Environmental Report 2017 - Toward the Toyota Environmental Challenge 2050

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Environmental Report 2017 - Toward the Toyota Environmental Challenge 2050
Environmental Report 2017
  Toward the Toyota Environmental Challenge 2050
Environmental Report 2017 - Toward the Toyota Environmental Challenge 2050
Environmental Report 2017 ―Toward the Toyota Environmental Challenge 2050―

Editorial Policy

Toyota Motor Corporation considers environmental issues to be one of its management priorities. Since 1998, we have published an annual
Environmental Report to explain our environmental initiatives. From FY2016, the content of the report is presented in conformance with the six
challenges defined under our long-term initiative, the Toyota Environmental Challenge 2050.
The Environmental Report is a specialized publication excerpted from the Sustainability Data Book. It covers only our environmental initiatives.
For information on Toyota’s CSR management and initiatives, please refer to our Sustainability Data Book 2017.
We have also published the Annual Report, in which Toyota shares with our stakeholders the ways in which Toyota’s business is contributing to
the sustainable development of society and the Earth on a comprehensive basis from a medium- to long-term perspective.

                                                    Annual Report                 http://www.toyota-global.com/investors/ir_library/annual

                  Securities Reports (Japanese text only)
                  http://www.toyota.co.jp/jpn/investors/library/negotiable/
                                                                                                      Sustainability Data Book 2017
                                                                                                       http://www.toyota-global.com/sustainability/report/sr/
                  U.S. SEC Fillings
                  http://www.toyota-global.com/investors/ir_library/sec/

                  Financial Results                                                                     Environmental Report 2017
                  http://www.toyota-global.com/investors/financial_result/                               – Toward the Toyota Environmental Challenge 2050 –
                                                                                                        http://www.toyota-global.com/sustainability/report/er/

                  Corporate Governance Reports
                  http://www.toyota-global.com/investors/ir_library/cg/

   he oyota        ficial      ebsite lists our initiatives not inclu e in the above annual report.
Sustainability                          http://www.toyota-global.com/sustainability/
Environment                             http://www.toyota-global.com/sustainability/environment/
Social Contribution Activities          http://www.toyota-global.com/sustainability/social_contribution/

Period Covered by Report                                                                           Reference Guidelines
The data featured in this report covers the period from April 2016                                    “GRI Sustainability Reporting Guidelines,” Version 4 (G4)
to March 2017. For major ongoing initiatives, data from April 2017                                    Ministry of the Environment of Japan “Environmental Reporting
onward is also included.                                                                              Guidelines” (FY2012 Version)

Scope of Report                                                                                    About the Icons
The report covers Toyota Motor Corporation (TMC)’s initiatives as                                   Third Party Assurance    Denotes data confirmed through Independent
well as the activities of consolidated subsidiaries and affiliates in                              Practitioner’s Assurance
Japan and overseas.

Company Profile

Company Name                            Toyota Motor Corporation                                   Date Founded                         August 28, 1937

President and                                                                                      Capital                              635.4 billion yen (as of March 31, 2017)
                                        Akio Toyoda
Representative Director
                                                                                                   Main Businesses                      Motor Vehicle Production and Sales
Company Address                         1 Toyota-cho, Toyota City,
   ea    ice                            Aichi Prefecture 471-8571, Japan                           No. of Employees
                                        1-4-18 Koraku, Bunkyo-ku,                                                                       364,445 (as of March 31, 2017)
                                                                                                   (consolidated)
    o yo     ea         ice             Tokyo 112-8701, Japan
                                        4-7-1 Meieki, Nakamura-ku, Nagoya City,
     agoya        ice                   Aichi Prefecture 450-8711, Japan

                                                                              1    Environmental Report 2017
Environmental Report 2017 - Toward the Toyota Environmental Challenge 2050
CONTENTS

 Highlights                                                                                                              3

 Message from the President                                                                                              4

 Toyota Environmental Challenge 2050                                                                                     5

 FY2016 Review of the Sixth Toyota Environmental Action Plan                                                             7

 Special Feature: Eco-friendly Vehicles Contribute to the Environment Only When Widespread                              13

Challenge 1 New Vehicle Zero CO2 Emissions Challenge
   Developing Technologies to Achieve the Leading Fuel Efficiency Performance                                           15
   Promoting Development of Next-generation Vehicles Using Electric Power, and Widespread Use According to
   Their Features                                                                                                       17

Challenge 2 Life Cycle Zero CO2 Emissions Challenge
   Promoting Environmental Management in Product Development (Eco-VAS)                                                  18
    ursuing ransport       iciency an    e ucing       2   Emissions in Logistics Activities                            19
    romoting an ntegrate       pproach to e uce            2   Emissions in Road Transport Sectors                      21

Challenge 3 Plant Zero CO2 Emissions Challenge
    e uce     2   Emissions in Production Activities                                                                    22
Toward a Low-carbon Society in 2050                                                                                     25

Challenge 4 Challenge of Minimizing and Optimizing Water Usage
   Reduce Water Consumption in Production Activities                                                                    27
oyota s    ater nvironment hallenge: onnecting with ociety to                      a e ur lants o.   egionally          29

Challenge 5 Challenge of Establishing a Recycling-based Society and Systems
   Reduce Consumption of Dwindling Natural Resources through Use of Renewable Resources and Recycled Materials          31
   Achieve Industry-leading Levels in Easy-to-dismantle Design for Effective Resource Recycling                         32
   Contribute Worldwide through Appropriate End-of-life Vehicle Treatment and Recycling Technology Developed in Japan   33
     pan     riginal ecycling ystems or n -o -li e ehicles                orl wi e                                      33
   Reduce Waste and Use Resources Efficiently in Production Activities                                                  34
   Reduce Packaging and Wrapping Materials and Use Resources Efficiently in Logistics Activities                        35

Challenge 6 Challenge of Establishing a Future Society in Harmony with Nature
   Promote Expansion of Nature Conservation Activities Connecting Communities                                           36
   Boost Grant for Environmental Activities Connecting to the World - Toyota Today for Tomorrow Project                 39
   Boost Contributions to Environmental Education Connecting to the Future – Toyota ESD Project                         41

 Environmental Management                                                                                               43
   Promote Strengthening of Consolidated Environmental Management                                                       45
   Reduce Vehicle Exhaust Emissions to Improve Urban Air Quality in Each Country and Region                             47
    e uce          missions in ro uction ctivities                                                                      47
   Promote Environmental Activities in Cooperation with Business Partners (Suppliers)                                   48
   Promote Environmental Activities in Cooperation with Business Partners (Dealers and Distributors)                    49
   Further Strengthen Global Employee Education and Awareness Activities                                                50
   Enhance Active Disclosure of Environmental Information and Communication                                             50

 Environmental Data                                                                                                     51

 Independent Practitioner’s Assurance Report                                                                            57

                                                                   2   Environmental Report 2017
Environmental Report 2017 - Toward the Toyota Environmental Challenge 2050
Highlights

“A List” top ranking                                                                                 “A List” top ranking
on CDP corporate climate change                                                                      on CDP water management
survey                                                                                               corporate survey for two
In the “CDP Climate Change Report 2016,”                                                             consecutive years
which summarizes the CDP’s*1 survey on                                                               “CDP Water Report 2016” ranked Toyota

corporate response to climate change,                                                                in its highest possible “A List” ranking of

Toyota attained the organization’s highest                                                           corporate water management. Toyota

possible “A List” ranking.                                                                           was the only Japanese automaker to
                                                                                                     make the grade.
*1         :     -base nonprofit organi ation which acts on behal o the worl s
     institutional investors to request information disclosures from leading companies on
     climate change, water and forestry resources. CDP analyzes and assesses survey
     results, sharing the information with institutional investors.
                                                                                                     Toyota won the 63rd

