Climate Change

Surrounding Environment

We are entering an era in which all companies are strongly aware of the need to proactively use renewable energy and to contribute to the realization of a sustainable carbon-free society.

The United Nations’ Sustainable Development Goals (SDGs), which consist of 17 global goals, specify Goal 7 as “Affordable and Clean Energy” and Goal 13 as “Climate Action.” Also, the Paris Agreement, which has been in the implementation stage since 2020, aims to keep the global average temperature rise below 2°C compared to before the Industrial Revolution and to make efforts to keep it down to 1.5°C.
To achieve these, there is an urgent need to develop and disseminate renewable energy alternatives to oil and coal, and mechanisms that enable efficient use of energy. Companies are also required to contribute to the creation of a sustainable society by grasping changes in environment (E) and society (S) and implementing appropriate governance (G).

Analysis of climate change business risks & opportunities[PDF:72KB]

Policy

The Toyota Tsusho Group has established as one of its Materialities: “Contribute to the transition to a carbon-free society by reducing CO2 emissions at automotive, manufacturing, and plant constration through the use of clean energy and innovative technologies.”
To this end, we have positioned our renewable energy business as one of our four priority business domains.
We intend to engage in a variety of unique initiatives aimed both at combating climate change and at growing the company at the same time. These include our renewable energy business; the stable supply of lithium—which is a key material for next-generation eco-cars—and the rebuilding, reusing, and recycling (the so-called “3Rs”) of batteries in the mobility field; and increased sales of products, such as bioplastics and recycled aluminum, that contribute to reductions in CO2 emissions in other fields.

Disclosure Based on TCFD Recommendations

The Financial Stability Board established the Task Force on Climate-related Financial Disclosures (TCFD) to examine how climate-related information should be disclosed, and how financial institutions should respond. The TCFD published its final report in June 2017. The final report recommends that corporations and organizations disclose to stakeholders their climaterelated risks and opportunities in four areas: governance, strategy, risk management, and metrics and targets.
At Toyota Tsusho, we believe climate change to be a key management issue and, in May 2019, expressed our support for the TCFD. Based on TCFD recommendations, we intend to disclose more information related to the influence that climate change has on our business activities.

Governance

At Toyota Tsusho, we deliberate upon risks, business opportunities, and action plans related to the environment—including climate change—at the Global Safety & Environmental Promotion Meeting, which is held regularly once a year. Our PDCA improvement cycle is also checked at the meeting. The content of these deliberations is incorporated into our business activities via the representatives of the sales divisions and group companies who make up the meeting.
Business opportunities tied to climate change have been identified as one of our Materialities. The action plans for our Materialities are deliberated by the Sustainability Management Committee, which also meets regularly once a year, then reported to the Board of Directors as appropriate. The content of these deliberations is incorporated into our business strategies via the representatives of the sales divisions who make up the committee. From 2020, the committee has also been tasked with setting KPIs and reviewing their progress.

Overview of Climate Change-related Governance

Strategy

At Toyota Tsusho, we seek to comprehensively analyze and understand short-, medium-, and long-term business opportunities and risks related to climate change. Going forward, we intend to implement our initiatives and disclose information based on TCFD recommendations. To this end, we are currently discussing the use of both scenario analysis and internal carbon pricing.
At Toyota Tsusho, we believe that the shift to a carbon-free society represents a business opportunity. In particular, our renewable energy business and lithium business for eco-cars overlap with our priority strategies. Also, the move from using virgin materials to using recycled materials—which is intended to improve carbon efficiency—is also an opportunity for our metal recycling business. Our group operates just one coal-related business—a coal-fired power plant in the Philippines. We are not engaged in any other coal-related businesses.

Risks and Opportunities

Risks include stricter regulations. In the mobility field, the acceleration of electrification is also a risk. More specifically, there is a risk that distribution volumes will fall due to a decrease in the number of parts used, and there is a risk our existing assets will become obsolete due to changes in material composition. However, electrification will also give rise to new business opportunities. These include opportunities stemming from Next Mobility Strategy, which is one of our priority areas, and opportunities based on new materials due to the need for weight reductions.
The shift to renewable energy also entails a risk that businesses based on fossil fuel resources will shrink. However, our expansion in onshore wind and solar power generation—which centers on Eurus Energy Holdings—is a major business opportunity. Regulatory risks such as fuel efficiency regulations, carbon tax, and other national policies must also be counted as risks of the shift to a low-carbon society.

