Charter and Action Plan

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1 Sharing the Toyota Earth Charter with Consolidated Subsidiaries In order to set and strive toward achieving higher and more specific goals based on a vision of harmonious growth, Toyota began revising its Earth Charter toward the 21st century and published a new version in April At the same time, Toyota also drafted the Third Toyota Environmental Action Plan (for FY2001 through FY2005) as a follow-up to the Second Environmental Action Plan which ends in FY2000. As the Earth Charter for the entire Toyota Motor Group, the new Earth Charter is shared by Toyota and its consolidated subsidiaries both in Japan and overseas (445 companies at the end of March 2001). Based on this consolidated environmental management system, Toyota plans to continue enhancing its environmentrelated actions both in Japan and overseas. New Toyota Earth Charter <Announced April 2000> The Third Toyota Environmental Action Plan <Announced April 2000> I. Basic Policy II. Action Guidelines Action Items (Please see next page) 1. Contribution toward a prosperous 1. Always be concerned about the 21st century society environment In order to contribute toward a prosperous 21st century society, aim for growth that is in harmony with the environment, and to challenge achievement of zero emissions throughout all areas of business activities. 2. Pursuit of environmental technologies Pursue all possible environmental technologies, developing and establishing new technologies to enable the environment and economy to coexist harmoniously. 3. Voluntary actions Develop a voluntary improvement plan, not only based on thorough preventive measures and compliance to laws, but that addresses environmental issues on the global, national, and regional scales, and promotes continuous implementation. 4. Working in cooperation with society Build close and cooperative relationships with a wide spectrum of individuals and organizations involved in environmental preservation including governments, local municipalities, as well as with related companies and industries. Challenge achieving zero emissions at all stages, i.e., production, utilization, and disposal (1) Develop and provide products with top-level environmental performance (2) Pursuit of production activities that do not generate waste (3) Implement thorough preventive measures (4) Promote businesses that contribute toward environmental improvement 2. Business partners are partners in creating a better environment Cooperating with associated companies 3. As a member of society Actively participate in social actions (1) Participate in creation of recycling-based society (2) Support environmental government policies (3) Contribute also to non-profit activities 4. Toward better understanding Actively disclose information and promote environmental awareness (1) Fuel efficiency (2) Exhaust emissions (3) Clean-energy vehicles (4) Recoverability (5) Substances of environmental concern in products (6) Automobile noise (7) Air conditioning systems (8) Global warming threat (9) Substances of environmental concern (10) Waste and resource conservation (11) Water resources (12) Logistics (13) Prior-assessment systems (14) Environment-oriented business ventures (15) Suppliers (16) Dealers cooperation (17) Recoverability (18) Transportation systems (19) Related basic research (20) Socially-contributing activities (21) Among the public (22) Among employees III. Organization in Charge Promotion by the Toyota Environment Committee which consists of top management (chaired by the President) (23) Comprehensive environmental management 86

2 Environmental Report 2001 The Third Toyota Environmental Action Plan for FY2001 to FY2005 The Third Toyota Environmental Action Plan was developed and will be implemented as a five-year plan for the period from FY2001 to FY2005. In order for the 21st-century society to develop into a truly prosperous and healthy one, it is required for Toyota to overcome the environmental issues that are becoming increasingly serious and complicated. This plan will be implemented from the perspective of responding to the need for taking steadier measures for environmental issues than before so that as a corporation, Toyota can contribute to realization of such a society. Item Action Policy Specific Goals and Implementation Items (Japan) Reference: Implementation Overseas, etc. (1) Fuel efficiency Secure top-level efficiency in all vehicle classes in each country and region Develop and commercialize CO2 reduction technology (new units, reduced weight) Steadily promote actions for early achievement of fuel efficiency standards for each country Meet new domestic fuel efficiency standards ahead of deadline (FY2005 for diesel engines; FY2010 for gasoline engines) Steady responses to achieve goals of European voluntary commitment for fuel efficiency (2009 JAMA average 140g/km) (2) Exhaust emissions Promote appropriate emissions reduction responses considering specific urban environment needs in each country and region Promote technological development challenging zero emissions Respond to regulations in developed countries prior to their enactment Expand emission control measures