Everything we do is connected to · PDF fileour growth strategy Vision 2020 Long-term vision for the Toyo Tires Group in 2020 ... Toyo Tyre & Rubber Australia Ltd. Wuxi Toyo-Meifeng

TOYO TIRE & RUBBER CO., LTD.CSR Promotion Dept., CSR Center

1-17-18 Edobori, Nishi-ku, Osaka 550-8661, JapanTel: +81-6-6441-8696http://www.toyo-rubber.co.jp/

The names of products, services and other items in this brochure are trademarks or Japanese registered trademarks of Toyo Tire & Rubber Co., Ltd.

Toyo Tires Group CSR Report 2013Communication Report

Everything we do is connected to society.

Corporate Mission Statement

Corporate Philosophy

A commitment to creating

new value through innovation,

in advanced, proprietary technologies.

Brand Statement

Toyo Tires Group CSR Report 2013

Everything we do is connected to society.

The Corporate Mission Statement outlines the spirit behind the founding of the company: the Corporate Philosophy and the Brand Statement outline what the company wants to be and our basic attitude to business; and the Charter of Corporate Behavior and Code of Conduct set out the rules that govern the conduct and the actions of the company and its personnel. In accord with these principles, each one of us in the Toyo Tires Group will practice CSR vigorously, being fully aware that our Group connects with society through us.

This report has been produced as a communication tool to help

stakeholders understand the Toyo Tires Group’s CSR activities.

As with the 2011 and 2012 reports, the main message of the

2013 report is “Everything we do is connected to society.” This

year’s report has been compiled under a central theme of

“connection,” and the letter C—the initial letter of “CSR

(corporate social responsibility)” and “communication”—is

displayed throughout the report as a symbol for our CSR

initiatives as a whole.

This report contains three feature articles, each of which

focuses on one of the core values of our CSR—“responsibility,”

“trust,” and “integrity.” The feature articles describe how our

CSR initiatives connect with these core values.

In addition to the contents of this report, more detailed

information about our CSR activities is available in the “Action

for CSR” section of our website.

Companies covered: The Toyo Tires Group

(Toyo Tire & Rubber Co., Ltd. and subsidiaries and af�liates

in Japan and overseas)

* Information on Toyo Tire & Rubber alone and information

that covers only domestic business sites are included.

Period covered: April 2012 to December 2012

(From �scal 2012, the Company changed to a �scal year

ending December 31.)

* Some information is from outside this period

Referenced Guidelines:

Sustainability Reporting Guidelines (Version 3.1) of the

Global Reporting Initiative (GRI)

Environmental Reporting Guidelines 2012 of the Ministry of

the Environment, Japan

Publishing date: December 2013

Inquiries:

CSR Promotion Dept., CSR Center

TOYO TIRE & RUBBER CO., LTD.

1-17-18 Edobori, Nishi-ku, Osaka 550-8661, Japan

Tel: +81-6-6441-8696 Fax: +81-6-6441-1604

Editorial Policy / Contents ·················································· 02

Message from the President ············································· 03

Overview of the Toyo Tires Group ··································· 05

Feature Articles “Toyo Tires Group’s CSR”

Accelerating Global Expansion ·································· 07

Environmental Initiatives ··············································· 09

Establishing Global Action Principles ······················· 11

Progress of Priority CSR Activities ···························· 13

To Connect with Society

Corporate Governance ················································· 15

Compliance ······································································ 17

Connecting with Stakeholders

Connecting with Customers ········································ 19

Connecting with Business Partners ·························· 21

Connecting with Shareholders and Investors ········· 22

Connecting with Employees ········································ 23

Connecting with Local Communities ························ 27

Connecting with the Environment

Environmental Management ······································· 29

Preventing Global Warming ········································· 31

Reducing Environmental Impact ································ 32

Preventing Environmental Pollution ··························· 33

Environmental Accounting ··········································· 34

CONTENTSEditorial Policy

The Toyo Tires Group Philosophy System

Corporate Mission

Statement

Corporate Philosophy

Brand Statement

Charter of Corporate Behavior/Code of Conduct

The theme is “Connection.”

For each of us to give our best

where we work,

so that our customers will always

have a better product

at a better price,

more today than yesterday.

Earning the trust of stakeholdersWe cannot gain trust unless we ful�ll our responsibilities.

Environmental protection is one of the greatest

responsibilities that our Group has to ful�ll, and ful�lling

the responsibility of environmental protection is essential

for us in winning the trust of shareholders. Always aware

of our “connection” with the environment, we will

continue striving to develop environment-friendly

products and reduce the environmental impact of our

business activities. We will also strive to resolve various

social issues through the use of “connections” with local

communities and governmental agencies, thereby

contributing to the development of a sustainable society.

Conducting business activities with integrity is fundamental Conducting business activities with integrity is

fundamental to ful�lling our responsibility to stakeholders

and earning their trust. Therefore, we must continue to

maintain and strengthen our management system to retain

sincere “connections” with our stakeholders. Our newly

established Charter of Corporate Behavior and Code of

Conduct embody such attitude of ours. As the guiding

principles to be embraced by all Group members, we will

share and practice the Charter of Corporate Behavior and

Code of Conduct globally throughout the Group.

Building more solid “connections” with stakeholders through closer communications Since a company connects with society through its

individual members, only by improving the awareness

and quality of behavior of individual persons is it

possible to enhance the value of the company for

society. This is nothing other than “strengthening

corporate power,” on which we are working now. To

improve the quality of our CSR practice, it is essential to

identify and meet society’s expectations and demands

towards our Group, through close communications with

each stakeholder group. And after building more solid

“connections,” we should try to meet the higher level of

expectations and demands.

The Toyo Tires Group is committed to remaining a

company that is truly needed by people and society, by

ensuring that each and every Group member is fully

aware of his or her “connection” with society.Toyo Tires Group CSR Report 2013

We seek to remain a company that is truly valued by people and society at large, with each individual keenly aware of “connection.”

Reinforcethe earnings base

Effectively implementour growth strategy

Vision 2020

Long-term vision for the Toyo Tires Group in 2020

• A company that has a strong presence with a distinctive technology and marketing strategy, which sees things through the customer’s perspective”

• A company that is trusted by society, and in which each employee is keen to ful�ll its corporate social responsibility

• A company rich in imaginative freedom, challenging spirit, energy, and vitality

Net sales: ¥600 billion

Operating margin: 10.0%

2011 Medium-Term Business Plan Five-year business plan, with fiscal 2015 as the target yearSlogan: Charge Our Dreams Net sales: ¥400 billion Operating income (margin): ¥30 billion (7.5%)

President & Representative Director

Akira Nobuki

Message from the President

To ensure that each individual employee practices CSRIn its Vision 2020, the Toyo Tires Group explicitly states

its goal of becoming a company that is trusted by society

and where all employees are keen to ful�ll their corporate

social responsibility (CSR). Corporate activities are an

aggregation of activities undertaken by individual

company members, but the one who actually practices

CSR is each individual person. Therefore, we should be

aware that each one of us is a point of contact, or

“connection,” between our company and society; that is,

our company connects with society through our own

behavior and attitude. Based upon this concept, we have

set out the main message of the CSR Report 2013 as

“Everything we do is connected with society.”

Amid rapid environmental changes, such as

globalization, unless we correctly understand the

meaning of connecting with society, we will not be able

to practice CSR in a way that is expected and demanded

by stakeholders. The Toyo Tires Group considers that

the core values of CSR are “responsibility,” “trust,” and

“integrity.” We will strive to ensure that each and every

Group member actively practices CSR, being fully aware

the meaning of connecting with society through

responsibility, trust, and integrity.

Our responsibilities are expanding and diversifying with globalizationThe Toyo Tires Group is accelerating the global

expansion of its business. This means that new

“connections” with stakeholders, including customers,

business partners, employees, and local communities,

are being born. As our business expands globally, the

responsibilities that our Group must ful�ll are also

expanding and diversifying—we must recognize this

anew and faithfully carry out our responsibilities.

Responsibility

Trust Integrity

Achieve the 2011 Medium-Term Business Plan and Move on to the Next StageIn May 2011, the Toyo Tires Group announced its “Vision 2020” and the “2011 Medium-Term Business Plan.” “Vision 2020” sets out the ideal state that our Group aspires to realize in 2020; the “2011 Medium-Term Business Plan” is a �ve-year action plan with �scal 2015 as the target year. Our business environment is changing on a daily basis, but we must achieve the goals of the Vision and Medium-Term Business Plan at any cost, as a foundation for promoting CSR management. We will step up our efforts to reinforce our earnings base, as set out in the Medium-Term Business Plan, so that we can steadily execute our growth strategies.

Net sales (unit: ¥100 million)

Operating margin (%)7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

12.0

10.0

8.0

6.0

4.0

2.0

0

(100 million yen) (%)

FY2012results

FY2015targets

FY2020targets

10.0

7.5

5.4

2,911 4,000 6,000

Saroma Tire Proving Ground

Kuwana PlantKuwana Service Co., Ltd.

Sendai PlantSendai Service Co., Ltd.

Fukushima Rubber Co., Ltd.

Tokyo Branch(Domestic Replacement Tires Dept.; Original Equipment (OE) Tires/Automobile Parts Sales Dept.)Tokyo Branch Kanda Office(Corporate Communication Planning Dept.)Toyo Tire Japan Co., Ltd.Toyo Chemical Industrial Products Co., Ltd.

Toyo Seiki Co., Ltd.

Nagoya Office (Original Equipment (OE) Tires/Automobile Parts Sales Dept.) Automotive Parts Technical CenterToyo Soflan Co., Ltd.

HeadquartersHeadquarters Dojima Office (Chemical & Industrial Products Business Unit)Soflan Wiz Co., Ltd.Toyo Tires Logistics Co., Ltd.Showa Estate Co., Ltd.F.T.G Co., Ltd.Toyo Advanced Technology Inc.Nitto Japan Co., Ltd.

R&D Center

Ayabe Toyo Rubber Co., Ltd.

Hyogo Manufacturing Complex (Akashi Plant)Hyogo Manufacturing Complex (Hyogo Plant)

Hiroshima Office (Original Equipment (OE) Tires/Automobile Parts Sales Dept.)

Miyazaki Tire Proving Ground

Tire Technical CenterOrient Koki Co., Ltd.

Toyo Tire Canada Inc.Nitto Tire Canada Inc.

Toyo Tire Holdings of Americas Inc.Toyo Tire U.S.A. Corp.Nitto Tire U.S.A. Inc.Toyo Tire Mexico LLC

Toyo Tire North America Manufacturing Inc.Toyo Tire North America OE Sales LLC

Toyo Automotive Parts (USA), Inc.

NT Mexico S.de R.L.de C.V.

Toyo Tyre & Rubber Australia Ltd.

Wuxi Toyo-Meifeng Rubber Products Co., Ltd.

Toyo Tire (Zhucheng) Co., Ltd.

Toyo Tire (Zhangjiagang) Co., Ltd.

Toyo Tire (Shanghai) Co., Ltd.

Toyo Automotive Parts (Guangzhou) Co., Ltd.

Toyo Rubber Chemical & Industrial Products (HK) Ltd.

Toyo TGPM Automotive Parts Foshan Co., Ltd.

Silverstone Berhad

Toyo Rubber ChemicalProducts (Thailand) Ltd.

Toyo Tyre Malaysia Sdn Bhd

Toyo Tyre (UK) Ltd.

Toyo Tire Benelux B.V.

Toyo Tire Europe GmbH

Toyo Tire Italia S.p.A.

Toyo Tire RUS LLC

Toyo Tire Europe GmbHRepresentative Office

Overview of the Toyo Tires Group

Company outline (as of December 2012)

Composition of consolidated net sales by business


Business Overview (consolidated)

Network (as of January 1, 2013)

FY2012 results are for the nine-month period ended December 31, 2012, due to change of company fiscal term.

