TOYODA GOSEI REPORT

2021

We are a global company that delivers
satisfaction to customers worldwide
through safety, comfort, well-being
and the environment
The Toyoda Gosei Group continues to meetthe needs of society through the provisionof automotive and other products using
rubber and plastic technology.

Contents

3 Management Philosophy
4 History of Toyoda Gosei
6 Businesses and Locations
8 Financial and Non-Financial Highlights

Value Creation Strategy
10 Letter from the President
14 Message from the Officer in Charge of Finance
16 Value Creation Process
18 Sustainability SDGs and ESG
20 Feature: Carbon Neutrality Strategy
26 Mid-Term Business Plan (2025 Business Plan)
28 Growth Strategies in Each Business Field:
Automotive Business/New Fields
36 Feature: Manufacturing Innovation Strategy

2Management Philosophy

Boundless Creativity and Social Contribution
Good corporate citizenship

Proper business operation

Sustainable growthWe, as a good corporate citizen, contributeto the economy and society throughcommunity-based business activities
and social action programs.

We promote business operations withintegrity through the establishment of asystem founded on thorough complianceand corporate ethics.

We aim to build up the TG Group's
collective strength through an open
and fair relationship with suppliers ,through a mutually strengthened
corporate structure and innovative
management response to change.

Customer satisfaction

Conservation of global
environment and resources

We aim to provide products and services
with satisfying quality and price in atimely manner, through forward-looking
R&D and production engineering.

We aim to conserve the global environmentand resources in order to hand down agreener world to our children throughevery business activity , which includes
cooperation with society and thedevelopment of an environment friendly
product and manufacturing process.

Respect for the individual
We aim to establish a vibrant corporate
culture through respect for individuality
and the value of enhanced teamwork,
based on shared responsibility andmutual trust between employees andmanagement.

Foundation of Value Creation

Financial Report

38 Environment〈E〉

76 Consolidated 10-Year Financial Summary
78 Financial Review
80 Consolidated Financial Statement

Contributing to environmental preservation through all our businessactivities ／ Environmental action plan activities and results ／Building a decarbonized society ／ Building recycling societies ／Environmental preservation and building environmentally-friendly
societies ／ Environmental management ／ Collaboration withexternal organizations ／ Third-party assessment

52 Social〈S〉

Human resources strategy ／ Respect for human rights ／ Promotionof human resources development ／ Active participation of a diverse
workforce ／ Workstyle and workplace cultural reforms ／Work-Life balance ／ Health and safety ／ Health and safety efforts ／Health management ／ Uniform global quality assurance ／Supply chain management ／ Contributing to local communities ／Support activities during the COVID-19 pandemic

66 Governance〈G〉

Consolidated statement of financial position ／ Consolidated
statement of profit or loss ／ Consolidated statement ofcomprehensive income ／ Consolidated statement ofchanges in equity ／ Consolidated statement of cash flows

Related information
84 Company and Investor Information
85 Editorial Policy, Recognition from Society

Corporate governance ／ Risk management ／Compliance ／ Management members

3History of Toyoda Gosei
Toyoda Gosei has exploited its expertise in rubber and plastics and provided new value to the world thatmeets the needs of the times.

1949

1960

1970

1949 Nagoya Rubber Co., Ltd. is established as a
1957
1967
1973
1976
1977
1978

1980

1980 Headquarters is relocated to present location(Kiyosu, Aichi Prefecture)spin-off of the rubber research division of
Toyota Motor Industry Co., Ltd.
Haruhi Plant begins operation
Inazawa Plant begins operation
Company name is changed to Toyoda Gosei Co., Ltd.
Morimachi Plant begins operation
US Ofﬁce is established in Illinois
Company is listed on the Nagoya Stock Exchange

1982 Bisai Plant is completed and begins operation
1985 Capital participation in Tai-yue Rubber Industrial Co., Ltd.

Company wins Deming Prize for Total Quality Management

1986 TG Missouri Corporation is established1997 Company obtains ISO 9001

Present Kitajima Technical Center is completed

1999 Company is listed on the Tokyo Stock Exchange

Company obtains ISO 14001
Toyoda Gosei North America Corporation is established

Development history of technologies and products
Automotive parts
Rubber1953

Brake hoses

1961

1977

Piston cups

Constant velocity
joint boots

1983

Nylon fuel hoses

1963

Flocked glass runs

1950

Weatherstrips

2003

1982

Two-color molded
opening trims

Sound insulating glass runs

Plastics
1954

Plastic injection
steering wheels

1960

PP steering wheels

1974

Instrument panels

1982

2000

Plastic fuel ﬁller caps

1989

Noise absorbing
air intake ducts

Driver-side airbags

1998

Curtain airbags

New ﬁelds
1986

Start of R&D forblue LEDs

4

1991

Success in developmentof blue LEDs is certiﬁed

600

400

Net sales (Billions of yen)

800

200

1990

2000

2010

2000
2001
2005
2006
2008
2009
2013

Toyoda Gosei Europe N.V. is established
Toyoda Gosei Asia Co., Ltd. is established
ISO / TS16949 certiﬁcation
Toyoda Gosei (Shanghai) Co., Ltd. is established
Toyoda Gosei Minda India Pvt. Ltd. is established
Miwa Technical Center is established
Toyoda Gosei East Japan Co., Ltd. is establishedGDBR Industria e Comercio de Componentes
Quimicos e de Borracha Ltda. is established2014 Toyoda Gosei Irapuato Mexico, S.A. de C.V. isestablished

2020

2016 Bawal Plant of Toyoda Gosei Minda India Pvt. Ltd.
begins operation2018 Gujarat Plant of Toyoda Gosei Minda India Pvt. Ltd.

begins operation
PT.Toyoda Gosei Indonesia is established2019 Hubei Toyoda Gosei Zheng Ao Rubber & Plastics
Sealing Technology Co., Ltd. is established
Thai Binh plant of Toyoda Gosei Haiphong Co., Ltd.
begins operation
2020 Inabe Plant begins operation
2021 Monterrey plant of TAPEX Mexicana, S.A. de
C.V. begins operation

2011

Lightweight radiator hoses

2010

2017

Lightweight opening
trim weatherstrips

2008

2014

Glass runs for ﬂush
surface door

2015

Plastic fuel ﬁller pipes Plastic water pipes Capless fuel ﬁllers

2017

Large radiator grilles

2018

Air conditioner
registers with
LED lighting

2019

Plastic turbo ducts /Battery cases

2020

Extra-large spindle
grillesHigh pressurehydrogen tanks

2021
2008

Rear-end
impact airbags

2010

Start of R&D for
GaN power devices

2017

Steering wheels with grip sensor /New type of side airbags

2020

UV-C space disinfectors, which use
UV-C (deep UV) LEDs, are launched
UV-C (deep UV) LEDs are conﬁrmed tobe highly effective in inactivating
the novel coronavirus

2014

Profs. Isamu Akasaki
and Hiroshi Amano(Toyoda Gosei technical advisor)
receive Nobel Prize in Physics

2007

Start of R&D for e-Rubber

Driver-side airbags forbetter protection inangled frontal collisions

2019

Development with EBM
Corp. of the SupeR BEAT
heart surgery simulator
that uses e-Rubber

2020

Exhibition of e-Rubber
technology at CES, the world’s
largest consumer
technology trade show5Businesses and Locations

Japan

18
companies

We supply rubber and plastic automotive parts globally.

Revenue by
Sales by region
product area

Employees
by region

721.4 billion

38,823(FY2020)(FY2020)¥¥721.4 billion

Employees

9,219(FY2020)

Sales¥358.0 billion

Weatherstrips¥84.8 billionJapan（11.8％）

9,219

Functional
Components

Europe & Africa

4companies

Japan¥134.4 billion¥358.0 billion（18.6％）

Americas14,268Interiors andExteriors

Employees

1,567¥268.1 billion（37.2％）

Sales¥26.2 billion

Americas¥203.4 billion

Asia
Safety Systems

Asia¥234.0 billion

13,769¥190.4 billion（32.4％）

Europe & Africa¥26.2 billion

Europe & Africa

1,567*Rounded down to the nearest one hundred million yen*Sales by region includes amounts for internal transactions within the Group, and so does not match the total value for consolidated sales

Product area
Automotive parts
Weatherstrips

Functional Components

Interiors andExteriors¥¥¥

84.8 billion(11.8％)

Door glass runs

6

Opening trim
weatherstrips

134.4 billion(18.6％)

Plastic fuel filler pipes

Plastic turbo ducts

Brake hoses

High pressurehydrogen tanks

268.1 billion(37.2％)

Instrument panel modules
and components

Americas

18
companies

Asia

23
companies

Employees

14,268

Sales¥203.4 billion

Employees

13,769Sales¥190.4 billion

Group Companies*

63
companies

With 63 group companies in 17 countries and regions, Toyoda
Gosei swiftly meets the needs of customers around the world.
We have established sales and engineering systems that are
customer-oriented and community-based with globally optimal
systems of production and delivery.
*Companies for consolidation

Other products
Safety Systems

234.0 billion¥(32.4％)

e-Rubber

Re-S brand for the utilizationof material remnants

LEDs

Air purifiers(general industry products)(Heart surgery training simulator)

Radiator grilles

Console boxes

Airbags

Steering wheels(with built-in airbags)

Pop-up hoodactuators

7

Financial and Non-Financial Highlights
Financial data
The Group adopted IFRS effective from the first quarter of fiscal 2018, ended March 31, 2019.
Additionally, fiscal 2017 data were converted to IFRS-basis.

Revenue（Billions of yen）

800

755.6

807.9

840.7

812.9
721.4

（Billions of yen）

（％）

40.6

20

200

2016

2017

2018

2019

2020
(FY)

Operating profit ratio

21.3

16.2

36.5
23.3

0

2016

2017

J-GAAP◀ ▶IFRS

2018

10
8

60 55.2

6
4

4.4

5.1

4.3
2.2

2
0

2016

2017

J-GAAP◀ ▶IFRS

2018

2019

53.0

56.0

60.0

60.0

40

53.4

46.8

2020
(FY)

0

2019

41.8

27.6

30.0

31.3

2016

2017

2018

2019

2020

200
150

40

100
20

97.5

89.0

46.5
31.0

2020

2017

J-GAAP◀ ▶IFRS

2018

2019

2020
(FY)

0

3.2

2016

2017

J-GAAP◀ ▶IFRS

2018

2019

2020
(FY)

（Yen）

300

271.99200
125.42

100

0

(FY)

2016

165.04180.09

86.74

2017

J-GAAP◀ ▶IFRS

2018

2019

2020
(FY)

Ratio of equity attributable to ownersof parent to total assets

152.2
148.0
134.0
125.4 127.9
108.2 107.3
97.9

（％）

60

50.7

51.2

50.0

48.7

50.5

2016

2017

2018

2019

2020

40

20

50

2016

5.2

0

(FY)

Cash and cash equivalents
Interest-bearing debt

（Billions of yen）

6.7

2

Cash and cash equivalents /Interest-bearing debt
60.0

6.4

Basic earnings per share

27.1

J-GAAP◀ ▶IFRS

8

4

20

Annual dividends per share
（Yen）

17.8

Capital investment
R&D expenses

80

9.6

10

6
11.2

（Billions of yen）

5.4

36.4 35.2

Capital investment /R&D expenses

（％）

8

35.1

10

J-GAAP◀ ▶IFRS

0Operating profit
Profit attributable to owners of parent

50

30

400

60

Return on equity

40

600

0

Operating profit /Profit attributable to owners of parent

2016

2017

J-GAAP◀ ▶IFRS

2018

2019

2020
(FY)

0

J-GAAP◀ ▶IFRS(FY)

Non-financial data
Environment〈E〉
CO2 emissions per sales unit
Japan consolidated (Toyoda Gosei Co., Ltd.
and domestic affiliates)（t-CO2/¥100 million）

150

111
100

50

103

100

15

95

90

87

10

60

59

76

73

69

48

63

42

37

33

（2012）

Outside Japan

Base year

2016

2017

Global consolidated

11.3

32

31

7.0
（2013）

5

2018

2019

2020

0

(FY)

0.8

0.6

6.8

5.5

5.3

5.3
4.0

4.4

4.0

3.7

Base year

2016

5.0
3.7

4.6
3.5

3.2

2.8

2.5

2.4

2017

2018

2019

2020

Japan consolidated (Toyoda Gosei Co., Ltd.
and domestic affiliates)（1,000 ㎥/¥100 million）

Outside Japan

0.72

0.7

（2013）（2012）

0Japan consolidated (Toyoda Gosei Co., Ltd.
and domestic affiliates)（t/¥100 million）

Global consolidated

Outside Japan

Water use per sales unit

Waste volume per sales unit

0.71

（2012）

0.62
0.58 0.53
0.54

0.5

0.46

0.52

0.45

0.43
0.41
0.42
0.40
0.41
0.39

2018

2019

0.4
0.0

(FY)

Base year

Global consolidated

2016

2017

2020
(FY)

Social〈S〉
Average years of service for males and females[Toyoda Gosei Co., Ltd.]（Years）

20

17.9

15 13.8

Female

19.5
14.8

18.6
15.5

18.5
15.5

Male

18.3
15.4

0

Female（People）

2017

2018

2019

2020

0

(FY)

（People）

25

25
58
7
51

61

53
6

12

47

49

20

20

2016

Male

80

40

5

[Toyoda Gosei Co., Ltd.][Toyoda Gosei Co., Ltd.]60

10No. of female managers

No. of parental leaves taken

2016

2017

2018

45

40
9

18

31

27

2019

2020

16

15
10

8

19

10

5
0

2016

(FY)

2017

2018

2019

2020
(FY)

Governance〈G〉
Employment rate of people with disabilities[Japan]Labor accident rate (rate of lost-worktime injuries)[Japan]

（%）

（%）

3

1.5
2.37

2.38

2.31

2.38

1.0

2.2%

2

All manufacturing industries

1.15

2.47

0.39

Statutory employment rate：2.0%

2016

2017

2018

1.02

1.20

1.20

1.21

2019

2020
(FY)

0

0.43

0.26

0.08

2016

2017

[Japan]

0.54

0.50

0.48

0.16

0.17

0.21

Toyoda Gosei Co., Ltd.

2018

2019

2020
(FY)

New manager training
New employee training
Training for mid-level employees（People）

400
300

Transport equipment manufacturing industry

0.5

1

No. of casualties in labor
Rate of lost-worktime accidents (people)＝
× 1million
injuries
Total labor hours

No. of people who have taken compliance training

200

317

317

244
134

100
0

336

72
2016

156

153

109

107

2017

2018

175

323
216

82

73

2019

2020
(FY)

9

Letter from the President

We will continue to growwith speed, fueled byenvironmental changes
Toru Koyama
President

10Value Creation Strategy

Major environmental changes continue
2020 was a year when the novel coronavirus threatened the sense of security in people’s lives. I would
like to express my deepest sympathy to all those
who contracted the SARS-CoV-2 virus and everyone
affected by the spread of infections. Toyoda Gosei
continues to hope for a return to regular life as soon
as possible, and we are doing our utmost to contribute to solutions to social issues through our businessactivities.
Toyoda Gosei had positioned 2020 as a year todisplay our true abilities and turn to full offense, but
we were hugely affected by the novel coronavirus
in the first half of the fiscal year. The entire Toyoda
Gosei Group worked together to restore profits,
reducing labor costs and expenditures among othermeasures. In the second half of the fiscal year, wewere boosted by a recovery in automobile production
volumes and achieved a significant increase in profits
compared with the previous year.
Throughout this unprecedented year, I felt
strongly that our business foundation has beenstrengthened by our rapid response to environmental
changes and our cohesion as One Team.
One way in which we adapted quickly to environmental changes was to swiftly develop infrastructure
and rethink systems to facilitate new working styles,
incorporating telework and Web conferences in orderto prevent the spread of COVID-19. At first, some
employees said that the new working styles would
weaken communication and the unaccustomed
working environment would be a distraction. However, by sharing good examples of telework in various
workplaces in the company and holding workshops
on how to use the new communication tools, thesesystems gradually became accepted. We now feelthat these systems can be used for the purpose of
implementing more effective and efficient working
styles.
The changes in working styles in response to theseenvironmental changes are seen in both our Japaneseand international locations. They are symbolized by the
adoption of various modifications so that production
preparations and production could be continued anddeliveries to customers would not be interrupted. Thiswas done even though production sites could not be
visited in a timely manner due to voluntary restrictions
on going out and travel restrictions in each country.
Locations where production preparations werepreviously carried out with support by people sent

Foundation of Value Creation

Financial Reportfrom Japan were able to prepare smoothly with remotesupport, using Web conferencing systems and cameras,
for the start of production. Times of emergency call foreven closer communication between the head officeand other locations, and we feel progress has been
made in localization of production preparation. This
year has also nurtured a sense of solidarity both within
the Toyoda Gosei Group and with our customers andsuppliers. We are sharing the status of our efforts with
suppliers and providing timely support when they
face difficulties. Our solidarity has increased thanks toactive communication in a difficult situation.
There have also been cases in which rapid
responses to environmental changes led directly
to business and social contributions. With thedevelopment of our new elemental technology
called e-Rubber and the commercialization of a heart
surgery simulator, we have expanded our networkin the medical field, including university hospitals.
Thinking about what we could do to help fight thecoronavirus, we went to talk to people at hospitals,
which were under great strain. Finding out what theyneeded led to us providing protective gear that takes
advantage of the features of the fabric in airbags, oneof our major products, and PCR test vehicles. Next, our
UV-C (deep UV) LEDs have been shown to inactivate
the novel coronavirus. The commercialization of UV-C
LEDs, which was already underway in our mediumterm plan, was brought forward with a focus on thethree areas of air disinfection, water purification, andsurface disinfection. These products are beneficial to
the world, and we have been able to bring them out
with exceptional speed.
Next, let me say a few words about “virtual businesstrips” as an example of my own efforts to deal withenvironmental changes. The COVID-19 situationand how we were dealing with production differedcompletely in each region of the world. I wanted togain a solid understanding of the situation in each placeand offer words of appreciation to our team members
who were working so hard. However, I couldn’t visit
them directly because of travel restrictions. WhenI asked myself what I could do, I decided I would
try to visit all of our overseas plants remotely as
a substitute for overseas trips. This allowed me todeepen my understanding of the circumstances inthose locations by confirming them live, even though it
was done remotely. In this way I was able to go aroundto all plants globally in a short time and actively
communicate with people in each country. I see this asa benefit brought about by work-style reforms.

11

Letter from the President

Key efforts in fiscal 2021
The automobile industry is said to be undergoinga “huge, once-a-century transformation,” in which
the wave of CASE is surging across the industry.
Achieving carbon neutrality has also come to be seen
as a critical issue shared by the entire world.
Toyoda Gosei is doing its utmost to achieve thegoals in its 2025 Business Plan for the medium-term,
while also looking toward these huge changes inthe business environment. We are accelerating new
efforts while keeping in mind that each of us must
adapt our own mindset and behavior.
Toyoda Gosei has three aims in working toward
carbon neutrality. The first is to eliminate therisks from climate change. Increasing emissions ofgreenhouse gases and a rise in the average global
temperature have resulted in abnormal weather,and the damage caused by this, such as the massive
flooding seen in one country after the other, has
become a familiar occurrence. We believe thatcompanies have a social responsibility to try toachieve carbon neutrality. Second is to respond to
the demand for carbon neutrality from our many
stakeholders, including customers and investors.
Fewer carbon emissions will lead to new values
and bases for decisions, and will be essential toraising our corporate value. The third is that carbon
neutrality is an opportunity for our company to growsustainably. Toyoda Gosei is developing products andtechnologies that will contribute to decreased CO2
emissions. We are already developing high pressurehydrogen tanks for FCEVs, plastic fuel filler caps andother lighter weight products, and rubber recycling
technology. We believe that it will now be importantto visualize CO2 emissions in life cycle assessments
while also making more concrete development plansfor products and technologies to further reduce CO2
emissions. We have shared these three targets withmanagement and all employees, and to achieve
them we have established a carbon neutrality
project and undertaken new challenges. At Toyoda
Gosei we work with rubber and plastic, and will face
many difficulties in achieving carbon neutrality
through the lifecycle associated with all upstream
to downstream aspects of our manufacturing. Our
efforts to date have focused on reducing productionrelated CO 2 emissions, but there is a need to
implement wide-ranging responses in materials,
design, distribution and more. We therefore decided
to start a companywide, cross-functional project with12

the participation of many divisions. We want these
efforts not to be undertaken by our company alone
but through an active partnership with potential
collaboration with our supply chain, including
raw material manufacturers and suppliers, andmanufacturers in the same industry. With applicationof the original technology we have developed so far
and innovative manufacturing initiatives, we believe
we can fulfill our social mission of carbon neutrality
as a leading company in the field of rubber andplastics.
Responding to the changes in the businessenvironment, we started the “Digital Transformation
Department” to resolve management issues witha greater sense of speed. Over the past several
years, we have increased the use of IT and IoT in
business process improvements and automation of
manufacturing lines, and achieved a certain level ofresults. With the new organization, we have brought
together related divisions to accelerate reforms fromthe perspective of what is best for the company
overall, and will build a global information base andconduct advanced analyses, make efforts to expand
the use of AI, and provide support for the resolutionof management issues with digital technology.
We have also started up an “Automotive Business
Headquarters” to strengthen coordination in
activities from receiving orders to production of newvehicle models, and build a system in which theentire business unit responds quickly to customer
demands. By rapidly introducing systems based on
environmental changes and properly sharing within
the company the changes occurring in the businessenvironment, we are each adapting our mindset andbehavior to meet the challenges of the changing
environment.

Value Creation Strategy

Accelerating efforts for SDGs/ESG
We believe we can contribute to a sustainable
society and also achieve growth of the company byproviding products that help to solve social issues. We
are taking the initiative in efforts that contribute tosolving the global issues shown in the United Nation’s
Sustainable Development Goals (SDGs) and in theEnvironmental, Social, and Governance (ESG) field.
I feel that through the development of airbags andproducts such as the UV-C LEDs mentioned earlier,
Toyoda Gosei products contribute to solving social
issues. All employees will make efforts to contributeto achieving the 17 SDGs, while at the same time
continuing efforts related to materiality issues thathave been identified as issues of focus. For the entire
company to move forward together as one, it isimportant that employees understand the SDGs andact on their own. In cooperation with entertainment
company Yoshimoto Kogyo, which is also committed
to the SDGs, we will expand into new endeavors
including the production of PR videos.
To meet the expectations of our shareholders, weare making ESG efforts. For Environment, we havedeclared our intention to achieve carbon neutrality by
2050 and are not only accelerating activities to reduce
CO2 emissions but have also set milestones related
to waste and water for the medium and long terms.
As “Environmental TG,” we are making a broad rangeof efforts. In the area of Society, we have introduced
engagement surveys to raise job satisfaction, based on
the belief that it is important to raise the activity andunity that form the foundation for the growth of ourcompany. We are also striving to raise the abilities of
the Group overall, such as strengthening training fornext-generation leaders, DX personnel, and others whowill support our future growth.

Foundation of Value Creation

Financial Report

We are going to start executive meetings called“Sustainability Meetings” to discuss issues related tosustainability, such as the environment and society, andfurther accelerate our SDGs/ESG efforts.

To our stakeholders
I joined Toyoda Gosei 40 years ago. When I think backon the history of the company, I see that we havebuilt many core competencies, from the developmentof rubber and plastic parts to the development ofblue LEDs, the development of airbags, and various
other undertakings. LEDs in particular, with their
low energy consumption and long life, are one of thetechnical innovations that could be said to be leading
the way to carbon neutrality. Airbag development
has also spread to countries around the world today
as means to help decrease the number of traffic
fatalities, an issue associated with automobiles. The
knowledge and know-how we have cultivated throughdevelopment and production, as well as our supply
chain and global network, are all major strengths of
Toyoda Gosei. We believe that we can continue tocontribute to a sustainable society into the future.
Our target year for carbon neutrality has been set
at 2050. The year before that, 2049, will be the year
Toyoda Gosei celebrates its 100th anniversary. Ourpredecessors took on challenges again and again
to make us a company that grows sustainably andbrings positive change to the world, and we build onthat inheritance as we climb steadily toward the year
2050.

13

Message fromthe Officer in
Charge of FinanceIR amid the pandemic
In FY2020, the TG Group was heavily affected by the
global COVID-19 pandemic. Faced with a fraught
outlook impenetrable to everyone, including investors,
we decided our IR staff needed to disclose information
more proactively than ever before. Although unable
to issue earnings forecasts, we published informationon the pandemic’s effects on our operations, including
capacity utilization by region and estimated earnings
impact, in the IR section of our website. At subsequent
financial results briefings, we followed up with updates
on capacity utilization by region and explained our
growth strategy during the pandemic.
At our first-quarter financial results briefing,
President Toru Koyama assumed my previous roleas the main presenter in light of the importance ofbeing able to disclose a full-year earnings forecast.
We have since continued to transparently disclose thepandemic’s earnings impact in a timely manner.
While the pandemic has precluded in-person IR
events, we have been holding various virtual eventsusing remote connectivity tools.
To provide progress updates on our new businesses,
namely e-Rubber and UV-C (deep UV) LEDs, senior
executives have spoken at online seminars hosted by
securities companies and explained the businesses’
future potential.

Evolving toward

IR evolution

IR broadly focused on

In recent years, companies have been facing growing
demands to address societal problems and undertake
ESG initiatives to realize sustainable operations. In
response to such demands, we managed our operations
in FY2020 with a core focus on ESG. As one part of our
ESG program, we held our second annual ESG briefing,at which we explained our ESG initiatives, mainly as
they pertain to carbon neutrality. Organizationally,
we established a Sustainability Promotion and IR
Department to integrate sustainability with IR,
the function of which is to externally disseminate
information, based on a commitment to broaden our IR
focus to encompass not only financial information but
a wide range of non-financial information also.
The TG Group has won accolades for such activities.
Most notably, we were the first auto parts maker to win
the Securities Analyst Association of Japan’s Award for
Excellence in Corporate Disclosure in the automotive/
automotive parts/tire division in FY2020.

non-financial
information also

Masaki Oka

Deputy Chief of Corporate
Strategy Headquarters,

Chief of Purchasing Headquarters,
Director, Corporate Officer

14

Value Creation Strategy

Management of operating performance
FY2020 revenue was down sharply as a result of
the pandemic.
We initially responded to the pandemic withemergency-mode measures to shore up earnings. We
subsequently decided that the pandemic presented an
opportunity to regain control of fixed expenses that had
become bloated during our preceding growth phase.
We ended up cutting fixed expenses across the board.
By virtue of such fixed-cost containment coupled witha sharp recovery in major customers’ production, we
earned all-time-record third-quarter profits.
Despite drastic changes in the external environment
during the pandemic, we will continue to reduce
variable expenses by reducing defects and increasing
production yields through use of IoT technologies,
minimize production setup costs through online remotesupport and endeavor to boost new work processes’
added value by increasing staff productivity. We will
also boldly forge ahead with digital transformation inpursuit of business model reforms.
Meanwhile, on the capex front, we will heavily invest
resources in priorities like digital transformation (IT)and the environment (carbon neutrality) and enhance
the corporate structure in response to the demands ofthe times, thereby increasing corporate value.

Return on equity
To stably achieve capital efficiency in excess of our costof equity, we are targeting a 10% ROE under our 2025
Business Plan.
As a first step toward this target, we plan todownsize unprofitable businesses. In previous roundsof restructuring, we divested a German subsidiary
in FY2019 and have downsized the optoelectronics
business. In FY2020, we commenced talks with
employees regarding discontinuation of a beleaguered
UK subsidiary’s operations. Through such moves, we
believe our plans to exit or downsize unprofitablebusinesses are largely on track.
In the core automotive parts business, we
strategically allocate limited resources using a 4x4
matrix consisting of four geographies (Japan, Americas,
Asia, Europe) and four product domains (weatherstrips,
functional components, interiors & exteriors, safetysystems). To fulfill the imperative of rebuilding ourbusiness portfolio, we will expedite the horizontal
rollout of improvement measures across geographies
and intensively allocate management resources basedon cross-functional prioritization by geography andproduct domain. Counting the e-Rubber and othernew businesses in addition to the 16 business units
encompassed by the aforementioned 4x4 matrix, wehave a total of 17 business units for resource allocation

Foundation of Value Creation

Financial Reportpurposes. We aim to boost ROE through well-delineatedresource allocation and efficient management.
We aim to achieve our 10% ROE target by deploying
h i g h l y e f fe c t i ve R OE co n t ro l s , i n c l u d i n g n e w
management control metrics (e.g., ROIC) and better
investment control rules.

Financial policy
We remained in sound financial condition in FY2020
despite the pandemic. Our financial policy first
disclosed in November 2018 remains unchanged.
Although our FY2020 earnings were severely impacted
by the pandemic, we are basically adhering to ourexisting financial policy with respect to shareholder
returns. In terms of capex, we still plan to allocate ¥50
billion annually to fund growth investments in pursuitof the 2025 Business Plan’s targets. We still plan to holdcash reserves equivalent to consolidated monthly turnover plus ¥30 billion. We have also set aside emergency
reserves for dealing with the pandemic.

Financial policy
Shareholder
returns

Regarding shareholder returns for the time being,
we will work wholly to reward shareholders
based on a consolidated payout ratio of 30% or
greater, from a variety of perspectives.

Capitalinvestment

We will secure ¥50 billion by FY2025 as fundingfor capital investment for growth.

Cashreserves

In view of the prevailing circumstances, we willsecure cash reserves* of consolidated monthly
turnover + ¥30 billion including funds to cover risk.
* Short-term borrowings (less than one year) are excluded.

Conclusion
Lastly, we intend to continue to offer opportunities
for investors to better understand our businesses
through proactive disclosure. As we improve ourdisclosures, we benefit from higher-quality feedback
from the investment community, leading to further
improvement in our management and IR. We willcontinue to unremittingly endeavor to strengthen our
IR as a transparent company and gain widespread favor.

15

Value Creation Process
With its company creed of “Boundless creativity and social contribution,” the Toyoda Gosei Group exploits its
expertise in rubber and plastic, its global reach, and its experience in pioneering new businesses, continuing
to meet social needs through the provision of automotive products and other innovations.