immediately in developing countries Further reduction of emissions in gasoline vehicles Systematically introduce low emission vehicles which emit 1/4 of the emissions permitted under Japan s 2000 regulation 1, starting with Prius in 2000 Development and introduction of clean diesel vehicles Introduce vehicles that accommodate the new Japanese diesel long-term regulations prior to its enactment Development of ultra-clean diesel vehicles US: Introduce ultra-clean gasoline vehicles that meet California s SULEV 2 levels, (starting with Prius in 2000) Europe: Develop ultra-clean diesel vehicle Asia: Introduce reduced-smoke diesel vehicles to Asian regions gradually (3) Clean-energy vehicles Strategic product introduction that takes into account multi-faceted development projects and the market characteristics of each country Take actions to expand the use of hybrid vehicles Active development of nextgeneration technologies such as Fuel Cell Hybrid Vehicle (FCHV) Further improve the Toyota hybrid system and expand the number of vehicle line-up equipped with the system for further popularization Develop and accelerate introduction of FCHV Continuous efforts to develop clean energy vehicles such as EV and CNG Implement the above along with usage development according to the characteristics of the products, etc. (4) Recoverability Promote development of recycling designs that can contribute to a vehicle recovery rate of 95% by 2015 Promote expanded uses for recycled materials Incorporate into vehicles recycling designs that can contribute to a potential recovery rate of 95% by 2015 (FY2005) Taking into account future recycling process technologies, improve dismantling ability and change to more recyclable materials, etc. * Establish a new dismantling research facility, which demonstrates the 3R (Reduce, Reuse, Recycle) point of view Appropriate responses to EU end-of-life vehicle directives and regulation in each EU country * Draft specific measures after ascertaining trends of EU directives and regulations of each country (5) Substances of environmental concern Global management of chemical substances and promote actions to become top-class worldwide in this field Expand number of substances subjected to control and improve the follow-up system Promote prohibiting use and reducing goals of the following substances for the present: Prohibit usage: mercury (except electric discharge tubes), cadmium and arsenic Reduce usage: lead (1/3 of 1996 level, or less, by FY2005) hexavalent chrome (1/2 of 1998 level, or less, by FY2005) (6) Automobile noise Further reduction of all sources of noise pertaining to automobiles Development of noise reduction technology that can coexist with improving fuel efficiency and reducing emission (7) Air conditioning systems Develop new air conditioning refrigerant as an alternative to HFC from the prospective of contributing to prevention of global warming Development of air conditioner using CO2 as refrigerant, etc. 1. Ministry of the Environment s Exhaust Emissions Technology Guidelines for Low-Emission Vehicles (1/4 of the regulation figures for 2000) 2. Vehicles that reduce HC emission volumes to 1/4 and NOx emission volumes to 1/10 compared to ultra-low emission vehicles determined by the California Air Resource Bureau (CARB) 87

3 Item Action Policy Specific Goals and Implementation Items (Japan) Reference: Implementation Overseas, etc. (8) Global warming Promote active CO2 reduction measures CO2: Reduce total emissions volume by 5% of FY1990 emissions by the end of FY2005 (Reduce by 10% by the end of FY2010) Actions to start from the product development stage; technological innovation for production with less energy use Environmental action plans will be prepared for each production affiliate based on regional guidelines (9) Substances of environmental concern Reduce VOCs (paint solvent emission volume) aiming for top global performance level Voluntary reduction of PRTR substances VOC: Achieve an average of 35g/m 2 or lower for all production lines by the end of FY2005 (Below 20g/m 2 for ideal product lines) Increase usage of water-based paint and introduce powder coating, etc. PRTR chemicals: reduce to 50% of FY1998 by the end of FY2005 Each Japanese Toyota vehicle production company and manufacturing consolidated subsidiary to prepare environmental action plan based on guidelines Plans call for compilation of each company s action plan as part of the Global Toyota Action Plan by the end of FY2000 (10) Waste and resource Reduce waste aiming for achievement of zero emissions and promote resource conservation activities Achieve zero landfill waste at all plants by the end of FY2003 Propagate company-wide results of Zero Landfill Activities of model plants (Tsutsumi and Myochi plant) company-wide Combustible waste: Reduce to 1/3 of FY1990 levels by the end of FY2005 Reduce sewage sludge and paint residue through measures applied at the source, etc. (11) Water resources Implement new actions for saving water resources Water usage in vehicle plants: Reduce water usage per basic unit by 20% compared to FY1995 levels by the end of FY2005 (12) Logistics Actively promote logistics rationalization aiming to reduce CO2 emissions and packaging and