Response to the TCFD

Based on its Corporate Philosophy of “Promote corporate activities that help protect the global environment”, the Toyota Boshoku group makes collective efforts to contribute to preserving the global environment in order to realize a sustainable society.
We formulated the 2050 Environmental Vision in 2016 and identified our Materiality (important issue to be resolved through our business operations) of “Together with our business partners, we will realize MONOZUKURI innovations that minimize environmental stress” in 2020 in order to promote environmental initiatives. And we revised a part of the 2050 Environmental Vision in 2023 based on social trends.
In April 2020, we endorsed the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). By extensively analyzing the impact of climate change on our business and the risks and opportunities that result from it based on scenarios, we are reviewing the applicable costs and reflecting them in our management strategy. Based on the results of scenario analysis, we will continue to strengthen our response to risks and opportunities and work on further information disclosure.

Governance

Concrete measures related to climate change and other environmental issues are decided upon by the Board of Directors, and implemented by such bodies as the Corporate Strategy Meeting, the Corporate Planning Meeting, and the Corporate Management Meeting.
Policies and plans to respond to environmental issues identified by the Board of Directors, the Corporate Strategy Meeting, and the Corporate Planning Meeting are shared at the Environmental Promotion Meeting, which is held three times annually, and is connected with implementation planning and progress management for environmental issues affecting the Toyota Boshoku group. Additionally, KPI are created based on implementation planning, and these are reported and subjected to management review at monthly Corporate Management Meetings.
Matters reported and discussed upon at the Environmental Promotion Meeting are reported to the Board of Directors as needed, whose directions and supervision allow such matters to be incorporated into group strategy.

Our corporate governance system

Strategy

Scenario Analysis on Climate-related Risks and Opportunities

(1) Scenario Analysis Results

We have identified short-term, medium-term, and long-term risks and opportunities based on the 1.5 to 2°C scenario*1 developed by the International Energy Agency (IEA), in which the impact of transition risks surfaces, and the 4°C scenario*2 developed by the Intergovernmental Panel on Climate Change (IPCC), in which the impact of physical risks surfaces. The table below lists the risks and opportunities that are assessed as particularly high.

  • 1.5°C scenario: NZE (IEA World Energy Outlook 2021); 2°C scenario: SDS (IEA World Energy Outlook 2021)
  • 4°C scenario: RCP 8.5 (IPCC 5th Assessment Report)
  Causes Risks / Opportunities Assessment Actions Response cost
(FY2025)
Transition risks and opportunities (1.5 to 2°C) Enhancement of climate change policies, including carbon pricing
  • Increase in procurement costs by introducing carbon prices, etc.
Risk
Risk
  • Survey of suppliers (CO2 emissions, efforts to reduce CO2 emissions, etc.) Promotion of activities for setting CO2 emission reduction targets
  • Support for suppliers (Sharing of energy saving cases, joint development of new materials and new methods, joint purchase of renewable energy, etc.)
  • Increase in operating costs due to the direct impact of the introduction of carbon prices or its indirect impact on energy prices
Risk
Risk
  • Introduction of highly efficient equipment to promote further energy saving and promotion of the development of new methods
  • Promotion of the introduction of renewable energy
  • Optimization of logistics (Reduction of CO2 emissions associated with transportation through the promotion of local production for local consumption)
2.6 billion yen
  • Increase in cost due to investment in energy saving and renewable energy for decarbonization
Risk
Risk
  • Optimization of investment by introducing ICP (Internal Carbon Pricing)
Enhancement of efforts to promote vehicle electrification
  • Expansion of business in new fields through collaboration between Toyota group companies
Opportunity
Opportunity
  • Expansion of new business domains and diversification of provided value
1.4 billion yen
  • Increase in demand for electrified products
Opportunity
Opportunity
  • Further planning and development of electrified products
4.2 billion yen
Change in evaluation by customers and the consumer value standard (raised environmental awareness, etc.)
  • Decrease in sales due to lower demand for products with insufficent low-carbon technology
Risk
Risk
  • Planning and development of products to further reduce carbon emissions
  • Planning and development of plant-derived products and lightweight products
  • Improvement of recyclability and promotion of simple disassembly design
2.1 billion yen
  • Increase in sales by developing low-carbon products
  • Expansion of demand for plant-derived products and lightweight products
  • Enhancement of competitiveness by developing technology to improve recyclability
Opportunity
Opportunity
Physical risks and opportunities (4°C) Worsening of extreme weather, including heavy rain and subsequent flooding
  • Decrease in sales due to the impact of supply chain disruption on production
Risk
Risk
  • Risk management using a system to manage the range of supplier impact
  • Selection of logistics routes that minimize the impact of disaster
  • Decrease in sales due to factory shutdown
Risk
Risk
  • Enhancement of the BCP system (Creation of manuals and establishment of an information collection/sharing system)
0.5 billion yen

(2)Priority Action

Challenge to Carbon Neutrality through a Circular Economy for Product Materials

The Toyota Boshoku group promotes the reduction of CO2 emissions in the product life cycle. In addition to reducing the weight of products, using plant-derived materials (biomass), and developing technologies for electrified products, we will improve the recyclability of products. We will also work to reduce CO2 emissions from the materials used in our products toward carbon neutrality.

(1) Measures to reduce CO2 emissions from product materials

Measures to reduce CO2 emissions from product materials

(2) Initiatives for a circular economy

Initiatives for a circular economy

Challenge to carbon neutrality by 2050 by recycling product materials and using biomass

  • Reusing products as raw materials to produce new products
  • Chemical decomposition of used products and reuse as raw materials for new products
  • A renewable resource of biological origin

Risk Management

The Carbon Neutral Environmental Center monitors climate change-related changes in the external or internal environment on a company-wide basis, and identifies risks that could negatively impact our business.
Climate-related risks are deliberated upon at the Environmental Promotion Meeting, and officially identified at the Risk Management Promotion Meeting, with participation from both the Chairman and the President, and with the Chief Human Resource Officer(CHRO), head of the Human Resources & General Administration Segment acting as chairperson.
The Risk Management Promotion Meeting receives reports from various departments, and discusses climate change-influenced risks of all kinds, such as typhoons and flooding. Judgments are made concerning the relative severity of risks, with consideration made to the relationship between various risks. Finally, climate-related risks which affect the entire company are identified.
Identified risks are reported to the Board of Directors, under the management of the Chief Risk Officer (CRO).

Our risk management system

Metrics and Targets

Medium- and long-term targets

Monitoring metrics

  • Scope 1, Scope 2 CO2 emissions and energy usage (Toyota Boshoku group)
  • Scope 3 CO2 emissions (Toyota Boshoku group)

FY2023 results