General Affairs Dept., Corporate Infrastructure Division

2-2-13, Fujinoki, Itami City, Hyogo 664-0847, Japan
Tel: +81-72-789-9101 Fax: +81-72-773-3270
https://www.toyotires-global.com/csr/
The names of products, services and other items in this brochure are trademarks
or Japanese registered trademarks of Toyo Tire Corporation

Publishing date: July 2020**It is English version published.
Japanese version was published in June 2020.

TOYO TIRE
will Shape the Future
On August 1, 2020, TOYO TIRE will mark the 75th anniversary of its foundation.
We will take this opportunity to expand the reach of our unique presence
over the next 25 years as we move toward our centennial anniversary,with each and every employee continuing to challenge themselves.

Philosophy

Editorial Policy

Company Philosophy

Our Fundamental Values: “The TOYO WAY”

We will endeavor to continuously improve our products, andFairnesscreate value for everyone who we work with.

Be fair and selfless in one’s actions to benefit society.

Pride

Our Mission
To create excitement and surprise with our products thatexceed customer expectations and enriches society.

Our goal is to be a company that:- Stays one step ahead of the future through constant technologicalinnovation;

Items that are thought to have a substantial impact on the economy, the environment, and society and could have a practical impact on theevaluation and decision-making of stakeholders have been positioned as the “material aspect (materiality)” and are reported under the title “TOPIC.”

Take pride in one’s self, work and company, and to persevere.

Initiative
Show initiative in all matters, and take ownership of one’s
actions.

Appreciation

Our Vision

When confirming the content and quality of this report, some of the GRI Standards, established by the Global Reporting Initiative (GRI) andpublished in 2016 or 2018, were used as reference. And we have finalized the boundaries of the content and the items in this report, taking into
consideration factors including the organization’s activities, their impact, and substantial expectations and interest of stakeholders.

Demonstrate sincere compassion and appreciation for people
and society.

Solidarity
Continuously advance creativity and innovation by working
together to mobilize our corporate knowledge and capabilities.

● Topic Boundaries: 38 Group Companies* (as of the end of April 2020)*Toyo Tire Corporation and the group companies (consolidated subsidiaries)● Setting the Organizations Name in This Report: Toyo Tire Corporation → “Toyo Tire Corporation”, all group companies → “TOYOTIRE” or “the group”, the each company of the group → each company name, all group companies affiliated with TOYO TIREHOLDINGS OF AMERICAS INC. → “TTHA group”, all group companies affiliated with TOYO TIRE EUROPE GMBH→ “TTE group”● Reporting Period: From January 2019 to December 2019
*More recent information is included in some parts of the report.

● Reporting Cycle: Once a year (Previous Publish: June 2019)● Approve the Report by the governance body: Executive Committee approved the report in June 2020
● Contact Point for Questions Regarding the Report: Toyo Tire Corporation General Affairs Dept., Corporate Infrastructure Division- Drives entrepreneurial and creative spirit through a progressive* This is our Communication on Progress in implementing the principles of the United Nations Global Compact and supporting broader UN goals.
** Information may differ from that previously announced as changes have been made to the scope of some of the data collected.

culture; and- Shares in the enjoyment felt by everyone involved in our activities.

CONTENTS
01

Philosophy

09

Value chain & SDGs

02

Editorial Policy

11

Priority Theme 1

03

Business Impact of TOYO TIRE

16

Priority Theme 205
07

Product and Service Reliability and Innovation
Contribution to the Global Environment

Message from the President

20

Priority Theme 3

CSR Policy

23

Priority Theme 4

01 TOYO TIRE CSR Report 2020

Respect for Human Rights and Diversity

25

Priority Theme 5

27

Priority Theme 629

Priority Theme 7

33

Fiscal 2019 CSR Activities Summary/ Third-Party Opinion on the TOYO TIRE "CSR Report 2020"

Harmony with Local Communities
Creation of Safe and Healthy Workplaces
Reinforcement of Corporate Governance and Complianc

The website version provides
the details of this PDF version.
WEBSITEhttps://www.toyotires-global.com/csr/<GRI Content Index>
https://www.toyotires-global.com/csr/pdf/gristd̲en.pdf

Collaboration with Business Partners

TOYO TIRE CSR Report 2020 02

Bringing a New Way of Drivingfrom TOYO TIRE to the World

Toyo Tire has deployed its mobility business in over 100 countries and regions,
including North America, Asia, and Europe.
With our eyes on the “mobility society” of the future,

Business Impact of TOYO TIRE

we are aiming to further strengthen our global network.
The bases that have significant impact
on the local area (Manufacturing/R&D)

Business Profile

Company Outline (As of the end of 2019)

Our primary business, which accounts for more than 80% of net
sales, is the production of automotive tires in Japan, the U.S.,
Malaysia, and China.

Company Name: Toyo Tire Corporation

Consolidated Subsidiaries:

Japan

Headquarters: 2-2-13, Fujinoki, Itami City, Hyogo,664-0847, Japan

Toyo Tire Corp., 43 subsidiaries, 11 affiliated companies,
and 1 other affiliated company.

Toyo Tire Corporation (Headquarters)

With the aim of optimizing operations in the tire production
system in the future, we have plans to reinforce production
capacity and construct new production bases in the U.S. andMalaysia, and reinforce production facilities for truck and bus
tires in Japan.

* Entities subject to consolidated financial statements: 41 consolidated
subsidiaries, 4 Affiliates accounted for by the equity method** Please refer to the securities report for economic performance in fiscal 2019.

Manufacturing base

R&D base

Paid-in capital: 55,935 million yen

Sendai Plant, Kuwana Plant,
Hyogo Manufacturing Complex

Corporate Technology Center
Tire Technical Center
Automotive Parts Technical Center<Business Strategic Brands>
TOYO TIRE, NITTO, SILVERSTONE

Number of Employees*: 11,840 (1,292)
Number of Employees by Geographic Segment:Japan
5,201 (908)Americas2,125 (381)Asia/Oceania 4,391 (2)Europe123 (1)* The information of entities included in the consolidated financial statements** Number of people in parentheses is Temporary Employees

In addition, we manufacture automotive parts that make use of
our proprietary vibration control technology, such as automobileanti-vibration rubber, in Japan, the U.S., China, and Thailand.

Co m plem

upply oent ar y s

New production plant in Serbia
5 million high performance tires (Production start inJanuary 2022)
Enhancing supplies mainly for Europe, andcurrent business areas, such as Russia, theMiddle East and Africa.

(Actual number of tires for trucks/buses)
Chinese plant TBR
Expansion in Kuwana plant

Transfer consigned
production■Net Sales by Geographic Segment (2019)11.8 %

332,838 million yen
Net Sales

377,457
million yen

44,61866,286 million yen

03 TOYO TIRE CSR Report 2020

TOYO TIRE ZHANGJIAGANG CO., LTD. (China)
TOYO TIRE (ZHUCHENG) CO., LTD. (China)
TOYO AUTOMOTIVE PARTS (GUANGZHOU) CO., LTD. (China)
TOYO TYRE MALAYSIA SDN BHDSILVERSTONE BERHADTOYO RUBBER CHEMICAL PRODUCTS (THAILAND) LIMITEDTOYO TYRE MALAYSIA SDN BHD

New Global
Supply Strategy

EuropeCountry where group companies are established

Germany, UK, Netherlands, Italy, Russia
European Tire Business Management

TOYO TIRE EUROPE GMBH (Germany)** Please refer to our homepage for “Growth
Strategy for Next Corporate Stage” included
the new global supply strategy.

70.1 thousand tons
Net Sales

Total Production Volume377,457

245.6

million yen

52.4 %

197,698 million yenJapan53.2 %
130.6 thousand tons

thousand tons

Manufacturing base

R&D base

TOYO TIRE SERBIA D.O.O BEOGRAD

European R&D Center■Composition Ratio of Tire Sales Numbersby Geographic Segment (2019)28.5 %

113,473 million yen

17.5 %

Manufacturing base

R&D base

30.1 %

Other Areas

China, Malaysia, Thailand, Australia

North America

North America

R&D base

North America R&D Center

Country where group companies are established

Ensure stable brand positionin pick-up trucks/SUVs/CUVs category.

Japanmillion yen

Manufacturing base

TOYO TIRE NORTH AMERICA MANUFACTURING INC.
TOYO AUTOMOTIVE PARTS (USA), INC.
TMM (USA), INC.

Asia/Oceania

Phase V Expansion for pick-up trucks/large SUVs
1st step: +1.2 million tires* (Production started in April 2019)
2nd step: +1.2 million tires* (Production start in January 2021)

Other

88.2%

Americas Tire Business Management■Percent of Tire Production Volume (New Rubber)by Geographic Segment (2019)

Other

Tires

Country where group companies are established

America, Canada, Mexico
TOYO TIRE HOLDINGS OF AMERICAS INC.

for 2023

Improve flexibility as a global hub.

（Automobile parts etc.,
Including
Adjustment amount）

Americas

Enhancing product proposal skills.

Phase II Expansion for SUVs/passenger vehicles
1st step: +2.4 million tires* (Production start in October 2019)■Net Sales by Business Segment (2019)

Also, the air suspension business for truck and bus tires will beseparated from Toyo Tire Corporation and Toyo Chemical Industrial
Products Co., Ltd. by the end of June 2020. As a result, structures of
relevant organizations and their supply chains, as well as terms ofcontracts with business partners, will be different in 2020 and beyond.

+0.2 million tires (Production start in July 2020)

Malaysian plant*Converted to the number of tires for passenger
vehicles in Serbia, Malaysia, and US.

Fukushima Rubber Co., Ltd.,
Toyo Soflan Co., Ltd.,
Ayabe Toyo Rubber Co., Ltd

US plant

Japanese plant

Promote local production
for local consumption.

The Toyo Tire Group liquidated Sendai Service Co., Ltd. and Kuwana
Service Co., Ltd. in December 2019 for business downsizing, anddissolved Nitto Japan Co., Ltd. and Nitto Tire Canada Inc. in January
2020 for business integration.

f h i g h - p e r fo r m a n c e t i r e s

on to Serbian plant for E
oducti
r
urop
p
f
ean
er o
f
s
ma
n
Tra
rke
ts
d
p
e
r
o
n
d
g
i
u
c t ion
ns
r co
s fe
n
a
Tr

European Plant

Consolidated Subsidiaries(Manufacturing base)<Significant changes to the organization and its supply chain>

Original
Equipment

17.1 %

Japan

22%

North America

39%

Other Areas

Asia

18.3 %

44.9 thousand tons

Replacement

82.9 %

10%

Southeast
Asia

11%

Europe18%

TOYO TIRE CSR Report 2020 04

Message from the President

In FY2020, we began drawing up a new medium-termbusiness plan that will start in 2021, with this growth strategy
at its foundation. At the same time, we will work on thecreation of a future mobility society by making the most of
cutting edge technologies, while providing attractive products
globally as we constantly stay ahead of the market.
While working to promote and develop the auto industry
and stimulate a rich automobile culture, we will focus on
solutions to numerous social issues, including the environmentand human rights, by contributing to the establishment of asound value chain.

TOYO TIRE Proudly Supports
a Rich Mobility Society through its BusinessWith the change of company name to Toyo Tire Corporation in
January 2019, we made a fresh start as a business entity
centered on mobility. As a member of a business group with“tire” in its name, each and every employee proudly supports
the mobility society as they work toward its betterment with asense of responsibility.
The mobility industry is at a significant inflection point.
Seeing an opportunity in this time of change, TOYO TIRE aims
to be a company whose presence is genuinely needed by the
public and keeps taking on challenges for survival.

Delivering Valueof Unique Strengths to Society
About 15 years ago, we opened a new tire production plantin the U.S. With the introduction of our proprietary production
method, the plant gave rise to tough and aggressively
designed large-diameter tires, a standard which met the
expectations of car-enthusiast Americans. It was a case of
us locating the latent need in the market and becoming thefirst to materialize the yet unmet demand. Now TOYO TIRES
and NITTO are enjoying high popularity as some of theleading brands of tires for professional-grade SUVs, theprevailing vehicles in North America, to become an integral
part of the automobile culture in the U.S.
The Toyo Tire Group may not be among the largest tire
manufacturers in scale, but we have opted for a strategy
to expand business by “leveraging our unique strengths”

as we tap into our agility and flexibility and fully optimize ourresources. Delivering diverse values to society through business
management - we believe this is our corporate mission.

Setting the New Growth Strategy
as the Backbone of the Mid-term Plan
Now, you may ask, what is TOYO TIRE’s biggest uniquestrength? I would say it is our “presence in the differentiatedarea of specialty.”
In the Growth Strategy for the Next Corporate Stage, which
was published in August 2019, we declared that our key policy
would be to further enhance our existing strengths. In order toexpand and increase the supply of our competitive,
high-performance large-diameter tires, we will further ramp
up capacity at the existing plants that underpin our North
America business.
In Europe, on the other hand, with a new tire plant currently
under construction in Serbia, we will expedite local production
for domestic consumption there and complement supplies to
the North American, Middle Eastern, and African markets. We
also hope to conduct significant renovations on our tire plants
in Japan. Other key projects in the new growth strategy
include the establishment of the “R&D Global Tripolar System(for strengthening R&D at the three poles of Japan, North
America, and Europe),” which is designed to improve
technological development prowess and the enhancement of
the overall levels of our sales capability on a global basis.

STATEMENT OF CONTINUED SUPPORT BY THE CHIEF EXECUTIVE OFFICER
I am pleased to confirm that Toyo Tire Corp. reaffirms its support of the Ten Principles of the United Nations Global
Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.
In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global
Compact and its principles into our business strategy, culture and daily operations. We also commit to sharing thisSincerely yours,
June 2020

Takashi Shimizu
Representative Director and President, Toyo Tire Corporation

05 TOYO TIRE CSR Report 2020

The UN Sustainability Development Goals (SDGs) havebecome a globally standard business rule for achieving
long-term economic growth. Demonstrating what form ofsustainability we wish to realize in the mobile society andseeking solutions to this challenge - We believe this to be a
managerial issue of paramount importance.
In March 2019, we announced TOYO TIRE’s SDGs, which
we must address to achieve the ideal state of our business in2030. All 14 goals thus set involve social issues that the Toyo
Tire Group intends to confront and find solutions to for thesake of sustainability, including climate change, demographic
changes, and technological progress.
As we go about achieving TOYO TIRE’s SDGs, the Toyo Tire
Group will make maximum use of its resources. If there isanything that is not available within the Group, we will use ouringenuity and efforts by relying on our unique approach of“turning the weakness of not having everything into astrength” to make up for what is missing by reinforcing
partnerships, reducing business risks, or constructively
expanding business opportunities.
After the announcement of TOYO TIRE’s SDGs, we haveengaged in dialogues with each organization and Group
company by taking advantage of every available
opportunity. In so doing, we try to spread theunderstanding of our SDGs within the Group by explaining
the background leading to their establishment and therationale behind the need for us to work on them. We hopethat everyone in the Toyo Tire Group will have a better
understanding of our ultimate goal of raising our corporate
value, while examining how our business can address
global issues and requests from our stakeholders.

