Value creation story
Putting sustainability at the core of management
- Mid-termManagement Hoshin (Policy)
- Follow-upthrough KPIs
- Strengthening monitoring of KPIs
TOYOTA BOSHOKU REPORT 2023 | 18 | |
Value creation process
To realize our Vision, we have drawn up our desired status for 2030 and we will steadily implement plans.
In order to realize our Vision and be the company we aim to become, the Toyota Boshoku group has clarified its materiality (the approach we adopt to resolve the important issues we have identified to be prioritized through our business operations from among a variety of social issues), as well as our 2025 target and our desired status for 2030. Then, in 2020, we formulated the 2025 Mid-Term Business Plan, an action plan to achieve this materiality. We will implement this plan while maximizing our underlying philosophy and the strengths we have developed over our 100-year history.
R&D | ||
The | ||
identity of | ||
Philosophy | the Toyota | |
Boshoku | ||
HITO | group | MONO |
(p. 39) | ||
ZUKURI | ZUKURI | |
Principles of Toyoda
(p. 01)
Corporate
Philosophy
Toyota
Boshoku Group
Guiding
Principles
Seat Business
Interior & Exterior
Business
Unit Components
Business
Formulation of the 2025 Mid-Term Business Plan to resolve issues identified through a review of the 2020 Business Plan and analysis of the current situation, and to realize materiality.
Mid-term Management Hoshin (policy unchanged until 2025)
Secure MONOZUKURI
1 competitiveness to be a trusted and chosen supplier
Social
Value
Backcasting
TB Way
2 | Acquire the R&D capabilities to |
respond to future changes |
Acquire the sales capabilities
3 that allow us to make proposals to customers around the world
Establish a management
4 foundation to support sustainable growth
* "Home" means a business or region that is capable of creating added value on a Genchi-Genbutsu (go, see & study) basis and has competitive advantage compared to competitors.
19 TOYOTA BOSHOKU REPORT 2023
Management resources and | Supplementary | ||||
Messages | strengthening them | Business portfolio | Governance | materials & data |
Putting sustainability at the core of management
Looking into the future,
we will create tomorrow's automobile
interior space that will inspire our customers the world over.
Our desired status for 2030
To become a sustainable, leading global company
by enhancing corporate value
Creating new value as
an Interior Space Creator
Materiality
The Toyota Boshoku group defines as our materiality the identification of important issues to be resolved through our business operations from among a variety of social issues and the approach we adopt to resolve them.
Issues Relating to Safety, Environment, and
Comfort to Resolve through Our Business Operations
As an Interior Space Creator, we will contribute to
1 people's quality of life, creating comfort, safety, and reassurance through innovation
Using our established technical capability, we will
2 contribute to realize a society with no traffic casualties
through providing products that assure safety
Together with our business partners, we will realize
3 MONOZUKURI innovations that minimize environmental stress
Issues Relating to the People and Organizations that are Our Sources for Exercising Competitiveness
We will develop people capable of contributing to
4 society, who have diverse values, a challenging spirit and understand the value of strong teamwork
We will continue to be a company of integrity trusted
5 by all our stakeholders, inheriting our tradition of fairness and moral behavior to the next generation
Offer "QUALITY OF TIME AND SPACE" in all mobility
Vision
TOYOTA BOSHOKU REPORT 2023 | 20 |
Sustainability management
Management framework for enhancing corporate value
Management Concept
Principles
of Toyoda
Corporate Philosophy
Toyota
Boshoku Group TB Way
Guiding Principles
Vision
Toyota Boshoku Group's Materiality
Mid-term Business Plan | ||
Business Plan | Revenue Plan | Resources Plan |
Annual Global | Annual | Annual |
Hoshin (Policy) | Profit Plan | Resources Plan |
Principles of Toyoda
Toyota Boshoku's company belief, which stipulates the founding spirit of Sakichi Toyoda, "for the world and for people," as our daily motto
Corporate Philosophy
Our philosophy, which has been converted into easily understood phrases in order to ensure that the Principles of Toyoda are widely practiced among our company members and clarified as the value provided to our stakeholders
Toyota Boshoku Group Guiding Principles
A guide to the basic conduct we expect in our business activities
TB Way
Our management beliefs, values, and behavioral principles in concrete terms
Vision
The company we aim to become, based on our values and philosophy
Toyota Boshoku Group's Materiality
In order to realize the Vision, the approach we adopt to resolve the important issues we have identified to be prioritized through our business operations from among a variety of social issues
Mid-term Business Plan
A plan that shows in detail how we will work toward realizing our materiality
Achieving sustainable growth in terms of both social and economic value
In order for the Toyota Boshoku group to realize its Vision and achieve sustainable growth, we believe it is essential to respond to the needs of society and solve social issues, thereby enhancing our social value while at the same time increasing our economic value.
