
the scope ofmaterial issues

Domain (2) Foundation forvalue creation

Domain (3) Risk management【Vision】
Goals/KPIs

Environmental【Process】

SocialGovernanceTargets/
KPIs
Shortterm
1–2years

Mediumterm
Approx.
5 years

Longterm
Approx.
10 years

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4. Sustainability promotion cycle and governance◆System for continuous value creation
General meeting of shareholders
ReportAppoint/
Dismiss

Audit &SupervisoryBoard
4 members (including 3
outside members)

Nomination &Compensation
Committee

ReportDevelopsustainability
policies

Appoint/
Dismiss

ReportMonitorthe entire scopeof sustainability

Board of Directors

Audit
ReportConsult

9 directors (including 3
outside directors)

Propose/Report(published online)

Supervise

Executive Committee

5 directors (including 3outside directors)

Decision-making bodyfor business execution

Sustainability
Committee
Chair: President ＆CEO
Members: Vice presidents of related HQSecretariat: ESG Promotion Dept.
Sustainability Task Force(Decarbonization, supply chain, etc.)

Formulate group sustainability strategy
Identify and periodically review materiali issues

Ascertain
progress towardsustainability
targets and KPIs

Implement measuresand policies according
to plans

Set sustainability
targets and KPIs

Promote andmanage initiatives
for sustainability
themesIncorporate each project’s
targets and KPIs into
annual policies and plans

Each function
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５．The history of our transformation and sustainability
201620172018【The starting point for change】【A new beginning】【Forming the backbone】⚫ Took extensive measures to prevent
recurrence of quality complianceproblems⚫ Returned to the basics and focused on
restoring trust and reforming
corporate culture⚫ Established new philosophy⚫ Started functional organizational
structure⚫ Relocated headquarters and began
operations there⚫ Divested rigid polyurethane foam andchemical industrial product businesses⚫ Shifted to a new management
structure with mobility at the core ofthe business⚫ Established a capital and businessalliance with Mitsubishi Corporation

Produ
ction

R&D

Quality

Employees and executives discussed what
the company should strive to be andformulated a new philosophy【Purpose-led management prototype】

Planningand
administ
rationCompliance

Sales

Environment
andsafety

We shifted from a divisional businessstructure to functional collaboration
to create unique added value【Material issues prototype】

We partnered with a different sector in
anticipation of a transformation theautomobile industry【Resource maximization 】
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５．The history of our transformation and sustainability
201920202021【Our second founding】【Creating a new path forward】【Shifting to a new stage】⚫ Changed company name toToyo Tire Corporation⚫ Formulated growth strategy forthe next corporate stage⚫ Adopted new brand statement:
Open Roads Await⚫ Developed a medium-term businessplan with junior and medium-level
employees across the organization⚫ Prepared for full-scale start of DX,
ESG promotion and strengthening of
human resource bases⚫ Maintained agile response to COVID-19⚫
⚫
⚫

The word “tire” is included in the company
name to galvanize our mission and prideboth internally and externally⚫

Started Medium-term ’21 Plan
Established Sustainability Committee
Introduced new HR system to promote
growth and motivation (Japan)
Conducted employee awarenesssurvey to increase engagement (Japan)

With the health and safety of employees
and stakeholders our top priority, we took
the initiative in implementing 100%
remote work and events
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