Operating Income

DiverTech business 21.4%62.3 billion yen

Composition of consolidated net sales by marketNet Income

Global Network

291,110320,569

294,092287,726

328,371

2008 2009 2010 2011 2012 (Fiscal year)

Net Sales

(Million yen)400,000

350,000

300,000

250,000

200,000

150,000

100,000

50,000

0

15,650

12,89312,182

8,664

−2,964

2008 2009 2010 2011 2012 (Fiscal year)

(Million yen)18,000

15,000

12,000

9,000

6,000

3,000

0

−3,000

13,218

6,704

521

2,957

−10,722

2008 2009 2010 2011 2012 (Fiscal year)

(Million yen)14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

−2,000

−12,000

Tire business 78.5%228.7 billion yen

Japan 44.6%129.9 billion yen

North America 36.2%105.5 billion yen

Other 19.2%55.7 billion yen

Domestic Network

Company name: Toyo Tire & Rubber Co., Ltd.

Established: August 1, 1945

Headquarters: 1-17-18 Edobori, Nishi-ku, Osaka 550-8661, Japan

Tel: +81-6-6441-8801

Paid-in capital: ¥30,484 million

Number of issued shares: 254,358,146 shares

Number of employees: (Consolidated) 9,777

(Non-consolidated) 3,124

Consolidated subsidiaries: 43 (Japan: 15; Overseas: 28)

Main products by business

[Tire Business]

Tires (for passenger vehicles, trucks & buses,

construction machinery, industrial vehicles),

other related products

[DiverTech Business]

Automobile components, railway car

components, thermal insulation &

waterproo�ng materials, industrial & building

materials, and other materials

In the Tire Business, we pursue a “two-top” brand strategy, with TOYO TIRES and NITTO. TOYO TIRES is a technology-focused, trustworthy brand, while NITTO is a brand that combines imagination, creativity, and innovation. We will meet market needs around the world by fully utilizing the distinctive characteristics of each brand.

In the DiverTech Business, we develop and manufacture a broad range of products that incorporate our proprietary rubber and urethane technologies. We contribute to society by supplying various industries with a wide variety of products, including anti-vibration rubber and air springs, which support the safety and comfort of automobiles and railways, as well as seismic isolation rubber for buildings and heat insulation materials.

Seismic isolation rubber

Air springs for railway cars

Seat cushions

Hydraulic engine mounts

2010

2011

2012

78.1%

21.9%

54.0%46.0%

Japan26 million

North America6.5 million

Asia12.5 million

45 million

FY2015 (planned)

29 million

FY2010

Sales by region

Japan

North America

Asia

Other

90 billion yen

77.5 billion yen

FY2015 (planned) FY2010

Japan

Overseas

JapanOverseas

Number of tires supplied by each region

Feature Article

In the Tire Business, we have been striving to strengthen our global supply and sales system. Particularly in recent years, we have worked to create a tri-regional supply system with bases in Japan, North America, and Asia, by acquiring and establishing new production bases in China and Malaysia, while expanding the production capacity of our tire plant in North America. We also seek to boost sales and earning power, focusing on Asia, through development and reinforcement of brand, market, and product strategies.


Accelerating Global Expansion

1Increasing globalization has generated new connections with stakeholders,

requiring us to fulfill an even greater social responsibility.

Establishment of Optimal Supply System Expanding into the Asian Market Connecting with Local Communities

Responding to New ConnectionsAccelerating Global Expansion

In the DiverTech Business, we have been promoting overseas expansion of our core businesses—automobile parts, urethane, and railway car parts. In China, we are now gearing up to start operations of two joint venture companies—one for the manufacture and sale of urethane seat cushions for transportation equipment, and the other for the manufacture and sale of air springs for railway cars. In Thailand, to respond to the expanding automobile market in Asia, we are working to strengthen our production and sales system for automobile parts.

In carrying out business activities, it is extremely important to connect with local communities. In recent years, companies have been expected to contribute not only to job and income creation, but also to the resolution of local social issues, such as environmental protection and creation of educational opportunities. The new tire manufacturing plant in Malaysia (completed in May 2013) was designed and built with the four concepts of resource saving, high quality, high productivity, and “skill-less.” This plant is environment-friendly, with energy-efficient manufacturing equipment, as well as photovoltaic power generation and LED lighting. By introducing state-of-the-art equipment and production processes, the plant provides a safe and comfortable work environment that does not depend on workers’ skills.

For details, see “Connecting with Local Communities” section (pp.27–28).

New tire plant in Malaysia “Toyo Tyre Malaysia Sdn Bhd”

Connecting with EmployeesAs our business has expanded globally, our employee composition has also substantially changed, with overseas employees accounting for 46% of the Toyo Tires Group’s total workforce (as of the end of December 2012) It is therefore important to create a workplace that embraces diverse values and work styles of individual employees, by taking into account the culture and customs of each country and region. We will also step up our efforts to recruit and develop global human resources who support our growth strategies.

Tire Business

DiverTech Business

April 2010Established Toyo Tire (Zhangjiagang) Co., Ltd. (Jiangsu, China)

December 2010Acquired Silverstone Berhad as subsidiary (Kuala Lumpur, Malaysia)

January 2012Established a joint venture company, Toyo TGPM Automo-tive Parts Foshan Co., Ltd., to manufacture and sell urethane seat cushions for transportation equipment (Guangdong, China)

April 2011Established Toyo Tyre Malaysia Sdn Bhd(Perak Darul Ridzuan, Malaysia)

June 2011Acquired Silverstone as a subsidiary and changed its name to Toyo Tire (Zhucheng) Co., Ltd. (Shandong, China)

Total: 6,910 employees

Percentage of employees by region (As of the end of December 2009)

Total: 9,777 employees

Percentage of employees by region (As of the end of December 2012)

October 2011Established a joint venture company, Wuxi Toyo-Meifeng Rubber Products Co., Ltd., to manufacture and sell railway car parts(Jiangsu, China)

December 2011Established a subsidiary, Toyo Rubber Chemical Products (Thailand) Ltd. to manufacture and sell automobile and OA equipment parts(Ayutthaya, Thailand)

Connecting with the Supply ChainIt has become increasingly necessary to promote CSR procurement throughout our global supply chain, giving more consideration to human rights, labor issues and environmental protection. Regarding conflict minerals (tin, tantalum, tungsten, gold) from the Democratic Republic of the Congo and surrounding areas in Africa, we are required to clarify whether or not conflict minerals are present within our supply chain. We will continue to conduct conflict mineral surveys and checks in cooperation with our business partners and customers.

For details, see the “Connecting with Business Partners” section (p21).

Tire Business DiverTech Business

For details, see the “Connecting with Employees” section (pp.23–24).

Toyo Tires Group’s CSR

Responsibility

Trust Integrity

—To Fulfill Our “Responsibility”—


Reinforcing Our Eco-Friendly Product Lineup

EnvironmentalInitiatives

The use of fuel-efficient tires is becoming widespread. These tires help to lower fuel consumption while also reducing environmental impact. Since fuel-efficient tires are required to achieve both fuel efficiency and safety performance at the same time, a tire labeling system that requires labeling of performance ratings has been introduced in Japan and Europe. NANOENERGY is our fuel-efficient tire brand, which features “Nano Balance Technology,” our proprietary material design technology that controls tire materials at the nano level. In July 2012, we launched “NANOENERGY 0,” a new fuel-efficient NANOENERGY brand tire that has achieved the highest grade under the Japanese tire labeling system, both in rolling resistance coefficient and wet grip performance. We have already released “NANOENERGY 1” and “NANOENERGY 2” in Europe, where the tire labeling system was introduced in November 2012. In the future, we will release NANOENERGY brand tires in other regions, thereby further promoting the widespread use of eco-friendly, fuel-efficient tires.

Rigid urethane foam, supplied by Soflan Wiz Co., Ltd., is widely used as heat insulating materials for buildings, contributing to reduced energy consumption. Hydrofluoro-carbons (HFCs), which are used as foaming agents to improve heat-insulating performance, are greenhouse gases that contribute to global warming; there is now a requirement to reduce emission of HFCs. In addition to chlorofluorocarbon (CFC)-free products that use carbon dioxide as a foaming agent, Soflan Wiz has developed the Soflan-R LSP series, HFC-free rigid urethane foam that uses HFO-1233zd,* the fourth-generation foaming agent that has a low global warming potential. We will continue our efforts to reduce the use of HFCs. Compared to HFC products, CFC-free products are susceptible to environmental conditions, such as temperature and humidity, due to their higher thermal conductivity. The Soflan-R LSP series have achieved significant reduction of environmental impact while ensuring the same level of heat insulating performance and strength as HFC products.

* The structural name of HFO-1233zd is 1-Chloro-3,3,3-trifluoropropene.

Enhancing Our Social Contribution ActivitiesThe Toyo Tires Group Environmental Protection Fund, which has been operated as a fund established within the Osaka Community Foundation, has provided financial assistance over the past two decades for nonprofit organizations involved in environmental protection activities. While continuing financial assistance through the foundation, in fiscal 2013 we launched an in-house fund to support a wider range of activities, including humanitarian assistance. We aim to further expand our social contribution activities.

Participation in the “Millennium Hope Hills” Project In Hope of Recovery from the Great East Japan EarthquakeThe first project supported by our in-house fund is the Millennium Hope Hills Project. This project is organized by Iwanuma City, Miyagi Prefecture, where our Sendai Plant is located, as part of the City’s efforts to recover and rebuild after the devastation of the Great East Japan Earthquake. This project aims to build hills along the shoreline, using rubble and debris from the earthquake and tsunami and to plant trees on them so that the tree-lined hills can serve as not only a breakwater, but also as evacuation areas and a biodiversity conservation center. This project also aims to pass down numerous lessons learned from the Great East Japan Earthquake to children 1,000 years in the future. Our company donated funds in support of the aims of this project. More than 160 employees participated in the Memorial Tree-Planting Ceremony as volunteers and planted trees.

Rollout of NANOENERGY Brand

Development of Soflan-R LSP Series

* Global Warming Potential (GWP) is an indication of the global warming effect of a greenhouse gas (i.e. the ability of the gas to trap heat in the atmosphere) in comparison to carbon dioxide over a 100-year time frame.

* The above values are measured values, not guaranteed values. LSP, NSP3 and NFS series: JIS A 9526 standard values* //: Parallel to the foaming direction

* Tecology is a coined word that combines “technology” and “ecology,” and a symbol of the Toyo Tires Group’s environmental activities implemented under the themes of ”expanding lineup of eco-friendly products,” “reducing the environmental impact of business activities,” and “enhancing social contribution activities.”

* According to a demonstration experiment conducted by the Tire Fair Trade Council (TFTC), there is about one percent difference in fuel ef�ciency between each grade. This means that the fuel ef�ciency of a tire with AAA-grade rolling resistance is 4% better than that of a C-grade rolling resistance tire.

(The actual fuel ef�ciency improvement depends on the vehicle you drive and how you drive it.)

The Toyo Tires Group is devoting a great deal of effort to developing environment-friendly products that are superior in terms of

global warming prevention, resource conservation, resource recycling, safety, and comfort. We plan to make all our products

environment-friendly by fiscal 2015.

The Memorial Tree-Planting Ceremony, in which Toyo Tires Group employees participated

Applying Soflan-R LSP series urethane foam

We seek to gain the trust of our stakeholders by contributing to

the development of a sustainable society through connection

with the environment.

DiverTech Business

Tire Business

For details, see the “Connecting with the Environment” section (pp. 29–34).

Awarded the highest AAA-a grade, as a fuel-efficient tire


Responsibility

Trust Integrity

For details, see the “Connecting with Local Communities” section (pp.27–28).

Comparison of physical properties ofthe representative spray rigid urethane foam

Foaming agent

Global Warming Potential (GWP)

Compressive strength (kPa) //

Adhesive strength (kPa)

Thermal conductivity (W/m·K)

LSP series

HFO-1233zd

1

150

100

0.026

NSP3 series

HFC-245fa/HFC-365mfc

858/804

150

100

0.026

NFS series

CO2

(CFC-free)

1

80

80

0.034

(as of December 2013)

—To Gain “Trust”—

Feature Article 2

Harmony between technologyand the environment

Fuel-efficient tire


Establishing the Toyo Tires Group Charter of Corporate Behavior and the Toyo Tires Group Code of Conduct

Action principles to be shared by all Group companies

Toyo Tires Group Code of Conduct Handbook (third edition) Awareness-raising tools developed in multiple languages to ensure Group-wide compliance with the new Code of Conduct

As a basis to build and maintain sincere connections with stakeholders,

we will put into practice the new Toyo Tires Group Charter of Corporate

Behavior and Code of Conduct throughout the Group.