Toyo Tire Corporation will celebrate the 75th anniversary of
its foundation in August 2020. This could not have beenpossible without the most generous support from all of
our stakeholders, for which I would like to express myheartfelt gratitude.
After the start of this year, the COVID-19 has spread
across the world at an alarming rate. Restrictions on the
movement of people have divided and slowed down the
global economy, which in turn is disrupting the global
society. Although there is still no telling what will happen
next, we will use the pandemic as a learning experience tomake efforts to enhance our staying power for the future,including re-constructing the foundation of supply chains,reinforcing the framework for global cooperation andsynergy, and establishing new ways of working.
Everyone at the Toyo Tire Group is determined to overcome
this difficulty as they continue to challenge themselves. I hopethat you will continue to have high expectations of us. Yourkind support in this regard will be much appreciated.

June 2020

2020: The Year to Prepare
for Actions to Take in the Next Decade

To our stakeholders:

information with our stakeholders using our primary channels of communication.

Sharing the Same Sustainability Goals in 2019

future issues of our CSR Reports and elsewhere we will
explain to our stakeholders the management targets of TOYOTIRE’s SDGs during the period of the new medium-termbusiness plan and our unique value creation narratives forrealizing them.

In 2020, we will start preparing a master plan that ourmanagement should follow for the remaining decade(2021-2030) to achieve TOYO TIRE’s SDGs in 2030. In
order to eliminate the bottlenecks that were identified in
the dialogues within the Group last year, we are in theprocess of developing a new framework for enhancing anawareness-raising campaign and monitoring progress inactivities by each organization.
This year, we are supposed to draw up a new medium-termbusiness plan. Given the fact that TOYO TIRE’s SDGs present
integrated goals for the Group’s business and sustainability, in

Representative Director
and President

TOYO TIRE CSR Report 2020 06

CSR Policy
Promote Sustainability (History)

2014

Stakeholder Engagement

Established Basic Policy
TOYO TIRE seeks to remain a company admired by individuals and society,each member keenly aware of their “Connection” with society.
Identified 7 Priority Themes & Ideal Status in 2020
Priority Themes

Providing eco-friendly products andservices founded on high quality and safety

2. Contribution to the Global Environment

Promoting environmental management on a Group-wide basis

3. Respect for Human Rights and Diversity

Diverse employees actively working in an environment
with a global sense of human rights

4. Collaboration with Business Partners

Entire supply chain engaging in CSR activities

5. Harmony with Local Communities

Contributing to local community development
while responding to stakeholders’ voices

6. Creation of Safe and Healthy Workplaces

With priority given to safety, promoting the creation of
workplaces that ensure well-being and security
Engaging in business activities with integrity
while constantly improving management transparency

7. Reinforcement of Corporate
Governance and Compliance2017

Employees/
Co-R&D/Business Partners/
Customers

1
Employees

The accelerating changes of business environment→ It has become clear the emerging social issues.

Related departments
at each site
Related departmentsof group companies

Cooperation*Responsibility: Vice President ofCorporate Headquarters*Secretariat: Corporate
Infrastructure Division

Committee, Meeting, Hotline

Surveys, Customer satisfaction
surveys, Hotline, Meeting

TOYO TIRE

7

Reinforcement ofCorporate Governanceand Compliance2

Contribution
to the Global
Environment

Local Communities/
Environment/
Customers

Engagement Policy
We recognize the impact of ourbusiness on society and will share
the rich blessings from the earth with
our stakeholders into the future.
Main Approach
Interview

Engagement Policy

5

Harmony with
Local
Communities

Engagement Policy
Through dialogue and collaboration
with stakeholders, we aim toresolve social issues and develop
local communities by making use of
the Group’s resources.

SDGs WG
Environment WG
Human Rights & Labor WG

Main Approach

Local Communities/
Environment

Supply Chain WG

Established New Global Human Rights & Labor Policy
Established New Global Anti-corruption and Anti-bribery policy
Revised of CSR Procurement Guidelines (Included the Sustainable Procurement
Policy for Natural rubber)
Set “TOYO TIRE’s SDGs” (to achieve by 2030) *See P9-10
Expressed the support for the Ten Principles of United Nations Global Compact.

07 TOYO TIRE CSR Report 2020

Main Approach

Main Approach

Interview

We recognize our responsibility
toward our various stakeholders
and will ensure transparency inmanagement and will pursue
fairness within the organization.

4

Collaboration with
Business Partners

Engagement Policy
The entire supply chain will
engage with diversifying social
issues, as well as achievesustainable procurement.

3

Respect for Human
Rights and Diversity

Engagement Policy
We will fulfill our responsibility torespect human rights through ourbusiness activities and aim for a society
in which all stakeholders can play anactive role with diverse values.
Main Approach
Surveys, Interview, Meeting,
HotlineEmployees/
Local Communities/
Business Partners

Main Approach*Names of some institutions are ones at the end of April 2020

2019

Responding to changes in the businessenvironment and social needs will create
delight and surprise in our stakeholders
beyond their expectations.

As the responsibility of thecompany to all of its stakeholders,we will ensure safety and security
in our business activities.

Established the WG for promoting sustainability
WG for promoting
sustainability

6

Creation of Safeand Healthy
Workplaces

Engagement Policy

Extracted four priority issues for our sustainability

Executive Committee

Product and Service
Reliability and Innovation

Engagement Policy● Responding to climate change● Responding to human rights and anti-corruption● Responding to the responsibility for sustainable procurement● Setting and achievement of TOYO TIRE’s SDGs (Ideal Status in 2030)

2018

contribute to enriching society.
Through our opportunities for engagement with stakeholders,
we strive to be accountable by communicating information
accurately and clearly.
And we also check if we are providing business partners andcustomers with not only products and services, but also theexcitement that exceeds their expectations through our various work.

Ideal Status in 2020

1. Product and Service Reliability
and Innovation

2014-2017

TOYO TIRE identifies stakeholders who have a major direct orindirect impact at each stage of the value chain. We consider the
impact on the evaluation and decision-making of all stakeholders
and examine the priority issues.
The significance of the Group in society is that we not only
solve the issues requested by our stakeholders,
but we also create surprise and new discoveries for society andBriefing, Surveys, Hotline, Meeting

Business Partners/
Local Communities

Directly
Stakeholders

Indirectly
Stakeholders
Shareholders and Investors/
Creditors/Local Communities/NGOs/
Government/Business organizations
Main Approach
General Meeting of Stockholders, Disclosureof Information on Website, Surveys, Interview

TOYO TIRE CSR Report 2020 08

Value Chain & SDGs

Value Chain

Priority Themes

Product andService
Reliability
and Innovation

Harmony with
Local Communities

Creation of Safe and
Healthy Workplaces

Reinforcement ofCorporate
Governance andCompliance
09 TOYO TIRE CSR Report 2020

Manufacturing

Logistics/Sale

Corporate

Use/Waste
Recycling

Raw Materials/
Purchasing:Resource depletionby climate change
and increasing
demandRaw Materials/
Purchasing:Resource depletionby climate change
and increasing
demandTOYO TIRE's SDGs
We will contribute to widespread of mobilities that will be enable social participationby using higher functionality technologies.
We will contribute to progress of mobilities by focusing on adding of value of products andtechnologies.

R & D:
R & D:
Social inclusion
inclusion
・･Social
Advancement of・･Advancement
user
needs
ofuserneeds
Climate risks
risks
・･Climateinclude transition
includetransition
risks andand physicalrisks
physical
risks
risks

We will contribute to the mobility industry efforts that will adapt to climate change and aim to
mitigate the influence by climate change by innovations.

Use:
Traffic demand
increase

Manufacturing/Logistics/Sale:･Climate transition risks･Resource depletion by climate change andincreasing demand

Logistics/Sale:
Market stabilization,
Sustainable growth

Corporate:･Ensuring stable of talent ･Mainstreaming of SDGs

Raw Materials/
Purchasing:
Building asustainablesupply chain

The significance of the Group in society is that we not only solve the issues requested by our stakeholders, but we also create surprise and new
discoveries for society and contribute to enriching society.
Through our opportunities for engagement with stakeholders, we strive to be accountable by communicating information accurately and clearly.
And we also check if we are providing business partners and customers with not only products and services, but also the excitement that exceeds
their expectations through our various work.

TOYO TIRE's Opportunities and Risks with Respect to Global Issues

Respect for
Human Rights
and Diversity

Collaboration with
Business Partners

R&D

Logistics/Sale:
Building asustainablesupply chain

Corporate: Market stabilization, Sustainable growth

Manufacturing/Logistics/Sale:
Utilization of diverse human resources
and technology

Corporate:
Responding to the social changes (climate change impacts, etc.)

Waste Recycling:
Resource depletionby climate change andincreasing demand

We will contribute to sustainable resource recycling through optimization of resource utilizationand improvement of product durability.
We will contribute to realize the safe and secure mobility society through implementing safety
awareness and supporting for improving maintenance skills.
We will contribute to improve resource usage efficiency including water and energy throughpromoting to upgrade of equipment and operation on manufacturing sites.
We will contribute to promote the use of renewable energy in the region to increase renewableenergy share of energy used at manufacturing sites.
We will contribute to promote local employment and to develop and stabilize the local economy
by strengthening global network.
We will contribute to create a society where diverse peoples are able to get equal opportunities andplay an active role by providing work environment that employees can continue to challenge withpeace of mind.
We will contribute to create a society where SDGs become mainstream through developing humanresources to support sustainable development of the world.

We will contribute to create a society where ethical consumption is standardized by building
a sustainable supply chain through cooperation with stakeholders.

We will contribute to develop the whole world economy steadily by improving regional educationand culture level through deployment of our resources.

We will contribute to create a society where everyone are able to work safety and healthy though"smartness" -development and introduction of technologies that reduce the human load,e.g. AI and IoT.

Sustainable Developmentof TOYO TIRE and Community

Contribution to
the Global
Environment

Raw Materials/
Purchasing

TOYO TIRE identifies stakeholders who have a major direct or indirect impact at each stage of the value chain. We consider the impact on theevaluation and decision-making of all stakeholders and examine the priority issues.

We will contribute to minimize social impact of extreme weather phenomena derived from climatechange by building a robust value chain.

Value Chain: Business globalization and borderless

TOYO TIRE CSR Report 2020 10

1Product andService Reliability
and Innovation
Priority ThemeTOYO TIRE’s SDGs
(Ideal Status in 2030)
We will contribute;- to widespread of mobilities that will be enable social
participation by using higher functionality technologies.
- to progress of mobilities by focusing on adding ofvalue of products and technologies.
- to the mobility industry efforts that will adapt toclimate change and aim to mitigate the influence byclimate change by innovations.
- to sustainable resource recycling through optimizationof resource utilization and improvement of productdurability.
- to realize the safe and secure mobility society throughimplementing safety awareness and supporting for
improving maintenance skills.

Priorities● Ensuring product quality based on thorough customer

orientation● Efforts to alleviate and adapt to climate change● Development of human resources with technical expertise

Reasons for being Priority Issues (Opportunity & Risk)
In the business environment, TOYO TIRE foresees thefollowing; increased demand or tightening of regulations
for products and services that concern climate change;
globalization of our business area; diversification of
consumers, etc. We necessary to respond to thesechanges in the business environment. So, we regard ourpriority issues as the development and supply of
products and services that meet the needs of thenext-generation mobility society, strengthening oftechnological and material development to achieve this,improvement of quality, and training of human resources.

Activities in 2019
- Construction of the quality assurance system by IoT- Raising the awareness of tire safety by a driving
simulator- Intelligent Tire Development Platform - T-MODE

11 TOYO TIRE CSR Report 2020

Management Approach

Quality Assurance

Responding to the Quality Standards ofEach Country

Policies

Improving the Quality of
the Development & Productive Proces

Against the background of, for example, climate change andexpanding demand for mobility resulting from population increasein emerging countries and economic expansion, more and morecountries and regions are rapidly introducing new laws andsystems relating to performance and environmental quality for
improving fuel efficiency of automobiles and reducing of CO 2
emissions from automobiles. We are working to strengthen ourhandling of quality standards throughout the Group by responding
to all quality related to increasingly complex laws and regulations.

TOYO TIRE states as its manufacturing principle that we will
“strive for the highest level of quality, safety, and societal benefits
in our products and services” and we will ascertain changes inmarket trends and customer needs in an accurate and timely
manner, and promote product development through unique ideas
and a drive to take on new challenges not influenced byconventional wisdom.
At the research and development stage, we will support aprecautionary approach towards environmental issues, andcontinue to develop products and services that reduce, prevent,and minimize the negative impact on the environment.
As for product quality and safety, we operate a quality
management system based on ISO9001 and IATF16949 (theformer ISO/TS16949) and have established risk countermeasuresthrough foreseeing and predicting. And all the manufacturingbases of the Toyo Tire Group have been certified to the ISO 9001
family of quality management systems. Furthermore, ourfundamental philosophy and action guidelines regarding
product safety is clearly defined in the “Toyo Tire Group Product
Safety Charter.”

Goals
As a quality improvement Goal, through the product planning andproduction transfer preparation stages, which include materialpurchases and logistics, we perform quality risk analysis for eachprocess and are sure to reflect that in each R&D project.
We will work to ascertain the state of their quality with a constantawareness of customer satisfaction by referring customer opinionsof our products and services. The collaboration between the
Quality Assurance, Production, Sales, Engineering, and otherdepartments, we will work to make improvements in order toprovide even higher quality products. We also push forward withefforts to improve current issues from various perspectives throughpersonnel exchanges with all Group companies.
We will improve functionality in all product development activities,
which are our goals in resolving global issues through our products
and services. We will also promote human resource training.

