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Decisive action from Toyota will help demonstrate leadership in climate transition

22nd November 2023

Discover how Toyota measure the success of corporate engagement, through effective tracking of progress to keeping climate and transition planning at the top of the corporate agenda.

Since the launch of the Climate Action 100+ initiative (‘the Initiative’), investors are becoming better equipped in conveying their expectations through corporate engagement. This can be demonstrated across both net zero commitments and climate transition plans, where there has been a broadening and deepening of engagement dialogues with companies.

One of the key measures of success of corporate engagement is the investors’ ability to keep track of the engagement progress, whilst keeping climate and transition planning at the top of the corporate agenda.

Whilst investors engaging through the Initiative will be exposed to tactics commonly observed internationally, this can differ in Asia. In Asian markets, regionally nuanced approaches in investor stewardship are equally prioritised, which has resulted in the creation of an interesting space and occasionally some tension in the engagement process.

Growing expectations from international markets for an accelerated transition

Against the backdrop of continued and deep engagement on climate with systemically important automakers such as Toyota, we have seen the first CA100+ flagged shareholder climate proposal on an Asian company in 2023.

Following the shareholder proposal which received 15% support from investors, active discussions continued and have extended beyond the implications to Toyota. The proposal brought to light the importance of clear communication and continued expectation management in bilateral dialogue between investors and companies.

This includes leveraging forums for investors to articulate their expectations on company engagement priorities and in constructive forms of engagement, whilst keeping track of company progress towards high ambition climate goals.

Investor priorities on Toyota’s role in the climate transition:

  • Toyota’s battery technologies are critical to the progress of its fleet strategy and capabilities in producing electric vehicles. This has, for a long time, been one of the key focus areas of the engagement by the investor leads of Climate Action 100+ for Toyota. With Toyota’s earlier announcement on its technological breakthrough in producing solid state batteries as early as 2027, the unveiled ambition of the lower cost and smaller batteries may have the potential to be a game changing element. However, a lot remains to be seen.


  • Considerable focus goes to Toyota’s ability to meet or put further ambition into its EV sales target. Any signals that are inconsistent with the trajectory of meeting their targets would prompt more questions from investors, as this has been one of the leading points in investors’ dialogue from the perspective of the company’s competitiveness in the sector. Investors continue to show keen interest in Toyota’s overall decarbonisation strategy and the possibility of exceeding its 2035 milestone target of 68% GHG emissions reduction, in its own operations and net zero by 2050.


  • The above targets and associated decarbonisation strategy, if further supported by transparent disclosure of their lobbying activities, would be a demonstration of the credibility of their planned transition with support from the top. The lobbying report by Toyota has been acknowledged in the Climate Action 100+ Investor Guide for Engaging in Asia, however increased transparency is required to alleviate investors’ continued interest in Toyota’s role in the energy transition.


  • Finally, to demonstrate further progress and leadership, Toyota’s voice in the automotive sector has great potential in building the demand for quality green steel, to accelerate progress in the steel sector. This has also been outlined in an  industry roundtable on steel sector transformation.

Numerous investors are engaging on the multiple topics listed above. Through joint investor effort, the Initiative can serve as a platform to galvanise calls for action for auto companies such as Toyota to demonstrate a robust transition strategy.