Environmental and social issues

Stakeholders■ Deepening social issues

・Global warming ・Depletion of resources
・Water risks from droughts and ﬂoods
・Increasing number of endangered species
・Aging populations■ Acceleration of technical innovations,rs, Supplier Employees, Loc

arShManagement resources (input)

ti e

s, C

ivi

ls

Philosophy
TG Spirit

Human

Number of employees 38,823
Sincerity Activity Unity

Manufactured●

u ni

Development
andTechnical
DesignManagement

Sales

●

mm

Value chain

・Diversiﬁcation of values
・Changing consumer behaviors
・From ownership to shares●

al c oNumber of locations 94
Capital investment ￥46.5 billion

Procurement

Production

Intellectual●

R&D expenses ￥31.0 billion

Social and relationship●

Number of suppliers 737

Natural

Total energy input 2,371,000GJ
Total material input 39,248t● Water resource input 1,150,000㎥

New businessdevelopment
experiences

Globalnetwork

Knowledgein the ﬁelds ofrubber andplastics●●

Financial●●

16

Total assets ￥775.1 billion
Interest-bearing debt ￥152.2 billionece■ Changing valuesoeh

to m ervi

・IoT/AI ・Electriﬁcation

rs
lde

v
, In

o
e st

us
rs, C

Competitive advantages

Value Creation Strategy

Foundation of Value Creation

Financial Report

Solving social issues

Social value

Business, Products
Automotive

Achieving a decarbonized society

Weatherstrips

Functional Components
Providing safety and comfort

Interiors and Exteriors

Supporting aging societies

Safety Systems

Achievingthe 2025
Business Plan

Other areas
e-Rubber・LEDs・
Re-S brand for the utilization ofmaterial remnants・
General Industry Products▲

P26

Contributing to the local community

Management foundation that
supports sustainable growth
Corporate Governance17

Sustainability

SDGs and ESG
Review of materiality (key issues)

Materiality identification process
STEP 1

Selection of materiality candidates

STEP 2

Evaluation/analysis of materiality candidates

STEP 3

Validity evaluation by management

STEP 4

Materiality identification

Good health and wellbeing

Industry, innovationand infrastructure

Business activities

With the company creed of “Boundless Creativity andSocial Contribution,” we contribute to a sustainable society
through company growth. For this purpose, we will takeinitiative in helping to solve the global issues indicatedin the UN Sustainable Development Goals (SDGs; sharedgoals that the international community aims to achieve by2030), and in the area of ESG (environmental, social andgovernance), based on an appropriate governance system.
We will meet the expectations of our stakeholders aroundthe world, including customers, shareholders, investors,
employees, and suppliers. In April 2020, we reviewed
materiality based on growing interest in sustainability andnarrowed our focus to the eight most important fields.

Most crucial fields in SDGs

Climate action

Affordable and clean
energyResponsible
consumption andproduction① Importance to stakeholders

Very high② Importance to Toyoda Gosei① Expectations fromstakeholders●

Contributions to SDGs●

Advancement of ESG activities
Proper information disclosure●(TCFD proposals, GRI standards)

18

Decent work andeconomic growth

Very highManagement baseHigh

Materiality(key issues)
determination

Reduced inequalities② What we aspire to be
Boundless Creativity andSocial Contribution(Good corporate citizenship, Proper
business operation, Sustainablegrowth, Customer satisfaction,
Conservation of global environmentand resources, Respect for theindividual)

Peace, justice andstrong institutions

Value Creation Strategy

Materiality (key issues)
Contribute to a safer and more
comfortable mobility society by
responding to the transformationof automobiles and reducing thenumber of traffic fatalities

●

●

●

●

●

●

●

Contribute to a decarbonizedsociety by reducing emissionsof CO2 and other greenhouse
gases

●

●

●

●

●

●

Contribute to a recyclingbased society by reducing
waste and water risks

●

●
●

●
●

Coexist with local communities
by creating employment andcontributing to society

●
●

●

●

Promote diversification in
employment, protect humanrights

●

●
●
●

●

Carry out thorough corporate
governance and compliance as
a company of integrity

Financial Report

Major efforts●

Create new businesses thatutilize core technologies

Foundation of Value Creation●●●

 evelopment of safety devices, such as airbag products for many different kinds ofD
accidents
Development of simulation technology to create safety devices that correspond tovarious riding postures, from adults to children
Development of advanced safety technology for autonomous driving
 evelopment of mobility products that are compatible with CASE/MaaSD
Development and commercialization of e-Rubber applications (smart insoles, heart
surgery simulator, etc.)
Development and commercialization of GaN power devices; development of spacedisinfectors, water purification units, and surface disinfectors using UV-C (deep UV)
LEDs
Collaboration with startups with the aim of synergy in core technologies
 evelopment and mass production of high pressure hydrogen tanks that are at the heartDof fuel cell electric vehicles
Push for lighter weight products for higher fuel efficiency (lightweight panels, plastic
fuel filler pipes, etc.)
P ush for establishment and spread of innovative and energy-saving production
techniques to achieve carbon neutrality
R evolutionary energy savings from higher productivity with the introduction of
innovative technologies, daily kaizen , and IoT/AI
Introduction of solar power generation and other renewable energy ush for waste reduction projects to minimize waste in production processes (effective use
Pof weatherstrip scraps; search for ways to minimize scrap generated in plating processes)
Investigation of applications for rubber material recycling technology that uses rubber
desulfurization and regeneration technologies
P ush for product design that allows easy disassembly and product design anddevelopment with the use of environmentally-friendly materials
Push for kaizen and recycling for water usage loss by expert teams
Creation of products (eco bags, etc.) that use material remnants (airbag base fabric,leather, etc.)
 aising of employees’ job satisfaction based on engagement surveys
RReformation of the company atmosphere through efforts to improve communication
ability at work
Business expansion and job creation in developing countries
Volunteer activities in cooperation with local governments and social welfare councils(companywide cleanups, community crime prevention, blood drives, on-site classes)
Push for activities for living with nature (woodland maintenance, plant afforestation,
river and wetland preservation), under the slogan “Linking activities with water, thesource of life”
 evelopment of human resources for global management (education program forD
future management candidates)
Creation of mechanisms to promote career advancement in female employees, so thatthey feel value in work
Review of personnel systems to promote the activity of senior workers
Hiring of people with disabilities in all Group companies and creation of pleasant workplaces
Explanatory meetings and practical training for supervisors and leaders on harassment prevention
 ctivities for thorough compliance and risk reduction centered on the Compliance andA
Risk Management Committee
Strengthening of ability to handle risk by preparing risk management guidelinesFormulation of and education with the Toyoda Gosei Group Charter for Business Ethics
and the Toyoda Gosei Guidelines for Business Ethics
E arly detection and correction of legal violations and misconduct by establishingcompliance consultation offices (inside and outside the company)

19

Feature

Carbon neutrality strategy
Becoming “Environmental TG,”a leader in CO2 reduction in
the field of rubber and plastic,
to achieve carbon neutrality
Hiroshi Yasuda

Chief of Carbon Neutrality and Environment Promotion Division

Chief of Corporate Strategy Headquarters,
Adviser to Automotive Business Headquarters /Director, Corporate Officer

Renewed determination in efforts toface global challenges
Natural disasters due to climate change, including floods
from heavy rains and fires resulting from heat waves, havebeen occurring in all parts of the world. These events haveenormous social and economic impacts. Many countries
have set targets for CO2 reductions and introduced strict
regulations, such as carbon border taxes. Japan has
declared “2050 carbon neutrality.” For businesses, thisproblem cannot be dismissed as a “fire on the other sideof the river.” Automakers, given that large amounts of CO2
are emitted over the entire lifecycle of their products, arerapidly shifting to zero emissions vehicles such as BEVs and
FCEVs. Their demands for cooperation from suppliers arestrong, and we will soon be facing a situation where CO2
reductions are a condition for receiving orders.
Toyoda Gosei first started full-fledged environmental
activities in 1993 with the adoption of its 1st Environmental
Action Plan, a five-year plan for environmental initiatives.
In February 2016, it announced the TG 2050 Environmental
Challenge consisting of six aggressive targets, one ofwhich is a clear declaration for a decarbonized society. This
marked a turning point, and each department has been
making aggressive efforts. They include TG-ESCO activities
in which entire plants make regular improvements to
reduce energy loss by always turning off power sources
during non-production times and switching to energy-

Targets 50&50
Toyoda Gosei again declared “2050 carbon neutrality”
at its ESG briefing in April 2021, positioning this as animportant management issue. It has also announced
its “Targets 50&50,” which sets mid-range targets ofreducing CO2 emissions by 50% (compared with 201320

saving equipment; reductions in waste and the amountsof water used; and introduction of renewable energy. To
achieve carbon neutrality, it will be necessary to combine
a number of things such as development of materials that
do not emit CO2 and innovative technical developmentsthat will significantly change manufacturing systems. To
advance these efforts in parallel, we will incorporate various
methods, including cooperation with other companies, andact with a sense of urgency.
Toyoda Gosei specializes in rubber and plastic polymer
technology. In moving toward carbon neutrality, we will act
with the determination to lead the industry and the Group.

How we think about
environmental activities

2050 Environmental Challenge
Products andtechnology

How we think about
management activities

Management Philosophy
How we think about
environmental activities

Environmental policy

Recyclingsociety

Contribute to an
environmentally-friendly
society through highpolymer and LED
technology

Decarbonizedsociety

Minimize waste andcreate resource
recyclingsystems

Cut plant CO２ tozero and utilize
renewableenergyRecyclingsociety

Environmental
preservation andliving with nature

Long-term target

TG 2050 Environmental Challenge
2030 Targets 50&50
Five-year plan

Environmental Action Plan

Minimize water
risks and improve
waste water
quality

Environmental
management

Strengthen and expand
environmental protection
and preservation
activities

Foster an environmentally
responsible corporate
culture andemployees

levels) and raising its renewable energy usage rate to
50% by 2030. The Targets 50&50 are milestones thatmust be reached to achieve carbon neutrality, andthe entire Toyoda Gosei Group, including suppliers, isworking toward them.

Value Creation Strategy

Foundation of Value Creation

Financial ReportCreating systems for rubber and plastic circulation
Product lifecycle

Achieving 2050 carbon neutrality will require the
combination of a number of innovative approaches
that enable CO2 reductions over the entire lifecycle ofthe product, from the procurement of materials andparts that form the upstream aspects of manufacturing
all the way through to the disposal stage after products
are no longer in use.

A rubber and plastics specialist
Toyoda Gosei has contributed to lighter weightautomobiles and to solving environmental problems with
its technical abilities and know-how as a manufacturer
that specializes in rubber and plastics. Carbon neutrality
is an issue that needs to be tackled on a global scale,and we would like to fulfill a social role by achieving

decarbonization over the entire lifecycle of our rubber
and plastic products. For example, we will take on thechallenge of creating cyclical mechanisms for rubber andplastic in collaboration with the plastics industry, such as
using naturally derived plastics with low CO2 emissions.
In addition, while up to now delivering high quality
products at reasonable prices to customers has led to
added value, in the coming years we will try to raise
product value further by reducing CO2 over the entire
lifecycle of each product.
To balance these efforts for the environment
while achieving stable growth of the company, we areaccelerating the development of products for BEVs and
FCEVs, including those that can be used for CASE and
MaaS (Mobility as a Service). Toyoda Gosei has manyoutside directors and other experts specializing in theenvironment, and we will mobilize all our resources forthis while emphasizing speed and effectiveness.

A company-wide cross-over project for corporate activities
Strengthened systems

The Carbon Neutrality and Environment Promotion
Division was established in June 2021 to strengthen
Toyoda Gosei’s systems for promoting these efforts.
The Environmental Committee that is central tothese activities was expanded in 2019 to the Global
Environmental Committee, which includes thepresidents of overseas head offices, and in 2021 theCarbon Neutrality and Environmental Committee.
The system for end-to-end efforts has been put inplace as a company-wide, cross-functional projectfrom development and design to production. To

promote sustainable activities, we are also working tocreate a corporate culture and personnel with a highenvironmental awareness.

Becoming “Environmental TG”
Toyoda Gosei’s philosophy of “Boundless Creativity andSocial Contribution” is the foundation of our efforts
for carbon neutrality. As “Environmental TG,” a leader
in reducing CO2 in the field of rubber and plastics, we
aim to be a company that contributes to a sustainable
society.

Medium- and long-term scenarios for carbon neutrality [see p. 39]
Global enhancement
・Global consolidated target
management
・Water use reduction

True start ofenvironmental
activities
Enhanced reduction of 6 gases
・Management system
Nature-friendly activities
consolidation
・Start of plant afforestation
・Legal management
・Waste reduction(50% decrease in CO2 emissions
and 50% renewable energy use)

Activities for decarbonized society
・Introduction of renewable energy
・Completion of LED lighting replacement
・Strengthened production technology kaizen
・Inauguration of energy-saving kaizen expert team・CO2 reduction targets
・Main plants
ISO acquisition

1st
Action Plan

5th
Action Plan

Targets 50&50

6th
Action Plan

7th
Action Plan
Announced April 2021

2020

2025

CarbonNeutrality
Declaration

TG 2050
Environmental
Challenge

2030 Milestone
Announced April 2020
(Targets raised April 2021)

Environmental Action Plan (5-year plans)
1993

2015

2030

2050

21

■ Feature ■ Carbon neutrality strategy

Roadmap for carbon neutrality by 2050
Expanding fields of activity
In fiscal 2020, carbon emissions from Toyoda Gosei’s
entire supply chain was 1.55 million t-CO2. Of that,
direct emissions from our company’s business activities(Scope 1) were 99,000 t-CO2, indirect emissions fromthe use of purchased electricity (Scope 2) were 367,000
t-CO2, and emissions other than Scope 1 and 2, fromthe procurement of raw materials, commuting andbusiness trips, and product use and disposal (Scope 3),
were 1.09 million t-CO2.
About five years ago, Toyoda Gosei set down fourpillars as activities for bringing CO2 emissions (Scope
1 and 2) related to production at the company down
to zero, and has aimed to achieve that target at an
early stage. Currently, we have expanded that range toinclude activities before and after production (Scope 3),
which accounts for about seventy percent of our supply
chain emissions, to achieve carbon neutrality over theentire lifecycle. We are strengthening and expanding
various activities with a deep commitment to reduce
CO2 emissions.

Four pillars for our aim of reaching zero
PillarⅠ Daily improvements
In addition to ongoing activities to save energy at plants,
members of the Carbon Neutrality and Environment
Promotion Division and plant members have worked

together for on-site surveys of energy loss, as well as tostudy improvement methods and implement measures.
Examples include the introduction of heat recovery
heat pumps to reduce steam loss, and the reduction ofpressure loss in compressed air.

Pillar Ⅱ Innovative production technologies
We aim for high value-added plants through innovations
on the manufacturing floor, including the design ofenergy-saving processes and manufacturing methods
while thoroughly pursuing production lines that emit
as little CO2 as possible. We are also moving ahead withtechnical innovations such as the prevention of trouble
with the use of IoT/AI and the reuse of waste materials.

Pillar Ⅲ Utilities upgrades
We a re m a k i n g sys t e m a t i c u p g ra d e s t o u t i l i t yequipment, the source of power used in our production
processes, because worn out equipment presents a riskof production problems and has inferior efficiency.
We are also replacing heavy oil with LNG as a powersource for steam energy, and making other systematic
upgrades to low CO2 equipment.

Pillar Ⅳ Introduction of renewable energy
We began installing solar power generation equipmentin 2007. Since 2019, we have become more active inintroducing renewable energy, such as by standardizing
installation of solar power generation equipment in newplants.

Plan for achieving carbon neutrality [see p. 42]

Without any measures（％）

Ratio of CO2 emissions volume

100

Daily improvements
Targets 50&50

2025 Target line

25% decrease(compared to FY2015)

50

Innovative production
technologies

Expand to50%
2030 Target line
50%
decrease

Target for the 7th
Environmental Action Plan

Reductionin energy
consumption

Utilities upgrades(energy-saving equipment)

Special priorities(compared to FY2013)

Renewable energy

Increase inrenewableenergy use
Effect from powercompanies switching
to power with low
CO2 emissions

0
2013

2020

2025

TG 2050 Environmental
Challenge formulated (2015)22

Renewable energy use

2030

2035

2040

2045

2050 (FY)TG 2050 Environmental Challenge

Zero (carbon neutrality)

Value Creation Strategy

Foundation of Value Creation

Financial Report

Contributing to zero CO2 emissions with product development thatbrings together our technical abilities
Up to this time, delivering high quality parts at reasonable prices to customers has led to added value. In the coming
years, however, the development of products that can contribute to a recycling-oriented society will be important.
Toyoda Gosei is a manufacturer of rubber and plastic products, and we aim to achieve zero CO2 emissions over the entire
lifecycle of products by bringing together a number of technological strengths, including material development, lighter
weight, process innovations, and 100% recycling. From the stage of purchase of raw materials and parts until disposal.

Challenge of reducing CO2 emissions■ Raw materials ■ From crude oil-derived to plant-derived materials
Plastic is light and easy to process, and has contributed
significantly to lighter weight vehicles. On the downside, it does not decompose easily in the naturalenvironment and if it is burned during disposal it emits
CO2. To bring the new added value of “sustainability”
to plastics, we are working aggressively to develop
plastics that pose a low environmental burden, suchas biomass plastic or biodegradable plastics as a new,nonpetroleum resource.

■ Core technology ■ Cellulose nanofiber
Naturally derived cellulose nanofiber (CNF), in which
fiber from wood material is extracted and nanosized,
is characterized by low density and high rigidity,
providing both light weight and strength. It has onefifth the weight of steel and more than five times
the strength. It effectively reduces CO 2 emissions
thanks to its light weight. It is plant-derived, absorbs
CO 2 when the plant is growing. Even if it is burned
during disposal, CO2 does not increase. With the aimof applying CNF in automotive parts, Toyoda Gosei isdeveloping a composite material that combines CNF
and plastic.

■ Design ■ Easy disassembly
When automobiles are scrapped, iron, glass, plastics
and other materials are reused by returning them to a
raw material state. However, about 140 kilograms ofmaterial from each automobile cannot be reused andis discarded. One reason is that these materials cannot
be broken down. Toyoda Gosei is therefore reviewing
the fixation methods of our parts from the design stage
in the upstream manufacturing process, and adopting
structures that make them easier to take apart to
reduce waste and increase recycling.

■ Process ■ Surface treatment innovations
Painting and plating lines, which involve surface
treatment technology that improves designability andappearance quality, emit large amounts of CO 2. We
are aiming to innovate surface treatment processes,
such as switching to plastic materials with outstanding
appearance quality that do not require plating.

■ Process ■ Rubber processing innovations
General rubber vulcanization processes need large
amounts of steam or heat. We focused on the energy
loss that occurs at that time and are trying to create
innovative processes for steamless vulcanization,
ambient pressure low temperature vulcanization, andno secondary vulcanization.

Expanding range from our own activities only (Scope 1, 2) to the entire product lifecycle of our products

Upstream

TG itself

Scope 3
Raw material
parts processing

Shipping anddelivery

Scope 1

Downstream
Scope 2

Scope 3

Commuting*Other: Capital goods, fuel and energy-related
activities not included in Scope 1 and 2,
waste material, business trips, leased assets

Product usage
Burning of fuelProduct waste*Other: Transport & delivery, productmanufacturing, leased assets,
franchises, investments

Use of electricity

Content of efforts

Material and part CO2 minimization
In collaboration with materials manufacturers:
Development and use of recycled andbiomass materials
In collaboration with parts manufacturers:
Reduction of CO2 emissions●●

Reduction of CO2 in distribution
In collaboration with logistics companies:
Loading efficiency, more efficienttransport routes
Introduction of electric trucks●●

Achieving zero CO2 at plants【Daily improvements】

Thorough energy-saving activities【Innovative production technologies】
Development of innovative
manufacturing methods【Utilities upgrades】
High-efficiency equipment【Renewable energy】
Solar panel installation,
green energy,
introduction of certificates, etc.

Minimization of CO2 in usage stage●●●

Lighter weight products
Product development for BEVs, FCEVs
Development of power devices andother technology

Minimization of waste●●

Design for easy disassembly
Promotion of waste collection andrecycling23

■ Feature ■ Carbon neutrality strategy

Concrete efforts for carbon neutrality
Product development efforts■ Plastic products ■We are developing products that have a low environmental impact while also ensuring a profit. For
example, by replacing the metal that previously wasused in nearly all fuel filler pipes with plastic material,
we were able to reduce weight by 50%. Today, we are
spreading plastic fuel filler pipe production lines atoverseas locations around the globe, contributing todecreased environmental impacts. In the future, wewill use the know-how we have cultivated over many
years in fuel system parts to develop technologies andproducts for BEVs and FCEVs. In addition, throughonboard products that apply LEDs, another of our fields
of expertise, we will contribute to lower electricity consumption in automobiles.

Product development that contributes to both environmental impact reduction and profits

For gasoline vehicles/HEVFor BEVs, FCEVs

Lighter weight by making withplastic Down 50% comparedwith conventional
products

Zero CO² emissions
Meet increased demandduring vehicle operation
for battery coolingCore parts for FCEVs

Plastic fuel filler pipes●●

Expand sales globally as a key
product with high added value
More than double sales by2025 compared with 2019

Cooling pipes●●

High demand for battery
cooling products for BEVs
Use of existing lines ispossibleHigh pressure hydrogen tanks●

Aim to expand business as
new parts with high addedvalue

Use of onboard LEDs
Interior lighting unit●

Application of LEDs tointerior and exterior
products for lower
electricity consumption■ Rubber products ■Regeneration of vulcanized rubber has long been
considered difficult. However, we developed a practicaldevulcanization technology for the regeneration of
vulcanized rubber about 25 years ago with the purposeof eliminating waste materials that are discharged fromweatherstrip production processes at Toyoda Gosei. We are
now aiming to further improve the quality of reclaimed
rubber and raise recycling efficiency. The key points indevulcanization technology are to apply appropriate energy
in the devulcanization process and selectively cleave thecross-links in rubber molecules. We have made innovative
modifications that control temperature, compressive
force, and shear force by adopting the optimum shape andcombination of pieces consisting of screws on two axes.
A dedicated building for the devulcanization (recycling)process was established at the Morimachi Plant in 2021. Thishas made it possible to cut waste materials of opening trims
by more than 40%. We have also developed reuse/recycled
products such as fatigue reduction mats, and are minimizing
waste by using rubber waste material and remnants tosteadily reduce CO2 emissions in the rubber field. [see p. 37]

24

Rubber recycling with devulcanization technology
Vulcanization is done so that rubber products maintain their shapeand strength. However, rubber hardens after vulcanization and isdifficult to use as a recycled material.
Devulcanization technology
Using our original devulcanization technology, we resolve
this hardness at the molecularlevel and have achieved
recycling of rubber materials

Treatment that cleaves
bound molecules is applied

S
S
S
S S
S
S S
S
S
S

Devulcanization process（Morimachi Plant）

Value Creation Strategy

Foundation of Value Creation

Financial Report

Efforts for zero plant CO2■ More compact painting lines ■Painting lines are subject to severe scrutiny forappearance quality, for which environmental control
is very important. Constant temperature and humidity
must always be maintained in painting booths. Becauseof that, air conditioning equipment has accounted forabout 40% of the energy consumption in painting lines.
We have now succeeded in making painting booths
Painting robot transport method
Previous Slider system

Development Turn system + tilt mechanism
Workpiece 1

Workpiece 1
Slide

Workpiece 2

Workpiece 2Turn■ Establishment of vulcanization simulation ■In the rubber extrusion process, we previously conducted
repeated trials and analyses while changing the time
and temperature for vulcanization. We have now
established a technology that can simulate this prior tovulcanization based on process and material data. Using
this technology, we have succeeded in greatly reducing
the number of trials and have been able to reduce theamount of energy needed in starting up a process.

more compact by switching the method used totransport materials prior to painting to the painting
robots. Switching from a “slider system” to a “turnsystem + tilt mechanism” that can transport materials
in a smaller space has allowed us reduce the boothvolume by about half. This smaller size results in a huge
reduction in the energy consumed by air conditioning
equipment, and has cut CO2
emissions by about 30%.
Painting booth
The painting yield is also
increased by simplifying
the robot posture, leading
to higher quality. We are
Booth volume
Decreased 45％
now going to make compact
painting booths standard
and spread them globally.

Before improvements

After improvements

Product sampled
Trial and analysis
Required 3‒10 daysor moreProduct
analysis

Degradation
test

Calculated 10 minutes inadvance from process
and material
information
Desktop
calculations
Material
information

Curing oveninformation

Degree ofvulcanization
Time■ Introduction of renewable energy ■Starting with the introduction of solar power at acompany dormitory in 2007, we have installed solar
power equipment at a number of Group locations.
Since 2017, the Environmental Committee has playeda leading role, with solar power implementationand investment plans made in the committee. The

installation of solar power generation facilities in newplants was standardized in 2019, and is being spread to
Toyoda Gosei locations globally. At the Inabe Plant inJapan, wind power equipment has also been installed
and CO 2 emissions are expected to be cut 800 tons
annually from the use of renewable energy.

Inabe Plant

Toyoda Gosei Memorial Gymnasium ENTRIO

Pure hydrogen fuel cells
3.5kW

Lithium ion batteries
500kWhSolar power
generationequipment
1.6MW

Wind power
generationequipment
10kW

Solar power generation equipment

Geothermal air
conditioning
equipment

LED lighting

Small-scale wind power
generation equipment(streetlight use)

Site area: 130,071 m2 , total floor area: 20,194 m2

Rainwater use
equipment

Total floor area: 9, 504 m2 , number of seats: 3, 500; includes commercial facilities

25Medium-term business plan, “2025 Business Plan”
To deal with the significant changes in the business environment and achieve sustainable growth into the future,
Toyoda Gosei’s 2025 Business Plan for the medium term lays out three key areas that take advantage of the
Toyoda Gosei Group’s cultivated strengths. We are making efforts tied to materiality that will provide both socialand economic value.

What we aspire to be

Financial objectives

PillarⅠ

FY2017

FY2025

Revenue¥806.9billion￥1 trillion

Operating profit
ratio

5.1 ％

ROE（Return on equity）

6.6 ％（ J-GAAP ）Pillar Ⅱ

Venture into innovation,
new mobility

Strategy for growing
markets/fields（ IFRS ）More than▲

Toyoda Gosei aims to grow as a global
company that acts flexibly and swiftly
in today’s dramatically changing
business environment, delivering
the highest levels of satisfaction
to customers worldwide throughsafety, comfort, well-being and theenvironment

8％
10 ％

Pillar Ⅲ
Innovative
manufacturing at
production sites

New Technology, New Products

Current Products

Current Products● Commercialization in new fields●S election and concentration of● Globally standardized production

utilizing core technologies● Development of newtechnologies and products
coping with CASE
● Strategies of modularizationand system products

business resources●M ake current products more
highly value-added● Business plan execution throughcooperation with customers andbusiness partners

know-how and processes● Further implementation of the

Toyota Production System（TPS)● "Jidoka " and manpower saving

utilizing IT● Reduction of environmental

burden by productionengineering reform

Base of the Pillars

Enhancement of our business foundation● Strengthening global operations● HR development● Business activities with integrity

Financial Policy
Shareholder
returns

Regarding shareholder returns for the time being, we will work wholly to reward shareholders
based on a consolidated payout ratio of 30% or greater, from a variety of perspectives.

Capitalinvestment

We will secure 50 billion yen by FY 2025 as funding for capital investment for growth.

Cash reserves

26

In view of the prevailing circumstances, we will secure cash reserves* of consolidated monthly
turnover + 30 billion yen including funds to cover risk.
*Short-term borrowings（less than one year) are excluded.

Value Creation Strategy

Foundation of Value Creation

Financial Report

The situation before us and key future strategies
The situation before us

Sales decreased in the first half of FY2021 due to thecoronavirus, and profits were also negatively affected.
To counter this, we implemented revenue measureswith the full, united power of the Group, including cutsin labor costs and business expenses. In addition, profits
significantly increased from rationalization efforts aswell as assistance payments and a rebound from losses
resulting from reorganization of our European business
in FY2019. As a result, we maintained profitability at thesame level as normal years even during the coronavirus
pandemic.
We aim to achieve an operating profit ratio of 8%
in FY2025 with the three steps shown at the bottom of
the page, as we work toward achieving the goals in our
2025 Business Plan. For the first step of “Completion ofcurrent structural reforms,” we are preparing for the endof production at our British subsidiary following the saleof our German subsidiary in 2019, which will complete
our restructuring in Europe.
For our LED business, which has been shrinking
for years, we have also decided to end production at
our domestic subsidiary. We will also end in-houseproduction. This concluded our general aims for
immediate structural reforms, and raised profitability 1%.

Performance trends since FY2017（when plan was formulated）

Key future strategies

Next, we will work on the other two steps to raise theremaining 2%.
In a shift of resources to growing regions andcustomers, we are moving to expand sales in theAmericas and Asia, centered on the existing businessesof Safety Systems and Functional Components. Byprioritizing investment of resources in product areas
and geographical regions with outstanding growthand profitability, we are attempting to improve andRevenue（Billions of yen）

4.3%

806.9

840.7

812.9

80.0
721.4

41.1
36.5

36.4
17.8

FY2017FY2018results
results
J-GAAP◀ ▶IFRS

FY2019results

FY2020results

1%

1.Completion of immediate
structural reforms
・Restructuring of European business

FY2025
forecast

optimize our portfolio.
In “Venture into innovation, new mobility,” we areworking toward achieving the 2025 Business Plan by
growing businesses with new technology, including
the development of products for CASE and the vehicle
electrification that is accelerating in recent years, highpressure hydrogen tanks, UV-C（deep UV) LEDs, ande-Rubber.

improvement FY2025（target）

improvement

5.1%

2.2%

1%

1%
FY2017（actual results）

5.1%
1,000

improvement［at time plan wasformulated］

Operating proﬁt ratio
8.0%

5.1%

Our thinking with regard to higher profitability
2025 Business Plan management goals
Three steps to 8% operating proﬁt ratio

Operating proﬁt

2.Shift of resources togrowing regions,customers

8.0%

3.Venture into innovation,
new mobility
・CASE products
・High pressure hydrogen tanks
・UV-C（deep UV）LEDs
・e-Rubber・Expand sales in key regions,to key customers

・Higher added value

27

Growth strategies in each business field
Mobilize all our resources
and connect the hugechanges before us toa leap into the future
Yoshiyuki Fujita

Chief of Automotive Business Headquarters
Chief of Safety & Health Promotion Division /Corporate Officer

Strategies in each field with a focus on“winning moves”
The effects of the novel coronavirus made FY2020 avery challenging year. Early 2021 was a continuation of
the period of enforced restraints, but in our automotive
business we understood that it was an important time
for preparation to leap forward soon after. With higher
added value and cost reduction of existing products
as a given, we are actively investing resources forthe development of products and technology thatmeet new needs. Together with consolidation, we are

steadily sowing seeds with a view to the future.
In the field of Safety Systems, we are strengthening
assessments in developed nations and responding
to the increased demand for airbags amid risinginterest in safety in developing nations. Functional
Components are important safety parts equivalent
to airbags, and while we will of course continue tosupply parts for gasoline vehicles, where we have built
up a track record globally, we are also putting energy
into the development of high value-added products
for the electric vehicles that will become widespreadin the future. Also of utmost importance in Interiorand Exterior parts and Weatherstrips is to cut costs

Strategy by segment/business field
Business
field
Segment

SS

SafetySystems

IE

Sales ratio of each business field

FC

WS

New
Technology
Interiors and Functional
Weatherstrips
Exteriors Components

Total

11.8%
18.6%

37.2%

Japan

32.4%

Americas
Asia■ SS (Safety Systems)■ IE (Interiors and Exteriors)

EuropeFY2025 sales
image■ FC (Functional Components)¥350
billion¥300
billion¥150
billion¥100
billion¥100
billionEnergyEnergyfocused on
focused on
Growing
Growing
Fastersales in most regions where sales in most regions where
profits can be
profits can be commercialization
regionsregions
earnedearnedNote: Assumed exchange rate $1=¥100

28■ WS (Weatherstrips)

Value Creation Strategy

During the coronavirus pandemic, hedging risks in global supply chains has been an issue for many companies.
In our automotive business, we implemented measuresin accordance with our business continuity plan centeredon the Production Administration Division, saying toourselves “Never stop the customer’s production!” Specifically, we implemented a timely production plan thatallowed us to deal with significantly varying production
volumes, responding as needed while quickly sharing information with our locations across the globe. This was
supported by a system to gather and list information ateach location, which changed moment by moment. Withan accurate understanding of things such as the timing
for materials and parts depletion, we switched to equipment alternatives or bridge production* when supply
was stopped. This allowed us to make the best decisions
on a case-by-case basis, such as ensuring a safe stock forunique products. We will further develop this system inthe future and intend to build structures so that stockand distribution status can be controlled in real time.
Being thrown into this drastically changing environment has again deepened our confidence in the effectiveness of the emergency response strategy we havebeen putting into place. Our online remote support for
production startups and other adaptations made undercoronavirus restrictions became an opportunity for us
to rethink the things we did as a matter of course, andtransform our working style in line with the new normal. The crisis situation we are currently facing is an
opportunity for new company growth. Once beyond
this major crisis, we will continue to respond flexibly to
new needs and all other changes, making a huge leap
forward to stay one step ahead of competitors.

