Challenges
- Responding to climate change risks and opportunities (TCFD)
- Reducing greenhouse gas emissions
Relevant stakeholders
Direct:Local communities, the environment, customers
Indirect:Shareholders and investors, creditors, NGOs/NPOs, industry groups
Our policy
Climate change has begun to cause frequent extreme weather events and natural disasters in recent years, such as heavy rainfall and flooding. We acknowledge that it is increasing the risks faced by our Group, including impacts on the growth of trees providing the natural rubber used to make tires, impacts on plant operations, and disruptions in the supply chain.
We also recognize that our Group's efforts to reduce CO2 and other greenhouse gas (GHG) emissions within its business are essential in working toward achieving both the Paris Agreement goal of limiting average temperature increases to below 2°C, and carbon neutrality in Japan.
As the impact of climate change intensifies, increasing social demands are being made towards mobility. We see the mobility business as the heart of our Group, and recognize that responding to climate change is the most key issue decisive to our growth. Our responsibility to both current and future generations is to reduce our greenhouse gas (GHG) emissions to help achieve the long-term targets set by the Paris Agreement and we are aiming to be carbon neutral by 2050.
With all this in mind, the Group has declared our support for the TCFD recommendations, and will report information covering governance, strategy, risk management, and metrics and targets in accordance with the TCFD framework in order to activate stakeholder dialogue and promote climate change-related initiatives that help work toward a more sustainable world.
The Group supports laws and regulations (such as the Act on Promotion of Global Warming Countermeasures, and the Act on Rationalizing Energy Use) as well as policies related to climate change and reduced energy use, and is taking appropriate steps to comply with them at our sites both in Japan and overseas.
Responsible executive (as of April 2026)
Senior Corporate Officer and Vice President of Quality Assurance, Environment & Safety Headquarters
Organizational responsibilities (as of April 2026)
The Toyo Tire Sustainability Committee is chaired by the president and meets four times a year. The committee reports, deliberates and makes decisions on how to respond to climate-related and other sustainability issues, and what progress is being made.
The Decarbonization Task Force, which sits under the Sustainability Committee, discusses climate-related activity plans, targets and KPIs, and the Sustainability Committee regularly confirms and monitors the status of those activities.
Any climate-related matters that have been approved in the Sustainability Committee are then reported to or debated in the Executive Committee and reflected in the formulation or review of our annual and medium-term business plans. The developments are reported to the Board of Directors in a timely and appropriate fashion.
Reporting systems
- Reporting hotline (whistle-blowing system): For executives, employees and suppliers
- Customer Relations Department: For customers (consumers) and local communities
- Online inquiry form: For customers (consumers), shareholders and investors, and NGOs/NPOs
Main resources for promoting activities (2025)
Costs of climate change adaptation and mitigation in main business area: 1,138 million yen
Responding to climate change risks and opportunities (TCFD)
Strategy
We have performed a scenario analysis of the impact climate change could potentially have on Group corporate activities.
- ① Select scenarios to use and understand the outlook of each scenario
- ② Investigate risks and opportunities in each scenario
- ③ Assess the significance of risks and opportunities, identify those of high significance and organize measures against risks
- ④ Calculate the financial impact of risks expected to have a large impact and explore possible countermeasures
● Scenarios to use and the outlook of each scenario
In our analysis, we evaluated the impact of climate-related risks and opportunities in a baseline scenario (3-4°C scenario) and a transition scenario (1.5°C scenario). In the baseline scenario we focused on physical risks, and explored transition risks in the transition scenario.
| Baseline scenario | Transition scenario | |
|---|---|---|
| Summary | No additional measures are taken to limit the rise of emissions, and average temperatures rise by up to 3-4°C within the 21st century | Decarbonization efforts advance in order to limit the average temperature rise to below 1.5°C during the 21st century |
| Scenario outlook |
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| Primary scenarios referenced |
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● Highly significant risks and opportunities, and actions to address risks
We identified climate-related risks and opportunities for each scenario and evaluated the significance of risks and opportunities based on the probability of certain events occurring that could prove to be pertinent factors in each risk and opportunity and the degree of impact on the expected costs and other factors in our business. We also established measures against risks of high significance.
