SUSTAINABILITY REPORT — 2020 INDEX Letter to stakeholders 5 1. Methodological note 11 2. Abstract 15 2.1 Toyota’s History and Values 30 2.2 Commitment to the Environment 30 2.3 The Role of Electrification, Towards Zero Emission Mobility 30 2.4 Sustainability of Toyota Motor Italia’s facilities 30 2.5 New Mobility Solutions 30 2.6 Mobility That Puts People at the Center 30 2.7 TMI’s People: The Engine of the Future 30 2.8 Support to the Network and the Community in the Covid-19 Emergency 30 3. Company profile 23 3.1. History and values 24 3.1.1. History of Toyota 25 3.1.2. Toyota values and vision 26 3.2. Toyota’s global sustainability strategy 30 3.3. Governance of TMI – Toyota Motor Italia 32 3.4. Internal Audit and Risk Management system 34 3.4.1 Internal Audit 35 3.4.2 Risk Management 36 3.5. Business Ethics, Compliance and Anti-Corruption 39 3.6 Privacy information security 40 3.6.1 The handling of data 40 3.6.2 Information security 42 4. Stakeholder mapping and materiality analysis 45 4.1 Stakeholder mapping 46 4.2 Materiality analysis and matrix 48 5. Toyota’s environmental commitment 51 5.1 Electrification towards zero emissions 54 5.1.1 The transition to sustainable mobility 54 5.1.2 The Role of the Full Hybrid 60 5.1.3 The role of hydrogen 64 5.2 Emissions Reduction and Facility Management 66 5.3 Water minimization and optimization 70 5.4 Waste management and circular economy 71 5.4.1 TMI spare parts logistics: a European best practice 73 5.5 Realizing a society in harmony with nature 75 5.6 Dealers’ environmental commitment 77 INDEX 6. Mobility at the service of the community 79 6.1 The new mobility solutions 82 6.1.1 KINTO One: Toyota’s long term rental 84 6.1.2 KINTO Share: Toyota’s car sharing 85 6.1.3 KINTO Join: Toyota’s corporate car pooling 87 6.1.4 KINTO Go: the multimodal app 88 6.2 Innovation and technology 89 6.2.1 Connectivity 90 6.2.2 Digitalisation of processes 91 6.2.3 Open innovation 92 6.3 Community outreach 94 6.4 Dealers’ social commitment 97 7. Mobility that puts people at the center 99 Letter to stakeholders 7.1 The development of contact points 102 7.1.1 The smile of our clients as a reward 103 7.2 TMI communication channels 105 7.3 Role of the dealers 108 7.4 Quality and safety of products and services 110 7.5 Our business partners 112 8. TMI’s people: the engine of the future 117 8.1 The characteristics of TMI’s workforce 120 8.2 Talent Attraction and Selection 122 8.3 Employee development 127 8.3.1 Development modes 127 8.3.2 The performance evaluation system 128 8.4 Diversity and Equal Opportunities 129 8.5 Welfare 132 8.6 Health and safety 134 8.6.1 The Integrated Management System 134 8.6.2 Safety culture 135 8.6.3 Security monitoring 136 8.7 Training 140 9. Attachments 143 10. Materiality Comparative Table - GRI 145 11. GRI content index 149 05 LETTER TO STAKEHOLDERS LETTER TO STAKEHOLDERS This ambitious vision drives us to constantly develop new solutions for our products and services that put people and their needs at the center of what we do. In our vision, technology is an enabling factor that must amplify human potential, to add value to the quality of life of each individual and the related society. For more than 20 years, the Toyota Group has been investing in the development of the Full Hybrid Electric system platform, a solution chosen by an increasing number of drivers (around 300,000 in Italy and 16 million worldwide). Such technology is capable of delivering high performances combined with extremely low fuel consumption, CO₂ emissions as well as other pollutants (NOx emissions are around 90% below legal limits), and the ability to travel for more than 50% of the time with zero emissions in the city. Dear Stakeholders, The Full Hybrid Electric represents the basis for the document that provides a comprehensive picture of the development of other electrification options (Full Hybrid, activities and results achieved during the year in relation Plug-in Hybrid, Pure Electric, Hydrogen Fuel Cell), on which to the objectives steted and guidelines for the future. we have been investing for over 20 years. We consider such technologies complementary, with the aim of providing Creating mobility solutions that respect the planet is one the right cars, at the right time, in the right place, at the of the foundations of Toyota’s Vision and our commitment right price, to give customers the possibility to choose towards a future society that is both environmentally according to their mobility needs. friendly and inclusive. This focus has led our company to achieve major milestones in environmental, social and Furthermore, the Toyota Group has always been committed governance sustainability over the past years. to