Hybrid technologies in
                                                                                                     Okochi Memorial
new Prius won the Energy                                                                             Production Prize
Conservation Grand Prize at the                                                                      for developing a new car painting line that reduces

FY2016 Minister                                                                                      environmental footprint

of Economy,
Trade and                                                                                                                                          olume
                                                                                                                                                    reduction

Industry Award
The hybrid technologies in the new Prius, Toyota’s first car
                                                                                                         CO emissions
adopting TNGA*2, won the Energy Conservation Grand Prize at
the FY2016 Minister of Economy, Trade and Industry Award, the
                                                                                                         from car painting line reduced by
                                                                                                                                               32%
                                                                                                       rante by the     ochi    emorial oun ation the       ochi   emorial
highest accolade from the sponsor, the Energy Conservation
                                                                                                     Prize, which began in 1954, is one of the most prestigious
Center, Japan, in the product and business model category.
                                                                                                     industrial awards in Japan, as well as the application of production
*2 Toyota New Global Architecture (TNGA): Toyota’s company-wide vehicle
    evelopment ramewor . he goal o            is to significantly improve the basic                   engineering and production technology. This marked the first time
   performance and marketability of Toyota vehicles by reforming and integrally
   redeveloping powertrain components and platforms.                                                 in 16 years that Toyota was awarded the prize.

“Environmental Report 2016” won a                                                                    TMMIN’s environmental initiatives recognized with

Excellence Prize in the Global                                                                       The Best Indonesia Green
Warming Countermeasure                                                                               Awards 2017
Reporting Category at the 20th
Environmental Communication
Awards sponsored by Ministry
of the Environment of Japan and
other organizations
Toyota has been widely acclaimed for
setting highly-motivated environmental                                                               Indonesian production affiliate TMMIN won the Best Indonesia
goals known as the Toyota                                                                            Green Awards 2017 from the sponsor, the La Tofi CSR School, at
Environmental Challenge 2050, and                                                                    its 7th Indonesia Green Awards.
explaining clearly its specific initiatives
and progress in achieving the goals,                        Environmental
                                                            Communication Awards
along with quantitative data.
                                                            Excellence Prize
                                                            Environmental Report
                                                            Category

                                                                                 3   Environmental Report 2017
Environmental Report 2017 - Toward the Toyota Environmental Challenge 2050
Message from the President

“Leaving this beautiful planet, our hometown,
to the next generation”

Firstly, I would like to express my sincere gratitude for your                  The reason behind this announcement is our earnest wish

continued support and understanding.                                            to leave this beautiful planet, our hometown, to the next

                                                                                generation, and to create a future mobility society that is
In recent years, we have seen an increasing number of
                                                                                an environment-friendly, safe, happy, and fun place to be.
terrible disasters, such as floods and heat waves, which is

said to be the result of global warming. Countries around                       In this period of great change, I would like to keep two

the world are now implementing initiatives to balance                           “loves” in mind. Those are a love for cars and a love for

emission an absorption o             2   and other greenhouse                   hometown.

gases in the second half of this century, which will help
                                                                                We kindly request the continued support and
keep temperature increases at the target of less than 2°C.
                                                                                understanding of all our stakeholders.

At Toyota, we have been engaged in our business under

the founding philosophy of contributing to society through

car manufacturing. Because everything that we and our

automobiles o in li e generates            2   emissions, global

warming or      2   emissions, is the root issue to our lives.

Based on this understanding, we announced the Toyota

 nvironmental hallenge               in    ctober         .   ur

goal is not just to contribute to keeping global warming
below      through ero         2   emissions, but to accelerate

initiatives aiming for a positive impact on the Earth and

society.

We have so far focused our efforts on developing eco-                                                                        September 2017

friendly vehicles such as hybrid vehicles, plug-in hybrid                                                                Akio Toyoda
vehicles and fuel cell vehicles. In August 2017, we                                               President, Member of the Board of Directors
                                                                                                                  Toyota Motor Corporation
announced collaboration with Mazda Motor Corporation

to explore joint development of technologies for the basic

structure of competitive electric vehicles.

                                                              4    Environmental Report 2017
Environmental Report 2017 - Toward the Toyota Environmental Challenge 2050
Toyota Environmental Challenge 2050
Toyota has promoted a wide range of initiatives to address increasingly severe global environmental issues, such as extreme weather phenomena
attributed to greenhouse gas emissions, biodiversity depletion due to development, and water shortages caused by population growth.
 he oyota nvironmental hallenge                          was announce in             ctober      as a means o contributing to the reali ation o a sustainable
society. The challenge reaffirms our commitment to reducing the environmental burden of automobiles to as close to zero as possible, while
developing measures to contribute to positive impact on the Earth and its societies.

                     Achieving Zero CO2 Emissions:                                                                 Benefitting the Earth
                     Challenge of Achieving Zero                                                                   Net Positive Impact Challenge

                             New Vehicle Zero CO2 Emissions Challenge                                                     Challenge of Minimizing and Optimizing
                                                                                                                          Water Usage
                              e uce global average           2   emissions from new
                                                                                                                          Minimize water consumption and implement wastewater
                             vehicles by 90% from Toyota’s 2010 global level
                                                                                                                          management based on individual local conditions
Actions                                                                                        Actions

Accelerate widespread use of next-generation vehicles to save energy                           Reduce water consumption in existing production processes as well
and utilize a diverse range of fuels                                                           as introducing technologies that reduce industrial water consumption
  Accelerate global expansion of hybrid vehicles and plug-in hybrid                            through rainwater use and improving water recycling rates
  vehicles                                                                                        Manage wastewater quality by complying with strict standards,
  Accelerate widespread use of fuel cell, electric, and other zero-                               improving the local environment by returning clean water
  emissions*1 vehicles
*1 Zero emissions: Complete elimination of harmful exhaust gas emissions. In recent
   years ero emission vehicles re er to   s an      s which o not emit      2 at all. In the
   environment fiel   ero emission means complete elimination o incinerate waste an
   lan fill waste.

                             Life Cycle Zero CO2 Emissions Challenge                                                      Challenge of Establishing a Recycling-
                                                                                                                          based Society and Systems
                               ompletely eliminate all       2   emissions from the
                                                                                                                          Promote global deployment of End-of-life vehicle
                             entire vehicle life cycle
                                                                                                                          treatment and recycling technologies and systems
Actions                                                                                        Actions                    developed in Japan
  e uce    2 emissions along the entire vehicle life cycle, from materials                     Establish a recycling-based society with four key features: use eco-
production, parts and vehicle manufacturing to driving and disposal                            friendly materials; use auto parts longer; develop recycling technologies;
stage                                                                                          and manufacture vehicles from End-of-life vehicles
    e uce     2 emissions during materials production by developing and                        Two global projects started in 2016:
   expanding use of low-emission materials                                                         Toyota Global 100 Dismantlers*2 Project
   Promote eco-friendly actions through wider use of recycled materials                            Toyota Global Car-to-Car Recycle Project
                                                                                               *2 Dismantlers: Auto-dismantling businesses operators

                             Plant Zero CO2 Emissions Challenge                                                           Challenge of Establishing a Future Society
                                                                                                                          in Harmony with Nature
                              chieve ero        2   emissions at
                             all plants by 2050                                                                           Connect nature conservation activities beyond the
                                                                                                                          Toyota Group and its business partners among
Actions                                                                                        Actions                    communities, with the world, to the future
  t all pro uction plants evelop an a opt low- 2 technologies and                              Enhance Toyota’s long-standing nature conservation activities in the areas
implement daily kaizen, while promoting the use of renewable energy and                        of nature fostering, environmental grants, and environmental education
hydrogen                                                                                       Develop three “connecting” projects started in 2016, sharing our know-
    Reduce energy consumption to one third or less by simplifying and                          how and environmental experiences
    streamlining production processes and taking innovative energy-saving                         Connecting communities: Toyota Green Wave Project
    measures                                                                                      Connecting with the world: Toyota Today for Tomorrow Project
    Adopt renewable energies at plants, including the use of wind power                           Connecting to the future: Toyota ESD*3 Project
    produced on-site at our Tahara Plant by around 2020                                        *3: ESD: Education for Sustainable Development