The Toyota Boshoku group has organized this approach as "the management structure we aim to become," and we are striving to offer multi-dimensional value to customers and society and to expand our business fields while strengthening our management foundation and competitive advantage. We aim to enhance our corporate value over the medium to long term by maximizing the economic value generated by our group through our business activities, reinvesting the results for future growth, and returning them to our stakeholders.
Organizing a Business Management Structure and following up on KPI progress
In order to realize the management structure we aim to become, we have developed the Business Management Structure, which is a system for effectively utilizing and controlling management resources, and we follow up on progress using KPIs. While strengthening the monitoring of management, we measure the degree of achievement of our mid-term business plan and implement the PDCA cycle, as necessary, to get back on track.
We aim to enhance both economic and social value, and control them with the Management KPI, Financial KPI, Operational KPI, Competitiveness KPI, and ESG KPI.
21 TOYOTA BOSHOKU REPORT 2023
Management resources and | Supplementary | ||||
Messages | strengthening them | Business portfolio | Governance | materials & data | |
Putting sustainability at the core of management
The management structure we aim to become
Enhance | ||||
economic value | ||||
Invest in growth | Distribute | |||
what we achieve | ||||
Sustainable growth | ||||||
valuecorporate | valueEconomic | Expand business | Shareholders/ | Customers | ||
investors | ||||||
fields | ||||||
International/Local | ||||||
Offer multi-dimensional value | communities | |||||
Company | Business | |||||
Enhance | Strengthen competitiveness | members | partners | |||
Strengthen management foundation | ||||||
Social value
Coporate growth while | |
Contribute toward | |
fulfilling our responsibility | |
social value | |
in harmony with society | |
CSR
To realize the management structure we aim to become
Enhance social value through
our business operations
CSV
Business Management Structure
Corporate value | value Economic value |
Social | |
Board of Directors | Corporate Management Meeting | Functional meetings | ||||||||||||||||||||||||
(reports once a year) | (reports every month) | (reports at each meeting) | ||||||||||||||||||||||||
Management KPI | Financial KPI | Operational KPI | Competitiveness KPI | |||||||||||||||||||||||
Overall indicators | Financial | Earnings by | Contribution | |||||||||||||||||||||||
• Net asset | results | business | to earnings | |||||||||||||||||||||||
• ROE | • Revenue | • Manufacturing | Demonstration | Sources of | ||||||||||||||||||||||
Growth potential | ||||||||||||||||||||||||||
Project | of | |||||||||||||||||||||||||
• Operating profit | productivity | competitiveness | ||||||||||||||||||||||||
Profitability | • Fixed costs, | management | • Development | competitiveness | ||||||||||||||||||||||
etc. | efficiency | • Quality | • People | |||||||||||||||||||||||
Productivity | • Materials cost | |||||||||||||||||||||||||
Earnings by | reduction | • Delivery | * | • Systems | ||||||||||||||||||||||
Safety | region | • Safety | • Information | |||||||||||||||||||||||
• R&D | • Infrastructure | |||||||||||||||||||||||||
Shareholder | development | |||||||||||||||||||||||||
returns | ||||||||||||||||||||||||||
The identify of | ||||||||||||||||||||||||||
CSV Promotion Meeting (twice a year) | the Toyota Boshoku group | |||||||||||||||||||||||||
(R&D, MONOZUKURI, | ||||||||||||||||||||||||||
HITOZUKURI) | ||||||||||||||||||||||||||
(p. 39) | ||||||||||||||||||||||||||
ESG | ESG KPI | |||||||||||||||||||||||||
Materiality
