CSR Policy

Basic Policy
Priority Theme
Comment from External Expert
Comment by Corporate Officer in Charge of CSR

Basic Policy (Established in May 2014)

「責任」「信頼」「誠実」

The Toyo Tire Group seeks to remain a company admired by individuals and society, each member keenly aware of their “Connection” with society.

The core values of CSR: “Responsibility”, “Trust”, and “Integrity”.
Responsibility: Responsibility of having a greater impact as the company becomes global.
Trust: Being a steward of our environment and society as we execute our business.
Integrity: Integrity in our business operation as the basis of our CSR.

Priority Theme

Priority Theme and Ideal Status in 2020

Priority Theme	Ideal Status in 2020	Priorities	Value Chain	Stakeholders
1 Product and Service　Reliability and Innovation	Providing eco-friendly products and services founded on high quality and safety	・Ensuring product quality based on thorough customer orientation ・Efforts to alleviate and adapt to climate change ・Development of human resources with technical expertise	・R & D ・Use/Waste recycling	Directly ・Customers Indirectly ・Shareholders and Investors ・Creditors ・Business organizations
2.Contribution to the Global Environment	Promoting environmental management on a Group-wide basis	・Efforts to alleviate and adapt to climate change ・Efforts to reduce water risk ・Resource recycling efforts	・Manufacturing ・Logistics ・Sale	Directly ・Local Communities ・Environment Indirectly ・NGO ・Shareholders and Investors ・Business organization
3.Respect for Human Rights and Diversity	Diverse employees actively working in an environment with a global sense of human rights	・Fulfilling responsibility to respect human rights ・Review labor standards taking into consideration customary international law	・R & D ・Manufacturing ・Logistics ・Sale	Directly ・Employees Indirectly ・NGO ・Shareholders and Investors ・Business organizations
4.Collaboration with Business Partners	Entire supply chain engaging in CSR activities	・Supply chain management (Society and Environment)	・Raw materials/ Purchasing ・Logistics	Directly ・Business Partners (Supply chain/Logistics) Indirectly ・Shareholders and Investors ・Business organizations ・Local Communities ・NGO ・Administration
5.Harmony with Local Communities	Contributing to local community development while responding to stakeholders’ voices	・Engagement with local communities ・Preserving biodiversity	・Raw materials/ Purchasing ・Manufacturing	Directly ・Local Communities ・Environment Indirectly ・NGO ・Administration ・Shareholders and Investors
6.Creation of Safe and　 Healthy Workplaces	With priority given to safety, promoting the creation of workplaces that ensure well-being and security	・Global-level worker safety and health management	・R & D ・Manufacturing ・Logistics ・Sale	Directly ・Employees Indirectly ・Business organizations ・Shareholders and Investors ・NGO
7.Reinforcement of Corporate Governance and Compliance	Engaging in business activities with integrity while constantly improving management transparency	・Reinforcing corporate governance ・Further spreading awareness of placing greatest priority on compliance	All value chain	We are working to reinforce corporate governance/compliance as the foundation of CSR management, while paying close attention to all stakeholders.

Identification Process of Priority Themes (2013 -2014)

We have identified, from a wide range of CSR issues, those that need to be addressed as a high priority, based on the materiality of each issue to the Group and its stakeholders. In May 2014 we consolidated those issues into seven priority themes.
We defined our “Ideal Status in 2020” to visualize where we want to be as a company in each area.

Identification Process of Priority Themes

Identification Process of Priority Theme

Interviews with external experts (April 2014)

Ms. Mariko Kawaguchi, Chief Researcher, Daiwa Institute of Research Ltd.

I believe that the challenges that the tire and rubber industries face are conserving resources (natural rubber sourcing), changing cars (commercialization of electric vehicles), and issues with human rights (child labor in rubber plantations). Especially with natural rubber which is the primary raw material, we are concerned about child and forced labor as well as destruction of ecosystem through development of rubber plantations. I believe that we must address these issues relating to environment, sourcing, and human rights from the standpoint of business sustainability. It is important for you as the company to show your stakeholders how you plan to identify and address these issues. I hope that Toyo Tire Group will be able to show us your plans as much as possible even if they are still work-in-progress.

Mr. Toshihiko Goto, Chief Executive Officer, Sustainability Forum Japan

In recent years, the way companies disclose information has been changing drastically. More emphasis is now being placed on long-term, non-financial, and diversity issues including protection of human rights and prevention of unethical business practices. It is important to define the company policy on issues that must be addressed over the long term. Examples include reducing CO2 emissions, diversifying the board of directors, and advancement of women in the workplace. In terms of risks associated with supply chain, I believe it is better to talk in good faith with the stakeholders, including local non-government organizations (NGO), to prevent potential issues. I would like Toyo Tire Group to consider the long-term limits of the environment, resources, and the society when deciding what actions the company should take.

Extracting priority issues required for the sustainability of the Toyo Tire Group (2017)

Taking into consideration the accelerating changes in the business environment after identifying Priority Theme and our vision for 2020 as well as new demands of our stakeholders, we have extracted issues that should be addressed with priority in order to achieve sustainability by our Group into the future.
Extracting of issues was done by stressing objectivity, taking into consideration the results of evaluations conducted by independent rating organizations, and after obtaining the opinion of independent experts.
Of the priority issues that were extracted, a working group (WG) was established for each those issue that require cross functional activity promotion, with the WG considering responses to these issues.