                                                         5   Environmental Report 2017 Toyota Environmental Challenge 2050
Environmental Report 2017 - Toward the Toyota Environmental Challenge 2050
Toyota Environmental Challenge 2050

Processes to Identify and Implement the Key Challenges (Materiality)

Environmental challenges may involve both business risks and opportunities. It is therefore essential to identify key challenges (materiality) from
both risk and opportunity perspectives when formulating a long-term vision. In order to grasp the potential risks and business opportunities,
Toyota has collected information, analyzing and identifying environmental challenges from the standpoints of their importance for both
stakeholders and our business.
For the implementation phase, we have created the Sixth Toyota Environmental Action Plan to carry out the company-wide specific initiatives to
accomplish the Six Challenges under the Toyota Environmental Challenge 2050.

                             Collect and Analyze Information

        Step
                             We examined a wide range of global trends in collecting and analyzing information. These include scientific

         1                   predictions for the environment in 2050, global frameworks and policy trends, development in emerging countries,
                             major index from external rating agencies, and world leaders’ remarks on environmental issues at G7 Summits.
                             This broad examination provided us with an understanding of macroeconomic trends and important needs of
                             societies, leading us to grasp potential risks and opportunities.

                             Identify Environmental Challenges (Materiality)

        Step
                             We identified environmental challenges (materiality) through analysis of both the external and internal environments.

         2                    ur analysis o the e ternal environment is erive        rom        investor an research organi ation surveys an ma or
                             in ices along with communication with sta ehol ers inclu ing international organi ations           s an consumers
                             while the internal analysis is based on the Guiding Principles at Toyota, the Toyota Earth Charter, and discussions
                             among internal related divisions.

                             Identify Key Challenges (Materiality)

        Step
                             We identified the key environmental challenges (materiality) by considering two aspects, which are the influence

         3                   on stakeholders, and impacts on our potential business risks and opportunities. This helped us prioritize the
                             importance of key challenges.

                             Toyota Environmental Challenge 2050 Approval, Regular Review, and Information Disclosure

        Step
                             High priority challenges for both stakeholders and Toyota were formulated in the Toyota Environmental Challenge

         4                   2050 (Six Challenges) and approved by the Corporate Planning Meeting, which decides our medium- to long-term
                             strategies. Steady implementation of our challenges requires management’s recognition of environmental activities
                             as potential business opportunities and effective investments, in addition to involving Group companies to strengthen
                             collaboration with our business partners. We will review and evaluate our action plans on a regular basis.

The Sixth Toyota Environmental Action Plan: Action Plan to Implement the Six Challenges

The Toyota Environmental Action Plan defines the Toyota Earth Charter in specific corporate activities to ensure steady progress of our goals.
We created the First Toyota Environmental Action Plan in 1993, followed by a review every five years afterwards to implement our plans.
The Sixth Toyota Environmental Action Plan clearly defines the initiatives to be implemented between FY2016 and 2020 in order to meet the Six
Challenges of the Toyota Environmental Challenge 2050.
Toyota will contribute to the sustainable development of society and the Earth in harmony with the global environment through monozukuri
(manufacturing), car manufacturing, providing products and services.

                                            6   Environmental Report 2017 Toyota Environmental Challenge 2050
Environmental Report 2017 - Toward the Toyota Environmental Challenge 2050
FY2016 Review of the Sixth Toyota Environmental Action Plan

Area                            esults     verview

Low Carbon                             Challenge 1:         e are wor ing to re uce global average                      2   emissions from new vehicles through improved
(Climate Change, CO2)                  environmental performance of vehicles and expanded vehicle lineups.
                                       In addition to the steady sales of hybrid vehicles (HVs), the second-generation Prius PHV was launched to
                                       accelerate development and widespread adoption of plug-in hybrid vehicles (PHVs).
                                       For electric vehicles (EV), we have established the development structure for early launch of new models.

                                       Challenge 2: In the area of vehicle development, we subjected eight vehicle models sold in Japan to life
                                       cycle assessment using Eco-VAS*1.                     2   emissions from Prius PHV were reduced by 5 percent compared
                                       with the previous model.
                                       In the area of logistics, we promoted kaizen measures to re uce                              2   emissions.
                                       *1 Eco-VAS (Eco-Vehicle Assessment System): Comprehensive environmental impact assessment system throughout the entire vehicle
                                          development process based on the concept of life cycle assessment (LCA) from vehicle production and use to disposal stages. The aim of
                                          Eco-VAS is to serve as a valuable environmental management tool for chief engineers.

                                       Challenge 3:         e ma e stea y progress re ucing                    2   emissions in production activities by developing
                                       and applying new technologies on a global scale and implementing shop-oriented initiatives in order to
                                       smoothly roll out improvements. s we change an up ate our pro uction lines we are eploying simplifie
                                       and streamlined technologies developed in each shop, such as the new painting line adopted for the Prius
                                       pro uction.        e actively promote our                    activities that support energy-saving activities in our plants.

Recycling                              Challenge 4: For effective water use, we introduced reduction technologies at plants around the world along
(Resources, Water)                     with water saving activities. Since water-related issues and measures differ depending on regional conditions,
                                       we formulated the Toyota Water Environment Policy as a common approach. In accordance with this policy, we
                                       evaluate our impact on the water environment from a range of perspectives, including water volume and quality.
                                         e efine the hallenge prioriti e plants an we are now wor ing to intro uce necessary measures.

                                       Challenge 5: In the area of production, we promoted reductions in the volumes of collected dust from
                                       mol ing process an slu ge. n the area o logistics we intro uce simplifie an returnable*2 packaging
                                       and wrapping materials. These efforts led to a steady reduction in the amount of waste and packaging and
                                       wrapping materials. In the area of resources recycling, we issued guidelines for End-of-life vehicle recycling laws
                                       prior to legislation an create a manual on appropriate treatment o waste oil ui                              an          generate       rom
                                       End-of-life vehicles. In Vietnam and Thailand, we launched establishment of End-of-life vehicle proper treatment
                                       systems. In Japan, we reinforced the capacity for collecting and recycling batteries from End-of-life vehicles, and
                                       made steady progress on remanufacturing HV batteries for stationary use and others.
                                       *2 Returnable: To enable used packaging materials to be returned to original shipping points for reuse.

Harmony with                           Challenge 6: n er the oyota                   reen        ave ro ect            an its a filiates establishe the ll- oyota
                                       Harmony with Nature Working Group and held joint events.
Nature
                                       Under the Toyota Today for Tomorrow Project, we announced our partnerships with IUCN*3 and WWF*4,
                                       and received positive feedback.
                                       In the Toyota ESD Project, the Toyota Shirakawa-Go Eco-Institute reached 190,000 cumulative visitors and
                                       strengthened its educational programs for children for the future.
                                       *3 IUCN (International Union for Conservation of Nature): Founded in 1948 through an international initiative, International Union for Conservation
                                          of Nature is a global nature conservation network comprising nations, government agencies, and non-governmental organizations.
                                       *4 WWF: World Wide Fund for Nature

Management              Environmental Management: In response to occurrence of minor environmental non-compliance issues and
                        complaints, we reinforced our proactive prevention measures, and conducted full implementation and standardization of
                        past measures.
                        Regarding initiatives with suppliers, we have completed the revision of our purchasing guidelines worldwide. In the area
                        of sales and services, we promoted the formulation of regional environmental guidelines.
                        We worked on the improvement of information disclosure and our Environmental Report 2016 received the Excellence
                        Prize in the Global Warming Countermeasure Reporting Category of the 20th Environmental Communication Awards.