Organizational restructuring that ispromising for further synergistic effects
Structural reinforcement from the reorganization
carried out in June 2021 will accelerate growth in
the automotive field. We established an “Automotive
Business Center” in addition to existing automotive
part engineering divisions so that, together withincreasing the speed of decision-making, we could findinter-disciplinary solutions to issues that are importantto the entire corporation. This will advance the digitaltransformation that will lead to carbon neutrality, an
important global issue, and work-style reforms. It will
also increase the speed of our work.
We have also introduced a project system in thedevelopment of products and technology, and arestrongly advancing development that crosses overessential fields in refining our “winning moves.”
Starting with total proposals for vehicle interiors basedon the Safety System and Interior/Exterior productfields, we are mobilizing all our resources to create
products and systems that will provide safety, comfort,
and well-being at a high level.

4companies*Production of a certain product at more than one plant at the same time

18companies■ Safety Systems 2 locations

Japan■ Functional Components 1 location■ Safety Systems 5 locations■ Interiors and Exteriors 1 location■ Weatherstrips 3 locations■ Sales and Research & Development

1 location

Asia

23companies

Financial Report

Our response to the COVID-19
pandemic has been a test for our future

and to increase our cost competitiveness so that we
do not lose out to local manufacturers in China andelsewhere. We will also make use of the knowledge
we have cultivated up to this time in efforts to develop
products that contribute to the achievement of carbon
neutrality, and try to start up new areas of businesses.
In additional to individual strategies, we believe it iscritical to thoroughly refine the new added values thatwill be our “winning moves” in each of our four fields,
so that we can prevail in the competition with othercompanies.

Europe& Africa

Foundation of Value Creation■ Interiors and Exteriors 6 locations■ Functional Components 7 locations■ Weatherstrips 6 locations■ Sales and Research & Development

3 locations

18companies

Americas■ Safety Systems 7 locations■ Safety Systems 4 locations■ Functional Components 10 locations■ Functional Components 4 locations■ Interiors and Exteriors 6 locations■ Weatherstrips 10 locations■ Sales and Research & Development 5 locations■ Interiors and Exteriors 7 locations■ Weatherstrips 4 locations■ Sales and Research & Development 2 locations

29

Growth strategies in each business field Automotive business

SS Business Area

Safety Systems(Safety Systems)

This business area started when we developed the first plastic steering wheel inJapan in 1954, and the mass production of driver’s side airbags in 1989. Since thenwe have commercialized various types of airbags for protection during side impacts
and for rear seat passengers. We have now reached full 360° coverage that protects
people in vehicles from impacts at all angles.
Through the supply of various safety system products that help to reduce
fatalities from traffic accidents, we will continue to contribute to a safe, secure, andcomfortable mobile society and to achieving the SDGs.
■ Strengths－ Technical ability to develop and produce
high-performance, low-cost airbags－ High quality production technology for

key safety parts－ Higher added value in coordination with

IE business area

Strategy forcoming years■ Opportunities

Deputy Chief of Automotive
Business Headquarters /Corporate Officer（Billions of yen）

400

300

250.7

234.0

2019

2020

200
100
0

（FY）

We are moving forward aggressively with efforts for new technology related to impact
and preventive safety, to deliver safety and security to all people on the move.

In developing nations, our focus is on ensuring
competitiveness as the demand for airbags
grows with rising concern about safety. In
India, this includes a collaboration with Daicel
on the localization of inflators. In developed nations,
we are expanding product variety for the protection not
only of people inside vehicles but also pedestrians, in
response to the differing assessments in each region. With
speedy product development that takes advantage of ouraccumulated knowledge, we will respond to new needs
and promote technical development that proposes ways tohelp solve hidden problems in mobility.
To prepare ourselves for the spread of autonomous
Mediumand long driving in the future, we are developing hightermsvalue-added products such as airbags that can beused with seats designed to have a greater levelof freedom and steering wheels that sense the condition of
the driver. We are also collaborating with other companies
in development with the aim of being a supplier that cancontribute to total safety, including systems that take aholistic approach to airbags and seat belts.

Increased variations, higher functionality

Products

From 2021

Airbags
Currently
mass
produced

From 2027

Underdevelopment

Under
development●●

Full 360°
coverage

Assessment
introduction
timing

●

From
2022

Steering wheels●

SensorUnderdevelopment●●

Grip sensor

Core

●

Passenger protection forautonomous driving

・・・Future
Rear seatpassenger
protection

Protectionof cyclists

Currently
mass
produced

Underdevelopment

Development of
airbag/seatbelt
systems

Protection ofpedestrians and cyclists

CASE-compliant cockpit

Underdevelopment

Notiﬁcation with
illumination

Leather
Polyurethane●

HMI functions

Developing driver-side airbag with new structure

A driver-side airbag with a new structure for safer protection was announced
in July 2021. This new product, in addition to mitigating impacts to thehead and chest by deploying instantaneously on impacts from the front, hasa donut-shaped indentation in the deployed surface that can catch the headto minimize rotation during impacts from an angle. It can meet the stricter
vehicle impact safety assessment standards that are expected in North
America and elsewhere in the future.

30

Chief of SS Business Area

■ Revenue－ Needs for improved airbag safety due to stricter
assessment standards in developed nations－ Growing use of airbags due to rising concern
about vehicle safety in developing nations－ Higher functionality of products with the spreadof autonomous driving

Short
term

TOPICS

Tadashi Yamamoto

New donut-shaped
indentation
Portion that
supports thebag shape
when it catches
the driverValue Creation Strategy

Foundation of Value Creation

Financial Report

Interiors and Exteriors

IE Business Area

(Interiors and Exteriors)

We are broadly expanding our interior products, such as instrument panels andconsole boxes that make interiors more pleasant, and our exterior products related
to vehicle design, such as radiator grilles. Most IE products are very visible, and in
addition to functionality it is important to ensure a high esthetic appeal.
We are working to expand our business by developing products and production
technology based on new and changing needs brought about by CASE.

■ Strengths－ Development and production
system for global supply, fromdesign to manufacturing－ Production technology capabilities for many
types of high-quality decoration, including
painting, plating, films, and soft surfaces

Strategy forcoming years■ Opportunities－ Growing needs for new decorative productsthat make vehicle individuality stand out－ Growing needs for new functions associatedwith electrification and autonomous driving－ Increasing demand for safety-relatedparts (radar transparent emblems)

Junichiro Kako

Chief of IE Business Area
Deputy Chief of Automotive
Business Headquarters /Corporate Officer■ Revenue（Billions of yen）

400

300

302.3

268.1

200
100
0

2019

2020

（FY）

We aim for further business growth with strengthened development of products andproduction technology, firmly based on changing design and functional needs from CASE.

We are expanding large molding andpainting equipment to reliably absorb
demand in growing products and regions.
We are also reducing costs through simplification and commonality of functional productdesign, such as consoles, and development of production technologies centered on automation ofassembly processes. Spreading these efforts globallywill raise our competitiveness.

Short
term

We are integrating new design and funcMedium
and long tional needs associated with vehicle electrification and autonomous driving, andterms
will develop high value-added products
such as functional lighting, HMI, and sensor-compatible garnishes. In addition to development ofenvironmentally-friendly materials and decorativetechnologies to achieve carbon neutrality, we willlead the industry in innovative product design andproduction technology development for easy disassembly.
TOPICS

Image of changing vehicle interiors with CASE

Products compatible with sensors

Enhancing Production Capacity for Interiors and Exteriors in North America

To respond to growing sales of radiator grilles
and other interior and exterior products, wewill expand the TG Missouri Headquarters
Plant and purchase a new building at the
Indiana Plant for molding machines andpainting booths. With this investment ofroughly four billion yen, we have broughtin the latest energy-saving equipment andare conducting environmentally-friendly
manufacturing.

TG Minto
Corporation
Toyoda Gosei
Texas, LLC

Toyoda Gosei
Irapuato Mexico,
S.A. de C.V.

TG Missouri Corporation
Headquarters Plant【Expansion】
TG Missouri Corporation
Indiana Plant【Expansion】
TG Kentucky, LLC
TG Missouri Corporation
Mississippi Plant

31

Growth strategies in each business field Automotive business

FC Business Area

Functional Components(Functional Components)

Toyoda Gosei supplies crucial components, such as fuel and brake parts, that
support the basic automobile functions of running, turning, and stopping.
With high quality as a given and ongoing efforts for lighter weight and greatercompactness, we have continued to maintain a top class share globally over many
years. Taking the enormous changes coming with vehicle electrification as anopportunity, we will try to expand our business in safety parts, where the barrier toentry by other companies is high, while also contributing to carbon neutrality.

－ Technology and manufacturing that
support high quality in key safetyparts－ Global supply system

Strategy forcoming years■ Opportunities－ Growing demand for relatedparts with the advance of vehicle
electrification－ Growth of environmentally-friendly
products (need for lighter weight)

Market trends indicate gasoline and hybrid
electric vehicles will be the main types ofvehicle for the time being, and global sales
will grow as products such as plastic fuel filler
pipes and fuel tank peripheral parts meet the needs forlighter vehicle weight and exhaust gas restrictions. We
aim to steadily expand sales with smooth production
preparations for developing nations where demandis expected to continue. At the same time, we arealso investing resources in advance development andequipment for the future electrification of vehicles.
Leveraging the knowledge we have built
Mediumand long up in battery and thermal control andterms
other areas, we will grow our businessfor electrified vehicles with high pressurehydrogen tanks for fuel cell electric vehicles, coolingpipes that efficiently cool the many batteries in thesevehicles, and battery cases. For carbon neutrality, weare starting new businesses centered on new materials
and material recycling, and also working on production
process innovations.

■ Revenue（Billions of yen）

200

150

147.4

134.4

2019

2020

100
50
0

Power
trainsFunctions

Storage/control/
supplyGasoline
vehicles

HEVs
PHEVs

（FY）

BEVs

FCEVs

High
pressurehydrogentanks
Fuel Tank Peripheral
Parts

Changes
Battery cases

Plastic fuel ﬁller pipes

Cooling

FC stack manifolds

Cooling pipes

Start of operations at the Inabe Plant, which will contribute to carbon neutrality

We started producing high pressure hydrogen tanks, a key component in FCEVs,
at our Inabe Plant in November 2020. This is a model plant for environmental
friendliness, where in addition to our own solar power generation, wind power
generation, and hydrogen fuel cell power generation, we purchase green energy
from natural energy sources. All of the electricity used at the plant is derived fromsustainable sources. We will increase production capacity sequentially in the future
in response to the spread of FCEVs.

32

Deputy Chief of Automotive
Business Headquarters /Corporate Officer

We aim for further growth by building development and production systems with a view tothe proliferation of electric vehicles, and starting up new, environmentally-friendly businesses.

Short
term

TOPICS

Chief of FC Business Area
Chief of WS Business Area

Growing
volume■ Strengths

Yutaka Ogasawara

Electric vehicles
have highcooling needs,
and pipe lengthis about fourtimes thatin gasoline
vehiclesValue Creation Strategy

Foundation of Value Creation

Financial Report

Weatherstrips

WS Business Area

(Weatherstrips)

These products, which we supply globally, are attached to doors and window frames and serve many roles,
including protecting the vehicle cabin from rain, wind, and noise, and in the smooth opening and closingof doors and raising and lowering of windows. We are proud of our top class world share, and are building
the best production layouts centered on developing nations. We are steadily building profit with efforts toimprove quietness, for which demand is rising with the spread of electric vehicles, and the promotion ofrubber recycling technology that contributes to a recycling-oriented society.

■ Strengths－ High share with global supply
system (top 3 globally)－ Rubber recycling technology－ Rising needs for quietness withvehicle electrification－ Contributions to carbon neutrality
using rubber recycling technology（Billions of yen）

200

150

112.4

100

84.8

50
0

2019

（FY）

2020

With no engine noise, sounds that occur with
Mediumvehicle motion stand out more in electric vehicles
and longandthe demand for interior quietness willterms
increase as these vehicles come into widespreaduse. We are developing products specifically for quietness,
which both reduce wind noise and improve sound insulation
performance at high levels. Furthermore, with replacing
rubber products with plastic products and maximum use of
rubber recycling technology, we will contribute to building
a sustainable society by replacing existing products withproducts that contribute to carbon neutrality.

Glass runs that
increase quietness Wind noise generated from surface unevenness
Previous productWe a t h e r s t r i p s a r e p r o d u c t s t h a t r e q u i r e
processing know-how, and to ensure reliable
profits we are introducing autonomous processes
that rely less on operator skill ahead of ourcompetitors, while also reorganizing production globallyand building a production network that is cost competitive
with manufacturers in developing nations. We are also
reducing waste by advancing rubber recycling technology
and developing products that use recycled rubber as wemove toward manufacturing with a reduced environmental
impact. This will also lead to new businesses.

Short
term

TOPICS■ Revenue

We aim for reliable profits by building the best production
networks globally and developing products that meet new needs.

Glass runs

Center pillar

A｀
A

Window glass

Glass runs

Center pillar

New structure

Strategy forcoming years■ Opportunities

A｀
A

Achieving zero unevenness
Cross-sectional structure of glass run（A-A' section）

Core location for expanding our business in the Chinese interior

The TG Zheng Ao Plant was enlarged and production equipment wasincreased in May 2021, doubling the weatherstrip production capacityfrom the level in FY2018. Following TG Start Light in northern China andFoshan TGR and Fu Yue in southern China, TG Zheng Ao became ourfourth production base in China in 2018. With its enhanced production
system, we will grow our business in the Chinese interior where future
growth is expected. Elsewhere, we will respond to demand in thedeveloping nations of India and Mexico where demand for weatherstrip
products will increase in the future.

（

）
）
）
）

TG Star Light Toyoda Gosei StarLight (Tianjin) Auto
Parts Co., Ltd.
TG Zheng Ao【Expansion】
Hubei Toyoda Gosei Zheng
Ao Rubber & Plastics
Sealing Technology Co., Ltd.

（（Fu-Yue Fuzhou Fu-Yue

Rubber & Plastic
Industrial Co., Ltd.
FoshanTGR Toyoda Gosei（Foshan）Auto
Parts Co., Ltd.

（33

Growth strategies in each business field New fields

Life Solution Business
In January 2021, the non-automotive fields of LEDs, e-Rubber, general industry
products, and GaN power semiconductors were brought together in the Life Solution
Business Headquarters. The planning, sales, and engineering divisions were integrated
with the aim of accelerating commercialization. We will first raise our name recognitionin the consumer products field with the supply of technologies and products thatenhance people’s lives and contribute to the SDGs, such as e-Rubber, where productapplications are progressing, and UV-C (deep UV) LEDs, which are promising as lightsources for disinfection, and then move them into automotive products.

Ryo Onishi

Chief of Life Solution
Business Headquarters /Corporate Officer│ Examples │ Commercialization of UV-C（deep UV）LEDs in three fields
We first achieved commercialization of UV-C LED
products in FY2020, and with the recently risingawareness of infection prevention are selling various
products in the three fields of space disinfection, water
purification, and surface disinfection.
In the field of space disinfection, we began selling
UV-C space disinfectors in December of last year. Theseare products in which bacteria and viruses are caught ina filter and killed with irradiation from UV-C LEDs. We
plan to sell new products with improved disinfection
function and an added humidification function in April
2022.
In the field of water purification, Toyoda Gosei
UV-C LED water purification units are used on “WOSH”
portable washstands that were launched in Novemberof last year by WOTA Corporation.
In the field of surface disinfection, we beganshipping our Disinfection Box in May of last year andlaunched a UV-C High-Speed Surface Disinfector in
November.
We will continue to raise output and increase
capacity and expand the fields of application.

Air disinfection
UV-C
space disinfectors
Bacteria andviruses arecaught in a ﬁlter
and killed withdeep ultraviolet
irradiation

Current

Future・・・

Start of sales scheduled
for April 2022

（15 m2 room）

UV-C LED
package・Expansion of space thatcan be disinfected
・Addition of functions(humidiﬁcation)

UV-C spacedisinfector withhumidiﬁcation function（15 m2 room）

Expand to other ﬁelds,such as air conditioners

Water puriﬁcation

Surface disinfection

UV-C LED water puriﬁcation units

UV-C High-Speed Surface Disinfector

Puriﬁcation by irradiation of circulatingwater with deep ultraviolet rays

Deep ultraviolet irradiation disinfects
top and bottom surfaces in 7 seconds

Used in WOSH
washstands（WOTA Corp.）

Irradiation
UV-C LEDwater
puriﬁcation
units

Expand ﬁelds of application with higher output and larger capacity│ Examples │ Smart Insoles using e-Rubber
e-Rubber, a next-generation rubber that functions
with electricity and physical force, is used in the
SupeR BEAT heart surgery training simulator that was
launched in October 2019, and we have continued toseek partners with whom we can expect to grow thisbusiness.
In a second round of commercialization in FY2021, weare using e-Rubber’s feature as a pressure-sensitive IoT
sensor in the planned launch of Smart Insoles, which
visually represent foot pressure data. Verification tests
are currently underway with a sports manufacturer.
Foot pressure data during golf swings are collectedwith Smart Insoles and analyzed, which can lead to
improved form.
In the future, in addition to expanding the areasof application of pressure-sensitive IoT sensors,
we will spread into other sports and the healthcare
field, including in frailty prevention, as “intangibles”
businesses.

34

Product specifications
・Sizes：
3 sizes：S (23-24.5cm)
M(25-26.5cm)
L (27-28.5cm)
・Colors：Multiple variations

Example of application screen on tablet computer
Swing form recorded on a tablet computer and foot pressure data are displayed inconjunction
Swing form recorded on a tablet computer

Foot pressure data obtained with Smart Insoles

Vertical motion andother foot pressure data
displayed in a time series

Value Creation Strategy

Foundation of Value Creation

Financial Report

Corporate Venture Capital
For “Venture into Innovation, New Mobility,” the first of the three pillars ofactivity set forth in the 2025 Business Plan, our mid-range business plan, we aremaking agile investments in startups. The main aims are to develop new products
leveraging the technology of the companies in which we invest and obtain astrategic return in the creation of new business. We will continue long-term
support, including providing management resources to these companies, so thatboth of our businesses can grow.

Mitsuhiro Nawashiro
Deputy Chief of Corporate
Strategy Headquarters

Deputy Chief of Research and Development
Headquarters, Chief of Product Development
Center, Deputy Chief of Life Solution
Business Headquarters / Corporate Officer

To realize new businesses quickly, we will grow together with our partners through investment
Toyoda Gosei’s Corporate Venture Capital Dept. wasestablished in 2019 to achieve, through investment instartups, the goals of supplementing the technology
in our existing businesses, acquiring future technologythat will be the seeds for new business, and accelerating
development by bringing the venture spirit of thecompanies into which we invest to Toyoda Gosei.
In selecting companies for investment, we haveconsidered six fields that are promising for synergy with
our own core technologies:(1)next-generation automotive
parts, (2)robotics,(3)semiconductors,(4)materials,(5)production technology, and(6)SDGs. Since January 2021,
based on the changing external environment, we have
expanded this to include carbon neutrality, healthcare,and intangibles. A specific example of synergy achievedin the past is a fixture that supports assembly work thatwas fabricated with the use of the 3D printer technology
of a company in which we invested. Taking advantage offeatures of that company’s technology in which recycledmaterials can be used in materials, we replaced the
traditional metallic fixtures in our plants with recycledplastic, reducing our environmental impact. While creatingproducts and businesses, we will continue to communicate
and share issues for the growth of the businesses in which
we invest, and hope move on to the next step together.
It is said that it generally takes 7 to 10 years to obtain areturn on venture investments, but we will grow together
with our investment partners as One Team so that we canbring that forward as much as possible.

List of companies in which Toyoda Gosei has invested
Company nameCategory

IMUZAK Inc.

Molds,
microfabrication

Production
technology

QBIT Robotics
Co., Ltd.

Service robots

Robotics

Slab Inc.

3D printer

Production
technology

TRYETING Inc.

AI

Materials

Uhuru
Corporation

Cloud

Intangibles
business

Ossia Inc.

Wireless power

Next-generation
parts

WOTA Corp.

Portable water
purifiers

Semiconductors/
SDGs

Ball Wave Inc.

Chemical sensors

Healthcare

Counterworks,
Inc.

Retail DX support

Intangibles
business

Genial Light
Co., Ltd.

Healthcare applicationsof optical technology

Healthcare

E-ThermoGentek
Co., Ltd.

Thermoelectric
generation modules

Carbon neutrality/
production technology

Slab Inc.
We are making efforts for higher
accuracy and speed of plastic 3D
pr in t e r s t ha t c an us e re c ycl e dmaterials, and developing production
technology to speed up productdevelopment and increase efficiency
of low-volume, high-mix production.
Join t de vel opmen t o f general purpose material manufacturing andproduction equipment will produce asynergistic effect.

Technology

E-ThermoGentek Co., Ltd.

Seiichi Yuyama
President

3D printers create solid value
and we are conducting joint
development with Toyoda
Gosei so that they can be used
as an effective tool in making
automobiles in the future.

As one aspect of increased renewableenergy use at Toyoda Gosei, we havebeen generating power ourselves using
solar, geothermal and other sources. In
collaboration with a company that hasoriginal thermoelectric power generation
technology that converts heat to electricity,
we will develop a power generation
system for the effective use of the thermalenergy discharged during the molding andprocessing of rubber and plastic products.

35

Feature

Manufacturing innovation strategy
Moving toward the concept of TG One Factory

We are innovating manufacturing on our production
floors by raising productivity with autonomation,and IoT, and developing production techniques thatmove us closer to carbon neutrality
Katsuhiko Kato

Chief of Automotive Business Management Center

General Manager of Production Engineering Management Division

Relentless effort is needed in manufacturing areas toensure competitiveness and grow sustainably as laws
and regulations are strengthened to combat global
warming, competition intensifies with the advent of
CASE, populations in developed nations age, labor costs
in developing nations rise, and other changes occur inthe environment.
The “TG Advanced Factory Concept” was formulated
as our vision for the company in the future. It adds
three concepts to the high productivity “Smart
Factory” that has been cultivated based on the Toyota
Production System. The first is that of a “Virtuous
factory” that eliminates human error with the use of
DX other approaches. Processes that utilize IoT and
AI to prevent the generation or passing on of defects
and do not cause difficulties for our customers will beachieved. Our aim is for plants where a culture of 100%
compliance with laws and regulations has taken rootand our colleagues around the world can work in safety.
Second is the concept of a “Clean factory” that makes
full use of innovative production technologies. As wework toward achieving carbon neutrality by 2050, we
TG Advanced Factory Concept

Factory where
everyonecan work

with vigor

will continue activities to reduce CO2, such as reducing
energy loss with process innovations, upgrading tomore efficient equipment, and introducing renewableenergy. In addition, we will work to develop recycling
technology for rubber, which has been considereddifficult to recycle, and the completely new energy
technology of replacing fuels by using CO2 methanationand hydrogen. Third is the concept of a “Factory where
everyone can work with vigor.” Workers are freed fromburdensome tasks with the introduction of automatedguided vehicles (AGVs) and expanded use of automatedvisual inspections and robots, and can shift to tasks withhigher added value such as equipment maintenanceand kaizen . This not only improves productivity, butalso helps to bring about diversity so that everyone,
regardless of age, gender, or other attributes can workin the same workplace with a sense of satisfaction.
Currently, we are making use of this in the reorganizationof production layouts under consideration in Japan aswell as China and North America. In addition, we will
start up new plants centered around the thinking in the
TG Advanced Factory Concept.

Ultimate goal

Job satisfaction

The company we want to be
Achieve diversity where everyone can work with the advance of automatedprocesses

100%
Poor health 0

Automated guided
Automated
Automated process
vehicle (AGV)
appearance inspection

Achieving carbon neutrality through production technology innovations

Clean factory

Virtuous
factory

Smart factory

CO2 emissions 0
Waste material 0

Disasters 0Complaints 0
Legal compliance
100%
L/T Shortest
Defects/breakdowns 0
Mechanization* 100%

*work with no added value

36

Devulcanization andregeneration process

Crushed rubber

ReclaimedrubberCarbon neutrality
by 2050CO20%Eradication of human error with the promotion of DX

Connecting with IoT

Use of AI machine learning

Absentmindedness

Impatience

Carelessness

Temptation

We will achieve the “TG One Factory Concept” with innovations in
manufacturing technology based on TPS thinking

Value Creation Strategy

It has been more than 40 years since Toyoda Gosei
established its first overseas operations. We haveaccumulated local know-how and have progressed withmutual exchanges in technology and knowledge thatare the strengths of each location. In 2020, we started
the Global Production Liaison Committee and worked
to speed up the entire group, such as by sharing

Foundation of Value Creation

Financial Report

information and the technology of each plant in acommon database and strengthen manufacturing. In
the future we will operate all the plants in the Toyoda
Gosei Group that are spread across the globe as one
huge factory, and develop further with the “TG One
Factory Concept” that dramatically raises QCD as theideal.

Work process innovation using IoT and AI
Elimination of defect losses is directly linked to being a factory that does not produce complaints. In cases ofweatherstrip production processes, IoT technology and AI are used and lead to defect prevention measuresand improvements. In addition to the experience of highly skilled workers, conducting big data analysis of
all processes will help to identify factors in defects that could not be discovered with conventional kaizen
methods and lead to anti-defect measures. In the future, we aim to develop control technology in which
AI classifies factors in defects with high precision without going through humans, and provide automatic
feedback on conditions that always produce good products. We also aim to eliminate factors caused byhuman error and create “virtuous factories” that do not cause problems for customers or society.

Weatherstrip production process (use of IoT and AI)
Causes of problems are newly
identified with the use of big data

Rubber materials
kneading process

Chemicalkneading process

A process that mixes the A process where sulfur andraw materials in rubber other chemicals are mixed in

Molding process

Prevention of defects with automatic feedback control technology

Processes in which anti-defectmeasures have been taken

Vulcanizing process

Processing/ shearing

Processes from raw
materials to finished products

Manufacturing processes

Inspection tools

Manufacturing data

Inspection data

Shipment

AI classifies
defect factors withhigh accuracy

Automatic
feedback ongood productconditions

Manufacturing × defect data tied to
big data analysis (AI)Full-scale operation of rubber recycling processes to achieve the medium-term goal of reducing waste
We aim to reduce waste materials by 30% (comparedwith FY2012 levels) by 2030 on our way toachieving carbon neutrality in 2050. In April 2021,
recycling processes for four types of weatherstrips
were brought together in a dedicated building. By
restoring waste rubber to a raw material state with
our original technology and using it in new products,
we expect to reduce waste by about 6,000t. Thisshould also have an effect in reducing CO2 emitted
during raw material transport and the incinerationof waste. In addition, we hope to contribute to
reducing the environmental impacts of the industry
overall, by using this recycled rubber not only inhouse but also selling it to other companies.

Weatherstrip recycling process [see p. 24]
Water injection(deodorization)

Input of wastematerial

Water

Water

Exhaust gas
treatment

Water
Cooling tank

Pulverization Desulfurization

Deodorization

Heat
Reclaimed rubber

Desulfurization process

Expanding the use of robots to save labor
Labor savings with automation of existing lines
Processing①

Processing①
Processing②

Processing②

Parts
②

〈After improvements〉

Parts
①

Collaborative
robotsProcessing③

Processing③

Parts Parts①②
Completedproducts〈Before improvements〉

Componentarea

In starting up new production lines, we seek productspecifications from the design stage that will makeautomation easier and aim to achieve productionlines that are totally automated, from component
and material input to shipment of finished products.
For existing lines, we will make full use of TPS kaizen
methods to separate and group tasks that can only
be done by humans and all other tasks, and achievelabor-saving lines that combine collaborative robots
and karakuri kaizen with low investment.

Visual inspection
Check, packaging

Visual inspection
Check, packaging

37

Environment〈E〉

Taking on the challenge of carbon neutrality and a circular
economy with the full strength of the Toyoda Gosei GroupThe Sixth Assessment Report of the Intergovernmental Panel on Climate
Change (IPCC), published in August 2021, states that there is no longer any
doubt that global warming is affected by human activities. The damage caused
by abnormal weather, such as the torrential rains and forest fires that are
occurring frequently in all parts of the world, is enormous. The climate change
problem is a real and urgent threat created by humans. Global warming is not
simply climate change; it also bears strongly on resource recycling, water risks
and biodiversity, and multifaceted efforts to combat it are important.
In 2016, the Toyoda Gosei Group formulated the TG 2050 Environmental
Challenge, which targets zero plant CO2, to do our part in overcoming thiscrisis. We also established the Targets 50&50, our medium-term targets for2030, for the early realization of carbon neutrality and a circular economy,
and have initiated company-wide, cross-sectional projects and are accelerating
efforts integrated into company activities.
The entire Toyoda Gosei Group will continue to do its utmost to contributeto protecting the global environment, under the slogan “A Greener, Richer
World for Our Children.”Kazuhiko Nagao

Deputy Chief of Carbon Neutrality and Environment Promotion Division

Contributing to environmental preservation through all our business activities
Basic philosophy
T h e To y o d a G o s e i G r o u p f o r m u l a t e d i t s 1 s t
Environmental Action Plan in 1993 based on its
environmental policy, and since that time has been
actively confronting environmental issues. In February
2016, we announced our TG 2050 Environmental
Challenge, and have set targets to be reached by 2030
as milestones. We have also formulated a 5-year action
plan in which activity items and targets are set, and are

Environmental policy

1. Environmentally-friendly corporate activities

We are keenly aware that all stages of ourbusiness relate deeply to the environment,from development, production, and sales
activities to end-of-life disposal. The
Toyoda Gosei Group, including all internal
departments, domestic and international
affiliates, and suppliers, conducts all businessactivities with concern for the environment incooperation and coordination with customers,
government agencies, and others.

carrying out activities to protect the environment.
Globally, we have placed integrated environmental
functions in the regions of the Americas, China, ASEAN,
and India. The Group is also making efforts as a wholewith area control in five global regions, the above four
plus Europe/South Africa. These efforts are made in
conjunction with government agencies, customers andsuppliers.