Responsibilities (April 2020)
R&D
Corporate Officer & Vice President of R&D Headquarters
Production Engineering
Corporate Officer & Vice President of Production Headquarters
Provision of products and services
Corporate Officer & Vice President of Sales Headquarters
Quality Assurance
Senior Corporate Officer & Vice President of Quality Assurance,
Environment & Safety Headquarters

While considering it important to achieve greater quality in the
upstream business processes for manufacturing, we aim to raise
the quality not only of products and services that we introduce tothe market but also the development and productive process itself.
For new products that we develop, our Quality Assurance
Department checks the design reviews that are performed at every
stage, from product planning stage to production planning stage.
This is to ensure that quality is designed into our products andproduction processes.
The new plant building of TOYO TYRE MALAYSIA SDN BHD,
which was completed in October 2019, is equipped with a tire
production operation system that features TOYO TIRE’s cutting-edge
technological know-how and Internet of Things (IoT) technology, bothof which reduce quality loss costs at production processes.

At the four tire experiment/evaluation bases in Japan, we test
our tires in compliance with ISO/IEC17025 (general requirements
for the competence of testing and calibration laboratories). Since
the initial accreditation in 2013, we have been making constantefforts to improve the accuracy and reliability of our testing.
Every year, our Tire Business and Automotive Parts Business eachhold a Global Quality Management Committee (QMC) meeting,where quality assurance managers and others concerned cometogether from manufacturing bases from around the world. At thismeeting, we share and discuss initiatives related to product quality,
improvement of the quality system for production, the logistic andsupplier quality demanded by customers (business partners).

TOPICSQC Circle Activities,
the Source of Sustainable Growth
For more than 50 years, the Group has undertaken QC circle
activities to take the initiative to raise the level of quality
management using what we have learned from a frontline
perspective. There are now more than 300 circles across all
facilities, now spread to sales departments. At all the circles,
members bring with them their experiences and knowledge inorder to resolve issues as well as working to improve quality byascertaining current conditions, setting goals, developing activity
plans, and analyzing issues.
To share their experiences and achievements with their peers
and learn from each other, a Group-wide QC Circle Conference isheld annually. In FY2019, six domestic circles and five overseas
circles qualified for this global competition and gave presentations
on their quality kaizen activities. In the latest conference, somecircles went beyond the framework of quality improvement tochoose project themes related to the SDGs, such as work stylereform and resource conservation, evidence that there is a growing
perception among field workers that everyday quality improvement
activities are a prerequisite to the sustainability of an enterprise.

TOYO TIRE’s Tire Safety AwarenessCampaign Chosen for the Nikkan
Jidosha Shimbun Car Accessory
Award 2019
Toyo Tire Corporation and Toyo Tire Japan Co., Ltd. are engaged
in a joint campaign that uses a driving simulator to raise theawareness of tire safety. This unique initiative received the Special
Prize of the Car Accessor y Award 2019 sponsored by theprestigious trade paper in Japan for the fact that no othercompanies have tried to help drivers to recognize the importanceof tires through a virtual experience.
Wishing to make an extensive contribution to the mobility society,
the Toyo Tire Group considers this initiative to educate drivers
about the proper use of tires that it manufactures/distributes to bea mission of great importance. Every year, this educational
campaign begins on April 8 - Tyre Day in Japan.
In FY2019, we introduced a new simulation system featuring ouroriginal software, which provides a realistic experience of a variety
of situations that not many drivers would have the chance toencounter in real life: driving on tires with different levels of airpressure to compare handling stability and driving a car that ishydroplaning*. So far, nearly 1,000 persons have tried this system atnine sites across the country, and as many as 96% of them said thatthey now have a better idea about the safety of tires.
Through these safety campaigns with unique hooks, we willremind as many persons as possible of the impor tance of
maintaining their tires in an attempt to reduce road traffic accidents.
* Hydroplaning: When a vehicle drives on a water-covered road, a layer of waterbuilds between the wheels and the road surface, resulting in a loss of tractionthat causes the vehicle to slide over the wate

TOYO TIRE CSR Report 2020 12

Priority Theme 1

Product and Service Reliability and Innovation

Resolving Global Issues
by Our Products
Supporting the Participation ofDiverse Individuals in Society
In developed countries such as Japan, several issues exist such as
the rapid decline in population, the increase of the aging
population, and measures to take for vulnerable road users as aresult of natural disasters. Through our products and services, we
contribute to the mobility society that supports the participation ofdiverse individuals in society. For example, The Toyo Tire Group’s
truck and bus tires underpin networks of logistics and public
transportation around the world. Our tires enjoy a high degree of
popularity among our customers and users for their superb
durability and fuel efficiency, guaranteeing safe and comfortabletransportation for ever-diversifying drivers and passengers alike.

Responding to Increasingly
Sophisticated Customer Needs
In addition to changes in the social environment, the values ofpeople involved in mobility and customer needs for the Group is
becoming increasingly sophisticated. The Group does not only
resolve issues according to the needs of the stakeholders, but weare also working on product development, with the aim to provide
new realizations and joy. For example, the neo-futuristic airlessconcept tire “noair” that we developed is aimed to pursue amaintenance free tire and realize a spare less solution. This
neo-futuristic airless concept tire responses to new needs in themobility society. And the “noair,” in 2017, have reached theindustry-leading level of being able to mount the tires on passenger
cars and drive at high speeds.

Responding to Climate Change Risks
We are actively engaged in developing technology to respond tothe various climate change risks that is expected in the future, suchas improving technology for fuel-efficiency and low emissions, andthe development of next-generation mobility to replace engine
vehicles, etc. For example, TOYO TIRE Corporation has begun joint
development of a suspension module (composite components) for
electric vehicles (EV) with GLM Co., Ltd. which is the EV
manufacturer. We are developing automotive parts to achieve a
comfortable ride by automatically controlling the vehicle’s shock
absorbers and damping the juddering or vibrations to best suit theroad conditions, and we are aiming for commercialization in 2020.

Responding to Resource Depletion due to
Climate Change and Increased Demand
It is essential to the sustainable growth of society to resolve theissue of shortages in natural resources caused by climate change
and population growth. We are working on reducing the use of raw
materials in all value chain; research on next-generation material
such as new functional rubber and sustainable raw material;
development of material and products with a high-level of wear
resistance, etc. For example, using our proprietary technology,“Nano Balance Technology,” we have established a new
development process that can maintain a high-level of wear
resistance through optimizing resource characteristics whileachieving significant fuel efficiency. We have started supplying
products using this technology from the spring of 2019,
contributing to resource saving by improving product life.

TOPICSIntelligent Tire
Development Platform- T-MODE

Supplying the NANOENERGY
M638 Bus Tire to SORA, the First
Fuel Cell-powered Bus Operated
by a Private Business

As the only automotive part in contact with the road, tires play a
crucial role in satisfying the various performance requirements forcars. As the mobility society is going through a period of drasticchange with the advancement of connected, autonomous,shared, and electric (CASE) technologies, automobile tires are
required to innovate continuously.
In order to support the “evolution of mobility,” tires need tooffer clear-cut performance and functionality in a timely
manner; high-precision and high-speed design hold the key tothis requirement.
In response, we have come up with T-MODE, an advanced tiredevelopment process, by evolving the simulation technology of
the conventional T-mode (a simulation core technology that
integrates tire structural analysis with vehicle behavior analysis)
and incorporating AI design support technologies.
The sixth-generation high-performance computing (HPC) system
quadrupled processing power, thus realizing automatic generationof machine learning data and reinforcement of massive parallel
processing technology and multiprocessing capability.
Thanks to the introduction of a brand new SPDM* platformsystem, T-MODE can send various types of data to unified
management as shared assets for designers.
Data from simulations run by designers is stored automaticallyon a shared server for use in new analysis and prediction, thusincreasing the efficiency and performance of design work.
Furthermore, T-MODE uses the database thus created to run
machine learning, making it possible to develop higher
performing tires in a shorter time. TOYO TIRE will continue to taketires to higher levels by applying our “proprietary design
technologies for future road mobility.”

TOYO TIRE’s bus tire NANOENERGY M638 has been supplied to
SORA*, a fuel cell bus introduced for the first time by Keihin Kyuko
Bus Co., Ltd. as a private business (in service since March 2019).
Designed specifically for large route buses, M638 has beendeveloped by implementing e-balance core technology for truck
and bus tires and Nano Balance Technology, another coretechnology for material design, to achieve the two often
paradoxical elements of wear resistance and fuel efficiency.
Equipped with a large sidewall protector to protect the outerside of tires from being damaged by road curbs, NANOENERGY
M638 not only supports safe operation of public transportation
systems with its high durability but also reduces the burden ofmaintenance work by customers. This eco-friendly specialty tire
also achieves high fuel efficiency and helps to reduce CO2
emissions in the mobility society throughout its entire life cycle.
* A commercial-model fuel cell bus developed by Toyota Motor Corporation, thisnew mode of eco-friendly public transportation uses electric power generated byhydrogen and does not emit CO2 or other environmentally hazardous substances.

* Simulation Process and Data Management. A platform system that sends various
types of data to unified management to share standardized processes

TOPICS
The PROXES Sport SUV Tire
Ranked the Highest
in a Russian Auto Magazine

TOYO TIRE has been conducting business for 75 years
since its establishment and has constantly made technicalinnovations, in addition to seizing changes and evolution insociety, and has delivered products and services that
contribute to resolving social issues to customers in global.
We will introduce the innovative technology of TOYO TIRE
which always keeps running aiming at the future.
* More information is available athttps://www.toyotires-global.com/rd/

Our PROXES Sport SUV premium tire was ranked the highest* inthe summer SUV tire test conducted by Russian auto magazine“AutoReview”.
* First place in the 19-inch category, third place in the 17-inch category

AutoReview applies an original program to objectively assess
the safety of auto products. The PROXES Sport SUV premium
tire received high marks for such features as tough side-cut
resistance, in addition to exceptional grip performance on wet
surfaces and excellent handling on dry surfaces.

13 TOYO TIRE CSR Report 2020

A fuel cell bus “SORA” and NANOENERGY M638

TOYO TIRE CSR Report 2020 14

Priority Theme 1

Product and Service Reliability and Innovation

2
Contribution to
the Global
Environment
Priority Theme

Training Human Resources
with Technical Expertise
With an eye toward a future in which the market environment is
projected to be dramatically different due to the mobility revolution,
TOYO TIRE is focusing its efforts on training professionals who cantransform difficulties and crises into opportunities for sustainablegrowth.
Toyo Tire Corporation aims to train human resources with“problem-solving skills and innovative capabilities” based on
thinking oriented toward customer needs as well as “logicalthinking and facilitation capabilities,” which are important abilities.
This will be done through company-wide, grade-specific training.
At each of our technical headquarters, we will conduct training foryoung employees so that they acquire technical expertise andpromote annual human resource training to achieve eachorganization’s mission.

Our production departments are putting a lot of effort into
improving the inspection skills of quality control personnel anddeveloping operators’ competence so that they can deal withmultiple tasks.
Examples of Training Human Resources
with Technical Expertise (2019)
Toyo Tire Corporation (Japan)- Education and training for tire technicians who joined thecompany less than two years previous in order to advance theskills of young employees: about 115 hours/employees
TTHA Group (U.S.)- Training of employees to enhance their technical capabilities andproblem-solving skills: about 18 hours/employees
TOYO TIRE ZHANGJIAGANG CO., LTD (China)- Tests to enhance their appearance inspection skills for quality
control personnel: 4 times a year

Holding of the 9thCompany-wide Technology
Development Presentation

Our Young Researcher
Recognized by the Rubber
Industry Organization of JapanAt Toyo Tire Corporation, technological development thatmeets customer needs and responds to the opinions of the
Production and Sales Departments is conducted whileconstantly keeping commercialization in mind. In addition,
we hold a company-wide technology development presentation
as a venue to present the Company’s cutting-edge
technology-related efforts and their results to management.
In FY2019, three out of the six entries were commended after
being evaluated based on the five criteria of originality, logic,
future prospect, speed of development, and presentation.

Yuki Hasegawa of Toyo Tire Corporation’ s Central ResearchCenter received the 12th CERI Young Scientist Incentive Award
from the Society of Rubber Science and Technology, Japan.
This prestigious award is given to researchers 45 years ofage or younger who have made outstanding contributions toscientific and technological progress in the areas of evaluationand processing of rubber and plastics. Hasegawa successfully
developed thermoplastic liquid crystal elastomer materials(polymer materials with rubber-like elasticity) that offer highfl e x i b i l i t y a n d s t r e tc h i n g f o r c e . H e r d e v e l o p m e n t w a s
exceptionally well received as it paved the way to improving
the processabilit y of elastomer materials for commercial
application by optimizing molecular structure design andmodifying the molding process.

■Outstanding Technological Development Award
Development of composite components for special applications:
The team designed a mixture of materials that achieves both
required characteristics and production accuracy.

■Unique Award
Development of a strip extrusion technique* for special
composition rubber:
The team developed an extrusion technique for improving strip
rubber’s productivity for a broad range of rubber compounding.

(Ideal Status in 2030)
We will contribute;- to improve resource usage efficiency including waterand energy through promoting to upgrade ofequipment and operation on manufacturing sites.
- to promote the use of renewable energy in the region
to increase renewable energy share of energy used at
manufacturing sites.

Priorities

TOPICSThe 2019 awards

TOYO TIRE’s SDGs

■Comments from Hasegawa:
Much is expected from thermoplastic liquid crystal elastomer
material as it offers the potential to realize “affinity with humans”
and “adjustability to changeable situations,” both of which canbe applied to next-generation mobility, as it presents uniqueproperties such as high flexibility and significant stretching force
when subject to thermal stimulation. I will do my best to reach
new heights in my future research endeavors.

* A technique for supplying strip rubber to form a rubber layer that makes up
treads and sidewalls

Management Approach
Policies
In 1990, TOYO TIRE established the Toyo Tire Group Global
Environmental Charter, which sets forth a fundamental philosophy
and action guidelines for promoting environmentally conscious
behaviors and activities. Since then, the Charter has guided ourenvironmental management as one of the fundamental principles
of internal controls for the Group. With the establishment of TOYOTIRE’s SDGs in 2019, we are putting together a new policy so that
we can move forward to create sustainable value. Over the past
three decades, both the quality and quantity of impact that the
Toyo Tire Group has had on society have changed significantly. Yet,
we will remain committed to fulfilling our corporate social
responsibility by offering solutions to climate change and otherenvironmental issues that the world faces today.
And we support international norms; the United Nations Rio
Declaration on Environment and Development, Agenda 21 and theTen Principles of United Nations Global Compact (UNGC), etc.

● Efforts to alleviate and adapt to climate change● Efforts to reduce water risk
● Resource recycling efforts

To fulfill our environmental responsibilities, we quickly
establish countermeasures for environmental issues based ona precautionary approach (risk assessments). We respond toorganization issues by operating ISO14001-based environmental

Reasons for being Priority Issues (Opportunity & Risk)

management system, and disclose the environmental performanceof our corporate activities in our CSR report.