                                   7     Environmental Report 2017 FY2016 Review of Sixth Toyota Environmental Action Plan
Environmental Report 2017 - Toward the Toyota Environmental Challenge 2050
FY2016 Review of the Sixth Toyota Environmental Action Plan (details)

                                                                                                                                                                                  : Steady progress toward FY2020 target
                                                                                                                                                                                  : Issues exist, but FY2020 target is expected to be met
                                                                                                                                                                                — : FY2020 target is not expected to be met
                                                                                                                                                                                                                                           Action
                                  Action Items                                        pecific ctions an               oals                                                            FY2016 Results                                        Items
                                                                                                                                                                                                                                         Evaluation

                           (1) New Vehicle Zero CO2 Emissions Challenge
)        2

                                                               Reduction rate in average CO2 emissions from new vehicles globally                     Reduction rate in average CO2 emissions from new vehicles globally
                           1.
ow carbon climate change

                                                               by over 22% from 2010 global level as of 2020                                           apan . . urope an          hina
                           Develop technologies to              Develop high-performance powertrain through TNGA and                                  The FY2016 results were down 11.9% from the FY2010 level
                           achieve the best fuel                introduce it in steps                                                                 We are promoting initiatives toward meeting our 2020 goal by
                           e ficiency per ormance                Achieve further high-performance development of HVs and                               developing low-CO2-emitting engines and transmissions through
                                                                expand their deployment                                                                      ma ing urther improvements in the environmental
                                                                                                                                                      per ormance o      s an e pan ing the pro uct lineup

                                                               HV: Promote higher performance and expand the lineup to                                  :      a ing stea y progress towar meeting the targete number
                           2.                                       broa en consumer a option o         s aim to reach annual                               o units sol by ma ing urther improvements in the
                           Promote development of                   sales of 1.5 million units and cumulative sales of 15 million                           environmental performance and expanding the product
                           next-generation vehicles                 units by 2020                                                                           line-up
                           using electric power and            PHV: Establish PHV as core electric vehicle in support of fuel                                 n          we launche three new hybri mo els in apan
                                                                      iversification an evelop higher-per ormance           s an                                it     - an e us            h    s account or    o the
                           widespread adoption                      promote widespread adoption                                                             Toyota vehicles sold in Japan and 15% globally
                           according to their features         EV: Promote technology development for short-distance
                                                                    purposes in combination with low-carbon tra fic systems                                                            Base
                                                                                                                                                      Region           Item           year         FY2020 goal      FY2016 results
                                                                  : romote activities to urther re uce cost achieve greater
                                                                    compactness an urability an strengthen pro uct appeal                                                              Year       1.5 million units 1.40 million units
                                                                    toward effective use of hydrogen as an important future                            Global     Number of
                                                                    energy source                                                                                  HVs sold
                                                                                                                                                                                     Cumulative 15 million units 9.94 million units

                                                                                                                                                          : n ebruary           oyota launche the secon -generation
                                                                                                                                                            Prius PHV. CO2 emissions uring riving were re uce an
                                                                                                                                                            product performance including EV driving range was
                                                                                                                                                            significantly enhanced
                                                                                                                                                            Positioning PHVs as the pillar of next-generation eco-friendly
                                                                                                                                                            vehicles a ter hybri vehicles oyota is accelerating
                                                                                                                                                            development toward widespread adoption
                                                                                                                                                      EV and FCV: Toyota considers these types of vehicles viable options
                                                                                                                                                            toward achieving emission-free vehicles through the use of
                                                                                                                                                            renewable energy and CO2-free hydrogen. Based on the
                                                                                                                                                            concept of “the right vehicle for the right place at the right
                                                                                                                                                            time we establishe a evelopment structure or early launch
                                                                                                                                                            of EVs as well as FCVs

                           (2) Life Cycle Zero CO2 Emissions Challenge

                           3.                                  Steadily promote environmental target management using vehicle                         n apan we use the co-             to con uct li e cycle assessment o
                           Promote environmental               environmental assessment (Eco-VAS) at the development stage                            eight vehicle models including new and redesigned models
                                                                 Reduce life cycle environmental impact or both new models and                        Life cycle CO2 emissions of all the assessed models were reduced
                           management for product                fully redesigned models compared with previous models                                compared to their reference vehicles. (CO2 emissions from the
                           development (Eco-VAS)                 Disclose assessment results properly to customers on website                         second-generation Prius PHV were 5% lower than those from the
                                                                 and in product catalogues                                                            2012 model)

                           4.                                   evelop artificial photosynthesis technologies rom       2 water an                      chieve a worl -lea ing e ficiency level in synthesi ing ormic aci
                           Study practical use development     solar power                                                                            using only CO2 water an solar power
                           of catalyst technology-based CO2
                           absorption and new material             omplete basic verification tests or creation o primary
                           creation artificial photosynthesis     CO2-absorbing material (material or fuel) using the world’s most
                           etc.)                                 e ficient photosynthetic unit in

                           5.                                  Promoting CO2 reduction activities by further improving transport                      Achieved the goal by promoting kaizen activities
                           Raising transport                   e ficiency a e comprehensive measures to re uce total istance
                                                               travelled and promote further modal shift)
                           e ficiency an re ucing
                           CO2 emissions in logistics          Region                Item                  Base year     Target (FY2020)              Region                  Item                Base year      FY2016 results
                           activities
                                                                Japan         Total emissions               FY1990          25% reduction             Japan          Total emissions               FY1990        36% reduction
                                                                          Emissions per transport volume   FY2006      14% reduction (1% reduction)              Emissions per transport volume   FY2006         17% reduction
                                                               Overseas                         Measure performance                                   Overseas                         Measure performance

                           6.                                  Establish micro-grid (F-grid) and regional optimal energy management                   Promoted all projects as planned
                           Contribute to local                 technology and promote domestic and overseas rollout                                      hira-mura oho u:
                                                                  eri y the tests in hira-mura pro ect in oho u an     otomachi                           Down 24% after the introduction of energy-saving equipment;
                           communities through the                                                                                                        Down 31% after the introduction of environment-friendly equipment
                           expansion of local grid               Plant project in Toyota City
                                                                                                                                                         otomachi lant oyota ity:
                                                                  eploy technologies at other plants in apan an countries in sia                            lanning       verification tests     an
                           energy management                     etc.                                                                                    ther plants in apan sia: ollecte in ormation such as
                           technologies                                                                                                                   intro uction environment laws an regulations

                           7.                                  Contribute to realization of smart mobility society through IT and ITS                 mprove profitability systems an unctional evelopment in
                           Promoting an integrated             technologies                                                                           verification tests use cases in various areas inclu ing oyota ity
                           approach to reduce CO2                  ase on the verification tests results o ne t-generation                               renoble rance       inawa o yo an         ayama ity towar
                                                                 transportation system a:mo in apan an rance which we use                             building sustainable business operation models
                           emissions in roa tra fic               ultra-compact s aim to eploy technologies in other regions                            articularly in oyota ity an     inawa promote utili ation an
                           sectors                               an establish business mo els consi ering the lympic ames                             commerciali ation o the a:mo system in line with local organi ations
                                                                   o yo       an aralympic ames                                                       and local governmental measures