As seen in various international standards, such as ISO26000 and the United Nations Global Compact, stakeholders’ demands for corporate social responsibility and compliance are becoming more sophisticated and diversified year by year. In addition, as our business has expanded globally, our employee composition has also substantially changed. To respond to these internal and external environ-mental changes, in November 2012 we established two new corporate policies: the Toyo Tires Group Charter of Corporate Behavior, and the Toyo Tires Group Code of Conduct. Going back to the basics of our social responsi-bilities, i.e. “conducting business activities with integrity is fundamental to fulfilling our responsibility to stakeholders and earning their trust,” we revised the previous charter of corporate behavior and code of conduct and developed new ones. The new Charter of Corporate Behavior and Code of Conduct are simple in content and structure so that they can be easily understood and followed by all directors and employees of the Group companies in Japan and overseas.

Rolling out to the Group Companies From fiscal 2013, we are rolling out the new Charter of Corporate Behavior and Code of Conduct to our Group companies, both in Japan and overseas. Especially for our employees at overseas bases, we have created educational and awareness-raising tools (posters, pamphlets, handbooks, etc.) in multiple languages and distribute them to ensure that overseas employees fully under-stand and comply with the new Charter of Corporate Behavior and Code of Conduct in their daily business activities. We also hold training seminars for compliance promotion leaders and managerial staff, in each country or region. By ensuring that the new Charter of Corporate Behavior and Code of Conduct are fully adhered to across the Group, we will seek to become a “company that is trusted by society and in which all employees are keen to fulfill their corporate social responsibility,” as stated in our Vision 2020.

Toyo Tires Group Code of Conduct Handbook

For each item in the Toyo Tires Group Code of Conduct, this handbook describes points of under-standing, concrete rules of conduct, cases of violation, and related in-house regulations. This handbook is designed to serve as a useful reference for employees when they have questions or face difficulties in making decisions in their daily business activities. We have developed English and Chinese versions of this handbook to be used by overseas employees. We have also created pamphlets and other awareness materials in multiple languages to disseminate the new Code of Conduct throughout the Group.

CorporateMission

Statement

CorporatePhilosophy

Brand Statement

Charter of Corporate Behavior/Code of Conduct

Aiming to become a corporate group valued by people and society

Establishing Global Action Principles


Responsibility

Trust Integrity

Briefing session for compliance promotion leaders in Europe (held in Germany)

For details, see the “To Connect with Society” section (pp. 15–18).

—To Remain a Company Built on “Integrity”—

Feature Article 3

Rules of conduct for each individual to follow in order to put the Toyo Tires Group Charter of Corporate Behavior into practice

Toyo Tires Group Charter of Corporate Behavior

At the Toyo Tires Group, we have a commitment to creating new value through innovation in advanced, proprietary technologies so that we continue to be a company admired by individuals and society. To realize this goal, we pledge to act with integrity by observing the following 10 principles.

Integrity 1) Comply with all laws, regulations, standards, and internal rules. 2) Conduct business activities in conformance with the principles

of free competition and fair trade. 3) Conduct ourselves with the highest ethical standards in our

relations with the government.

Manufacturing 4) Strive for the highest levels of quality, safety, and social

bene�ts in our products and services.

Human 5) Ensure a safe and healthy work environment for all of our

employees. 6) Promote workplace diversity and inclusion for each employee.

Environment 7) Engage in sound, sustainable environmental practices.

Society 8) Communicate with stakeholders in an open and fair manner. 9) Contribute to the growth of the local economy and community. 10) Conduct business with respect for human rights, local

cultures, and customs.


Items

To Connectwith

Society

Corporategovernance

Compliance

Connectingwith

Stakeholders

Customers

Businesspartners

Shareholders/investors

Employees

Localcommunities

Connectingwith

the Environment

Environmentalmanagement

Preventingglobal

warming

Reducingenvironmental impacts

Preventingenvironmental

pollution

Medium-term themes Fiscal 2012 results Self-evaluation Reference pagesFiscal 2013 initiatives

Progress of Priority CSR Activities Fiscal 2012 results and fiscal 2013 initiatives

P.15-16

P.17-18

P.19

P.20

P.21

P.22

P.23-24

P.25-26

P.27

P.28

P.29-30

P.31

P.32

P.33

: Achieved : Not achieved

Strengthening corporate governance

Strengthening the internal control system

Implementing Charter of Corporate Behavior and Code of Conduct

Establishing compliance promotion system

Enhancing education and awareness-raising activities

Strengthening monitoring

• Appointed an outside director

• Revised basic policy for internal control

• Renewed the Toyo Tires Group Charter of Corporate Behavior and the Toyo Tires Group Code of Conduct

• In Japan: Appointed compliance promotion leaders• Overseas: Held discussions on the compliance promotion system

• Reviewed grade-specific education programs

• In Japan: Worked to raise awareness of internal reporting system• Overseas: Discussed the establishment of an internal reporting system (external hotline)• Implemented Control Self-Assessment (CSA) at all business sites in Japan

• Strengthen Group governance in response to global business expansion

• Review the basic policy for internal control

• Disseminate the Toyo Tires Group Charter of Corporate Behavior and the Toyo Tires Group Code of Conduct throughout the Group on a global basis

• In Japan: Promote autonomous activities of compliance promotion leaders• Overseas: Appoint compliance promotion leaders and hold regional committees

• Revise the Code of Conduct Handbook• Strengthen department-specific and theme-specific training programs • Launch Compliance Promotion Month at overseas bases

• In Japan: Continue activities to promote awareness of the internal reporting system • Overseas: Promote establishment of the internal reporting system (external hotline)• Promote global implementation of CSA (at overseas bases)

• Strengthen the quality assurance system in response to global business expansion • Promote acquisition of ISO9001 certification at overseas bases• Work to maintain and improve customer satisfaction for inquiry/complaint

handling and improve response time (continued)• Communicate customer inquiry/complaints throughout the company (continued) • Introduce electronic bidding system to overseas bases • Hold Subcontract Act seminars (continued) and strengthen compliance with the Subcontract Act

• Distribute CSR Procurement Standards Agreement Forms to business partners throughout the world• Survey the renewal status (continued)

• Increase opportunities for management to interact with shareholders and institutional investors

• Employ global leaders• Participate in seminars for international students• Support recruitment activities at new overseas bases

• Expand the application of the annual leave restoration system • Introduce the reemployment system for former employees

• Continue Global Program in grade-specific training• Conduct self-development-oriented Global Program on a trial basis• Hold seminars for managers at overseas bases

• Acquired OSHMS certification at the Sendai Plant • Promote acquisition of OSHMS certification at other business sites

• Establish a Safety Hazard Prediction Training Hall at the Kuwana Plant

• Continue to actively participate in community events • Plan new projects

• Promote the use of the Toyo Tires Group Environmental Protection Fund • Participate in forest maintenance activities

• Strengthen the operation of environmental PDCA by increasing the frequency of working group meetings• Promote acquisition of ISO14001 certification at overseas bases

• Promote the use of software for managing information on revisions to laws/regulations• Conduct on-site inspections of industrial waste collecting, transporting, and processing companies (improve plan achievement rate)

• Achieve at least 13% reduction compared to 1990 levels

• Achieve at least 1% reduction from previous year

• Reduce the total amount of waste generation from previous year • Promote efforts toward complete zero emissions

• Reduce emissions compared to previous year

• Maintain present levels

• Strengthened the quality assurance system

• Worked to maintain and improve customer satisfaction for inquiry/complaint handling and to improve response time

• Communicate customer inquiry/complaints throughout the company

• Used the electronic bidding system (continued) • Held Subcontract Act seminars (continued)

• Distributed CSR Procurement Standards Agreement Forms to business partners• Conducted ISO/TS16949 compliance survey (continued)• Held a plant tour of the Sendai Plant• Exhibited at the Nomura IR Individual Investor Fair 2012• Launched a new section titled “Yokuwakaru Toyo Tire & Rubber (Japanese

only)” on our website

• Increased employment of foreign nationals• Participated in job-hunting events for international students

• Encouraged use of annual paid leave• Expanded application of annual leave restoration system

• Introduced Global Program in grade-specific training• Created a handbook (with useful tips) for managers at overseas bases

• Promoted activities to acquire OSHMS certification at the Sendai Plant • Considered introduction of OSHMS to other business sites

• Conducted special training at business sites

• participated in community events

• Promoted the use of the Toyo Tires Group Environmental Protection Fund (established in-house fund)

• Surveyed the environmental impact management status at new overseas bases

• Introduced software for managing information on revisions of laws/regulations (already introduced to a total of five business bases) • Conducted on-site inspections of industrial waste collecting, transporting, and processing companies (plan achievement rate: 93%)

• 11.8% reduction compared to 1990 levels (target: 12%)

• 4.6% increase from previous year

• 4.1% reduction from previous year• Signed up with new recycling companies

• 33.7 %reduction from previous year

• 64.6% reduction from fiscal 2000 levels

Maintaining and expanding the environmental management systems (ISO14001)

Improving environmental compliance

Reducing CO2 emissions(Reducing emissions by 15% from 1990 levels by fiscal 2015)

Promoting energy-saving activities(Reducing energy consumption by at least 1% from previous year)

Achieving complete zero emissions by fiscal 2015(Reducing total waste generation from previous year)

Reducing emissions of PRTR-designated chemical substances(Reducing emissions compared to previous year)

Reducing VOC emissions(Reducing emissions by 60% from 2000 levels by fiscal 2015)

Strengthening quality management

Improving customer satisfaction

Promoting fair transactions

Promoting CSR procurement

Strengthening communication with shareholders and institutional investors

Employing diverse human resources

Promoting work-life balance

Developing global human resources

Introducing the Occupational Safety and Health Management System (OSHMS)

Preventing recurrence of major accidents

Strengthening communication with local communities

Enhancing environmental protection activities

Co

rpo

rate

law

yers

Ind

epen

den

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dito

rs

Advice

Cooperation

Cooperation

Cooperation

Cooperation

Aud

iting

ReportingHot Line

Internal Audit Dept.

ComplianceManagement Section

Cooperation

Reporting/Cooperation

Investigation

Strategic Planning Committee

Financial Risk Management Committee

Human Resources Committee

R&D Committee

Quality Assurance Committee

Safety & Environment Committee

Compliance Committee

Special Committees

Execution of business operations

Aud

iting

Auditing

Reporting

Reporting

Reporting

Reporting

Reporting

Divisions responsible for the execution of business operations

Instruction onexecution

Corporate Of�cers

ExecutiveCommittee

Prior deliberation/Reporting

Decision-making/Supervision

Reporting/Submittingopinions

Representative Director

Appointment

General Meeting of Shareholders

Election/DismissalElection/Dismissal

Election/DismissalReporting

Com

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Trai

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Toyo

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roup

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orpo

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Directors Board ofCorporate Auditors

Corporate Auditors

Corporate Governance



Corporate Governance Structure

The Toyo Tires Group has established an effective corporate

governance structure, comprising the “Board of Directors,”

which is responsible for managerial decision-making and

supervision, “Special Committees,” which act as

deliberative and consultative bodies for their respective

areas, the “Executive Committee,” which is responsible for

business execution, and the “Board of Corporate Auditors,”

which audits the performance of the Board of Directors and

overall business execution. Our corporate governance

structure allows these organs to effectively fulfill their

respective functions and responsibilities.

The Board of Directors, which has been reduced to

seven members (including one outside director), makes

decisions on important matters such as management

policies, goals and strategies, and supervises business

operations. The Executive Committee comprises

18 members (including six corporate officers concurrently

serving as directors). It is responsible for reporting on the

status of business execution and on the decisions made by

the Board of Directors. It also offers opinions to the Board

of Directors. The Board of Corporate Auditors comprises

four members, three of whom are outside auditors. These

external auditors have been appointed to strengthen

management auditing functions. (All the numbers of people

indicated above are as of March 28, 2013.)

The outside director and outside auditors make

proposals from an objective and knowledgeable

perspective, thereby fulfilling their supervisory and

checking functions from an external standpoint.