Highly significant risks and opportunities
Actions to address risks
- Develop technologies that reduce tire weight to minimize raw material usage (Material issue 1, 2)
- Promote the development of tires aimed at reducing the environmental impact of mobility, including through fuel-efficient performance (Material issue 1, 2)
- Develop high efficiency, high precision tires using THiiiNK to reduce R&D costs (Material issue 4)
- Strengthen supply capacity at production bases in Europe and the United States to create an agile and optimized global supply system and lessen the impact of reduced production and rapidly rising distribution costs
- Promote GHG emission reduction throughout the supply chain as part of obtaining SBTi certification (Material issue 5)
- Minimize damage and loss and restore operations promptly using business continuity plans (Enterprise risk management)
Significance mapping of risks and opportunities by scenario (2035 time horizon)
Baseline scenario: Risk significance assessment
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Transition scenario: Risk significance assessment
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Baseline scenario: Opportunity significance assessment
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Transition scenario: Opportunity significance assessment
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● Financial impact of risks that are expected to have a significant impact, and possible countermeasures
1.Impact of changes in climate patterns on the procurement of natural rubber (risk)
| Type | Climate-related event/financial impact on business | Impact cost/year impacted | Calculation method | Countermeasures |
|---|---|---|---|---|
| Chronic | Changing climate patterns will generate changes in the areas in which natural rubber plants can grow, a deterioration in quality and other issues, all of which could increase the cost of natural rubber procurement | Approx. 0.7 to 9.7 billion yen(Medium-term: 2030) |
(Minimum)
Volume of natural rubber procurement × Increase in natural rubber prices
Increase in natural rubber procurement cost × Percentage increase in natural rubber procurement volume
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2.Impact of carbon pricing mechanism(risk)
| Type | Climate-related event/financial impact on business | Impact cost/year impacted | Calculation method | Response measures |
|---|---|---|---|---|
| Policy | Introducing a carbon pricing mechanism results in a rise in the cost of emitting CO2 | Approx. 0.5 billion yen(Medium-term: 2030) |
Shortfall in CO2 reduction target × Carbon tax
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| Approx. 5.7 billion yen(Medium-term: 2030) |
CO2 emissions × Carbon tax
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Risk management
Identification and assessment of climate-related risks is carried out primarily by the Corporate Administration Division, which leads TCFD response, the Corporate Infrastructure Division's ESG Promotion Department, which oversees the Sustainability Committee, and the Environment & Safety Division's Environment & Health Department, which manages the Decarbonization Task Force. After assessment, they are deliberated by the Sustainability Committee to evaluate company-wide climate-related risks.
Through the Sustainability Committee's Decarbonization Task Force, we closely monitor the regulatory requirements in each country-such as GHG emissions reduction targets (including renewable energy targets), vehicle fuel efficiency regulations, and bans on sales of new gasoline-powered vehicles-and encourage the relevant departments to address each risk and manage progress.
Metrics and targets
Climate-related metrics
-
GHG emissions (Scope 1, Scope2, Scope3)
See the results from 2019-2025 here. -
GHG emissions intensity
See the results from 2019-2025 here. -
Introduction of an internal carbon pricing system
Used to evaluate decarbonization-related projects and other investment initiatives. Following a trial operation in fiscal 2023, the system was officially launched in fiscal 2024. As of April 2026, the carbon price* is set at 10,000 yen/ton.
* The appropriateness of the carbon price will be assessed each year and revised if necessary.
Climate-related targets
GHG emissions reduction targets
- * Decided by the Sustainability Committee in November 2021 and approved by the Executive Committee in December 2021.
- * Announced on February 15, 2022.
- * Target increased from 46% to 50% as decided by the Sustainability Committee in November 2025 and approved by the Executive Committee in December
| Scope1,Scope2 | GHG emissions: Reduce GHG emission by 50% by 2030 compared to 2019 and aim to achieve carbon neutrality by 2050. |
| Scope3 | GHG emission per unit: Aim to help reduce GHG emissions per tire in 2030 by 20% compared to 2019. |
*One of our milestones is to aim to reduce Scope 1 & Scope2 GHG emissions by 25% by 2025 compared to fiscal 2019
Continuing to align with TCFD
To continue incorporating the TCFD recommendations, in the future we will further refine our scenario analysis to gain a greater understanding of the quantitative impacts of risks and opportunities, and to investigate, devise and enact strategies in response.