                                                                ctively participate in integrate tra fic ow improvement pro ect or                      n une         implemente      measures to help control the amount o
                                                               establishment of a low-carbon mobility society                                         tra fic an manage its ow in the athorn oa istrict o ang o
                                                                Establish WBCSD/SMP 2.0 Sathorn Model and formulate roadmap                           vali ating the congestion-easing e ects o tra fic management
                                                                 or ang o rollout                                                                       ra fic ow rate: mprove by .        length o ueue at tra fic lights:
                                                                                                                                                        own by     m
                                                                                                                                                       n ebruary        propose a roa map or eploying the measures
                                                                                                                                                      implemente in the athorn oa istrict throughout ang o to
                                                                                                                                                        hailan s ational ra fic anagement oar chaire by the eputy
                                                                                                                                                        rime inister om i an receive approval

                                                               Promote adoption of eco-driving globally                                                oo the ollowing initiatives:
                                                                 Promote eco-driving globally among customers and employees                               ontinue to promote customer e ucation activities such as
                                                                                                                                                        eco-driving advice through dealers and eco-driving support through
                                                                                                                                                        rental & leasing shops
                                                                                                                                                         n ctober                 create an istribute pamphlets to be
                                                                                                                                                        utilized for raising awareness of customers and employees for
                                                                                                                                                        eco-driving to the distributors and business entities under its control.

                                                                    8     Environmental Report 2017 FY2016 Review of Sixth Toyota Environmental Action Plan
Environmental Report 2017 - Toward the Toyota Environmental Challenge 2050
FY2016 Review of the Sixth Toyota Environmental Action Plan (details)

                                                                                                                                                                                                                                  Action
                                 Action Items                                      pecific ctions an             oals                                                     FY2016 Results                                           Items
                                                                                                                                                                                                                                Evaluation

                           (3) Plant Zero CO2 Emissions Challenge
)        2

                             .                           Promote activities to reduce CO2 emissions through the development                   Promote technological development and steadily introduce developed
ow carbon climate change

                           Reduce CO2 emissions          and deployment of low-CO2 production technologies and daily kaizen                   technologies toward achieving the FY2020 goals
                                                              ursue urther pro uctivity an inclu e o fices an other sites in                   Accelerate shop-oriented daily kaizen activities
                           in production activities         rollout of activities
                                                           tili e clean energies in accor ance with the particular con itions
                                                         of each country and region
                                                           Promote introduction s in stages toward 2020
                                                         Manage greenhouse gases (GHG) emissions from sources other
                                                         than energy sources
                                                                Region                  Item             Base year     Target (FY2020)            Region                 Item              Base year      FY2016 results

                                                               Global*1          Emissions per vehicle    FY2001        39% reduction             Global          Emissions per vehicle     FY2001       34% reduction
                                                                                 Emissions per vehicle    FY2001              re uction                           Emissions per vehicle     FY2001       46% reduction
                                                                       TMC                                                                              TMC
                                                                                 Total emissions           1990               re uction                           Total emissions            1990        45% reduction
                                                                      Overseas     Promote regional No. 1 reduction activities                         Overseas   Implement reduction scenarios that match local situations

                                                         *1 TMC + worldwide consolidated subsidiaries (manufacturing)

                                hallenge o     inimi ing an        ptimi ing        ater sage
ater

                           9.                            Promote continual activities to reduce water consumption in                          Promote introduction of water usage reduction technologies
                                                         consideration of water environment in each country and region                        as well as daily water conservation activities
esources

                           Reduce water
                                                           ntro uce innovative initiatives lin e with planning o new plants
                           consumption in                  and production line reforms
                           production activities           Reduce water consumption through daily kaizen and other activities

                                                                  Region                  Item           Base year Target (FY2020)                 Region                  Item            Base year      FY2016 results
ecycling

                                                         TMC (vehicle plants) Emissions per vehicle       FY2001        12% reduction         TMC (vehicle plants) Emissions per vehicle    FY2001        20% reduction
                                                                Overseas            Promote regional No. 1 reduction activities                   Overseas          Implement reduction scenarios that match local situations

                           (5) Challenge of Establishing a Recycling-based Society and Systems

                           10.                           Reduce use of petroleum-derived plastics                                             Petroleum-derived plastics
                           Reduce consumption of          Develop technology for recycled plastics and eco-plastics meeting                    Ran trials to recover plastics from End-of-life vehicles three times a
                                                          quality and performance requirements                                                 year wor ing with several ismantling companies in the hubu
                           dwindling natural              Establish collection systems for used plastics                                       region
                           resources through use of                                                                                            Continued to collect and recycle End-of-life bumpers generated
                           renewable resources and       Promote reuse of rare resources and use of recycled materials                         through repair wor at oyota ealers
                                                           Develop CFRP recycling technologies                                                Rare resources
                           recycled materials              Develop technologies for recycling and reducing use of rare earth                   Set out to develop technologies for recycling CFRP materials
                                                           materials                                                                             ontinue to wor on re ucing the amount o rare earth metals
                                                                                                                                               used in hybrid components

                           11.                           Maintain and improve industry-leading levels for easy-to-dismantle                   Continued to apply easy-to-dismantle designs to newly
                           Achieve industry-leading      design                                                                                 evelope vehicles as well such as the rius      an e us
                           levels in easy-to-dismantle    Integrate reliable easy-to-dismantle designs into all models including              (TNGA-based vehicles)
                           design for effective           ne t-generation vehicles            an smart mobility vehicles
                           resource recycling             Develop and integrate easy-to-dismantle designs into new
                                                          technologies and new materials parts

                           12.                           Deploy proper End-of-life vehicles treatment technology overseas                      oo the ollowing initiatives:
                                                         Japan in accordance with conditions in each country and region                          ssue the ui elines or utomobile ecycling aws prior to
                           Contribute worldwide           Conduct proper End-of-life vehicle treatment in accordance                            legislation
                           through End-of-life vehicle     with local n -o -li e recycling laws while enhance                                     reate the     aste oil ui        proper reatment anual asic
                           treatment and recycling         initiatives in countries and regions where laws are expected to be                      ition on ismantling n -o -li e vehicles assuming countries an
                                                           intro uce base on the gui ance.                                                      regions without su ficient ismantling acilities an e uipment
                           technology developed           Establish 100 of proper ELV treatment facilities                                      Launch to establish the infrastructure necessary for End-of-life
                           in Japan                        (seven sites by 2020*)                                                               vehicles proper treatment in preparation for enactment of End-of-life
                                                              * Target number of sites was reduced from 10 to 7 in consideration of changes     vehicle regulations (Vietnam)
                                                                to the external environment                                                     Launch to establish a system for End-of-life vehicles
                                                                                                                                                proper treatment using e isting in rastructure hailan

                           13.                           Promote advanced development of Toyota’s original recycling                           oo the ollowing initiatives:
                                                         technologies and provide support overseas Japan                                          ince          collecte an recycle a total o           batteries
                           Deploy original End-of-life     Enhance technologies for remanufacturing and recycling                               from ELVs
                           vehicle resources               nic el-metal-hy ri e batteries lowering cost an provi e                               n apan rein orce the capacity or collecting an recycling
                           recycling system overseas       support overseas                                                                     batteries towards globalization (expansion of volume) of
                                                           Establish technologies for remanufacturing and recycling lithium-ion                 battery recycling in the future
                                                           batteries and provide support overseas                                               Continuing to promote remanufacturing (testing and re-assembly)
                                                           Practical use of recycling wiring harnesses in Japan                                 an reuse o batteries inclu ing application o stationary batteries
                                                           (expand scale of operations)                                                         Completed development of smelting-less copper recycling
                                                           Practical use of recycling magnets in Japan (expand                                  technology or .          purity an began to e amine new
                                                           scale of operations)                                                                 processing technologies
                                                           Develop power generation and storage systems using HV units                            ollecte magnets rom n -o -li e hybri vehicle e tracting rare
                                                           Study and set goals for bumper collection and recycling                              earth from magnets and recycling into magnets since FY2012
                                                           technologies in major regions overseas                                                  ollecte a total o    tons o magnets
                                                                                                                                                Continued to examine the application of reuse in stationary storage
                                                                                                                                                battery systems
                                                                                                                                                  arrie out verification tests or recycling n -o -li e bumpers into
                                                                                                                                                plastic pellets at North American Parts Operations (NAPO)