2. Good corporate citizenshipAs a good corporate citizen, we participate in,support, and cooperate with environmental
activities by many groups while also
working on environmental activities in
the community and broader society. We
also provide education for all employees
to support them in becoming involved inenvironmental activities as members of thecommunity and society, and support social
contributions and volunteerism.

TG 2050 Environmental Challenge— A Greener, Richer World for Our Children
The Toyoda Gosei Group specializes in the field ofhigh polymers ー rubber and plastics. Our symbol is thebenzene ring, a hexagonal hydrocarbon structure that is
the starting point for polymers. Borrowing from the six
sides of the benzene ring, the TG 2050 Environmental
Challenge sets six challenges to strengthen ourenvironmental efforts with a long-term view to the year
2050. As a roadmap to achieve that, we have set targets
for 2030 (Targets 50&50) as milestones and formulated
a five-year Environmental Action Plan to guide ourefforts.

TG 2050 Environmental
Challenge(Six Challenges)

Recyclingsociety

3. While spreading
information on these
activities, we listen to theopinions of people at alllevels of society and work
to improve our activities
wherever we can.
Products andtechnology
Contribute to an
environmentally-friendly
society through highpolymer and LED
technology

Minimize waste andcreate resource
recyclingsystems

Cut plant CO２ tozero and utilize
renewableenergyRecyclingsociety

Environmental
preservation andliving with nature

Minimize water
risks and improve
waste water
quality

Environmental
management
Foster an environmentally
responsible corporate
culture andemployees

38

Decarbonizedsociety

Strengthen and expand
environmental protection
and preservation
activities

Value Creation Strategy

Support for TCFD recommendations
The Toyoda Gosei Group endorsed therecommendations of the Task Force on
Climate-related Financial Disclosures(TCFD) in May 2019, and has analyzed
risk/opportunity scenarios and response
scenarios based on guidelines. Together
with an acceleration of efforts, including
the TG 2050 Environmental Challenge
and review of our 2030 milestones, we are
actively disclosing relevant information.
Please visit our website to see the resultsof our scenario analysis.
h t t p s : / / w w w . t oyo d a - go s e i . co m / c s r /environmental/report11/

Foundation of Value Creation

Financial Report

Medium- and long-term scenario for achieving carbon neutrality [see p. 21]
Global enhancement ・Global consolidated target management

Targets 50&50

・Water use reductions(50% decrease in CO2 emissions
and 50% renewable energy use)

Enhanced reduction of 6 gases
Nature-friendly activities ・Start of plant afforestation
True start ofenvironmental
activities

2030
Milestones
7th

1st

Action Plan

TG2050
Environmental
Challenge

Activities for decarbonized society

・Introduction of renewable energy
・Completion of LED lighting replacement
・Strengthened production technology kaizen
・Inauguration of energy-saving kaizen
expert team・Management system
consolidation
・Legal management
・Waste reduction
・CO2 reduction
targets
・Main plant
ISO acquisition

CarbonNeutrality
Declaration

6th

5th

Action Plan

Action Plan

Announced April 2020
(Targets raised April 2021)

Action Plan
Announced
April 2021

Environmental Action Plan (5-year plans)

1993

2015

2020

2025

2030

2050

Environmental organization
Our medium- and long-term policy and key action
items are discussed and decided in a Carbon Neutrality
and Environmental Committee chaired by the company
president. The Carbon Neutrality and Environmental
Committee consists of three subcommittees in theareas of products, production, and quality. In the areaof production, a production and environment subgrouphas been established to strengthen environmental
activities over the entire manufacturing process. The
above subcommittees are further broken down into
working groups that promote and manage areas such as

reductions in energy use, waste products, and volatileorganic compound (VOC) emissions, and preservationof the environment. In this way, environmental
preservation and management activities are conductedfrom an expert perspective.
A carbon neutrality project was started in FY2021 toaccelerate efforts over the product lifecycle. The projectis headed by the president and with outside directors asadvisors and the general managers of related divisions
as members.

Environmental organizational structure
Carbon Neutrality
and Environmental
Committee*1(meets 2 times/year)(Chairperson: Company president)

Discussion of mattersnecessary for mediumand long-term businessdecisions

CarbonNeutrality
Project
Formulation of mediumand long-term targets anddiscussion of measuresand issues to achieve themProducts and Technology Environment
Subcommittee (meets as needed)

Products and Technology

Production andEnvironment Subgroup
Production(meets 2 times/year)

Discussion of specific measuresand issues to achieve shortand medium-term goals

Promotes and manages development ofenvironmentally-friendly products and technologies

Production Environment Subcommittee(meets 3 times/year)

Promotes and manages policies and technical development
measures for reduced emissions from production processes

Subcommittee on Systems for SOC Regulations
and Quality Assurance (meets as needed)

Quality Assurance

Develops systems for compliance with
SOC regulations and for quality control*1 The position of the Carbon Neutrality and Environmental Committee within theorganization can be seen in our Corporate Governance Organization Chart (see p. 67)

Liaison Committee for Environmental
Communication with Domestic
Affiliates (meets 3 times/year)
Manages, guides, and supports
coordinated environmental efforts
by affiliates and suppliers in Japan

Liaison Committee for Environmental
Communication with Overseas
Affiliates (meets as needed)
Manages, guides, and supports
coordinated environmental efforts
by affiliates in other countries

Deployment from the Carbon Neutrality and Environmental Committee, the Production and Environment Subgroup, and the respective subcommittees to plants andother operations is done with the establishment of expert committees in accordance with the ISO 14001 system at each plant.

Carbon Neutrality Project

Task

Structure The project is headed by the President
and has Chiefs of the Corporate Strategy
Headquarters, Research and Development
Headquarters, and Automotive Business
Headquarters serving as project leaders. The
core members are division general managers
and above. This structure allows for quick
decisions and actions in management issues.
Activities Each task is carried out with therelevant division general manager as leader.

●

A

●

Understand product life
cycle assessment (LCA)
and set reduction
targets
Task

B

Prepare andimplement reduction
scenarios

Achieving carbon
neutrality

Identify where to start and points of focus forstrategic reductions● Formulate scenarios (pillars of major activity)● Identify items for execution to bring about● scenarios●

Visualization of CO2 emissions
and reduction volumes
Items in setting targets(1) Set medium- and long-termtargets (2050, 2030, 2025)(2) Category (Scope 3)
Unit target details(3) Set targets for each theme
Task

C

Financial influences/budgeting and IR/
public relations

Clarify financial influences and environmental
investments
Identify regulatory and industrial trends,
release information, conduct public relations● Coordinate with customers, JAPIA, others● Create environmental business
●

●

39

Environment〈E〉

Risk and opportunity associated with climate change and resource depletion
The risks and opportunities associated with climate change andresource depletion are recognized
as an important management
issue. From a global perspective
based on laws, regulations andtrends, we are strengthening our
responses to the overall financial
and social risks from the effects on
economic and production activities
of more drastic abnormal weather,changing precipitation patterns,
droughts and floods.

Risk

ClimatechangeResource
recycling
Management(regulatorycompliance)

Biodiversity

Opportunity

Please visit our website to see the results of our scenario analysis.
https://www.toyoda-gosei.com/csr/environmental/report11/

Effects of water shortages and floods
on production activities

Cost reductions from re-use anddecreased use of water

Loss of trust in the company due toenvironmental problems, including
legal violations, and insufficient efforts
to protect the environment

Increase in brand strengthfrom enhanced environmental
activities

Cost increases from difficulty in procuring Cost reductions from recycling
materials, soaring material prices
technology, use of fewer materials

・Rising prices for raw materials due todecline in natural resources
・Decreased product quality due
deteriorating water quality

・Business continuity by protecting

nature to ensure human resources
and raw material
・Securing quality water resources with
forest maintenance, river conservation

Resource utilization and environmental emissions in business activities
To lessen the amount of energy, material and otherresource inputs, and maximize product output, we areutilizing our skills in product development, processdevelopment and workplace kaizen in efforts toimprove through business activities.
The input resources we use include environmentallyfriendly materials and clean energy.

INPUT

OUTPUT

Total material input 39,248t
Plastic
25,913t

Rubber (rubber sheets) 13,335t
Excluding purchased parts, metal and liquid

Total energy input 2,261,000GJ*1
Purchased electricity 1,470,000GJ
Renewable energy 19,000GJCity gas
650,000GJ
LPG
1,000GJ

Heavy oil
Kerosene
LNG
Gasoline

Water resource input 1,140,000㎥
Industrial water 641,000㎥

Clean water
189,000㎥
Underground water 311,000㎥

PRTR*2 substances usage

5,000GJ
0GJ
110,000GJ
1,000GJ

525t*1 Gigajoule (1,000,000,000 joules)*2 Pollutant Release and Transfer
Register*3 Sulfur oxide*4 Nitrogen oxide*5 Volatile organic compounds*6 S ubject operations: 4 plants ofHaruhi, Inazawa, Heiwacho andSeto, Kitajima Technical Center,
Miwa Technical Center and SunCourt Inoguchi

Environmental impact in the value chain
From the perspective of preserving the earth,
we have surveyed and disclosed not only GHG
emissions (Scope 1, *7 Scope 2 *8 ) in our businessactivities but also emissions in our entire value
chain including excavation of raw materials andproduct use and disposal (Scope 3*9 ). Our Carbon
Neutrality Project was inaugurated in FY2021 to
improve the accuracy of Scope 3. Together with
this, we have established milestones and createdscenarios for carbon neutrality.
*7 G reenhouse gas emissions emitted directly by the company itself(natural gas and other fossil fuels, etc.)*8 I ndirectly emitted greenhouse gases (electricity, etc.)*9 G
 reenhouse gases emitted in the supply chain that are indirectly
emitted by the company (manufacturing, transport, business travel,commuting, etc.)40

Products

Business
activities

Emitted into the atmosphereCO293,000t-CO2
6 gases
2,000t-CO2
SOx*3
0t

NOx*4
92t
Dust
0t
Volume of substances subject to PRTR 77t
230t
VOC*5 emissions

Waste discharge
Landfill waste
Incinerated waste

0t
1t

Industrial waste and general waste 5,927t
For-profit disposal by sale 6,032t
Volume of substances subject to PRTR 41t

Wastewater
Total wastewater 870,000㎥
Volume of substances subject to PRTR 0.1t

Nitrogen emissions*6
8.8t
Phosphorus emissions*6 0.6t
4.3t
COD emissions*6

CO2 emissions by scope level●Scope 1

FY2020 (Global) 1,553,000t -CO2

99,000t-CO2●Scope 2 367,000t-CO2●Scope 3

1,087,000t-CO2(Other indirect emissions)・Raw materials/capital goods 978,000t-CO2
・Employee commutes & business trips 26,000t-CO2
・Distribution 30,000t-CO2
・Other 53,000t-CO2

Value Creation Strategy

Foundation of Value Creation

Financial Report

Environmental action plan
Sixth environmental action plan activities and results (FY2016–FY2020)
Our efforts to achieve a sustainable society have been focused in four areas: “Building a decarbonized society,”“Building a recycling society,” “Building an environmental preservation and nature-friendly society,” and“Environmental management.”
As a result of the collective efforts of the entire Toyoda Gosei Group, we have achieved our targets for all key
items (CO2, waste, water).

Results for key items●

CO2 emissions/percentage of renewable energy

Building adecarbonizedsociety

CO2 emissions
per sales unit

Japan, consolidated
Toyoda Gosei Co., Ltd.

Global, consolidated●

2020 target

Item

Global, consolidated

CO2 emissionsof renewable energy
Renewable energy rate Percentage
among electricity consumed

77［1］17% decrease vs. 2012

80［1］

65［1］

17% decrease vs. 2012

93,000t-CO2

More than 2%

15,459KW○

35% decrease vs. 2012○

20% decrease vs. 2012○

40% decrease vs. 2012

○

4%

○

Discharged waste volume
Japan, consolidated

2020 target

Waste volume
per sales unit

Toyoda Gosei Co., Ltd.
Overseas affiliates●

23% decrease vs. 2012

15% decrease vs. 2012

Item

Building a
recyclingsociety

RatingFY2020 results

12% decrease vs. 2012

FY2020 results

Rating10% decrease vs. 2012

61

39% decrease vs. 2012

6% decrease vs. 201338［1］62% decrease vs. 2013

12% decrease vs. 2012

［1］○

39% decrease vs. 2012

61［1］

○
○

Water usage
Item

Japan, consolidated

2020 target

Water used
per sales unit

Toyoda Gosei Co., Ltd.
Overseas affiliates[1] Figure when the reference value is taken as 100.

FY2020 results

8% decrease vs. 2012

Rating57

43% decrease vs. 2012

55［1］45% decrease vs. 2012

［1］

82［1］

18% decrease vs. 2012○○○

Please see our website for details. https://www.toyoda-gosei.com/csr/environmental/report2/

Seventh environmental action plan (FY2021–FY2025)
An environmental action plan was formulated for FY2025.

Targets for key items●

CO2 emissions/percentage of renewable energy
Item

Building adecarbonizedsociety

Global, consolidated
Toyoda Gosei Co., Ltd.
●

Renewable energy percentage
CO2 emissions

Renewable energy percentage
Item

Overseas affiliates●

Waste volume

25% decrease vs. 2015 50% decrease vs. 2013

Carbon neutrality

20％

20％

50％

100%
100%

2025 targets(Reference) 2030 targets TG 2050 Environmental Challenge

40% decrease vs. 2012 50% decrease vs. 2012

Minimization

Waste volume per sales unit 50% decrease vs. 2015 55% decrease vs. 2015

Item

Low risk area●

Carbon neutrality

12％

Water usage
High risk area

Building
environmentallyfriendly societies(Reference) 2030 targets TG 2050 Environmental Challenge

25% decrease vs. 2015 50% decrease vs. 2013

Discharged waste volume
Toyoda Gosei Co., Ltd.

Building a
recyclingsociety2025 targets

CO2 emissions

Water quality
Water intake

2025 targets(Reference) 2030 targets TG 2050 Environmental Challenge

Measures completed at two locations Measures completed at four locations

Measures completed at three locations Measures completed at seven locations

Water intake per sales unit 6% decrease vs. FY2019 11% decrease vs. FY2019

Minimization of water risks

Living with the environment
Item

Global, consolidated

Toyoda Gosei Co., Ltd.

No. of activities

2025 targets(Reference) 2030 targets TG 2050 Environmental Challenge

Implementation of nature activities (>1 time/year)

Area of green restoration +18% restoration compared with 2019 +35% restoration compared with 2019100% restoration

Please see our website for details. https://www.toyoda-gosei.com/csr/environmental/report2/

41

Environment〈E〉

Building a decarbonized society
In addition to lighter weight products that lead to improved vehicle fuel efficiency, we are reducing CO2 emissions
through improved productivity and more efficient distribution.

Basic philosophy
In addition to achieving the goal set under the Paris
Agreement of keeping the rise in the global averagetemperature to below 2°C compared with pre-Industrial
Revolution levels, we must reduce greenhouse gas
emissions to virtually zero by the end of this century.
With the aim of zero CO2 emissions as presented in the
TG 2050 Environmental Challenge, we are utilizing
new production techniques and product development
skills with an eye toward next-generation vehicles in
addition to the manufacturing skills we have cultivatedover time. Plans for execution are included in our

7th Environmental Action Plan with activity targets
for FY2025. We have also set the goal of cutting
CO 2 emissions 50% (vs FY2013 levels) by 2030, themidpoint for the TG 2050 Environmental Challenge,
and implementing stepwise, specific CO2 reductions. We
are also conducting activities to reduce CO2 emissions
over the entire life cycle, with consideration of partsand materials procurement, product development,
production, and use up to the disposal stage. In June
2021 we started a company-wide, cross-sectional carbon
neutrality project to accelerate these activities.

Reducing CO2 emissions
The Toyoda Gosei Group is reducing CO2 emissions in the product stage, production stage, and over the entire
lifecycle to achieve the targets set for FY2025.
●

Product development stage: Environmentally-friendly product development

In the product stage, we are making headway in providing
parts for environmentally-friendly, next-generation
vehicles and developing products with lighter weight for
greater fuel efficiency and lower energy consumption
across the areas of materials technology, product design,and production technology. Examples include theProduction stage: Reductions with development of new processes, daily kaizen

We have set 2030 milestones
for achieving zero plant CO 2
in the TG 2050 Environmental
Challenge, and are working
to achieve this with regularkaizen , production technology
innovations, more efficientutilities, and expansion ofrenewable energy in plants.

Without any measures

（%）

100
Ratio of CO2 emissions volume●

development of hydrogen tanks for FCEVs and aggressive
efforts to switch materials (e.g., from metal or rubber toplastic) in instrument panel peripherals and other interior
products and in functional parts such as hoses, reduce
the number of components, integrate functions, and use
thinner material while ensuring strength.

Daily improvement
Targets 50&50
Renewable energy use

2025 Target line
Targets for the 7th
Environmental Action Plan

50

Expand to50%

25% decrease(compared to FY2015)

2030 Target line

50%

(compared to FY2013)

Special priorities

Renewable energy
0

2020

2025

2030

TG2050 Environmental Challenge formulated

2035

2040

2045

Reductionin energy
consumption

Increasein renewableenergy use
Effect from powercompanies switching
to power with low
CO2 emissions

2050 (FY)TG2050 Environmental Challenge Zero (carbon neutrality)

Recycling: Reductions in materials and parts procurement, more efficient distribution

Toyoda Gosei has prepared and distributed green
procurement guidelines for materials and partsprocurement with low environmental impact. Together
with regular supplier surveys to ensure compliance, we
also provide support when improvements are needed.

42

Utilities upgrades(energy saving equipment)

decrease

2013●

Innovative production
technologies

We have reduced CO2 emissions with more efficient
distribution, including truck allocation with improved
payloads and shorter distribution distances and reviewsof transport modes.

Value Creation Strategy●

Foundation of Value Creation

Financial Report

Renewable energy

We are expanding renewable energy, including the
installation of clean solar and wind energy generationequipment and the purchase of green power. This
reached 4% of our total global electricity consumption

by the end of FY2020, more than meeting our target of
2%. Our next challenge is to raise clean energy levels toat least 20% globally by FY2030.

CO2 emissions, CO2 emissions per sales unit (index) *1
CO2 emissions

Global, consolidated

CO2 emissions per sales unit

(10,000t-CO2)(index)

60

49.4

77

30

0

100

Achieved

46.6

2012

(Base year)

2016

2017

2018

2019

Target12％

decrease
vs. FY2012

2020

Japan, consolidated(10,000t-CO2)

50

10

0

0

(FY)

(index)20

100

Achieved

2012(Base year)

Target
15％

65

17.3

decrease

2016

2017

2018

2019

50

vs. FY2012

12.2

2020

0

(FY)

CO2 emissions in distribution, CO2 emissions per sales unit (index)*1CO2 emissions in distribution

Toyoda Gosei Co., Ltd.
(10,000t-CO2)

20

Achieved

80

15.4

Target
17％

9.3

100

vs. FY2012

Achieved

10(index)decrease
Target17％

decrease

CO2 emissions per sales unit

Toyoda Gosei Co., Ltd. (Range: delivery distribution, intra-process distribution, procurement distribution)(10,000t-CO2)

2.0

50

1.0

2012

(Base year)

2016

2017

2018

2019

2020

0

0

(FY)

2012

(Base year)*1 Emissions per sales unit (index) is a figure obtained taking FY2012 as 100[CO2 conversion factor]
The CO2 conversion factors used for Japan*2 are the 1990 Keidanren factors. The
CO2 conversion factors used for other countries are from the GHG Protocol (2001).

decrease
vs. FY2012

1.15

2016

2017

2018

2019

100

Target
8％

86

1.07

vs. FY2012

0(index)Achieved

2020

50

(FY)

0

*2 E
 lectricity: 0.3707t-CO2/MWh, class A fuel oil: 2.69577t-CO2/kL, LPG:
3.00397t-CO2/t, Town gas: 2.15701t-CO2/1,000 Nm³, Kerosene: 2.53155
t-CO2/ kL, LNG: 2.68682t-CO2/t, Gasoline: 2.36063t-CO2/kL (excluding
external factors of gas companies’ town gas heat conversion)

Solar power generation graph (does not include stand-alone systems such as outside lights with solar panels)
Generation capacity (kW)Total generation capacity (kW)Japan, consolidated

Toyoda Gosei (itself)

MiyoshiDistribution Center
Heiwacho Plant
Nishimizoguchi Plant
Morimachi Plant
Bisai Plant

0

TG East Japan Co., Ltd. (Miyagi)

1,000

Heiwacho Plant, Morimachi Plant

2,000

Overseas afﬁliates
（kW）

4,911
Kitajima Technical Center

3,000

Sun Court Inoguchi

4,000Haruhi Plant Safety Office

5,000

Miyoshi Distribution Center

（kW）

（kW）

6,000

TGAP

172kW

4,000

TG
Opseed

2,000

146kW

15,000Zhangjiagang TG

2007 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

0

(FY)

TGMIN
Bawal

10,000TGT

766kW

FoshanTGR

2,198(including
ENTRIO)

10,866

Tianjin TG

FoshanTGR TGRT

5,000

TGMIN
Neemrana
1,496kW2007 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

(FY)

Reductions in 6 greenhouse gases*3

Trend in greenhouse gas (6 gases) emissions (CO2 equivalents)

Of the six greenhouse gases, Toyoda Gosei Co., Ltd.
uses three (HFC, PFC, SF6) and is conducting activities
to reduce all of them. By FY2015 we had completed aswitch to alternative gases with a low environmental
impact for the shield gas used in the production ofsteering wheel cores and other gases. This has resulted
in a 74% decrease in greenhouse gases since FY2012. We
will continue these reduction activities in the future.

Toyoda Gosei Co., Ltd.

*3 Hydrofluorocarbon (HFC), perfluorocarbon (PFC), sulfur hexafluoride(SF6), methane (CH4), nitrous oxide (N2O), nitrogen trifluoride (NF3)

CO2 emissions(10,000t-CO2)

2.0

Target62％

1.3

decrease

1.0

vs. FY2012

Achieved0

2012(Base year)

2016

2017

2018

0.02

2019

0.2
2020

(FY)

43

Environment〈E〉

Building a recycling society
Toyoda Gosei uses resources effectively and contributes to a recycling society by reducing waste volumes*1 andwater usage and designing products that are easily recyclable.
*1 We are currently attempting to reduce waste volumes for the minimization of industrial waste as set forth in the TG 2050 Environmental Challenge.

Basic philosophy
To move closer to the recycling society, or circular
economy, envisioned in the TG 2050 Environmental
Challenge, Toyoda Gosei aims to minimize industrial
waste and water risks. We have set 2030 targets
as milestones, and are making every effort to use
resources effectively, reducing materials usage andwaste volumes through thorough sorting and thedesign of easily recyclable products.
Frequent water shortages and floods have becomea major problem in all parts of the world. We areattempting to identify these risks in every country andregion where we have operations while also striving togive back to the community by reducing water usage,
recycling water, and releasing cleaner wastewater.

Waste reduction

Establishment of 2030 milestones

We have set and are working toward 2030
milestones to achieve the targets in the TG
2050 Environmental Challenge. For this we aredeveloping products and materials that minimize
remnants and waste and are easy to recycle, andthoroughly sorting them in plants.

Scenario for minimizing amount of waste (reduction image)
（%）

100

Daily improvement

Percentage of waste●

Post-occurrence measures

60
50

0

2030 Target

2012

2017

2020

Industrial method development

50%2025 Target line
Targets for the 7th
Environmental Action Plan
40% decrease(compared to FY2012)

decrease

Recycling(compared to FY2012)

2025

2030

(including development ofrecycled products)

2040

2050 (FY)TG2050 Environmental Challenge Minimization●

Development of product recycling technology

We develop and design easily recyclable products
and materials with thought to the entire lifecycleof automobiles. We are also developing recycling
technology for waste material.

Development of technology for end-of-life vehicle parts recycling
Key items

Measures implemented

New recycling

・Composite material separation technology
・New recycling technology(high quality material recycling)

Use of recycled ・End-of-life vehicle recycling technology
materials in vehicles ・Development of applications for recycled materials
Product design for ・Product design for easy dismantlingeasy recycling・Materials and composition changes for easy recycling●

Reduction of waste materials in the production stage

To reduce waste in production processes, we arecombating waste at its source and recycling. We havealso started a waste reduction project with coordination
among plants and production technology, materials
technology, and product design departments tostrengthen efforts to combat waste at its source. At
each plant, we are reducing waste through genchigenbutsu (go and see), identifying items for reduction
with the help of external experts, and implementing
rubber, plastic, and liquid reductions.
Study sessions are also held to promote waste
reduction at both domestic and international Group
companies.

44

Amounts of waste generated and disposed of(results for FY2020: Toyoda Gosei Co., Ltd.)
Amount of internal reuse 1,183t

Amountof waste
5,928t〈100%〉

Amount oflandfill waste
0t〈0%〉

Amount ofincinerated waste
1t〈0.1%〉

Amount of compensatedrecycling(payment received)
6,032tAmount ofpaid recycling(payment made)
5,927t〈99.9%〉
Figures in parentheses are the proportionof the discarded materials volume

Value Creation Strategy●

Foundation of Value Creation

Financial Report

Reduction of packaging in the distribution stage

The packing material used in product transport isbeing reduced to prevent products from being soiled
by increasing the number of times reusable containers
are used in the field and maintaining cleanliness. We

are also reducing packing material by putting lids on
reusable containers and other changes, considering
the balance between maintaining product quality andreducing the use of packing materials.

Waste volume, waste volume per sales unit (index)*2
Waste volume

Japan, consolidated（t）

20,000

Achieved

14,223
10,0000

Waste volume per sales unit

61
9,509

(index)100

Toyoda Gosei Co., Ltd.
（t）

20,000Target10％

12,844decrease vs.
FY2012

2012 2016 2017 2018 2019 2020

(FY)

(Base year)50

10,00000(index)Achieved

61
5,928

100

Target12％

decrease vs.

50

FY2012

2012 2016 2017 2018 2019 2020

(FY)

(Base year)

0

Amount of distribution packing material used, amount used per sales unit (index)*3
Amount used

Overseas afﬁliates（t）Target6％

60,000
Achieved

40,00020,000036,691(index)150

decrease vs.
FY201338
17,5632013 2016 2017 2018 2019 2020

(Base year)(FY)

Amount used per sales unit

Toyoda Gosei Co., Ltd.
（t）

1,500

100

1,000

50

500

0

0

(index)

150

108
740

884

100

Target8％

decrease vs.
FY2012

2012 2016 2017 2018 2019 2020

(Base year)

(FY)

50
0

*2 The amount of waste per sales unit (index) is a figure obtained taking the base year as 100*3 The amount of distribution packing material used per sales unit (index) is a figure obtained taking the base year as 100

45

Environment〈E〉

Reducing water risks
We have set and are working toward 2030 milestones
to achieve the targets in the TG 2050 Environmental
Challenge. For this we are assessing risks in both water
usage and water quality in Japan and international
locations, and making improvements at high-risk
locations.
Even in places where risks are low, we are trying to
reduce water intake amounts for the effective use ofresources.
In FY2020, we cut water use through improvements
to reduce leakage and by promoting recycling. We
are also planning upgrades to wastewater treatment
facilities for cleaner waste water.

2030 water usage milestone
Item2030 Target

Water quality

High risk area

Water intake
Water intake
per sales unit

Low risk area

Measures completed
at four locations
Measures completed
at seven locations
11% decrease vs.
FY2019Water use, water use per sales unit (index)*1
Water use

Water use per sales unit

Japan, consolidated(10,000t)

400

Achieved

260

57

200

0

(index)

100

2012

2016

2017

2018

2019

400

FY2012

2020

200

Achieved

55

202

200

(FY)

50

100

0

0

82
114

2012

(Base year)(index)100

Achieved184

decrease vs.

Overseas affiliates(10,000t)(10,000t)

Target8％

162(Base year)

Toyoda Gosei Co., Ltd.

2016

2017

2018

2019

2020

Target8％

decrease vs.
FY2012

(FY)

50

0

(index)100

Target8％

decrease vs.
FY2012

50

154
0

2012

(Base year)

2016

2017

2018

2019

2020

(FY)

0

*1 Water use per sales unit (index) is a figure obtained taking the base year as 100

Environmental preservation and building environmentally-friendly societies
We comply with laws and regulations related to chemical substance control and the environment, and are
conducting activities to protect biodiversity.

Basic philosophy
In addition to strengthening the selection andmanagement of chemical substances to create products
and processes that are kind to people and the earth,
we are improving environmental management inthings such as compliance with laws, regulations and46

customer standards in every country where we dobusiness, based on ISO 14001.
We are also maintaining a company woodland,
creating biotopes, and working to preserve tidal flats
and other areas for biodiversity.

Value Creation Strategy

Foundation of Value Creation

Financial Report

Control and reduction of substances of concern●

Control of chemical substances contained in products

to requests from automakers in each country for
information on chemical substances in products, wehave devised mechanisms and conducted systems for
global collective management of chemical substancesthat we are currently using in Japan, China, Thailand
and Vietnam. We will be steadily expanding this system
to places where it is not yet in use.

To strengthen the management of chemical substancesin our products, we control substances that are legally
regulated in each country, substances that are selfregulated by automakers, and substances covered byour own company regulations. We monitor the trends
in European REACH*2 regulations and the EU RoHS
Directive *3 and have a system in place to respondrapidly when these regulations are revised. To respond*2 Registration, Evaluation, Authorization and Restriction of Chemicals*3 Restrictions on the use of specific hazardous substances contained in electrical and electronic equipment

Chemical substance regulations in each region(Year)

～2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

EU End-of-Life Vehicle (ELV) Directive
Review of ELV, exclusion rules
Review of ELV, exclusion rules
Review of ELV, exclusion rules
EU Restriction of Hazardous Substances
Review of RoHS, exclusion rules(RoHS) Directive revision
6 substances
4 substances
9 substances
5 substances
substances
EU REACH regulations 4added
added to 20th SVHC list
added to 23rd SVHC list
added to 17th SVHC list
added to 14th SVHC list
to 11th SVHC list
7
substances
4
substances
2 substances1
substance
6
substances*5
151 substances SVHC
th
th
th
st
added to 12 SVHC list
added to 18 SVHC list
added to 21 SVHC list
added to 24th SVHC list
added to 15 SVHC list
2 substances
10 substances
4 substances
8 substances
4 substances
th
th
th
nd
added to 13 SVHC list
added to 22 SVHC list
added to 25th SVHC list
added to 16 SVHC list added to 19 SVHC list
22 substances
th
th
th
4
list
:
9
substances
requireauthorization
5
list
:
12
substances
requireauthorization
6
list
:
11
substances
requireauthorization
require authorization

EuropeNorth
America

EU CLP Regulations
Classification,labeling notification

USA EPA Action Plans◆TSCA revision

China / Provisions on
Environmental Administration of
New Chemical Substances

Asia

Laws and regulations*4◆China / Compulsory Product◇China: Guidelines for Air Quality Assessment in Cars

Certification regulations

China / Hazardous Chemical Safety Control Ordinance◆China / ELV management requirement

South Korea / Revised ELV and RoHS regulations◆China / Revised RoHS

South Korea / REACH
Japan / Chemical Substances
Control Law: Amendment◆Taiwan / Toxic Chemical◆Japan: Mercury Act

Substance Control Act*4 Restrictions on the use of substances of concern contained in automobile parts and materials*5 Substances of high concern

Reduced use of substances of concern

Volumes and flow of emitted PRTR substances

In production processes, we are switching to waterbased paint and release agents, making painting
lines more compact, improving coating efficiency,
and making other efforts to reduce Pollutant Release
and Transfer Register (PRTR) substances and volatileorganic compounds (VOCs).
Through on-site visits, we also share information
on cases in which VOCs were successfully decreased topromote reduction activities.