With the impact of climate change becoming more
severe, societal demands on mobility are also
increasing. TOYO TIRE recognizes that efforts toadapt to and mitigate climate change is the mostimportant issue affecting the growth of the Group in
one way or another. Reduction in the emission ofgreenhouse gases to achieve the “2-degree goal” setin the Paris Agreement, reduction of the water risks
that are increasing due to climate change andincreased demand, and resource recycling are our
responsibility not only to modern society but also to
future generations. So, we have positioned these aspriority issues to be addressed for the sustainability of
the Group.

Activities in 2019
- Revision work of the Toyo Tire Group Global
Environmental Charter- The third-party assurance for the environment date

Goals
For our activities within Japan, we have formulated the Toyo Tire
Group Global Environmental Action Plan, the target year of which is2020, plan and manage annual activity. And we translate the plans
into English and share it for business sites outside Japan.
As for global environmental issues such as climate change, water
security, resource cycle, etc., we are moving forward with a review
of our medium- and long-term targets.

Responsibilities (April 2020)
Senior Corporate Officer & Vice President of Quality Assurance,
Environment & Safety Headquarters

Assurance:
To ensure the veracity and reliability of data that it discloses,
the Toyo Tire Group obtained the independent practitioner’s
assurance of the FY2019 environmental data.
(As per the procedures of the independent practitioner)-Scope: The scope of verification is Scope 1 and 2 emissions,energy consumption, water intake and drainage.

■Surprise Award- Boundary: 22 sites (1 management, 21 sites of development
and manufacture)

Development of next-generation, light-weight tires for higher
fuel efficiency:
The team developed tires with lighter weight and lower
rolling resistance while ensuring handling, comfort, and otherperformance parameters equivalent to those of conventional tires.

* Excluding off-site mobile units- Period Subject to Report: from 1 January 2019 to 31 December
2019.
- C r i te r i a o f Ve r i fi c a t i o n: I S O14 0 6 4 - 3: 20 0 6 a n d t h e S G S
verification protocol- Verification Organization (a third-party): SGS Japan Inc.

Researcher Hasegawa

15 TOYO TIRE CSR Report 2020

TOYO TIRE CSR Report 2020 16

Priority Theme 2Contribution to the Global Environment

Response to
Climate Change
Opportunities and Risks posedby Climate Change
We recognize that opportunities and risks posed by climate change
are important business issues.
We have established a company-wide working group (WG) anddiscuss action for climate change issues. The WG brings together
the responsible parties in related business organizations anddiscusses about action plans. The plan is approved by the
Executive Committee which the Board of Directors delegatesauthority to, and the plan is spread to all companies andorganizations in the Group.
The WG is considering actions for climate change that we should
engage in while referring to the contents of the CDP* Climate
Change Questionnaire and Final Report (Recommendations) of
TCFD**. Based on the predicted impact of climate change
published by IPCC and various research institutes, we are in theprocess of organizing climate-related long-term opportunities, risks(physical and transition), and financial impact that will occur incontinuing corporate operations.
For example, we recognize the impact of climate change as anopportunity, and receives profit from the development and sales offuel-efficient products. And there are some countermeasures thathave launched in response to the risks of the strengthen
environmental regulations in each country, such as changing fuelsources, making active use of renewable energy, and improving theenergy efficiency of facilities. In future, we will prioritize theseopportunities and risks that have been organized, evaluate thebusiness impact using scenarios that are based on scientificevidence, and set long-term targets.
* An international NGO working in environmental fields (climate change, water security andforest). Uses questionnaires to collect information related to companies’ CO2 emissions
and initiatives on climate change, etc., evaluate and disclose.
** Task Force on Climate-related Financial Disclosures. Established by the Financial Stability
Board (FSB) in 2015 for the purpose of discussing the financial industry’s response to
climate change issues.

Reduction of Energy Consumption
We are moving forward with efforts to reduce energy consumption
through the effective use of energy required for business activities
both in and outside the organization. Efforts are also being made to
develop new products and technologies that contribute to climatechange alleviation and adaption.
TOYO TIRE ZHANGJIAGANG CO., LTD. renovated its plant to
reduce power usage at the vulcanization process, which requires
the largest amount of energy within the production process. As aresult, this subsidiary in China was able to reduce more than 50%
of its power usage of said process in FY2019.

emissions significantly.

2017

2018

2019

7561.17473.07346.1■GHG emissions (1000t-CO2e)4314.91654.7
1591.54213.81725.01534.23991.71810.01544.4

Direct (Scope 1) GHG emissions

By Region (1000GJ)▶Japan▶US▶Asia (Excluding Japan)▶非再生可能エネルギー源由来燃料
Typeof Source (1000GJ)▶Non-Renewable Sources▶Renewable Sources▶Purchased Electricity*Reference: Percentage of renewableenergy in purchased electricity▶Purchased Steam2017

4798.8216.82222.54927.8138.3
2082.95065.8
2.91
1963.3

-

-

15.6%

323.0

324.1

314.2

■Reductions in energy requirements of products and services(Fuel Efficient Tires)
Amount of reductions in energy
consumption (GJ/km) *Estimated values

2017

2018

2019

164.0

186.7

169.2

25.1
21.6

28.6
25.3

20.7
21.0

2018

2019

320.9

313.3

296.3*

232.5
51.0

226.1
53.6

204.8
57.8

37.5

33.7

33.8

By Region▶Japan▶US* Renewable energy sources can include geothermal, wind, solar, hydro, and biomass.
** In 2019, the Sendai plant (Toyo Tire Corporation, Japan) converted the factory's
thermal energy source from waste tires to natural gas.

▶Asia (Excluding Japan)

2017
Energy indirect (Scope 2) GHG
emissions

2018

2019

337.9

313.0

294.6*

126.3
86.3
125.3

99.2
86.7
127.2

70.4
91.2
133.0

By Region▶Japan▶US▶Asia (Excluding Japan)▶Tires for Passenger Vehicles (PCR)▶Tires for Trucks and Buses (TBR)■Energy intensity ratio for the organization
2017(GJ/million yen)

18.7

2018

19.0

TOPICSTOYO TYRE MALAYSIA SDN BHD：Cut CO2 Emissions through Higher Boiler Energy Efficiency
resulted in a more than 20% reduction in natural gas consumed
by the boilers. This is equivalent to an approximately 2,400-ton
reduction in annual CO 2 emissions, in recognition of which theyreceived the Toyota Environmental Award from their customer,
Toyota Motor Corporation.
Besides this, they have introduced a solar power generation
system to reduce CO 2 emissions. Going forward, this subsidiaryin Malaysia will make continued efforts to reduce CO 2 emissions
over the product life cycle by relentlessly pursuing higher energy
use efficiency in their business undertakings and replacing thecurrent energy sources with renewable alternatives.

2019

19.5

we are examining water utilization plans, improvement of work
processes, and the promotion of recycled water usage in basesthat operate in communities that have been assessed as being
impacted by water either now and in the future.

Interactions with water as a shared resource
Identify water-related impacts for our businessactivities (manufacturing)
Approach:
Accessed the water-related impacts by Aqueduct Water Risk
Data (Aqueduct, WRI) at the end of February 2020.

Result:Around Zhucheng (China), where the Group’s production facility
is located, has been evaluated the water-related impact as
Extremely high because in this area, there is a large demand forwater, the yearly and monthly fluctuations in the water supply
are significant, and the development status of wastewater
treatment infrastructure. Around Chon Buri (Thailand) has been
evaluated the water-related impact as high because in this area,
there is a large demand for water, the past flooding ofsurrounding rivers, and the development status of wastewater
treatment infrastructure.In addition, the predictions for 2030 has
assessed that, if stable economic development continues in the
future, the ratio of demand to water supply are expected toincrease more than the present demand. In this forecast, thedemand will be 1.4 times in Zhucheng (China) and Grad
Beograd (Serbia), 1.7 times for the area around Perak (Malaysia).

* Third-party verified data

■CO 2 emissions intensity
2017
Scope 1+2 /Sales (t-CO2/million yen)

1.63

2018

1.59

2019

1.57

*Reference: Production ratio ofFuel Efficient Tires (%)▶Energy consumption /Sales

The vulcanization process is part of the tire manufacturing
process for grooving treads by applying heat and pressure toachieve higher elasticity and durability. As such, the process
requires copious amounts of steam and accounts for a large
portion of energy consumption at the manufacturing process.
At TOYO TYRE MALAYSIA SDN BHD, they have introduced
equipment that efficiently recovers exhaust heat from steam
boilers at the vulcanization process to preheat water to be fed tothe boilers, thus increasing energy efficiency.
With this equipment, the feed-water temperature can beincreased by more than thirty degrees centigrade, which has

Greenhouse gas (GHG) emissions are said to be the main causeof climate change, and we are working to reduce GHG emissions
by making effective use of energy through business activities bothin and outside the organization and our products. We arepromoting fuel conversion and equipment renewal atmanufacturing bases as a countermeasure to scope 1 and 2. For
example, Ayabe Toyo Rubber Co., Ltd. converted its boiler fuelfrom heavy oil to LP gas in 2019, which helped them reduce CO 2
And we are promoting development of Fuel Efficient Tires as acountermeasure to scope 3, too.

■Energy consumption within the organization
Total fuel consumption (1000GJ)

Reduction of Greenhouse Gas (GHG)
Emissions

Efforts to Reduce
Water Risk
We recognize that access to fresh water is one of Human Rights.
So, we are aware that water risks in business activities are ourbusiness issue.
The company-wide Working Group (WG) also discusses about
the water securities, not only climate change. The WG is examining
the water security that we should address with reference to thedetails of the CDP Water Security Questionnaire.
Using the Aqueduct Water Risk Data disclosed by Aqueduct(World Resources Institute: WRI), the Group has identified
water-related impacts on business activities around our production
facilities. And we will engage in efforts to reduce water intake andwaste water through effective use of the water appropriate for thesize of the impact. In this evaluation, it was confirmed that none ofour bases/sites operates in areas where there is a high risk of anyof the following: water supply fluctuates from season to season,water may run short due to drought, groundwater may run out, oraccess to drinking water is not ensured there or thereabouts. And

We checked that no business sites use water taken fromwetlands listed in the Ramsar Convention or any other nationally,
internationally proclaimed conservation area, high biodiversity
area, and importance water resources to local communities andindigenous peoples. As for impacts for which sufficiently
accurate information is difficult to obtain for our Group to reporton at the current time, we will work to ascertain current
conditions giving priority to areas where there is a risk ofincreased water risk in the future.
* Identify using the following information; Ramsar Sites Information Service,
UNESCO-World Heritage Center, Ministry of the Environment (Japan), Agency
for Cultural Affairs (Japan)

Reducing Water Withdrawal
and Water Discharges
Primarily at its production facilities, our Group uses water
withdrawal from ground water, third-party water for its boiler
equipment, parts processing facilities, product cooling, cooling
towers, welfare facilities, and other facilities.
Regarding water withdrawal and water discharges, eachproduction facility is responsible establishing its own goals basedon the size of the facility and products they produce. We are also
revamping our equipment to reuse water as much as possible ineach production process.

* The details of each performance that energy and water usage, significant air emissions (GHG, others), and waste, and the detail of each data (boundary, period, assumptions underlyingof data) are available at our website.

17 TOYO TIRE CSR Report 2020

TOYO TIRE CSR Report 2020 18

Priority Theme 2Contribution to the Global Environment

3
Respect for
Human Rights
and Diversity
Priority ThemeTOPICS

Resource Recycling Efforts
TOYO TIRE considers our mission to contribute to the shift from asociety that consumes resources to one that recycles as the social
responsibility of a manufacturer that conducts business globally.

TOYO TIRE(ZHUCHENG) CO., LTD.:
Achieved Full Recycling of
Steam Drain

We strive to secure a stable and sustainable supply of raw
materials indispensable for business growth, such as natural
rubber, the main raw material in the procurement stage, in terms ofboth quality and volume. We are also moving forward with efforts todevelop new materials and to improve product design andproduction processes to make more efficient use of materials.

TOYO TIRE (ZHUCHENG) CO., LTD. is based in thecity of Zhucheng, China, where, according to anassessment by international organizations, water risks
are high there or thereabouts due to the sheer numberof water consumers.
They purchase large quantities of steam for use attheir tire production process but are aware of theneed to save water. So they began recovering
contaminant-free steam drainage (warm water
generated as a result of steam cooling down) forrecycling in an effort to reduce water intake. As theysucceeded in recycling all waste steam, they were able
to reduce water intake by more than 10% annually.

The Toyo Tire Group is making constant efforts to increasematerial usage efficiency. Toyo Soflan Co., Ltd., for example, reuses
100%* of defective units and discards (cut pieces from the molding
process) from its resin product manufacturing process by feedingthem back to the process.
* Excluding products using special materials■Water withdrawal (1000kL)
Total water withdrawal from all
areas

2017

2018

2019

3,891.5

3,719.1

3,737.3*

18.8
2,909.9

0.00
2,734.9

0.00
2,726.8

962.7

984.2

1,010.5

By Source▶Surface water▶Groundwater▶Third-party water2017
Total water withdrawal fromareas with water stress

2018

2019

-

-

87.2

-

-

0.00
86.1

By Source▶Surface water▶Groundwater▶Third-party water

1.10* Third-party verified data** At present, all water intake is from fresh water (water for which the total dissolved
solids are 1,000 mg/L or less)■Water discharge (1000kL)
Total water discharge to all areas

2017

2018

2019

2,601.8

2,284.3

2,194.8*

1,816.8

1,542.8

1,525.0

785.0

741.5

By destination▶Surface water▶Third-party water2017
Total water discharge to areas
with water stress

2018

-

669.7
2019

-

86.9

* Third-party verified data** At present, all water intake is from fresh water (water for which the total dissolved
solids are 1,000 mg/L or less)

TOYO AUTOMOTIVE PARTS (USA), INC., on the other hand, is
expanding the scope of items for reuse that would be otherwise
disposed of. In FY2019, they designated 16 items for reuse. They
also chose the Resource Conservation and Recovery Act(RCRA) of the U.S. as a topic for environmental learning, asegment covered in their weekly meetings, in order to raise theenvironmental awareness of their employees.
As for when products are used, efforts are being made to extend
the service lives of products, which includes manufacturing
products with outstanding durability and producing reused tires(retreaded tires) from used tires.
The information that the management and treatment of specificchemical substances is available at our website.
■Total Production Shipments of Recycled (Retreaded) Tires*TOYO Brand
2017
Production output(1,000 units/year)

124.9

2018

131.0

2019

130.0

Water with a High Level of Sodium
Hypochlorite Discharged from Toyo Tire
Corporation’s Sendai Plant
On October 2, 2019, it was confirmed that water discharge fromour Sendai Plant caused a temporary rise in the chlorine
concentration of the Gokenbori River that runs by it.
To prevent a recurrence, we re-trained the plant’s employees on
the risks associated with substances subject to the Water Pollution
Prevention Act and how to respond to abnormalities, and wereminded them of the emergency contact tree that is in place forwhen an abnormality is detected. Furthermore, they installed achlorine concentration continuous measurement meter to launch asystem that automatically suspends discharging of water outsideof the plant when an abnormality occurs.
We offer our sincere apology to the host community, residents,
and relevant administrative bodies for the enormous concerns
and inconvenience that this may have caused.