                                                                  9    Environmental Report 2017 FY2016 Review of Sixth Toyota Environmental Action Plan
FY2016 Review of the Sixth Toyota Environmental Action Plan (details)

                                                                                                                                                                                                                 Action
                             Action Items                                 pecific ctions an               oals                                            FY2016 Results                                          Items
                                                                                                                                                                                                               Evaluation

                       (5) Challenge of Establishing a Recycling-based Society and Systems
ater

                       14.                          Promote activities to reduce waste through development and                   Continue to reduce the dust from casting processes and reduce the
                       Reduce waste and use         deployment of waste reduction-oriented production technologies and           volume of sludge by increasing the recycling rate
esources

                                                    daily kaizen
                       resources e ficiently in         romote waste re uction an e ficient use o resources through
                       production activities          improving yields and other source-oriented measures
                                                      Promote activities to reduce resources loss by reducing amounts of
                                                      valuables and waste generated
                                                    Promote activities to reduce metal scrap generation and implement All
ecycling

                                                    -Toyota campaigns to effectively use resources internally

                                                                                                                       Target                                                                     FY2016
                                                          Scope            Region        Item        Base year                         Scope          Region        Item        Base year
                                                                                                                     (FY2020)                                                                     results
                                                                                                         Promote activities to
                                                                                                          reduce metal scrap
                                                                                                            generation and                                                      Promote yield
                                                                                       Volume                                                                     Volume improvement and reliably
                                                              Valuables    Japan*2 generated             implement All-Toyota             Valuables    Japan     generated collect scrap materials
                                                                                                             campaigns to
                                                                                                             effectively use
                                                                                                          resources internally
                                                                                      Waste volume                    35%                                        Waste volume                      39%
                                                     Waste                 Japan       generated     FY2001                       Waste                Japan      generated      FY2001
                                                                                       per vehicle                  reduction                                     per vehicle                    reduction
                                                                                      Waste volume                    63%                                        Waste volume                      59%
                                                              Waste*1         TMC      generated     FY2001                                 Waste        TMC      generated      FY2001
                                                                                       per vehicle                  reduction                                     per vehicle                    reduction
                                                                               ero lan fill waste     3                                                     ero lan fill waste
                                                                           Overseas   No. 1 regionally in reduction promotion                         Overseas       romote various activities such as reuse

                                                         aste at cost incinerate waste lan fill waste
                                                    *2 TMC + worldwide consolidated subsidiaries (manufacturing)
                                                        ero means irect lan fill waste e ual to    or less the amount
                                                       generated in FY1995

                       15.                          Promote kaizen mainly for increasing use of returnable containers and         romote simplifie an returnable pac aging materials apan
                         e uce pac aging an         re ucing amount o pac aging materials                                           ontinue to ma e the same level o improvement as be ore
                                                    (Japan)                                                                         own        rom
                       wrapping materials and         Continue kaizen at conventional level (down 14% from FY2006)               (Overseas)
                       using resources e ficiently   (Overseas)                                                                    Assess improvement practices
                       in logistics activities        Promote awareness of case studies

                       (6) Challenge of Establishing a Future Society in Harmony with Nature
 Harmony with Nature

                       16.                          Toyota Green Wave Project - an initiative to connect with local                stablish the ll- oyota armony with ature or ing roup                at
                       Promote nature               communities through the various activities un erta en by all oyota           group companies and others (23 companies) and commence activities
                                                    companies an their global a filiates to preserve the natural                  (Connecting activities)
                       conservation activity        environment                                                                    Expand harmony-with-nature activities by carrying out a total of 116
                       “Connecting regional           Continue the currently sustainable plant activity and simultaneously          activities per year at all Toyota companies in Japan
                       conservation activities        expand the various activities of all Toyota Group companies to               Hold a joint event twice a year to strengthen group collaboration
                                                      overseas subsi iaries a filiates an local communities an e pan                    ay         ree-planting estival ctober          cosystem
                       with region and                the reach o activities in partnership with sta ehol ers                       conservation)
                       community                                                                                                 (Enhance awareness)
                                                                                                                                      ummari e the reen ave ro ect activities in a boo let istribute
                                                                                                                                    to employees in the or ing roup companies an post on the
                                                                                                                                    company website in June 2016
                                                                                                                                    Enhance information dissemination to recognize biodiversity and
                                                                                                                                    the activities of the individual companies
                                                                                                                                   evelop the lant in armony with ature pro ect
                                                                                                                                      pply the nowle ge obtaine through bio iversity
                                                                                                                                    conservation activities from the new Toyota R&D Center project
                                                                                                                                    to each plant implementing sustainable plant pro ect activities in
                                                                                                                                    order to improve the level of harmony-with-nature activities
                                                                                                                                   Selected a model plant in Japan and commenced activities
                                                                                                                                    in March 2017

                       17.                          Connect environmental and biodiversity conservation activities to            Announced partnerships with an international organization and NGOs
                       Boost nature and             the world through grants for those activities                                   ssue a press release on the            e ist ro ect ay
                                                      Toyota Today for Tomorrow Project                                            Switzerland)
                       biodiversity conservation      Strengthen grants for projects helping to solve environmental issues         Issued a press release on the WWF Living Asian Forest Project
                       grants to connect              as a means to prioriti e the environment fiel among social                      uly         o yo an      agoya
                       environmental activities       contribution activities                                                      Announced Toyota’s initiatives at the Sixth World Conservation
                                                        ollaborate with global organi ations an sta ehol ers to provi e              ongress eptember               . .
                       to the world                   new value and extend the circle of activities globally                       At the thirteenth meeting of the Conference of the Parties to the
                                                                                                                                     onvention on iological iversity                    oyota hel
                                                                                                                                   its first si e event ointly with        ir i e nternational an
                                                                                                                                     onservation nternational ecember               e ico
                                                                                                                                     hrough the above- escribe activities oyota built cooperative
                                                                                                                                   relationships with international organi ations an       s receiving
                                                                                                                                   positive ee bac in particular rom government o ficials e perts
                                                                                                                                   and NGOs.
                                                                                                                                  n a ition to collaborating with the above organi ations continue
                                                                                                                                 the Toyota Environmental Activities Grant Program from FY2000 to
                                                                                                                                 assist NGOs and NPOs

                                                         10   Environmental Report 2017 FY2016 Review of Sixth Toyota Environmental Action Plan
FY2016 Review of the Sixth Toyota Environmental Action Plan (details)

                                                                                                                                                                                                         Action
                            Action Items                             pecific ctions an         oals                                                  FY2016 Results                                       Items
                                                                                                                                                                                                       Evaluation

                      (6) Challenge of Establishing a Future Society in Harmony with Nature
Harmony with Nature