reducing its energy consumption and the environmental impact of its activities. A commitment formalized in 2015 in the Toyota Environmental Challenge 2050, an action plan aimed at ensuring concrete A key element is the presence of a solid Environmental environmental protection and sustainable mobility. The Management System certified UNI EN ISO 14001:2015, cornerstone of the Toyota Group’s strategy is to reduce effectively implemented through an environmental the average CO₂ emissions per vehicle by 90% by 2050 monitoring plan of the energy consumption of the compared to 2010 levels. entire building structure in Rome. Toyota Motor Italia 06 07 LETTER TO STAKEHOLDERS LETTER TO STAKEHOLDERS Nota metodologica has been using only energy produced from renewable A long-term perspective and a firm commitment to sources. The objective is the continuous improvement conducting business in an ethical way, protecting the of the Company’s energy performance, in particular environment and people, is the only way to achieve the reorganization of the air conditioning system of the common goals, such as the Sustainable Development Office-Multipurpose buildings, which has allowed a 50% Agenda 2030 of the United Nations and the challenges reduction in gas consumption and a saving of 40 MWh per outlined in the Toyota Environmental Challenge 2050. year; the construction of a photovoltaic system of about 625.000 kWh/year, equal to more than 25% of the annual Toyota Motor Italia and the entire global Toyota team electricity needs of the entire Toyota real estate structure, will continue to work together with its stakeholders from which we expect a reduction of 254 tons per year in to achieve the Toyota Group’s greatest ambition: the CO₂ emissions; and investments aimed at updating the creation of a future society that can live in harmony technology and systems of the headquarters: a first step with nature, through sustainable, responsible, safe and towards a real estate structure that aims, in the future, inclusive mobility. to be self-sustaining in terms of energy. Our vision in contributing to the realization of a society Mauro Caruccio that is improving continuously has prompted us to take CEO Toyota Motor Italia important actions in a year that will be remembered for the serious global emergency caused by the spread of Covid-19. In this context, the Toyota Group, with the support of its Toyota and Lexus dealer network, has made available to the Italian Red Cross (“Croce Rossa”) a fleet of vehicles for home healthcare activities and for the delivery of medicines and basic necessities. At the same time, the company has also contributed through a financial donation to the Italian Red Cross, used for local assistance activities and the consequences of the health emergency. In addition, there are many other support activities carried out by the Toyota Group in Italy, such as the donation to the Spallanzani Hospital in Rome, or the supply of face masks to the Civil Protection (“Protezione Civile”) thanks to the contribution of Toyota Motor Corporation and Toyota Motor Europe. 08 09 Methodological note — CHAPTER 1. 11 CHAPTER 1 METHODOLOGICAL NOTE his document, which is Toyota Motor Italia’s The scope of data and economic information is the same T first Sustainability Report, aims to transparently as that of the Consolidated Financial Statements of Toyota communicate Toyota Motor Italia’s (in the document also Motor Italia as of 03/31/2020. “TMI”) sustainability strategies with respect to performance in the areas of environmental, social and Governance With reference to social and environmental data and sustainability for fiscal year 2020 (April 1, 2019 to March 31, information, the reporting boundary includes Toyota Motor 2020). In order to allow comparability of data over time, a Italia, headquartered at Via Kiichiro Toyoda, 2, Rome. comparison with data for fiscal year 2019 (April 1, 2018 to March 31, 2019) is also provided. Any perimeter exceptions In the 2020 reporting year, we report that there were no are expressly explained in the text. significant changes related to the Company’s size, ownership structure or supply chain. In preparing this document, reference was also made to the sustainability-related information of the parent company For further information and suggestions regarding the Toyota Motor Corporation (also “TMC” or “Toyota” in the Toyota Motor Italia Sustainability Report, please contact document), which is contained in the 2019 Sustainability [email protected]. Data Book or other communication channels. This document is also available on the Toyota Motor Italia This annual report has been prepared in accordance with the website www.toyota.it .