To further promote business expansion and global

business development, it is increasingly important to

enhance our corporate governance. We will strive to

further strengthen our Group governance, in cooperation

with the Group companies in Japan and overseas.

Corporate Governance Structure

In November 2012, we established the Toyo Tires Group

Charter of Corporate Behavior and the Toyo Tires Group

Code of Conduct to ensure that all directors, officers, and

employees of the Group companies act in accordance

with the applicable laws and regulations, the Articles of

Incorporation, and ethical standards. Furthermore, we

seek to improve the performance of the entire Group by

strengthening and enhancing the functions of the Special

Committees—Strategic Planning, Financial Risk Manage-

ment, Human Resources, R&D, Quality Assurance, Safety

& Environment, and Compliance. We have also set up and

operate a “Reporting Hot Line” to enable employees to

directly report and consult on compliance matters.

Based on the Companies Act, the basic policy on the

development of internal control system has been resolved

by the Board of Directors, and in accordance with the

basic policy, an internal control system has been

established and continuously improved. The basic policy is

reviewed each year to reflect changes in the management

environment and to ensure that our internal control system

remains effective.

Establishment and Improvement of the Internal Control System

Strengthening of the Risk Management System

The Toyo Tires Group has established its risk management

guidelines, “Toyo Risk Avoidance Main Standard

(TRAMS).” In accordance with the TRAMS, we have

appointed a Chief Risk Management Officer to oversee the

risk management of the entire Group and established the

Risk Management Committee. We are working to reinforce

and enhance our risk management system, with a focus

on business continuity plans (BCPs).

In addition, special committees and meetings are

organized to discuss and respond to specific types of risk.

President

Emergency Response System (for Group-wide emergency situations)

Chief Risk Management Of�cer

Head of Risk Management Committee • Gather information from across the Group • Hold emergency response meetings • Lead the emergency response operations until the emergency response organization is activated

Emergency Response Meeting • Determine how to respond to the emergency • Establish teams to respond to the emergency • Communicate decisions and give instructions on response operations to the entire Group

Risk Management Secretariat • Assist the Head of the Risk Management Committee

In accordance with our information security policy and

information security management regulations, we

implement various measures to prevent information

leakage, computer virus infection that can lead to the

failure of computer systems, and other information security

incidents. We are striving to raise employee awareness

and to ensure compliance with information security

guidelines and thorough application of security update

programs, in order to maintain and continuously improve

the level of information security so as to effectively respond

to changes in the environment.

Information Security Efforts

Basic Approach

To meet the expectations of its stakeholders, the

Toyo Tires Group seeks to establish and maintain

an appropriate management system while pursuing

transparency and efficiency in its management. We

will continue striving to reinforce corporate govern-

ance, internal control systems and compliance, as

well as to promote CSR management.

Total22

incidents

Compliance Promotion System

Power harassment8 incident

Employment problems5 incident

Labor hours/salary3 incident

Embezzlement/bribery1 incident

Noti�cation/reporting violations1 incident

Other 4 incident

Flow of Internal Reporting

President Compliance Committee

Group-Wide Compliance Promotion Subcommittee

CSR Center CSR Promotion Dept.

Legal Dept.

Internal Audit Dept.

Reporting Hot Line

* One report may contain multiple incident categories; the sum of the incidents by category differs from the total number of whistleblowing reports received.

implement various education programs, including compliance promotion leader training, compliance tests for managers, and director seminars. In fiscal 2013, we will strive to further raise compliance awareness by improving departmental activities and theme-based initiatives.

Compliance


Compliance Promotion System

In response to our global expansion, we also provide compliance education at overseas bases. In April 2012, compliance training was held at the Silverstone Berhad tire plant in Malaysia.

Efforts at Overseas Bases

Continued Implementation of the Compliance Promotion Month

With the aim of proactive prevention and early detection of compliance violations, we have operated an internal report-ing system since fiscal 2006. Reporting Hot Lines have been established both inside and outside the company, to enable not only our employees but also our business partners to report compliance incidents or concerns. In fiscal 2012, a total of 16 whistleblowing reports were received, all of which were handled appropriately. In the future, we will promote the use of the internal reporting system at overseas bases.

Internal Reporting System

The Intellectual Property Department of the Technology Management Center is responsible for the protection and management of intellectual property. We respect the intellectual property rights of others by conducting thorough prior-art searches. Also, by applying for and obtaining patents for newly developed technologies, we protect our own proprietary technologies, which we actively incorporate into our products. We also educate our employees to fully understand the importance of intellectual property rights, through the following training programs by hierarchical level and job type.

Compliance is essential in conducting fair and honest business activities. In the Toyo Tires Group Charter of Corporate Behavior and the Toyo Tires Group Code of Conduct, compliance is positioned as the top priority principle of corporate and individual behavior. We have created the Code of Conduct Handbook to help our employees understand the Code of Conduct and apply it in their daily activities.

Although in the past the Code of Conduct Handbook was distributed only in Japan, the third edition of the Handbook is now being distributed to employees at overseas bases. We will strive to further solidify sincere connection with society, while working to improve compliance awareness throughout the Group.

As a foundation for developing a sincere connection with society

1) New employee training2) Technical staff training (for new employees

when they are �rst assigned, middle-level employees, and technical group leaders)

3) Sales staff training (trademarks, etc.) 4) Seminars for executives (recent trends, etc.)

Respecting and Utilizing Intellectual Property

Fraudulent acquisition of fireproofing certification for some of our rigid polyurethane thermal insulation panels

In November 2007, fraudulent acquisition of fireproofing certifica-tion was discovered for some of our rigid polyurethane thermal insulation panels. As of the end of January 2013, 97.5% of the replacement work was completed. We will continue efforts to complete replacement work as soon as possible.

The Internal Audit Department has been established in the CSR Center to monitor and evaluate the status of business execution and internal controls. In fiscal 2012, we rolled out a Control Self-Assessment (CSA) program to all operation bases/departments in Japan. In the CSA program, each department evaluates its own management status, including compliance, and based on the evaluation results, conducts improvement activities. In fiscal 2013, we plan to implement the CSA program not only in Japan, but also at overseas bases, so as to strengthen the internal control system throughout the Group.

Implementation of CSA

Since fiscal 2008, November has been designated as Compliance Promotion Month, in which various awareness-raising activities are implemented. In fiscal 2012, as in the previous year, a read-out session was held at all bases in Japan, in which employees jointly read out the Toyo Tires Group Code of Conduct Handbook. In fiscal 2013, we plan to launch Compliance Promotion Month at our overseas bases, to raise compliance awareness throughout the Group.

Breakdown of incidents reported Gentaro AokiGeneral Manager, CSR Center


The Compliance Committee, one of the special committees, discusses and determines compliance-related policies and measures for the entire Group. Implementation and promotion of these policies and measures are undertaken by the Group-Wide Compliance Promotion Subcommittee and the CSR Center. In Japan, in fiscal 2012 we appointed all department heads as “compliance promotion leaders” to promote education and awareness-raising activities in their respective departments. In the future, we plan to appoint compliance promotion leaders in each overseas operation base and to hold regional meetings, so as to further strengthen the compliance promotion system.

Revision of Grade-Specific Training

Voice

Person making report or seeking consultation

Rep

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Rep

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Rep

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Co

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unic

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resu

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Com

mun

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resu

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Com

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resu

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Reporting Hot Line(external company)

Consultationonly

Requestfor action by the

company

End

Reporting Hot Line(internal)

Reporting Hot Line(corporate lawyers)

Investigationteam

Discuss howto deal with

reportedincidents

Discuss howto deal with

reportedincidents

Compliance Management Section

Compliance Committee

Dep

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and

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Rem

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and

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Compliance Promotion Leader Training

Compliance training at plant in Malaysia

Poster for Compliance Promotion Month

Basic Approach

The Toyo Tires Group defines compliance as “not merely complying with laws and regulations, but also responding sincerely to social demands and needs.” Based on this idea, we have established the “Toyo Tires Group Charter of Corporate Behavior,” corporate action principles applied uniformly across the Group, and the “Toyo Tires Group

Code of Conduct,” a set of principles to guide the conduct of all directors, officers and employees of the Group companies. We will strive to ensure that the Charter of Corporate Behavior and the Code of Conduct are fully adhered to across the Group, while working to raise the compliance awareness of each member of the Group.

Compliance education is provided in grade-specific training for all levels of employees, including new employees, middle-level employees, and managers. In fiscal 2012, we revised our grade-specific training to be discussion-centered and improved the content of the training. With the aim of improving compliance awareness of members in managerial positions and above, we

Quality Assurance System

Quality Management System (ISO 9001/TS16949) Certification Status

President

Tire Business Group Headquarters DT Business Group Headquarters

Quality Assurance Committee

2008

4,000

3,000

2,000

1,000

02009 2010 2011 2012

3,6443,342

3,133

2,646 2,695

(FY)

(Inquiries)

Company/PlantYear/Month certified

ISO9001 ISO/TS16949

Sendai Plant

Tire Business Group Headquarters Kuwana Plant

DT Business Group Headquarters Kuwana Plant

Toyo Soflan Co., Ltd.

Hyogo Manufacturing Complex



Soflan Wiz Co., Ltd. Iwaki Plant

Toyo Advanced Technology Incorporated.

Toyo Seiki Co., Ltd.

Toyo Tyre and Rubber Australia Ltd.

Toyo Tire Europe GmbH

Toyo Tire U.S.A. Corp.

Toyo Tire North America Manufacturing Inc.

Silverstone Berhad

Toyo Automotive Parts (USA),Inc.

New Pacific Industry Co., Ltd.


Toyo Tire (Zhucheng) Co., Ltd.

Toyo Tire (Zhangjiagang) Co., Ltd.

Toyo Tyre Malaysia Sdn Bhd

1995/ 7

1995/12

2001/ 6

2000/ 1

2003/ 1

1997/ 3

2004/ 2

2005/ 8

2012/ 6

1994/ 3

1995/11

1997/11

2008/ 7

2010/ 5

2004/ 2

1998/ 1

2007/ 5

2008/10

2013/ 2

2013/10

2006/11

2006/11

2010/11

2009/ 1

2010/ 5

2007/ 4

Technology Management Center• Tire Quality Assurance Dept.• DT Quality Assurance Dept.• Environment, Safety & Health

Enhancement Dept.• Intellectual Property Dept.

Technology Management Center

CSR Center

Headquarters for each Business Group

R&D Division for each Business Group

Connecting with Customers


Basic Approach

In accordance with the Toyo Product Safety Charter, setting safety as its top priority, the Toyo Tires Group has developed a concrete action plan to achieve the objectives set out in the Charter. In response to our global expansion, we will step up our efforts in preliminary investigations of the market environment and usage conditions in individual countries, so as to provide safe and the most appropriate products for each market.

Basic Approach

In conjunction with the enforcement of the Product Liability Act in 1995, the Customer Relations Department was established with the aim of improving our capability to respond to product liability issues as well as increasing fans for Toyo Tires. Under the motto of prompt and accurate service, the Customer Relations Department staff respond to customer inquiries and provide information on products, including tires (main product) and industrial/automotive parts. The Customer Relations Department is committed to ultimate customer satisfaction through responsiveness and empathy.TOYO Product Safety Charter

At the Toyo Tires Group, the Quality Assurance Committee (a special committee) plays a central role in operating and managing a Group-wide quality assurance system that covers all Group companies. The Quality Assurance Committee formulates basic policies and measures regarding quality assurance. When a major quality problem occurs, the Committee also determines actions to be taken, and ensures that prompt and appropriate action is taken by the relevant departments, including the Quality Assurance Department.

Quality Assurance System

For inquiries and requests received via toll-free number and website, the Customer Relations Department staff try to provide clear and accurate explanations so that customers can fully understand. To customers who submitted inquiries via email, questionnaires are sent to obtain feedback on their level of satisfaction with the way their inquiries were handled (response content, response time, etc.). Based on the questionnaire results, the Customer Relations Department staff work to improve their response to customer inquiries. Efforts are being made to maintain and improve the level of customer satisfaction with inquiry responses, by setting numerical targets for customer satisfaction ratings and inquiry response times. For any complaints received from customers, the Customer Relations Department staff work sincerely, in cooperation with the relevant business offices and the Tire Technical Service Department, to resolve problems quickly and satisfactorily, so as to build and maintain good relationships with our customers.

