CSR Materiality (Material Issues)

Identification of CSR Materiality (Material Issues)

The Toyota Tsusho Group is committed to resolving various social issues throughout the world as it undertakes business globally based on its corporate philosophy of living and prospering together with people, society, and the earth while striving to be a value-generating corporation that contributes to the creation of prosperous societies. The global environment in which the Group conducts business changes daily, and we have identified key CSR issues that we need to be aware of as we pursue the realization of our corporate philosophy and Global Vision to clarify those social issues that we need to focus on based on our management strategies and taking into consideration recent trends in international society. In the process of identifying those issues, we engaged in repeated discussions while taking into consideration the opinions of management and other internal and external stakeholders.The Group’s CSR materiality are positioned as issues that demonstrate the Toyotsu Core Values in the three areas of the Global Vision and that we need to be aware of as we pursue “Be the Right ONE.”

The materiality identified at this time are not intended to be unchanging. They will be reviewed periodically by the CSR Committee, taking into consideration changes in the Group’s environment and other factors, and will be appropriately revised. This will lead to awareness of the materialities by each employee, sustainable growth through their incorporation in business activities, and contribution to the resolution of social issues and achievement of the SDGs.

CSR Materiality for the Toyota Tsusho Group (Material Issues)

Process of Identifying Material Issues

Issue Identification

  • We referred to guidelines such as CSR and ESG guidelines (GRI Standard, ISO 26000, UN Global Compact, FTSE4Good, MSCI) and the standards of Toyota Environmental Challenge 2050 to identify and organize social issues, focusing on the 169 targets of the SDGs, which are considered to comprehensively cover global social issues.
  • We checked if these organized social issues aligned with our corporate philosophy, behavioral guidelines, Global Vision, and Mid-term Business Plan, and identified 43 issues.

Prioritize Issues with Stakeholders

Through questionnaires and dialogue with stakeholders, both inside and outside the Group, regarding the identified 43 social issues, we prioritized expectations and requests for the Group, and the importance of these social issues to the Group, and created a materiality matrix.

Stakeholders

  • Internal: Interviews with individual divisions, questionnaires administered to all Toyota Tsusho employees, CSR staff in Japanese affiliated companies, and overseas staff
  • External: Interviews with Japanese institutional investors, and questionnaires administered to general investors

Narrowing Down

We created proposed materialities using a materiality matrix, focusing on social issues with a high level of importance inside and outside the Company.

The materialities identified are not the only materialities which the Group will address. Instead, they are the materialities identified as being the most important for the Group.

Validation

Confirm the suitability of the identification process and the proposed materialities

  • Managers and the chief division officers of each division participated in CSR Committee discussions (at a meeting held in early December 2017)
  • Individual interviews with outside directors

Main Opinions from Participants

  • It is noteworthy that the materialities are prepared after conducting a well-established process.
  • This is no longer a time in which countries and governments can accomplish whatever they want on their own. It is necessary for society to change, and the Company needs to be aware of changing its systems and programs. It is necessary to refer to the knowledge of NGOs, NPOs, and other organizations.
  • When viewed from the perspective of the materialities, we need to start a discussion on businesses that will become contradictory, businesses that should be slowed down, and businesses that we should terminate in the future. I want to establish materialities that will lead to an image of a set of guidelines for the future.
  • It is necessary to change employee awareness so that we can expand perspectives from the Company’s existing method of creating business by focusing on resolving customer problems and shifting from social issues that are global problems to a concept of business creation. Accumulating “quick hits” in the form of successful experiences will likely generate a virtuous cycle.
  • The more amicable the language the vaguer it becomes, and this can give the impression that ultimately nothing will be done. So we need to use sharp language and adopt innovations.
  • For employees, if the individual topics are narrowed down too far, the next step is difficult. But, if they are too general, it is difficult to know what to do. It is necessary to organize topics in a way that makes it easy for employees, as they are the ones who are to act.

Identify CSR Materiality

The CSR materiality was approved following discussions by the CSR Committee at meetings held in March, 2018. The materiality was explained and reported to the directors and Audit & Supervisory Board members at a Board of Directors’ meeting.

Material Issues

Strive for the elimination of traffic casualties and contribute to the creation of a safe and comfortable mobility society

3 GOOD HEALTH AND WELL-BEING
9 INDUSTRY, INNOVATION AND INFRASTRUCTURE
11 SUSTAINABLE CITIES AND COMMUNITIES

The automobile industry is on the cusp of a once-in-a-century transformation.
The birth and evolution of advanced technologies, such as automated driving, the Internet of Things (IoT), and artificial intelligence (AI), are poised to greatly expand mobility potential.
The Toyota Tsusho Group sees these environmental changes as business opportunities, and will use material innovation, automated driving, and advanced safe driving support technologies to reduce the number of road accidents and improve traffic infrastructure. Through this, we aim to achieve zero traffic fatalities and injuries and contribute to the development of a safe and comfortable mobility society.