(Unit: t)

Atmospheric emissions 77

Chemical
substances
handled525

Recycled
16

Products
285

Released Released
into
into
waterways sewers
0.11
0Released
into soil
0

Amounttransferred
as waste
41

Disposal(amount
treated)105

VOC emissions, emissions per sales unit (index)*6
VOC emissions

Japan, consolidated

VOC emissions per sales unit

（t）

500

Achieved

454

68

100

Target6％

decrease vs.
FY20122500(index)339
2012(Base year)

2016

2017

2018

2019

2020

(FY)

Toyoda Gosei Co., Ltd.
（t）

500

50

250

0

0

Achieved

427

72
230

2012

(Base year)

2016

2017

2018

2019

2020

(index)100

Target6％

decrease vs.
FY2012

(FY)

50

0

*6 Emissions per sales unit (index) is a figure obtained taking FY2012 as 100

47

Environment〈E〉

Activities for living with nature that build ties with the community
The Toyoda Gosei Group has set a target of no net lossof greenery; that is, restoration of greenery equivalent
to the area of its plants, by 2050. To achieve that, we are
maintaining mountain woodlands, removing invasive
species from rivers, installing biotopes, and protecting●

tidal flats by the ocean.
In conjunction with the Toyota Group, government
agencies, NPOs and other organizations, we are alsoenhancing our activities for nature-friendly living.

Long-term targets for 2050

The area of Toyoda Gosei plants is 59 hectares, anddespite environmental considerations some nature wasdestroyed in their construction. We have set a target for,and are now working toward, “No net loss of greenery,”in which we aim to restore greenery to an area that is
the same size as that of our plants by 2050.

Activities to achieve no net loss of greenery
Scenario for achieving this
0

2010

2030

2040

-50
-60

Efforts to protect the water used at our plants from its source (mountains) to its destination (sea)2050

Protecting rare species in biotopes

-18

-20

-40

59ha

Breeding endangered creatures

-10

-30

Greenery

PlantsWorking to save our water, the source of life on earth0

2020

Achieving no net loss of greenery
Restoring the greenery lost in plant
construction in an activity to livewith nature●●

2025 targets

Increase greenery by about
10 ha compared with 2019-45

Abundant water with abundant forests-36“Toyoda Gosei Kimori no sato ”

2030 targets

Increase greenery by about
19 ha compared with 2019
・Tree planting ・Forest maintenance・Use of abandoned farmland
・Solar power generation, more

-53.5
-55.1
-59.0
2020 targets
2019 performance Greenery increased by about 1.6ha in one year-70
ha (area of lost greenery)

Plant afforestation
Biotope creation● Creation of biotopes in regulating
ponds Heiwacho Plant

for woodland maintenance●

Clearing undergrowth (scheduled for June, October)Protecting local aquatic life

Eradicating non-native species

Eradication of lance-leaved
coreopsis (June)
Environmental education throughnature observation● Eco tour (June)●

Fostering organisms inclean and beautiful seas

Environmental
preservation in tidal flats●

Preservation of Fujimae
Tidal Flats (May, October)No net loss of greenery target

Activities to eliminate compliance and environmental violations and complaints
Regular checks are conducted by expert departments
and maintenance and management are carried out
to ensure legal compliance and no environmental
problems or complaints. Preventive activities such asenvironmental preservation project team activities arealso conducted to combat risks. In addition, we analyze
problems that occur at other companies, inspect similar
facilities including those at domestic and international
affiliates, and take preventive measures. There were no
occurrences of environmental abnormalities in FY2020.

Proper disposal and storage of PCB-containing equipment
The law stipulates that hazardous and persistent PCB(polychlorinated biphenyl) waste must be disposedof by the end of March 2027. We started outsourcing
this disposal in FY2006 for the proper treatment ofequipment that
contains PCBs.
By FY2020, 896
units had beentreated.

We will continue to process untreated lowconcentration PCB waste at an early stage. Until that iscompleted, appropriate management based on the PCB
Special Measures Law is done to prevent runoff and soil
contamination.
Category

High concentration PCB
waste material(PCB levels: >5,000 mg/kg)

Low concentration PCB
waste material

Treatment of PCB waste

48

Type

Ballast, power
capacitors, etc.

Transformers, power
capacitors, etc.
(PCB levels: 0.5–5,000 mg/kg)

No. of units treated Treated weight

802
units

6.9t

94
units

80.3t

Value Creation Strategy

Protecting soil and groundwater

Location

We carefully monitor and treat soil and groundwatercontamination from toxic substances such as trichloroethylene, which was formerly used in cleaning agents.
We have established observation wells at each plant,
and regularly confirm that there is no soil or groundwater pollution from toxic substances and oils.

Foundation of Value Creation

TargetFinancial Report

Status of corrective measures

Purification in progress (proactive treatment, asHaruhiGroundwater
Plant
contamination from off-site sources is possible)
Because substances we have no history of using
have been detected, regular reports to the
Inazawa
Groundwater government contain results of measurements only
Plant
* Results below reference values since 2010
(Government reports concluded in FY2012)

Mottainai check
To eliminate waste of resources, we have performed
plant inspections and regular mottainai inspections forcorrective treatment since 2018.
Since 2021, production engineering departments
have also been involved in the inspections, andexecutives in charge of the environment and leadersof each plant perform the inspections with a focus onplaces where remnants
a n d wa s t e m a t e r i a l s
generated in production
processes are kept. The
thoroughness of sortingand kaizen for recycling
are investigated.

Mottainai check / Inazawa Plant

Environmental management
In coordination with affiliated companies in Japan and other countries, we are continuing employee training andeducation programs so that every employee can act with awareness of the environment.

Basic philosophy
We are also making aggressive efforts for education to raise the environmental awareness of employees and train
personnel for sustainable environmental activities.

Enhancing Group-wide environmental management
The entire Toyoda Gosei Group promotes environmental
management. Environmental data has been collectedby domestic affiliates since FY2001 and by international
affiliates since FY2003. Based on these environmental

data (CO2 emissions, waste, water usage, VOC emissions,and more), we set annual targets and promote reduction
activities every year.

Plants subject to environmental management
Toyoda Gosei Co., Ltd.

Haruhi Plant
Nishimizoguchi
Plant
Seto Plant

Inazawa
Plant
Bisai Plant
Morimachi
Plant

Heiwacho
Plant
Kanagawa
Plant*1
Inabe Plant*2

Affiliates in Japan

Ichiei Kogyo Co., Ltd.
Toyoda Gosei Hinode Co., Ltd.
Hoshin Gosei Co., Ltd.
Toyoda Gosei Interior
Manufacturing Co., Ltd.

Kaiyo Gomu Co., Ltd.
TG Opseed Co., Ltd.
TGAP Co., Ltd.

TS Opto Co., Ltd.*3
TG East Japan Co., Ltd.
Toyoda Gosei Kyushu
Co., Ltd.

Overseas Affiliates■ Americas (Regional headquarters: Toyoda Gosei North America Corporation)TG Missouri Corporation
Toyoda Gosei Texas,
Toyoda Gosei Automotive Sealing
LLC
Mexico S.A. de C.V.
TG Kentucky, LLC■ Asia (Regional headquarters: Toyoda Gosei Asia Co., Ltd.)■ China (Regional headquarters: Toyoda Gosei (China) Investment Co., Ltd.)
Tianjin Toyoda Gosei Co.,
Toyoda Gosei
Toyoda Gosei (Foshan) AutoLtd.
(Zhangjiagang) Co.,
Parts Co., Ltd.

■ Europe and Africa

TG Automotive Sealing
Kentucky, LLC
TG Fluid Systems USA
Corporation

Toyoda Gosei Star Light(Tianjin) Auto Parts Co.,
Ltd.

Waterville TG Inc.
TG Minto Corporation
TAPEX Mexicana S.A.
de C.V.

Ltd.
Toyoda Gosei (Foshan)
Rubber Parts Co., Ltd.

GDBR Industria e Comercio deComponentes Quimicos e de Borracha Ltda.
Toyoda Gosei Rubber
Mexico, S.A. de C.V.
Pecval Industria Ltda.
Toyoda Gosei Irapuato Mexico, S.A. de C.V.

Toyoda Gosei (Tianjin) Precise
Plastic Co., Ltd.
Hubei Toyoda Gosei Zheng Ao Rubber& Plastics Sealing Technology Co., Ltd.

Toyoda Gosei(Thailand) Co., Ltd.
Toyoda Gosei Rubber(Thailand) Co., Ltd.
Toyoda Gosei
Haiphong Co., Ltd.
Toyoda Gosei South
India Pvt. Ltd.
Toyoda Gosei UK Ltd.
Toyoda Gosei Czech,
s.r.o.

P. T. Toyoda Gosei
Safety Systems
Indonesia
Toyoda Gosei Minda
India Pvt. Ltd.
Fong Yue Co., Ltd.
P.T. Toyoda Gosei
Indonesia
Toyoda Gosei South
Africa (Pty). Ltd.

*1 The Kanagawa Plant was closed in August 2021. *2 The Inabe Plant was added from April 2021. *3 TS Opto will be liquidated from December 2021.
Acquired ISO 14001 certification. When new plants and new companies are established, we aim to acquire ISO 14001 within three years of starting operation.

49

Environment〈E〉

Environmental audits●

ISO 14001 environmental audit

Toyoda Gosei and its domestic and international
affiliates acquire ISO 14001 environmental management system certification. Internal environmental
audits are carried out by audit teams composed ofmembers from business areas outside those being
audited in order to raise the independence andobjectivity of the audits. Toyoda Gosei Co., Ltd.

commissions external reviews by the Japan Quality
Assurance Organization ( JQA) to assess whether ourenvironmental management systems are run properlyin accordance with ISO 14001. We are promoting 100%
acquisition with the intention to have new companies
acquire ISO 14001 certification within three years of
being established.

ISO 14001-certified production sites Acquisition rate 100%
Toyoda Gosei Co., Ltd. 7 plants
Affiliates in Japan●

10 companies

Overseas Affiliates

Americas: 12 companies,
Asia: 7 companies,
China: 7 companies,
Europe/Africa: 3 companies
Internal environmental audits / Toyoda Gosei Hinode Co., Ltd.

International environmental audits

Voluntary inspections are performed based on TG Global EMS, which areenvironmental management system standards that we have establishedourselves, and kaizen activities are carried out.
Corrective measures have been completed for all correction items.

Toyoda Gosei (Thailand) Co., Ltd.

Activities based on green procurement guidelines
We conduct surveys of the status of compliance withgreen procurement guidelines of the suppliers with whom
we do business, and conduct genchi-gembutsu (go andsee) inspections of high-risk companies. When needed,

we carry out joint kaizen activities.
In carbon neutrality study groups, we
provide examples of CO2 reductions andother information.

Environmental education
Toyoda Gosei educates employees on environmental
p ro b l e m s i n c l u d i n g t h e d e s t r u c t i o n o f n a t u reand environmental pollution, the impacts on theenvironment of production activities, and compliancewith environmental regulations. The content each year
emphasizes understanding and practices based on legal
trends, with examples incorporated to create specificand understandable teaching materials.

Environmental education system
Level-specific training
Toyoda Gosei Co., Ltd.
Education for new managers

Affiliate Companies
Japan
Overseas

Education for those posted overseas
Education for environmental key persons
Acquisition of environmental education qualifications
Education for new employees

ISO education
Toyoda Gosei Co., Ltd.

Affiliate Companies
Japan
Overseas

Education for environmental staff
Education to improve internal auditors’ skills
Education to register internal auditors
Education for supervising managers
Education for key environmental facility workers
Education for general workers

Activities to raise environmental awarenessWe are attempting to raise the environmental awarenessof employees through Environment Month events,
regular environmental lectures, and other activities sothat all employees have an awareness of the environment

50

in their activities for ongoing environmental protection.
We also conduct a questionnaire survey of employees
each year to assess their environmental awareness andplan educational activities based on the results.

Value Creation Strategy

Foundation of Value Creation

Financial Report

Responding to surveys by the media, environmental NGOs, customers and others and sharing information on
our environmental activities outside the company
We actively disseminate information on our environmental activities by publishing various reports, including
our annual report and securities report, and by responding to CDP, Nikkei SDGs, and other surveys, and surveys
by our major customers.
We also hold ESG briefings and other events toengage with stakeholders such as institutional investors,
and improve our environmental activities based on theinformation we obtain.

ESG briefing

Collaboration with external organizations

Participation in the Japan Auto Parts Industries Association and collaboration with member companies
As the leading company in the Japan Auto Parts
Industries Association’s Global Warming Prevention
Subcommittee, we work with member companies toprepare positive case studies and various study sessions.

Measures to counter global warming is an issue on a
global scale, and requires effort in collaboration withthe entire automobile industry. We will continue toactively participate and put out information.

We endorse Japan Business Federation's Challenge Zero and other initiatives, and were selected for
the Ministry of Economy, Trade and Industryʼs Zero Emissions Challenge
Toyoda Gosei has endorsed Japan Business Federation's
Challenge Zero initiative to combat climate change andits Biodiversity Declaration. We will continue to carryout activities based on the thinking of Japan Business
Federation.

We have also been selected by
the Ministry of Economy, Tradeand Industry as a company tointroduce innovations to achievecarbon neutrality by 2050.

Third-party assessment
The Toyoda Gosei Group has gained consistent recognition for its Group-wide environmental activities. The Groupwill increase its activities for further improvement based on these assessments.

Toyoda Gosei acquired the highest ranking in the Development Bank of Japanʼs DBJ Environmental Rating*1
In the DBJ Environmental Rating (implemented in2017) of the Development Bank of Japan (DBJ), we
received the highest rating, “Particularly advanced
efforts for environmental friendliness.” We wererecognized for our efforts to minimize CO2 emissions
and develop environmentally friendly processes andequipment under a cross-company and global system
led by the company president, with the TG 2050
Environmental Challenge as our long-term goal, andfor efforts to improve the fuelefficiency of vehicles, which are
the final product, both in terms oflighter weight and functionality
through the development anddesign of products and materials
that are easy to recycle throughout
the entire life cycle.

*1 A rating system developed by DBJ that evaluates the level of environmental management of a company, identifies superior companies, and applies a three-step loan interest rate according to the score.

“A” rating by CDP for climate change engagement
In a company survey conducted by the CDP, *2 aninternational not-for-profit environmental organization,
we have received an A− rating in two fields, “Climatechange” and “Water security,” for two consecutive years.
We actively disclose information through the approachof management to environmental activities, ESG briefings
for institutional investors and other activities. In addition
to medium- and long-term environmental targets, we
set numerical targets for each year. This and activities tosteadily reduce CO2 and water usage in a
step-by-step fashion led to these ratings.
Our efforts to reduce CO2 in coordination with suppliers, Scope 3 emissions
information disclosure, and efforts tocombat climate change were also highly
rated, and we have received an “A” rating for two consecutive years in climatechange supplier engagement.

*2 A not-for-profit organization (NPO) established in 2000. It is operated with support from institutional investors and others in each country, and conducts surveys of corporate environmental information and publishes the results.

51

Social〈S〉

Developing personnel who can thrive ina changing environment, and contributing tosociety through manufacturing.
As a good corporate citizen, the Toyoda Gosei Group aims to contributeto development of the economy and society through respect for humanrights, business activities rooted in each country and community andsocial contribution activities. To build a foundation for those endeavors,
we are developing personnel who can act globally, while also promoting
diversity, and implementing workstyle reforms. Together with efforts
for the health of employees and their families, which we take to be an
important management issue, we are increasing our collective strength
through respect for the individuality of each person and teamwork
to achieve a vibrant corporate culture with meaningful work. We willcontinue to conduct research and development with anticipation of
future changes, improve our manufacturing technology, strengthen our
supply chain and make constant kaizen efforts to satisfy our customers.

Hiromasa Zaitsu

Chief of General Administration and Human Resources Headquarters, IT Headquarters
Corporate Officer

Human resources strategy
T h e a u t o m o b i l e i n d u s t r y t o d ay i s f a c i n g h u ge
structural changes and social issues, exemplified by
CASE and the push for carbon neutrality. For Toyoda
Gosei to continue to grow, we intend to create newvalue that will help to solve social issues through thedevelopment of new technologies and products in
our core automotive parts business, while actively
proposing ideas to the automobile manufacturers who
are our customers. In new business areas, we will needto cultivate markets on our own and provide products
and services that are attractive for end users.
Toyoda Gosei has continued to grow through efforts todevelop technologies and continuously improve quality,
cost, and delivery that meet the needs of our automobile
manufacturer customers. Now, in addition to these efforts,
we will seek to provide new values and services.

One of the most important issues we face isdeveloping the people who will be able to support
the further growth of the company amid hugeenvironmental changes. The values we embrace in the
TG Spirit, together with the PDCA cycle and problemsolving methods that are the basis for how we do ourwork, have been the strengths of our company. We willcontinue efforts to make them pervasive and thorough.
We are also identifying issues we need to resolve inmoving toward our vision for the future, drawing up
scenarios and execution plans, and strengthening theabilities that will enable us to achieve these things. As
every employee attempts to adapt their thinking anddevelop their skills, we strive to create an open, positiveand forward-looking culture in the entire organization.

Three pillars of human resources strategy
1. Promote the development of
human resources(1) D evelopment of candidates for global
executive personnel(2) “Management declaration activity” in which
division and department general managers
clearly show their organization’s vision(3) “Constructive problem-solving training for
the TG vision” that thinks backward fromthe company we want to be in the future(4) “New employee 3-year independenceplans” and “Overseas training assignments”(5) “Digital personnel development” for people
who can carry out DX(6) S pecial Skills Dojos, Maintenance Skills
Dojos, and Mold Skills Dojos raise the levelof skill on the manufacturing floor

52

2. Active participation of
a diverse workforce

3. Create a positive andpleasant corporate culture(1) “Challenge program” topromote the developmentof female managers(2) Active “mid-career hiring”
and incoming training at
the time of hiring(3)“Special treatment system”
to facilitate the activity ofsenior employees(4) Employment rate ofpeople with disabilities(1) “Workstyle reforms” utilizing IT, suchas promoting electronic approval andtelework(2) C larification of organizational issues
and execution of countermeasureswith “engagement surveys”(3) “Harassment prevention training”
for managers and supervisors in thecompany(4) Various measures to balancechildcare, elder care, and work(5) “Entrio” memorial gymnasium andsports club activities(6) Health management

Value Creation Strategy

Foundation of Value Creation

Financial Report

FY 2025 priority item targets
Classification

Promotion of human1
resources development

Item

FY2020 results

FY2025 target

No. of people who have taken training for executive personnel

50

65

20.6%

25% or higher

10

270

Percentage of management who are mid-career hires

30.9%

30% or higher

Employment rate of people with disabilities

2.78%(entire Group in Japan)

Achievement of legally mandated rate(all Group companies in Japan)

Percentage of people who have had overseas
assignments (management, technical personnel)
No. of DX personnel trainers

No. of female managers

2

3

Active participation of
a diverse workforce
Creating pleasant
workplace environments

Local executive percentage (VP and above of overseas affiliates)

Average overtime hours

Annual paid leave taking rate *1
Engagement survey results *2*1 FY2019

25

26.3%

10.0 h/month
79.6%

40

40% or higher

Less than 10.0 h/month
90% or higher

56% (positive evaluation)

65% or higher*2 FY2021

Respect for human rights
Basic philosophy
The Toyoda Gosei Group respects the United Nations’ Universal Declaration of Human Rights, the UN Guiding
Principles on Business and Human Rights, and other international norms. The Toyoda Gosei Group Charterfor Business Ethics lays out our basic principles of “respecting human rights and the diversity, character, andindividuality of each person and striving to create workplaces that are free of discrimination and harassment
and always healthy, pleasant and safe, based on labor-management cooperation.” The Toyoda Gosei Guidelines
for Business Ethics, our behavioral standards to realize the ideals in the Charter, declares respect for individual
character, human rights, and fairness in hiring, and forbids forced labor and child labor.

SystemRespect for human rights is handled by the Complianceand Risk Management Committee, with the company
president as the chair. The results are checked by the
Board of Directors.

Rights education
In the Toyoda Gosei Group, education on the company’s
individual rights policy and human rights is provided atvarious opportunities, including training when people firstjoin the company and at the time of promotions. Human
resources personnel are also sent for outside training tolearn about human rights problems professionally. Thisand other efforts are made to develop HR personnel withsuperior sensitivity to individual and human rights.

Harassment prevention
Together with training for executives, managers,
supervisors and others, a “TG Positive Workplace

Support Squad” report
is sent out about once amonth and all employees
strive to create a healthy
and pleasant workplace
free of harassment.
Harassment prevention training for management

Efforts at domestic and international Group companies
Self-check surveys are conducted at 52 Group companies(as of April 2021) in Japan and other countries tounderstand the status of human resources management
compliance and human rights in accordance with thelaws of each country and the Toyoda Gosei Group Charterfor Business Ethics. Issues uncovered in the surveys are
addressed in coordination with relevant departmentsin the company and the regional headquarters, andmechanisms are put in place to handle human rights due
diligence and spread activities for improvement.

Stable employment
The company and labor union, from the many difficulties
experienced together in the chaotic years after WorldWar 2, strive for long-term stable employment andto maintain and improve labor conditions. A labormanagement declaration was issued on the occasionof the company’s 50th anniversary, and frank exchangesof opinion have been carried out in various workplaces
based on mutual trust and responsibility of labor andmanagement. This is founded on the firm belief thatcompany growth leads to the happiness of the people
working there. Efforts are always being made to achieve
this management philosophy.
Measures are also carried out based on the laws andregulations of each country and region and our global
human resources management policy. We constantly
strive to strengthen the human resources managementfoundation and maintain and improve healthy labormanagement relations.
Places for labor-management talks
Company(management level)

Problems of entire company

Executives

Offices, plants

Problems of branches and plants

Branch executives
Workplace committee chairs

Divisions(workplaces)

Problems specific to workplaces

Workplace committee
members

We value regular talks between people on equal footing separate from the “superior-subordinate” relationship53Social〈S〉

Promotion of human resources development
To raise the collective strength of Toyoda Gosei globally, we are striving to develop human resources and create
workplace environments where each employee can display his or her full abilities.

Training of global executive candidates

Ability to makemanufacturing
innovations

Ability to produce
high added value

Professionalism andhigh levels of skill

Personnel who are in demand fromthe business environment

Ability to play anactive role anywherein the world

Personnel who are in universal demand

Ability to create
innovations

Personnel who can play active roles globally

Ability to transmit
skills and techniques
globally

For the systematic training of people who will manage
the company in the future, we have introduced aprogram to help people learn how to look at and think
about things at the management level and cultivate
the qualities that will help them bear higher levels ofwork responsibility, with aims such as broadening their
outlook and improving their judgment. Outside Japan,
we are training executive candidates globally with
the introduction of a certification system for solving
problems by clarifying issues and setting goals.

Basic competencies needed in business

1 Problem-solving
ability

to work
2 Ability
in teams

3 Basic skills

TG Spirit (Toyoda Gosei Group’s shared values toward work)

Improving ability to build visions
The ability to create a vision is important inorganizational management. We are helping people
to learn the importance of and how to create visions
that can be used in management, starting with ourManagement Declaration Activity that clearly shows
the organization’s vision for division and department
general managers. We have also introduced training
for newly appointed executives that involves higher
order thinking in which they construct visions to solve
problems. They also learn the importance of having avision and how to create one, and try to implement itin their management.

Training to develop global executive personnel

New employee 3-year independence training program
For the early training of new employees , we have introduced a “New employee OJT system” for independence
in three years. We provide both on-the-job training andclassroom training to help them perform their work
according to the PDCA cycle within a few years after
Item

Year

OJT
<workplace>

OFF-JT<training>54

1st year in company
Position

New employee training
Business manners
PDCA, others
Plant training
Understanding
manufacturing

joining the company. Interviews in the pivotal fourth andsixth years in the company are held to understand thesituation of new employees, discover problems early,
and take measures to counter them.

2nd year in company

3rd year in company

Work guidance based on PDCA

Basic problem-solving
training

Special education
Technician training
Production engineering
training

Report/contact/consult
training (communication)
New employee interviews (2nd year)

Problem-solving practicaltrainingValue Creation Strategy

Foundation of Value Creation

Financial Report“Digital personnel development” for people who can carry out DX
processes, corporate culture and atmosphere. We willcontinue this DX to gain a competitive advantage.
Training people who can do this is an urgent task, andwe are setting up a new educational program for theirdevelopment.

I n r e s p o n s e t o t h e ra p i d l y c h a n g i n g b u s i n e s senvironment, we are overhauling production processes
and products using data and digital technology.
While transforming our business model, we are alsotransforming the work itself and the organization,

DX personnel level

Necessary DX personnel

1 Data Scientist (DS)

Expert2 Digital Architect (DA)

Personnel who can extract and analyze important information from large amounts of dataand provide feedback to product development, and perform kaizen for product defects
Personnel who are well-versed in the most recent digitaltechnology (AI, cloud, etc.) and can implement it

Training planfor 2025

86 people
59 people

Personnel who can advance planning and development themes
for new services and businesses using digital technology

Intermediate

3 Program Owner (PO)
Entry level

Personnel who can come up with completely new ideas and
125 people
create new businesses and services
Personnel who can envision what a digital-based businesslooks like and advance the transformation of work

Enhanced training programs, invigorated personnel development
To improve the skills and abilities needed in working at
Toyoda Gosei, we are enhancing educational content
and promoting human resource development in three
key areas: “problem-solving,” which is fundamental
to work, “the ability to work in teams” based oncommunication, and “basic skills” for strong on-siteabilities. We are extending our human resources training
program widely for global employees including ourinternational locations. We are also introducing on-line
training and e-learning for the changing environment.

Level-specific education system“Basic competency” training
Officers
Executive
Management

SeniorManagement

Problem-solving ability

Ability to work in teams

Problem-solving[vision creation]

Business/organization
management

Management
T1

SX

T2

S1

T3

S2

T5・T4 B1・B2

Problem-solving[setting challenges]
Problem-solving[problem occurrence]
PDCA

Basic skills

Role education

New division generalmanagers
Advanced skills/
Skill transfer

Human management
Coaching
Mental care
Guiding/
looking after
newer employees

Fundamental skills[advanced]

Communication
Teamwork

Fundamental skills[intermediate]

Reporting, contacting,consultation

Fundamental skills[beginner]

New division deputy generalmanagers, department
general managers
New group leaders,section managers
Division assistantmanagers, supervisors

Global education

Executive candidate
education
Global leader
education
Management

S2, 4th, 5th year

Regional education
problem-solving,knowing TG

2nd, 3rd year
new employees

New employees

S1, mid-level, team leaders

Special Skills Dojos, Maintenance Skills Dojos, and Mold Skills Dojos raise the level of skill on the manufacturing floor
Improving the skills of each worker is an indispensable
part of enhancing manufacturing capabilities at production
sites. We have therefore introduced various measures withthe basic policy of “cultivating a culture that values skills.”
Manager and supervisor training covers more thanjust the work of managers and supervisors. We have also
started a Special Skills Dojo for practical training in eacharea of manufacturing so that people acquire special skills,
and are conducting practical training. For maintenancepersonnel, we have begun electrical system training togive people the ability deal with increasing robots and IT,
and practical training in Maintenance Skills Dojos.
In addition, mold maintenance workers from Toyoda
Gosei companies in Japan and other countries as well asaffiliated companies participate in Mold MaintenanceDojos to improve their mold maintenance skills. Mold
Skills Competitions that test workers’ skills are also held
for personnel training in the Toyoda Gosei Group. We
have been entering the Skills Olympics since 2017 andin 2019 an employee won the Fighting Spirit Award forpunching dies. In 2020 his work area changed to plastic
molds, and with the high-levelskills and knowledge he gainedin his original work he will also
be involved in training new
employees in the future so thatthey can play active roles on
the production floor.

55

Social〈S〉

Active participation of a diverse workforce
Toyoda Gosei hires and trains a diverse workforce, including women, foreign nationals, mid-career hires, and people
with disabilities. We provide fair and impartial training, evaluations, and promotions with respect for diversity,
through which we try to invigorate the company. At the same time, we are establishing internal systems andimproving the environment by introducing various support measures and maintaining office environments with
better cafeterias, restrooms, and break rooms.

Encouraging the active roles of women
A special organization established in 2010 has been
active with the aim of creating a situation in which all
people, regardless of sex, can be active and grow. A
working group of management volunteers was started in2018 and has begun working to raise the managementlevel. The group is reviewing the work styles of managers
with the themes of promoting the active roles of diverse
employees and the work-life balance of managers
themselves and their subordinates. “Tea Meetings” totake up the problems and opinions of female employees
and strengthen personal connections, and “Challenge
Programs” as an early
development measure formanagement work arealso held. In the Challenge
Programs, female
management candidates
systematically learn
management skills while
also sharing concer ns
Workplace reform management classor worries and giving each other advice through thepractice of these skills in the workplace. Together withcreating an environment where people can continue
working with a sense of security, there is also support for
future autonomous career advancement.

Key points in activities
Training and support
for the active rolesof female employees

Reforming
the attitudes andbehaviors of superiors

Creatinga workplace culture

Trend in cumulative number of female managers(People)

40

40
30

25

20

16

10

2

0

2011

2019

2020

2025

(FY)

Workplaces that welcome people with disabilities
We view the hiring of persons with disabilities as a social
responsibility, and make active efforts in this area. The
Committee for Employment of People with Disabilities
implements hiring, job assignments, and manager andsupervisor education, and helps to establish stable
positions. We place particular emphasis on getting people
settled in the workplace, monitoring conditions throughregular care interviews, taking up problems, and making
systematic improvements such as installing accessible
restrooms. Work that people with disabilities can perform

is identified, and they are systematically hired and placed.
As of the end of FY2020 (March 1, 2021), 127 people
with disabilities had been hired for a hiring rate of 2.47%,
exceeding the legally mandated employment rate of 2.3%.
Our special subsidiary TG Welfare Co., Ltd. holds
seminars for people with disabilities for the entire Groupand serves in other ways to create places for educationand share information with 14 Group companies thathave received special affiliate certification, achieving ahiring rate of 2.78% for the Group overall.

Changes in employment rate for people with disabilities
（％）

3.00
2.50

We have formulated a three-year plan to
improve the workplace environment, andare making systematic improvements suchas installing restrooms with considerationof LGBT individuals and others.

