About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

DataMateriality (Key Issues)With “Boundless Creativity and Social Contribution” as our company creed, we aim to contribute to therealization of a sustainable society through our growth by achieving both social value and economic value.
In order to realize the vision for the company and the delivered value set forth in the 2030 Business Plan, wehave designated and worked on several key areas as “materiality” where we can make a particular contribution
from among various social issues, such as social forecasts and SDGs, taking into consideration the changing
business environment.

Social Issues/Megatrends

Business Operations

Providing both innovations in
automotive technology (BEVs, CASE)
and a safe and secure mobility society
Changes in company competitivenesswith accelerating digital/ITtransformation

Opportunities and Risks

Expansion of CASE (BEV/FCEV)
marketExpansion of MaaS market
Market changes
Accelerate adoption ofdigitalization, IoT, and DXIncreasingly serious problems in the
global environment
Business transformation due to climatechange and resource shortages

Management BaseDemographic changes (decliningbirthrate and aging population)

Environment and resources

Human capitalChanging values and diversifying work
stylesSupply chain

BCP risks
Rising geopolitical risks

Governance

BEV expansion to bring new products to market

Risk

Opportunity

Support for BEV leading markets and BEV leading OEMs

Risk

Opportunity

Expansion of FCEV market

Opportunity

Advancement of technology for preventing traffic accidents

Opportunity

Reduction in fuel system components

Risk

Change in the way that users value and relate to their cars

Risk

Opportunity

Market changes due to infrastructure improvements and laws and regulations inemerging countries

Opportunity

Increased production efficiency (automation and reduced workforce)

Opportunity

Market expansion in new fields through green technology*

Risk

Opportunity

Change in competitiveness due to adoption of carbon pricing

Risk

Opportunity

Full utilization of rubber and plastic materials and development of materials (lighterweight, material replacement, higher durability, and new materials)

Risk

Opportunity

Large-scale disasters due to extreme weather conditions

Risk

Opportunity

Reduction of energy costs due to implementation of energy-saving initiatives

Opportunity

D&I for diversification of thinking, skills, and experience

Opportunity

Human resource portfolios for efficient use of human capital (including re-skilling)

Opportunity

Rising global labor costs

Risk

Production impact, supply chain disruptions, and human casualties due to geopoliticalrisks, infectious diseases and disasters

Risk

Rising raw material costs, material shortages

Risk

Serious quality issues and recalls

Risk

Cyberattacks and scam emails

Risk

Leakage of confidential information

Risk

Antitrust law violations (bid rigging and cartels)

Risk

Opportunity* Green technology: T echnologies and products that solve or mitigate environmental problems (e.g., technologies and products that contribute to more lightweight designs
and decarbonization)

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19About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Materiality (Key Issues)
Materiality Identification Processof
1 Selection
materiality candidates

and analysis
2 Evaluationof materiality candidates

of appropri3 Assessment
ateness by managementof
4 Identificationmateriality

5 Review

Selection of issues to beconsidered by sustainability
implementation memberswith reference to social
issues, market and socialtrends, GRI standards, etc.

Analysis and evaluation
based on our materiality
and the materiality of ourstakeholders

Interviews with outside
directors and others onidentified material issues,
including identification
processes, to evaluate
the appropriateness ofmateriality

Selection of priority topics
to be addressed throughdeliberations by theManagement Council

Review of initiatives
linked to corporate
policies, confirmation at
Sustainability Council,
and periodic review ofmateriality

Key Sustainability Issues(Materiality)

Responding to the transformationof the automobiles
Reducing traffic fatalities forrealizing a safe, secure, andcomfortable mobility society

Creating new businesses
utilizing core technologies

Main Initiatives(Social Issues/Opportunities and Risks to be Addressed)
Development of new products for BEVs
BEV-related share of revenue: 40% BEV production volume/Car production volume

P.25* Based on S&P Global Information

Development and sales expansion of airbag products
to deliver safety and comfort to all P.27
P.48

Airbag production volume: +1.5 fold increase (compared to FY2022)

Deployment of corporate venture capital (CVC)Based on cash allocationP.37
P.38(Allocating funds mainly for R&D, human resources, and strategic
investments with the aim of expanding fields that contribute to safety,

Creating a recycling-oriented
society through waste
reduction and water risk
reduction

Living together with local
communities
Use of diverse humanresources and respect forhuman rights

Corporate governance as acompany with integrity
Ensuring compliance

20

Achieving a safer, more secure, andmore comfortable mobility society

Expanding new businesses by leveraging experience innew business development P.34
Realization of smart factories (double productivity)Creating a decarbonizedsociety by reducing CO2emissions and greenhousegas emissions

Relevant SDGs
Most Important Areas

Target Setting FormulaP.26

Expanding sales to BEV leading markets and OEMs

KPIs and Medium- to Long-term Targets (FY2030)

Solving social issues by creatinginnovations

comfort, and decarbonization)
Creating environmentally-friendly businesses byleveraging our knowledge in the rubber and plastics
P.33
fields P.29
Globally integrated operations to achieve carbon
neutrality P.54
Contribution to a recycling-oriented society(Car to Car recycling) P.58

Scopes 1 and 2: Carbon neutralWaste volume (total) [non-consolidated]: −50% (compared to FY2012)
Scope 3: −27.5% (compared to FY2019)Waste volume (unit) [overseas]: −55% (compared to FY2015)
Renewable energy adoption rate: 100%

Initiatives rooted in local communities(local self-reliant management, Center of Excellence)Diversity & inclusion P.62
Safety and health management P.68
Strengthening quality and supply chain to support
sustainability management P.65
Responding to geopolitical and economic risks P.82

Percentage of employees receiving training on human rights: 100%
Employee engagement affirmation rate [non-consolidated]: 75%
Ratio of local executives (vice presidents and above) at overseas locations:
60% or more
Number (ratio) of female managers [non-consolidated]: 100 (8.8%)
Ratio of mid-career hires in management positions [non-consolidated]:
30% or more
Number of serious accidents: 0
Percentage of suppliers implementing sustainability activities: 100%

Strengthening of BCP resilienceEnhancing of internal controls

P.84

P.70

P.42

Number of major legal violations: 0
Major cyber security incidents: 0

Realization of a decarbonized,
recycling-oriented society

Sustainable growth throughdiverse workforce

Fair and transparent corporate
governance system

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