                         .                        Toyota ESD Project - an initiative to strengthen environmental            oo the ollowing initiatives:
                      Boost contribution to       e ucation using regional business bases an company property an           (Global)
                                                  thereby connect environmental conservation activities to the future        Opened a learning center at Toyota Motor Thailand for the general
                      environmental education       Toyota ESD Project - an initiative to strengthen environmental           public
                      “Connecting                   e ucation using regional business bases an company property            (Employee education)
                      environmental activities      and thereby connect environmental conservation activities to the         Same as No.25
                                                    future                                                                 (Forest of Toyota)
                      to the uture                    romote evelopment o e ucational programs ta ing a vantage              Held hands-on nature programs for local elementary school children
                                                    of the special characteristics of company-owned land (The Toyota                chil ren in
                                                      hira awa- o co- nstitute orest o oyota iyagawa orest in                 he cumulative number o visitors reache               as o arch
                                                       ie re ecture etc. an promote human resources evelopment               2017
                                                    to connect to the future                                                 Held two sessions of seminars such as “Living in Satoyama to learn
                                                                                                                             about forest resource utilization and forest management while
                                                                                                                             having fun
                                                                                                                             oyota hira awa- o co- nstitute
                                                                                                                             The number of visitors who stayed at the Institute in FY2016 reached

                                                                                                                              he cumulative number o visitors reache              as o arch
                                                                                                                               trengthene programs or nurturing chil ren or the uture
                                                                                                                             held children’s summer and winter camps (six different camp
                                                                                                                             themes or a total o       camps with         chil ren participating rom
                                                                                                                             all over apan up by        chil ren         rom the previous fiscal year
                                                                                                                           (TOYOTA Mie Miyagawa Mountain Forest)
                                                                                                                             Held a total of four hands-on forest programs for learning forestry
                                                                                                                             and lumber utilization in cooperation with local NPOs and high schools
                                                                                                                           (New Toyota R&D Center)
                                                                                                                             Conducted a survey of wasps jointly with a local junior high school as
                                                                                                                             part of its environmental education program
                                                                                                                             Conducted a survey of harvest mice as part of environmental
                                                                                                                             education for employees

                      19.                         Respond to environmental issues with bio technology                      nitiatives in biomass an agriculture fiel s
                      Promoting environmental      Promote cellulose ethanol development by further improvement of             egan verification tests at overseas cellulosic ethanol pilot plants
                                                   yeast ferment capacity                                                    mprove mar et acceptance o the res            series a manure-
                      contributions through        Contribute natural capital creation by applying to farming biomass        composting an eo ori ing material or the livestoc in ustry
                      biotechnology and            business and agriculture area                                               onclu e cooperative agreements with local governments with the
                      afforestation business                                                                                 goal of expanding the use of Housaku Keikaku (an agricultural IT
                                                   ontribute to   aptation in climate change through urban greening          management tool + site improvement tool) by agricultural corporations
                      automotive peripheral       business and group owned technology                                      Promoted urban greening initiatives
                      technologies an orest          espon to heat islan    issemination o wall greening igh                   romote mar et acceptance o mart reen ar ing                    an
                      conservation activities      e ficient sha ing paint                                                      mart reen all            or special urban greening materials
                                                                                                                               ol by oyota oo    ar en a consoli ate subsi iary

                                                   stablish a mo el to use resources e ectively in orestry in   iyagawa                ie iyagawa ountain orest
                                                  Mie Prefecture                                                              arrie out initiatives to re uce orest maintenance costs or
                                                                                                                            revitalize sustainable forestry
                                                                                                                              tili e harveste lumber in company acilities an relate
                                                  Realize a sustainable technical center in harmony with nature and         commercial facilities
                                                  local communities at the new research and development facility            ew oyota            enter
                                                  currently in the planning stage                                             ontinue stea y environmental conservation activities an surveys
                                                                                                                            at the development site and reported the results to the Environment
                                                                                                                            Monitoring Committee (twice a year)
                                                                                                                               or e with e perts to continue activities to conserve wil bir s
                                                                                                                            which are eclining in number in the i awa istrict
                                                                                                                              onfirme success ul bree ing o owls as well as oriental ollarbir s
                                                                                                                            very ew o which ha success ully bre in the region in the nest
                                                                                                                            boxes that had been installed
                                                                                                                              ublici e the nowle ge obtaine through conservation activities in
                                                                                                                            environmental reports (four times) and academic society meeting
                                                                                                                            (twice)

                      Management
Management

                      20.                         Enhance activities of various environmental committees to improve         oo the ollowing initiatives:
                      Strengthening               environmental management activities and ensure superior                   Regularly held the (annual) All-Toyota Production Environment
                                                  environmental performance (CO2 water etc. across all business              Conference and Liaison Committee (Board of Directors meeting)
                      consolidated                activities in countries and regions around the world                      Held an environmental global award ceremony (to promote kaizen
                      environmental                                                                                          activities at overseas a filiates
                      management                                                                                            Held the Sixth Toyota Global Environment Conference in November
                                                                                                                                    an iscusse oyota nvironmental hallenge             etc. with
                                                                                                                             managers from various regions

                                                                                                                            oo the ollowing initiatives:
                                                  Thoroughly comply with environmental laws and regulations and                el seminars etc. targeting those responsible or environmental
                                                  strengthen proactive prevention measures or environmental ris s            initiatives at oyota roup companies in apan ey point e pansion
                                                  Improve chemical substance management by carefully monitoring              potential ris i entification an countermeasures
                                                  legal trends in each country and region                                      i cases o environmental non-compliance at             in apan
                                                                                                                             and 0 overseas); one complaint (1 in Japan)
                                                                                                                                ll were minor non-compliance issues an complaints an
                                                                                                                             corrective measures and yokoten (sharing) to other departments
                                                                                                                             were completed.

                                                  Improve chemical substance management by carefully monitoring            Deployed chemical substance management globally
                                                  legal trends in each country and region                                   Ensured entry of chemical substance data into the IMDS
                                                                                                                            Monitored processes and evaluated suppliers’ chemical substances
                                                                                                                            management.

                      21.
                                                  Steadily introduce low-emissions vehicles to improve urban air quality    n response to tightening o emissions regulations esigne to help
                      Reduce vehicle exhaust      in each country and region                                               improve the urban environment in various countries an regions
                      emissions to improve        Contribute to air quality improvement through air quality research       we stea ily intro uce vehicles that satisfie these regulations
                      urban air quality in each   in collaboration with research organizations in each country
                      country and region

                                                       11   Environmental Report 2017 FY2016 Review of Sixth Toyota Environmental Action Plan
FY2016 Review of the Sixth Toyota Environmental Action Plan (details)

                                                                                                                                                                                                       Action
                    Action Items                             pecific ctions an           oals                                                    FY2016 Results                                         Items
                                                                                                                                                                                                     Evaluation

              Management
 Management

              22.                          Develop and deploy VOC emissions reduction technologies through             Continue efforts to limit the use of cleaning solvents and to recover
              Reducing VOC emissions       reduced usage of paint and thinners in painting processes                   a larger percentage of solvents
                                             Promote continual reduction in VOC emissions through initiatives          Promoted switching bumper-painting processes to water-borne
              in production activities       lin e to painting e uipment upgra e plans as well as aily kaizen          paints in conjunction with facility remodeling

                                              Scope          Region             Item            Target (FY2020)            Scope          Region              Item            FY2016 results
                                                                        Emissions volume 26g/m or less   2
                                                                                                                                                      Emissions volume
                                                             Japan*1     per area painted (average for all lines)                         Japan        per area painted          21.5g/m2
                                              Vehicle                                                                     Vehicle
                                               body                     Emissions volume 19g/m 2 or less                   body                       Emissions volume
                                              painting           TMC     per area painted (average for all lines)         painting            TMC      per area painted          14.6g/m 2

                                                                         Promote regional No. 1 reduction activities                                           romote coating e ficiency
                                                             Overseas                                                                     Overseas          improvement and other activities
                                              Bumper                    Emissions volume 310g/m 2 or less                 Bumper                      Emissions volume
                                              painting        TMC        per area painted (average for all lines)         painting         TMC         per area painted           193g/m 2
                                                              Japan/                                                                       Japan/
                                           Other painting    Overseas    Promote VOC emissions reduction activities    Other painting     Overseas     romote painting con ition optimi ation etc.

