Toyota reviews climate stance as big investors turn up the heat
Japan’s Toyota Motor Corp signaled a shift in its climate change stance on Monday, saying it would review its lobbying and be more transparent on what steps it is taking as it faces increased activist and investor pressure.
The carmaker came under scrutiny after siding with the Trump administration in 2019 in a bid to bar the state of California from setting its own fuel efficiency rules.
Toyota “will review public policy engagement activities through our company and industry associations to confirm they are consistent with the long-term goals of the Paris Agreement,” it said in a statement, adding that actions will be announced by the end of this year.
The automaker also said it will “strive to provide more information so that our stakeholders can understand our effort to achieve carbon neutrality.”
A company spokeswoman, who confirmed that “public policy engagement activities” includes lobbying, was not able to respond immediately to questions about pressure from investors.
Four funds with about $235 billion in assets under management are pressuring Toyota before its annual shareholder meeting in June to draw a line under its lobbying against international efforts to prevent catastrophic global warming.
“This move must not be a PR exercise but instead signal a clear end to its role in negative climate lobbying which has given it a laggard status,” Jens Munch Holst, chief executive officer of Danish pension fund AkademikerPension, told Reuters.
AkademikerPension has “escalated via intense direct engagement” with Toyota after a decade of communicating with the automaker through a third party, Troels Børrild, spokesman at the Danish fund, told Reuters.
AkademikerPension will consider preparing a shareholders resolution to submit at next year’s annual general meeting if “Toyota fails to deliver on its commitment,” Børrild said.
The fund would consider selling its Toyota holding if there is no change, but the spokesman said fund officials did not believe it would come to that.
“Right up until now, the company has repeatedly undermined climate action, from opposing the U.K. government’s ban on internal combustion engines by 2030 to opposing car fuel economy standards in the U.S.,” Munch Holst said.
The Toyota spokeswoman told Reuters that it would need more time to respond to Munch Holst’s comments.
The other investors are Church of England Pensions Board, Sweden’s AP7 and Norway’s Storebrand.
Toyota was among major automakers that supported the Trump administration in its attempt to bar California from setting its own fuel-efficiency rules or zero-emission requirements.
They have since dropped that support in a “gesture of good faith an to find a constructive path forward” with the Biden administration.
With pressure growing on carmakers to slash emissions, Toyota is also scrambling to produce EVs that can compete globally with rivals’ models. This week, Toyota introduced its first large-scale battery electric vehicle, the bZ4X, which will go on sale globally next year.
Toyota this year settled a lengthy Justice Department civil probe into its delayed filing of emissions-related defect reports for $180 million.