Taking pride in the tires manufactured by our company, we seek to improve customer satisfaction by serving our customers with our extensive product knowledge and experience. Our mission is to maintain the high evaluation we have earned from customers in the United States for the quality of our products and services. To this end, we are working hard every day to improve our product knowledge. Recently, based on the mid-term sales expansion plan, we changed our response system so that we can handle customer inquiries and complaints more promptly and efficiently. The new system is designed to enable more effective follow up for customer inquiries and complaints, involving not only the Customer Relations Department, but also the entire company. We will continue working hard to ensure that customer feedback is reflected in the continu-ous improvement of existing products and development of new products.

Responding to Customer Inquiries and Complaints

Changes in the number of inquiries from customers

Toyo Tire U.S.A. Corp.

Nancy Sanchez


1. Fundamental PhilosophyThroughout our corporate efforts to provide better movement and greater comfort, we provide even safer products to customers, consumers, and society, and contribute to the creation of a wealthy and abundant society.

2. Action Guidelines1) As an environment-creating corporation that seeks to

make even more symbiotic relationships between people and the earth, Toyo Tire & Rubber provides customers, consumers, and society with products and services that are trusted and safe.

2) To assure the safety of products, Toyo Tire & Rubber complies with the necessary internal rules and external laws, regulations, standards and guidelines, and based on conformity with them, seeks even higher product safety.

3) Toyo Tire & Rubber considers product safety from the stages of product planning, development and design, through to production, sales, and even after the end of use.

4) Toyo Tire & Rubber conducts education and awareness-raising concerning product safety for every employee layer and seeks to raise product safety consciousness.

5) At Toyo Tire & Rubber, in addition to informing and educating customers and consumers about methods of suitable use for products and misuse prevention, we listen earnestly to their opinions and desires and reflect them in our products as we pursue thorough product safety.

Quality Assurance Efforts

I. Strengthening the quality assurance system throughout the group• Improving promotion systems (organizations and frameworks) • Making continuous improvements through environmen-

tal and quality risk assessments • Establishing quality assurance systems at overseas bases

II. Strengthening quality assurance on a global basis to adapt to changes in environmental and other laws and regulations• Responding to the increasingly complex quality

standards in each country • Establishing a global quality assurance network • Strengthening product safety to respond to sales

activities worldwide

Voice

Quality Management Customers Relations Department

Complaint from customer

Customer Relations Dept.

In principle, the business office should contact the customer within 24 hours from the time the complaint is received at the Customer Relations Dept.

In principle, a complaint should be resolved within a month from the date the complaint is received at the Customer Relations Dept.

System for responding to customer complaints

Customer Relations Dept. asks, by email or telephone, the business office closest to the

customer’s address to deal with his/her complaint. (Also, contacts the Tire Technical Service Dept. staff member in charge of that area, by email.)

The relevant business office contacts the customer and handles his/her complaint.

(Business office requests support of the Tire Technical Service Dept., when necessary.)

Business office reports the progress and results of complaint handling to Customer Relations Dept.

The Customer Relations Dept. confirms that the complaint has been resolved.

Strengthening connections with customers~Efforts in the United States~

Basic ApproachBasic Approach

The Toyo Tires Group is committed to fully disclosing information regarding its management and business activities in a fair, timely, and appropriate manner. To fulfill our accountability to all stakeholders, we will design, implement, and improve various communication activities.

Promotion of IR Activities

As tools to allow stakeholders to gain a better understanding of our Group, we create and publish annual reports, fact books and other information on our Website. In fiscal 2013, to make our company better known, we launched a new section titled “Yokuwakaru Toyo Tire & Rubber (Japanese only)” on our website, where detailed company information is available.

Improvement of Communication Tools

Deepening connections with shareholders and investors through enhanced communication

Institutional and individual investors and securities analysts

in Japan and overseas are interested in our Group’s

capabilities and potential.

From fiscal 2013, with a new management team and

structure, the Toyo Tires Group has been striving to

proceed along the path for further growth. We will strive to

enhance our communication activities to convey the

Group’s information and messages more effectively—not

only financial results, but also action plans and their

significance, and the attractiveness of potential

management resources.

Haruhiko Kitagawa

General Manager, Corporate

Communications Planning Dept.


As part of our IR activities, we regularly communicate the latest information on our management to institutional and individual investors and securities analysts in Japan and overseas, through financial results briefing sessions and other means. We also endeavor to promote understanding of our business activities by conducting various events, including individual interview sessions and inspection tours of our business bases.

Plant inspection tourOn July 12, 2012, the Sendai Plant tour was conducted, as part of the Tohoku inspection tour organized by SMBC Nikko Securities to provide securities analysts with opportunities to meet with companies in the Tohoku region. The Sendai Plant tour included a guided-tour that allowed participants to see first-hand the manufacturing process, and a briefing session designed to deepen their understanding of our Group’s business activities.

Exhibiting at the Individual Investor Fair The Toyo Tires Group exhibited at the Nomura IR Individual Investor Fair 2012, held at the Tokyo International Forum on December 14 and 15, 2012. During the two days, we explained to about 250 individual investors face-to-face about our Group’s management policies.

Voice

Connecting with Shareholders and Investors


Toyo Tires Group booth at the Nomura IR Individual Investor Fair 2012

Yokuwakaru Toyo Tire & Rubber

Sendai Plant inspection tour

Connecting with Business Partners


The Toyo Tires Group has established its Basic Purchasing Policies, with four pillars: “fair and transparent transactions”; “thorough compliance”; “partnership”; and “consider-ation for both quality and the environment.” We seek to carry out fair and open purchasing activities with all our business partners inside and outside Japan.

Partnership

Fair and Transparent Transactions

Use of electronic bidding systemWe select suppliers and other business partners based on a comprehensive evaluation of quality, price, delivery timing, and stable supply capability. In 2003, we introduced an electronic bidding system through which bidding information is available on the Company’s website. To ensure transparency in the purchasing process, we will continue to promote the active use of electronic bidding.

Thorough Compliance

Consideration for Both Quality and the Environment

As a priority for fiscal 2013, the Toyo Tires Group is working to further promote CSR procurement at its overseas bases. As part of such efforts, we plan to introduce the electronic bidding system, which has proved very successful in Japan, to our overseas production bases, to ensure a high level of fairness and transparency in their purchasing activities. We also plan to visit overseas bases to check their purchasing practices against the Group’s purchasing regulations, thereby promoting the improve-ment of purchasing practices as well as compliance with regulations. In the future, we will continue to be committed not only to observing the laws and regulations, but also to achieving full compliance in all business activities, including supplier selection and pricing.

Promotion of CSR procurement We aim to grow and develop together with our business partners, by building and maintaining sincere and sound relationships based on mutual trust. In recent years, it has been increasingly required to address social responsibility issues, including human rights, labor issues, and environmental protection, throughout the entire supply chain. In line with this, we have developed a consent form for the Toyo Tires Group CSR Procurement Standards, and distributed forms to our business partners to ask for their cooperation in our CSR procurement efforts.

ISO/TS16949 conformance surveyTo ensure that all parts and materials procured from our suppliers meet the required quality and environmental standards, we visit our suppliers on a regular or as-needed basis to perform quality audits and chemical substance inspections (in which we inspect procured parts and materials to determine whether they contain any regulated substances). For suppliers required to be ISO/TS16949-certified, we investigate whether they have acquired or properly renewed certification.

Compliance with the Subcontract ActIn purchasing activities, we comply with all applicable laws/regulations and social norms, and maintain the privacy of confidential information. Since we conduct our business with cooperation from numerous business partners, we believe it is vitally important and our responsibility to comply with the Subcontract Act. Under this belief, we have been implementing Group-wide education and awareness-raising activities on the Subcontract Act. In fiscal 2012, training sessions on the Subcontract Act were held for staff members in purchasing-related departments, as well as the executives and relevant staff of affiliated companies. The training was very practical, involving not only an explanation of the Subcontract Act, but also a practical lecture and a test to confirm participants’ understanding level. In the future, we will continue striving to ensure full compliance with the Subcontract Act, by further enhancing our education and awareness-raising activities.

Efforts at Overseas Business Bases

(Number of employees)

2008 2009 2010 2011 2012 (Year)

12,000

10,000

8,000

6,000

4,000

2,000

0

New employees

Young employees

Mid-level employees

Managers

General Managersand representatives

Common andselective trainingTechnology-related departments

TW

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Manufacturingleader training

Groupmanagertraining

Assistantmanagertraining

Manufacturing-related departmentsSales-related departments

Departmental specialized trainingTraining forselected personnel

New employee training

Follow-up trainingfor new employees

Brush-uptraining

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el

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ning

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iver

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tec

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al p

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od

life

des

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sem

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Co

mp

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tal h

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“My

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upp

ort

Pro

gra

m

Gra

de-

spec

i�c

Div

erTe

ch s

ales

trai

ningGroup executive

developmenttraining

Training fornewly-appointed

general managersand representatives

Grade-speci�ctraining

Education and Training System

7,0291,439

5,590

（20.5%）

（79.5%）

6,9101,511

5,399

（21.9%）

（78.1%）

8,567

3,175

5,392

（37.1%）

（62.9%）

9,360

4,046

5,314

（43.2%）

（56.8%）

9,777

4,499

5,278

（46.0%）

（54.0%）

*Figures are as of December 31 each year.

Connecting with Employees


Basic Approach

Employment and Human Resources Development

For an organization to achieve sustainable growth, it is essential to secure and develop capable human resources. Based upon this belief, the Toyo Tires Group is striving to promote the diversification of employment and workplaces, and to improve its training and career development programs. While

respecting the individuality and values of each individual employee, we will continue working hard to become a “company rich in imaginative freedom, challenging spirit, energy and vitality,” as stated in our “Vision 2020.”

Development of Global Human Resources

To support the global expansion of our Group’s business, we are working vigorously to develop global human resources. As part of such efforts, various new courses have been introduced in grade-specific training programs, including a course designed to promote understanding of different cultures, and a course featuring activities in foreign languages. For local executives at our overseas bases, seminars are held to encourage them to share not only business strategies, but also the history and values of the Group. In the future, we will strengthen our efforts to develop global human resources by creating opportunities for the next-generation Group executives to gain the necessary experience and skills.

To support the medium and long-term development of employees, we have established and are operating the “Individualized Human Resources Development System.” Under the system, career interviews are conducted in which employees are encouraged to discuss their career plans with their supervisors. In conjunction, the “Human Resources Development Committee” has been established to ensure that each department develops and implements the medium and long-term development plans for individual employees (including career development, assignments, and transfers). We are implementing various initiatives to promote the growth of individuals and the organization, with the aims of “building a strong organization that promotes and stimulates the growth of people” and of “ensuring that each individual with diverse strengths and skills is assigned to an appropriate workplace so that he or she can realize their potential to the fullest extent.”

To respond to global business expansion and an increasing demand for specialized skills, the Toyo Tires Group endeavors to secure the necessary human resources through various methods—not only new graduate and mid-career recruiting, but also the reemployment of retired employees. We also actively employ foreign nationals, through participation in job-hunting events for international students.

Employment Situation

Support for Career Development

With the aim of becoming a company where people with and without disabilities can work together in a pleasant environment, we are implementing various initiatives to promote the employment of disabled persons, mainly at Showa Estate Co., Ltd., a special subsidiary established for the employment of people with disabilities. Each business office is also making efforts to expand the employment of disabled persons, by creating working opportunities in the areas of clerical and technical work, and light work such as cleaning and management of company housing and premises.

Promoting Employment of Disabled Persons

Promoting Work-Life Balance

Human Rights Education

We are working to enhance our education and training programs, to nurture the abilities of employees, to provide them with career development opportunities and to raise their motivation. To enable employees to acquire the education and skill training needed to advance on their career path, we have established a training system that comprises various training programs, including grade-specific training, training for selected personnel, and department-specific training. In the future, we plan to create training programs so that employees from different countries and regions can enjoy learning and interacting with each other.

Improvement of Education and Training Programs

We provide human rights education in grade-specific training. Human rights education is conducted on various themes, such as “personal information and privacy,” “sexual harassment,” “power harassment,” “social discrimination,” and “human rights of children, elderly, and disabled people.” As part of our efforts to eliminate social discrimination, we actively participate in local activities in the areas where our business sites are located.

