AIR QUALITY

CRITERIA POLLUTANT TAILPIPE EMISSIONS

Hydrocarbons, nitrogen oxides (NOx) and carbon monoxide — all byproducts of fuel combustion — are linked to various air quality issues such as smog formation as well as various health effects. Limiting criteria pollutant emissions from our vehicle tailpipes help to reduce some of the environmental impacts of driving.

The U.S. Environmental Protection Agency (EPA) and the state of California have certification programs to categorize vehicles in terms of their level of tailpipe emissions, and Environment and Climate Change Canada has issued Tier 3 regulations aligned with the final U.S. Tier 3 rule.

While the EPA Tier 3 and California Low Emission Vehicle III (LEV III) regulations have different nomenclature for categorizing vehicle emissions, the bins include the same vehicle emission groupings. For the 2020 model year, EPA Tier 3 and California LEV III regulations required an auto manufacturer’s fleet average to meet an emission standard for non-methane organic gas with nitrogen oxides (NMOG + NOx) of 0.065 g/mi for passenger cars and light-duty trucks up to 3,750 pounds, and 0.074 for other light-duty trucks. The regulations set declining emission standards from 2017 through 2025, when the NMOG + NOx average for both sets of vehicles will become 0.030 g/mi.

The EPA Tier 3 vehicle standards were intended to be harmonized with California's Low Emission Vehicle program and create a federal vehicle emissions program that allows automakers to sell the same vehicles in all 50 states.

Toyota's goal is to maintain flexibility to build vehicles based on customer preferences. In setting tailpipe emission regulations, we believe standards should be performance-based and consider the interaction with other vehicle rules — such as fuel economy/greenhouse gas standards — to ensure the total package of requirements is effective and acceptable to the consumer. Fuels must be considered with vehicle technologies as a holistic system. Reduced sulfur levels in gasoline, required by the federal Tier 3 and California LEV III programs, are enabling the after-treatment systems being designed for compliance.

Toyota annually complies with the state of California, U.S. and Canadian vehicle criteria pollutant emissions standards.

The 2021 "Greenest List”, published by the American Council for an Energy Efficient Economy (ACEEE), names the Toyota Prius Prime, Toyota RAV4 Prime AWD, and Toyota Corolla Hybrid as three of the greenest vehicles of the year. ACEEE evaluated more than 1,000 models and awards each car with a Green Score based on an environmental damage index (EDX), which reflects the cost to human health from air pollution associated with vehicle manufacturing and disposal, the production and distribution of fuel or electricity, and vehicle tailpipes.

BIODIVERSITY

ENDANGERED AND PROTECTED SPECIES

ABOUT THIS CHART:

As sites apply for certification of their conservation programs with Wildlife Habitat Council (WHC), they work with a WHC biologist to take an inventory of species onsite. This inventory includes any species listed by federal law as endangered or threatened. In addition to the 15 sites with WHC-certified programs, we assess new sites for the presence of endangered and protected species.

“Protecting Species”

PROTECTED AREAS/CRITICAL HABITAT

ABOUT THIS CHART:

TMNA has begun an analysis to determine whether sites are in a protected area, critical habitat or biodiversity hotspot (see below for definitions of these terms). We started with our largest facilities, those that have Conservation Certification from Wildlife Habitat Council, and those under construction or undergoing major renovations. In the table above, we only include the sites that meet one or more of these criteria. We will be analyzing additional sites going forward, and the information will be used to inform our biodiversity strategy and project selection.

A Protected Area is defined as a geographic area that is designated, regulated or managed to achieve specific conservation objectives. (GRI Standards Glossary 2016)

Critical Habitat is a term defined and used in the U.S. Endangered Species Act. It is a specific geographic area(s) containing physical or biological features that are essential for the conservation of a threatened or endangered species and that may require special management and protection. Critical habitat may include an unoccupied area(s) if it is determined to be essential for the conservation of the species.

A Biodiversity Hotspot is defined as an area that meets two criteria: It must have at least 1,500 vascular plants as endemics — which is to say, it must have a high percentage of plant life found nowhere else on the planet; and it must have 30 percent or less of its original natural vegetation.

Biodiversity hotspots represent just 2.3 percent of Earth’s land surface, but they support more than half of the world’s endemic plant species and nearly 43 percent of endemic bird, mammal, reptile and amphibian species.