56

Training camp at TG Welfare Co., Ltd.
to support independence

2.00
0Legally mandated rate

2.41

2.38

2.62
2.31

2.70
2.38

Group overall

2.78
2.47

2.20

2.00
2016

Toyoda Gosei Co., Ltd.

2017

2018

2019

2020

Creation of an environment for stable work after retirement

Trend in cumulative number of re-employed retirees

We have established an environment so that employees
can work with assurance after retirement in a postretirement rehiring system. Many people can make useof their high levels of expertise and experience after
they are rehired. A system of reduced working days andworking hours supports working styles for a good worklife balance.

500(People)

348

373

429

2016

2017

2018

470

470

2019

2020

(FY)

250
0

(FY)

Value Creation Strategy

Foundation of Value Creation

Financial Report

Workstyle and workplace culture reforms
From FY2017 we began efforts to make work more
efficient with the use of IT, such as enhanced electronic
approval and Web conferences, and reviews of meeting
structures with the aim of every employee thoroughly
executing his or her essential tasks. Overall activities
entailing a range of efforts to change the way we work
are conducted for workstyle reforms. We are also
reviewing personnel systems in order to deal withenvironmental changes with a sense of speed and raise

The keys ofworkstyle reforms

Changing ourway of thinking

Correction of long working
hours and labor compliance

Increased
work efficiency

Workplace culture reforms
Creation of a workplaceculture where people arefree to exchange all opinions

Two-way
communication

the quality of work. In conjunction with this, we are
eliminating waste and adopting a working style witha varied pace through the creation of opportunities
for communication in the workplace, such as informal
gatherings with officers and superiors.
Example of workplace culture reform activities
Five Articles for Officers
1. I will greet people with a smile
2. I will listen to team members talk until
they are finished
3. I will say “I appreciate your efforts”
for positive information from teammembers, and “Thank you” fornegative information
4. I will back team members who take onchallenges, and assume responsibility
5. I will try to make myself better
understood
We aim to create an environment in which anythingcan be discussed freely, with officers themselves
leading changes (this year is 6th year)

Active bottom-up
proposals

Reducing long working hours and raising the annual paid leave taking rate
We are trying to reduce long working hours and encourage people to take their annual paid leave for a better worklife balance.

Company-wide average overtime hours(h/month)

20

19.7

20.1

19.3

(%)

100

17.0
10.0

10
0

Annual paid leave taking rate

2016

2017

2018

2019

2020

92.4

94.4

95.3
79.6*

50

(FY)

0

2016

2017

2018

2019

(FY)

*There were company shutdowns due to COVID-19 (121.8% in cases including holidays)

Creating systems and environments for flexible working styles
Telework
We have introduced a telework system as one part of ourwork-style reforms. Changes from the previous workfrom-home system include the introduction of satellite
spaces in each business location and increased options inplaces to work. We are also issuing a Telework Newsletterto share good examples in each department and promote
the active use of telework.

Miwa Technical Center(satellite space)

Introduction of hot desking
In parallel with increasing the frequency of telework,
we have introduced “hot desking” on some floors in the
Headquarters office and Kitajima Technical Center. We will
expand this further for a more pleasant work environment.
We are making huge reforms in the way work is done, suchas paperless work with the use of IT, and implementing aworking style that is not bound by place.

Headquarters office(hot desking)Interviews with new employees on working styles
Labor consultants identify things that are troubling
new employees using an interview format, leading topersonnel training in the workplace, communication
between superiors and subordinates, and improvementsin the workplace environment.

Classification

Targeted persons

Office, technical workers 2nd, 4th, 6th year employees
Skilled workers

2nd year employees, 1st–3rd year female employees

57Social〈S〉

Engagement survey

Schedule of actions for kaizen

Overall

Apr‒JunLabor and management Workplace

Engagement surveys are done for greater improvement
in company policies and workplaces by gauging employees’ true feelings through the survey.
From the results of the 2021 survey, it was foundthat employees work with a sense of responsibility forsafety and comply with laws and regulations. It wasalso found that when important changes in company
policy or the way work is done are implemented,
the background and reasons for those changes are
explained sufficiently to employees. We will continue
to make improvements through executive discussions,exchanges of opinions between labor and management,
activities in workplace units, and more.

・Survey

Jul‒Sep

Oct‒Dec・Management meeting reports

Jan‒Mar・Progress reports

・Executive

・Look back anddiscussions

future efforts

・Share with management, all employees (brieﬁngs, company newsletters, etc.)

Identify issues in each department → Develop countermeasures → Execute → Review

Subcommittee/informal activities for the exchange of opinions

Opening of Toyoda Gosei Memorial Gymnasium (ENTRIO)
Entrio was opened in September 2020 with the conceptof being a place that would bring people together
through sports, make them smile, and energize them.
In addition to hosting the official games of company
sports clubs and internal company events, it creates
excitement and contributes to a sustainable society
as a meeting place for people and people, people andcompanies, and companies and companies.

It was named for thethree “en ” (connections)of work , community , andsports that we treasure
in mutual support andgrowing together , and“trio” meaning three.

Toyoda Gosei Memorial Gymnasium (ENTRIO)

Work-Life balance
Trend in number of men taking childcare leave and leave taking rate
(People)No. of people taking leave

20

Leave taking rate

（％）

12.0

15

9.0

10

6.0

5

3.0

0

2016

2017

2018

2019

2020 (FY)0.0

Major systems for childcare support

Special parental leave

F

Paternity leave

M

Childcare leave

M/F

7th grade

4th grade

1st grade

3 yo

System exceeding laws

2 yo

1 yo

Timing/event

Delivery date

SystemSubject

Amount required by law
Pregnancy

A system is adopted wherein each employee can selecta working style with consideration of work-life balance,and employees are supported so that they can workwith a sense of security and motivation. Childcare
support includes systems for shorter working hours
and holiday day-care, plus working parent networking
events. For these efforts we have been certified by
the Ministry of Health, Labor and Welfare in Japan as
a “Childcare Support Corporation.” For nursing care
support we are also undertaking activities to increaseknowledge and familiarize employees with our systems.
We have introduced systems for reduced days or
reduced working hours so that individuals can undergo
treatment for disease while continuing to work, and fora balance between medical care and work.
We will provide education for the creation of
workplace environments where people can use thesesystems without hesitation, while continuing toenhance our support and policies.

Sick/injured childcare leave M/F 10 days/year
Kids support leave M/F 5 days/year
Childcare fee assistance for holidays M/F

Major systems for care support

FY202086** Childcare 82 / nursing care 1 / medical treatment 3

58

Care leave

M/F

Care day off

M/F

10 days/year

3 years

Reduced working hours

2

System exceeding laws
1 yearCare leave

54

Subject

Childcare leave

6 months

Amount required by law

Number of people taking childcare leave and care leave

93 days

Working parent networking meeting(support for childcare-work balance)

1 monthHoliday day-careValue Creation Strategy

Foundation of Value Creation

Financial Report

Safety and health
Basic policy for safety and health
Toyoda Gosei and the Toyoda Gosei Group consider employee safety and mental and physical health to be one of
the most important management issues, and we do our best to ensure secure and pleasant workplace environments
for all business activities.

Safety and health efforts
Safety and health declaration(1) Compliance with laws and internal regulations and standards related to health.
(2) With “safety before all” foremost in mind, thorough safety-first behavior by all employees.
(3) Cultivation of a culture of safety in which activities are conducted with a sense of ownership and there
is mutual development with participation by all employees.

Promotion system
To ensure safe and pleasant workplaces, a Central
Safety and Health Committee (meets 4 times/year) is
organized with the executive in charge of safety as thechairperson. Meetings are attended by the company
president, labor union chairperson, plant managers of
all locations in Japan, and the presidents of domestic
and international affiliates. Various measures related tosafety and health are reported and discussed, and theresults are spread globally.
In addition to the above, information is sent out
repeatedly in the President’s New Year message andcompany newsletters.
For suppliers, efforts are made to regularly share all
relevant information through procurement meetingsand other means.

President
General safety and health manager
Central Safety and Health Committee (meets 4 times/year)
Safety and health committee at each location (meets once/month)(Affiliates in Japan)

Safety and health committee at each company (meets once/month)(Affiliates in other countries)

AmericasInternational subsidiaries

China

International subsidiaries

ASEAN

International subsidiaries

India

International subsidiaries

Europe & South Africa

International subsidiaries

Targets/results
Globally, our target is for zero grave *1 or serious *2
STOP 7 *3 accidents. Safety measures for high-risk
equipment are promoted at Toyoda Gosei and safety &fire prevention maps (SFPM) are used to visualize thesafety and fire prevention level and rectify weaknesses
at domestic and international affiliates. As a result,
we achieved zero grave or serious STOP 7 accidents
globally in FY2020.

Number of serious
accidents
Number of serious
STOP 7 accidents

Subject

2018

2019

2020

Global０００Global１１０*1 Grave: death*2 Serious: Victim loses part of body (or function)*3 STOP 7: Seven things with which there is a possibility of serious injury: (1)being pinched or caught in a machine, (2) heavy objects, (3) falling
objects or people, (4) electric shock, (5) vehicles, (6) hot material,
explosives, gas, (7) severance

Safety and health management system
Globally, we have introduced and operate labor safety
and health management systems centered on risk
assessments.
After obtaining JISHA system eligible OSHMS
certification, Toyoda Gosei has been voluntarily
operating its own system with the addition of internal
control items.

No. of certified
businesses

Toyoda Gosei Co., Ltd.
Subsidiaries in Japan(JISHA system OSHMS)
Subsidiaries in other countries(OHSAS 18001)

No. of businesses within-house operation

11 companies/
11 companies
4 companies/ 8 companies/
12 companies 12 companies
12 companies/―
45 companies―

59Social〈S〉

Risk assessmentswith our own equipment safety criteria to confirm safety.
In manufacturing departments, surveys of
workplace risks and hazards are performed and work
risk assessments are done to counter them. Reliable
implementation of risk reduction measures leads to theprevention of risk.

Risk assessments of equipment are conducted at thetime of new installation, modification, and relocation
by equipment planning departments, with the purposeof eliminating risk factors in the equipment design andfabrication stages. A safety check is done at the stage
before the equipment is used to evaluate compatibility

Safety and health education
Educational curricula are set and various types of
Safety Dojos have also been set up and are being
education is provided in line with position in theoperated at all Toyoda Gosei business locations incompany and timing of needed training. During theJapan to prevent past accidents from fading and tocoronavirus pandemic a classroom education format
teach employees to sense risks. These dojos are being
was difficult and new trials were started with Webspread globally.
based education*1 and e-learning.*2
Safety and health education by the Safety & Health Promotion Division and number of students (FY2020)
Name of training/education

Targeted persons

Mid-level skilled worker training
New supervisor training/
TL safety & health education
Pre-overseas assignment training
Overseas leader,No. 2 pre-assignment training

Classroom education Web-based education

Skilled work next-term supervisor
candidates
Newly promoted/
assigned individuals
Individuals scheduled for overseas
subsidiary assignment
Individuals scheduled for overseas
subsidiary assignment

e-learning

No. of students

◯

42

◯

109
◯

33

◯

6

◯

*1 Web-based education: A learning format in which two-way communication is possible on the Web*2 e-learning: A self-study format using electronic texts that can be accessed as the individual likes during work intervals

Domestic and international subsidiary audits
With the aim of visualizing the safety and fire
prevention level at domestic and international
subsidiaries and mitigating weaknesses, safety andfire prevention maps (SFPM) have been establishedand spread since FY2020. Based on the results of eachcompany’s self-evaluation, attempts have been madeto raise the level of safety at 14 domestic subsidiaries
with genchi-gembutsu (go and see). Because of the
difficulty due to the coronavirus pandemic of directly
visiting international subsidiaries for inspections andguidance, this was done with Web-based meetings andguidance using images
and videos specialized
for four key companies.
After reviewing things
such as problems in theassessment standards
that became clear
through this activity,
we will continue using
this method in FY2021.

Inspections and guidance with genchigembutsu at subsidiaries in JapanWork accident occurrence
From the safety measures for high-risk equipment thathas been continued since 2017, the number of serious
STOP 7 accidents has been kept to zero since 2017.
However, “pinching” accidents that could lead to graveor serious accidents have continued to occur, and so
we have taken measures with priority on elimination ofequipment that could pinch or catch workers and leadto grave or serious accidents.

Safety measures for high-risk equipment and STOP 7 accident occurrence

Trends in the labor accident rate in the TG Group (rate of lost-worktime injuries)

10(incidents)

100

No. of accidents

80
59

5

Pinching: 5

0

60

50

39

2016

2017

2018

2019

2020

2021

(FY)

0

No. of structural measures implemented(incidents)

Serious STOP 7 accidents
STOP 7 accidents
No. of structural measures implemented
100
94

（%）

2

All industries
Manufacturing industry
Afﬁliates in Japan
Toyoda Gosei Co., Ltd.
1.63

1.66

1.5
1.15

1
0.5
0

1.02

0.79

0.75

0.39

0.43

0.26
0.23

2016

0.08
0

2017

Automobile manufacturing industry
Overseas Afﬁliates

1.83

1.80

1.20

1.20

1.11
0.54
0.16

0

2018

0.51
0.50

0.26
0.17

2019

1.95
1.21

0.61
0.58
0.48
0.21

2020

(FY)

Value Creation Strategy

Foundation of Value Creation

Financial Report

Health management
Health declaration ̶ To achieve “Boundless Creativity and Social Contribution”
1. We believe the health of our employees is an important management issue and will strive to foster anorganizational culture that puts safety and health first.
2. We will strive to create positive and lively workplaces where employees can work energetically.
3. We will support the health of our employees and their families by cooperating with the health insurance
association and making efforts for primary prevention.*3*3 Activities undertaken with the aim maintaining and improving health and preventing disease, including public health guidance and health education.

Promotion system
With the Safety & Health Promotion Division serving
as the executive office, we have established mental
and physical health committees consisting of company
occupational physicians and members of our Human
Resources Division, health insurance union, and labor
union. The committees discuss health management
measures and track their progress. In addition, activity
reports are given and approvals are obtained in ourCentral Safety and Health Committee, which thenspreads these measures to the Safety and HealthCommittees in each place of business.
Central Safety and Health Committee (meets 4 times/year)
Mental Health Committee (meets 4 times/year)
Physical Health Committee (meets 4 times/year)
Safety and health committee at each location (meets once/month)

Health management
The ability of each employee to work with energy andhealth into the future is essential as a foundation to fulfill
our corporate social responsibility as stated in Toyoda
Gosei’s management philosophy. In recognition of this,
we are promoting health management to maintainand promote the health of our employees. In 2021

Toyoda Gosei was recognizeda s an “O u t s t an din g He al t hManagement Corporation” inthe large corporation category(White 500).

Turning health awareness and knowledge into action
Health promotion activities in individual workplaces
were started in 2016, and in 2020 efforts to improvehealth with modifications in individual workplaces,such as adopting a theme of exercise, were being madeby 206 out of 243 teams.
We h ave u s e d t h e “A i c h i He a l t h P l u s ” a p p ,distributed by Aichi Prefecture, since 2020 with the aimof establishing exercise habits. We have also introduced
a “Health challenge” in which employees compete innumber of steps walked during longholidays. Awards are given to the top
people and other efforts are made tofurther promote exercise.
With these and other activities,
Toyoda Gosei was recognized as a “Sports
Yell Company 2021” by the Ministry of
Education, Culture, Sports, Science andTechnology (Japan Sports Agency).

Anti-smoking measures
With the aim of preventing health damage in smokers
and passive smoking in non-smokers, we first banned thesales of cigarettes in the company (including vending
machines). At the same time, we provided support by
public health nurses to help smokers quit smoking.
Since 2016 we have held “Smoking cessation talks” withinvited outside instructors and held experience-based
exhibitions that include measurements of lung age as
motivation to quit smoking.
In anticipation of the Revised Health Promotion Act
in Japan, which went into full effect in April 2020, we
extended a smoking ban on all company property inthe country starting in January 2020. At that time, theban on employee smoking was not limited to company
property but was extended to at least 100m from theproperty boundaries to prevent passive smoking byneighborhood residents. In cases when a nursery schoolor medical institution was in that zone, we expanded theban zone to include the area around them.

To protect all people working in the company frompassive smoking, we set a company policy with the aim ofpreventing harmful passive smoking. In addition to steadyefforts beforehand to gain employees’ understanding,we made repeated requests to staffing agencies andcontractors for their cooperation. Today, one year after
the smoking ban on company property, its continuation
has had no effect on productivity or employee retention.
The company-wide smoking rate has decreased
from 42.5% in 2010 to 27.5% in 2020.
Smoking rate at Toyoda Gosei

（％）

40

35.6

33.8

30
20

2016

2017

32.6

2018

30.4

2019

27.5

2020

(FY)

61

Social〈S〉

Uniform global quality assurance
Toyoda Gosei ensures quality in all business activities, from development
to production, based on our basic quality policy. Every one of our plants has
obtained certification in the ISO 9001 (JQA QM7318/QMA11826/QMA12841)
and IATF16949 (JQA-AU124) international standards for quality management
systems. Each plant also sets its own quality control goals for production.
These goals are based on the principles of Total Quality Management, or
TQMーactivities designed to enhance the quality of products, work, andmanagement, and increase the dynamism of individuals and organizations,through constant improvement and the participation of all based on the“Customer First” principle. In addition, all Group companies use our Quality
System Global Standards, which incorporate quality improvement with rules
and know-how to ensure quality.

Fundamental
principles of
TQM
Customer
first

TQM
Constant
improvement

Participationby allMonitoring and responding to manufacturing processes and market quality
Defect-free process completion is carried out in production
and other processes for parts involved in the basic
automotive functions of running, turning, and stopping,as these parts are directly linked to safety. We want the
Toyoda Gosei name to equal quality in the minds ofcustomers worldwide. For this purpose, we advance quality
assurance declaration activities at all production locations.
This means that all employees make efforts to improvesafety and the people in charge of all manufacturing
processes improve quality through the development ofpeople and processes. When a mechanism that can ensure
the target quality has been completed and is in place,the manager makes an “assurance declaration” to thepresident or site manager. The president or site manager
then conducts a site inspection. Through “jidoka ,” we
TOPICS

improve quality by creating processes that do not produce
or pass on any defects and developing workers with ahigh sensitivity to safety and to avoiding mistakes. Audits
and improvements by certified auditors of production
processes for safety-related parts are also carried out.
A system is in place so that whenever a quality
problem occurs in the market, we can quickly investigate
the causes based on information from automakers andimplement prevention measures. When it is difficult to
pinpoint the cause of a problem and develop solutions
internally, we work with the quality departmentsof automakers to take precise measures to prevent
recurrence based on inspections with test vehicles andother means. In this way we prevent such quality defects
from occurring in the next products.

Quality Learning Center established to cultivate a quality mindset

All members of the Toyoda Gosei Group, including suppliers andinternational locations, learn repeatedly about quality. We have establisheda Quality Learning Center to cultivate a mindset of thinking and acting witha customer-first and quality-first approach. In addition to showing examplesof past problems, exhibitions convey the company history of placing
importance on quality, examples of quality improvements implementing
the TG Spirit, and efforts for the future.

Tour of the Quality Learning Center

TQM for a stronger, better company
TQM activities are undertaken across the company
to raise product and work quality and individualand organizational vitality, and to create a flexible
and resilient corporate character through constantimprovement and the participation of all based on the“Customer First” principle.
In addition to Workplace Management Kaizen
Activities and Small Group Activities, we are sequentially introducing education to help workers acquire
AI and big data analysis skills and ways of thinking toenhance creativity, so that they can deal with a dramatically changing environment. We are also fosteringa corporate culture of cultivating data literacy andwide-ranging imagination, and developing people who

62

can contribute to DX and other transformations and toincreased competitiveness.
For global expansion, we are energizing small group
activities together with each location with a focus on the
China and ASEAN regions. We began a Global Small Group
Activity Competition in 2016 to help each other improve.
TQM activities at Toyoda Gosei
Level

Activities

Manager

Workplace management kaizen activities

Office,technical
workers

Small group activities (group kaizen activities)
Activities to improve practical abilities in statisticalquality control (SQC) and artificial intelligence (AI)Skilled workers Small group activities (QC Circle activities)

Value Creation Strategy

Foundation of Value Creation

Financial Report

Supply chain management
We aim to deepen our partnerships with suppliers based on our basic procurement policy, while achieving
sustainable growth for us both.

1. Optimum global procurement

2. Mutual growth based on mutual trust

3. Moving toward a sustainable society

We procure the best raw materials,
products, and equipment fairly from a
global perspective while considering cost,quality, technology, and production.
We a l s o w e l c o m e p r o p o s a l s f r o m
suppliers for new technologies andmethods and new products.

We aim to raise the collective strengthof the Toyoda Gosei Group basedon open and fair relationships with
suppliers, strengthening our mutual
corporate cultures, introducing
innovative management, and building
mutual trust.

Toyoda Gosei has set activity norms as
guidelines for efforts that should be made for
the SDGs and other social issues, and sharedthem with suppliers in carrying out activities.
We also aim to ensure complete legal
compliance and confidentiality in corporate
activities, including our supply chain.

Strengthening our relationships with suppliers
To participate in an initiative related to the supply
chain, we have announced a Declaration of Partnership
Building as promoted by the Ministry of Economy,
Trade and Industry in Japan, and are building anddeepening relationships of equal trust with suppliers.
Every April, we also explain our management
philosophy, business environment and company
policy in a procurement policy briefing with about 200
suppliers, and share our efforts and targets in the areasof safety, compliance, quality, production, and costs.
We hold procurement liaison meetings six times ayear to share production information and information on

quality, compliance, safety and other matters. In addition,
we hold seminars on carbon neutrality and other social
issues to strengthen our partnerships with suppliers.

Support for suppliers so that we can grow together
To support our suppliers, we implement various initiatives from the perspectiveof safety, quality, cost and production.
Safety initiatives include prevention activities based on fire prevention
inspections of painting and other production equipment and risk assessments.
Efforts related to production include manufacturing site improvement throughmanufacturing reform activities. Both of these areas are related to personnel
development.
We have also established Supplier Month as a time to express our sincere
appreciation to each of our suppliers for their ongoing efforts, while also
listening to their concerns and working continuously to resolve them.

Supplier Month posters

Sustainability activities to help resolve social issues
We are making efforts over our entire supply chain to
perform our social responsibility as a company andpromote sustainability.
Based on rising expectations for sustainability efforts
in companies, we have created Supplier Sustainability
Guidelines and requested that our suppliers thoroughly
understand and practice them.
These guidelines set policies related to humanrights and labor, the environment, compliance, andother matters. In addition to social aspects (child labor,
forced labor, no discrimination and equal opportunity,
freedom of association, reduction of long working hours,
minimum wage, health and safety, and more), we ask
suppliers to observe environmental aspects such as

water use and biodiversity.
With regard to the environment, suppliers are asked
to reduce CO2, recycle resources including waste, andcontrol chemical substances with our Green Procurement
Guidelines.
For conflict minerals,
we ask suppliers to be
responsible in their procurement of resources
and raw materials. Oncea year we conduct asurvey of conflict materials with the cooperation of all our suppliers. Supplier Sustainability Guidelines

63

Social〈S〉

Contributing to local communities
The Toyoda Gosei Group wants to earn the trust ofsociety through all its business activities, including thedevelopment and manufacture of products that satisfy
customers worldwide, environmental preservation, andsocial contribution. Toyoda Gosei Group companies

and their employees around the world are making
efforts to contribute to their communities in the fourareas of social welfare, environmental preservation,
youth development, and community safety, and growtogether with strong local roots.

Social welfare

Sales of goods produced by people
with disabilities

Environmental preservation

Wheelchair repair in welfare
institutions

Youth development

Support for Boys and Girls Invention
Club

Donations with money collected
through charity meals

A total of more than 300,000 trees
planted domestically and internationally

Community safety

Environmental education forelementary school students

Anti-crime patrols

Road safety campaign

World social contribution activities
During Volunteer Month every
autumn, people at Group company
locations worldwide participate
in a “Worldwide Day of Action in
Autumn.”Volunteer activities ranging from
community cleanup to donationso f go o d s t o u n d e r p r i v i l e ge dchildren are conducted as suits
Toyoda Gosei (Japan)
Food drives

TGR (China)
Public area cleanup activities

TGMO (North America)
Donations to local senior care homes

the situation of each region.

Sports promotion
The Wolfdogs Nagoya are regularly
in championship contention in
Japan’s top volleyball league,and the Blue Falcon won two
titles in 2020, their first league
championship and the national
tournament championship. The
Scorpions play in Japan’s B3.League.
We aim to foster a sense of unity in
Wolfdogs Nagoya
Volleyball team64

Blue Falcon
Handball team

Scorpions
Basketball team

employees and the community fora vibrant, rich and active society.

Value Creation Strategy

Foundation of Value Creation

Financial Report

Support activities during the COVID-19 pandemic
Supporting facilities for people with disabilities and donating goods to hospitals
From March through April of 2021, baked goods madeat nine facilities for people with disabilities in Aichi and
Shizuoka Prefectures, where Toyoda Gosei has many of
its business operations, were sold to employees in ourcompany cafeterias. With the money from sales andan equal amount provided by the company, articles
were purchased and donated to medical facilities in thecities of Inazawa and Kiyosu in Aichi Prefecture.
Toyo d a G o s e i h a s l o n g p rov i d e d a m o n t h l yopportunity for people with disabilities themselves
to sell bread and other baked goods produced at theirfacilities in our company cafeterias. This was done as
one part of our efforts to support the independence ofpeople with disabilities. However, to support facilities
where sales had fallen due to the prolongation of
COVID-19, employees acted on their behalf to sell
their baked goods in 11 business locations in Marchand April. Baked goods from the facilities were alsopurchased with donations from the company. Then, as
an expression of gratitude to local hospitals and publichealth centers that have worked so hard to combat
infections, the company presented them with our UV-C
space disinfectors* and baked goods from the facilities.
* Devices that capture bacteria and viruses in a filter and irradiate them withdeep ultraviolet rays to disinfect air.
They are fitted with Toyoda Gosei’s UV-C (deep UV) LEDs.

Sales by employees

Donation to local healthcare professionals

Donation of food and disaster preparation foods to food banks
Food brought in by employees was donated to the NPO Second Harvest Japanin June 2021. Upon learning that the food bank was facing huge shortages ofrelief supplies from the long-term effects of COVID-19, employees from 16
locations including Toyoda Gosei Group companies quickly sent a call out forfood and 2,759 items, including unopened prepackaged food items and rice,
were donated. Toyoda Gosei has made donations to food banks every year since2017, and in September donated 1,837 disaster preparation food items, such as
regularly updated emergency food sets, to the same organization.
Donation to foodbank

Blood donations by employees to help eliminate the shortage of blood for transfusion
Employees from 11 business locations including Toyoda Gosei Group companies
in Japan conducted blood drives in September 2020 and March 2021. These blood
drives were done in response to a request from blood centers, which were facing
a national shortage of blood for transfusions as a result of the large decrease in
the number of people giving blood due to the effects of COVID-19. To help makeit easier to give blood during the pandemic, the environment inside the blood
donation vans was arranged with droplet prevention sheets, temperature checks,
mask wearing and other steps. Toyoda Gosei has conducted blood drives for about
50 years, since 1971, and so far more than 30,000 employees have donated blood.

Employees cooperate in blood drive

Participation in infection prevention trial at Centrair
Toyo da Go s ei p ar ticip a t e d in a demons tra tion
experiment at Chubu Centrair International Airport
to develop the airport environment for safe andsecure use by employing effective antibacterial andantiviral products. This trial was held for three weeks
starting on August 6, 2021 in collaboration with
Central Japan International Airport Co., Ltd., Toyota
Tsusho Corporation, Toyota Central R&D Labs, Inc.
and others. Toyoda Gosei set up UV-C high-speed

surface disinfectors and WOSH portable washstands in
the Access Plaza, Premium Lounge and elsewhere tosurvey the needs of airport users. The UV-C high-speed
surface disinfectors use UV-C (deep UV) LEDs that arehighly effective in disinfection and can disinfect smart
phones, passports and other small items in a short time.
WOSH portable washstands can be used in areas where
plumbing is not available by purifying and circulating
the water inside for repeated use.

65Governance〈G〉

Building and operating transparent management
systems for thorough Group-wide compliance.
The entire Toyoda Gosei Group is striving to enhance corporate
governance so that we can continue as a company of integrity that istrusted by society. To build and maintain fair and transparent corporate
governance systems, we are increasing the effectiveness of themonitoring and auditing of corporate management by outside directors
and Audit & Supervisory Board members, while also installing internal
control systems company-wide to ensure the propriety and efficiencyof work. Through Group-wide compliance activities, we are pursuingthorough legal compliance and business ethics.
We are also globally identifying risks with the potential to have ahuge impact on our operations, and implementing risk management
activities to prevent future problems.

Hiroshi Yasuda

Chief of Corporate Strategy Headquarters

Chief of Carbon Neutrality and Environment Promotion Division,
Adviser to Automotive Business Headquarters / Director, Corporate Officer

Corporate governance
Basic philosophy
We view the enhancement and strengthening ofcorporate governance with the aim of ensuring soundand efficient corporate management to be crucial
in achieving sustainable growth. Based on this, weare building and maintaining fair and transparent
management systems and organizational systems thatcan respond precisely to environmental changes.

Additionally, Toyoda Gosei pursues consummate
corporate governance by voluntarily implementing
a range of policies in accord with the letter and spiritof the ideals and principles in Japan’s Corporate
Governance Code, formulated by the Financial Services
Agency and the Tokyo Stock Exchange.

Corporate governance system
Toyoda Gosei has adopted an audit and supervisoryboard system and set up the shareholders’ meeting,Board of Directors, Audit & Supervisory Board, andaccounting auditors as statutory entities. We have also
put in place internal auditors and other internal control
systems including internal audits.
The Board of Directors consists of nine directors
and holds regular monthly meetings (extraordinary
meetings held as needed), where matters prescribedby law or in the Articles of Incorporation and importantmatters related to corporate management are reported,discussed, and resolved.
A system of corporate officers is used to speed
up decision making and business execution. For
important business matters, division chief meetings andmanagement meetings are held monthly. Functional
meetings and committee meetings relevant to key areas
such as technology, costs, and personnel are also held asneeded for good management decisions.
The Audit & Supervisory Board consists of fivemembers and holds regular meetings. Members also
attend important meetings such as Board of Directors’
meetings and audit each department and subsidiary,through which they fulfill their function of auditing
corporate management.
Accounting auditors are external auditors who
combine auditing functions with a commitment toensuring an independent and fair auditing system.
The Company adopts the current system because
audit, supervisory, and execution functions are wellcoordinated with each other under this structure, withlegality and efficiency of the Company's decision-making
and business execution sufficiently ensured.
Also, in order to strengthen the supervisory functionof the Board of Directors and to increase the objectivity
and transparency of the decision-making process, wehave established an Executive Appointment Committee and Executive Compensation Committee under the
Board of Directors as non-mandatory advisory committees.

Internal control systems
In accordance with the provisions of Japan’s Companies
Act, Toyoda Gosei has formulated a Basic Policy on
Establishing Internal Controls. Under this policy,
we are striving to ensure appropriate operations by
establishing internal control systems, which help us

66

deliberate important matters, establish related rules andguidelines, and handle internal audits, compliance and risk
management. Every year, the Board of Directors checks thestatus of establishment and operation of internal controls
in an ongoing effort to improve and reinforce them.