- Reported at Corporate Management Meeting
TOYOTA BOSHOKU REPORT 2023 | 22 | |
Materiality
Important issues to be prioritized by 2030 and penetration measures by region
Issues relating to safety, environment, and comfort to resolve through our business operations
Materiality | The meaning and concepts of materiality | Related SDGs |
1
As an Interior Space Creator, we will contribute to people's quality of life, creating comfort, safety, and reassurance through innovation
Comfortable spaces | Promotion of innovation |
Toyota Boshoku group has consistently developed its operations "for the world and for people," expanding from textiles into automotive interiors and contributing to the enhancement of safety and reassurance in people's daily lives. We are evolving into an Interior Space Creator, providing products and services such as those employing sensor-based biometric information to achieve comfort, which means enabling people to live with confidence while staying true to themselves (realization of smart cities).
2
Using our established technical capability, | To contribute to the ambitious target of a | |||
we will contribute to realize a society with | society of "zero traffic casualties," we will | |||
no traffic casualties through providing | continue to offer high-quality,high-safety | |||
products (integrated seats, seatbelts, airbags, | ||||
products that assure safety | ||||
and other such products) and services that | ||||
Product safety Reduction of traffic accidents | optimize Toyota Boshoku's strengths in R&D | |||
that is part of Toyota Boshoku's identity. | ||||
Aging society |
3
Together with our business partners,
we will realize MONOZUKURI innovations that minimize environmental stress
Reduction of environmental loads
Productivity improvement | Climate change |
Energy and resource conservation
Cooperation with business partners
Aiming for a sustainable global environment in which children can live happily with smiles on their faces, we will make effective use of business resources and achieve the targets set out in our 2050 Environmental Vision, including zero CO2 emissions, zero wastewater from production processes, and minimal volumes of natural resources used and waste produced. To accomplish this, we will work with our business partners to realize innovation and improve productivity in MONOZUKURI (and all manufacturing- related processes), utilizing the latest leading-edge technologies.
Issues relating to the people and organizations that are our sources for exercising competitiveness
Materiality | The meaning and concepts of materiality | Related SDGs |
4
We will develop people capable of contributing | To continue challenging ourselves to find |
to society, who have diverse values, a challenging | solutions for the world's problems, we will |
spirit and understand the value of strong teamwork | develop autonomous human resources by |
bringing together talented individuals from | |
Ensuring diversity Workstyle innovation | around the world, who understand different |
Respect for human rights | ideas and ways of thinking, respect one |
another, and think together. | |
Company-member health and work safety |
5
We will continue to be a company of integrity trusted by all our stakeholders, inheriting our tradition of fairness and moral behavior to the next generation
Governance Compliance
Strengthened information security
Fair and equitable procurement
To continue being a company that is trusted by all stakeholders and grows together with them, we will continue to practice "ensuring that our corporate activities are fair and transparent," as enshrined in our Corporate Philosophy and the Principles of Toyoda that embody the concepts of Sakichi Toyoda, while "doing what is right" as laid down in the TB Way.