Critical Ecosystem Partnership Fund (CEPF) maintains a list of hotspots by region. CEPF is a joint initiative of l’Agence Française de Développement, Conservation International, the European Union, the Global Environment Facility, the Government of Japan, the MacArthur Foundation and the World Bank.

“Restoring Habitats”

CONSERVATION CERTIFICATIONS

ABOUT THIS CHART:

Wildlife Habitat Council^® (WHC) partners with corporations, fellow conservation organizations, government agencies and community members to empower and recognize wildlife habitat and conservation education programs. WHC's voluntary certification standard, Conservation Certification, is designed for broad-based biodiversity enhancement and conservation education activities on corporate landholdings.

Our partnership with WHC began in 1999 when Toyota joined WHC's membership. In 2008, the conservation program at our Kentucky assembly plant became Toyota's first WHC certification. Today, programs at 15 Toyota sites have achieved Conservation Certifications and in 2020, Toyota Motor Manufacturing Texas won WHC’s Invasive Species Project Award for feral hog management.

ENERGY - OPERATIONS

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Total energy consumption in North America decreased by 6 percent in fiscal year 2021 compared to the previous year. This is due in part to the plants shutting down for eight weeks during the COVID-19 pandemic. Energy efficiency projects resulted in energy savings of 105,000 MWh.

Energy intensity, measured in MWh of energy consumed per vehicle produced, was 2.23 in fiscal year 2021.

Energy data is compiled primarily from electricity and natural gas invoices. For mobile sources, either fuel consumption or miles traveled is tracked.

GHG EMISSIONS - OPERATIONS

ABOUT THIS CHART:

Total Scope 1 and 2 CO₂ emissions have decreased 8 percent between fiscal years 2020 and 2021 and 22 percent since fiscal year 2016. The decrease from the previous year is due in part to reduced operations during the COVID-19 pandemic, but over the last five years, the decrease can also be attributed to energy efficiency improvements, investments in renewable energy, and changes in production volumes and model mix.

TMNA uses The GHG Protocol: A Corporate Accounting and Reporting Standard, Revised Edition (published by WBCSD and WRI) to develop the emissions inventory. TMNA follows the financial control approach.

Gases included in Scopes 1 and 2 include CO₂

Scope 1 sources include stationary combustion (such as burning natural gas for energy) as well as owned mobile sources (such as Toyota-owned fleet vehicles and owned logistics trucks).

Scope 2 emissions include consumption of purchased electricity from Toyota sites in North America. Scope 2 emissions are calculated using the location-based approach. Indirect emissions from electricity used at Toyota's U.S. locations are calculated using EPA eGRID emission factors. For sites in Canada, provincial emission factors are sourced from Canada's National Inventory Report, and for Mexico, a country-specific emission factor is sourced from Carbon Footprint Country Specific Electricity Grid Greenhouse Gas Emissions Factors v1.4, September 2020. Where renewable electricity is purchased, an emission factor of zero is assumed.

Toyota does not purchase steam.

Three of Toyota's U.S. manufacturing plants are required to report GHG emissions data under U.S. EPA's Greenhouse Gas Reporting Program. Individual plant data for our plants in Kentucky, Texas and Indiana are available on EPA's website through its online data publication tool.

In Canada, Toyota’s Cambridge and Woodstock plants are required to report under Environment Canada and Climate Change's Greenhouse Gas Emissions Reporting Program and Output Based Pricing System; both plants are also required to report GHG emissions to the province of Ontario under its Environmental Protection Act.

Operations CO₂ Emissions

COMPLIANCE

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Many of Toyota's activities in vehicle development, manufacturing and logistics are subject to local, state, provincial and federal laws that regulate chemical management, air emissions, water discharges, storm water management, greenhouse gas emissions, and waste treatment and disposal. These regulations vary by facility based on the type of equipment operated and the functions performed.

In Figure P11, Toyota reports those environmental violations considered significant, meaning those resulting in fines of $5,000 or more and in an impact to the environment. In fiscal year 2021, our North American manufacturing plants and logistics sites had zero significant environmental regulatory violations. In September 2020, Toyota paid a civil penalty of $273,888 to the U.S. Environmental Protection Agency for a regulatory violation of Section 5 inventory requirements of the Toxic Substances Control Act (TSCA) that occurred during 2019. The violation did not result in an impact to the environment.