Value Creation Strategy

Foundation of Value Creation

Financial Report

Internal controls for the Toyoda Gosei Group
reports from subsidiaries and set up systems to confirm
the propriety and legality of subsidiaries’ businesses
through advance approval reports. We also send nonexecutive directors and Audit & Supervisory Board
members to key subsidiaries in a system to monitor
and act as a check on their business execution.

To cultivate a healthy internal control environment at
Toyoda Gosei and its subsidiaries, all Group companies
share its management philosophy. The Toyoda Gosei
Group Charter for Business Ethics, a shared guideline
for compliance, has also been instituted and expanded
to subsidiaries. While respecting the independence ofsubsidiary management, we receive regular businessCorporate governance system
Shareholders' Meeting
Appointment/
Dismissal

Appointment/
Dismissal
Audit

Board of Directors
Appointment/
Dismissal

ReportSupervision

Consultation
Submission/
ReportAudit & Supervisory Board

Appointment/
Dismissal
Cooperation

Accounting Auditors

ReportAudit

Executive
Executive
Appointment Compensation
Committee
Committee

Audit

Audit &
Supervisory
Board Dept.

Business Execution System
President

Direction/Supervision

ReportAudit Div.
Cooperation with Audit &Supervisory Board andAccounting Auditor

Business Execution
Audit

Corporate Officers
Functional/Business Divisions
Subsidiaries

Company Meetings
Submission/
ReportDecision/
ApprovalManagement Meetings
Functional Meetings
Committees

Internal audits, Audit & Supervisory Board membersʼ audits, and accounting audits
We have set up an Audit Division to handle internal
audits. With the aims of achieving business objectives
and preventing misconduct and mistakes, internal
audits are conducted across the overall business(including audits of functional departments) based on
an internal auditing plan approved by management at
the beginning of each term.
The results of internal audits are reported to
management, and audited departments are given
recommendations for improvements based on the audit
results. The effectiveness of internal audits is increased
by checking their improvement plans and results.
Each Audit & Supervisory Board member follows theauditing policy and audit plan established by the Audit& Supervisory Board when investigating the Company
and subsidiaries. They attend the meetings of importantdeliberative bodies and committees including the Boardof Directors, division chief meetings and management
meetings, listen to reports on business from directors

and others, inspect financial statements and otherimportant documents, and conduct onsite audits ofoffices and subsidiaries to audit the performance of
duties by directors from the perspectives of ensuring
legality and appropriateness, protecting assets andrights, and preventing loss. Moreover, a special
department has been established to assist the auditors’audits.
The certified public accountants who performed
the FY2020 accounting audit of Toyoda Gosei are
Tomohiro Nishimura and Satoko Nakatani of PricewaterhouseCoopers Aarata LLC.
Audit & Supervisory Board members, internal
auditing department personnel, and accounting auditors
regularly meet to confirm their respective auditing
systems, auditing policy, auditing plans, implementation
status, and audit results. They cooperate in performing
efficient and effective audits, contacting each other as
needed to exchange ideas and share information.

67

Governance〈G〉

Director (skills matrix)
Name

Position at
Toyoda Gosei

Toru
KoyamaPresident

Manufacturing
Executive
Executive
Corporate
Overseas (production/
Appointment Compensation
GovernanceTechnology
quality
management
operations
Committee Committee
management)

○

○

○

Executive Vice
President○○○

Hiroshi
YasudaDirector○○○

MasakiOka

Director○○

TakashiIshikawa

Director

○

○

Naoki
MiyazakiDirector

○

○

○

○

○

SojiroTsuchiya

Director
Outside Independent

○

○

○

○

○

Kimio
YamakaDirector
Outside Independent

◎

◎

○

Director
MayumiMatsumoto Outside Independent

○

○

○

Tomonobu
Yamada

○

○

○

Sales

○

Finance Personnel○

Environment
and energy

100％(13/13)○100％(13/13)

○
○

○

○

○

100％
(11/11)○○100％(13/13)○○100％(13/13)○○100％(13/13)○○100％(13/13)

○
○

○

100％
(13/13)100％(13/13)○○

Board meeting
attendance rate

(Apr. 2020–Mar. 2021)○○

Note: “ ◎ ” denotes the chairperson.

Expected roles of and support for outside directors
All three outside directors possess a wealth ofexperience and keen insight.
Mr. Tsuchiya’s experience and expertise lie in global
strategy and production engineering; Mr. Yamaka’s,
in finance and the environment; Ms. Matsumoto’s, inthe environment and SDGs. Ms. Matsumoto is Toyoda
Gosei’s first female director.
The three adeptly fulfill monitoring and advisory
roles in addition to actively participating in Board
discussions.
In their monitoring role, they receive support
in the form of departmental briefings on business
operations and challenges and direct access to frontline operations through on-site visits to domestic andoverseas subsidiaries to better understand the actual
state of operations. Additionally, they are briefed inadvance on the content and background of resolutions
to be voted on at Board meetings to facilitate sounddecision-making.
At the same time, the outside directors advise
management on company direction and businesschallenges. Advisory opportunities include regularlyscheduled liaison meetings attended by all outside
directors and outside Audit & Supervisory Board
members, each of whom attends various othermeetings also, including sales and technology strategy
meetings, Decarbonization and Environmental
Committee meetings and ad hoc meetings.

Changes in numbers of directors and Audit & Supervisory Board members
In 2012, Toyoda Gosei adopted a system of corporate
officers and downsized its Board of Directors to eight
directors from 23 as of 2011. It appointed its first outside
director in 2015.

Directors

Outside director ratio

23

2011

2011

68

Female director ratio

9

0％

33％

0％

11％

2021

2011

2021

2011

2021

Audit & Supervisory Board (ASB) members
５

The Board currently comprises nine directors, three or
one-third of whom are outside directors. One of the outside
directors is a woman. The outside director appointments
have increased the Board’s objectivity and diversity.

Outside ASB member ratio

Female ASB member ratio

5

2021

60％

60％

0％

20％

2011

2021

2011

2021

Value Creation Strategy

Foundation of Value Creation

Financial Report

Changes in numbers of directors and Audit & Supervisory Board members
Toyoda Gosei appointed three outside directors, Sojiro
Tsuchiya, Kimio Yamaka, and Mayumi Matsumoto, at
its annual shareholders’ meeting on June 17, 2021. The

Audit & Supervisory Board has three incumbent outside
members: Chika Kako, Hideomi Miyake, and Masami
Hadama.

Election of outside directors and outside Audit & Supervisory Board members
Appointment

Name

SojiroTsuchiya

Outsidedirectors

Kimio
YamakaMayumiMatsumoto

Independent
director

Reason for appointment○

To benefit from his management oversight and advice based on his extensive experience,
including as a director of Denso Corporation, and his expertise, including full-spectrum
manufacturing expertise cultivated over decades at Denso and other companies/groups. Mr.
Tsuchiya has been designated as an independent director because he meets the requisite
criteria and is deemed free of potential conflicts of interest with regular shareholders.

○

To benefit from his management oversight and advice based on his extensive experience andexpertise in finance, particularly policy finance, project due diligence and the environmental
and energy sectors. Mr. Yamaka has been designated as an independent director because hemeets the requisite criteria and is deemed free of potential conflicts of interest with regularshareholders.

○

To benefit from her management oversight and advice based on her extensive experienceand high-level insight as a news anchor and researcher in the broad fields of social issues,environment and energy in the management of Toyoda Gosei. Ms. Matsumoto has been
designated as an independent director because she meets the requisite criteria and isdeemed free of potential conflicts of interest with regular shareholders.
To reflect in Toyoda Gosei’s audits her wealth of experience and keen insight gained from her
career at Toyota Motor Corporation, where she served mainly in vehicle development andmaterials development roles and was involved in management as a managing officer.

Chika Kako
Outside Audit Masami& Supervisory Hadama
Board members
HideomiMiyake○To reflect his extensive experience and deep insight in law in the auditing of Toyoda Gosei.
Mr. Hadama has been designated as an independent director because he meets the requisite
criteria and is deemed free of potential conflicts of interest with regular shareholders.

○

To reflect his extensive experience and deep insight as a corporate manager in the auditingof Toyoda Gosei. Mr. Miyake has been designated as an independent director because hemeets the requisite criteria and is deemed free of potential conflicts of interest with regularshareholders.

Ensuring the effectiveness of the Board of Directors
To improve the Board of Directors’ effectiveness,
Toyoda Gosei annually debriefs Board members. In
FY2020, Toyoda Gosei again assessed the Board’s
effectiveness, debriefing all nine directors and all
five Audit & Supervisory Board members. Finding nomaterial deficiencies across any of its assessment rubrics,
it concluded that the Board continues to function
effectively. During the debriefing process, the following
suggestions to further improve Board effectiveness were
made, mainly by outside directors.
Regarding the Board’s roles and responsibilities,
the directors and Audit & Supervisory Board members
agreed that the Board is appropriately sized andpossesses an appropriate mix of expertise, but somerecommended endeavoring to add more diversity to theBoard to fulfill growth strategies going forward.

Regarding Board deliberations, outside directors
in particular lauded the candor and liveliness of Board
discussions but some recommended more discussion of
future strategies and risk mitigation with respect to, e.g.,
decarbonization.
Outside directors and Audit & Supervisory Board
members reported that they find the liaison meetingsscheduled monthly to give them a better understandingof management issues and individual businesses’
respective operating environments and challenges tobe helpful. We will accordingly offer them additional
learning opportunities, including tours of business sites.
We will ende avor t o f ur ther up grade Bo ard
effectiveness by making improvements in responseto the issues raised and suggestions made during the
FY2020 assessment of Board effectiveness.

Executive compensation
Directors’ compensation consists of monthly fixedcompensation and performance-based compensationin the form of cash bonuses (short-term incentive)
and stock-based compensation (long-term incentive)
based on the idea that directors should be appropriately
incentivized to pursue sustained growth in Toyoda Gosei’svalue. Directors’ compensation is split roughly 70:20:10

among monthly compensation, cash bonuses, and stockbased compensation, respectively.
Monthly compensation is set at a fixed amount thatreflects the recipient’s job responsibilities and experience
as well as compensation levels at other companies. Cashbonuses are based primarily on fiscal yearly consolidated
operating profit. Secondary variables that factor into69

Governance〈G〉

outside directors have made suggestions about further
enlarging the incentive element of director compensation
by, e.g., adjusting compensation to reflect the extent of
directors’ respective environmental contributions.
In March 2020, outside directors replaced the
Executive Compensation Committee and Executive
Appointment Committee’s previous chairs with the aimof making the committees even more objective andtransparent.

Director compensation scheme

The total compensation for each officer class, the total by each type ofcompensation, and the number of officers receiving the compensation

Short-termLong-term

Performance-based compensation

Fixed
compensation

their determination include the degree to which fiscal
yearly plans are attained, employees’ bonus levels, bonus
levels at other companies, medium-/long-term earnings,
previously paid bonus amounts, and contributions to ESG
management. Stock-based compensation is intended as
an incentive to pursue sustained growth in Toyoda Gosei’svalue. It is paid in the form of restricted stock to promote
greater sharing of value with shareholders.
Directors’ aggregate annual cash compensation(monthly compensation plus bonuses) is capped at ¥650
million (outside directors’ share of which is capped at ¥65
million). Directors’ aggregate annual restricted stock-based
compensation is capped at ¥100 million (outside directors
are not eligible for restricted stock-based compensation).
All three compensation caps were approved at the annual
shareholders’ meeting on June 12, 2020.
Outside directors and Audit & Supervisory Board
members receive only fixed monthly compensation
because their role is to oversee and monitor managementfrom an independent vantage point.
Individual directors’ compensation is set in accord withthe above policies following a fair and transparent review/
reporting process by the majority-independent Executive
Compensation Committee, established in 2019.
At Executive Compensation Committee meetings,

Through June 2020
Monthly compensation

Capped at ¥60 million/month 80%（ annualized ）¥720 million（

Cash bonuses

Amount approvedat annualshareholders’meetings）

20%

From July 2020
Monthly70%
compensation

Cashbonuses

20%

Restricted
stock-based 10%compensation

Committeesʼ roles and composition
Name

Role

Members

Deliberates and reportson the compensation
system for directors
Executive
Compensation and their individualcompensation
Committee(restricted stock-based
compensation, etc.)

Toru Koyama, president,
Naoki Miyazaki, director,
Sojiro Tsuchiya, outside director,
Kimio Yamaka, outside director(chairperson),Mayumi Matsumoto,outside director

Deliberates and reports
on proposals regarding
the appointment andExecutive
Appointment dismissal of directors andAudit & Supervisory Board
Committee
members (appointmentof the president, etc.)

Toru Koyama, president,
Naoki Miyazaki, director,
Sojiro Tsuchiya, outside director,
Kimio Yamaka, outside director(chairperson),Mayumi Matsumoto,outside director

Officer class

Total amount by type of
Total
compensation (Millions of yen) Number
executiveof subject
Fixed
Performance-based Non-cashcompensation compensationcompensation compensation officers(Millions
MonthlyMonthly
Cash
Stock-based (People)of yen)compensation bonuses compensation

Directors (excluding
outside directors)

376

250

98

26

7

Audit & Supervisory Board
members (excluding
outside members)

76

76

-

-

3

Outside officers

70

70

-

-

7

Note: Bonuses are the provision of allowance in the given fiscal year.

Communication with shareholders and investors
Toy o d a G o s e i m a ke s a r ra n ge m e n t s t o e n g a geconstructively with shareholders and investors throughorganic coordination among concerned organizationalu n i t s . S u c h a r ra n ge m e n t s i n c l u d e s c h e d u l i n gopportunities for shareholders/investors to engage withmanagement and disclosing requisite information.
Means of engagement with institutional investors
include financial results briefings conducted by
the president and/or other senior executives, small
meetings, ESG briefings, facility tours, and one-on-one
meetings between investors and IR staff, including theofficer in charge. Means of engagement with individual
investors include company briefings.
While in-person engagement has been largely
precluded by the pandemic, Toyoda Gosei continues toremotely engage with shareholders/investors online.
Input obtained from shareholders/investors
through such engagement is transmitted to the senior
management team and Board of Directors and acted
upon if deemed conducive to the Company’s sustained

70

growth or otherwise value-additive.
In compliance with fair disclosure rules, Toyoda Gosei
restricts dialogue with shareholders and investors andthoroughly controls information in the Company during
a silent period before earnings reports are released. If
insider information emerges in the Company, it is tightly
controlled as part of thorough information management.

Main IR activities
Targeted persons

IR activities

Financial results briefings,
Domestic institutional
Small meetings, ESG briefings,
・Issuance of theinvestors (including
Facility tours, Business briefings,“Toyoda Gosei
securities analysts)
Individual discussions
Report”
Overseas
Individual discussions,institutional investors Participation in IR events
・Disseminationof financial
Company briefings,
information andIndividual
Plant tours after annual
IR materials on
shareholders and shareholders’ meeting,
the website
investors
Issuance of “Interim Report on
Business Results”

Value Creation Strategy

Foundation of Value Creation

Financial Report

Messages from outside directors
Manufacturing governance means “keeping promises”
For manufacturing companies, governance is not simply a matter of not doing
things that are illegal; it means “keeping promises” with customers, employees
and other stakeholders. Its essence is relationships of trust, in protecting thesafety and health of customers and employees, not passing on defective parts,
achieving costs, observing delivery dates, protecting the local environment andproviding employment. In a broader sense, it means not betraying expectations.
The idea of sustainable manufacturing is also important in keeping
promises. Responding to crises, such as disasters, epidemics or accidents,
requires preparation against risks and workplace skills. Rapid problem-solving
ability is key, especially in dealing with the unexpected. For this it is crucial todevelop workplace skills and raise problem-solving abilities through regularkaizen activities.

Sojiro Tsuchiya
Outside Director

Governance in the age of carbon neutrality.
Focus on trends in renewable energy and hydrogen
The Paris Accords call for keeping the rise in temperature down to 1.5–2°C, andmajor countries including Japan have committed to carbon neutrality by 2050.
More than eighty percent of greenhouse gas emissions is CO2 related toenergy, and renewable energy and electrification are the base from which toapproach decarbonization. However, for heat that is difficult with electrification,
decarbonization is done with hydrogen and methane derived from hydrogen,while for materials derived from fossil resources such as chemicals,
decarbonization is done with hydrogen and bio-derived materials. This greenhydrogen demand gives rise to enormous demand for renewable energy inmanufacturing processes and is promising for a positive cycle of growing supply
and lower costs for renewable energy and hydrogen.
It is important for management to anticipate the timing and methods ofdecarbonization in each field as well as the speed at which renewable energy
and hydrogen will spread and their costs go down, and then to take measuresand preparations with this in mind. Carbon neutrality in the manufacturingindustry requires looking into commercialization of renewable energy andhydrogen without fixating on energy reductions only.

Kimio Yamaka
Outside Director

Climate change and sustainable company growth
The Intergovernmental Panel on Climate Change (IPCC) published its Sixth
Assessment Report in August 2021, and warned of impending crisis for billions
of people from greenhouse gas emissions.
Environmental problems are closely interwoven with the economy.
Steps for carbon neutrality will impact many areas for automotive parts
manufacturers, and business must adapt to electrification. Toyoda Gosei isdisclosing information recommended by the Task Force on Climate-related
Financial Disclosures (TCFD), and has begun discussions for scenarios with amedium- and long-term view to 2030 and 2050. It is currently taking actions for
decarbonization.
I hope the company will actively disseminate information on its efforts forsustainability, not only via paper media and websites, but also social media andother means, and create even greater corporate value on the global market.

Mayumi Matsumoto
Outside Director

71Governance〈G〉

Risk management
Basic philosophy
We are working to prevent risks that could have graveconsequences for management and to minimize damage
in adverse events. For these purposes, we identify risks ineach function and make decisions on how to respond in
the Compliance and Risk Management Committee andgeneral meetings. A Compliance and Risk Management
Committee headed by the company president identifies
key risks, determines measures to counter them, andchecks on the progress in executing these measures. In
this way, these measures are made more effective.
M o r e ove r , R i s k M an a ge m e n t an d Re s p o n s e
Guidelines have been established. These guidelines show

the behaviors to adopt to prevent potential risks and torespond to problems appropriately and quickly. At the
beginning of 2020, an emergency response task force ledby the company president was set up to deal with thenovel coronavirus. Actions taken to minimize the impactof the novel coronavirus included (1) preventing infection
by promoting work from home, regulating business trips
and visitors, and cancelling company internal events, (2)implementing measures for the event that an infection
occurred in an employee, (3) maintaining our production
network by monitoring issues, including at our suppliers,and (4) introducing profit improvement measures.

Crisis Management Project in anticipation of large-scale earthquake disasters
A crisis management system has been put in place forthe event of a massive disaster, such as the predicted
Nankai Trough earthquake or natural disasters due toclimate change. This system is based on the principles
of human life first, community support, and earlyrecovery. Specifically, in addition to infrastructureand system measures based on a crisis management
project, resilience training has been conducted morethan 140 times for directors and members of antidisaster departments since FY2013. These efforts are
based on the company’s belief that improving the skillsof response personnel is essential. Specific proceduresfor the recovery of affected buildings, facilities,

and processes have also been established, and foralternative production in a production recovery system.
Recovery training for design drawings and otherdata is also carried out so that product development
can be continued even after disasters. In addition,
workshops to strengthen crisis management not onlyin Toyoda Gosei companies but also at affiliates andsuppliers are conducted regularly. Assessments using
anti-earthquake measure implementation statuscheck sheets, clarification of weak points with graphs,
introduction of responses taken at Toyoda Gosei andother companies, and cooperative preparation ofbusiness continuation plans (BCP) are carried out.

Disaster response

Efforts to date

Disaster outbreak ー First response

RecoveryClassification

Permanent
Warning & Monitoring Team
Disaster occurs●

Emergency
Task Force

Facilityandequipment
measures

Emergency
earthquake alertFirst Response
Task Force
Advance Team (investigative team)District
Task Force

Measures
●

●

●

●

Life Support
Task Force

Production Restoration
Task ForceInstructions
Reports

Systemmeasures
Skills●●●●●Earthquake resistance measures for buildings and facilities
Establishment of a disaster prevention center to serve as an operations
base for the entire company for anti-disaster department operations
Equipping all locations with a multi-channel access radio system (which
is used in Japan for various purposes, from daily work to emergency
and disaster situations) and satellite phones
Installment of a crisis management server (earthquake-resistant
structure) and emergency power generators
Operation of a disaster recovery system for restoration of damaged
systems and data centers (special facilities equipped with andoperating computers, data communications, and other devices)
Introduction of site and building safety decisions
Earthquake bulletin and employee safety information system training
Maintenance of supply chain information
Preparation of a business continuity plan (BCP)
Continuation of resilience training (disaster simulations)

Strengthening of global risk response
The status of risks, not just domestic but alsofrequently occurring global risks (tightening supply ofparts and raw materials, coronavirus-related operations
stoppages and more), is identified at an early stage
both in Japan and internationally (issuance of a weekly

BCP), and necessary actions are taken by global TG.
Standardization is also underway so that measurements
can be taken by international locations on their own
initiative, strengthening their risk response.

Strengthening information security measures and raising awarenessTo strengthen the control of confidential information,
annual checks of the compliance status of each division
based on company confidentiality management
regulations are conducted together with onsite audits.
Self-inspections are also done at Group companies inJapan and overseas business locations. Confidentiality

72

officers are assigned in all departments, andconfidentiality education activities are conducted basedon information system security operating standards
and a confidential information management manual.
Security control education is also conducted for new
employees.

Value Creation Strategy

Foundation of Value Creation

Financial ReportCompliance
Basic philosophy
Toyoda Gosei’s management philosophy states, “We
promote business operations with integrity throughthe establishment of a system founded on thoroughcompliance and corporate ethics.” Together withhighly ethical and fair business practices, we strive
for thorough compliance in all areas based on thisphilosophy.
The Toyoda Gosei Group Charter for Business Ethics

sets forth shared values and behavioral standards forthe entire Toyoda Gosei Group. Group companies
in Japan and other countries then formulate andimplement their own behavioral guidelines based on
the Charter. Toyoda Gosei Co., Ltd. has also establishedthe Toyoda Gosei Guidelines for Business Ethics, which
it expects every employee to follow, and has worked tofamiliarize all employees with these guidelines.

Compliance system
Toyoda Gosei has established the Compliance and Risk
Management Committee with the Company’s president
serving as chairman and all company officers as members.
The Committee’s activities include reporting on anddiscussing the status of compliance with business ethics,
laws, and regulations. The items reported and discussed
in the Committee are shared with the complianceadvocates selected by each department in Companywide Compliance Advocates’ Meetings so that they will
be reflected in the activities of each workplace. The
committee works for thorough compliance with a unified
approach between management and the workplace.
Regular compliance liaison conferences are also heldwith Group companies in Japan. Group companies in othercountries have also established compliance committees,
appointed compliance advocates, or set up othercompliance systems suited to the circumstances in theirregion and company. Compliance activities are carried out
globally in coordination with Toyoda Gosei Co., Ltd.

Specific efforts
Compliance activities
Toyoda Gosei conducts level-specific and risk-specifictraining with the aim of raising and solidifying
compliance awareness in every employee.
Each year, a compliance sustainment questionnaire
survey is conducted for all employees to check thedepth of compliance awareness and whether there aresigns of violations. Kaizen activities are then conductedbased on the results.
At the same time, both domestic and international
Group companies are establishing basic policies andadvocacy systems for compliance, and carrying out
their own inspections for risks in their main activities.
The results of the inspections are checked by eachfunctional department in Toyoda Gosei, and efforts are
made for thorough compliance in the entire Toyoda
Gosei Group with support for the kaizen and responsesof each company through feedback reports.
 fforts for the prevention ofE
antimonopoly and competition law violations
Specific behavioral guidelines that Toyoda Gosei expects
employees to follow in various business activities,
especially sales, are embodied in the Codes of Conduct
for Antitrust Law Compliance in the Company’s internal
regulations. Efforts are made for thorough compliancethrough training and education for employees.
Antitrust law compliance manuals based on the

ComplianceCorporate activities

Domestic
affiliates

Support for thecompliance system

Management
Philosophy

Support for thecompliance system

Toyoda Gosei Group
Charter for Business Ethics

Overseas
affiliates

Toyoda Gosei Guidelines for
Business Ethics
Compliance advocates from each division

All company executives

Compliance and Risk
Management Committee
Legal affairs/
complianceworkshops

Company-wide Compliance
Advocates’ Meeting

Ensuring
compliance

Compliance consultation office(internal/external)
Labor consultation office(internal)

laws of each country are prepared for the regions where
Group companies are located, and efforts are madeto prevent anticompetitive acts globally. Continuing
education activities are also conducted through training
specifically for antitrust and competition laws, regularlevel-specific compliance training, and other training.

Anti-bribery efforts
The Toyoda Gosei Group has formulated Global AntiBribery Guidelines as a common guide for global
activities, and is making efforts to prevent bribery,
accounting fraud, and other forms of corruption. Withlevel-specific training and training for Group companies
doing business in regions where there is high risk,
education to prevent corruption is provided to employees.
 arly detection and correction ofE
problems with internal reporting system
Compliance consultation offices have been set up
both inside and outside the company. In external
offices, outside lawyers who can deal with problems
from an objective standpoint are in charge. Internal
labor consultation offices have also been establishedto specifically handle labor troubles and harassment.
In addition to internal consultation offices in all
Group companies in Japan, an external complianceconsultation office shared with Toyoda Gosei has been
established. At overseas Group companies, external orinternal consultations offices have been established.

73

Management members
1

Toru Koyama

4

President(As of June 17, 2021)

Masaki Oka

8Director, Corporate Officer

Outside Director

1982 Joined Toyoda Gosei

1985 Joined Toyota Motor Corp.

1980 Joined Japan Development Bank

2005 General Manager of Development Division,
Safety Systems Business Unit, Toyoda Gosei

2012 Project Senior Manager, Finance &Accounting Division, Toyota Motor Corp.

2007 Deputy Director-General, Development
Bank of Japan

2012 Corporate Officer, Toyoda Gosei; President,
Toyoda Gosei North America Corp.

2014 General Manager of Related Business
Department, Toyota Motor Corp.

2009 Director of the Energy Strategy Institute Co.,
Ltd. (current)

2015 Managing Officer, Toyoda Gosei

2015 Adviser, Toyoda Gosei; Corporate Officer,
Toyoda Gosei; General Manager of Finance &Accounting Division, Toyoda Gosei; in charge of
IT Planning Division, Toyoda Gosei

2012 General Advisor on Energy Policy for
Yamagata Pref. (current)

2016 In charge of Corporate Planning Division,
Toyoda Gosei; Director, Managing Officer
Toyoda Gosei; Chief of Purchasing
Headquarters, Toyoda Gosei

2014 Project Professor, Graduate School of
Economics, Kyoto University (current)

2016 Deputy Chief of Finance & Accounting Headquarters,
Toyoda Gosei; in charge of Audit Division, Toyoda Gosei

2018 Director, Senior Managing Officer, Toyoda
Gosei

2017 Chief of Finance & Accounting
Headquarters, Toyoda Gosei

2019 Executive Vice President, Toyoda Gosei; Chiefof Corporate Planning Division, Toyoda Gosei

2018 Director, Managing Officer, Toyoda Gosei;
Chief of IT Headquarters, Toyoda Gosei

2020 President, Toyoda Gosei (current)

2016 Director, Toyoda Gosei (current)

91981 Joined Toyoda Gosei
2007 General Manager of Sales Division 1,
Toyoda Gosei
2012 Corporate Officer, Toyoda Gosei

52016 Director, Managing Officer, Toyoda Gosei;
President, Toyoda Gosei (Shanghai) Co.,
Ltd. (current)
2017 Director, Senior Managing Officer, Toyoda
Gosei; Adviser to General Industry Products
Division, Toyoda Gosei

2009 Project Researcher, same as above
2011 Director, principal researcher, International
Environment and Economy Institute (current)

Takashi Ishikawa

1985 Joined Toyota Motor Corp.

2014 Visiting Associate Professor, Special Division ofEnvironmental and Energy Science, Komaba
Organization for Educational Excellence(KOMEX), The University of Tokyo (current)

2008 General Manager of Upper Body
Engineering Division 2, Toyota Motor Corp.

2017 Director, Japan Council for Renewable
Energy (current)

2013 Adviser, Toyoda Gosei; Corporate Officer,
Toyoda Gosei

2019 Director, Toyoda Gosei (current)

2019 Corporate Officer, Toyoda Gosei

10

Kenji Oiso

Audit & Supervisory Board Member

2020 Director, Corporate Officer, Toyoda
Gosei (current); Chief of Research andDevelopment Headquarters (current)

2020 Executive Vice President, Toyoda Gosei(current); Chief of Audit Division, Toyoda
Gosei (current); Adviser to General Industry
Products Business Headquarters

1980 Joined Sumitomo Metal Industries, Ltd.
2002 Deputy Manager, Finance & Accounting
Div., Sumitomo Metal Ind., Ltd.

6

Naoki Miyazaki

2004 Joined Mitsubishi Sumitomo Silicon, Co., Ltd.

Director

2006 General Manager, Finance & Accounting
Division, SUMCO Corp.

1980 Joined Toyota Motor Company

Hiroshi Yasuda2011 Corporate Officer, SUMCO Corp.

2008 Managing Officer, Toyota Motor Corp.

Director, Corporate Officer

2013 Senior Managing Officer, Toyota Motor Corp.

1982 Joined Toyoda Gosei

2014 Adviser, Toyoda Gosei; Executive Vice
President, Toyoda Gosei

2014 Functional Officer, Yokogawa Sumikin Bridge Corp.
2016 Joined Miraial Co., Ltd. General Manager,
Finance & Accounting Division, Miraial Co., Ltd.

