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EXECUTIVE PERSPECTIVE: A vision for climate and sustainability from Toyota

We sat down with Kevin Butt, Toyota Motor North America Regional Environmental Director, to understand how one of the largest global auto makers is thinking about sustainability, climate risk and its products over the next few decades.

19 March 2017

How is sustainability important for Toyota’s long term prosperity?

As it should be for corporate citizens generally, it is important to Toyota that we are part of the solution to the world’s greatest challenges, such as those addressed in the United Nations Sustainable Development Goals. Being a responsible corporate citizen is central to Toyota’s culture and
is embedded in our Guiding Principles.  It is also important to become a company that can achieve “sustainable growth”, meaning growing our business while at the same time reducing any negative effects or externalities (e.g. GHG emissions)  from our operations and products.   The spirit of this challenge propels our innovation, and is part of Toyota’s DNA. We wish to continue to be a company that creates a desirable future with our stakeholders and brings smiles to our customers and society.

How is Toyota leading on sustainability?

Toyota has a broad portfolio of diverse initiatives promoting sustainability including:

  • As of Jan. 31, 2017, we have reached more than 10 million cumulative units of hybrid vehicle (HV) sales globally, including plug-in hybrids. The latest milestone was achieved just nine months after total global hybrid sales reached 9 million units at the end of April 2016.
  • Including Prius Prime, Toyota and Lexus now have 14 hybrid models available in North America; globally, we have 33. We estimate Toyota’s hybrid technology has helped save more than 7.66 billion gallons of gasoline worldwide and resulted in an estimated 77 million fewer tons of CO2 emissions, since 1997 when Prius first became available in Japan.
  • In late 2015, we introduced the Mirai fuel cell electric vehicle in Japan, followed by Europe and California in 2016. The Mirai provides over 300 miles of driving range, a refuelling time of around five minutes, and the only tailpipe emission is water.  Mirai availability will expand as hydrogen infrastructure grows.
  • We have made close to 6,000 hydrogen fuel cell patents available, royalty free, to support the expansion of a hydrogen society.
  • We are a leader in the number of dealerships that have achieved LEED® certification.  With 54 and counting, Toyota and Lexus have more dealership facilities certified to LEED® standards in the U.S. and Canada than any other auto manufacturer.

What is an example of an industry leading best practice in sustainable product or operations at Toyota?

From a product perspective:

  • Our Prius Prime has an EPA-estimated 133 MPGe, making it the most fuel-efficient vehicle on the road today. The improved efficiency represents a substantial 26 percent enhancement over its predecessor.
  • Our Mirai fuel cell electric vehicle boasts one of the highest ranges of any zero emission vehicle on the road.  With a range of over 300 miles per tank, a refueling time of around five minutes, and emissions that consist only of water vapor, Mirai is leading the world forward toward a more sustainable future.
  • Advanced battery research – breakthrough involving magnesium batteries
    that could open the door for smaller, longer-lasting batteries for everything
    from cell phones to cars.   We published this research in the hopes of moving battery research along.

From an operations perspective:

  • We achieved a 12th consecutive Energy Star Partner of the Year Sustained Excellence Award.  Toyota was recognized with this award from the Environmental Protection Agency for its continued leadership in protecting the environment through energy efficiency. EPA recognizes Energy Star partners that demonstrate improved energy performance of buildings and plants through a corporate-wide energy program. Since 2002, Toyota has saved more than 16 billion kWh of electricity and realized cost savings of $640 million across its 14 North American manufacturing sites.
  • We are a founding member of the US Zero Waste Business Council and a thought-leader in developing new waste metrics.  The U.S. ZWBC defines a Zero Waste Business as one with a 90 percent or greater diversion of all waste from landfill, incineration and the environment, with an ultimate goal of 100 percent diversion. Toyota is helping to define how to measure this, and, in the process, is helping to evolve waste management thinking from basic diversion of waste from landfill to reducing at the source and increasing reuse and recycling.

Is Toyota transparent about its GHG emissions (including scope 3 or use of its products)?

Yes.  TMC reports global GHG emissions in its global environmental report and
through CDP.  TMC provides scope 3 data to CDP, including for emissions from use of sold product.  The graphic below illustrates how our carbon footprint per unit of production is decreasing over time.

toyotaIs there a strategic plan in line with IPCC guidance to reduce GHG emissions at Toyota through 2050 in order to help keep the planet within 2 degrees C of warming?

Yes, Toyota has recently committed to setting science based targets across scopes 1, 2 and 3 emissions to do our part to keep the world within 2 degrees C of warming.  Alongside this commitment is the Toyota Environmental Challenge 2050, which among many important milestones, pledges Toyota to reduce our vehicle emissions (scope 3 use of product sold) by 90% bv 2050.  Such an achievement will exceed policy guidance to keep our planet within 2 degrees C of warming:



All regions, including North America, have been working on the next 5-year
environmental action plan, which will put us on track to achieving these ambitious goals.

How would you sum up the importance of sustainability and its impact on long term value creation?

Toyota will continue to improve in all aspects of sustainability in part to
achieve a net positive impact as a business, as outlined by our 2050 Global Challenge.  We will lead by example as this is the best long term value creation strategy for all of our stakeholders.

Any opinions Expressed in "Executive Perspectives" are those of external parties and not those of Thomson Reuters.


Corporate Governance, Executive Perspective

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