Toyota
Shareholder Resolution
At Toyota’s annual general meeting on June 14, 2023, investors should vote in favor of the shareholder resolution filed by AkademikerPension, Storebrand, and APG. The resolution calls on the company to conduct and publish a comprehensive annual review of their climate-related lobbying activities, direct and indirect (e.g. via industry associations), which would both reduce risks from climate change and align with the Paris Agreement and Toyota’s own goal of carbon neutrality by 2050.
AkademikerPension (filing under Kapitalforeningen MP Invest), Storebrand, and APG have filed a shareholder resolution, Proposed Resolution 4, for consideration at Toyota’s annual meeting on June 14, 2023. It would require that Toyota conduct and publish a comprehensive annual review of their climate-related lobbying activities, direct and indirect, including via industry associations.
Toyota is the world’s largest automaker by sales, but their climate policy engagement has not been aligned with the Paris Agreement and staying below a 1.5°C pathway. Toyota has expressed support for the Paris Agreement and has a 2050 carbon neutrality target. However, per analysis from the think tank InfluenceMap, Toyota “has mostly negative engagement globally on policy mandating the full electrification of the automotive sector, instead promoting an extended role for ICE-powered vehicles, including hybrids… [and] opposed numerous policies mandating the long-term phase-out of internal combustion engine (ICE)-powered vehicles and the introduction of zero-emission vehicle targets in multiple regions in 2021-23.”
Despite a new CEO, Koji Sato, taking over in April 2023 from now Chairman, Akio Toyoda, there has been no significant evidence of a shift towards positive climate policy engagement. Toyota’s climate lobbying falls far short of the 2022 Global Standard on Responsible Climate Lobbying proposed by institutional investors.
As the world’s largest automaker in one of the highest emitting sectors globally, Toyota’s negative climate policy engagement undermines the Paris Agreement. For example, Toyota allegedly weakened the 2022 G7 Communique and threatened to shut down manufacturing in the UK in response to the UK government’s ICE phaseout plans.
Toyota’s resistance and inaction also presents undue risk to Toyota’s own future, as they fail to respond to a global market shift towards electric vehicles (EVs) that is well underway. According to EV-Volumes, multiple markets, including China, the EU, USA, and Korea, have all well-surpassed 5% market share, which has been identified by Bloomberg analysis as a market tipping point for mass EV adoption. Toyota is also a prominent member of multiple influential industry associations that have negative climate lobbying positions. This includes the Japanese Automobile Manufacturers Association and Japan’s business lobby, Keidanren—on which Akio Toyoda serves, respectively, as Chair and Mobility Committee Chair—the National Association of Manufacturers (NAM) in the US, and the European Automobile Manufacturers Association.
This shareholder resolution is a continuation of publicly reported, multi-year engagement between institutional investors and Toyota, and Toyota has failed to take the necessary action on their climate policy engagement and decarbonization plans. Toyota needs to align their policy engagement with the Paris Agreement and their own commitment to carbon neutrality by 2050. Support for the resolution is growing ahead of the AGM. Institutional Shareholder Services, recommended shareholders vote in favor of the resolution; AP7, a Swedish pension fund, pre-declared their vote for the resolution; and two of the largest pension funds in the USA, California Public Employees’ Retirement System (CalPERS) and the Office of the New York City Comptroller announced their votes for the resolution. On June 14, investors must vote for Proposed Resolution 4 on climate policy engagement.