While there were no significant environmental violations in the last fiscal year, in January 2021, Toyota paid a civil penalty of $180 million to the U.S. Environmental Protection Agency to resolve investigations stemming from a self-reported process gap in fulfilling certain emissions defect information reporting requirements under the Clean Air Act. The reporting gap occurred between 2005 and 2015. As a countermeasure, Toyota has put robust reporting and compliance processes in place.

DEALERS

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The Toyota and Lexus brand divisions provide guidance to dealerships on sustainable strategies to achieve Leadership in Energy and Environmental Design (LEED®) certification. LEED® is administered by the U.S. and Canadian Green Building Councils and is based on meeting stringent requirements in sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality. As of July 2021, 69 Toyota and Lexus dealerships in the U.S., Canada and Mexico have achieved LEED certification for the construction and renovation of their sales and service areas.

“Dealers”

ENVIRONMENTAL MANAGEMENT SYSTEM CERTIFICATIONS

ABOUT THIS CHART:

Environmental management systems are an essential part of Toyota’s overall effort to minimize risks and achieve leading levels of environmental performance. An environmental management system (EMS) provides a framework for identifying significant environmental aspects and impacts and setting corresponding controls, goals and targets to manage and reduce these impacts over time. The facilities listed in the chart have had their environmental management systems third-party certified to ISO 14001, the International Organization for Standardization’s standard for designing and implementing an effective environmental management system.

GREEN BUILDING

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Seventeen Toyota and Lexus facilities have achieved Leadership in Energy and Environmental Design (LEED®) certification. LEED® is a point-based system administered by the U.S. and Canadian Green Building Councils promoting a whole-building approach to sustainable construction and remodeling. LEED certification is based on meeting stringent requirements in sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality. Ranging from office space to vehicle distribution centers, these facilities represent Toyota’s continued efforts to improve the design and efficiency of all operations. Toyota Motor North America is a platinum member of the U.S. Green Building Council.

Toyota has three projects that are pursuing LEED certification: the renovation of the vehicle logistics facility at the Port of Long Beach in California, the newly constructed visitor center at the assembly plant in Mississippi, and the new parts distribution center in Clarington, Ontario.

“Building for the Future”

WASTE

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Waste data is collected on a calendar year basis. In 2020, Toyota's North American manufacturing plants, R&D centers, logistics sites and offices generated 713.8 million pounds of waste. This is a 4 percent decrease from 2019, due to the COVID-19 pandemic, which resulted in our plants shutting down for eight weeks and our offices remaining closed through most of 2020.

We recycled, reused or composted 93.2 percent of all waste in 2020. Only 1.5 percent was sent to landfills for disposal (for certain waste streams, landfill disposal is required by law), and 5.3 percent was incinerated or used for fuels blending or waste-to-energy.

“Eliminating Waste”

Scope = Toyota's North American headquarters, manufacturing, R&D, sales and logistics sites in the U.S., Canada and Puerto Rico. Also includes data from manufacturing in Mexico. Data from non-manufacturing sites in Mexico will be included in future years. Data excludes construction and demolition waste from new construction and expansion projects.

WATER

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In fiscal year 2021, Toyota withdrew 1.5 billion gallons of water at North American facilities, including manufacturing plants, R&D centers, parts and vehicle distribution centers, service training centers and offices. This represents a 14 percent decrease from the previous year, due in part to plant shutdowns during the COVID-19 pandemic.

Only 8 percent of water withdrawal occurred in an area of "high" or "extremely high" water stress.

More than 95 percent of total water withdrawal came from municipal sources (both fresh and recycled water from utilities); the remaining withdrawals came from surface water bodies, groundwater and rainwater.

We estimate 1.2 billion gallons were discharged, either to surface waters or to municipal utilities.

Consumption (defined as withdrawal minus discharge, or the water that was not returned to either a municipal utility or surface or ground water) was 287.9 million gallons.

Water withdrawal volumes were compiled primarily from water utility invoices. For rainwater, measurements are taken from the collection units.

Water discharge is either measured by meter or, in the case of non-production facilities, estimated based on occupancy.

“Conserving Water”

Scope: Toyota North American manufacturing, R&D, owned logistics, offices
*Water-stressed areas have been identified with WRI's Aqueduct^TM Water Risk Atlas 3.0 and include sites with overall risk scores of "high" and "extremely high."