Toyota Motor Corp

###### Governance

Toyota is committed to enhancing corporate governance to ensure sustainable growth and the stable long-term growth of corporate value.

At Toyota, the Board of Directors is the ultimate decision-making and oversight body for addressing climate-related issues. The Board deliberates and oversees related strategy, major action plans, and business plans, and important climate-related matters are included in the Board's agenda. Furthermore, at Toyota, Outside Audit & Supervisory Board Members also take part in Board of Directors meetings. Final decisions are rendered by the ten Members of the Board of Directors, but they incorporate the views of the Outside Audit & Supervisory Board Members, who possess diverse backgrounds. In recent years, Outside Members of the Board of Directors and Outside Audit & Supervisory Board Members speak on almost all proposals.

Also, we often hold study meetings in which a group of seven Outside Members of the Board of Directors and Outside Audit & Supervisory Board Members discuss medium- and long-term issues.

We also set periodic opportunities, besides the Board of Directors meetings, for two-way communication between Outside Members of the Board of Directors and Outside Audit & Supervisory Board Members and the operational execution side on important management issues and medium- to long term issues, including carbon neutrality.

In addition, we deliberate on and monitor management and corporate activities based on views of various stakeholders through a wide variety of bodies for deliberations, including the Labor-Management Council and the Joint Labor-Management Round Table Conference.

We have been continuing our efforts to respond swiftly to the rapidly changing external environment, and we will further press forward with our innovative changes. [...] ###### Review of Toyota's Industry Associations

###### Six Stances with Respect to Industry Associations

In conducting activities for fostering understanding of public policies aligned with the Paris Agreement, Toyota takes the following stances regarding the realization of carbon neutrality.

We have used these as evaluation items in studying the positions of industry organizations.

**1 Paris Agreement** We support the Paris Agreement and ensure that our collective action objectives are consistent with it.

We respect the latest scientific findings of organizations such as the IPCC. We quote objective scientific research
**2 Climate change science**

and make reference to the impact of human activity on climate change.

We have defined emissions reduction targets that are consistent with the Paris Agreement and announced our
**3 Emissions reduction targets**

backing of support policies.

We have declared our understanding of the importance of improving energy efficiency and we support related
**4 Energy efficiency improvement**

policies (energy-saving, fuel efficiency improvement, etc.).

We make reference to and provide recommendations regarding the development and verification of new
**5 Technology**

technologies that contribute to carbon neutrality, recommended by organizations such as the IPCC.

We support carbon pricing (a fair, structured, effective, and feasible system that takes into account the conditions

**6 Carbon pricing**

in each region, encourages technological development and innovation, and includes implicit carbon pricing), which

uses market mechanisms to efficiently promote emissions reductions. [...] ###### Strategy when an association is not aligned with the Paris Agreement

In cases where an association is conducting activities that are inconsistent with the goals of the Paris Agreement, we will encourage the association to review its stance through constructive dialogue by following the steps indicated below.

⿎We will share Toyota's stance with respect to climate change.

⿎We will clarify the differences between Toyota's stance with respect to climate change and that of the association.

⿎We will engage in an exchange of opinions regarding climate policies.

⿎Through constructive dialogue, we will encourage the association to review its stance.

We will reexamine the industry association membership in an appropriate manner each year.

Review of Toyota's Industry Associations [...] We selected 4 industry associations (Japan Automobile Manufacturers Association (JAMA), Japan Business Federation(Keidanren), Alliance for Automotive Innovation (Auto Innovators), and European Automobile Manufacturers' Association (ACEA)), and reviewed their public policy engagement activities to check whether they are aligned with Toyota's positions. [...] Methodology We reviewed the industry association's publicly stated policy and advocacy positions for the year 2021 against our climate related policy positions provided on page 5 to 7. When an association has not stated a position on certain climate related policy positions, we did not automatically consider them a misalignment. [...] Summary of Results Toyota has played a large role in the making the 4 association's climate related policy positions and have found them to be basically aligned with our positions. Some associations have not stated a stance on certain policies. [...] Strategy when an association is not aligned with our positions If an association's advocacy does not align with our positions, we will increase our engagement with them to change their stance.