2015 President, Toyoda Gosei

2017 Project General Manager, Finance &Accounting Division, Toyoda Gosei

2010 President, Toyoda Gosei Czech, s.r.o.

2020 Chairman, Toyoda Gosei

2019 Managing Director, Toyoda Gosei Corporate Pension Fund2012 Corporate Officer, Toyoda Gosei

2021 Executive Vice President,
Toyota Boshoku Corp. (current);
Director, Toyoda Gosei (current)

2020 Full-Time Audit & Supervisory Board
Member, Toyoda Gosei (current)

2006 General Manager of Planning Division,
Safety Systems Business Unit, Toyoda Gosei

2016 Director, Managing Officer, Toyoda Gosei; Chiefof Production Headquarters, Toyoda Gosei;
Chief of Plastic Parts Production Center, Toyoda
Gosei; President, Tianjin Toyoda Gosei Co., Ltd.
2017 Adviser to Quality Assurance Headquarters,
Toyoda Gosei
2018 Director, Senior Managing Officer, Toyoda Gosei
2019 Director, Corporate Officer, Toyoda Gosei(current); Chief of Safety & Health Promotion
Division, Environment Division, Toyoda Gosei
2021 Chief of Corporate Strategy Headquarters,
Toyoda Gosei (current); Chief of Carbon
Neutrality and Environment Promotion Division,
Toyoda Gosei (current); Adviser to Automotive
Business Headquarters, Toyoda Gosei (current)

74

2008 Collaborative Researcher, Research Center for Advanced
Science and Technology, The University of Tokyo

2016 Managing Officer, Toyoda Gosei

2019 Director, Corporate Officer; Chief of GeneralIndustry Products Division, Toyoda Gosei

3

2003 Freelance announcer, Horipro Inc.

Director, Corporate Officer

2014 Managing Officer, Toyoda Gosei; Chief ofSales Headquarters, Toyoda Gosei (current)

2021 Adviser to Life Solution Business
Headquarters, Toyoda Gosei (current)

1993 Contract newscaster, Japan Broadcasting Corporation

2021 Chief of Corporate Strategy Headquarters,
Toyoda Gosei; Deputy Chief of Corporate Strategy
Headquarters, Toyoda Gosei (current); Chief ofPurchasing Headquarters, Toyoda Gosei (current)

Executive Vice President

2010 Director, Toyoda Gosei

1987 Contract newscaster, TV Asahi Corporation

2020 Chief of Corporate Planning Division, Toyoda Gosei

Tomonobu Yamada

Mayumi Matsumoto
Outside Director

2019 Director, Corporate Officer, Toyoda Gosei(current); Chief of Audit Division, Toyoda Gosei

2

Kimio Yamaka

7

Sojiro Tsuchiya
Outside Director

1975 Joined Nippondenso Co., Ltd.
2002 Director, Denso Corp.
2004 Managing Officer, Denso Corp.
2007 Senior Managing Director, Denso Corp.

11

Yamato Suzuki

Audit & Supervisory Board Member
1987 Joined Toyota Motor Corp.
2012 Group Leader, Litigation Dept., Legal Division,
Toyota Motor Corp. (Project Senior Manager)
2015 Project General Manager, Corporate
Planning Division, Toyoda Gosei

2013 Advising Executive Engineer, Denso Corp.

2016 Deputy General Manager, Legal Division and Project
General Manager, Corporate Planning Division, Toyoda
Gosei; General Manager, Legal Division, Toyoda Gosei

2015 Director, Toyoda Gosei (current); Adviser,Denso Corp (retired June 2016)2021 Full-Time Audit & Supervisory Board
Member, Toyoda Gosei (current)

2011 Executive Vice President, Denso Corp.

Value Creation Strategy

12Foundation of Value Creation

Financial Report

Chika Kako

Outside Audit & Supervisory Board Member
1989 Joined Toyota Motor Corp.
2015 Chief Engineer, Lexus International ZL,
Toyota Motor Corp.
2018 Managing Officer, Toyota Motor Corp.
2019 Field General Manager, Material Technology
Field, Materials Advanced R&D andEngineering Company, Toyota Motor Corp.

1

2

3

4

5

6

7

8

9

10

11

12

13

14

2020 Senior General Manager, Material Technology
Field, Advanced R&D and Engineering
Company, Toyota Motor Corp. (current); Audit& Supervisory Board Member, Toyoda Gosei(current)

13

Masami Hadama

Outside Audit & Supervisory Board Member
1993 Public Prosecutor
2006 Public Prosecutor, Special Investigation Dept.,
Tokyo District Public Prosecutors Office2007 Registered lawyer, partner at TMI
Associates (current)
2008 Professor, Sophia University Graduate
School of Law
2012 Representative, TMI Partners
2014 Audit & Supervisory Board Member, Toyoda
Gosei (current)

14

Hideomi Miyake

Outside Audit & Supervisory Board Member
1968 Joined Toyoda IronWorks Co., Ltd.
1993 Director, Toyoda IronWorks Co., Ltd.
1999 Managing Director, Toyoda IronWorks Co.,Ltd.
2003 Senior Managing Director, Toyoda
IronWorks Co., Ltd.
2005 President, Toyoda IronWorks Co., Ltd.
2011 Chairman, Toyoda IronWorks Co., Ltd.
2015 Audit & Supervisory Board Member, Toyoda
Gosei (current)
2016 Senior Adviser, Toyoda Iron Works Co., Ltd.
(current)

Corporate Officers

Ryo Onishi
Yoshiyuki Fujita
Junichiro Kako
Hiroki Fukui
Hiroyasu Hirayama
Hiromasa Zaitsu
Yutaka Ogasawara
Tadashi Yamamoto
Mitsuhiro Nawashiro

75

Financial Report
Consolidated 10-Year Financial Summary
FY2011J-GAAP
Operating results

Financial position（Fiscal year ended
March 31, 2016）

Net sales

504,518

599,615

689,477

727,846

781,886

Operating profit

20,41536,706

43,79841,60342,824

Ordinary profit

20,287

36,77745,847

43,792

41,490

Profit before income taxes

19,07636,571

46,101

39,851

36,710

Profit attributable to owners of parent

8,971

21,42926,214

21,155

20,25570,71579,07392,36485,28378,388229,238

244,798

279,281291,246

281,212

183,864

196,163

210,214250,557

241,408

225,555

244,846

262,596

316,926

306,160

454,794

489,644541,877

608,172

587,373

23,30035,97839,06941,84821,073Current liabilities

149,968

157,748

168,136

180,795

162,592

Bonds payable

-

-

-

-

-

34,39723,32931,13842,92944,691

Non-current liabilities

67,45759,751

73,462

88,902

96,937

Total liabilities

217,426

217,500

241,598

269,697259,530

Shareholders’ equity

238,400

255,201

275,840

289,321

301,756(Reference) Interest-bearing debt

57,69859,30770,207

84,77765,765

Cash flows from operating activities

51,11252,45155,44851,283

77,765

Cash and deposits

Total assets
Short-term loans payable＊1Long-term loans payable

Cash flows from investing activities

76（37,027） （40,989） （45,680） （62,432） （56,261）

2,224（6,128）（732）

Return on sales (%)

1.8

3.6

3.8

2.9

2.6

Total asset turnover (times)

1.16

1.27

1.34

1.27

1.31

Equity ratio (%)

48.6

51.7

51.6

51.6

51.7

Return on equity (ROE) (%)

4.1

9.0

9.8

7.1

6.6

Capital investment

37,62339,09743,08564,73354,498Depreciation and amortization

41,964

38,63338,74339,353

44,462R&D expenses

25,93627,27929,17029,57928,409Number of employees at year-end (consolidated)

29,10830,19031,672

34,75435,903

Annual dividends

36.00

44.00

56.00

56.00

56.00

Basic earnings

69.33

165.63202.54163.44156.49Dividend payout ratio (%)

51.93

26.57

27.65

34.26

35.79

Cash flows from financing activities*1

FY2015（Fiscal year ended
March 31, 2015）

Non-current assets

Per share
information (yen)FY2014（Fiscal year ended
March 31, 2014）

Property, plant and equipment

Key performanceindicators

FY2013（Fiscal year ended
March 31, 2013）

Current assets

Cash flows

FY2012（Fiscal year ended
March 31, 2012）

Including current portion of long-term loans payable and redemption of bonds within one year.

（238） （24,736）

Value Creation Strategy

Foundation of Value Creation

Financial Report(Millions of yen; rounded down to the nearest million yen)

FY2016FY2017（Fiscal year ended
March 31, 2017）（Fiscal year ended
March 31, 2018）755,601

806,938

40,675

41,13639,007

43,20031,288IFRSFY2017FY2018FY2019FY2020（Fiscal year ended
March 31, 2018）（Fiscal year ended
March 31, 2019）（Fiscal year ended
March 31, 2020）（Fiscal year ended
March 31, 2021）

Revenue

807,958

840,714

812,937

721,498

Operating profit

35,17936,525

17,88836,47935,775

Profit before tax

35,50737,356

16,10637,301

16,233

21,175

Profit attributable to owners of parent

21,361

23,30911,22635,20597,553

104,309

Cash and cash equivalents

97,991

107,311

127,930

134,003305,273

328,524357,666

382,106

359,565

380,578245,666

259,537

241,581257,728

273,479

290,246

315,425

333,819

Non-current assets

321,819

326,023

349,619394,577

620,699

662,388

Total assets

679,485

708,129

709,185

775,155

31,762

43,722

Borrowings

43,72232,39644,657

42,835

170,574

189,075

Current liabilities

195,392

194,309

180,653

185,535-

10,00057,26154,45864,511

93,089103,399

109,379

110,663

119,403

Non-current liabilities

118,435

133,674

158,256

169,164

281,237

308,479

Total liabilities

313,828

327,983

338,909354,700

311,127

324,890

Equity attributable to owners of parent

89,023

108,181(Reference) Interest-bearing debt

108,233

125,486

148,057

152,215

60,40160,848Cash flows from operating activities

44,00457,46365,247

67,247（82,131） （39,201）

Current assets
Property, plant and equipment

Bonds and borrowings

Cash flows from investing activities（21,832） （55,491） （54,174）（49,949）

14,794

6,541

Cash flows from financing activities

5,966

7,749

12,525

2.1

2.6

Profit attributable to owners of parent ratio (%)

2.6

2.8

1.4

4.9

1.25

1.26

Total asset turnover (times)

1.23

1.21

1.15

0.97

50.7

49.6

Ratio of equity attributable to owners of parent to total assets (%)

51.2

50.0

48.7

50.5

5.2

6.6

Return on equity (ROE) (%)

6.4

6.7

3.2

9.6

55,21864,816

Capital investment

53,411

46,891

41,83546,58940,902

44,037

Depreciation and amortization

32,54532,92735,32335,527

27,164

27,864R&D expenses

27,68430,02531,37431,00036,67938,234

Number of employees at year-end (consolidated)

38,23439,42939,40338,823

53.00

56.00

Annual dividends

56.00

60.00

60.00

60.00

125.42163.60

Basic earnings per share (yen)165.04180.0986.74

271.99

42.26

34.23

Dividend payout ratio (%)

33.93

33.32

69.17

22.1

（13,065）

77

Financial Report

Financial Review

Overview

In FY2020 , the global economy experienced a major
recession in the fiscal first half in the wake of the COVID-19
pandemic that erupted in late FY2019. Although theglobal economy embarked on recovery from mid-2020,
the end of the pandemic is still not in sight. The Japanese
economy was likewise hard-hit by the pandemic , but
Japanese companies seized the opportunity to accelerate
digital transformation (DX) and radically reform workstyles,
most notably by widely adopting teleworking. Additionally,
the Suga Cabinet, formed in September 2020, launched asociety-wide push to reduce CO2 emissions with its 2050
Carbon Neutral Declaration. The automobile industry
was beset by a market downturn from FY2019 throughmid-FY2020. The downturn was compounded by antipandemic lockdowns in Europe, the US and much of therest of the world. The lockdowns forced automakers toidle production plants, resulting in a steep drop in auto
production. Production recovered rapidly from the second
half of FY2020, but unit production remained below its
year-earlier level in both Japan and overseas.
Amid such an environment, the entire TG Group shifted
into emergency mode in the fiscal first half. We focusedon emergency measures to shore up earnings in response
to declining sales. From the fiscal second half, we havebeen placing priority on allocating resources in pursuinga growth strategy revolving around three key areas towardrealization of our mid-term 2025 Business Plan against a
backdrop of drastic change in the external environment.
The first pillar of activity is “Venture into innovation,
new mobility.” In other words, we are pursuing expeditious
commercialization of innovative technologies in new
business domains. First, to accelerate commercialization,
we reorganized our development operations , partly tostrengthen leading-edge development capabilities , inJanuary 2020. Additionally, to realize sustained growth
while navigating major changes in our operating
environment, we invested heavily in startup companies
again in FY2020 through a corporate venture capital fundestablished in FY2018. We are committed to creating
new businesses by cross-pollinating core technologies
cultivated over decades with external expertise and todeveloping new automotive products for CASE vehicles
and MaaS. We have been developing UV-C (deep UV)LEDs , a new technology , as a high-value-added LED
since 2017. UV-C LED irradiation has been found toinactivate coronaviruses. We have started to roll out UV-C
LED products for consumers to help make life more safe
and secure amid the pandemic. Since November 2020,
we have been selling UV-C LED water purification units
that are installed in Wota Corp.’s WOSH portable handwashing stand that recycles used water. In December
2020, we launched a UV-C space disinfector that disinfects

78

airborne germs. Other examples of recent progress in new
businesses include commencement of production of highpressure hydrogen tanks for the Toyota Mirai FCEV (FuelCell Electric Vehicle) in November 2020 at our Inabe Plant
in Mie Prefecture.
The second pillar of activity is “Strategy for growing
market/fields. ” We have designated the Americas andnon-Japan Asia as high-priority geographies and highvalue-added products such as airbags, plastic fuel filler
pipes and radiator grilles as high-priority products. We
are aggressively expanding sales to not only Toyota Motor
Corporation but also other Japanese automakers, mostnotably Honda Motor Co., Ltd., and foreign automakers,
including the Detroit Big Three. Within Asia , one of
our high-priority geographies, we plan to merge local
subsidiaries in India and subsequently operate them asa unified business. We will grow our Asian earnings by
expanding sales and improving operational efficiency inthe growing Indian market.
The third pillar of activity is “Innovative manufacturing at
production sites.” We are upgrading production efficiency
through such means as remote production setup and loss
reduction through utilization of IoT technologies. We arealso digitally transforming and automating manufacturing
processes. Additionally , we have improved operating
efficiency through videoconferencing, teleworking andother such technologies, mainly in staff organizations.
FY2020 revenue decreased 11.2% year on year to¥721.4 billion despite Chinese sales growth driven by
growth in major customers’ auto production in China. The
revenue decline was largely due to pandemic-induced
sales declines across all other geographies in the fiscal
first half, deconsolidation of former German production
subsidiary Toyoda Gosei Meteor GmbH (TGM) in FY2019
and the forex impact of yen appreciation.
Operating profit grew 103.9% year on year to ¥36.4
billion. Its growth was attributable to overhead andlabor cost-cutting, rationalization , including utilizationof government subsidies, and nonrecurrence of a yearearlier loss on liquidation of a business in conjunction
with divestment of our entire TGM equity stake. These
growth drivers vastly outweighed the impact of pandemicinduced sales declines and accrual of a provision for
restructuring of a UK subsidiary. Profit attributable toowners of the parent increased 213.6% year on year to¥35.2 billion , boosted by recognition of deferred tax
assets upon commencement of labor-management
negotiations predicated on discontinuation of a UK
subsidiary’s production.
(Millions of yen)

Consolidated results

FY2020FY2019

Revenue

721,498
36,47935,205

812,937
17,888
11,226

Operating profit
Profit attributable to owners of parent

Value Creation Strategy

Revenue by segment
Japan
Revenue was down 11.6% year on year to ¥358.0 billion,
largely as a result of sales declines due to the pandemic.
Despite the sales declines, Japanese operations earned
segment income of ¥12.0 billion against a year-earlier lossof ¥5.0 billion. The turnaround was largely attributable
to nonrecurrence of a year-earlier loss on liquidation ofa business in conjunction with divestment of our entire
TGM equity stake, in addition to deep cuts in labor andoverhead expenses.
Americas
Revenue decreased 16.5% year on year to ¥203.4 billion
under the weight of sales declines due to the pandemic,
semiconductor shortages and unseasonably cold winterweather in the US. Segment income was down 16.7% at¥13.8 billion as labor cost savings (partly attributable togovernment subsidies) failed to offset the sales declines’
impact.
Asia
Revenue grew 1.2% year on year to ¥190.4 billion, largely
as a result of growth in sales to major customers in China.
The Chinese sales growth outweighed sales declines inThailand, Indonesia and elsewhere. Despite these sales
declines’ impact , segment income increased 36.4% to¥14.4 billion, boosted by Chinese sales growth and grossmargin expansion driven by cost-cutting.
Europe & Africa
Revenue was down 28.2% year on year to ¥26.2 billion,
largely as a result of pandemic-induced sales declines
and TGM ’ s deconsolidation in the third quarter of
FY2019. Despite accrual of a provision for restructuring
a UK subsidiary, segment loss shrank to ¥3.9 billion froma year-earlier ¥4.2 billion , largely by virtue of TGM ’ sdeconsolidation and reduction in labor costs (partly
attributable to government subsidies).
(Millions of yen)

Revenue by segment

FY2020FY2019Japan

358,082
203,421
190,479
26,261

405,116
243,590
188,292
36,567

Americas
Asia
Europe & Africa

Foundation of Value Creation

Financial Report

Financial condition
Analysis of financial position
1. Assets, liabilities, and equity
Assets at fiscal year-end totaled ¥775.1 billion, a ¥65.9
billion year-on-year increase driven mainly by an increasein property, plant and equipment. Liabilities totaled ¥354.7
billion, a ¥15.7 billion year-on-year increase due mainly
to growth in trade and other payables. Equity totaled¥420.4 billion, a ¥50.1 billion year-on-year increase mainly
attributable to growth in retained earnings.
2. Cash flows
Cash and cash equivalents at the end of the fiscal year
under review increased by ¥6.0 billion, from ¥127.9 billion
at the end of the previous fiscal year, to ¥134.0 billion.
Cash flows and related factors during the fiscal year underreview were as follows.
Cash flows from operating activities
Net cash flows provided by operating activities came to¥67.2 billion in inflows, an increase of ¥2.0 billion frominflows recorded in the previous fiscal year. This was mainly
due to a decrease in outflows of ¥25.1 billion for changes
in trade and other payables, ¥4.6 billion for changes inprovisions, and ¥3.7 billion for income taxes paid, despitea decrease in inflows of ¥31.6 billion for changes in tradeand other receivables.
Cash flows from investing activities
Net cash flows used in investing activities came to¥49.9 billion in outflows, a decrease of ¥4.2 billion fromoutflows recorded in the previous fiscal year. This was
mainly due to the absence of ¥11.4 billion in outflows that
occurred in the previous fiscal year for the sale of shares insubsidiaries, which resulted in a decrease in the fiscal year
under review, despite increases of ¥3.2 billion in outflows
for the purchase of property, plant and equipment, andintangible assets, and ¥2.4 billion in outflows for payments
into time deposits.
Cash flows from financing activities
Net cash flows used in financing activities came to ¥13.0
billion in outflows , an increase of ¥25.5 billion fromoutflows recorded in the previous fiscal year. This was
mainly due to a decrease of ¥31.6 billion in proceeds fromshort-term borrowings and a decrease of ¥7.3 billion in
repayments of short-term borrowings, resulting in a net
outflow of ¥24.3 billion in proceeds from and expenditures
for short-term borrowings.
(Millions of yen)

Cash flows
Cash flows from operating activities

FY2020FY201967,24765,247

Cash flows from investing activities（49,949） （54,174）

Cash flows from financing activities（13,065）

12,52579

Financial Report

Consolidated Financial Statement
Consolidated statement of financial position(Millions of yen)

FY2019（as of March 31, 2020）

FY2020（as of March 31, 2021）

AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Inventories
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Other financial assets
Investments accounted for using equity method
Retirement benefit asset
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets

127,930
142,062
8,364
63,925
17,282359,565

134,003
149,249
9,617
72,88814,819380,578

273,479
3,741
32,244
14,252
2,603
14,473
8,824
349,619
709,185

290,246
4,571
41,983
14,844
6,254
21,34915,326
394,577
775,155

119,083
44,657
8,335
1,585
1,881
5,110
180,653

126,784
42,835
4,076
3,439
2,638
5,760
185,535

103,399
13,466
34,615
107
4,158
2,507
158,256
338,909109,379
13,51034,745
4,578
5,015
1,935
169,164
354,700

28,027
26,968（1,220）2,233
289,061
345,070
25,204370,275
709,185

28,04625,626（1,232）
17,759320,883
391,083
29,372
420,455
775,155

Liabilities and equity
Liabilities
Current liabilities
Trade and other payables
Borrowings
Other financial liabilities
Income taxes payable
Provisions
Other current liabilities
Total current liabilities
Non-current liabilities
Bonds and borrowings
Other financial liabilities
Retirement benefit liability
Provisions
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
EquityShare capital
Capital surplus
Treasury shares
Other components of equity
Retained earnings
Total equity attributable to owners of parent
Non-controlling interests
Total equity
Total liabilities and equity

80Value Creation Strategy

Foundation of Value Creation

Financial Report(Millions of yen)

Consolidated statement of profit or loss
Revenue
Cost of sales
Gross profit

FY2019FY20201, 2019 to（AprilMarch 31, 2020）

1, 2020 to（AprilMarch 31, 2021）

812,937

721,498（712,436）（622,832）（61,523）（56,423）（23,417）（8,987）

11,226
2,614
13,84135,2052,870
38,07586.74

271.99271.97

100,501

Selling, general and administrative expenses

98,665

2,328

Other income
Other expenses

3,225

17,8882,843（5,538）913
16,106（2,265）
13,841

Operating profit
Finance income
Finance costs
Share of profit of investments accounted for using equity method
Profit before tax
Income tax expense
ProfitProfit attributable to
Owners of parent
Non-controlling interests
ProfitEarnings per share
Basic earnings per share (yen)Diluted earnings per share (yen)36,4793,035（3,116）903
37,301
773
38,075－(Millions of yen)

Consolidated statement ofcomprehensive income
Profit

FY2019FY20201, 2019 to（AprilMarch 31, 2020）

1, 2020 to（AprilMarch 31, 2021）

13,841

38,075（2,313）
（467）

6,252
3,757

（17）

112

（2,798）

10,121（11,061）

9,702

Other comprehensive income
Items that will not be reclassified to profit or loss
Equity instruments measured at fair value throughother comprehensive income
Remeasurements of defined benefit plans
Share of other comprehensive income of investments
accounted for using equity method
Total of items that will not be reclassified to profit or loss
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Share of other comprehensive income of investments
accounted for using equity method
Total of items that may be reclassified to profit or loss
Other comprehensive income, net of tax
Comprehensive income
Comprehensive income attributable to
Owners of parent
Non-controlling interests
Comprehensive income

130（10,931）（13,729）

111（1,281）

1,393
111

74
9,776
19,89857,97453,857
4,116
57,97481

Financial Report

Consolidated statement of changes in equity

Share
capitalBalance as of April 1, 2019
ProfitOther comprehensive income
Total comprehensive income
Purchase of treasury shares
Dividends
Transfer from other components ofequity to retained earnings
Other
Total transactions with owners
Balance as of March 31, 2020
ProfitOther comprehensive income
Total comprehensive income
Issuance of new shares
Purchase of treasury shares
Dividends
Changes in ownership interest in subsidiaries
Change in scope of consolidation
Transfer from other components ofequity to retained earnings
Other
Total transactions with owners
Balance as of March 31, 2021

Balance as of April 1, 2019
ProfitOther comprehensive income
Total comprehensive income
Purchase of treasury shares
Dividends
Transfer from other components ofequity to retained earnings
Other
Total transactions with owners
Balance as of March 31, 2020
ProfitOther comprehensive income
Total comprehensive income
Issuance of new shares
Purchase of treasury shares
Dividends
Changes in ownership interest in subsidiaries
Change in scope of consolidation
Transfer from other components ofequity to retained earnings
Other
Total transactions with owners
Balance as of March 31, 2021

82

Millions of yen

28,027-

Equity attributable to owners of parent
Other components of equity
Exchange
Equity instruments
CapitalTreasurydifferences
Remeasurements
measured at fairsurplusshareson translation
value through otherof definedcomprehensiveof foreign
benefit plansincomeoperations
Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen

26,968---28,02718--

18
28,046－

26,96818（1,360）-（1,341）
25,626（1,219）（0）-（0）（1,220）
（11）
-

（11）
（1,232）Equity attributable to owners of parent
Other components
Retainedof equityTotalearnings
Total
Millions of yen Millions of yen Millions of yen

14,674（12,508）（12,508）-

285,669
11,226
11,226（7,767）

67

（67）

67
2,233
18,652
18,652531-（7,834）
289,061
35,20535,205（7,120）80（3,657）

3,657-（3,126）
17,759-（3,383）
320,883

354,120
11,226（12,508）（1,281）（0）（7,767）（7,768）345,070
35,20518,65253,85736（11）（7,120）
（829）
80

（823）

15,498（2,333）（2,333）
-

（405）
（405）
-

-

（338）

405

（338）
12,826
6,289
6,289
-

405
3,657
3,657
（0）
-

-

（3,657）

19,116（3,657）（9,769）（9,769）（10,593）
8,705
8,705
531
531
（1,356）

Non-controllinginterests

Total

Millions of yen

Millions of yen

26,024
2,614（1,221）
1,393（2,328）114（2,213）25,204
2,870
1,246
4,116
（1,984）
1,335
373

-

-

-

325
50
29,372（7,844）
391,083

380,145
13,841（13,729）111（0）（10,095）
114（9,981）
370,275
38,07519,89857,97436（11）（9,104）
506
453
325

（7,794）420,455--

Value Creation Strategy

Foundation of Value Creation

Financial Report(Millions of yen)

Consolidated statement of cash flows

FY2019FY20201, 2019 to（AprilMarch 31, 2020）

1, 2020 to（AprilMarch 31, 2021）

Cash flows from operating activities
Profit before tax
Depreciation and amortization
Impairment loss (reversal of impairment loss)
Loss on liquidation of operations
Increase (decrease) in provision
Increase (decrease) in retirement benefit liability
Decrease (increase) in retirement benefit asset
Finance income

16,10637,301-

813

37,49821,615
146

1,118
12

Loss (gain) on sale of fixed assets
Decrease (increase) in inventories
Decrease (increase) in trade and other receivables
Increase (decrease) in trade and other payables
Other
SubtotalInterest received
Dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities

-

4,749

101

933

（2,843）（2,800）

（913）

（903）

（4,943）（6,410）

2,912

Finance costs
Share of loss (profit) of investments accounted for using equity method

37,812398

28,965（18,937）

3,116

668

（2,707）

6,187（4,506）（3,378）

2,141

2,001

76,629975

75,485893（2,802）（3,168）65,247

67,247（11,696）（7,964）

Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment, and intangible assets
Proceeds from sale of property, plant and equipment, and intangible assets
Purchase of investments
Proceeds from sale of investments
 ayments due to sale of shares in subsidiaries
P
resulting in change in scope of consolidation
Other
Net cash used in investing activities（13,677）（16,142）（46,385）（49,595）

（996）

（566）

15,815
826

1,542（11,428）128（54,174）

15,673632
16
33（49,949）

Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Repayments of lease liabilities
Dividends paid
Dividends paid to non-controlling interests
Payments of the abolition of the in-house deposit system
Other
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of period

52,912

21,249（47,078）（39,749）（5,272）（11,417）（7,766）（7,117）

24,227（2,240）（2,328）-71

32,429（2,777）（1,984）（4,193）494

12,525（13,065）

107,311

127,930

127,930

134,003

23,597（2,979）

4,233

1,840

83

Company and Investor Information
Location of
headquarters

1 Haruhinagahata, Kiyosu, Aichi,
452-8564, Japan

Date ofestablishment

June 15, 1949

Capital¥28 billion

Consolidated
subsidiaries

57 (14 in Japan, 43 in other countries)

Equity method
affiliated companies

6 (3 in Japan, 3 in other countries)

Number of
employees

Consolidated: 38,823
Toyoda Gosei Co., Ltd.: 6,526

Distribution for each type of shareholder
Treasurystock at cost
0.43％

Individuals,
others
5.75％

Financial
institutions
25.80％

Foreigncorporations
17.89％

Financial
instruments
business
1.02％
Domestic
business entities
49.11％(As of March 31, 2021)

Common stock

Authorized
200,000,000 shares
Issued129,473,203 shares(Excluding 558,012 shares of treasury stock)

Number of shareholders

9,544

Stock exchange
listings

Tokyo Stock Exchange andNagoya Stock Exchange

Shareholder registryadministrator andspecial accountmanagement institution

Mitsubishi UFJ Trust and Banking
Corporation

Securities code

7282

Major shareholders
Shareholder name

Number of shares held Investment ratio(unit: 1,000 shares)(%)

Toyota Motor Corporation

55,45942.83

The Master Trust Bank ofJapan, Ltd. (Trust Account)

8,793

6.79

Custody Bank of Japan, Ltd.
(Trust Account)

5,246

4.05

Sumitomo Mitsui Banking
Corporation

5,049

3.89

Nippon Life Insurance
Company

1,592

1.23

The Dai-ichi Life Insurance
Company, Ltd.

1,535

1.18

Toyoda Gosei Employee
Stock Ownership Association

1,423

1.09

Custody Bank of Japan, Ltd.
(Trust Account 9)

1,191

0.92

Daiei Sangyo Kaisha, Ltd.

1,041

0.80

State Street Bank West
Client-Treaty 505234

1,035

0.80

Note: Share-holding stakes are calculated after deducting treasury shares.

84

Value Creation Strategy

Foundation of Value Creation

Financial Report

Editorial policy
This report was compiled with the aim of providing
shareholders, investors, and all other stakeholders witha deeper understanding of the Toyoda Gosei Group.
It describes the FY2020 business performance of theGroup and explains the Groupʼs strategy and efforts forcreating medium- and long-term value. Since the 2018
report was issued, the Toyoda Gosei Report has been
compiled as an integrated report. We have tried tomake it straightforward and globally understandable,with reference to the International Integrated Reporting
Framework (International Integrated Reporting Council(IIRC)) for the IR section and the GRI Standards (Global
Reporting Initiative) for the ESG section.

Reference guidelines
・International Integrated Reporting Framework(International Integrated Reporting Council (IIRC))

・GRI Standards (Global Reporting Initiative)
・Environmental Reporting Guidelines, 2018 Edition(Ministry of the Environment, Japan)
・Environmental Accounting Guidelines, 2005 Edition(Ministry of the Environment, Japan)* Environmental data/examples are available on our website.
For CO2 emissions we received third-party verification.
https://www.toyoda-gosei.com/csr/environmental/report1/

Period covered by report

Disclaimer

April 1, 2020 to March 31, 2021
Past efforts and the latest information are given as
needed to promote understanding of disclosed
content.

Careful attention was paid to the content of thisReport, but accuracy and the timing of updates are
not guaranteed and Toyoda Gosei shall bear no
responsibility for trouble, loss, or damage resulting
from updates or errors in the information herein.

Scope

Toyoda Gosei GroupThe scope is outlined individually for some items.
Date of issue

December 2021
Last published in September 2020; issued once a year

Recognition from society
Main indices selected in composite● JPX Nikkei Index 400● MSCI Japan Empowering Women Index (WIN)● S&P/JPX Carbon Efficient Index
Ranking● CDP: Supplier Engagement Rating 2020: A; Water Security Score 2020: A­; Climate Change Score 2020: A­● WWF Japan: Third in transportation equipment sector in “Corporate Anti-Global Warming Measures Ranking”● Securities Analysts Association of Japan: First in automotive/automotive parts/tire division of the 2020 Award for

Excellence in Corporate Disclosure● Securities Analysts Association of Japan: Second in automotive/automotive parts/tire division of the 2021 Award

for Excellence in Corporate Disclosure85

1 Haruhinagahata, Kiyosu, Aichi,
452-8564, Japan
Public Relations Dept., General Administration Division
Phone: +81-52-400-1452 Fax: +81-52-409-7491
https://www.toyoda-gosei.com/
2021.12.1,000 TP Japan