TOYO TIRE’s SDGs
(Ideal Status in 2030)
We will contribute;- to create a society where diverse peoples are able toget equal opportunities and play an active role byproviding work environment that employees cancontinue to challenge with peace of mind.
- to create a society where SDGs become mainstream
through developing human resources to support
sustainable development of the world.
- to promote local employment and to develop andstabilize the local economy by strengthening global
network.

Priorities● Fulfilling responsibility to respect human rights● Review labor standards taking into consideration

customary international law

Reasons for being Priority Issues (Opportunity & Risk)
For TOYO TIRE to grow as a global company in the
future, we believe it is important to understand thediversification of our stakeholders. And we must respondin good faith to diversifying needs while having theconsideration and appreciation for people and society.
To create this environment, it is important to build anorganization that can make the most of the personalities
and values of people from various backgrounds andenable them to demonstrate their capabilities. So, we
support and respect international norms, reduces therisk of business activities negatively impacting humanrights, as well as positions opportunities to support andpromote the benefits of human rights as issues thatshould be addressed with priority.

Management Approach
Policies
We respect international norms related to human rights and labor,such as the Universal Declaration of Human Rights, the ILO
Declaration and the Ten Principles of United Nations Global
Compact (UNGC). In addition, we set “Global Human Rights andLabor Policy” and actively contribute to the promotion and spreadof human rights to the extent that they impact the Group’s businessactivities in order to fulfill our responsibility to respect human rights.
In particular, for the work environment, we provide safe andhealthy work conditions, thoroughly prohibit not only discriminationin HR practices but also the direct and indirect use of forced andchild labor. We show our attitude towards the responsibility for
respecting human right in procurement activities as “CSR
Procurement Guidelines.” And we also support and promote theenjoyment of human rights in collaboration with business partners
so that the Group does not take part in human rights violations.
We have positioned the promotion of diversity as an important
human resources policy, and we are moving forward with efforts toreinforce systems to train diverse human resources and for them tofully demonstrate their capabilities.
The Toyo Tire Group Charter of Corporate Behavior wascompiled as corporate action principles applied uniformly acrossthe Group in order to faithfully conduct business activities. The
charter addresses the undertaking of business in a manner that
respects human rights and the culture and customs of each region
as well as valuing diversity among all people in the workplace.
*More information about the new policy is available athttps://www.toyotires-global.com/csr/pdf/human_rights_en.pdf(Please refer to Priority Theme 4 for the CSR Procurement Guidelines, and to Priority
Theme 7 for the Charter of Corporate Behavior).

Goals
We respect human rights in the workplace and work to eliminate allforms of discrimination and to promote diversity.

Responsibilities (April 2020)
Corporate Officer & Vice President of Corporate Headquarters

Activities in 2019
- President sends a message on Human Rights Day- Promoting Work Style Reform- Launching the Digital Innovation Division

Recycling*The details of each performance that energy and water usage, significant air emissions (GHG, others), and waste, and the detail of each data (boundary, period, assumptions
underlying of data) are available at our website.

19 TOYO TIRE CSR Report 2020

TOYO TIRE CSR Report 2020 20

Priority Theme 3

Respect for Human Rights and Diversity

Fulfilling the Responsibility
to Respect Human Rights

Global Human Rights & Labor Policy

mid-career recruiting, but also disabled persons and thereemployment of retired employees.

TOYO TIRE established “Global Human Rights & Labor Policy” andcommenced operations.

From FY 2018, Toyo Tire Corporation no longer publishes
recruitment ratios on gender or nationality when hiring new

At TOYO TIRE, there are increasing opportunities to communicate
with diverse stakeholders, both internally and externally. So, we
have established the “Global Human Rights & Labor Policy,” andwe are committed to corporate management that respects thehuman rights of all people involved in the business.

We respect the human rights of every person involved in ourbusiness activities, both in the workplace and the business
communities we operate in. Our goal is to contribute to the creationof an inclusive society* by responding to globalization anddiversification of stakeholders.

graduates. Instead, we have changed to a policy that evaluates andhires human resources evenly.

We consider the respecting of human rights a business issue thatshould be addressed with priority. We have established thecompany-wide working group (WG) and discuss action for there s p e cting of hum a n r ights. T h e WG br ings to g eth e r th e
responsible parties in related business organizations and discusses
about action plans. The plan is approved by the E xecutive
Committee which the Board of Directors delegates authority to, andthe plan is spread to all companies and organizations in the Group.

We recognize the possibility of causing, promoting or act in amanner that will have a negative impact for human rights. We willtake reasonable steps to avoid these outcomes.

In FY2019, a report was received by the grievance control
system run by the Toyo Tire Group about a human rights concern(harassment). We make it a rule to investigate every fact aboutsuch cases to take corrective measures if it is an active problem
and preventive measures if it is a latent problem. Many of theharassment cases occur because of a lack of understanding andawareness of the act of harassment by the perpetrator. As this is
the case, when an incident is reported, we organize a training
session at the base/site in question and, if deemed necessary,other relevant bases/sites to prevent a recurrence. The Toyo Tire
Group will remain committed to the prevention or mitigation ofnegative impacts on human rights within the organization.
As for the impact that we have on parties outside the grouporganization for which sufficiently accurate information is difficult
to obtain for our Group to report on at the current time, we will
work to ascertain current conditions, which includes conducting
research in the future on areas with high human rights risks.

TOPICS
President Sends a Message
on Human Rights Day

In line with this policy, in FY2019, we conducted interviews at allaffiliates to ask about their diversity and work environment. Theinterviews did not reveal any concerns over human rights and labor attheir workplaces, but we are currently preparing for due diligence.
* An inclusive society: the process of improving the terms on which individuals andgroups take part in society —improving the ability, opportunity, and dignity of thosedisadvantaged on the basis of their identity.

Diversity of
Human Resources
Employment Situation
TOYO TIRE is committed to ensuring fair employment practices
and treatment of employees across our organization. We are also
striving to create workplaces where diverse individuals can fully
demonstrate their capabilities, regardless of nationality or gender.
In terms of recruiting, we endeavor to secure necessary humanresources through various methods - not only new graduate andNew employee hires (Toyo Tire Corp.)*Full-time employee including mid-career hiring

Total: 167
Age groups• Under 30 years old: 68.9%• 30-50 years old: 28.1%• Over 50 years old: 3.0%
Gender*: Male 85.6% / Female 14.5%

Diversity of employees (Toyo Tire Corp.) *Full-time employee
In January 2019, TOYO TIRE published the Global Human
Rights & Labor Policy and in March expressed its support for
the Ten Principles of the United Nations Global Compact(UNGC), declaring its commitment to fulfill the responsibility
to respect human rights as a global business entity. Then on
Human Rights Day on December 10, Takashi Shimizu,
TOYO TIRE’s President & CEO, sent out a message to all
employees of the Group emphasizing the importance ofrespecting diversity within the organization. The message
was translated from Japanese to Portuguese, English, andChinese, and was shared with all the bases/sites within theGroup via e-mail or on bulletin boards.
Fully aware of the value created by respecting humanrights, the Toyo Tire Group tries to provide a work
environment where all employees can continually challengethemselves without worries.

21 TOYO TIRE CSR Report 2020

Total: 3,595 (+1.8% from the previous year)
Age groups• Under 30 years old: 22.4%• 30-50 years old: 61.3%• Over 50 years old: 16.2%
Gender*: Male 93.4% (+2 pt from the previous year) /Female 6.6% (+4 pt from the previous year)
People with disabilities: 16
Foreigner**: 21
Total number of managers: 819
Male-female ratio of managers:
Male 95.2% (±0 pt from the previous year) /Female 4.8% (+5 pt from the previous year)
Percentage of Foreign** managers: 0.6% (±0 pt from the previous year)* Gender-specific data: Refers to data for each biological sex. We do not havequantitative data specific to individual social sexes due to the difficulty in determining
them. Our goal is to provide a workplace environment where all the employees are
given equal opportunities.
** Data on foreign nationals: Refers to data on foreign nationals as defined in the
Nationality Act of JapanTo ensure diversity and equal opportunity at workplaces, we aredeveloping various personnel systems to empower all employees,
while at the same time conducting career interviews with each andevery employee, drawing up a human resources development plan,and organizing an awareness-raising training session.
A good example of how diversity can be promoted can be foundat Toyo Tire Japan Co., Ltd. In 2016, they established a humanresources empowerment committee, whose main goals were careeradvancement and empowerment of female employees. Because it isof equal importance to have supervisors and male employees
actively participate in the initiative and raise their awareness, thecommittee involves all employees in its activities. Meanwhile, more
women are holding managerial positions, thanks to aggressive
efforts to review job descriptions, job responsibilities, and authorities
of female employees to assist their career advancement.

We consider the establishing of constructive dialogues between
companies and labor representatives is a way to share information
on workplace issues which will lead to solutions to these issues.
* More information about the current situation of labor management relations is available
at our website.

Improvement of Education
and Training Programs
We consider our people to be our most important resource tosupport continued business growth and we are aware of theimportance of developing these human resources. In this changing
labor environment, we have expanded our education and training,
the goals of which are for employees to acquire the skills needed toachieve business management targets.
For example, Toyo Tire Corporation divides its training programs
into three categories: “Grade-Specific Training”, “Selective Training”,
and “Independent Training”. We created training programs to meetthe objectives of these three categories and employees’ grade levels
and years of service.

TOPICSShowa Estate Co.,Ltd.:
Promoting Employment of
Persons with Disabilities
Showa Estate Co., Ltd. is a special subsidiary company of Toyo
Tire Corporation. Under the slogan of “Involve diverse people andgrow together!” , they are aggressively hiring persons withdisabilities, which is one of the corporate missions of the Toyo Tire
Group. In collaboration with other Group companies in Japan,
they are focusing on the creation of a safe and secure workplaceenvironment and the expansion of the range of their work. Thanks
to their dedications, many persons with disabilities are playing anactive role at those companies.
To ensure that employees with disabilities can continue to workin the Group, they assist those in leadership positions to qualify as
a work adjustment supporter ( job coach). Furthermore, they
organize periodic in-house training sessions, such as lectures oninterpersonal support skills by guest speakers from welfare
universities and business manner workshops for persons withdisabilities, to help them increase their employability.
By including diverse people in society through the employmentof persons with disabilities, we aim to be a company that is
indispensable to local communities.

Promoting Work Style Reform

For each and every employee to fulfill their expected roles as they
respond to changes in the operating environment, Toyo Tire
Corporation is working on work style reform with the aim of allowing
its employees to design and optimize their personal work style.
In FY2019, we promoted the diversification of work styles by, forexample, expanding the scope of teleworking and having a model

department and others participate in Telework Days in response tor e q u e s ts f ro m th e g ove r n m e nt, w h il e a t th e s a m e tim e
implementing measures to increase work efficiency by updating
the workflow and visualizing job responsibilities of each employee.
Based on the outcome from FY2019, we aim to further improve thework-life balance on a company-wide basis by increasing thedepth and expanse of activities in this regard.

Launching the Digital
Innovation Division
Toyo Tire Corporation has engaged in extensive discussions on
strategies and directions of its move to digitalize operations acrossthe board as part of its response to constant evolution in thebusiness environment. With the environmental changes in the auto
industry in mind, we have examined the values that digitalization
can bring to the Group to map out five digital strategies (seebelow).
Accordingly, in Februar y 2020 we established the DigitalI n n o v a t i o n D i v i s i o n w i t h a v i e w to w a r d p r o m o t i n g t h ereorganization of our business across the board, creating astrategic business management structure, and deploying businessstrategies with a focus on next-generation mobility by introducing
and leveraging digital technologies. Going forward, this newdivision will take the lead in accelerating further digitalization of theGroup, thereby establishing a start-to-end process that reaches
customers and enhances mobility in management.
<The five digital strategies>
1. Original product planning based on field data
2. Data-driven provision of customer experience
3. Utilization of big data and a cyber-physical system (CPS) for lower costs
4. Sales/supply system that anticipates demand
5. Data-driven development of a management foundation

TOYO TIRE CSR Report 2020 22

4Collaboration
with Business
Partners
Priority ThemeTOYO TIRE’s SDGs
(Ideal Status in 2030)
We will contribute to create a society where ethicalconsumption is standardized by building a sustainablesupply chain through cooperation with stakeholders.

Priorities● Supply chain management (Society and Environment)

Management Approach
Policies
We formulated the Toyo Tire Group’s Basic Purchasing Policies inorder to comply with laws and regulations related to freecompetition and fair transactions in every country and region as
well as pursuing appropriate quality and price through fairtransactions.
“TOYO TIRE Group CSR Procurement Guidelines” were alsoestablished. We will promote sustainable purchasing incollaboration with business partners, the goal of which is to
reduce, prevent, and minimize the negative impact that businessactivities have or could have on the environment or society andsimultaneously raise corporate value and competitiveness. We will
also secure stable supplies.
* More information about the new policy is available athttps://www.toyotires-global.com/csr/pdf/procurement_en.pdf

Reasons for being Priority Issues (Opportunity & Risk)
It essential to TOYO TIRE’ sustainable growth that weunderstand the impact of its activities on the supply
chain and engage in resolving social issues faced by
the supply chain, as a global company. In addition, we
believe that it is only through a sound supply chain that
we can deliver safer, more secure products andservices to consumers. To this end, we position
contributing to sharing the Group’s thoughts onsustainable procurement with business partners andsolving global social problems throughout the supply
chain as issues that should be addressed with priority.

Activities in 2019
- Public awareness of the Revised CSR Procurement
Guidelines

Goals
We share our sustainable purchasing policy with all business
partners and efforts are made to ascertain conditions throughout
the supply chain and conduct fair transactions.