23 TOYOTA BOSHOKU REPORT 2023
Messages | Management resources and | Supplementary | |||
strengthening them | Business portfolio | Governance | materials & data | ||
Putting sustainability at the core of management
Materiality formulation and penetration initiatives
In July 2020, we defined as our materiality the identification of important issues to be prioritized through our business operations from among a variety of social issues and the approach we adopt to resolve them. (p. 87)
In addition, in order for our company members-the main actors of the initiatives-to understand their meaning and take ownership, we are implementing various penetration measures in each region, centering on the Regional Management & Collaboration Hubs.
Initiatives for materiality penetration in each region
(FY2023 results)
Management of materiality progress
In addition to the financial targets established in the 2025 Mid-Term Business Plan, in December 2021 we established ESG KPIs, which measure social value.
The ESG KPIs consist of seven environmental, 10 social, and eight governance items, with a responsible person assigned for each item and targets set for each fiscal year through fiscal 2026, as well as targets set for fiscal 2031.
(p. 33)
THE AMERICAS
JAPAN
- Sent out TBA Executive Message for Materiality
• Created training tools andstarted training for allToyota BoshokuAmerica company members
FY2024 Plans
• Translatingtraining toolsintoSpanish
and Portuguese and startingtraining in
non-English-speaking regions
• Developing and implementing
sustainability policy and ESGKPIs
CHINA
•Continued internal
dissemination of materiality
through Chinese language
versionof materialityvideo
• Creating materialityposters and deploying them within the region
- Monthly delivery of messages and quizzes concerning sustainability, including materiality,on the PC startup screen
• Conducting lectures on
sustainability,including
materiality,in newcompany
member trainingandposition-basedtraining
- Proactive communicationof materiality through PRactivities
such as motor shows
FY2024 Plans | |
• Implementing training for new | |
company members | |
• Implementing surveys to gauge | |
degree of understanding of | |
materiality | ASIA & OCEANIA |
EUROPE & AFRICA | |
• Continued viewing of | |
• Designating every May as | materiality videos at monthly |
orientations | |
"Materiality Month," interactive | • Continued display of materiality |
seminars are held with the | |
on all company members' PC | |
participation of all regional | |
screen-savers | |
entities. The introduction of | |
FY2024 Plans | |
specific activities stimulates | |
sustainability awareness and | • Strengthening penetration |
action. | activities by utilizing regional |
• Implementing sustainability | CSR meetings |
management using ESG KPIs | |
within the region |
FY2024 Plans
- Review of ESG KPIs within the region to comply with the Corporate Sustainability Reporting Directive (CSRD) introduced in Europe
TOYOTA BOSHOKU REPORT 2023 | 24 | |
Initiatives to achieve the 2050 Environmental Vision
Accelerating environmental management to achieve a sustainable society
In 2016, the Toyota Boshoku group formulated the 2050 Environmental Vision, and we have been striving to conserve and preserve the global environment by working to reduce our environmental impact from various angles.
However, global environmental issues such as climate change, natural resource depletion, and the biodiversity crisis are becoming more serious as each year passes.
Against this backdrop, in order to further focus on solving environmental issues and contribute to the conservation and preservation of the global environment, we reviewed the Toyota Boshoku group's past activities and our future target, based on the Toyota Boshoku Basic Policy of Biodiversity formulated in 2011, and in July 2023 drew up three priority actions. We aim to further contribute to global environmental conservation by promoting these three key initiatives: measures to prevent global warming in response to climate change, resource circulation in response to the depletion of natural resources, and co-existence with nature in response to the biodiversity crisis.
Additionally, with the formulation of the priority actions, we extended the scope of our activities and revised our Stretch Environmental Goals to Challenge 6. The whole group is working together to address environmental issues through our business activities and contribute to the realization of a sustainable global environment.
Vision
We will work together with all stakeholders with the aim of creating a sustainable global environment where children can lead their lives with a smile.