wrapping material waste CO2: Stabilize emissions to levels below FY1990 levels by the end of FY2005 by improving transportation efficiency Reduce the use of export packaging and wrapping materials by 20% compared to FY1995 levels by the end of FY2005 (13) Prior-assessment systems Further improve comprehensive prior assessment system of environmental impact generated from overall product lifecycle (production, use, and disposal) Promote comprehensive environmentally considerate designs through improved cooperative design and production technology activities beginning from development stage Improve management standards for substances of environmental concern in each of production, usage and disposal stage, and establish a system to follow-up on product-wise conformity with reduction goals * Actions in left column to be implemented worldwide (14) Environment-oriented related business ventures Actively promote businesses, such as ITS and the afforestation that contribute to improvement in the environment Develop and promote various ITS (Intelligent Transport Systems) that contribute toward transportation environment improvements Steady promotion of afforestation business (a total of 2,800ha to be planted in Australia in 2005, possibility of expanding to other regions) Develop other environment-oriented businesses * Actions in left column to be implemented worldwide 88

4 Environmental Report 2001 Item Action Policy Specific Goals and Implementation Items (Japan) Reference: Implementation Overseas, etc. (15) Suppliers cooperation Promote propagation and establish activities of the Toyota Suppliers Environmental Guidelines Further promote green purchasing Promote and support establishing environmental management and thoroughly implement management of substances of environmental concern based on Toyota standards (substances used in products and in production processes) (ISO certification to be acquired by all suppliers by FY2003) Promote and support the development of more environmentallyconcerned products and increased purchasing of those products by suppliers (Parts, raw materials, and supplementary materials) Establish 100% green procurement administrative supplies (by FY2003) (Office supplies, personal computers, and OA equipment) Globally expand the Suppliers Environmental Guidelines Procurement from European and U.S. affiliates: Beginning in FY2001 Procurement from other affiliates: Beginning in FY2003 and gradually thereafter (16) Dealers cooperation Promote propagation and establishment of activities of the Toyota Japanese Dealer Environmental Guidelines Establishment of an environment management system, and promote and support the achievement of environmental standard goals by Toyota dealers (Goal is to have all dealers achieve the standards by FY2002) Enhanced support of dealers environment-related efforts Globally expand the Dealers Environmental Guidelines (by FY2005) (17) Recoverability Actively participate in social actions aimed towards realization of recovery rate of 95% by 2015 Promote recycling process technology development Demonstrate and propose recycling process technology for 95% recoverability (FY2005) Participate in building a vehicle recycling system, from production to the disposal process, with the cooperation of government, municipalities and related industries * All efforts should be implemented with 3R point of view Appropriate responses to EU end-of-life vehicle directives and regulation in each EU country * Specific measures to be drafted after ascertaining trends in EU directives and regulations of each country (18) Transportation systems Promote investigation and research on ideal transportation environment and make proposals based on the results Research and propose transportation policies that help ease traffic congestion Research results to be announced overseas (19) Related basic research Promote and support basic research that helps improve the environment and make proposals based on the results Promote investigation of automobile exhaust emissions in the environment along roads, and analyze and research their effects on living beings Research results to be announced overseas (20) Socially-contributing activities Globally promote and demonstrate support for environmental education, reforestation activities, basic academic research, etc. Research and conduct trials on new uses of Satoyama resources, afforestation in cooperation with citizens movements, and continuation of environmental education Increase support of environmental organizations activities and basic academic research (Project to commemorate receipt of the Global 500 Award, etc.) Expansion of Global 500 Award commemoration projects to North America, Europe, and Asia (21) Among the public Enhance environmental communication activities in each country and region Provide better environmental information using the Internet Improve and continue issuance of environmental reports Conduct various symposiums, exhibits, etc. under environmental themes Actions in left column to be implemented worldwide including issuance of regional environmental reports (22) Among employees Enhance environmental education system Establish, implement systematically and improve all company employee education (from FY2001) Actions in left column to be implemented worldwide (by FY2005) (23) Comprehensive environmental management Establish and promote a consolidated environmental management system Implement consolidated environmental management system that covers automobile-related production companies (in Japan and overseas) (beginning in FY2001) Expand the consolidated environmental management system to cover all business areas (by FY2005) * Actions in left column to be implemented worldwide 89