Responsibilities (April 2020)
Corporate Officer & Vice President of Business Headquarters

Partnership with
Business Partners
Promoting Sustainable Procurement
Creating a supply chain that supports sustainable procurement is
indispensable for continuing to ensure a stable supply of raw
materials with the quality and volume to support the growth of
TOYO TIRE. Sustainable procurement means that we work toward
resolving social issues throughout the entire supply chain, fromproduction to consumption, and aims for sustainability in society.
Because this is an urgent high priority issue for the Group, we
have established a company-wide working group (WG) anddiscuss action plans, which include orientation, goals, and targets.
The WG brings together the responsible parties in related businessorganizations, the discussed action plan is approved by the
Executive Committee (chairperson: President), which the Board of
Directors delegates authority to, and the plan is spread to allcompanies and organizations in the Group.

CSR Procurement Guidelines

Briefing on the Revised CSR Procurement Guidelines

23 TOYO TIRE CSR Report 2020

To work toward resolving social issues throughout the entire supply
chain, from production to consumption, we have established the“TOYO TIRE Group CSR Procurement Guidelines.”
The contents of the guidelines are periodically revised based on
the demands of society and changes in the business environment.
In the 2019 revisions, we added a policy concerning the sustainableprocurement of raw materials (especially natural rubber).
Following the revision in the Guidelines, in FY2019 we invited 60
business partners in Japan to a briefing session. We also shared
the content of the Purchasing Policy (on sustainable purchasing of
natural rubber, in particular) individually with the Group’s key
natural rubber suppliers to help them to internalize the Policy.

** A platform that aims for production and use of natural rubber around the world to be
conducted in a method that considers the natural environment and social issues,
going beyond the norms of the industry.

International collaboration on thesustainable procurement of natural rubber

Response to the Conflict Minerals Issues

In the future, being able to procure a stable supply of natural
rubber is a particularly important management issue for theGroup, which uses natural rubber as the main raw material for
manufacturing. Meanwhile, the natural rubber industry facessocial issues, such as deforestation at production sites andinfringement of the rights of local residents, and there is aworldwide movement to achieve sustainable procurement of
natural rubber by resolving these issues.
Since 2016, we have endorsed the aims of the “Sustainable
Natural Rubber Initiatives (SNR-i) *” proposed by the International
Rubber Study Group (IRSG), and we have promoted CSR
procurement while gaining the understanding of our business
partners. In addition, we also participated in the “Global Platform
for Sustainable Natural Rubber (GPSNR)**,” a new framework
launched in 2018 by the Tire Industry Project (TIP), a project of theWorld Business Council for Sustainable Development (WBCSD).
The Sustainable Natural Rubber Procurement Policy, which has
been added to version 3 of the Toyo Tire Group CSR Procurement
Guidelines, respects the Sustainable Natural Rubber Principles
by the Global Platform for Sustainable Natural Rubber (GPSNR).
In FY2019, we sent the new guidelines to all primary supplies ofnatural rubber (natural rubber processing services) that we workwith to solicit their understanding of our new procurement policy andtheir cooperation with sustainable procurement. We also visited
some of our largest natural rubber suppliers at their sites to compare
notes on how we can build a sustainable natural rubber supply
chain. The suppliers we visited this time account for approximately
80% of our total purchase of natural rubber (by volume).
Through international initiative or our own value chain, we will
work closely with our stakeholders to create a sustainable natural
rubber supply chain.
* Initiatives with the aim to support the improvement of productivity, enhancing quality,
support forest sustainability, water management, and to demonstrate the highest
respect for human and labor rights across the natural rubber supply chain.

Conflict minerals refer to tin, tantalum, tungsten, and gold which
are produced in conflict areas such as Central Africa. In Europe
and North America, the law requires that the supply chain ofminerals be subject to due diligence and other procedures sincepurchasing them could finance the local armed forces that
propagate conflicts and violations of human rights.
We conduct thorough investigations by tracing all the way backalong the supply chain to refining companies to determine
whether the materials or products supplied to us contain conflictminerals from the relevant countries, in cooperation with ourcustomers and suppliers.

Promotion of Fair andTransparent Transactions
With the Toyo Tire Group Code of Conduct as our action
guidelines, we formulate our own codes of conduct to reflect
differences in laws, regulations, and customs of each country andregions, and strive to spread and promote compliance.
For example, in FY 2018, the Procurement Division collaborated
with the Legal Dept. and the Compliance Dept. to create achecklist. We use this checklist to confirm whether the
Subcontract Law applies to each transaction and to check foromissions in the information recorded in the documents that must
be created and stored under the Subcontract Law. We conducteda self-assessment of the compliance status with the Subcontract
Law and analyzed these assessment results and are
implementing corrective and preventative actions as necessary.
Furthermore, we conduct on-going study groups, promote thesharing of information within the group, and ensure that
Subcontract Law compliance managers improve their knowledge
and have a unified understanding of the law.

TOPICS
Briefing on the Revised CSR
Procurement Guidelines
Toyo Tire Corporation invited 60 suppliers in Japan with whom it
does regular business to a briefing session on the latest versionof the Toyo Tire Group CSR Procurement Guidelines, whichwere revised in January 2019.
On this occasion, the participating suppliers were updated on
the business environment that the Toyo Tire Group now finds
itself in and the impact that its business activities have on theenvironment and society, as well as sustainable procurement
activities at which the Group aims. Within a limited time, wewere able to show the suppliers that the development of asustainable supply chain is one of the key programs of theGroup’s endeavor to promote sustainability.
Going forward, the Toyo Tire Group will provide as many
opportunities as possible to communicate with global suppliers
so that we can work together to realize sustainability in themobility industry.

TOYO TIRE CSR Report 2020 24

5Harmony
with Local
Communities
Priority ThemeTOYO TIRE’s SDGs
(Ideal Status in 2030)
We will contribute to develop the whole world economy
steadily by improving regional education and culture level
through deployment of our resources.

Priorities● Engagement with local communities● Preserving biodiversity

Reasons for being Priority Issues (Opportunity & Risk)
To become a company that is needed by society in the
future, TOYO TIRE believes that it is important to aim at
being a company that can share joy with everyone(stakeholders) who is involved in our business activities.
It is our opinion that overcoming environmental
problems, securing human resources, and thestable growth of local economies are vital to ourcontinued growth in the future. To achieve this, weplace importance on opportunities for dialogue withstakeholders, and position the resolution of issues in thelocal community and social issues through collaborationand contribution to the enrichment of society as issues
that should be addressed with priority.

Activities in 2019
- Deepening communication with stakeholders- Promotion of the support for raising next-generation
childrenManagement Approach
Policies
We will create common values with local communities bycontributing to environmental protection to the extent that ourbusiness activities impact the environment, supporting raisingnext-generation children, and the growth of local communities
by the Group’s resources and collaboration with stakeholders
based on various forms of communication.
At production facilities that are expected to have a particularly
significant impact on the environment as the scale of ourbusiness grows, we will make use of a precautionary approach torespond to the risk that our impact on biodiversity in surrounding
areas will increase.

Goals
We will resolve social issues through collaboration withstakeholders and aim to create common values.

Responsibilities (April 2020)
Corporate Officer & Vice President of Corporate Headquarters

Environmental
Protection Efforts

Support for Raising
Next-Generation Children

We understand that our business activities have the greatest direct
impact on the environment of the areas around our production
facilities. We build trust in those activities by maintaining a dialogue
with and providing information to stakeholders in areas aroundproduction facilities, and strive to reduce the minus impact. And we
promote efforts to protect biodiversity in local communities assomething that not only generates direct benefits for local life but
also leads to sustainable growth.

We consider the sound upbringing of children, society’s next
generation, as a social issue that must be addressed for thecontinued development of local communities, and we provide
donation to support the raising of next-generation children.

For example, the Kuwana Plant works with the NPO Mori-no
Kaze to undertake “TOYO TIRES Midori-no Tsunagari Mie”
activities, through which we are transforming a local abandoned
thicket into a healthy forest. In FY2019, the fifth year of this project,they observed a ceremony to celebrate the opening of a walking
trail by inviting people from the local community.

Since the beginning of the program, they offered a scholarshipto 26 undergraduate students at local universities (four of themearned a bachelor’s degree) and financial assistance to 210
elementary school students in Kamunting and Taiping in the formof the Undergraduate Scholarship Program and the Student
Education Assistance Program, respectively.

Toyo Tire Corporation is an active participant in Operation Clean
the Ina River, which aims to preserve the limpid stream and protect
and nurture wild habitats. With the understanding that protection of
the natural environment leads to the sustainable development of acommunity, a total of some twenty persons, including our
employees from our Headquarters and their family members,
volunteered as community members. The friendly ties with thecommunity members were further strengthened at an insect
observation event held afterwards for those who were interested.

The recipients were chosen through interviews conducted attheir homes by our employees. A total of US$249,000 has been
used, mainly to pay for their books, transportation to their schools,
and their living expenses.

Engagement with
Local Communities
We understand that our business activities have a direct impact on
local economies, environments, and societies, and earnestly listen
to the evaluations and expectations of society. We emphasize
communication with local communities at all our business sites,
strive to properly understand the needs of stakeholders, and reflectthat in our business.
To express appreciation to their host community and publicize
their business activities to the neighborhood, the Sendai Plant
organizes a community fureai interaction fair. Every year, thisannual event attracts 1,700 visitors, including local residents andfamily members of the Sendai Plant’s employees. At the last fair,
we set up a booth featuring a driving simulator that runs on our
original programming. Visitors were given experiences of drivingwith worn or poorly-pressurized tires to learn about how tires canassure safety. This time again, the popular plant tour proved to be
an excellent opportunity to foster mutual communication, andsuccessfully impressed the visitors with the dedication and pride
that we put into manufacturing of tires.

Students who have received scholarships (TOYO TYRE MALAYSIA SDN BHD)

A ceremony to celebrate
the opening of a walking
trail

Vocational talk about the tire
A booth featuring a driving simulator

TOPICS
Volunteering to Speak forChildren of the Next Generation

Support for Developmentof Local Communities
As one of our responsibilities as a member of local communities,
TOYO TIRE provides support for efforts to revive local economies
and rebuild disaster-stricken communities.
The TOYO TIRE HOLDINGS OF AMERICAS INC. (TTHA Group)
organizes a “Holiday Toy Drive” for the holiday season. Following
the huge success of last year’s Drive, they invited their employees
to donate toys and delivered them to children who were
undergoing treatment at a local children’s hospital.
Support for reconstruction in the disaster-hit areas (FY 2019)25 TOYO TIRE CSR Report 2020

Since 2013, TOYO TYRE MALAYSIA SND BHD has sponsored ascholarship program for schoolchildren and students who arehighly motivated academically but may not have access to asatisfactory learning environment due to economic reasons.

- Contributions for the disaster recovery and reconstruction of“Sennen-Kibo-no-Oka” (Iwanuma City, Miyagi, Japan)- Donations to support the typhoon No. 19 disaster area in the firstyear of Reiwa (the Japanese Red Cross Society)- Donations to support the hurricane "Dorian" disaster area at
September 2019
- Donations to support the Australian bushfire at September 2019

It is our belief that the development of human resources
who will underpin the sustainable prosperity of the auto
industry is crucial to ensure business continuity andsocietal enrichment through mobility. It is out of thisbelief that we began supporting “Jonetsu Kyoshitsu(Class of Passion),” which is sponsored by the Kansai
Career Education Support Council*, in 2013 by using the
Toyo Tire Group’ s resources to organize career talks toenhance students’ interest in manufacturing and help
them to develop a career view from early in their life.
In FY2019, at the request of three schools, we gaveclasses for a total of 94 students, including fifth-graders,
eighth-graders, and international students studying inJapan. Volunteer lecturers are selected randomly from avariety of departments to meet varying expectations fromdifferent schools. Also, teaching materials are prepared ina way that the students’ needs are carefully catered to.
* An industr y-labor organization in Kansai that suppor ts career
education at elementary, junior high, and high schools

TOYO TIRE CSR Report 2020 26

6Creating Safeand Healthy
Workplaces
Priority ThemeTOYO TIRE’s SDGs
(Ideal Status in 2030)
We will contribute to create a society where everyone isable to work safety and healthy though "smartness"-development and introduction of technologies that
reduce the human load, e.g. AI and IoT.

Priorities● Global-level worker safety and health management

Reasons for being Priority Issues (Opportunity & Risk)
TOYO TIRE believes that it is our obligation to all theirstakeholders that we are thorough in prioritizing safety inall business activities. The globalization and diversity areprogressing for our employees within the company. And
preventing industrial accidents and promoting the healthof workers, creating a comfortable work environment,
and continuing to manage and improving them, does not
only reduce economic damage and loss of life, but also
lead to improvements in performance and corporate
value, such as better productivity and quality. Thus, wehave positioned these as issues that should be
addressed with priority.

Activities in 2019
- Natural Disaster Simulation Drills

25 TOYO TIRE CSR Report 2020
27

Management Approach
Policies
At TOYO TIRE, labor and management work together to operate an
occupational health and safety management system based on
OSHMS Guidelines (Guidelines on Occupational Safety and HealthManagement System, Ministry of Health, Labour and Welfare) andpromote safety and health throughout the company. These efforts
consist primarily of conducting risk assessments andimplementing necessary measures based on their results under
the leadership of top management.
The Company-wide Safety and Health Meeting, a jointlabor-management committee, makes decisions regarding annual
policies, targets, and plans related to occupational health andsafety, which are then approved by the Safety and Environment
Committee and implemented. Furthermore, the Meeting evaluates
progress in implementing plans and makes improvements.

Goals
The frequency of accidents, lost-time accident rate, number ofﬁres, and several other indicators are used to ascertain the state ofoccupational health and safety in the workplace, and efforts are
made to improve conditions at workplaces.

Responsibilities (April 2020)
Senior Corporate Officer & Vice President of Quality
Assurance, Environment & Safety Headquarters

Creating Safe Workplaces
We are working to create safe workplaces from the threeperspectives of “equipment,” “personnel,” and “management
system development” at all business sites.
With regard to physical aspects, by conducting a risk
assessment on the hazards, we promote the elimination of
hazards based on safety standards for equipment and safetymeasures such as an enclosure or interlock. From humanaspects, we strive to bring to light the “residual risks” that remain
after countermeasures are implemented for hardware, and we arethoroughly enhancing risk management by indicating highresidual risks, implementing work standards, and throughsmall-group-based (independent improvement activities led by asmall group) risk prediction activities, etc.
As for creating a management mechanism, we are expanding
the safety management system (OSHMS/GSC/OHSAS18001).
We have compiled the Industrial Accident Response Manual sothat we can mitigate risks to the company and employees, protect
employees’ safety and the company’s credibility, and minimize theoccurrence of such accidents by taking prompt action when alabor-related accident occurs. Stipulated clearly in this manual areconcrete steps to follow when an industrial accident occurs, anecessary risk management system against industrial accidents,
procedures in ordinary times, the code of conduct for employees,
and procedures in the times of emergency.