Physical Risks

Regarding natural disasters and other physical risks, our policy is to implement risk management based on insurance.

Risk Management

Given the characteristics of our businesses, we ensure that we manage environmental risks—which include climate change—to a high standard. Business opportunities and risks related to climate change are deliberated by the Global Safety & Environmental Promotion Meeting and the Sustainability Management Committee, and their members and responsible departments incorporate the contents of these deliberations into our business strategies and activities.

Investments and Loans

At Toyota Tsusho, our officers participate in various meetings to see the impacts that our investment activities have on ESG: the CSO takes part in the Investment and Loan Committee; the assistant to the CSO in the Investment and Loan Meeting; and the CSO, the assistant to the CSO, and general manager of the Sustainability Management Group in the Investment Strategy Meeting.
Environmental risks number among the evaluation items at the Investment and Loan Committee and the Investment and Loan Meeting. We identify risks—regardless of their size—that exceed certain condition thresholds set by either the Investment and Loan Committee or the Investment and Loan Meeting. Should there be any concerns, we are required to address them and to report subsequent improvement measures.
At Toyota Tsusho, we have acquired ISO 14001, an international standard related to environmental management systems. The Head Office monitors any investments that have manufacturing workplaces by carrying out internal environmental audits once every three years.
Going forward, we are considering using our six Materialities for evaluating projects in which we intend to newly invest or provide loans or increase our current investments. By comparing these projects against our climate change-related Materialities, we intend to evaluate the extent of both positive and negative influences.

Metrics and Targets

One of our Materialities is “Contribute to the transition to a carbon-free society by reducing automotive, manufacturing, and energy plant construction CO2 emissions through the use of clean energy and innovative technologies.” We have set the following KPIs for this, and also use them as metrics and targets.

* The Toyota Tsusho Group, as a member of the Japan Foreign Trade Council, Inc., expresses support for Keidanren (the Japan Business Federation)’s Commitment to a Low Carbon Society. As such, we are engaged in initiatives aimed at reducing electrical power intensity (which is defined as the amount of electric power used for a unit of the floor area of an entire company) in 2030 by 15.7% compared to 2013 levels; by FY2019, we had achieved a reduction of 9.7%.

Toyota Tsusho Group CO2 Emissions Reduction

The Japan Foreign Trade Council, Inc. (JFTC) supports the initiatives of government and the Japan Business Federation (Keidanren) to build a low-carbon society, and has participated in the Keidanren Voluntary Action Plan on the Environment (currently known as the Keidanren Commitment to a Low Carbon Society) since fiscal 1998, and has set a target of reducing electric power consumption intensity (the amount of electric power consumed per unit of floor area throughout an entire company) by 15.7% by 2030 compared to 2013. The JFTC is taking action to create a low-carbon society in accordance with its Shosha's Environmental Code of Conduct. Toyota Tsusho declared its support for the TCFD recommendations in May 2019 and is now working in collaboration with other member companies regarding climate change related proposals and initiatives. As a company that has appointed a vice chairman to the JFTC, Toyota Tsusho is involved in decision-making.

Toyota Tsusho participates in a variety of initiatives as a member of the Environmental Partnership Organizing Club (EPOC), an organization based in the Chubu region that brings together industry (general companies), government (the Ministry of Economy, Trade and Industry and local governmental bodies) and academia (universities).
EPOC was established to engage in the following activities:

  • Promote environmental action throughout society;
  • Enhance environmental awareness among the public;
  • Disseminate information to encourage environmental action; and
  • Undertake international exchange activities relating to environmental action.

Toyota Tsusho disseminates various information relating to environmental responses in the Chubu region via EPOC and seeks to create a world-leading environmentally-advanced region and a safe and comfortable circular economy and society. Group companies participate in EPOC.

Toyota Tsusho has set targets for CO2 emissions (on an intensity basis and for Scope 1 and 2) in the form of long-term greenhouse gas emissions reduction targets and is taking action to achieve those targets.