Number of employees and percentage by region

Support for child-rearing and nursing care As part of efforts to support employees with family responsibilities, we have established child-care and family-care leave systems, which enable employees to concentrate on raising their child (up to the age of two) or caring for family members (for a maximum of one year). There are male employees who have taken child-care leave. We have also introduced special working systems to allow employees with children in the third grade or younger, and those who need to care for family members to be exempted from overtime/holiday work, and to work flexible and reduced hours. From the perspective of labor CSR, we have introduced a system to restore expired annual leave, to allow employees to use their unused paid leave granted in the year before last (up to five days per year) not only for illness or injury, but also for child care, family nursing care, and volunteer activities. Employees commended for long service are also eligible for this system. In response to the introduction of the lay judge system in Japan, we have introduced a system in which the days when an employee serves as a lay judge are counted as special paid holidays. We are also striving to promote the improvement of operational efficiency and to establish flexible work systems, so that individual employees can realize the working style they desire and live a fulfilling life.

Introduction of rehiring system We have introduced a reemployment system to rehire former employees who left the company for reasons such as marriage, childbirth, child-rearing, family-care, or spouse’s or fiancé/ée’s transfer, under certain conditions.

Overseas

Japan

Rubber product manufacturing industry *2 Manufacturing industry *2The Toyo Tires Group *3

(FY)

Lost-time accident rate *1

2005 2006 2007 2008 2009 2010 2011 2012

1.4

1.2

1.0

0.8

0.6

0.4

0.2

0.0

0.930.84

0.79

1.18

0.70

0.930.92 0.81

1.01 1.021.091.09

1.12 0.99 0.981.05 1.00

0.63

0.21

0.40

0.32

0.82

0.85

0.480.40

Basic Approach

*1 Lost-time accident rate: Number of lost-time accidents per million hours worked.*2 Rubber product manufacturing industry, manufacturing industry: Data based on the Survey

on Industrial Accidents (preliminary data) by the Ministry of Health, Labour and Welfare.*3 The Toyo Tires Group: Data for 16 business sites, including af�liated companies (for �scal

2012, data from April to December).

Connecting with Employees


Key Safety Management Policies

1) Provide training for new employees, focusing on three activities.*

2) Systematically promote the use of risk assess-ments and hazard maps.

3) Introduce the Occupational Safety and Health Management System (OSHMS).

4) Open a Safety Hazard Prediction Training Hall at the Kuwana Plant.

* “Stop, call, and wait” activities; hazard prediction training (KYT) activities; pointing and calling activities

At the Toyo Tires Group, both labor and management are working together in safety, health, and disaster prevention activities. In fiscal 2012, in addition to risk assessments for equipment and tasks (evaluating the degree of danger inherent in each item of equipment and task), we worked on improving workplace safety to ensure that appropriate measures are taken for high-risk operations and sites, without omission. We are also working to ensure that hazard maps are displayed at all workplaces, towards building a common awareness of residual risks among staff and management.

Creating Safe Workplaces

Fiscal 2013 Safety, Health, and Disaster Prevention Management Policy

Measures against metabolic syndrome Since fiscal 2008, to help prevent metabolic syndrome, we have conducted specific health examinations and specific health guidance. Industrial health staff—especially nurses—provide health guidance to employees at risk of developing lifestyle-related diseases, to raise their health awareness. The Health Insurance Society implements lifestyle-related disease prevention programs, through external institutions.

Mental health care promotionTo protect employees’ mental health, the Toyo Tires Group promotes four types of activities while working on continuous improvement. We encourage our employees to practice self-care and use free telephone consultation services when needed. We are now making preparations for the full-scale introduction of stress check services. For manager and supervisors who play a central role in “line care” activities, we hold seminars to deepen their understanding of mental health care in the workplace, inviting industrial physicians and counselors as lecturers. Mental health care by industrial health staff is also provided, with priority on early detection and intervention through individual guidance and consultations. In the future, we plan to enhance support for employees trying to return to work, through close cooperation between industrial health staff and medical institutions.

Creating Healthy and Comfortable Workplaces

Introduction of a safety confirmation systemThe Toyo Tires Group has introduced a safety confirmation system that covers all business sites and employees, and holds a Group-wide simultaneous disaster simulation drill four times a year to test the system and related procedures. Training on telephone safety confirmation procedures (in accordance with the contact network) is also conducted to ensure that the safety of employees and facilities is checked not only by the safety confirmation system, but also by telephone.

Earthquake and disaster drills The installation of earthquake early-warning systems has been completed at 17 domestic bases of the Toyo Tires Group. In earthquake drills, employees are trained to make a calm initial response in the very short time between when an earthquake warning is issued (based on the location and depth of the epicenter) and when the earthquake occurs. At each of our business sites, joint fire drills are conducted with the local fire department and volunteer fire-fighting units.

Creating Disaster Resistant Workplaces

Response to Asbestos Issues

At the Toyo Tires Group, one employee has thus far been

recognized as suffering from a work-related illness associated with

asbestos. At present, seven people have been issued with

personal health records (Kenko Kanri Techo).

We will continue to conduct special health examinations for

people who may have come into contact with asbestos in the past.

First-aid and life-saving trainingWe distribute to all business bases DVD recordings of a first-aid and life-saving training session held at the Kuwana Plant, to help our employees acquire basic first-aid and life-saving knowledge and skills. The installation of AEDs (automatic external defibrillators) has been completed at all business sites of the Toyo Tires Group in Japan. We also inform local residents that AEDs installed at our plants are available for their use.


Safety, Health, and Disaster Prevention Activities

Safety Hazard PredictionTraining Hall at the Kuwana Plant

Mental health seminar by an industrial physician for managers/supervisors, held at each business base

DVDs of a �rst-aid and life-saving training session

Initial �re-�ghting unit heading to the �re site (Sendai Plant)

Joint �re drill with the local �re department(Kuwana Plant)

Joint �re drill with the local �re department and local volunteer �re-�ghting units (Fukushima Rubber)

Basic training, from �re reporting to �re-�ghting activities (Hyogo Plant)

We also continue to promote the introduction of the Occupational Safety and Health Management System (OSHMS) to our business sites. In fiscal 2013, the plan is to acquire OSHMS certification for the Sendai Plant, and to introduce the OSHMS system to other business bases. In May 2013, a training hall was opened at the Kuwana Plant to raise awareness of the potential dangers within the facilities and the importance of following the established rules.

Overall Achieve zero accidents [Target] Steady reduction policy of work-related accidents

Safety Take thorough measures to prevent [Target] Frequency rate: management recurrence of major accidents 0.5 or below

Health [Target] Sick leave rate: management Reduce amount of sick leave 0.5 or below

Disaster preventionmanagement Conduct and improve disaster drills, assuming a major disaster

The Toyo Tires Group believes that when a natural disaster or an infectious disease occurs, from the perspective of risk management it is important to keep damage to employees to a minimum and to confirm their safety. We have introduced a safety confirmation system, and conducted unique disaster response drills designed based on the lessons we have learned from the Great East Japan Earthquake. Safety, health, and disaster prevention activities

are undertaken vigorously throughout the Group, with senior management and those in charge at each business site taking leading roles. As for safety efforts, we are working on the development of a system to prevent the recurrence of major accidents. With regards to disaster prevention efforts, we conduct practical training on how to react properly in the event of a disaster, including how to call the emergency services (119) via mobile phone, and first-aid drills.

Financial assistance made in the past (cumulative total)

Areas of activities of the organizations to which funds were provided (Fiscal 2013)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 (FY)’

Num

ber o

f org

aniz

atio

ns re

ceiv

ing

fund

s

Amou

nt o

f fun

ds p

rovi

ded

(100

milli

on y

en)800

700

600

500

400

300

200

100

0

4.00

3.50

3.00

2.50

2.00

1.50

1.00

0.50

0.00

390 million yen

676 organizations

Environmental educationand hands-on learning16 organizations (40%)

Awareness-raising activities/events8 organizations (20%)

Local environmental maintenance 6 organizations (15%)

Ecosystem protection3 organizations (7%)

Satoyama woodland/forestmanagement and tree-planting2 organizations (5%)

Recycling2 organizations (5%)

Water and river environment 1 organization (3%)

Research and others2 organizations (5%)

40organizations

Support for Environmental Protection Activities

The Toyo Tires Group Environmental Protection Fund has been operated as a fund established within the Osaka Community Foundation. While continuing financial assistance through the foundation, from fiscal 2013 we have launched an in-house fund to support a wider range of activities including humanitarian assistance. Through these systems, the Toyo Tires Group will continue its efforts to support and enhance environmental protection activities in Japan and overseas.

Connecting with the Toyo Tires Group Environmental Protection Fund

Since its establishment in November 1991, the Osaka Community Foundation has provided support to numerous social contribution activities undertaken by NPOs and other organizations, through funds established with contributions by individuals, companies, and other sources. As of May 2013, the number of funds established had reached 232, and the total amount of contributions was 2,920 million yen. In fiscal 2013, we made a total of 163 grants totaling 84.53 million yen, of which funds from the Toyo Tires Group Environmental Protection Fund accounted for approximately 25%, the largest among all funds established at the Foundation. In cooperation with the Toyo Tires Group and its employees, we will continue to strive hard to support organizations involved in environmental protection, thereby contributing to local communities.

Eiichiro Katsuyama Secretary GeneralOsaka Community Foundation


The Toyo Tires Group Environmental Protection Fund was established in 1992 to provide financial assistance for nonprofit organizations involved in environmental protection activities. In line with the company’s intention to support employees’ commitment to environmental protection, the fund adopts a matching gift system, under which the company donates the same amount of money donated by employees. In fiscal 2013, a total of 22.44 million yen was provided in financial assistance to 40 organizations. Since its establishment, the fund has provided financial aid of 390 million yen to a total of 676 organizations.

Voice

Connecting with Local Communities


Support for the Saroma Grand Harvest Festival

In September 2012, we opened the grounds of the Saroma Tire Proving Ground (Saroma town, Tokoro-gun, Hokkaido) for the “Saroma Grand Harvest Festival,” organized by the Saroma Town Tourism and Products Association. The Saroma Grand Harvest Festival is an annual thanksgiving festival to celebrate the agricultural, forest, and marine harvest of the year, featuring the sale of a wide variety of local produce and specialties. The festival is one of the most popular events in the eastern Hokkaido region, attracting about 10,000 visitors from the surrounding areas each year. The 2012 festival marked its 18th year. Since the 6th festival, the Toyo Tires Group has offered part of the Saroma Tire Proving Ground for use as a venue. During the festival, we set up a Toyo Tires booth and held a tire safety awareness event to remind visitors of the importance of daily tire checks and maintenance.

Tire Safety Awareness-Raising Activities

The Toyo Tires Group undertakes tire safety awareness-raising activities to educate drivers about the importance of appropriate use of tires and daily tire checks. In fiscal 2012, at shopping malls near our business sites and at the Toyo Tires Turnpike, we conducted various tire safety awareness events, including distribution of tire safety handbooks and free tire inspections.

Participating in Community Cleanup Activities

Our plants and business offices actively participate in cleanup activities in their respective communities. Recognizing these activities as opportunities to interact with and convey our gratitude to local residents, we will continue to actively participate in community cleanup activities.

Holding the Fureai Community Fair

In October 2012, the Sendai Plant held the “Fureai Community Fair” to express its gratitude to local residents as well as family members of its employees. This event has been held in the autumn each year since 1993, the 2012 fair marking the 20th anniversary. Employees from the Sendai Plant and Toyo Tire Japan South Tohoku Sales Company participated in the operation of the event, running food stalls, game stalls, and various attractions. The fair attracted about 1,800 visitors. As part of the fair, a guided plant tour was conducted with approximately 200 participants. The tour participants gained a deeper understand-ing of business activi-ties of the Toyo Tires Group.