At manufacturing bases, where diverse people work, we
make announcements in multiple languages and use
illustrations and color-coded warning signs, so that all theemployees can work safely.
As a result of all these efforts, in FY2019, our total incidence rateof occupational accidents in Japan decreased by 29% from theprevious year.

Health and Productivity
Management

FY2019 Safety Performance By Region● The lost-time accident rate (Manufacturing base)*Number of lost-time accidents per million hours worked in total

Japan: 0.16

(0.60 in FY2018)

In preparation for natural disasters, for which the degree ofdamage increases each year, the Risk Management Committee,
which is a special committee in our company, conducted simulations
with the cooperation of external expert organizations, and extracted
issues from the existing manual. Then, based on these issues, werevised the “Natural Disaster Response Manual” in March 2019.

Others: 1.82

We consider employee health management from a businessperspective and support the idea of strategically conducting
health management. We have been reinforcing our preventative
measures particularly for mental health issues that are the maincause of long-term absences.

(1.81 in FY2018)

Creating Disaster Resistant
Workplaces
We have enhanced our efforts related to ﬁre prevention
management, and strengthened our disaster prevention andmitigation efforts taking into consideration our experience withmajor disasters such as the Great East Japan Earthquake.

The Toyo Tire Group has compiled the Infection/Contagion
Response Manual, which stipulates a necessary risk management
system, procedures in ordinary times, the code of conduct for
employees, and procedures in times of emergency, with the aim of
mitigating damage by infection/contagion, protecting the safety of
its employees, and minimizing the occurrence of such risks.
* For the Toyo Tire Group’s responses to the COVID-19, see P31.

TOPICSNatural Disaster Simulation Drills
In the face of increasingly severe damage from natural disasters,
TOYO TIRE has compiled the Natural Disaster Response Manual
to prepare for such events.
In accordance with the Manual revised in March 2019, Toyo Tire
Corporation conducted a real-time simulation drill that assumed
emergency responses at times of large-scale natural disasters.
More than 60 persons from different organizations who
par ticipated in the drill joined together in the Emergency
Countermeasures Headquarters to check the initial response
levels of the business continuity planning and identify issues after
the occurrence of a disaster. The Risk Management Committee
h o l d s t h e r e s p o n s i b i l i t y to a d d r e s s t h e p l a n n i n g a n dorganizational improvements that were made clear in the drill.

Natural Disaster Simulation Drills

TOYO TYRE MALAYSIA SDH BTD:
Received the Safety Award from
the Malaysian Government
TOYO TYRE MALAYSIA SDN BHD participates in the Systematic
Occupational Health Enhancement Level Programme (SoHELP)
by Malaysia’ s Department of Occupational Safety and Health.
SoHELP aims to reduce issues related to occupational safety andhealth and ensure compliance with related regulations. A total of
270 multinational companies participate in this programme
across the country.
Member companies of this programme follow a series of steps
for occupational safety and health management, that is, planning-> risk assessment -> correction -> auditing by management ->training -> auditing by the government. Our Malaysian subsidiary
worked on visualizing issues identified as a result of risk
assessment at workplaces and organized training programs for
its employees accordingly. With their activities winning appraisal
from the government, they were chosen to be one of the ten
recipients of the Best Overall Workplaces SoHELP
Implementation 2018.
Through this programme, they will continue developing a safe
workplace culture that focuses on preventive maintenance.

Awarded "CHAMPION"*The detail of each data (boundary, period, assumptions underlying of data) are available at our website.

TOYO TIRE CSR Report 2020 28

7
Reinforcement ofCorporate Governanceand Compliance
Priority ThemeTOYO TIRE’s SDGs
(Ideal Status in 2030)
We will contribute to minimize social impact of extreme
weather phenomena derived from climate change bybuilding a robust value chain.

Priorities● Reinforcing corporate governance● Further spreading awareness of placing greatest

priority on complianceReasons for being Priority Issues (Opportunity & Risk)
We are living in a time when the future outlook is
increasingly uncertain, what with climate change, thechanging demographic structure, and infectious
diseases that spread globally. In order to sustain
international business growth as we strive to survive the“once-in-a-century” change in the auto industry, we at
TOYO TIRE believe it essential to ensure managementtransparency and pursue fairness within theorganization. To this end, we recognize that we havea responsibility to various stakeholders, and it isnecessary to maintain an appropriate management
system and increase awareness that compliance is themost important issue, and we have positioned these as
issues that should be addressed with priority.

Activities in 2019
- Reinforcing governance for the promoting sustainability- Organizational changes aimed at further strengthening
the management foundation- Strengthening of awareness that prioritizes complianceManagement Approach
Policies
We properly implement the principles of the corporate governancecode in order to implement effective corporate governance. We
ensure the rights and equality of shareholders, strive to establish
appropriate cooperation and dialogue with stakeholders otherthan shareholders, and work to secure appropriate information
disclosure and transparency to achieve this. Taking into
consideration its accountability toward shareholders, the Board of
Directors properly fulfills its roles and duties to raise profitability,
increase capital efficiency, etc., in order to achieve sustainablegrowth and raise the Company’s corporate value in the mediumand long-term.
As for efforts to strengthen compliance required to embody thisphilosophy, the Toyo Tire Group compiled not only the “Toyo Tire
Group Charter of Corporate Behavior” as corporate action
principles applied uniformly across the Group in order faithfully
conduct business activities but also the “Toyo Tire Group Code of
Conduct” for each director and employee to put the charter into
practice. We strive to spread these throughout the Group. We haveestablished the Global Anti-corruption and Anti-bribery Policy,
which is in accord with the Ten Principles of the United Nations
Global Compact (UNGC), in a bid to ensure fairness andtransparency in our business activities.
* More information about the new policy is available athttps://www.toyotires-global.com/csr/pdf/anti-bribery_en.pdf

Goals
We will increase the transparency of management and aim to
implement highly specialized, effective corporate governance byspreading awareness of the corporate philosophy and improving
compliance levels.

Responsibilities (April 2020)
Corporate Officer & Vice President of Corporate Headquarters

Corporate Governance System
Corporate governance system of the Toyo Tire Corporationconsists of the Board of Directors, which is responsible fordecision-making and supervision; the Executive Committee,
which serves as the decision-making body for business execution;
the Special Committees, which act as deliberative andconsultative bodies for their respective areas; and the Audit &Supervisory Board, which audits the performance of the Board of
Directors and overall business execution. Our corporate
governance structure allows these organs to effectively fulfill theirrespective functions and responsibilities.
In February 2020, we established a Nomination andCompensation Committee, an advisory body for the board of
directors on personnel affairs, compensation, and other mattersconcerning Directors. At the 104th Annual General Meeting of
Shareholders held on March 27, 2020, it was resolved to introduce
a monetary compensation receivables system for granting
restricted stock to internal directors in order to incentivize them to

25
29 TOYO TIRE CSR Report 2020

pursue the sustainable enhancement of corporate value andensure that they share said value with our shareholders. In
addition, we appropriately manage conflicts of interest. We havedetermined that the outside directors appointed by the Company
carry no risk of conflicts of interest with general shareholders andreported them as independent directors. Regular independent
evaluations of the Board of Directors ensure the functionality andeffectiveness of the Board of Directors and various committees.

Governance Structure (April 2020)
Chairman: Representative
General Meeting of The Shareholders: * Director,
President & CEO

Once a year

Audit &
Supervisory Board
Board of Directors:
Once a month“Reporting Hotlines” have been established and operated asa system to enable employees to directly report and seek
advice regarding their concerns, such as compliance issues
that could develop into a crisis. In addition, multiple reporting
routes have been secured, and a system that makes it easy forrequired information to rise to the governance organization has
been created.

Role of Governance Entities in Priority
CSR Themes
In order to strengthen governance related to efforts targeting theseven priority CSR themes, the Executive Committee(chairperson: President) has created a system to promote theGroup’s sustainability management.
In the group-wide working groups (WG) established upon
approval by the Executive Committee, we identify the sustainable
development goals (SDGs), the impacts, risks, and opportunities
in various priority themes, and plan for actions. And the corporate
officer in charge of the Corporate Headquarters compiles theinformation and reports it to the Executive Committee. The
effectiveness of the processes for each theme discussed by WGs
is debated and evaluated when the report is made to the
Executive Committee.
Based on the strategy and policy set by the WG, the related
special committees develop plans for important activities,
analyze the results, and formulate improvement measures. And
the progress in implementing the plans by the divisions
responsible for execution of business operations is reported to
the Executive Committee.
We disclose the information about the action of each priority
theme an once year as “CSR Report.” Before disclosing, thereport is reviewed by the corporate officers in charge of thevarious control departments and finally approved by Corporate
Officer & Vice President of Corporate Headquarters.
The staff in charge of rerated the theme promotes engagementwith stakeholders about each priority theme. And Corporate
Officer & Vice President of Corporate Headquarters aggregates
the results of engagement and shares them to the Group as
necessary at any time.

**See the Notice of the Annual General Meeting of
Shareholders for information of Directors attendance
rates and expertise of each director.

* Chairman: Director, Chairman of the Board(Not concurrently serve as executive)
Members: 9 Directors (of which 3 are outside members)** See the Notice of the Annual General Meeting of Shareholders for
information of Directors attendance rates and expertise of each director.
And see the Financial Results on the total compensation for Corporate
Officers and the Policy of corporate officer compensation.

Internal Control System
In accordance with the Companies Act in Japan, the basic
policy on constructing the internal control system was decided
by the Board of Directors, and the internal control system wascreated in line with that basic policy. The basic policy is reviewed
each year to reflect changes in the management environment
and to ensure that our internal control system remains effective.

* Members: 3 Members of Audit & Supervisory
Board (of which 2 are outside members)

Nomination andCompensation Committee
Executive Committees:
Twice a month* Members: 5 Members(of which 3 are outside members)* Chairman: Representative Director, President & CEO
Members: 11 Members (Senior Corporate Officer,
Corporate Officer,Division General Manager ofCorporate Administration Div.)Special Committees
Compliance Committee:
Once a quarter* Chairman: CCO, who areelected by the Board of Director

Crisis Management
Committee:* Chairman: Vice President of
Crisis Management

Organization &Personnel Committee:* Chairman: Representative
Director, President & CEO

Technology Committee:* Chairman: Vice President of R&D
Headquarters

Quality AssuranceCommittee:* Chairman: Vice President of
Quality Assurance, Environment &Safety Headquarters

Safety & Environment
Committee:* Chairman: Vice President of
Quality Assurance, Environment &Safety Headquarters

Investment & Credit
Committee:* Chairman: Division General
Manager of Corporate
Administration Div.

Once a quarter

Once a quarter

Once a month

Once a quarter

Once a quarter

Twice a month

Each Division

Group Company*Management responsible departments of eachcompany are listed in the affiliate management rules

Compliance Promotion System
Within our Group, compliance is deemed a matter of the highest
priority in management, and the president works as the party incharge of compliance to create and improve the compliance system.
In addition to establishing the Compliance Committee, one of
the special committees that debates and examines issues related
to promoting compliance, we have a system of compliance officers
and are striving to promote compliance, mainly by the chiefcompliance officer (CCO), compliance officers (CO), andcompliance leaders (CL).
We have a structure in place that enables prompt investigation
when a compliance issue (or a suspicion of one) is reported to the
CO. Efforts related to the investigation and measures
implemented to prevent recurrence are announced within thecompany. We make use of this information as the investigation
whether does not have any similar cases (horizontal deployment),
reconfirmation of laws and internal rules. And when a similar caseoccurs, we use it as a reference for solving the issues and formeasures to prevent recurrence.
TOYO TIRE CSR Report 2020 30

Priority Theme 7

Reinforcement of Corporate Governance and ComplianceCorporate GovernanceSpreading the Philosophy
As of January 1, 2017, the Toyo Tire Group has formulated a new
philosophy which will be the basis for the work of all corporate
officers and employees, and measures are implemented to spreadthe philosophy among all employees.
We have positioned the “Corporate Creed,” the important founding
spirit that we will maintain into the future, as the overarching concept;
put into words our significance in society in the form of “Our Mission”;
and clearly specified the vision for the company that we should strive
for in that mission as “Our Vision.” We also established “Our
Fundamental Values” as a foundation for ideas that all corporate
officers and employees should value equally.
All initial in-house training programs start with a session on
management philosophy in order for everyone in the Toyo Tire Groupto understand such philosophy well. In FY2019, Toyo Tire
Corporation organized a management philosophy training session
for officers and division general managers as well as one fordepartment heads. In the latter session, department heads were
given case studies to understand the importance of spreading
visions and strategies at workplaces, as well as group work where
they shared what they are doing to spread the management
philosophy at their workplaces. The session proved to be a valuable
opportunity for them to share the current status and issues at otherdepartments, which then helped them to increase their drive tospread the management philosophy more.
Three years after our management philosophy was established,
we have finally begun to see increased recognition andunderstanding of it within the company. We will continue our efforts
to spread our management philosophy even further until fulfilling it
becomes part of our subconscious.

Work of the Board of Directors
TOYO TIRE holds a regular board of directors meeting once every
month to make decisions on important matters and supervise thestatus of business execution by Directors. In FY2019, a total of 18

meetings, including extraordinary ones, were held. Outside Directors
attend the board of directors meetings and other important meetings
to offer their opinions on deliberations to fulfill their responsibility tomonitor and supervise management.
Since FY 2017, the Company has been conducting an analysis
and evaluation of the effectiveness of the Board of Directors as awhole by conducting a signed survey of directors and Audit andSupervisory Board members regarding the operation, composition,
activities, etc. of the Board of Directors. The compilation, analysis,
and evaluation of the surveys are entrusted to a third party in order toensure impartiality. The summary of the results of the survey
conducted in FY 2019 along with how we will respond going refer to
website. Based on this content, we will continue to further improve
the functionality of the Board of Directors.
Effective on February 19, 2020, we chose to establish a
Nomination and Compensation Committee, an advisory body for theboard of directors that deliberates on personnel affairs,
compensation, and other matters concerning Directors and offers
advice, proposals, and recommendations to the board of directors.
With the establishment of the Nomination and Compensation
Committee, more than half of whose members are Outside
Directors, we will further enhance independence, objectivity, andaccountability of the board of directors’ functions for personnel
affairs, compensation, and other matters concerning Directors, thus
reinforcing the corporate governance structure.