  • Target: 5.85% reduction (fiscal 2019, compared to fiscal 2013); 2030 long-term target: 15.7% reduction (compared to fiscal 2013)
  • Results: 9.70% reduction (fiscal 2019, compared to fiscal 2013)

Toyota Tsusho has also set a target of reducing CO2 emissions (on an intensity basis and Scope 3 category 4) continuously by 1% per year (five-year average) until 2030.
To achieve this, the Kaizen & Cost Reduction Promotion Committee is working with transportation companies to reduce indirect CO2 emissions from the transport of cargo with the aims of optimizing transport routes, consolidating freight, and increasing container loading efficiency rates.

  • Target: 5.85% reduction (fiscal 2019, compared to fiscal 2013); 2030 long-term target: 15.7% reduction (compared to fiscal 2013)
  • Results: 4.8% reduction (fiscal 2019, compared to fiscal 2013)

In addition, Toyota Tsusho is taking action to make the transition to a low-carbon society and reduce greenhouse gas emissions through the electric power business by using renewable energy sources such as wind power, solar power, and biomass. We are also conducting active research and development looking ahead to the future. In fiscal 2020, we invested approximately 80 million yen in R&D relating to climate change.

Toyota Tsusho has introduced the energy management standards established by the Energy-Saving Promotion and Review Council and conducts energy-saving audits to confirm compliance with those standards. In addition, based on energy efficiency investment and action plans, we have set targets for optimizing air conditioning settings, reducing lighting fixtures, replacing PCs with energy-saving models, and turning off all lights at the Nagoya and Tokyo Head Offices at night and are taking action to achieve those targets.
With regard to fiscal 2019 results, we used J-Credits* equal to the amount of electric power consumed and achieved zero emissions.

Toyota Tsusho supports Japan's regulatory system relating to climate change, which comprises the Energy Conservation Act and the Act on Global Warming Countermeasures. Each year, we submit to the government information on energy consumption, attainment of energy conservation targets, and greenhouse gas emission volumes. Under the business operator class category evaluation system of the Energy Conservation Act, Toyota Tsusho has received S class evaluation, which places it among outstanding companies for energy conservation.

* J-Credit is a scheme for the effective use of renewable energy, etc. in which the amounts of emissions reduction and absorption of CO2 and other greenhouse gases are certified as “credits” by the Japanese government.

Greenhouse Gas Emissions (Intensity) and Reduction Rate

  FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Emissions intensity
(t-CO2/1,000m2
62.72 59.23 57.98 55.02 56.19
Reduction Rate Results ▲1.70% 5.81% ▲0.80% 2.96% ▲1.92%
Target Reduction of at least 1% annually

Scope of calculation: Toyota Tsusho Corporation (domestic head offices, branches and sales offices)
Intensity: Scope 2 emissions/floor area

The Toyota Tsusho Group is also reducing CO2 emissoins by consolidating production facilities, reducing standby power consumption, and taking other measures.

We are taking various initiatives to reduce CO2 emissions at Group companies in Japan, primarily their manufacturing operations. These include reducing power consumption through the consolidation of manufacturing facilities (reduction of idle space), installation of skylights and LED lighting, and deployment of inverter controls, as well as the reduction of standby power consumption by turning off compressors when not in use. Outside Japan, Group companies are reducing their CO2 emissions by adopting thermal heat pumps and through other measures.
Since 2018, for our annual Conference on the Global Environment, we have purchased a green electricity certificate using renewable energy to offset the CO2 emissions associated with the meeting to zero.

豊通ニューパック(株)の明かり窓
Skylights at Toyotsu-New pack Co., Ltd.
豊通ニューパック(株)のLEDライト
LED lighting at Toyotsu-New pack
天津豊田鋼材加工有限公司(中国)で導入した地中熱ヒートポンプ
Underground thermal heat pumps installed at Tianjin Fengtian Steel Process Co., Ltd. (China)

Climate Change Adaptation

Toyota Tsusho is formulating measures for adapting to climate change with the objectives of responding to the effects of climate change and preventing or mitigating damage. The risks of weather disasters from events such as torrential rain and extreme heat are rising, and the entire Group is taking action with an awareness that the formulation, management, and operation of business continuity plans (BCPs) that anticipate these risks is crucial.