We will also follow the TCFD recommendations when providing our stakeholders with timely disclosures.
Reducing GHG emissions
Reducing energy consumption
To help mitigate climate change, the Toyo Tire Group is striving to reduce energy consumption through effective usage of the energy required for corporate activities both in and outside the organization. We are also developing new products and technologies that contribute to climate change mitigation and adaptation.
See the results from 2021-2025 hereEnergy consumption (during logistics)
See the results from 2021-2025 hereEnergy intensity
See the results from 2021-2025 hereExamples of reducing energy consumption
- Optimizing heat sources (by switching from steam to electricity, etc.) to reduce heat loss
- Reinforcing heat insulation of steam pipes and metal molds and removing unneeded pipes to reduce heat loss
- Applying radiative cooling paint to buildings to reduce cooling load
- Using steam highly efficiently (utilizing waste heat and installing accumulators) and upgrading to highly efficient equipment to increase energy efficiency
More specifically, the Kuwana Plant has reduced heat loss by switching the heat source for the component-warming storage from steam to electricity, reducing the energy consumption of this equipment by more than 90%. Since October 2024, the Sendai Plant has also been using steam ejectors to recover flash steam from condensate generated during the vulcanization process and reuse it as low-pressure steam. This has reduced fuel consumption by approximately 300 kL per year in crude oil equivalent.
Reducing the energy requirements of products (fuel-efficient tires)
See the results from 2021-2025 hereReducing greenhouse gas emissions
Greenhouse gas emissions are seen as a major cause of climate change, and the Toyo Tire Group is working to reduce GHG emissions through its products and business activities inside and outside the organization.
In addition to the initiatives to reduce energy consumption listed above, we are also addressing Scope 1 and 2 emissions by converting equipment to alternative fuel sources, including electricity. More specifically, we are converting not only steam-powered equipment but also forklifts to electric power, and in 2025 electrified 11 forklift units to achieve an annualized CO2 emissions reduction of approximately 450 tons.
Our initiative to convert boilers to gas fuel with fewer GHG emissions has been completed at all bases in Japan aside from those where extensive gas infrastructure still needs to be built.
The Toyo Tire Group aims to contribute to a 20% reduction in Scope 3 GHG emissions per tire by 2030 compared to 2019. A calculation of GHG emissions throughout the Group's value chain based on the Japan Automobile Tyre Manufacturers Association's (JATMA) Tyre LCCO2 Calculation Guidelines Ver. 3.0.1 revealed that emissions from the Category 11 product use phase account for at least 80% of overall GHG emitted. According to the guidelines, fuel-efficient tires can reduce CO2 emissions during use (during vehicle driving) by 95.4 kg CO2e per tire for passenger car radial (PCR) and 879.0 kg CO2e per tire for truck and bus radial (TBR) compared to standard tires. Our technical division is working to develop technologies to enhance fuel efficiency of tires by reducing their rolling resistance and weight. Over the medium to long term, the Group is planning to enlist the help of the Product Planning Division in upgrading fuel efficiency performance each time we change a tire model.
As of 2025, emissions from PCR had been reduced by 3.0% compared to 2019, which is a reduction of 182 thousand tons-CO2e.
GHG emissions
See the results from 2019-2025 here.GHG emissions intensity
See the results from 2019-2025 here.Third-party assurance:
To ensure the accuracy and reliability of the data that we disclose, we have obtained the assurance of a third-party organization for our fiscal 2025 environmental data.
- Verification of scope: Energy-derived CO2 emissions, energy-derived CH4 and N2O emissions, non-energy-derived dry ice, HFC (at some bases), total Scope 1 emissions, total Scope 2 emissions, Scope 3 emissions (categories 1, 11 and 12), total water intake, breakdown of water intake, total water discharge and breakdown of water discharge at 114 sites* of Toyo Tire Corporation and its affiliated companies
- Verification period: January 2025 to December 2025
- Verification criteria: ISO14064-3: 2006, related laws and regulations, and the assurance organization's protocol
- Third-party assurance organization: SGS Japan Inc.
