The TG 2050 Environmental Challenge, our long-term environmental activities plan, was formulated by the Carbon Neutrality and Environmental Committee and announced in February 2016. The Toyoda Gosei Group is reinforcing its activities to achieve a sustainable society.

The Carbon Neutrality and Environmental Committee meets twice a year, with the company president serving as the chairperson. The committee discusses risks and opportunities related to climate change, including effects on our suppliers, certifies our medium-and long-term goals, formulates scenarios to achieve those goals and reflects them in corporate strategy. The results are regularly reported to the Board of Directors and management meetings.

Toyoda Gosei has been making efforts to reduce CO₂ based on its TG 2050 Environmental Challenge. Heeding the intensifying calls for action from society in recent years, higher targets were set that brought forward the timing for the achievement of zero CO₂ emissions from 2050 to 2030, and the introduction of 100% renewable energy by 2030.

To achieve this, we considered the “4℃ scenario^*1” and “1.5℃/2.0℃ scenario^*2” announced by the Intergovernmental Panel on Climate Change (IPCC) and identified the following climate-related risks (physical risks and transition risks) and opportunities for our business activities, for which we are taking action.

• *1 4℃ scenario: The scenario in which the earth’s average temperature rises about 4℃ compared with pre-industrial revolution levels
• *2 1.5℃/2.0℃ scenario: The scenario in which the rise in the earth’s average temperature at the end of the 21st century is kept to 1.5℃/2.0℃compared with pre-industrial revolution levels

At Toyoda Gosei, climate-related risks (physical risks & transition risks) are managed by the Carbon Neutrality and Environmental Committee, Internal Control Committee and Management System (ISO 14001). In the risk management process, risks are identified and evaluated and then ranked according to their frequency and impact. After this, measures such as avoidance, mitigation, transference, or retention are determined, and progress is managed by the committees and others. Regular reports on major risks are made to the Board of Directors.

Toyoda Gosei has been working to reduce CO₂ based on the TG 2050 Environmental Challenge. With recent societal demands, the timing for achieving CO₂ emissions in the company’s own production activities (Scope 1, 2) has been brought forward to 2030 from the original 2050. The target year for adopting 100% renewable energy has also been revised upward to 2030. The development of environmentally-friendly production processes and equipment and other CO₂ reduction activities are being undertaken across the company. We also formulate an “Environmental Action Plan” every five years and undertake activities that incorporate them into our company targets each year.

In February 2016, our Carbon Neutrality and Environmental Committee formulated and announced the TG 2050 Environmental Challenge, our long-term environmental activities plan, and we intensified activities in the Toyoda Gosei Group to achieve a sustainable society.

The company president serves as the chairperson of the Carbon Neutrality and Environmental Committee, which holds twice yearly meetings. At these meetings, risks and opportunities related to the environment are discussed, including impacts on suppliers, and medium- and long-term targets are set. Scenarios for achieving these targets are formulated and reflected in management strategy. The results are regularly reported to the Board of Directors and at management meetings.

Based on the LEAP approach^*8 recommended by the TNFD, Toyoda Gosei assessed the nature-related dependence and impacts in the automotive parts business, and the points of contact with nature in regions where business activities are conducted. We utilized external tools such as the UNEP FI^*9 Encore and the IUCN^*10 IBAT for scientific and objective assessments.

In assessing the upper regions of our supply chain, assessments targeted synthetic rubber and plastics. We purchase large volumes of these materials, which are thought to have relatively large impacts on nature. We also selected the leather that is used in steering wheels, one of our major products, as a priority assessment target because of the high risk^*11 of biodiversity loss in regions where leather is procured as a raw material.

Then, following the TNFD’s scenario analysis guidelines, we analyzed scenarios for nature-related risks and opportunities in 2030. A physical risk was assumed to be a scenario where degradation of the ecosystem progresses, and a transition risk to be a scenario where the market and government policies toward nature are strengthened. The nature-related risks and opportunities in our business activities were organized.

Toyoda Gosei manages nature risks (physical risks and transition risks) with its Carbon Neutrality and Environmental Committee, Internal Control Committee, and management system (ISO 14001). The risk management process starts with identification and assessment of risks, and prioritization of them from frequency of occurrence and impact. Then, these committees decide measures including avoidance, reduction, transference, and possession, and manage their progress. Reports on major risks are given regularly to the Board of Directors.

Based on the core disclosure metrics recommended by the TNFD, Toyoda Gosei sets nature-related indicators and targets, and conducts activities. These activities are classified as activities to control and avoid risks in business, activities to create opportunities, and ongoing activities to protect the natural environment. Policies are advanced for each of them.

■Development of vegan leather steering wheel