Case Study: Business Continued at an Alternate Site During Flooding in Thailand
Toyota Tsusho formulated BCPs that anticipate the inability to use key management resources as a result of physical risks of climate change and is taking various responsive measures.
In 2011, when the northern and central regions of Thailand experienced widespread flooding, damage occurred in Bangkok and seven industrial parks, and some 450 Japanese-affiliated companies were affected. Two years later, when massive flooding again occurred in October 2013, the Amata Nakhon Industrial Estate, one of Thailand's largest, was flooded and extensive damage again occurred. Despite this, TTK Asia Transport (Thailand) Co., Ltd., a Toyota Tsusho Group transportation company with a site in the industrial park, had a BCP in place, enabling it to relocate all personnel and trucks to an alternate site and maintain operations without interruption.

Strategy on Climate Change Risks and Opportunities(External Collaboration)

In the energy field, we use renewable energy and clean energy, as these are environmentally friendly energy sources.
While pursuing supply stabilization and cost reduction in the field of wind power generation—a strong field for the Toyota Tsusho Group—we will also endeavor to expand power source options such as to include geothermal power and hydraulic power, expand in regions such as Africa and the Middle East, and expand functions such as energy storage, energy transmission, and retailing, with the aim of further enhancing our renewable energy business.
Meanwhile, in the automobile-related field the popularization of next-generation vehicles such as HVs and EVs has led to rapid increases in demand for the lithium used in batteries for environmentally friendly cars. Lithium is a type of rare metal, and Japan relies on imports for 100% of its lithium materials. In order to develop new supply sources to support the proliferation of next-generation electrified vehicles, Toyota Tsusho conducted lithium reserves surveys, focused on Salar de Olaroz salt lake in northwestern Argentina, and after acquiring a 25% stake in a salt lake development project in 2012, commenced lithium carbonate production in December 2014. Toyota Tsusho will continue to contribute to the stable supply of the lithium batteries that will support the next-generation environment and the transition to a carbon-free society.

<External Collaboration>
In addition, Toyota Tsusho participates in various programs as a member of EPOC, an environmental partnership group formed by industry, government, and academia in the Chubu region. EPOC promotes the expansion of environmental behavior to society and the development of a culture for such behavior, dissemination of information on environmental behavior, and international exchange activities.
Through EPOC, we disseminate information on environmental responses from the Chubu region and seek to create a safe and comfortable circular society while establishing a world-class environmentally-advanced region.

Advocacy of COOL CHOICE

Toyota Tsusho supports the "COOL CHOICE" initiative, which encourages "smart choices" that contribute to global warming countermeasures such as switching to energy-saving and carbon-free products and reviewing lifestyles. We also adopted the new "Be Yourself," work attire guidelines, which allow all Toyota Tsusho employees to make their own decisions about what to wear at work and are compatible with the year-round Cool Biz/Warm Biz campaign.

CDP

CDP

Toyota Tsusho has been participating in CDP since the fiscal year ended March 31, 2017. CDP is an international NPO that was established in London in 2000. CDP calls on participating companies to disclose strategies on climate change and specific figures on the amounts of greenhouse gases emitted. As a representative of institutional investors with a total operational amount exceeding U.S.$100 trillion, CDP sends questionnaires to companies, analyzes and evaluates their responses, and discloses scores. Scores are ranked according to eight levels: A, A-, B, B-, C, C-, D, and D-.

CDP Evaluation Results for CDP2019
  • Climate change: A-
  • Water security: B
  • Forests (Palm oil): B-
    Forests(Timber): B
    Forests (Soy): B-

ISO 50001

Toyota Tsusho acquired ISO 50001:2018 (energy management systems) certification in 2020. The scope of the certification covers business sites in Japan (18 sites in 11 prefectures) subject to notification requirements as specified businesses under the Enegy Conservation Act as well as employee benefit facilities. We created energy management standards for each site and periodically confirm their implementation status by conducting energy-saving audits to encourage energy-saving measures.