Launching the In-House Fund

Tree planting activities carried out by NPO “Niranjana Sewa Sanga” in Bihar State, India (supported from �scal 2011 to 2013)

The lively venue crowded with many visitors

Tire safety awareness event at a shopping mall

R&D Center (Osaka Prefecture):Participating in a city-wide simultaneous cleanup activities organized by Ibaraki City

Kuwana Plant (Mie Prefecture): Participating in Toin Town Cleanup Campaign

The 20th Fureai Community Fair

Staff members of the Foundation

Basic Approach

The “Millennium Hope Hills” Project (Iwanuma City, Miyagi Prefecture), the �rst project supported by the in-house fund

The Toyo Tires Group Environmental Protection Fund

As a good corporate citizen, the Toyo Tires Group is committed to contributing to the development of local communities. To this end, we will strive to resolve social issues in collaboration with govern-mental agencies as well as various stakeholders,

while listening to the opinions of local residents. We will also strive to support and enhance environmental protection activities, through the Toyo Tires Group Environmental Protection Fund.

Atmospheric emissions 221 t

Amount transferred 101 t

Amount used 334,000 t

Amount used 3.1 million t Amount used 6,075 t

In-house generation 129,071,000 kWh Amount used (crude oil equivalent) 158,000 kl

Final disposal (as land�ll) 3,426 t (16%)Total amount produced 21,000 t

Environmental Management System

Environmental Management System (ISO 14001) Certification Acquisition Status

Business site Year/Month certi�ed

Sendai Plant

Kuwana Plant

Toyo Soflan Co., Ltd.

Miyoshi Plant

Atsugi Plant

Hyogo Manufacturing Complex


Toyo Advanced Technology Inc.


Soflan Wiz Co., Ltd. Iwaki Plant

F.C.C. Co., Ltd.

New Pacific Industry Co., Ltd.

Silverstone Berhad

Toyo Automotive Parts (USA), Inc.


1998/6

1999/12

1999/3

[March 2008 (Integrated)]

1998/6

[June 2007 (Integrated)]

2000/2

[February 2006 (Integrated)]

2000/8

2002/10

2004/9

2008/11

Correspondence with the Toyo Global Environmental Charter Medium and Long-Term Targets

Act

ion

Gui

del

ines

Reforming managementsystems

Endeavor to protect the environment by complying with environmental laws and regulations and agreements with local residents.

Reduce CO2 emissions per-unit of production by 15% compared to fiscal 1990 by the end of fiscal 2015.

Promote modal shift in logistics.

Reduce energy consumption per-unit of production by 6% compared to fiscal 2009 by the end of fiscal 2015.

Achieve complete zero emissions at our business sites in Japan by the end of fiscal 2015.

Achieve zero emissions at business sites in China.

Reduce emission of VOCs (volatile organic compounds) by 60% compared to fiscal 2000 by the end of fiscal 2015.

Eliminate the use of SOC (substances of concern).

Promote chemical substance management based on global standards, such as the EU-ELV and RoHS Directives and REACH regulations.

Promote preferential purchasing of environment-friendly raw materials and development of environment-friendly technologies.

Minimize the use of environmentally hazardous substances in products in development stage.

Promote tire weight and noise reduction and fuel efficiency improvement, and develop energy-conserving products.

Ensure that all Toyo Tires Group products put on the market are environment-friendly by the end of fiscal 2015.

Promote environmental protection and social contribution activities by providing financial assistance to non-governmental

organizations (NGOs), etc. involved in biodiversity and environmental conservation in Japan and overseas.

Participate in and cooperate with regional events (cultural festivals, cleaning, etc.).

Support employees’ voluntary social contribution activities.

Raise employees’ environmental awareness and publicize the Group’s environmental activities to customers and the general public through CSR reports, etc.

Define the content of education and training required for each grade (position/duties) and provide appropriate education and training.

Understand and comply with local laws and regulations.

Respect the culture and customs of each country/region and endeavor to harmonize with local communities.

Properly maintain environmental conservation facilities, and measure and manage pollution loads.

Conduct emergency response drills.

Develop and implement a concrete action plan for each plant in line with the Toyo Global Environmental Action Plan.

Conduct business activities in accordance with ISO 14001 guidelines.

Conduct environmental accounting in accordance with the Ministry of the Environment’s Environmental Accounting Guidelines.

Execute internal and external auditing.

President

Safety & Environment Committee

Safety, Health and Disaster Prevention Subcommittee Environment Subcommittee

DiverTech Working GroupTire Working Group

Natural rubber + synthetic rubber42%

Tire cord 11%

Carbon black, chemicals, and other materials47%

Power purchased 41%

Heavy oil and kerosene 19%

City gas 20%

Coal 17%

Other 3%

Waste plastic 29%

Burnt residue 31%

Soot and dust 14%

Sludge 10%

Metal scraps 6%

Waste oil 3%

Fiber, wood and paper scraps 2%

Waste alkali 0% Other 5%

CO2 emissions331,100 t-CO2

NOx emissions 499.7 t

SOx emissions 228.3 t

Amount of wastewater 2.9 million t

Water resources PRTR-designated chemical substances Wastewater

PRTR-designated chemical substances

Raw materials Energy Waste materials Atmospheric emissions

1) Compliance with laws and regulations

2) Reduction of environmental impacts

3) Development of environment-friendly products

4) Harmony with society

5) Internal and external awareness-raising and public relations activities

6) Expansion of efforts overseas

7) Response to emergencies

Global warming prevention

Energy conservation

Waste reduction

Reduction of harmful chemical substances

Green procurement

Consideration for the environment at the development stageDevelopment and provision of products and technologies that reduce environmental impacts

Toyo Tires Group Environmental Protection Fund

Interaction with local communities

Management systems Harmony with local communities

Prevention of environmental disasters and accidentsReview and improvement of emergency response and other related manuals

Management systems

Environmental accounting

Environmental auditing

*Calculated in accordance with the Greenhouse Gas Emissions Calculation and Reporting Manual (Ver. 3.3) (Ministry of the Environment, Ministry of Economy, Trade and Industry)

Environmental Management


Toyo Global Environmental Charter

The Toyo Tires Group established the “Corporate Environment Improvement Committee” (present Safety & Environment Committee) in 1972. In fiscal 2004, a working group was formed for each of the business segments (Tire and DiverTech), to ensure smooth implementation of environmental activities. We are striving hard to remain an environmentally responsible and transparent company, by ensuring that the working groups play a leading role in promoting environmental activities in their respective business segments, while implementing the PDCA cycle.

Environmental Management System

The Safety & Environment Committee Policy comprises the Safety, Health, and Disaster Prevention Subcommittee Policy and the Environment Subcommittee Policy. The Environment Subcommittee Policy for fiscal 2012 includes the following three commitments:

The Toyo Tires Group has developed a medium and long-term plan for environmental activities, on the basis of the Toyo Global Environmental Charter. We will continue to actively pursue environmental activities, from a medium and long-term management perspective, so that we can promptly respond to environmental changes.

Toyo Global Environmental Action Plan

Environmental Performance at Business Sites in Japan

Input of energy and resources


The Toyo Tires Group carries out its business activities with commitment to being environmentally aware and providing high-quality products and services. In line with our commitment to environmental responsibility, we established an environmental department, ahead of competitors in the industry. In 1992 we established “Toyo Global Environmental Charter,” which we use as the basis for vigorously promoting environmental efforts.

1. Fundamental PhilosophyThrough corporate activities that offer the means to provide joy in movement and comfort in daily living, we protect the planet that is our home and contribute to the creation of a wealthy and abundant society.

2. Action Guidelines1) Compliance with laws and regulations We comply with laws and regulations related to the

environment and work to protect it.2) Reduction of environmental impacts We strive to reduce the generation of waste materials in our

business activities and suppress the consumption of energy and harmful chemical substances as much as possible to reduce our effect on the environment. Moreover, we conduct recycling and make other efforts to preserve resources and use them effectively.

3) Development of environment-friendly products At the product planning stage, we consider every step from

production to post-use and strive to develop new products and new technologies that are friendly to the earth. Moreover, we continue to develop and provide products, technologies, and services that are useful for global environmental protection, including through energy conser-vation and pollution prevention.

4) Harmony with society Through use of the Toyo Tires Group Environmental

Protection Fund and dialogues with different sectors in society, we strive to realize even better living environments as a member of both global and local communities.

5) Internal and external awareness-raising and public relations activities

We implement clear and comprehensive education and awareness-raising activities about all aspects of the environment for every employee level. Moreover, we also endeavor with public relations activities for our customers, society, and local residents.

6) Expansion of efforts overseas We also comply with local environmental laws and

regulations in our business abroad, and work to achieve harmony with the regions along with creating environmental management systems.

7) Response to emergencies To prevent environmental disasters, we conduct thorough

management and maintain and improve our equipment. In addition to investigating and taking countermeasures immediately at times of emergency, we strive to prevent any recurrence.

3. Maintaining/Improving Management SystemsIn addition to establishing of�cers and other staff responsible for safety and environment, and advancing the improvement of management systems, the enforcement divisions clarify our action plans and work to realize an even better environment. Moreover, we conduct annual auditing to con�rm the results of our environmental protection activities, evaluate them, and implement new measures.

(�scal 2012 results)

INPUTEmissions and waste from our business activities (�scal 2012 results)

OUTPUT

For Item I, efforts were made to further reduce CO2 emissions and achieve complete zero emissions. For Item II, efforts were made at the Kuwana Plant to promote fuel switching from heavy oil to other fuels. For Item III, efforts were made to ensure appropriate management of waste disposal, through the use of electronic manifests and software for managing information on revisions to laws/regulations.

I. Promote activities to reduce environmental burdens II. Promote energy-saving activities III. Improve environmental compliance

CO2 emissions per-unit of production

Types and ratios of waste generated (Fiscal 2012 results)

* The graph shows yearly changes in annual CO2 emissions (for each fiscal year from April 1 to March 31 of the following year) at production bases under our direct control.

* In accordance with the Greenhouse Gas Emissions Calculation and Reporting Manual (Ministry of the Environment, Ministry of Economy, Trade and Industry), CO2 emissions were calculated using the all-power-source average method. For the electricity emission factor, the actual receiving-end emission factor was used; for denominator, the combined value of “new rubber consumption” and “amount of materials converted to new-rubber amount” was used.

Changes in the amount of waste generated

50

40

30

20

10

0

(1,000 t)

(FY)2008 2009 2010 2011 2012

22.4 20.6 20.2 21.9 21.0

Recycling status by type (Fiscal 2012 results)

Other

Thermal recycling58%

Re-use7%

Export overseas16%

Material recycling9%

Cement calcining Small and medium boilers

Steel manufacturingGasication furnaces

Metal reningTire manufacturer plants

Papermanufacturing

Chemical plants, etc.

Retreaded tire basesOther

Export overseas

Material recycling

Other10%

Amount of used tires generated and recycling rates

Amount generated

Recycling rate

1,0109989979501,056

8790919189

2008 2009 2010 2011 2012 (FY)

(1,000 t) (%)1,200

1,000

800

600

400

200

0

1009080706050403020100

Waste plastic 29%

Burnt residue 31%

Soot and dust 14%

Sludge 10%

Metal scraps 6%

Waste oil 3%

Fiber, wood, paper scraps 2% Waste alkali 0%

Other 5%

Total amountgenerated21,000 t

120

100

80

60

40

20

0

(t-CO2/t)

1990 2008 2009 2010 2011 2012 2013 2014 2015

10089 89

80 85 88.2 87 85(Target) (Mid-term target)

Preventing Global Warming


Reducing CO2 Emissions

In energy-saving activities, we are working to achieve the target of reducing energy consumption per-unit of production by at least 1% over the previous year. In fiscal 2012, we implemented various energy-saving measures, including conversion to LED lights at the Sendai Plant, replacement with high-efficiency equipment, and reduction of energy losses from steam and air leaks. Energy-saving activities by the Fukushima Rubber Co., Ltd. are noteworthy; they promoted the use of waste heat for factory heating and reduced the number of compressors in opera-tion through inspection and repairing of compressed air leaks. In recognition of these activities, Fukushima Rubber was awarded the fiscal 2012 METI Tohoku Bureau Director General Award as an excellent energy management company. However, due to a decrease in production volume, energy consumption per-unit of production for the entire Group increased by 4.6% from the previous year. In response to the Japanese government’s request to conserve electricity during the summer and winter months, following the Great East Japan Earthquake, we have set voluntary targets that are equal to or higher than those requested by the government, and have been actively promoting electricity-saving and peak-demand reduction efforts at each business site. As part of such efforts, we held Cool Biz, Warm Biz, and casual dress campaigns, not only at production plants but also at offices. As a result of Group-wide concerted efforts, the Group as a whole achieved electricity-saving targets of 15.5% in summer and 7.4% in winter, which are higher than the targets set by the government. In fiscal 2013, we will further promote Group-wide energy-saving activities, involving all members, by further strengthening cooperation between business sites.

