Toyota Way

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A fundamental element in guaranteeing Toyota do Brasil's transparency, the objective of this ... year lines of Corolla, Hilux and SW4, and ...... Elimination of excess water in the parts washer, reducing the consumption of compressed air in the.
Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Results and outlook

About the report and remissive index

Toyota do Brasil 2012 Sustainability Report

Summary Message from the president................. 4 Toyota 2020 Global Vision..................... 6 Profile.....................................................10 Corporate governance......................... 16 Strategy (Toyota Way)......................... 22 Environmental management.............. 28 Strategic stakeholders......................... 42 Product responsibility......................... 68 Results and outlook............................. 80 About the report and remissive index............................ 84

Presentation

A fundamental element in guaranteeing Toyota do Brasil’s transparency, the objective of this sustainability report is to demonstrate the company’s performance in fiscal 2011-2012, as well as the commitments and targets established for improving its socio-environmental and economic performance. Published for the fourth year running in accordance with Global Reporting Initiative (GRI) guidelines, the document shows Toyota’s close links with Brazil, reinforced by the inauguration of the new factory in Sorocaba (SP) and the launch of two new cars: the hybrid Prius and the compact Etios, the latter produced in the country. All our initiatives are aligned with the Toyota Way, based on the pillars of quality and continuous improvement, expanding our offering of vehicles for the Brazilian people.

CAPA PROVISÓRIA

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Last year was very hectic for the Brazilian automotive industry, especially due to the new policies implemented by the federal government. We also had the consequences of natural disasters that occurred in Japan and Thailand, which directly impacted the company’s production worldwide, including Brazil. However, we overcame the adversities and got to follow our business plans. In 2011, we launched the new model year lines of Corolla, Hilux and SW4, and we pre introduced our hybrid Prius in the national market. The best indication of the good acceptance by our customers was for Toyota to keep the leading position in the segments of mid-size sedans and diesel pick-ups and SUVs.

Message from the president A year to overcome difficulties | GRI 1.1, 1.2

This is reflected in our numbers: in the first half, we had a stable sales growth and in the second half, we were able to keep the same level presented in 2010, reaching nearly 100,000 cars sold in Brazil. Our Indaiatuba factory was runned almost at its full capacity , producing more than 65,000 cars. The year of 2011 also brought achievements to Toyota do Brasil Foundation, inaugurating its formal support to APA Costa dos Corais project, a world case of environment protection. In August 2012, we inaugurated the new plant in Sorocaba (SP), which marked Etios production start, our compact car model.At first, it will produce 70,000 cars annually, generating 1,500 direct jobs. This is our first ecofactory in Brazil, which employs the same concept used in the headquarter in Japan, reinforcing our commitment to the environment.

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Results and outlook

About the report and remissive index

Message from the president

Toyota 2012 Sustainability Report

Message from the president

We also started selling Prius and relaunched Lexus in the Brazilian market. Prius is the first Toyota hybrid car sold in Brazil, and Lexus is our flagship in the Luxury segment, which is in expansion in this Country. In 2012,Toyota Motor Corporation(TMC) developed its ‘2020 Global Vision’, a plan that intends to place the company in the forefront in the future of mobility, focused on technology progress, engagement of people and employees and identification of new possibilities for intelligent networks, which supply information technology for optimized use of energy and consumption. Just as in 2011, I keep my motto: consider the needs and feeling of all members of our organization, understand what the consumer needs and promptly answer in a proper manner, promote and support the development of our partners and strengthen the communication between everyone in Toyota family. This annual report brings the main facts of the fiscal year, which started in April 2011 and ended in March 2012, as well as our practices in search of continuous improvements. I hope you enjoy reading it! Shunichi Nakanishi President, Toyota Mercosur

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Toyota 2012 Sustainability Report

Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Results and outlook

About the report and remissive index

Toyota 2020 Global Vision

Toyota 2020 Global Vision Faced with the global challenges of recent years, the Toyota Motor Corporation developed a new global vision. Created in January 2012 and symbolized by a tree, the Toyota 2020 Global Vision is intended to lead the way to the future of mobility, focused on technological progress, engaging people and employees and identifying new ways of using smart grids that employ information technology to optimize energy use and consumption. The image of a tree was chosen to symbolize the Toyota Vision – from the roots to the fruit. The company’s principles are represented by the roots, because everything it does stems from this single base. These roots support the trunk of the tree, meaning the strength and stability of its operations. It is only based on this that our work will produce fruit, represented in the 12 principles that make up the Vision (read more on page 8).

The Toyota 2020 Global Vision builds on the principles, values, precepts and philosophy of the Toyota Way, the objective of which is to produce better and better vehicles and enrich life for the community.

We want to be the company of choice for consumers and to make our employees proud that they work at Toyota This is how the company intends to build an environment and a structure that make consumers smile when they choose a Toyota, based on the principle that we will only achieve our results through the efforts of each employee, a fundamental element in building this cycle of sustainable growth.

New model

70,000 Toyota 2020 Global Vision Roots to fruits | GRI 4.8

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Etios production capacity at the new Toyota factory in Brazil.

Etios leaving the assembly line of the Sorocaba ecofactory

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Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Toyota 2012 Sustainability Report

Results and outlook

About the report and remissive index

Toyota 2020 Global Vision

Visão Global da Toyota Toyota Way

The 12 principles of the Toyota 2020 Global Vision Safer and more responsible ways of transporting people

Respect for the planet

Show the way Toyota will take the lead. We will take advantage of opportunities and invest in the future. Future of mobility We will develop new forms of transportation and seek new ways of connecting technology with people.

Show t he way Exceed expectations

Enriching lives around the world Through the concept of monozukuri (manufacture), we will create jobs, develop people and contribute to society.

Commitment to quality

Safer and more responsible ways of transporting people Safety is our number one priority – for our employees and our customers. Nothing is more important.

Rewarded with a smile Future of mobility

Challenging targets

Commitment to quality We will constantly raise our standards of trust, credibility and customer satisfaction. Constant innovation Our goal: “Better and better cars”. We will continue to reinvent ourselves, introduce new technologies and stay ahead of the competition.

Employing people’s talent and passion

There is always a better way

Constant innovation

Enriching lives worldwide

Respect for the planet We will show consideration for the planet in everything we do. We will research and promote systems and solutions that do not harm the environment. Exceeding expectations Our mindset will be to anticipate and fulfill the needs of those that we serve.

Values

toyota way

Precepts

Rewarded with a smile The best expression of customer satisfaction is a smile. We will be grateful and appreciative in everything we do. Challenging goals Our purposes are elevated and we work together... this is what we are. Engaging people’s talent and passion The power of our organization stems from the skills and differences of our employees and business partners... solving problems and creating new ideas.

Principles

There is always a better way The spirit of kaizen – achieving higher levels and facing the challenge of finding the best way to do everything we do... every day.

