TOYOTA MOTOR CORPORATION | Climate lobbying at Toyota

Status
15.34% votes in favour
AGM date
Resolution details
Company ticker
7203.T
Lead filer
AkademikerPension, Storebrand Asset Management, APG Asset Management
Resolution ask
Report on or disclose
ESG theme
  • Environment
ESG sub-theme
  • Lobbying / political engagement
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
Japan
Supporting materials
Resolved clause
It is proposed that the following provision be added to the Articles of Incorporation. The Company shall conduct a comprehensive, annual review and issue a report (at reasonable cost, omitting proprietary information) describing if, and how, the Company’s climate-related lobbying activities (direct and through industry associations), including public statements, serve to reduce risks for the Company from climate change and how they align with the goals of the Paris Agreement and the Company’s goal of carbon neutrality by 2050. The report should disclose any instances of misalignment with those goals, along with the planned actions to address these.
Supporting statement
The new provision in the Articles of Incorporation is intended to ensure that the Company makes robust disclosures, as part of its annual reporting, of (i) which lobbying activities directed at the issue of climate change the group companies are pursuing (whether through directly or indirectly influencing the legislative and administrative process or through public influence activities), and (ii) the extent to which these serve to reduce risks for the group companies from climate change and how they are aligned with the goals of the Paris Agreement of 12 December 2015 to keep average global temperature rise well-below 2 degrees Celsius, aiming for 1.5 degrees Celsius. The co-filing Shareholders of the proposal recognize and appreciate that the Company issued a second report on climate lobbying in December 2022; “Toyota’s Views on Climate Public Policies 2022.” However, like the first report, this report falls far short of investor expectations as set forth, for example, by the Climate Action 100+ Net Zero Company Benchmarks for Climate Policy Engagement (please see the October 2021 edition (ENG) (JPN) and the September 2021 edition (ENG) (JPN) for details). Using the CA100+ Benchmark criteria, the quality of the Company’s disclosure on climate policy engagement as of December 2022 was scored 36/100, the same low score as of December 2021. The co-filing Shareholders of the proposal find that the Company and shareholders alike could benefit from a strengthening of the Company’s disclosures in 1) scope, covering more jurisdictions and trade associations, and 2) rigor in the analysis of potential misalignment with the goals of the Paris Agreement, and seek to support such strengthening by proposing an adjustment to the Company’s Articles of Incorporation to introduce annual reporting on this material topic to the Company, shareholders and wider stakeholder groups in line with global investor expectations. Such disclosures could serve to mitigate reputational and other risks, including potential backlash from customers, business partners, employees and investors associated with the Company’s climate-related lobbying activities in recent years. The co-filing Shareholders of the proposal and other like-minded institutional shareholders of the Company have engaged intensively and constructively with the Company since 2021 and encourage the Board of Directors to support and recommend a vote for this proposal.
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CalPERS, a co-lead on the Climate Action 100+ Toyota Motor Corporation engagement, has pre-declared their intention to vote FOR the resolution as well as accompanying rationale here: https://www.calpers.ca.gov/page/investments/corporate-governance/proxy-voting/notable-proxy-votes

How other organisations have declared their voting intentions

Organisation nameDeclared voting intentionsRationale
AP7ForWe appreciate that the Company issued a second report on climate lobbying in December 2022. However, like the first report, this report falls far short of investor expectations as set forth, for example, by the Climate Action 100+ Net Zero Company Benchmarks for Climate Policy Engagement and the Global Standard on Responsible Climate Lobbying.
Anima SgrForAn evaluation of how the company's lobbying activities align with the Paris Agreement goals would provide information that would allow shareholders to better evaluate the company's risk related to its lobbying activities.
LocalTapiola Asset Management LtdForAn evaluation of how the company's lobbying activities align with the Paris Agreement goals would provide information
that would allow shareholders to better evaluate the company's risk related to its lobbying activities.

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