Establishing a Carbon Neutral Society

To establish a carbon-neutral society, Toyota Industries has set the prevention of global warming as our highest priority issue and seeks to reduce emissions during product use and energy usage in the business activities of all sites and to minimize CO₂ emissions throughout the entire value chain.

For Toyota Industries, dealing with global warming is not just a “risk.” It also presents “opportunities” in doing business to both differentiate ourselves by leveraging our technology-based product appeal and conduct eco-conscious production activities. For the ultimate goal of establishing a carbon neutral society as stated in our Global Environment Commitment, we set a goal of establishing a zero CO₂ emissions society on a global basis in our Environmental Vision 2050 and have been making efforts to reduce greenhouse gas (GHG) emissions throughout our entire supply chain. In the area of product development, we have been promoting the development of technologies related to environmentally friendly products in various fields, including electrification. In production activities, promoting thorough energy savings and utilizing renewable energy and hydrogen are the two pillars of our activities. As specific efforts, we will adopt solar and other renewable energy sources and effectively utilize clean energy, such as hydrogen, while thoroughly eliminating wasteful use of energy in production processes and increasing the efficient use of energy.

Endorsement of the TCFD Recommendations

Toyota Industries announced its endorsement of the TCFD* recommendations in December 2019. We see climate-change related risks and opportunities as a crucial management issue and take action with climate change as one of our CSR material issues. In November 2021, we conducted scenario analysis in the materials handling equipment business and disclosed information relating to governance, strategies, risk management, metrics and targets, which are the disclosure items recommended by the TCFD.

* The Task Force on Climate-related Financial Disclosures. The task force was established in 2015 pursuant to a request from the G20 to investigate climate-related disclosure by the Financial Stability Board and how financial institutions should respond.

<Governance>

We established three committees under the Board of Directors: a Management Committee to address the Company's management vision and mid-term management strategy, including climate change; a CSR Committee; and an Environmental Committee to handle specific areas of expertise and discuss important matters related to climate change. The CSR Committee and the Environmental Committee are chaired by the President. The committees deliberate and investigate important matters related to the promotion of environmental management. Such matters include formulation of mid- and long-term targets for key management indicators related to climate change, such as the achievement of CO₂ emissions targets, progress management, and investments related to energy conservation.

Corporate Governance

Environmental Management

<Strategy>

To identify the impacts that climate change risks and opportunities will have on the Company, we conducted scenario analysis in the materials handling equipment business, one of our core businesses. The time frames were set at 2030 and 2050, the years adopted in the medium-term business strategy and long-term environmental vision. The scenarios adopted were the below 2°C scenario, under which the Company will be exposed to transition risks, and the 4°C scenario, under which the Company will it be exposed to physical risks. When performing the analysis, we made reference to the future scenarios relating to representative concentration pathways (RCP 2.6 and 8.5 scenarios) in the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) as well as the Sustainable Development Scenario (SDS) and the Stated Policies Scenario (STEPS) in the World Energy Outlook of the International Energy Agency (IEA).

Image of the Company’s social conditions under each scenario

We identified the business risks and opportunities under the above scenarios that would have a significant impact on our business. We then identified, for example, the risk of sales decreasing due to stricter regulations concerning climate change mitigation and opportunities to increase sales as a result of higher demand for products with outstanding environmental performance, set these as targets for CSR material issues, and incorporated them into our business strategies.

<Risk Management>

Climate-related risks have been expressly defined as one of the Company’s CSR material issues and are managed under company-wide risk management structures. We set clear management metrics and targets in order to mitigate the impacts of climate-related risks, and the CSR Committee, and Environmental Committee, both of which are chaired by the President, perform periodic monitoring.

Corporate Governance

CSR Materiality

<Indicators and Targets>

In order to mitigate risk and expand opportunities posed by climate change, we have set medium- to long-term targets for products and production.

CSR Materiality

Environmental Management

Targets

With regard to Scope 1 and 2 emissions, we will improve production and operating processes, introduce high-efficiency, energy-saving equipment, electrified production processes, and switch fuels to hydrogen and other forms of clean energy. With regard to Scope 3, we will reduce CO₂ emissions by electrifying products, raising their efficiency, and making them lighter, increasing loading efficiency and transport efficiency and logistics, and taking other measures.

Activity Results

Examples