Philosophy

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ilustração PROVISÓRIA

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Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

2012 was a year of many challenges for Toyota do Brasil (TDB). The natural catastrophes in Japan in March 2011 hit the entire supply chain, also affecting production in Brazil. Even so, with the efforts of our employees and partners (suppliers and dealers) and the trust of our consumers, we were able to overcome this adversity and end 2011 with sales close to our 2010 record (55,030). Toyota do Brasil commercialized 53,159 vehicles in 2011. GRI 2.1

Toyota aims to achieve excellence in environmental performance with the inauguration its unit in Sorocaba, production of the Etios compact model and the importation of the Prius

Profile Technology, quality and trust | GRI 2.1, 2.4, 2.5, 2.6, 2.9

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Results and outlook

About the report and remissive index

Profile

Toyota 2012 Sustainability Report

Message from the president

This spirit was also evident in the maintenance of the expansion planned by Toyota: the preparation of the Sorocaba (SP) ecofactory, inaugurated in September 2012, production of the Etios and importation of the hybrid Prius. This enabled the company to further deepen its roots in Brazil, reinforcing quality and its relationship of trust and commitment to the Brazilian people. GRI 2.9 Toyota is the world leader in research and development, using advanced automotive technology. The company also creates intelligent solutions for current mobility challenges and assumes responsibility for future generations. The main foundation of new Toyota technological concepts is a constant striving for innovation.

Non-conventional ideas need to be given space for development and the technologies of the future need to be tested under real conditions. Innovative system Engine technology is one of Toyota’s major assets. Its range of engines has been recognized with awards that reflect the high design and quality standards imposed by the company’s engineers. Toyota engines are developed to provide performance and response capacity while offering fuel economy and reduced emissions. Benefits for customers include the innovative Toyota Hybrid Synergy Drive® system: the new hybrid system available in the Toyota Prius. Hybrid systems employ an electric motor that plays an auxiliary role to the gasoline engine, producing peak performance while reducing fuel consumption (read more in the chapter Product responsibility).

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Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Toyota 2012 Sustainability Report

Assessment

98%

of the models evaluated are in perfect condition, in accordance with the rigorous TÜV standards

About the report and remissive index

Profile

Safety is Toyota’s main priority. The company employs advanced steering, anti-locking and traction control technologies. Additionally, each new model is carefully conceived to maximize safety, through the use of computerized simulations and crash tests (an impact test to verify whether the vehicle meets determined safety standards in traffic accidents). The body and chassis are designed to absorb impacts and provide passengers with maximum safety, while SRS airbags are activated in the event of a collision This is confirmed by the 2012 report from the German multinational Technischer Überwachungs-Verein (TÜV, or Technical Inspection Association in English)1, which nominated Toyota the leading brand in reliability and quality. A total of 19 Toyota models were among the best in each of the 2012 TÜV Report’s five categories – vehicles aged between two and three years, four and five years, six and seven years, eight and nine years and ten and eleven years.

performance of the Corolla and the Yaris in the older vehicle categories. The 2012 TÜV report surveyed around 8 million vehicles in Germany between July 2010 and June 2011. Consolidated position More than five decades of investment have consolidated TDB as a strategic front for Toyota’s development. With 4,559 employees at the three plants in Brazil – in São Bernardo do Campo (SP), Indaiatuba (SP) and Sorocaba (SP) –, in addition to two vehicle distribution centers in Guaíba (RS) and Vitória (ES), a representation office in Brasília and a commercial office in São Paulo (SP), TDB currently manufactures the Corolla sedan – Toyota’s main product in Brazil and worldwide, with more than 35 million units sold since 1966 –, and the Etios, a new compact for the Brazilian market – produced at the Sorocaba ecofactory (read more in the chapter Product responsibility). GRI 2.4, 2.5

Among the models evaluated, 98.1% were in perfect working condition in accordance with the strict TÜV standards, an improvement over the 2011 report when the rate was 97.8%. The Auris came in second place in the same category, repeating its performance of the previous year.

A private company, TDB’s concern for the environment is aligned with its growth prospects in the Brazilian market and with global Toyota Motor Corporation (TMC) guidelines. The ecofactory in Sorocaba, for example, employs the most advanced technologies applied by Toyota in Japan, proposing a new form of development based on best resource management, emission control and waste management practices (read more in the chapter Environmental management). GRI 2.6

In the category of vehicles aged between four and five years, the Prius came second, with 96.7% of the models tested in perfect condition. In this category, the Prius was followed by a number of other Toyota models, such as the RAV4 (fourth place), the Verso (sixth place) and the Avensis (tenth place). Also worthy of note was the

With its entry in the compact segment, Toyota expects to increase customer numbers in Brazil. It is also preparing to meet the challenges involved in responding to the demands of commercializing more competitively priced vehicles while maintaining the international quality standards of the Toyota brand.

The Prius, launched in Brazil in 2012, was the leader in the category of vehicles aged from two to three years for the second year running in Germany.

TÜV, one of the largest certification bodies in the world, is responsible for the mandatory inspections carried out on vehicles licensed in Germany. Based on the data gathered in these inspections, the company produces an annual report in which it rates the quality and reliability of the vehicles.

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Results and outlook

Engines made in Brazil In 2012, Toyota announced the construction of a new engine plant in Porto Feliz (SP). With an initial investment of R$ 1 billion, the new venture should employ around 700 people and have a production capacity of 200,000 units per year. The engines that will be produced by the new factory will include the two models used in the Etios (1.3 and 1.5) and the 1.8 and 2.0 Corolla engines. The factory is projected to open in the second half of 2015.

Key information | GRI 2.1, 2.2, 2.4, 2.7, 2.8

Head office of Toyota do Brasil Avenida Piraporinha, 1.111 – Bairro Planalto – São Bernardo do Campo São Paulo (SP) – Brazil Number of employees 4,559 Production 60,456 units* Main products Corolla Etios** Plants • São Bernardo do Campo (SP) • Indaiatuba (SP) • Sorocaba (SP) • Guaíba (RS) – vehicle distribution center • Vitória (ES) – vehicle distribution center • Brasília (DF) – Representative office Dealers 134 dealers located throughout the diverse regions of Brazil: North (9), Northeast (19), Southeast (62), South (29) and Central-West (15)

*Total production in 2011 (Anfavea data). **Model launched in September.

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Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Results and outlook

About the report and remissive index

Toyota 2012 Sustainability Report

Profile

| GRI 2.10

The most valuable auto manufacturer in the world

Awards

The best cars Toyota has gained recognition and received a number of awards for the sustainability and quality of its vehicles. This year, for the second time, the company was considered the auto maker that most respects the environment in the Motorpress 2012 Best Cars award, which was created in 1996 and is promoted simultaneously in 24 countries. The Toyota Hilux won the 2012 Best Cars award for best pickup of the year for the fifth time – the other years were 2006, 2007, 2008 and 2009. In 2011, the

| GRI

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Corolla received this award in the midsize sedan segment.

In 2011, Toyota was awarded the title of most valuable auto manufacturer in the world, according to the report 2011 BrandZTM Top 100 Most Valuable Global Brands report. Considered to be the largest database on consumer relations with brands, the survey covers 50,000 brands, 30 countries and more than one billion consumers.

Toyota also received a tribute from the magazine Car and Driver for its “green initiative” in bringing the first mass-produced hybrid car in the world to Brazil. The president of Toyota Mercosur, Shunichi Nakanishi, was awarded the Green Economy prize, granted by the business leaders’ group Lide, which recognizes members of the business community and executives whose performance in their respective segments is distinguished.

According to the survey, in 2011 the value of the Toyota brand increased by 11%, reaching US$ 24.2 billion. Since publication of the BrandZTM report was initiated in 2006, Toyota has been considered the most valuable vehicle manufacturer in the world, with the exception of 2010, when it dropped to second place. In addition to Toyota, the Lexus brand also entered the ranking among the top ten most valuable brands, worth US$ 3.7 billion. According to the authors of the report, one of the reasons for Toyota’s return to the top may be its hybrid technology, used in Toyota and Lexus vehicles, which reflects the company vision of excellence in environmental performance and fuel efficiency.