Contribute to the transition to a low-carbon society by reducing automotive, manufacturing, and energy plant construction CO2 emissions through the use of clean energy and innovative technologies

7 AFFORDABLE AND CLEAN ENERGY
9 INDUSTRY, INNOVATION AND INFRASTRUCTURE
13 CLIMATE ACTION

Global warming is a major issue that affects all life on the planet. In order to tackle this problem, the Toyota Tsusho Group is actively increasing sales of next-generation eco-cars (HVs, PHVs, EVs, and FCVs), developing infrastructure such as hydrogen stations, reducing vehicle weights by using alternate materials, and securing lithium resources that support increased production of the automobile batteries essential for eco-cars.
We are also using the clean energy knowledge we have accrued through our experience with renewable energy such as wind and solar power together with various innovative technologies to contribute to the realization of a sustainable, low-carbon society by reducing automobile CO2 emissions, cutting CO2 emissions through product life cycles, including logistics business, and contributing to eliminating CO2 emissions from plants.

Contribute to the development of a recycling-based society by transforming waste into resources for manufacturing

11 SUSTAINABLE CITIES AND COMMUNITIES
12 RESPONSIBLE CONSUMPTION AND PRODUCTION

Natural resources are not limitless. We must reduce our impact on the environment by efficiently using and reusing these resources.
As a trading company involved in manufacturing, the Toyota Tsusho Group considers it a vital mission to contribute to the environment, secure resources, and provide them in a stable manner.
To effectively use these limited resources, we will develop recycling businesses including recovery and processing or reusable resources from scrap generated from end-of-life vehicles and in plants, secure resources from urban mines, and reuse used vehicles and parts, contributing to a recycling society by recycling waste.

Grow with developing countries, including those in Africa, and endeavor to solve social issues through business operations

7 AFFORDABLE AND CLEAN ENERGY
8 DECENT WORK AND ECONOMIC GROWTH
9 INDUSTRY, INNOVATION AND INFRASTRUCTURE
17 PARTNERSHIPS FOR THE GOALS

The Toyota Tsusho Group undertakes local infrastructure development, industrial development, job creation, and other measures to solve social issues in developing countries in Africa and other regions through its automobile business and other business activities.
In the Republic of Kenya, for example, we worked as a strategic business partner in a national project aimed at supporting the realization of the country’s national vision. We used the results as a pilot model to promote the autonomy of local residents and support the growth of the Toyota Tsusho Group through initiatives such as improving living environments by developing basic infrastructure and providing opportunities for occupational training.

Begin everything we do with ensuring safety and compliance, and continue to be an organization trusted by society

3 GOOD HEALTH AND WELL-BEING
16 PEACE, JUSTICE AND STRONG INSTITUTIONS

All corporate activities are supported by societal trust and sustained by societal confidence. The Toyota Tsusho Group does its utmost to ensure safety in related companies and the safety of all workers. We are constantly engaged in activities that earn society’s trust and confidence, such as conducting safety education activities at plants and offices using our practical safety workshops and ensuring high levels of quality that guarantee safety and security.
In our day-to-day operations, we define specific codes of conduct for all sites and offices, both in Japan and overseas, and strictly comply with laws and regulations such as those concerned with preventing corruption or anticompetitive behavior. We are improving our management transparency and enhancing our corporate governance.

Respect human rights, and actively develop people who will contribute to society by nurturing them and giving them opportunities to apply their skills

4 QUALITY EDUCATION
5 GENDER EQUALITY
8 DECENT WORK AND ECONOMIC GROWTH
10 REDUCED INEQUALITIES

The Toyota Tsusho Group promotes diversity and inclusion as a management strategy. We are striving to create working environments which bring out the strengths of diverse personnel by undertaking reforms to implement more flexible and productive ways of working.
We are also working to develop human resources that can create business on a global scale and human resources that can achieve success in the global market while providing occupational training opportunities to local communities and actively developing human resources inside and outside the Company that are valuable to and contribute to society.
In our supply chain, we are taking measures to eliminate child labor and forced labor, improving the labor environment from various perspectives as a company that values and protects people.

Future Issues

To achieve sustainable growth, it will be necessary to respond to the expectations of stakeholders according to changes in the times. To incorporate this into management strategies, the materialities and specific measures will be periodically checked and revised in the future.

In the fiscal year ending March 31, 2019, we will disseminate the CSR materialities with emphasis on internal dissemination and will investigate incorporating them into the Mid-term Business Plan.