                                           *1 TMC + consolidated subsidiaries in Japan (manufacturing)

              23.                          Reinforce cooperation with suppliers to further promote environmental        oo the ollowing initiatives:
              Promoting environmental      activities globally                                                           Completed revising purchasing guidelines at the global level (at 36
                                            Ensure compliance with each country’s laws and regulations while             a filiates in   countries base on the                 reen urchasing
              activities in cooperation      steadily promoting chemical substance management                              ui elines which were revise in apan in anuary
              with business partners        Pursue cooperative environmental initiatives in a broad range of             Requested suppliers in Japan to conduct self-assessments in
              (suppliers)                    areas inclu ing     2 emissions re uction resource recycling                or er to ensure thorough chemical substances management
                                             water impact re uctions an the establishment o societies in                 and carried out activities to enhance future initiatives.
                                             harmony with nature                                                         Continued to implement the CDP Supply Chain Program (to address
                                                                                                                         climate change and the water environment)
                                                                                                                         Enhanced mutual studies through holding an annual CSR Study
                                                                                                                            eeting etc.

              24.                          Promote environmental management in cooperation with dealers and             oo the ollowing initiatives:
              Promoting environmental      distributors                                                                (Japan)
                                           (Japan)                                                                       Promote environmental initiatives by updating the content of the
              activities in cooperation      Promote environmental initiatives by adhering closely to the Toyota          oyota ealer         hec list an promote        2 emissions re uction
              with business partners           ealer      hec list an promote        2 emissions re uction etc.          etc. by using e ternal environmental certification systems an
              (dealers and distributors)     by improving environmental management                                       improving environmental management
                                           (Overseas)                                                                  (Overseas)
                                             Promote and strengthen environmental initiatives led by each                Currently creating environmental guidelines for the sales and services
                                             regional headquarters and distributor in each country                       fiel s in each region
                                             (CO2 re uction etc.                                                         Promote and strengthen environmental initiatives (CO2 emissions
                                              romote an strengthen ealer nvironmental is u it rogram                     re uction etc.
                                             (DERAP)                                                                      ighty-three istributors an           ealers rom      countries
                                                                                                                         worl wi e participate in the ealer nvironmental is u it
                                                                                                                           rogram            an        o participating ealers satisfie
                                                                                                                         the five re uirements up        rom the previous fiscal year

              25.                          Raise awareness of environmental conservation through global                 oo the ollowing initiatives:
                                           environmental education among employees                                        n collaboration with the oyota nstitute continue to provi e
              Bolster global employee       Systemize environmental education programs conducted in                      environmental education to managers and new employees in
              education and awareness       cooperation with consoli ate a filiates                                       conjunction with the Toyota Global Environment Month (observed
              activities                    Conduct environmental education in accordance with situations                at oyota companies globally which mar e its th year in
                                            in each country and region                                                        itionally planne an implemente various measures starting
                                                                                                                         in January 2016 and continuing throughout the year to ensure that
                                                                                                                         the Toyota Environmental Challenge 2050 is fully understood inside
                                                                                                                         the company and to further improve the environmental awareness
                                                                                                                         of our employees
                                                                                                                         Developed an internal environmental education plan in line with
                                                                                                                         the Sixth Toyota Environmental Action Plan in each country and region

              26.                          Enhance environmental information disclosures                                 oo the ollowing initiatives:
              Enhance active disclosure     Expand business organizations subject to collection of                        After obtaining an approval for its three-year plan for enhancing
                                             environmental in ormation an creation o the system                           environmental in ormation isclosure the ro uction nvironment
              of environmental                urther enhance nvironmental eport contents                                  Committee set out to create a system for acquiring newly disclosed
              information and              Further enhance environmental communications activities in each                in ormation an thir -party verification
              communication                country and region globally                                                    Effectively described the progress status in line with the Toyota
                                                                                                                          Environmental Challenge 2050 and the Sixth Toyota Environmental
                                                                                                                            ction lan in the Environmental Report 2016
                                                                                                                          Received the Excellence Prize in the Global Warming Countermeasure
                                                                                                                          Reporting Category of the 20th Environmental Communication Awards
                                                                                                                          Produced and made public videos effectively spotlighting Toyota
                                                                                                                          employees who are striving to meet the Toyota Environmental
                                                                                                                          Challenge 2050
                                                                                                                          Produce a series of the video through 2020
                                                                                                                       Made it a standard practice to feature the environmental topics of
                                                                                                                       overseas a filiates on the       website
                                                                                                                         lanning to buil a system or sharing in ormation with overseas a filiates
                                                                                                                       in order to achieve further standardization

                                               12    Environmental Report 2017 FY2016 Review of Sixth Toyota Environmental Action Plan
Special Feature

  Eco-friendly Vehicles Contribute to the Environment
  Only When Widespread
  Global cumulative sales of hybrids exceed 10 million units

  Mitigating the environmental effects of automobiles has long been a priority for Toyota. Based on the stance that eco-friendly vehicles
  contribute to the environment only when they are widely used, we have striven to make hybrid vehicles widespread. In August 1997
  Toyota launched the Coaster Hybrid EV in Japan, followed in December of that year by the launch of the Prius, the world’s first mass-
  produced hybrid passenger vehicle. Toyota hybrid vehicles’ global cumulative sales exceeded 10 million units as of January 31, 2017
  with tremendous support from customers around the world.

The environment surrounding eco-friendly vehicles has changed                                                Now that customers around the world opt for hybrid vehicles
dramatically since Toyota launched the first hybrid vehicle 20 years                                         and other highly fuel-efficient vehicles, it made possible for the
ago. The spread of Prius created a new customer standard of                                                  automotive industry as a whole to contribute to addressing global
choosing cars based on their environmental performance. As the                                               environmental issues. Having reached the milestone of selling 10
number of automakers developing and launching new hybrid vehicles                                            million hybrid vehicles, Toyota is encouraged to keep striving to make
increased, so a new market segment of “hybrid vehicles” was                                                  ever-better cars for its customers.
established.

Hybrid Vehicles Continue to Restrain CO2 Emissions

Toyota calculated that by the end of January 2017, the use of                                                    2   emissions by approximately 77 million tons, and has saved
   million oyota s hybri vehicles in lieu o conventional gasoline                                            appro imately          million       o gasoline.
vehicles of similar class and engine performance has reduced

                                                                                                             Trees’ CO2 Absorption Equivalent
CO2 Emissions Reduction Benefit of Toyota Hybrid Vehicles
                                                                                                                               Global CO 2 emissions reduction benefit of
(Toyota Calculations)                                                                                                          approximately 77 million tons

   14            CO2 reduction volume              Cumulative CO2 emissions reduction            80
           Unit: million tons (the right-hand scale applies to the line graph)

   12                                                                                            70

                                                                                                 60
   10        CO2 emissions reduction
             benefit of Toyota hybrid vehicles                                                   50
   8
              Approx.
   6          77 million tons
                                                                                                 40
                                                                                                                                                                               × Approx.        40
                                                                                                 30
   4
                                                                                                 20
                                                                                                                                Forest area equivalent to approximately 40 times
   2                                                                                             10                              the area of Tokyo (approximately 8.75 million ha)

   0                                                                                             0           * A one hectare man-made forest of Japanese cedar (1,000 trees) aged about 40 years
        1997 ’98 ’99 2000 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17                  is estimate to absorb appro imately . tons o        2 annually (reference: Ministry of

                                                                                             (January)         Agriculture of Japan, Forestry and Fisheries website)

                                                                                 13     Environmental Report 2017 Special Feature
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