Priority actions
Resource | ||||
circulation | ||||
Global | Co-existence | |||
warming | ||||
with nature | ||||
prevention | ||||
Challenge 6 | Environmental management | |||
Global warming prevention | ||||
1 | GHG Net-zero1 | 2 | GHG Net-zero | |
in the product life cycle | in the plant | |||
Resource circulation | ||||
3 | Sustainable | 4 | Waste | |
resource circulation | minimization | |||
Co-existence with nature | ||||
5 | Water resource impact | 6 | Conservation and | |
regeneration of | ||||
minimization | ||||
natural capital |
1 To achieve net zero greenhouse gas emissions
25 TOYOTA BOSHOKU REPORT 2023
Management resources and | Supplementary | ||||
Messages | strengthening them | Business portfolio | Governance | materials & data | |
Putting sustainability at the core of management
Initiatives for the TCFD recommendations
In April 2020, we endorsed the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). By extensively analyzing the impact of climate change on our business and the risks and opportunities that result from it based on scenarios, we are reviewing the applicable costs and reflecting them in our management strategy. Based on the results of scenario analysis, we will continue to strengthen our response to risks and opportunities and work on further information disclosure.
Response cost2 | |||||
Causes | Risks / Opportunities | Assessment | Actions | (FY2024) | |
• Survey of suppliers (CO2 emissions, efforts to | |||||
Risk | reduce CO2 emissions, etc.), Promotion of activities | ||||
• Increase in procurement costs by | for setting CO2 emission reduction targets | - | |||
introducing carbon prices, etc. | • Support for suppliers (Sharing of energy saving | ||||
cases, joint development of new materials and new | |||||
methods, joint purchase of renewable energy, etc.) |
Enhancement of climate change policies, including carbon pricing
• Introduction of highly efficient equipment to | ||
• Increase in operating costs due to the | Risk | promote further energy saving and promotion of |
the development of new methods | ||
direct impact of the introduction of | ||
• Promotion of the introduction of renewable energy | ||
carbon prices or its indirect impact on | ||
• Optimization of logistics (Reduction of CO2 emissions | ||
energy prices | ||
associated with transportation through the promotion | ||
of local production for local consumption) |
4.5 billion yen
Transition risks and opportunities (1.5 to 2°C3)
• Increase in cost due to investment in | Risk | • Optimization of investment by introducing ICP | - | |
energy saving and renewable energy | ||||
(Internal Carbon Pricing)5 | ||||
for decarbonization | ||||
Enhancement of | • Expansion of business in new fields | Opportunity | • Expansion of new business domains and | 1.3 billion |
through collaboration between Toyota | diversification of provided value | yen | ||
efforts to promote | group companies | |||
vehicle | • Increase in demand for electrified | Opportunity | • Further planning and development of electrified | 2.9 billion |
electrification | products | products | yen | |
Change in | • Decrease in sales due to lower | Risk | |||
demand for products with insufficent | |||||
evaluation by | low-carbon technology | • Planning and development of products to further | |||
customers and the | reduce carbon emissions | ||||
• Increase in sales by developing | 3.2 billion | ||||
consumer value | • Planning and development of plant-derived | ||||
low-carbon products | Opportunity | products and lightweight products | yen | ||
standard (raised | • Expansion of demand for plant-derived | ||||
• Improvement of recyclability and promotion of | |||||
environmental | products and lightweight products | simple disassembly design | |||
• Enhancement of competitiveness by | |||||
awareness, etc.) | developing technology to improve | ||||
recyclability | |||||
Worsening of | Risk | • Risk management using a system to manage the | |||
• Decrease in sales due to the impact of | range of supplier impact | - | |||
Physical risks and | extreme weather, | supply chain disruption on production | • Selection of logistics routes that minimize the | ||
opportunities | including heavy rain | impact of disaster | |||
(4°C4) | and subsequent | • Decrease in sales due to factory | Risk | • Enhancement of the BCP system (Creation of | - |
flooding | manuals and establishment of an information | ||||
shutdown | |||||
collection/sharing system) | |||||
Commitment to SBT certification
In October 2022, we submitted a commitment letter to SBTi, an organization that certifies Science Based Targets (SBT), which are greenhouse gas emission reduction targets consistent with the levels required by the Paris Agreement, and have made a commitment to working toward obtaining SBT certification.