2.5, 2.7, 2.8

The parent company Founded by the Toyoda family in 1937. the Toyota Motor Corporation (TMC) is a leading global auto maker and one of the ten largest companies in the world, according to Fortune Global 500 Business.

Timeline TDB Milestones

In 2011, it produced the best-selling car in the world for the second time running. This was the Toyota Corolla, with 1.02 million units commercialized according

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1958

Toyota opens an office and begins to assemble vehicles in São Paulo, Brazil

1959

Launch of the Bandeirante Jeep, one of the most popular vehicles in Toyota’s history

The company, which has more than 325,000 employees worldwide, manufactures the Toyota, Lexus, Daihatsu and Hino brands; its shares are traded on the stock exchanges of Tokyo, Nagoya, Osaka, Fukuoka and Sapporo (Japan), New York (USA) and London (United Kingdom). With production in 28 regions and countries, TMC commercializes vehicles under its different brands in 160 countries.

to survey by Forbes, one of the most distinguished business magazines in the world, in partnership with the consultancy IHS Global. The study also

lists the Toyota Camry in eighth place in the ranking, with approximately 726,000 units commercialized globally. In 2011, TMC produced almost 8 million vehicles.

1962

Inauguration of the first Toyota plant in Brazil, in São Bernardo do Campo (SP)

1997

Start up of importation of the Hilux from Argentina

1998

Start up of Corolla production at the newly-opened Indaiatuba plant in São Paulo

2001

Production of the Bandeirante is discontinued

2003

Integration of Toyota management in Brazil and Argentina with the creation of Toyota Mercosur

In addition to the Corolla, Toyota invests in other formats, such as the Hilux pickup, the Camry sedan and the Prius – the first and the bestselling hybrid vehicle worldwide. Launched in 1997, commercialization of the Prius was initiated in Brazil in 2012. The compact Etios was also launched in the Brazilian market in the second half of this year.

2005

The Guaíba Distribution Center is inaugurated to organize distribution logistics for Hilux and SW4 vehicles imported from Argentina

2008

Toyota celebrates its 50th anniversary in Brazil

2009

Start up of construction of new plant in Sorocaba (SP)

2012

Inauguration of the Sorocaba (SP) ecofactory for production of the Etios compact. Importation of the hybrid Prius is initiated

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Toyota do Brasil (TDB) has an administrative structure which ensures that decision making is in accordance with the legislation, head office guidelines from Japan and market regulations. In accordance with its strategic vision, Toyota pursues alignment with international standards of transparency for its customers, employees, partners and surrounding communities.

Management best practices are a priority for Toyota

| GRI 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10

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Results and outlook

About the report and remissive index

model adopted

Toyota commercial office in São Paulo: employees studying notice boards

Corporate governance Transparent and ethical conduct

Product responsibility

Corporate governance

Toyota 2012 Sustainability Report

Message from the president

TDB governance is integrated with that of Toyota Mercosur, comprising the company’s subsidiaries in Brazil and Argentina. The model has been in place since 2003 and is designed to integrate the two companies, providing greater flexibility and dynamism in the use of available resources, streamlining decision making processes and expanding the business throughout Latin America, including the Caribbean and Mexico. GRI 4.1 The governance structure and decision-making processes are set forth in the Authorization Policy for Toyota Mercosur, a document that establishes limits and responsibilities for each group. The Brazilian and Argentinean units have their own

2003

integration of management of the Toyota subsidiaries in Brazil and Argentina

governance structures, backed by head office guidelines and adapted in accordance with local legislation and characteristics. The highest Toyota Mercosul governance body is the Board of Directors (BOD), led by the president of TDB and supported by the vice presidents of the Finance, Commercial and Industrial areas. The BOD is assisted by a secretary. There are no independent or non-executive Board members. GRI 4.1, 4.2, 4.3 Under the leadership of the company president, the BOD is responsible for developing and executing the company’s strategic planning and analyzing its performance in monthly meetings. Decisions may be arrived at in three ways depending on the matter in hand: a decision taken solely by the BOD; a local decision, which is communicated to the Toyota Motor Corporation (TMC); and decisions pre-approved by TMC. GRI 4.1 There is also an Executive Committee, which is responsible for analyzing and communicating projects and making proposals for operational improvements. Members meet monthly and assist the BOD with inputs drawn from the different groups to which they belong. Called Functional Meetings, these groups decide on matters related to the Finance, Commercial, Corporate, Purchasing areas and others, analyzing and addressing proposals to promote ongoing improvements in the operations. GRI 4.1, 4.9

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Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Results and outlook

Toyota 2012 Sustainability Report

About the report and remissive index

Corporate governance

Results

Organizational Chart

Appraisal of senior management | GRI 4.5, 4.10 All senior managers undergo an annual appraisal encompassing results and behavior. The items analyzed include the fulfillment of individual targets, contribution to company performance and personal skills, for example, leadership capacity, as well as alignment with Toyota Way principles (read more in the chapter on Strategy). GRI 4.10 Similar to the appraisal conducted with other company employees, the process includes a self-assessment and may lead to the reformulation

of job attributions or changes in remuneration, in accordance with fulfillment of the hoshins (strategic planning attributed to different employees and sectors of the organization) established. GRI 4.10

Shunichi Nakanishi

The members of the BOD and the Executive Committee receive fixed remuneration as stipulated in their work contract, with the exception of the president of Toyota Mercosur and some statutory directors, who receive variable remuneration GRI 4.5

President, Toyota Mercosur

Characteristics of the governance structure | GRI 4.1, 4.3, 4.7

Hideaki Hayashi

BOD and Executive Committee • Structured to maintain a direct relationship with the Toyota Motor Corporation (TMC) head office. • They have the autonomy to manage the business in Brazil.

Senior Vice President, Finance

Luiz Carlos Andrade Jr. Senior Vice President, Corporate and Commercial

Composition of the BOD • In accordance with Toyota do Brasil articles of incorporation and head office guidelines. • Consisting of statutory directors of the company and a secretary. • There are no independent members. • Members are selected based on the needs of the company´s business. • In the event of a vacancy or organizational need, the structure may undergo extraordinary modification. • The composition of the board is normally reviewed in an annual meeting between the president of Toyota Mercosur and the board of TMC. Executive Committee • Comprising the statutory and non-statutory directors responsible for the diverse company areas. • Members are nominated by the BOD, with head office approval. The main selection criterion is professional competency. • Composition may be renewed annually, similar to the BOD. When there are significant modifications in these structures, these are communicated to employees and other relevant stakeholders, such as dealers, suppliers and sector associations. 18

Percival Maiante Director of Human Resources and Corporate Planning and Secretary to the Board

Tsuneo Itagaki Senior Vice President, Industrial

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Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Results and outlook

Toyota 2012 Sustainability Report

About the report and remissive index

Corporate governance

Control mechanisms The Internal Audit area, the Ethics Committee and the Ethics Channel are some of the mechanisms implemented by Toyota to ensure transparency, ethical decision making, conformity with internal procedures and policies, compliance with national legislation and sector regulations, and accountability.

and reliability of information and internal processes in the subsidiary. Company management in Brazil is aligned with the TMC model, which adopts the guidelines established in the North American Sarbanes-Oxley (SOX) law, a reference for verifying and assuring management processes.

