Sustainability Management

• Our Approach to Sustainability
• Sustainability Promotion System
• Materiality
• Stakeholder Engagement

Our Approach to Sustainability

Recognizing that the realization of a sustainable society is a prerequisite for our business growth, the Toyo Tire Group believes that applying our solutions and resources to resolving global environmental and societal issues will help us to mitigate business risks and expand business opportunities into the future. In other words, we cannot achieve sustainability without tapping into the characteristics of our business and service territories to continue creating value for our customers and society through our products and services. By reinvesting the profits thus generated into sources for creating further value, we can establish a cycle of creating high added value. For this to happen, we believe that it is imperative to work with stakeholders in the supply chain and collaborate with relevant international organizations.

Sustainability Promotion System

In April 2021, we established the Sustainability Committee (Chairman: President & CEO of Toyo Tire Corporation) under the Executive Committee in order to strengthen and promote sustainability management.
The Sustainability Committee deliberates and makes decisions on matters concerning the Group's sustainability strategies, submits them to the Executive Committee as per in-house rules, and reports them to the Board of Directors.
To implement strategies, the Sustainability Committee determines topics for activities that are linked to material issues (materiality), establishes a cross-sectional task force to work on them, and orchestrates the planning of policies, targets, and activity plans (measures). It then verifies and deliberates on their content and progress periodically, provides instructions and advice based on the analysis results, and improves our activities. For sustainability items other than materiality, they leave each functional organization to implement them and periodically monitor their progress.
The Sustainability Committee also works with other special committees as appropriate in promoting sustainability.

Materiality

Since it is difficult to respond to all the social issues and demands due to limitations in scope of relevance to business areas, internal resources, etc. in incorporating sustainability into the company’s business management, it is important to identify the issues that must be prioritized and focused on according to the company’s intentions. TOYO TIRE decided the materiality at the Sustainability Committee in June 2021 and approved it at the executive committee in July of the same year.
Identifying the materiality will clarify the orientation for effectively deploying internal resources and the issues that must be tackled by each employee, which will heighten work motivation and promote unity of awareness. This is also important in increasing stakeholder engagement by publicly disclosing which social issues and demands TOYO TIRE group intends to respond to and the corporate values it intends to improve.

TOYO TIRE Group’s Materiality

1. Contribute to the realization of a sustainable mobility society

This is a high priority issue because sustainability for tire and auto parts manufacturers can only be ensured through the sustainability of the mobility society. One of our company’s key challenges is to fulfill our responsibilities (i.e., contribute through our unique products and services) to ensure a sustainable mobility society characterized by zero environmental load, accidents, and inefficient transportation.

2. Support and create a rich, mobile life

Responding to people’s various expectations for their mobile lives through our unique products and services while satisfying the sustainability requirements (environment and safety) of a mobility society creates added value that supports diversity of a mobility society and is one of the key challenges of our company.

3. Create challenges and job satisfaction for various human resources

Our company is looking for human resources with mid- to long-term perspectives, original and flexible thinking, independence, and spirit of challenge. One of the key issues that our company must prioritize is the strengthening of the diverse pool of human resources who can support our company’s business management and create even greater values in an uncertain economy and society that are changing drastically and rapidly.

4. Continue to promote the next-generation mobile technology innovation

The values that are provided through our products and services must support the evolution of mobility that is being demanded in this new era. One of the key issues that our company must prioritize is the constant implementation of technological innovation to materialize the aforementioned values and the continuous promotion of technological evolution that addresses the social demands.

5. Pursue decarbonization in all corporate activities

TOYO TIRE group will address this key issue by adjusting our vector to the global trend in which countries around the world including Japan, business communities, and industries are beginning to incorporate the same decarbonization targets and initiatives. We will not only strive to create an environmentally-friendly mobility society through our products and services, but also decarbonize the entire manufacturing process and supply chains and conduct various initiatives to improve cost competitiveness.

6. Promote supply chain sustainability

We position and prioritize the environmental and social issues of the supply chain as key issues based on our understanding that sustainability of business management cannot be ensured without the sustainability of raw material suppliers including that of natural rubber and that truly abundant mobility life can only happen through healthy supply chains.

7. Protect the fundamentals of manufacturing (quality and safety)

No matter how valuable a product or service may be, if its core values including quality and safety are compromised, then it will no longer be valuable or significant within a society. One of the key tasks tackled by our company is to ensure quality and safety as our top priority in all business aspects such as by learning from our past mistakes.

Materiality identification process

We identified materiality using the following process.

Third-Party Evaluations and Expert Opinions on TOYO TIRE's Materiality

Stakeholder Engagement

We consider the impact on the evaluation and decision-making of all stakeholders and examine the priority issues.
The significance of the Group in society is that we not only solve the issues requested by our stakeholders, but we also create surprise and new discoveries for society and contribute to enriching society. Through our opportunities for engagement with stakeholders, we strive to be accountable by communicating information accurately and clearly.
And we also check if we are providing business partners and customers with not only products and services, but also the excitement that exceeds their expectations through our various work.

List of stakeholder groups

Value Chain	Affected Stakeholders
	Directly	Indirectly
Raw materials /Purchasing	Business Partners (Suppliers*)	Shareholders & Investors, Creditors, Local Communities, NGOs, Government, Business Organizations**, global environment
R & D	Employees, Co-researchers & Joint developers, Business Partners (Car Manufacturers)
Manufacturing	Employees
Logistics	Employees, Business Partners (Logistics)
Sale	Employees, Business Partners (Car Manufacturers, Dealers)
Use /Waste recycling	Customers

• * Main supply chain elements: natural rubber farmers and wholesalers, synthetic rubber manufacturers, petrochemical product producers
• ** TOYO TIRE or one of our group companies belongs to the following trade associations;

Engagement Policy

Through Engagement

• Responding to changes in the business environment and social needs will create delight and surprise in our stakeholders beyond their expectations.
• We recognize the impact of our business on society and will share the rich blessings from the earth with our stakeholders into the future.
• We will fulfill our responsibility to respect human rights through our business activities and aim for a society in which all stakeholders can play an active role with diverse values.
• The entire supply chain will engage with diversifying social issues, as well as achieve sustainable procurement.
• Through dialogue and collaboration with stakeholders, we aim to resolve social issues and develop local communities by making use of the Group’s resources.
• As the responsibility of the company to all of its stakeholders, we will ensure safety and security in our business activities.
• We recognize our responsibility toward our various stakeholders and will ensure transparency in management and will pursue fairness within the organization.

Engagement approach example

Customers	Providing product information at consultation counters / sites, satisfaction surveys, tours / meetings, etc.
Business partners	Supplier briefing sessions, questionnaires, consultation / reporting counters, information exchange by visiting, etc.
Employees	Labor-management consultations, in-house newsletters, consultation / reporting counters, etc.
Local community	Community contribution activities, business site tours, interviews and meetings with local governments and NGOs / NPOs
Shareholders, Investors	General meeting of shareholders, investor interviews / meetings, information provision on IR sites, tours, etc.

External initiatives

We subscribe or endorse to the following initiatives;