Participation in the Ministry of Economy, Trade and Industry's GX League
In May 2023, we participated in the Ministry of Economy, Trade and Industry's Green Transformation (GX) League.6
Toyota Boshoku joins 30by30 Alliance for Biodiversity
In October 2022, we joined the 30by307 Alliance for Biodiversity led by Japan's Ministry of the Environment, and endorse the Alliance's objectives.
2 The response costs will be updated in accordance with the next mid-term business plan
3 1.5°C scenario: NZE (IEA World Energy Outlook 2021); 2°C scenario: SDS (IEA World Energy Outlook 2021)
4 RCP 8.5 (IPCC 5th Assessment Report)
5 Putting a price on the amount of carbon dioxide emitted by a company in the course of its business
6 A collaborative platform where industry, the government, academia, and financial institutions take on the challenge of rapidly achieving carbon neutrality and promote the transformation of the overall economic and social system, including stakeholders other than themselves
7 The objective is to effectively conserve at least 30% of terrestrial and marine areas as healthy ecosystems toward the goal of halting and restoring biodiversity loss by 2030
TOYOTA BOSHOKU REPORT 2023 | 26 | |
2025 Mid-Term Business Plan
Overview of the mid-term business plan and initiatives to achieve goals
The 2025 Mid-Term Business Plan, which began in fiscal 2022, reached its second anniversary in March 2023. Having first reassessed the current situation and fleshed out our 2025 target, we are promoting activities to achieve our goals.
In order to realize our 2025 target, namely, "As an interior system supplier, become a company that serves as 'Home'* and secures competitiveness that can surpass global suppliers," we aim to secure a world-leading competitive advantage for each product and become the supplier of choice for customers around the world.
On the other hand, we recognize that there is a gap between our goals and the current situation, in terms of factors such as scope for further improvements in cost and quality, the speed of expanding the fields where we operate as an interior system supplier, and activities to expand sales to non-Japanese auto manufacturers.
Therefore, by rolling out the 2025 Mid-Term Business Plan in December 2022 and clarifying our management issues, based on changes in the environment, we formulated
- Mid-termManagement Hoshin (policy) to achieve the 2025 Mid-Term Business Plan. The Mid-term Management Hoshin replaces the previous "priority actions," and will remain unchanged until 2025, with measures tied to each fiscal year.
- "Home" means a business or region that is capable of creating added value on a Genchi-Genbutsu (go, see & study) basis and has competitive advantage compared to competitors
Overview of the 2025 Mid-Term Business Plan
Mid-term Management Hoshin | Details of | |
(policy unchanged until 2025) | initiatives | Fiscal year measures (FY2024) |
1
2
3
4
Secure MONOZUKURI competitiveness to be a trusted and chosen supplier
Acquire the R&D capabilities to respond to future changes
Acquire the sales capabilities that allow us to make proposals to customers around the world
Establish a management foundation to support sustainable growth
p. 30
p. 31
p. 32
- Design and manufacturing quality improvement
- Cost planning that outperforms competitors
- Reduction of lead time from planning/development to production/delivery
- Promotion of technology roadmap
- Acquisition of technological capabilities as an interior system supplier
- Automobile interior space solutions system
- Generating the seeds of new business and sowing them in society
- Promotion of activities to win orders with our sights on 2030
- Strengthening of proposal capabilities
- Gaining the trust of customers
- Decision-makingprocess improvement
- Visualization of management information (p. 35)
- Creating an open workplace culture
- Encouraging company members to take on new challenges
- Formulation of a human resources portfolio for 2030
- Enhanced disclosure of human capital
27 TOYOTA BOSHOKU REPORT 2023
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Toyota Boshoku Corporation published this content on 31 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 October 2023 05:30:45 UTC.