Operational processes and ethical guidelines are set forth in the following documents: Policies and Procedures, Code of Conduct, Internal Regulations and Authorization Policy. These policies and procedures set forth the responsibilities and attributions for each position in the units.

The board of TDB is responsible for maintaining an internal control structure and procedures for the financial statements. Senior management must also evaluate the efficiency and effectiveness of the controls implemented on a regular basis.

The audit processes, either established locally or jointly with the head office, are aimed at guaranteeing the transparency

External audit Toyota do Brasil is submitted to an external audit process which is designed to check on process management and performance and identify opportunities for improvement. The subsidiary is also subject to a formal assessment by the Toyota Motor Corporation which involves sporadic visits to the country, the last of which took place in August 2011.

| GRI 4.8

Code of Conduct The TDB Code of Conduct is a document that reinforces the company’s commitment to the highest standards of conduct in work relations, in business procedures and in relations with suppliers, customers and society in general. It sets forth the guidelines to be followed by employees in their daily activities, encompassing questions such as conflicts of interest, respect for diversity and human rights, as well as business and government relations. In 2010, the document was reviewed with the objective of reinforcing standards of conduct in Toyota Mercosur (Brazil and Argentina).

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Employees may access the code via the internet. It is also disseminated via training sessions and internal communication media, such as posters and banners. When they join TDB, employees receive a copy

employees

Communication channels of the internal regulations and an abridged copy of the code of conduct. The complete version of the code is available in each work sector. Every year, managers, supervisors and employees in the operational areas of all TDB units receive information on practices or processes which may constitute breaches of conduct and should be reported. In January and February of 2012, the annual Code of Conduct campaign was undertaken in all TDB units. All new employees undergo an induction process in which they receive orientation on the Code of Conduct.

| GRI 4.4, 4.6, 4.8 All Toyota employees have access to channels for reporting unethical behavior or suspected fraud. The subjects handled by the Ethics Channel range from reports on conflicts of interest to the disclosure of confidential information, theft and improper use of company property. Any irregularity may be reported via the 0800 hotline, by email and Intranet. The Toyota Ethics Committee, consisting of managers from the Legal, Administrative, Human Resources and Audit areas are responsible for fielding and analyzing the reports. The committee’s final report is sent

to the president and the Human Resources director, who are responsible for dealing with the case in accordance with company guidelines. In the event that the report concerns the president or a vice president, the Ethics Committee forwards it to the head office in Japan for solution. GRI 4.6, 4.8

With a view to creating an open communication channel between the president and employees, thus forging closer links between all areas of the company, Breakfast with the President was created in February 2010. This one-hour meeting is held regularly at each Toyota plant. GRI 4.4

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Toyota 2012 Sustainability Report

Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

The pillars of the Toyota Way are designed to preserve and reinforce company values and principles wherever Toyota has operations, driving continuous improvement and respect for people. More than a philosophy, this is a policy that guides all company processes and decisions. The Toyota Way is a culture of best practices promoting the manufacture of quality products, ensuring customer satisfaction, with respect for communities and partners, focused on the development of company employees.

The basis for the company to gain market leadership was established in 2001, when the Toyota Way was documented, setting forth the guidelines which combine a focus on product quality and the capacity to deal with challenging situations in managing the company (read more in Basis of the Toyota Way). The model consists of a set of management values and business methods implemented worldwide at all levels and in all company units.

These concepts are disseminated in line with: • principles focused on continuous improvement; • alignment with head office strategic planning (hoshin), investing in training to incorporate employees into this culture of continuous evolution; • incorporating the mission and values into managers’ and business partners’ activities. Respect for people is a fundamental component of the Toyota Way. Therefore, respect for each individual’s capacity to think logically and solve problems in order to drive continuous improvement, is essential. The company also values the establishment of bonds of trust and mutual respect between leaders and employees, striving to create growth opportunities within its units. It is Toyota’s understanding that highperforming employees will result in more efficient and effective operations and higher quality products. For this reason, the company encourages kaizen at all levels and in all sectors. GRI 4.8

| GRI 4.8, 4.11

Basis of the Toyota Way Challenge – to build a long term perspective, facing challenges with courage and creativity to make our dreams come true.

| GRI 4.8, 4.11 Continuous improvement

Kaizen – to improve the operations of our businesses continuously, focused on innovation and evolution. Genchi genbutsu – in Japanese, “going to the source”, looking for and finding the concrete facts in order to make the right decisions, build consensus and achieve our targets, sparing no efforts.

Respect – to make every effort to build mutual understanding and trust. Respect for people

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Results and outlook

About the report and remissive index

Strategy (Toyota Way)

The model, established formally in 2001, guides all company management processes

Strategy (Toyota Way) The Toyota Way

Product responsibility

Team work – encouraging each employee’s personal and professional growth, sharing development opportunities and maximizing individual and team performance.

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Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Toyota 2012 Sustainability Report

Results and outlook

About the report and remissive index

Strategy (Toyota Way)

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TPS criteria | GRI 4.11

Quality Assurance Ensuring that only quality units proceed to subsequent stages of the process, preventing the breakdown of the production chain. Production Flexibility The capacity to adapt to changes in demand, both in quantity and variety. Respect for the Human Condition Incentivize the creativity and the innovation potential of the individual and value team work. Honor mutual trust and respect between employees and management

Processes

Integrated philosophies Just in Time Production – to produce and transport precisely what is needed, in the right quantity and at the right time.

Intense work on standardizing processes is developed with a view to eliminating waste, in line with Toyota global environmental management principles

Jidouka – a concept proposing 100% quality in part production. It is also a basic principle for not allowing a defect or failure to proceed in the process without being identified. Upon discovering an anomaly, the employee should stop production so that the problem may be rectified.

| GRI 4.11

Toyota Production System Seventy-five years ago the company adopted the Toyota Production System or TPS, a management philosophy aimed at meeting customer needs on time, with high quality, at the lowest cost. This model is a global benchmark for lean manufacturing, which strives for excellence in production, while reducing costs, eliminating waste and optimizing processes. Toyota is engaged in an intense initiative to standardize processes and implant a continuous improvement culture (kaizen), which entails ongoing efforts to eliminate waste and refine processes. This policy is also aligned with Toyota global environmental management principles, driving the more responsible use of resources and materials in production routines.

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These concepts are communicated to employees and dealers through systematic training. Employee participation in the execution of the TPS is fundamental. They are charged with identifying problems and improvement opportunities in the production process. The success of this system is directly related to the capacity of leaders, supervisors and employees to observe and suggest improvements that reduce costs and waste in production, in the operation (defects or repairs), in transportation, in inventories and in the assembly process.

Best practices

The company also incentivizes its suppliers to adopt TPS criteria and standards. As such, company business partners should be aligned with Toyota production, quality, cost and waste reduction policies, upholding the company’s standards of quality in benefit of the customer, the partner and the environment.

