Dear Readers,

At Toyota, we’re working today to build a better tomorrow. We look to a future where mobility can meet the needs of society without impacting the environment. We hope to be a role model for others and work together with our communities to achieve that sustainable future.

As I write this, Toyota continues to grow in North America. So does our responsibility to reduce our environmental footprint. We believe in continuous improvement in all facets of our operations. This includes the smallest of improvements to major technology breakthroughs. We also believe in sharing progress with others in the industry, as well as with the communities in which we do business. We want to understand how people imagine environmental sustainability in the future. That’s why we strive for a high level of transparency with this report and encourage an open dialogue with our stakeholders.

Still, we have far to go to address the pressing challenges of our time. Global climate change. Resource depletion. Water scarcity. Habitat destruction.

These are critical issues facing communities in North America, and the same issues we identified - through a comprehensive environmental materiality assessment - as our core areas of focus for the North American region. We are now developing strategies for each of these areas that will not only improve our environmental performance throughout the region, but also will help us create positive environmental results in our communities.

We are able to do all this more effectively through the newly-created Toyota North American Environmental organization. For the first time, Toyota’s North American companies are coordinating their environmental activities at every level and setting strategic direction with one voice. This was a big step forward for us, and has positioned us to tackle these core issues more quickly and efficiently.

This is an exciting time for Toyota and I am honored to head up this new organization. Going forward, we will be setting short- and long-term targets for all of Toyota’s North American companies in a comprehensive Environmental Action Plan - beyond those already set by each individual company. And we will be communicating more with our business partners and stakeholders, to get them involved, to keep them informed, and to learn from them.

During 2013, we saw many notable accomplishments for our vehicles and in our operations. Some examples include:

In North America, we exceeded the two million mark in Toyota and Lexus hybrid vehicle sales, while globally, Toyota exceeded the five million mark. Toyota estimates that the use of those five million hybrids around the world has avoided 34 million tons of CO2 emissions.

We introduced the all-new 2013 Avalon Hybrid, the first Toyota vehicle to be fully styled, developed and built in North America. It is also one of the more fuel-efficient vehicles in the mid-size segment, achieving an impressive EPA-estimated 40 mpg.

The U.S. Environmental Protection Agency presented Toyota’s manufacturing division with their ninth ENERGY STAR award, and presented our U.S. sales and logistics division with their third WasteWise award.

Ten of our North American manufacturing plants have achieved “zero waste to landfill.” Over the last decade, our returnable packaging program has seen cumulative savings of 308 million pounds of wood and 185 million pounds of cardboard.

We are saving 61 million gallons of water annually through the implementation of four reverse osmosis concentrate recovery systems.

We have a total of 36 Toyota and Lexus dealerships certified to LEED® in the U.S. and Canada, a testament to their commitment to sustainable building design, construction and maintenance.

And finally, we have many examples of environmental philanthropy and volunteerism, including the continuation of our groundbreaking partnership with the World Wildlife Fund in the Galápagos Islands, an extension of our signature partnership with the National Audubon Society and the TogetherGreen™ program, and improvements to biodiversity at our facilities through our partnership with the Wildlife Habitat Council and their “Corporate Lands for Learning” and Wildlife at Work” programs.

The following pages cover these stories and more. Each year, we also feature a different Toyota Way concept. This year, we present examples of yokoten - how we share lessons learned across the organization to improve environmental performance. We invite you to learn more about the Toyota Way and how it drives continuous improvement in all aspects of our business.

I am pleased to present Toyota’s 2013 North American Environmental Report. I hope you
enjoy our story.

Kevin M. Butt

Kevin M. Butt
Regional Environmental Director,
Toyota North American Environmental
November 2013