Performance Data

  • Greenhouse Gas Emissions (Scope 1 and Scope 2, Domestic)
  • Greenhouse Gas Emissions (Scope 1 and Scope 2, Overseas)
  • Breakdown of Greenhouse Gas Emissions (Scope 1)
  • Greenhouse Gas Emissions (Scope 3)
  • Breakdown of Greenhouse Gas Emissions (Scope 3)
  • Greenhouse Gas Emissions (Domestic Logistic Related)
  • Greenhouse Gas Emissions Intensity
  • Targets and performance of Greenhouse Gas Emissions (Intensity)
  • Electricity consumption (Domestic)
  • Electricity consumption (Overeseas)
  • Internal Carbon Price
Greenhouse Gas Emissions(Scope 1 and Scope 2, Domestic)
温室効果ガス(Scope 1, Scope 2)排出量(国内事業所)
Tabulation scope:
Toyota Tsusho Corporation and 55 domestic Group companies(2015-2018)
Toyota Tsusho Corporation and 64 domestic Group companies(2019)
Greenhouse Gas Emissions(Scope 1 and Scope 2, Overseas)
温室効果ガス(Scope 1, Scope 2)排出量(海外事業所)
Tabulation scope: 174 overseas Group companies
Conversion coefficient: IEA Emission factors 2018

Breakdown of Greenhouse Gas Emissions(Scope 1)

Unit ton-CO2

  FY
2017
FY
2018
FY
2019
①CO2 127,190 128,217 161,824
②CH4/N2O/ HFCs/PFCs/ SF6/NF3 Others 0 0 0
Total 127,190 128,217 161,824
①Toyota Tsusho Corporation, 55 domestic and 174 overseas Group companies (2017-2018)
Toyota Tsusho Corporation and 64 domestic and 174 overseas Group companies (2019)
②Toyota Tsusho Corporation
Greenhouse Gas Emissions (Scope 3)
温室効果ガス業務活動別(Scope 3)排出量
Tabulation scope: Domestic Consolidation

Breakdown of Greenhouse Gas Emissions (Scope 3)

Unit ton-CO2

  FY 2017 FY 2018 FY 2019
Category 2 (Capital goods) 209,877 135,441 126,565
Category 3 (Fuel- and energy-related activities not included in scope 1) 11,105 11,454 14,399
Category 4 (Upstream transportation and distribution) 22,868 21,699 21,127
Category 5 (Waste generated in operations) 4,067 3,372 3,109
Category 6 (Business travel) 1,668 1,377 1,589
Category 7 (Employee commuting) 4,029 3,304 3,755
Category 8 (Leased assets) 0 0 0
Category 14 (Franchises) 0 0 0
Total 253,615 176,647 170,544

Tabulation scope: Domestic Consolidation
*Category4-Toyota Tsusho Corporation and Toyota Steel Center Co., Ltd. Conversion coefficient:

Greenhouse Gas Emissions (Domestic Logistic Related)
温室効果ガス排出量(国内物流関連)
Tabulation scope:
Toyota Tsusho Corporation Based on the Energy Conservation Law
Greenhouse Gas Emissions Intensity
温室効果ガス排出量原単位
Scope of calculation: Toyota Tsusho Corporation (domestic head offices, branches, sales offices, and leisure facilities)
Scope 2 is calculated on a market basis.

Targets and performance of Greenhouse Gas Emissions (Intensity)

  FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Emissions intensity 62.72 59.23 57.98 55.02 56.19
Reduction Rate Results -1.70% 5.81% -0.80% 2.96% -1.92%
Target Reduction of at least 1% annually

Scope of calculation: Toyota Tsusho Corporation (domestic head offices, branches and sales offices)
Intensity: Scope 2 emissions/floor area (ton=CO2/1,000m2)

Electricity consumption (Domestic)
電力使用量(国内事業所)
Tabulation scope:
Toyota Tsusho Corporation and 55 domestic Group companies(2015-2018)
Toyota Tsusho Corporation and 64 domestic Group companies(2019)
Electricity consumption (Overeseas)
電力使用量(海外事業所)
Tabulation scope: 174 overseas Group companies

Internal Carbon Price

J-Credit purchase costs were recognized and introduced as carbon pricing, and J-Credit purchase costs from January to December 2019 (approximately 5.3 million yen) were allocated to each seat in the company as carbon pricing (110 yen/seat-month).

※ The company uses J-Credits for electric power generated from renewable energy, and since January 2019, 18 offices in 11 prefectures in Japan have been CO2 free from electric power use, essentially achieving 100% renewable energy use.
(J-Credit is a government certification program that provides credits for amounts of reduction and absorption of CO2 and other greenhouse gasses through the use of renewable energy and other means.)

  FY2019
Internal carbon price Approx. ¥530 million
Third Party Certification

Third-party certification has been obtained from Lloyd's Register Quality Assurance (LRQA) for a portion of the performance data above.

LR Independent Assurance Statement[PDF:615KB]