### Toyota's Perspective on Public Policy

Toyota's mission, as defined by the Toyota Philosophy, is \"Producing Happiness for All\", and the vision is \"Creating Mobility for All\". We have always been committed to contribute to the overall good, so our approach to business is in line with the vision of the 17 Sustainable Development Goals (SDGs). Our perspective on public policy flows from our desire to do good for society.

The role of government and public policy is critical to helping reduce the effects of climate change and promote expansion of advanced technology vehicles around the world. Toyota seeks to ensure that public policy, societal needs, technology development, and consumer needs are aligned to the greatest extent possible.

As a member of society in the countries and regions in which we operate, we believe it's a privilege and a responsibility to contribute to public policy by sharing our technical and consumer knowledge, our vision and our views. Toyota does this transparently and always in full accordance with the spirit and letter of the law. We have positive relationships with governments and their administrative agencies, regulators, mainstream major political parties, non-profit organizations, local communities, customers, dealers, suppliers, and employees. We show respect to all, consistent with a core company belief and therefore hope to become a company that is respected and welcomed by all.

Contributing to society and public policy means that Toyota places a high priority on participating and influencing activities through industry and other associations. For example, many Toyota executives and employees are currently participating in various associations across the globe and are involved in contributing to their public policy advocacy.

Review of Toyota's Industry Associations [...] This year, we increased the number of associations reviewed, and we also reviewed each organization's activities with the goals of the Paris Agreement, rather than Toyota's stance. Specifically, we reviewed whether the major advocacies and activities made by each organization in 2022 were consistent with the scientific findings of the IPCC relating to the Paris Agreement. [...] Methodology [...] We reviewed the major advocacies and activities posted on each organization's website, etc., with the contents of the IPCC's Working Group III, Sixth Assessment Report. Specifically, we reviewed the organizations' stances on carbon neutrality, renewable energy, energy transition and zero carbon technologies, carbon pricing, and strengthening GHG regulations. [...] Strategy when an association is not aligned with the Paris Agreement [...] In cases where an association is conducting activities that are inconsistent with the goals of the Paris Agreement, we will clarify the misalignment and encourage the association to review its stance through constructive dialogues.

In the course of our global business activities, Toyota will promote electrification strategies that contribute to reducing CO2 emissions throughout the entire lifecycle of a vehicle, while consulting with governments on how to improve the environment for the promotion of electrification. In addition, we will review public policy engagement activities through our company and industry associations to confirm they are consistent with the long-term goals of the Paris Agreement, and disclose our assessment and actions by the end of this year. We will also strive to provide more information so that our stakeholders can understand our effort to achieve carbon neutrality.

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]At Toyota, the advocacy policy on climate change, including the basic approach and stance, is decided and announced publicly by the officers and executives in charge in a way that is consistent with the corporate climate strategy established for realization of the Paris Agreement goals and 2050 carbon neutrality.
Individual advocacy activities are subject to a prior review by the officer or the department in charge of advocacy for its consistency with the company advocacy policy. Major activities are publicly available in the disclosure document of the policy.
Advocacy activities carried out through national trade associations (JAMA and Keidanren, in the case of Japan) are checked in advance for their consistency with the Toyota climate change strategy, in accordance with the procedures described below. For example, the actual process of deliberation at the JAMA Environmental Technology & Policy Committee is as follows:
<Process implemented>
Toyota's senior executive is a member of the JAMA Environmental Technology & Policy Committee, and a Toyota representative belonging to the department in charge takes part in the "Environmental Policy Committee† which advises the senior committee.
1) The Toyota representative who is on the Environmental Policy Committee will discuss the subject of the deliberation with the relevant departments within the company (External & Public Affairs Group, Environmental Engineering Division, etc.).
2) By speaking up at the Environmental Policy Committee, the Toyota representative ensures that the JAMA proposal will be aligned with Toyota's strategy. Matters deemed to require further discussion will be submitted to the Environmental Technology & Policy Committee.
3) The Toyota senior executive sitting on the Environmental Technology & Policy Committee discusses the subject with the representative and forms Toyota's position.
4) The senior executive checks up on the consistency with Toyota's strategy and, based on this, voices opinions at the Environmental Technology & Policy Committee meeting to ensure consistency.

Does your organization have a public commitment or position statement to conduct your engagement activities in line with the goals of the Paris Agreement?[…]Yes