Promoting Energy-Saving Activities

We have been promoting energy-saving activities in logistics with the goal of reducing energy consumption per-unit of production by at least 1% over the previous year, and by an average of at least 1% over the five years from fiscal 2008 to fiscal 2012. The Sendai Port ceased functioning following the Great East Japan Earthquake, forcing us to transport products produced at the Sendai Plant to other ports by land. In fiscal 2012, however, the Sendai Port resumed operations and our logistics operations resumed as they were prior to the earthquake. As a result, the transportation energy consumption per unit of weight transported (for the entire Group) was down by 14.6% over the previous year, and down by 1.4% over the five-year average. CO2 emissions from transportation also decreased by 13.6% from the previous year. In fiscal 2013, we will continue promote environment-friendly logistics.

Energy-Saving Efforts in Logistics

The Toyo Tires Group has participated in the “Challenge 25 Campaign” since 2010. As part of our efforts for this campaign, we have defined five priority commitments for energy savings (listed below) and strive to implement these commitments.

Participation in Challenge 25 Campaign


The Toyo Tires Group aims to reduce CO2 emissions per-unit of production at its domestic production sites by 15% from fiscal 1990 levels by the end of fiscal 2015. In fiscal 2012, our target for CO2 emissions reduction was 12% from fiscal 1990 levels. Although a 12.2% reduc-tion was achieved at the end of December, due to a decrease in production volume, the reduction for the full year (until the end of March 2013) was only 11.8%. In fiscal 2013, due to the anticipated recovery in production volume and expected effects of fuel shift from heavy oil to city gas for boilers, which has been promoted at the Kuwana Plant over the past two years, we have set a higher target of a 13% reduction from fiscal 1990 levels, and are striving hard to achieve this.

Reducing Environmental Impacts


Waste Reduction

The Toyo Tires Group defines “zero emissions” as “reducing the final landfill waste to less than 1% of total waste generated,” and has been striving to reduce such landfill waste. From fiscal 2004 to 2010, zero emissions had been achieved at all domestic business sites of the Toyo Tires Group (including production sites and technical management sites). However, in fiscal 2011, due to suspended operations of industrial waste disposal operators damaged by the tsunami that followed the Great East Japan Earthquake, part of the generated waste could not be recycled and was sent to landfills. In fiscal 2012, due to the gradual resumption of recycling processing operations of the damaged waste disposal operators, the volume of waste going to landfill decreased by half from 7,454 tons to 3,426 tons. In accordance with the revised Waste Disposal and Public Cleaning Law, we also conducted on-site inspections of industrial waste collecting, transportation and processing companies. In the future, we will strive to once again achieve zero emissions at all domestic business sites as soon as possible, and to promote on-site inspections of industrial waste collecting, transportation and processing companies.

[Our ve priority commitments for energy savings] 1) Maintain proper temperature control so that room temperature is a

minimum of 28°C in summer, and does not rise above 20°C in the winter.2) Turn off lighting and OA equipment, etc. when not in use.3) Save water by not running taps unnecessarily.4) Practice eco-driving (gentle acceleration and no idling).5) Use carbon-offset goods and wood-based products.

Toyo Tires Group participates in the Challenge 25 Campaign.

Recycling of Used Tires

Under the leadership of the Japan Automobile Tyre Manufacturers Association (JATMA), the tire industry as a whole is striving to promote the recycling of used tires. In 1990, ahead of competitors in the industry, the Toyo Tires Group introduced a cogeneration system that uses scrap tires as a fuel at the Sendai Plant. We have been vigorously promoting conservation of fossil fuels and effective use of resources through thermal recycling.

The number of used tires generated in Japan in 2012 (January to December) was 94 million (1.01 million tons in weight), up 2 million (12,000 tons) from the previous year. This was due to a recovery in demand for new cars, which had been sluggish following the Great East Japan Earthquake of 2011, and an increase in the number of scrapped cars due to the eco-car subsidy program. The quantity of recycled tires decreased by 8,000 tons to 882,000 tons compared to the previous year; the recycling rate was 87% in 2012, down 3% from the previous year. There is now considerable demand for used tires as an alternative fuel. Paper and cement plants purchase cut and pulverized scrap tires from overseas, because they cannot secure the necessary amount of used tires in Japan.

Recycling Status

Source: Japan Automobile Tyre Manufacturers Association (JATMA)

(Unit: million yen)

Category Major activities

1. Business area costs

Pollution prevention costs

Global environment protection costs

Resource recycling costs

2. Upstream/downstream costs

3. Administration costs

4. R&D costs

5. Social activities costs

6. Environmental remediation costs

Air pollution prevention measures (replacement of boilers), improvement of wastewater treatment facilities, etc.

Energy-saving measures, greenhouse gas emissions control measures, etc.

Processing and recycling of industrial waste, etc.

Purchasing of eco-friendly products, pulverization of waste tires and urethane, etc.

Operation of environmental management systems, environmental impact monitoring activities, etc.

Development of alternative materials, research and development of fuel-ef�cient tires, etc.

Tree-planting activities, contributions to the Environmental Protection Fund, etc.

Payments of levies related to pollution burdens, etc.

Investment Cost

(Unit: million yen)

FY2011

179

78

95

6

1

0.0

3

0

0

183

FY2012

362

250

105

7

0

0.0

3

0

0

365

FY2011

995

131

300

565

55

87

330

29

21

1,517

FY2012

952

209

301

442

33

81

418

22

18

1,524Total

Category Major activities

I. Cost reduction through energy saving

II. Pro�ts from recycling and sale of waste

Cogeneration, and operation on holidays during summer months

Energy-saving activities

Recycling and sale of waste materials

Amount

FY2011

0

97

91

188

FY2012

213

72

10

295Total

Category Environmental performance indicators

Effects related to resources input in business activities

Effects related to environmental impacts and

waste generated by business activities

Effects related to goods and services produced by

business activities

Total energy input

Electricity

Heavy oil and kerosene

Gas (city gas and LPG)

Other (coal and waste tires)

Water resource input

CO2 emissions

Emissions of PRTR-designated chemical substances

Transfer of PRTR-designated chemical substances

Total emissions of waste materials

Waste materials sent to land�lls

Total wastewater

Water quality BOD

Water quality COD

NOx emissions

SOx emissions

Volume of tires collected

Unit

1,000 giga-J

1,000 giga-J

1,000 giga-J

1,000 giga-J

1,000 giga-J

Million m3

1,000 t-CO2

t

t

1,000 t

1,000 t

Million m3

t

t

t

t

t

FY2011

6,158.0

2,311.6

1,262.8

1,209.4

1,258.1

3.3

340.9

333.9

72.3

21.9

7.5

3.1

16.5

35.0

614.3

268.1

7,593.0

FY2012

5,759.3

2,405.1

1,113.0

1,237.6

1,240.2

3.1

331.1

229.8

101.1

21.0

3.4

2.9

12.3

19.6

499.7

228.3

6,530.0

In comparison with the

previous year

-398.7

93.5

-149.8

28.2

-17.9

-0.2

-9.8

-104.1

28.8

-0.9

-4.0

-0.2

-4.2

-15.4

-114.6

-39.9

-1,063.0

Changes in the amounts of PRTR-designated chemical substances handled, emitted and transferred

Changes in VOC emissions (with fiscal 2000 as 100)

10,000

8,000

6,000

4,000

2,000

0

50045040035030025020015010050

0

(Amount handled) (Amount emitted/transferred)

(FY)2008 2009 2010 2011 2012

5,239

6,079

8,9627,841

6,075

8251 37

72101

285

232

304334

221

Amount handledAmount emittedAmount transferred

100

80

60

40

20

0

(%)

2000 2008 2009 2010 2011 2012 2015

100

5550 49 46

35 40 (Target)

60% reductionby the end of �scal 2015

(FY)

5

4

3

2

1

0

(million tons)

(FY)2008 2009 2010 2011 2012

3.1 3.2 3.2 3.3 3.1

1.600

1.400

1.200

1.000

800

600

400

200

0

(t)

(FY)2008 2009 2010 2011 2012

868

740 705614

500473352 342

268 228

NOxSOx

Amount of water used Volume of NOx/SOx emissions

EnvironmentalAccounting



Environmental Protection Costs

For the Toyo Tires Group overall, in comparison with the previous fiscal year, air pollution prevention-related investment increased. This is mainly due to plant and equipment investment for fuel switching. “Resource recycling costs” (within business area costs) accounted for the largest portion of the total environment-related expenses. Resource recycling costs are costs of outsourced waste recycling.

Range of data collectionToyo Tire & Rubber Co., Ltd. Headquarters, Sendai Plant, Kuwana Plant, Hyogo Manufacturing Complex, R&D Center, Tire Technical Center, Automotive Parts Technical Center; Fukushima Rubber Co., Ltd.; So¦an Wiz Co., Ltd.; Toyo So¦an Co., Ltd. Miyoshi Plant, Atsugi Plant; Ayabe Toyo Rubber Co., Ltd.; Toyo Seiki Co., Ltd.

Period covered: January 2012 – December 2012

• Calculations conform to the Environmental Accounting Guidelines (2005 edition) published by the Ministry of the Environment.

• Depreciation of investments is included in cost. • For costs spanning more than one category, only the costs related to

environmental protection were included.

• In cases where environmental protection costs cannot be clearly separated, a proportional calculation was made using the “environmental ratio” considering the degree of reference to the environmental protection efforts.

• R&D costs include the costs of efforts to develop eco-friendly products and use alternative materials. • Personnel expenses were calculated by man-hours and average wages.

Environmental accounting review for fiscal 2012

Economic Effects Produced by Environmental Protection Measures

Environmental Protection Effects (Quantitative Effects)

Preventing Environmental Pollution


Compliance with the PRTR Law

In fiscal 2012, the Toyo Tires Group used a total of 29 PRTR-designated chemical substances, for which the amount released and transferred are required to be reported under the PRTR Law (Law concerning Pollutant Release and Transfer Register). Although the amount of PRTR-designated chemical substances handled increased at one time, in fiscal 2012 it decreased to 6,075 tons, down 23% from the previous year. This was due to our vigorous efforts to reduce the use of PRTR-designated substances, including a change in composition of products containing PRTR-designated substances and also use of alternatives. In recent years, regulations on chemical substances in products have been increasingly tightened and extended to cover a wider range of substances, around the world. We will continue to promote chemical substance management in compliance with the global standards.

Reducing VOC emissions

In accordance with the revised Air Pollution Control Law, since fiscal 2006 the Toyo Tires Group has been striving to fulfill the requirements for controlling VOC (volatile organic compounds) emissions to the atmosphere. By continuously improving production methods and processes, we achieved our targets of reducing VOC emissions by 30% in fiscal 2009, and by 35% in fiscal 2010, compared to 2000 levels. In fiscal 2012, VOC emissions significantly decreased, partly because some business sites in the DiverTech business segment were merged with another Group company. In the future we will continue striving to reduce VOC emissions with the target of a 60% reduction compared to 2000 levels by the end of fiscal 2015.

Water Resource Conservation

The Toyo Tires Group uses large amounts of water to cool the equipment that generates heat during the manufactur-ing process. We are striving to make effective use of water resources by circulating and reusing cooling water.

Preventing Air Pollution

NOx (nitrogen oxide) and SOx (sulfur oxide) emissions were reduced through the introduction of cogeneration systems and a fuel shift from heavy oil to natural gas at the Kuwana Plant. We will continue regular monitoring of air emissions and emission reduction efforts at each business site.

Documents

Everything we do is connected to · PDF fileour growth strategy Vision 2020 Long-term vision for the Toyo Tires Group in 2020 ... Toyo Tyre & Rubber Australia Ltd. Wuxi Toyo-Meifeng