A core concern for Toyota is the reduction of excess production and operational, logistics, storage and assembly costs. Since it initiated its activities, the company has adopted the practice of producing parts in accordance with demand, eliminating the risk of excess stocks, while supplying

Reducing costs and waste Under TPS guidelines, waste is considered to be any element that increases the cost of the product, in other words, anything that does not add value. Cost reductions are achieved with the extreme elimination of waste in the production system, without compromising quality.

materials for the assembly of vehicles strictly in accordance with market requirements and characteristics. The same standard is in place for vehicles, which are produced and placed in the market in accordance with the demand identified by the company. Another example is the proximity between the Sorocaba plant and its supplier park. In addition to concentrating 78% of logistics volume, the company minimizes greenhouse gas emissions

Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Toyota 2012 Sustainability Report

About the report and remissive index

Strategy (Toyota Way)

| GRI 4.8

A new five-year plan | GRI 4.8

The Toyota strategic management model is initiated at the head office in Japan, and is executed in distinct ways in the subsidiaries, adapted for the regional context. Every year, specific hoshins (strategies) are developed for each region. These correspond to parts or stages of the company’s long-term planning, based on the Toyota Way and the principles set forth in the Code of Conduct.

Strategies are communicated to operational employees, supervisors and managers, each one of which has a crucial role in ensuring that Toyota achieves its targets and plays a leading role in society. In 2011, the company elaborated a strategic plan which extends to 2012 (read more in the section on Planning).

In line with the auto manufacturers’ environmental commitment, Toyota developed the Toyota Environmental Action Plan, a five-year plan based on its Global Vision for the period from 2011 to 2015. The document sets forth a series of actions and targets to reduce the impacts of the company’s activities both locally and globally during this period. The main focuses are environmental management and continuous process improvement in the production, sales, suppliers, buying, logistics and community relations areas. The plan also encompasses the company’s main stakeholders, encouraging them to improve performance. The

These hoshins are applied at all levels of the company. They are broken down by senior management into specific actions plans.

| GRI 4.8

Planning

Five-year action plan Unified effort to rebuild the operations and businesses affected by the natural disaster in Japan as well as to restore TMC’ image and consumer confidence. Development of unique vehicles and services, as well as investment in new businesses and vehicles.

Global hoshin 2011-2012

Establishment of a production, supply and sales system which is valued by the customer, particularly in the emerging countries. Review of governance and human resources practices based on the regional management model. Expansion of internal and external communications. Initiatives to drive competitiveness and maintain operational capacity in Japan.

Regional hoshin (Latin America, Middle East and Africa)

Set up and follow through on plan to place new products in emerging markets, focused on young people/consumers in lower income groups. Prepare future strategic plans for the subsidiaries and companies. Construct a regional development plan, incorporating cultural and economic aspects. Build a supply chain and vendor network that support the “Consumer first” concept.

Increase consumer confidence in the wake of the product recall campaigns. Domestic hoshin (Toyota do Brasil)

27

Environment

Long term strategy

26

Results and outlook

Reinforce Toyota Way values and engage employees. Increase efficiency and strengthen operations, with a focus on the new u nit in Sorocaba.

2011 to 2015 Toyota proposes a series of actions and targets for reducing the impact of its activities during this period.

improvements proposed include streamlining logistics, with the calculation of emissions produced by the transportation of products and parts, control in packaging and the reduction of emissions in the production process. There are also measures related to employee safety and product quality (read more in the chapter Product responsibility). The new targets represent an extension of the actions already underway and propose more detailed tracking of company and production chain socioenvironmental indicators, in line with the Toyota 2020 Global Vision (read more on page 7).

Toyota 2012 Sustainability Report

Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Toyota has assumed an international commitment to reduce its environmental impacts. For this reason, the company continuously develops and applies improvements to its processes through a system which aligns global directives with its managers’ and employees capacity to innovate and meet targets.

To ensure proper environmental management TDB has adopted an Environmental Management System (EMS) which incorporates Toyota Way principles, ISO 14001 standards and the company’s socio-environmental guidelines. All of its actions are based on three pillars: •n  ot just better performance, but continuous improvement; •p  ositive impacts on society and on the surrounding communities; • z ero cases of legal non-compliance/ complaints; • minimization of environmental risks; • improved environmental performance. In practice, these objectives will be reached based on planning, using the Toyota Environmental Action Plan, now in its fifth version (2011 to 2015), as the main monitoring tool. The action plan projects company short and

| GRI EN4, EN5, EN8, EN18, EN19, EN20, EN21, EN 26, EN30

medium term targets, driving kaizens to improve indicators ranging from the consumption of natural resources (such as energy and water) to waste generation and pollutant gas emissions. One year into the 2011-2015 five-year plan, all the goals and targets proposed are on track. Each subsidiary projects its growth and defines local objectives. Progress is also driven by the Toyota Production System (TPS) and the Toyota Way, which set forth principles for continuous improvement (kaizen) and combating waste (muda). In the first year of the 2011-2015 plan, advances have been made in continuous improvement, reductions in the consumption of energy, water, atmospheric emissions and waste generation. Future plans include: the review of the Environmental Purchasing Guide; ongoing reduction in resource consumption, gas emissions and waste generation; control over materials used in packaging; and the elimination of the use of substances of concern (SoCs) in vehicles and replacement parts. In order to reach these targets, TDB engages the diverse company areas and maintains dialogs with business partners, such as dealers and suppliers.

Goals for 2011-2015 • Zero cases of legal non-compliance and complaints

• ISO 14001 certification for all suppliers

• Zero accidents

• Monitoring of CO2 emissions in the supplier network

•4  % reduction in energy consumption against a base year of 2008

•L  egal compliance in 100% of the network, including waste management and conformity with the changes in automotive recycling legislation

•4  % reduction in VOC emissions against a base year of 2008 •4  % reduction in waste generation, against a base year of 2008

•8  5% of dealers certified in the Dealer Environmental Risk Audit Program (Derap) • ISO 14001 certification for 40% of the dealer network

•4  % reduction in water consumption, against a base year of 2008

•C  ollection of key performance indicators from ISO 14001 certified dealers

•5  % reduction in CO2 emissions, against a base year of 2009*

• Annual publication of the sustainability report

•5  % reduction in the generation of packaging waste, against a base year of 2009

28

Results and outlook

About the report and remissive index

Environmental management

The company seeks to continuously improve its processes

Environmental management Actions planned

Product responsibility

*This reduction target is for part, product and raw material transportation.

29

Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Results and outlook

Toyota 2012 Sustainability Report

Environmental management

| GRI EN5

| GRI EN4, EN5, EN7

Energy saved

Energy

Lower consumption

2010

Two Toyota do Brasil (TDB) directives are ongoing reduction in energy consumption and making company processes more economical. This is a way for the company to mitigate the impacts caused by its production. In 2011, TDB reduced consumption from 4.56 GJ to 4.45 GJ per vehicle,

almost reaching the established target of 4.43GJ per vehicle. The target was not fulfilled due to an increase in the production of forged parts for export (USA) at São Bernardo do Campo (SP), and the introduction of a third shift in the stamping sector at Indaiatuba (SP) to meet the demand for parts from the Sorocaba unit (SP).