Contributions to Achieving SDGs and Examining Future Ideal Status　(2017-)

Having positioned contributing to efforts to achieve the 2030 sustainable development goals (SDGs) adopted by the United Nations as one important business issue, we have established cross functional WGs group-wide where this issue is discussed. After compiling the goals by the end of fiscal 2018 and obtaining approval by the Executive Committee as SDGs for our Group, we plan to expand these throughout the entire Group and all organizations.
Furthermore, we defined our “Ideal Status in 2020” to visualize where we want to be as a company in each current priority theme and we are also examining a long-term vision for our Group that can be realized by achieving SDGs.

Promotion System

To promote sustainability, the Executive Committee (chairperson: President), which has been delegated authority by the Board of Directors, has approved the creation of WGs to discuss issues that should be addressed with priority, and the WGs debate an action plan that includes orientation, goals, and targets. The WG brings together the responsible parties in related business organizations, the discussed action plan is approved by the Executive Committee, and the plan is spread throughout the entire Group and all organizations. WGs for the four themes of “supply chain”, “environment”, “human rights and labor”, and “SDGs” have already been established and discussions are underway.
To promote sustainability, the Executive Committee manages the progress of activities undertaken by each WG, and evaluations are made of the effectiveness of the management methods for each theme using the results of performance ratings by an independent organization, the opinions of stakeholders obtained from the complaint processing mechanism, and industry trends. Improvements are then made.

Working Group (WG)	Members (Domestic^*1)	Activities
SDGs WG	Corporate Headquarters: Corporate Planning Division Others^*2	Create our group SDGs and our vision for the group in 2030
Supply Chain WG	Business Headquarters: Procurement Division R&D Headquarters: R&D Division No.1	Update CSR Procurement Guidelines (examine policies for sustainable procurement of raw materials, including natural rubber)
Environment WG	Quality Assurance, Environment & Safety Headquarters: Environment & Safety Division R&D Headquarters: Central Research Center, R&D Division No.1 Production Headquarters: Domestic Production Division Fundamental Production Engineering Headquarters: Production Engineering Division	Create a Climate Change strategy (scenario analysis)
Human Rights & Labor WG	Corporate Headquarters: Administration Division, Compliance & Legal Division Environment & Safety Headquarters: Environment & Safety Division	Create a Human Rights & Labor policy and an Anti-Corruption policy

*1 Responsible parties at related overseas companies also participate in all WGs
*2 Organizations closely tied to each goal participate as members.

Supporting Independent Initiatives

We support the following independent initiatives when promoting sustainability.

WBCSD (World Business Council for Sustainable Development)

IRSG (International Rubber Study Group)

Comment from External Expert

For the Tire and Automotive Parts (Business), there are numerous ESG issues that should be tackled by not only the Company and Group companies but by the entire supply chain.

These are environmental (E), social (S), and governance (G) related issues that should be resolved in order to create a sustainable society in line with the demands of international society. They have been included in numerous principles, agreements, and agendas, such as the United Nations Global Compact (2000), Guiding Principles on Business and Human Rights (2011), the Paris Accord (2015), and SDGs (2015).
As noted in the “Message from the President” in this report, the Company has captured these changes, identified ESG issues that should be addressed with priority in January 2018, and positioned them as business issues related to the Group’s sustainability in May. Furthermore, based on the approval of the Executive Committee, the decision-making body for business execution, four Sustainability Promotion WGs were launched to examine the issues of supply chain, environment, human rights and labor, and SDGs. Various efforts including not only indicating a policy of identifying issues and making company-wide efforts through a commitment by management from a long-term perspective but also respecting international norms and related standards can be highly praised.
Efforts to address ESG issues are assessed for the three stages of policy, system and execution, and disclosure. It is hoped that in the future, each WG will create a concrete implementation plan, work with the other WGs to execute the plans, set standards to evaluate achievement (KPIs), and disclose the status and results of its efforts to stakeholders.

Hirose Etsuya, Senior Executive Officer, ESG Research Center, QUICK Corp.

Comment by Corporate Officer in Charge of CSR

Thank you for the valuable opinions from an expert perspective regarding the Toyo Tire Group CSR Report 2018.

As for our efforts to solve ESG problems, we are trying to promote sustainability in the mobility field, which is currently undergoing rapid changes, and are greatly encouraged by the fact that our capturing changes in the business environment and building a global sustainability promotion system have been highly praised.
We are now at the stage of moving forward with formulating a global policy taking into consideration international standards, and going forward, we will resolve identified priority issues while the Executive Committee manages performance based on the formulated policy. The group, and in particular the WGs, is examining SDGs that will generate growth for society and Group through the Group’s contributions to the solving of issues. When setting goals, we search for those that not only solve issues requested by society but also those that create surprise and new discoveries within society and can contribute to enriching society.
We will continue to proactively inform stakeholders about these sustainability activities via these CSR reports, etc. We strive to improve both quality and reliability while considering the accuracy and clarity of the reported details with reference to international guidelines such as GRI standards, CDP question items, and Business Reporting on the SDGs in order to correctly assess our group’s corporate activities regarding information disclosure.

Hirokazu Miyabe, Division General Manager, Administration Division,
Toyo Tire Corporation