* Toyo Tire Corporation (Headquarters, Sendai Plant, Kuwana Plants (tire and automotive parts), Hyogo Manufacturing Complex, Corporate Technology Center, Tire Technical Center, Automotive Parts Technical Center, Miyazaki Tire Proving Ground, Saroma Tire Proving Ground, Tokyo Office, Hiroshima Office, Kanto Distribution Center, Kansai Distribution Center); Fukushima Rubber Co., Ltd.; Ayabe Toyo Rubber Co., Ltd.; Orient Machinery Co., Ltd. (Headquarters, Sendai branch, Rokko branch); Toyo Tire Japan Co., Ltd. (88 sites); Toyo Tire North America Manufacturing Inc.; Toyo Automotive Parts (Guangzhou) Co., Ltd.; Toyo Tire (Zhangjiagang) Co., Ltd.; Toyo Tire (Zhangjiagang) Co., Ltd.; Toyo Tyre Malaysia Sdn. Bhd.; Toyo Rubber Chemical Products (Thailand) Limited; Toyo Tire Serbia D.O.O
Please click here to read more about verification statement.Increasing use of clean energy
From the second half of 2022, the Toyo Tire Group began switching electricity purchased primarily at production sites to power derived from renewable sources. We will systematically promote efforts to achieve a global 90% renewable energy usage ratio by 2030. That ratio stood at 92% on a purchased electricity basis at the end of 2025. We are also actively introducing photovoltaic (PV) power generation systems for in-house use.
We have installed PV power generation systems at several bases, including the Serbia Plant (8.4 MW generation capacity), which started operation in 2022, the Malaysia Plant (15.8 MW), and the Corporate Technology Center in Japan. These contribute to reducing CO2 emissions by approximately 19,000 tons per year.
Furthermore, as part of our efforts to increase use of renewable energy, we began procuring electricity for our Kuwana Plant via an off-site power purchase agreement (PPA) in June 2026. The power is sourced from specific PV power generation facilities located in Japan’s central Chubu region, and we receive both the electricity generated and its associated environmental value in the form of certificates. These facilities have a total installed capacity of approximately 7.8 MW, with an estimated annual generation capacity of approximately 9.7 GWh. This enables us to procure electricity from specific renewable energy sources on a long-term basis, helping reduce Scope 2 emissions. We will continue using off-site PPAs and other approaches to steadily and systematically adopt renewable energy.
SBTi*1initiatives
In November 2024, Toyo Tire Corporation received SBT certification from the Science Based Targets Initiative (SBTi) for its GHG emissions reduction targets set for 2030, which are based on scientific evidence to limit global warming to within 1.5ºC.
We have already set targets for reducing GHG emissions as the Toyo Tire Group and are currently working to achieve them, and we will further strengthen and promote our efforts across the entire supply chain.
GHG emissions reduction targets have been certified are as follows.
| Classification | Target |
|---|---|
|
Scope1,Scope2
(Emissions from our company's business activities) |
46.20% reduction in total emissions by 2030 (compared to 2019) |
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Scope3 Category 1
(Emissions from other companies in purchased products and services) |
Suppliers accounting for 89.00% of emissions related to purchased products and services will have science-based targets by 2029 (compared to 2019) |
*1 SBTi: Initiative to achieve the target of limiting global average temperatures increase to within 1.5ºC.
CDP Climate Change assessment （Rated A）
In the 2025 assessment by the international environmental disclosure platform CDP, we received an “A” rating—the highest possible rating—in the climate change category.
This is based on a comprehensive evaluation of our climate change-related governance, strategy, risk management, metrics and targets, and disclosure transparency. We have continuously focused on efforts such as enhancing disclosures based on TCFD recommendations, reducing greenhouse gas emissions, and expanding our use of renewable energy.
Going forward, we will continue to prioritize climate change as one of our most important management issues, and remain committed to promoting effective measures and enhancing the quality of our disclosures to help achieve a sustainable society.