Dialogue with Shareholders and Investors
The Company holds a general meeting of shareholders once a year
and a quarterly financial result briefing. During the first half and fullyear briefings, our top executives provide detailed businessinformation, including financial results, future business outlook,business environment, and market trends, to institutional investors
and securities analysts. In addition to announcing financial results,
there were also small meetings attended by the president and otherparties as well as several engagement opportunities for managers
and institutional investors.

* Covered Risks: disasters/accidents, quality, purchasing, legal violations, information
management, labor, and issues of rubber bearings

Internal Reporting System
We have been operating an internal reporting system since fiscal 2006.
“Reporting Hotlines” have been established in Toyo Tire Corporation
Audit Department, an independent law office, and independent
specialized companies as an in-house whistle blower system. Not only
employees but also business partners can use the system, and reports
can also be made anonymously. Overseas, we are moving forward withefforts to establish hotlines at each business site.

In FY2019, members of our investor relations (IR) team held
dialogues with more than 360 shareholders and investors from 260
institutions. In addition, our board members organized two small
meetings on the Toyo Tire Group’s new growth strategy announcedin August 2019, which were attended by a total of 25 institutional
investors and others from 22 investment houses. The opinions andrequests of shareholders and investors are regularly used as
feedback for management and in-house related departments.

There is greater awareness of the “Reporting Hotlines” in Japan asa result of a call to promote usage by distributing cards, displaying
posters, and issuing internal monthly compliance communiques.

Promoting ComplianceSpreading Awareness of the Charter ofCorporate Behavior and Code of Conduct
We compiled not only the “Toyo Tire Group Charter of Corporate
Behavior” as corporate action principles applied uniformly across theGroup in order faithfully conduct business activities but also the “ToyoTire Group Code of Conduct” for each director and employee to put
the charter into practice. Taking into the consideration differences in

Anti-Corruption
TOYO TIRE established “Global Anti-corruption and Anti-bribery
policy” and “Anti-bribery rules”, and commenced operations. In
FY2019, we provided a training session on anti-corruption andanti-bribery to ensure that our global policy is adhered to. We also
conducted interviews with all the affiliates within the Toyo Tire Groupto ask about risks of corrupt practices and bribery to ensure an
absence of concerns over such risks at this point.
We strive to ensure fairness and transparency in all its businessactivities. We recognize that if acts of corruption and/or bribery are
discovered, there is a risk of not only a large financial penalty anddetention of the perpetrator concerned, but also a risk of causing serious
damage to the goodwill of the Group among its suppliers, business
partners and society. As one of the corporate social responsibilities of
the Group, we will work to prevent corruption and bribery.

TOPICSTOPICS

Results of the FY2019 Compliance Survey
Toyo Tire Group’s Responses to the Effects of the Spread of the Novel Coronavirus Infection
In response to the worldwide spread of the novel coronavirus
infection that began at the end of 2019, pursuant to the Risk
Management Rules, we established the Emergency
Countermeasures Committee (upgraded to the Emergency
Countermeasures Headquarters in February) in January 2020 to
implement effective measures by gathering information and having
a series of discussions on how we should deal with the pandemic.
In the wake of the spread of the novel coronavirus infection, theToyo Tire Group is taking measures that place top priority on theassurance of health and safety of our employees andstakeholders, as well as the maintenance of employment.

We have newly created and distributed the “Code of Conduct
Handbook: Global Version.” This handbook translated into 9
languages: Japanese, English, Russian, German, Italian, Chinese,Thai, Malaysian, and Portuguese, and defines the basic actions thatevery Director and employee of the Group should take.

In addition, efforts are made to improve understanding of theGroup’s management by providing opportunities each quarter for IR
staff to respond to the particular concerns of institutional investors andanalysts (handling individual inquiries). Furthermore, the Group actively
works to respond to increasing requests by the investors outside
Japan, which includes enhanced responding to individual inquiries
except during the quiet period and conducting overseas roadshows.

Strengthen the Risk Management System
As the risk manager, in our Group, the person in charge of the
Corporate Control Department is responsible for parties below therisk management officer appointed for each risk and the risk
management system as stipulated in the Risk Management Rules.
The main risks are managed through established activities not only
to evaluate and analyze potential risks for the Group during
non-emergency times and to reduce the possibility of themoccurring, but also to minimize damage during emergencies and topromptly restore business.

laws, regulations, and customs between countries and regions, thevarious Group companies outside Japan have created independentcodes of conduct using the code of conduct as action guidelines.

In more concrete terms, we not only take measures to prevent
employees and visitors to the company from getting infected but
also have expanded the scope of the telecommuting system,
which was introduced in Japan as part of the ongoing work stylereform, and even closed our business bases/sites withadministrative departments.
Meanwhile, Toyo Tire Corporation continues to recruit new
graduates for FY2021 as originally planned by creating andensuring opportunities to communicate with prospective
employees through online company information sessions andgroup/individual interviews.

*Response rate 88.2% [92.3％ for 2018]❶ Conducting compliance promotion activities
Conducted at least one activity toraise compliance awareness within
the last year,

97 %(96% in FY 2018)❷ Awareness and understanding of compliance
Know the meaning of compliance,* TOYO TIRE’ s compliance: We shall comply with laws andinternal rules in all aspects of our business activities and shallconduct ourselves according to the highest ethical standards.

88 %(87% in FY 2018)❸ Making compliance part of the corporate character
Conscious of compliance when
conducting your work,

93 %Comment“Over the past several years, the levels of awareness of complianceamong our employees have reached consistent heights. Having
said that, a number of employees replied by saying, ‘I thinkcompliance is about following laws/regulations and internal rules’ or‘Sometimes I find it hard to seek consultation on small difficulties atwork.’ If we are to raise awareness levels further, we need to takedifferent approaches. Based on these outcomes, we will work withworkplaces on an individual basis to
discuss what we should be doing so we
can help our employees to further raise
their awareness of compliance.”
Rie Kawakubo
Compliance Dept., Compliance & Legal Division,
Toyo Tire Corp.

(94% in FY 2018)

31 TOYO TIRE CSR Report 2020

TOYO TIRE CSR Report 2020 32

Fiscal 2019 CSR Activities Summary /Third-Party Opinion
on the TOYO TIRE "CSR Report 2020"【Activities of Sustainability Promotion WG in FY2019】
Working Group(WG)

Fiscal 2019 CSR Activities Summary

Through these dialogues, we were able to determine the societal

Achievement (FY 2019)achievement of- Publication of the TOYO TIRE’s SDGs
- Interviews with all Group companies

TOYO TIRE’s- Internal dissemination of the SDGs

Setting and

SDGs WGIn FY2019, our working group (WG) for promoting sustainability
held direct dialogues on “TOYO TIRE’s SDGs” with all companies in
the Group to brief them on TOYO TIRE’s approaches (orientation) tothis imperative and gather information on their initiatives andchallenges in this regard.

Purposes

SDGs

Plan (FY 2020)- Development of internal targets and actionplans for achieving TOYO TIRE’s SDGs
- Interviews with all Group companies(follow-up on their activities)(follow-up on their activities)(briefing sessions for Group companies in Japan)(Production/rollout of dissemination tools,
position-specific training)

Organizations

impact that our business activities will have moving forward and theimportance of deepening our understanding of the corporate valuethat results from such activities. In FY2020, we will make continued
efforts to strengthen understanding of the goals of thesustainability promotion while celebrating the diversity in values
and cultural backgrounds of our people.

- Analysis of the evaluation results about the CDP
survey- Further enhancement of disclosure

Environment
WG

Responding
to climate change

Toyo Tire Corp

Human
Rights& Labor
WG

Responding tohuman rights andanti-corruptio

Responding to the

Supply Chain
WG

responsibility forsustainableprocurement(publication of the independent practitioner’s assurance
report, consideration of appropriate responses to the TCFD)(follow-up on their activities)(follow-up on their activities)- Discussion on the revision to the Toyo Tire Group
Global Environmental Charter

Comment by SDGsWG Leader
that we would act in a way that contributes to their achievement.
This declaration has carried a lot of weight and great significancein the 75-year-long history of thecompany.
If we wish to unify people fromdifferent walks of life to help eachother and hand down this planet tofuture generations, we believe thatbeing mindful of “Why we do this”
is more important than “What weshould do.” As we continuously
share this basic principle andcollaborate with our employees
and everyone else with whom weHaruhiko Kitagawa
conduct business for society, we
Division General Manager ofwill achieve our goals one by one.
Corporate Infrastructure Div.,- Further enhancement of disclosure- Interviews with all Group companies- Interviews with all Group companies- Analysis and evaluation of water risks in the regions
where we operate

In 2019, we set TOYO TIRE’s SDGs, which the Toyo Tire Group
must achieve by 2030, and announced them within and outside
the Group.Three years ago, Toyo Tire Corporation redefined its
body of Philosophy, which forms the backbone of the company,
and changed the company name last year to once again manifest
its mission. This process gave us an opportunity to think deeply
about the responsibility that we have when doing business globallywith various parties, which led us to endorse the UN SDGs, aninternationally unifying initiative for businesses. We then came up
with our autonomous behavioral code that contributes to theachievement of the UN SDGs in the form of TOYO TIRE’s SDGs
and our work is just beginning on these.
We shed new light on all aspects of our business management,
including procurement of raw materials, recruitment, employee
training, and corporate governance, as well as technologicaldevelopment, production/supply, and marketing/sales, in termsof sustainability and harmony with relevant parties, and declared- Internal dissemination of the SDGs

- Revision of the Toyo Tire Group Global
Environmental Charter- Revision of the Toyo Tire Group Global
Environmental Action Plan
(formulation of a climate change strategy)- Interviews with all Group companies- Internal dissemination (via training) of the policies
on human rights and labor and the prevention ofcorruption- Development of a risk check sheet- Interviews with all Group companies- Sharing of the President’s messages on humanrights to employees across the globe- Sharing of the President’s messages on humanrights to employees across the globe- Publication of the revised CSR Procurement
Guidelines, which includes a Sustainable Natural
Rubber Procurement Policy- Internal dissemination of the Guidelines- Translation into Chinese- Revision of self-check sheets for suppliers- Communication with suppliers via theself-check sheets- Activities as a member company of GPSNR- Announcement of policies on human rights andlabor and the prevention of corruption- Internal dissemination of the policies(via training, translation into Chinese)(risk check, follow-up on their initiatives)(follow-up on their activities)(Briefing sessions for members of procurement departments
in Japan)- External dissemination of the Guidelines(Briefing sessions for suppliers in Japan and notification to
overseas suppliers of natural rubber)- Activities as a member company of the Global
Platform for Sustainable Natural Rubber (GPSNR)

Third-Party Opinion on the TOYO TIRE "CSR Report 2020"
Since the establishment of its Basic Policy and seven Priority Themesin 2014, the Toyo Tire Group has stepped up its CSR activities,
continuously disclosing relevant data with a sincere eye towards
transparency. It merits mentioning that the company has reaffirmed its
intention to advance this approach over the long term by striving toachieve its seven Priority Theme-derived “TOYO TIRE’s SDGs” by 2030.
It is also reassuring to know that careful preparations are underway todevelop relevant policies and to collect a broader scope of data for
analysis. These policies include those on the priority issues of “climatechange,” “human rights, labor, and anti-corruption,” and “responsibility
for sustainable procurement,” which were identified in FY2017.
Going forward, it is expected that the Group will specify the roles ofthese priority issues in realizing its seven Priority Themes within thecontext of the TOYO TIRE’s SDGs, as well as systematically showcase
a comprehensive picture of concrete initiatives and targets that eachdepartment will employ, including Priority Theme 1 of “Product andService Reliability and Innovation.” Some initiatives mentioned in thisreport that are being planned for 2020 to address these priority issues
need to be promoted systematically over the mid and long term,
together with business partners and other stakeholders. Doing so will
also satisfy the demand for disclosure of ESG information by
investors, and thus should be pursued without fail. Specifically, these
initiatives include the consideration of appropriate responses to the
Task Force on Climate-related Financial Disclosures (TCFD), theexamination of risks associated with human rights, and the promotion

33 TOYO TIRE CSR Report 2020of sustainable supply chain management.
In 2020 the Group will draw up a new medium-term business plan
to take effect from 2021. Within this plan, I believe that some of theinitiatives covered in TOYO TIRE’s SDGs, such as a reduction in risks
and expansion of opportunities, will be given a strategic position of
support and close engagement. I also expect that the Toyo Tire Groupwill, while formulating an action plan for the TOYO TIRE’s SDGs,
redefine how the pursuit of the Priority Themes can create value andbegin to develop an original story of value creation that goes beyond
this new medium-term business plan heading towards 2030.

Mr. Hiro Motoki

Comment by Corporate Officer in Charge of CSR (Receiving Comments from an External Expert)
First of all, we would like to express our appreciation to Mr. Motoki
for his valuable opinions and advice regarding our CSR Report2020. In accordance with the new growth strategy announced lastyear, TOYO TIRE will drive its efforts to achieve sustainability as
part of its push to reinforce its business foundations that aredesigned to realize individual strategies. In so doing, we have been
made keenly aware that, if we are to realize sustainability, we mustachieve the right balance between the creation of financial values
and sustainability, involve all parties concerned in our endeavors,
and give due consideration to diversity.
This year, in order to prevent further spread of COVID-19, we
decided to close all of our business locations except
manufacturing and logistics sites, while ensuring business
continuity by allowing our employees to work from home, thus
assuring the safety of our employees and other stakeholders. We
were suddenly forced to confront head-on all sort of issues amid
the pandemic, including negotiating with business partners fromaround the world who are in different situations and operating
environments, caring for employees, developing and training new
recruits and young employees remotely, implementing work stylereform, and promoting diversity in humanpower. We had todetermine what we could do to stay in business in light of thesustainability pertaining to these issues during this state of crisis.
We will make the most of this valuable experience to further
enhance our flexibility so that we can achieve sustainability in any
operating environment.
As we work to achieve TOYOTIRE’s SDGs in the course of ourbusiness, we will deliver uniquevalues (differentiated presence) tosociety at large. As Mr. Motoki
mentioned in his comments, going
forward, we intend to offer an
original story of value creation thatlooks beyond the new medium-termbusiness plan and is aligned with our
growth strategy.

Takehiko Sasamori
Director Corporate Officer &Vice President ofCorporate Headquarters,
Toyo Tire Corporation

President, E-Square Inc.

TOYO TIRE CSR Report 2020 34