Indirect energy bought and consumed 2009

2010

2011

GJ/vehicle

GJ

GJ/vehicle

GJ

GJ/vehicle

GJ

From non-renewable sources

1.88

124,823

1.96

126,661

1.82

123,090

From renewable sources

2.23

148,061

2.60

168,020

2.63

177,300

Total electrical energy bought (Gj)

4.11

272,884

4.56

294,681

4.45

300,390

GJ/vehicle

GJ

GJ/vehicle

GJ

GJ/vehicle

GJ

Natural gas

1.63

108,224

1.72

111,151

1.59

107,440

LPG

0.25

16,599

0.24

15,510

0.23

15,650

Hydroelectric

2.23

148,061

2.60

168,020

2.63

177,300

Total

4.11

272,884

4.56

294,681

4.45

300,390

2011

GJ/veículo

GJ

GJ/veículo

GJ

Improvements in energy conservation and efficiency

0.014

958

0.0013

891

Process redesign

0.010

657

0.0005

305

Equipment modernization

0.015

958

0.0007

480

Total

0.039

2.573

0.0025

1.676

Improvements in energy conservation and efficiency, process redesign and equipment enabled total energy consumption savings of 1,676 GJ. GRI EN5

| GRI EN4

With the preparations for the start up of operations in Sorocaba, new employees were hired and new routes created between this plant and Indaiatuba. This led to a 2,762.61 GJ increase in indirect

energy consumption. However, these routes were optimized to ensure the increase was not even higher. GRI EN7 For 2012, TDB has a 1% energy (electricity, natural gas and LPG) consumption reduction target compared with last year. The kaizens are still underway, with no actual reductions as of yet.

Quantity of primary fuels used 2009

2010

2011

To improve eco-efficiency, the company promoted simple kaizens which optimized processes and energy efficiency. The kaizens implemented in 2011 were:

installation of frequency inverters in the boiler panels; replacement of gas-powered trucks with electrical ones; substitution of paint with blackout tape.

• Indaiatuba – optimization of light bulbs, with a reduction in quantity; reduction in current for spot welders; reprogramming of oven timer (resin); replacement of mercury bulbs with fluorescent bulbs; replacement of fluorescent bulbs with LED bulbs; changes in routes, economizing and optimizing natural gas consumption;

• São Bernardo do Campo – replacement of sodium and mixed light bulbs with mercury vapor ones; elimination of generation of nitrogen by deactivating membrane1; elimination of energy consumption by compressors which used to be left on during the weekends when production ceased.

In the thermal treatment area, nitrogen was used to eliminate scaling on parts. The function of the membrane was to boost the injection of nitrogen in the process used in the five ovens. A study established that only one oven would need nitrogen. The purchase of nitrogen in bulk would be enough to feed this oven. This enabled the elimination of the membrane and the air compressor which fed it.

1

30

About the report and remissive index

Kaizens proposed for 2012 | GRI EN5

• Automatically turn off the oven refrigeration pumps in the forge area at the end of the shifts. • Installation of prismatic lighting in the Logistics building. • Study reducing the pressure of plant compressors from 8.5 kgf to 6.5 kgf. • Improvements to the equipment refrigeration system, cutting costs with the wastage of water, electricity, wastewater treatment and labor. • Installation of a water demineralization unit, improving the boiler water treatment system and consequently natural gas consumption. • Installation of light sensors to save electricity. • Redesign of some processes to optimize lighting. •E  limination of excess water in the parts washer, reducing the consumption of compressed air in the drying process. • Keeping the air conditioning on only when the test benches are in operation. •U  sing the pressure gauges on the natural gas-powered forklifts to determine the right time to fill them up and review of routes to optimize timing and natural gas consumption. • Turning off slush* ovens and heating for trimming** during breaks and shift changeovers. • Reduction of pump rotation frequencies. • Replacement of pneumatic nutrunners with electrical ones. • Replacement of fluorescent bulbs with LED bulbs. • Installation of eco-conduits for separation of electrical circuits.

*Machine that transforms TPU powder into a “skin” used to cover the Corolla dashboard. Two “skins” are extracted per mold. ** Table on which the excess dashboard film is removed.

31

Message from the president

Toyota 2020 Global Vision

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Corporate governance

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Environmental management

Strategic stakeholders

Product responsibility

Toyota 2012 Sustainability Report

Results and outlook

About the report and remissive index

Environmental management

33

| GRI EN8

Water Toyota do Brasil achieved the water consumption target set for the year. In 2011, each vehicle produced required the 3.19 m³ of water, compared with 3.53 m³ in 2010. This gain came from kaizens suggested by employees and applied in the plants. The target for the year ending in March 2013 is 3.13 m³/vehicle,

evolving further in eco-efficiency in the production process. All the water used in the production process in the São Bernardo do Campo (SP) and Indaiatuba (SP) plants is treated in wastewater treatment plants and then returned to the public network in accordance with the legislation in force.

| GRI EN8

Water consumption by source 2010

2011

m³/vehicle



m³/vehicle



Ground water

2,80

180,945

2,50

169,348

Municipal supply and others

0,73

47,175

0,70

51,364

Total

3,53

228,120

3,20

215,746*

Toyota maintains wastewater treatment plants at its production units

*The calculation is done based on vehicles produced, including some non-production plants.

Water discharge | GRI EN21

In fiscal 2011/2012, TDB had a total water discharge of 23,000 m³. The treatment method used was physical-chemical, and the effluent generated was discharged in the public sewage network.

| GRI EN21

Total water discharge*

Quantity (m³) Wastewater generated in the process (IDT) Wastewater generated in the process (SBC) 32

22,000 1,000

* There was no reuse by other organizations.

Greater | GRI EN26 efficiency Kaizens at Indaiatuba

3.19 m

3

was the total water consumption per vehicle in 2011, down from 3.53 m3 the previous year

The environmental kaizens conducted in the production areas helped to reduce water consumption, waste generation and VOC emissions. One example was the improvement in the UF (ultrafiltration) process, which consists of separating the solid and liquid parts in the ED painting process, maintaining quality while reducing the need for cleaning. In the old process, cleaning was necessary after only five days’ production (from Monday to Friday). Analysis of the process, equipment and operation showed that it would be possible to use a new technology for this system which would reduce the number of times it would have to be cleaned – instead of every weekend, it could be done every six months. Another advantage with the implantation of the new UF system was lower consumption and better quality water. Additionally, there was a reduction in the

quantity of chemical products used. The cleaning of the UF modules was previously divided into six stages, consuming 4,200 liters of deionized water. With the adoption of the new UF module system, cleaning is carried out every six months and involves only one stage: circulating chemical solution through the UF system with 70 liters of deionized water, 1% de butyl glycol and 3% acetic acid. Another kaizens conducted in the paint pre-treatment area was the result of process analysis which identified improvements to the regulation of the water jet sprays. Before the improvement, the jets were operated for 87 seconds. With the adjustments, this time was reduced to 23 seconds, resulting in greater process efficiency and reduced water consumption. These are just some examples of kaizens carried out at the Indaiatuba plant.

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Toyota 2020 Global Vision

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Strategic stakeholders

Product responsibility

Results and outlook

Toyota 2012 Sustainability Report

About the report and remissive index

Environmental management

| GRI EN26

Initiatives 2010

2011

Description

Reductions obtained

• Elimination of overflow water from DI tank.

IDT: automation purging in cooling tower through solenoid valve linked with compressors

2,390.4 m3

Emissions

IDT: Review of paint load in bell thinner

31,263.6 g/m2 VOCs

Waste

IDT: Installation of dressers on robots and reduction in size of cleaning cloths (no need for big cloths)

Water use

Reductions obtained

Description • Reduction in bodywork spraying time with DI water.

8,480 m3

• Replacement of ultrafiltration system, reducing cleaning frequency.

39.15 t

Increase in thinner recovery rate and approximation of robot.