5 Continued Reporting Due to editorial policy and space limitations, some features included in the Environmental Report 2000 could not be included in this year s report. In the interest of continued reporting, major developments in these areas are reported below. Page no. in Area Details Current status 2000 report Procurement and Production Logistics Building structures for chemical substances management and survey of current conditions Powder paint technologies Plans to implement no-rinsing procedures for all lines at the Hirose Plant Expansion of collaborative shipments with Daihatsu Currently progressing with implementation Continuing to develop technologies Implemented no-rinsing procedures at almost all lines in FY2000 Collaborative maritime transport began in FY2000 in the Kyoto and Shiga region Overseas Initiatives Trial sales of used body parts 68 Started trials sales in Thailand in March 2000 and in Malaysia in August 2000 Continuing to study the prospects of trials sales in Europe also Other businesses (ITS) Proposal of IMTS (Medium-range medium-capacity public transport system) 73 Moving from the trial runs on an experimental line at the Higashi- Fuji Technical Center in March 1999, it was introduced in April 2001 as a park route transport system at a newly opened theme park in Awaji Island in order to make it more possible for people to use it and for the voice of customers to be reflected in the system Development and commercialization of optimal vehicle operation management systems (TIME series) for catering to different industries and business operations 73 Developed new bus location guidance system (TIME-b) and began field tests on a welfare bus route in Miyoshi-cho, Nishikamo-gun, Aichi Prefecture from November 2000 to May 2001 Other businesses (Information and Communication) Collection volume of cellular phones and battery packs 75 From April to September 2000, IDO collected 138,000 (10 tons) of cellular phones and 232,000 battery packs (5 tons). From October of the same year, IDO became KDDI through a merger *On page 40 in Procurement and Production of last year, the total number of suppliers that have acquired ISO certification including those having acquired certification by the end of FY1999 was reported as a total of 197. However according to the results of a recalculation, the actual number was 198. The figure has been corrected and newly reported. Moreover, the number of targeted suppliers has expanded to 505 companies. For details on the achievement status of the Second Environmental Plan and Toyota Environment Chronology, please visit Toyota s Website at Official Company Names for Overseas Affiliates These are the official company names for overseas affiliates, that have been abbreviated in the text. North America CAPTIN (Canadian Autoparts Toyota Inc.), Canada TABC (TABC, Inc.), U.S. TMMK (Toyota Motor Manufacturing, Kentucky, Inc.), U.S. TMMC (Toyota Motor Manufacturing Canada Inc.), Canada NUMMI (New United Motor Manufacturing, Inc.), U.S. Bodine (Bodine Aluminium, Inc.), U.S. TMMI (Toyota Motor Manufacturing, Indiana, Inc.), U.S. TMMWV (Toyota Motor Manufacturing, West Virginia, Inc.), U.S. TCI (Toyota Canada Inc.), Canada SERVCO (Servco Pacific Inc.), U.S. TMS (Toyota Motor Sales, U.S.A., Inc.), U.S. TMMNA (Toyota Motor Manufacturing, North America, Inc.), U.S. TTC (Toyota Technical Center, U.S.A., Inc.), U.S. Latin America TDB (Toyota do Brasil Ltda.), Brazil TASA (Toyota Argentina S.A.), Argentina TDV (Toyota de Venezuela C.A.), Venezuela Europe and Africa TMUK (Toyota Motor Manufacturing (UK) Ltd.), UK TMMF (Toyota Motor Manufacturing France S.A.S.), France TMEM (Toyota Motor Europe Manufacturing, S.A.), Belgium TDG (Toyota Deutschland G.m.b.H.), Germany TMI (Toyota Motor Italia S.p.A.), Italy TAAB (Toyota Autoimport AB), Sweden TGB (Toyota (GB) PLC), UK TSAM (Toyota South Africa Motors (Pty) Ltd.), South Africa TMME (N.V. Toyota Motor Europe, Marketing & Engineering S.A.), Belgium Asia TMT (Toyota Motor Thailand Co., Ltd.), Thailand TMP (Toyota Motor Philippines Corp.), Philippines TAM (P.T. Toyota-Astra Motor), Indonesia Kuozui (Kuozui Motors, Ltd.), Taiwan STM (Siam Toyota Manufacturing Co., Ltd.), Thailand T&K (T&K Autoparts Sdn. Bhd.), Malaysia ASSB (Assembly Services Sdn. Bhd.), Malaysia TAP (Toyota Autoparts Philippines Inc.), Philippines TMV (Toyota Motor Vietnam Co., Ltd.), Vietnam TMCL (Toyota Motor (China) Limited), China Ho Tai (Ho Tai Motor Co., Ltd,), Taiwan Oceania TMCA (Toyota Motor Corporation Australia Ltd.), Australia Middle East and Southwest Asia TMMT (Toyota Sabanci Motor Manufacturing Turkey Inc.), Turkey TKM (Toyota Kirloskar Motor Ltd.), India 90

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