38,645 g/m2 VOCs

 _

TDB’s greenhouse gas (GHG) emission reductions were achieved through decreasing energy consumption (electricity, natural gas and LPG) and are expressed in metric tons of CO2 equivalent. The CO2 emission reductions were achieved through environmental kaizens in the production (paint, assembly, stamping and other) areas. There was a 1.89 kg of CO2/vehicle reduction compared with 2010, meaning the 2011 target was not achieved. The target for 2012 is 113.24 kg of CO2/ vehicle. GRI EN18

| GRI EN16 Direct greenhouse gas emissions* (in metric tons of CO2)* 2009

2010

2011

Electricity, heat or steam generation

2,285.0

1,699.0

1,950.5

Natural gas trucks





214.0

LPG trucks





693.0

Total

2,285.0

1,699.0

2,857.5

*The calculations are based on natural gas consumption and the conversion factor established by Cetesb (CO2 Emissions Inventory).

| GRI EN19, EN20

Best practices reduce emissions Increased loading efficiency and the development of lighter, higher capacity packaging, together with the quality, efficiency and speed of the routes used for product distribution and part collection from suppliers are some measures adopted by TDB to reduce the impacts of its activities. Volatile organic compounds (VOCs), for example, reduce air quality. Formed by substances that associate with nitrogen oxide (NOx), this type of compound can be very harmful to the respiratory tract. Focused on this problem for more than a decade, Toyota included VOC reduction in its socio-environmental planning, implementing kaizens in its plants and units, in particular at Indaiatuba (SP). In the Sorocaba (SP) plant, the improvements implemented include substituting thinner-based paint with 34

water-based paint in paint processes and using 3wet methodology, which eliminates one oven phase thus reducing VOC emissions.

| GRI EN18

GHG emission reduction initiatives

IDT

VOC emissions were reduced from 276.2 metric tons in 2010, to 257.3 metric tons in 2011. The mass balance method is used to calculate the volume of these atmospheric emissions. GRI EN20

• Optimization of lighting with reduction in quantity.

Toyota fulfilled its target, reducing VOC emissions from 40.36 g/m² to 35.82 g/ m² in fiscal 2011-2012. The current target is to achieve 35.13 g/m². TDB does not emit substances harmful to the ozone layer. GRI EN19, EN20

• Replacement of fluorescent bulbs with LED bulbs.

• Reprogramming of oven timer (resin). • Replacement of mercury bulbs with fluorescent bulbs.

• Reduction in current for spot welders. • «Alteration of routes, economizing and optimizing natural gas consumption. • Installation of frequency inverters in the boiler panels. • Substitution of gas-powered trucks with electrical ones. • Substitution of paint with blackout tape.

SBC

• Replacement of sodium vapor and mixed bulbs with mercury vapor bulbs. • E limination of nitrogen generation through deactivation of membrane. • E limination of energy consumption by compressors which remained turned on during the weekends when there was no production.

35

Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Results and outlook

Toyota 2012 Sustainability Report

Environmental management

Waste generation

Target reached Toyota environmental policy also incorporates the 3 Rs – Reduce, Reuse and Recycle. Currently, more than 99% of waste is recycled. A small percentage is treated before being returned to nature.

|GRI EN20

Significant atmospheric emissions* 276.2

40.36

- 7.3%

257.3

- 12.7%

35.82

2010

To ensure ongoing reduction in waste generation, Toyota do Brasil (TDB) establishes annual targets for two areas: Production and Logistics. Respectively, they are responsible for waste from the production process, measured in kg/vehicle, and

packaging, measured in kg/load and distance transported. In 2011, the company had a rate of 13.43 kg of waste generated per vehicle produced. This number is in line with the 14.08 kg/vehicle target established the previous year. Management of non-recyclable material was refined in 2011. More than 0.5% of all the waste generated by Toyota do Brasil was used in co-processing.

2011 in metric tons

g/m2

* The mass balance method is used to calculate the volume of volatile organic compounds (VOCs).

Logistics measures

The Logistics area committee, supported by the Environment area, sets annual waste and carbon (CO2) emission reduction targets for the transportation of parts produced or acquired by Toyota and vehicle transportation. Again these reductions are achieved through kaizens, with solutions focused on waste reduction through the use of smaller, lighter packaging, returnable materials, and packaging optimization. This resulted in the generation of 70.64 kg of CO2 per vehicle in 2011, a reduction of around 2% against 2010 or a total of 120 metric tons of CO2. The company has set a target to reduce the packaging volume discarded by 5% between 2009 and 2012. With the innovations suggested and applied by the employees, who are fully aware of the need to reduce the environmental impacts generated by company activities, it is believed that Toyota will meet this target. 36

About the report and remissive index

Disposal Wastewater treatment

99% of the waste generated is recycled

Wastewater treatment is a major focus in the TDB production process. The goal is to return wastewater to the public sewage network free of substances harmful to human health and the environment, in accordance with legal standards. All the sludge produced in this process is sent to other companies for use as fuel in co-processing in high temperature kilns.

Elimination of substances of concern Since 2008, TDB has eliminated a series of substances harmful to the environment and public health from its production process in accordance with Toyota global directives. These so-called substances of concern (SoCs) are lead, mercury, cadmium and chrome. The production process is strictly monitored to guarantee the elimination of these substances.

37

Message from the president

Toyota 2020 Global Vision

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Corporate governance

Strategy (Toyota Way)

Strategic stakeholders

Environmental management

Product responsibility

Results and outlook

Toyota 2012 Sustainability Report

About the report and remissive index

Environmental management

| GRI EN26 São Bernardo do Campo Kaizens

Less waste

The main kaizens carried out at the São Bernardo do Campo (SP) unit were associated with reducing waste generation. The following were implemented in 2011: • reduction of scrap generated during production of parts for the END ABS and END without ABS; • drainage of oil from the exportation forge saw, which was disposed of together with the

sawdust. It is now reused in saws 1 and 2; • reuse of hydraulic oil in the ZAF-068 machine, through analysis of oil parameters (viscosity, density) in conjunction with the supplier FUCHS. The 2012 target is to reduce waste generation by 1% compared with 2011. GRI EN26

|GRI EN26

Target

| GRI EN22

1%

Total weight of waste

Non-hazardous waste (t)

2010

2011

Composting

164.0

182.0

Recycling

12,325.0

9,411.0

Landfill

242.1

151.3

12,731.1

9,744.3

Total

Hazardous waste (t)

 

2010

2011

Recovery

196.0

155.0

Co-processing

283.0

603.0

Incineration*

-

-

479.0

758.0

Total

 

percent reduction in waste generation in 2012, against previous year.

*Toyota does not incinerate non-hazardous and hazardous waste.

| GRI EN30 INVESTMENTS AND SPENDING ON ENVIRONMENTAL PROTECTION

Cost of waste disposal, emission treatment and mitigation

Prevention and environmental management costs

38

2010

2011

Waste treatment and disposal

R$ 1,002,600.00

R$ 1,058,000.00

Emission treatment (e.g.: spending on filters, agents)

R$ 16,000.00

R$18,000. 00

Depreciation of specific equipment, spending on materials and operational and maintenance services, spending on personnel for this purpose

R$ 954,098.71

-

2010

2011

Training and education personnel

R$ 6,000.00

R$ 7,500.00

External environmental management services

R$ 376,128.93

R$395,000.00

External management system certification

R$ 30,065.54

R$ 32,000.00

Additional expenses for installation of cleaner technologies (e.g.: additional cost beyond standard technologies)

R$ 69,927.00

 - 

Total

R$ 2,454,820.18

R$ 1,510,500.00

39

Message from the president

Toyota 2020 Global Vision

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Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Results and outlook

Toyota 2012 Sustainability Report

About the report and remissive index

Environmental management

First Toyota ecofactory in Brazil The new Toyota do Brasil (TDB) plant inaugurated in Sorocaba (SP) in August 2012, is aligned with the ecofactory model established by the Toyota Motor Corporation (TMC), based on high socioenvironmental efficiency standards. In this manner, the company is driving economic, social and environmental development in alignment with the guidelines set forth in the 2020 Global Vision and the Toyota Environmental Action Plan. The Sorocaba unit came into operation in compliance with Environmental Management System requirements and is expected to receive ISO 14001 certification in early 2013.

The new unit combined sustainable construction principles with sustainable production to reduce impacts on the surrounding area The main innovative features of the factory are: a compact plant that required smaller quantities of construction materials; an innovative press that uses 40% less electricity than a conventional mechanical press; and a new paint method which, in addition to using water-based paint and reducing

Logistics

78%

of the parts are produced close to the ecofactory

volatile organic compound (VOC) emissions, eliminates one of the oven phases, reducing CO2 emissions. At this plant, which is currently producing the Etios compact, the targets are similar to those established at the other manufacturing units but even more rigorous: from the start up of operations, maximum reduction targets for CO2 and VOC emissions were established, together with an optimized logistics operation, the objective being to generate lower impacts with a less costly and more efficient operation. The company participated in studies to determine the impact of the new plant on local traffic and in conjunction with the local government defined changes in the traffic network and infrastructure to facilitate access to the industrial park, the Castello Branco highway and the Sorocaba city center. In accordance with the legislation in force, Toyota will provide environmental compensation by investing approximately 0.5% of the cost of the plant in the Parque Natural Municipal Corredores da Biodiversidade. This park, the first conservation area in Sorocaba, was planned by the municipal Environment department with support from Toyota environmental consultants.

Suppliers next door

The ecofactory supplier park is located only 600 meters away from the Toyota plant and houses 11 major suppliers. The logistics volume concentrated in the park corresponds to 78% of total parts volume. This enables Toyota do Brasil to minimize gas emissions from logistics operations.

40

Looking for employees In addition to the compensation measure, TDB intends to boost sustainable local development with voluntary actions. One major measure is the Morizukuri (literally “create forest”) – a tree planting project based on an innovative method developed by Akira Miyawaki, professor at the National University of Yokohama and director of the Japanese Center for International Ecology Studies. This method will enable the creation of a green belt around the Sorocaba plant, using a planting technique whereby the average forest development time will be reduced from between 100 and 200 years to between 10 and 20 years. The methodology has already been applied at TMC plants in Japan, India, Thailand and other countries. The planting engaged company employees and their families, as well as suppliers and dealers, on a voluntary basis and was begun in the second half of 2011. Eighty thousand trees were planted in the first phase of the project. Toyota initiated the second phase in July 2012 and intends to plant an additional 55 thousand seedlings by the end of the fiscal year.

To hire more than 1,500 employees for the Sorocaba plant, TDB maintained regular contact with educational institutions and initiated the recruitment and selection process in August 2012. To integrate these newcomers into the Toyota culture, experienced leaders were transferred from the Indaiatuba (SP) unit, even though local manpower was prioritized in the hiring process.

Savings of

atmosphere

are projected in water consumption

reduction expected in volatile organic compound (VOC) emissions

50% 60%

41

Toyota 2012 Sustainability Report

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Toyota 2020 Global Vision

Profile

Corporate governance

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Environmental management

Strategic stakeholders

Product responsibility

Results and outlook

About the report and remissive index

Strategic stakeholders

The company’s major stakeholders are its customers, dealers, suppliers, employees, communities and the government A brand management process implemented by Toyota Mercosur in 2008 for the Brazilian and Argentinean operations studied the brand’s relations with its main stakeholders with the objective strengthening these as a basis for building value. The survey identified four main stakeholder groups, outlining their roles

43

and expectations from their relations with the company (see box). GRI 4.14, 4.15 Toyota do Brasil (TDB) puts its customers first. As such, many company actions are aimed at this audience. The company also adopts initiatives aimed at forging closer relations with other partners in the production chain, such as events and conventions for dealers and suppliers, training and courses for employees and ongoing dialog with public authorities, among others. Assessments and incentives for improved environmental management are also part of the measures aimed at maintaining robust relations with these partners. GRI 4.14, 4.15, 4.16, 4.17

Stakeholders | GRI 4.14, 4.15, 4.16, 4.17

Strategic stakeholders Toyota and its stakeholders | GRI EN4, EN8, EN10

Brand builders Individuals and/or companies that have a direct or indirect impact on building the company’s image • Employees • Suppliers • Advertising agencies • Banco Toyota and TCFA (Argentina) • Dealer associations (Abradit and Actra) • TMC/shareholders • Toyota subsidiaries • Dealers • Customers Brand endorsers Individuals and/or companies whose opinions influence people with respect to our values and perception of the company • Press • Universities

42

• Opinion leaders • Employees’ families • Customers • NGOs Sector regulators Public authorities or companies that influence our activities through guidelines or regulations • Government authorities Sector representatives Individuals and/or companies representing social, commercial or individual interests associated with the brand •S  ector associations (Anfavea in Brazil; Adefa in Argentina) • Financial community • Insurance companies • Competitors • Unions

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Toyota 2012 Sustainability Report

Results and outlook

About the report and remissive index

Strategic stakeholders

45

Customers

Priority service In Brazil, each step in the process of acquiring a Toyota vehicle is monitored by the Customer Relationship area, which is responsible for evaluating and improving relations with customers, implanting improvements throughout the process, from the first contact with an authorized dealer to postsales service. This ensures that the company hears customers’ opinions and acts on them to implement improvements. In fiscal year 2011/2012, TDB established customer satisfaction targets. The main success in this area was the implantation of the front office service team, which helped the company achieve an 84% service level, exceeding the 80% target set by TMC.

The company initiated relationship activities in social media with the Reclame Aqui (Complain Here) website as a pilot project. This site received 140 contacts during one year of operation, all of which were handled by the team responsible. In 2012, the company created an exclusive 0800 line for the Lexus brand. Another project planned for fiscal 2012/2013 is Complaint Reduction, which will analyze data from the Customer Relationship area to proactively eliminate the causes of complaints, working directly with the company areas involved. For social media, Toyota will have an employee dedicated to internet contacts, in particular complaints and opinions posted on Facebook.

Call Center The Toyota Call Center or SAC in the Portuguese acronym, has a team of 14 third-party attendants and 15 specialized engineers to handle more complex enquiries related to mechanical problems or technical issues. Investments in the center helped TDB to win the 2011 annual best customer relationship award from TMC. This recognition was a crowning achievement for the call center team, endorsing their performance in providing solutions for customers and their commitment to customer satisfaction. This was the second time the team won the award, having already received it in 2006. In parallel, Gfk Custom Research, one of the largest market research companies in the world, organized a survey entitled

Toyota Customer Contacts 2009

2010

2011

Sales

94,710

99,471

99,553

Etios

CPUS (transport paid in dealer network)

798,529

922,880

797,165

In 2012, Toyota implemented Customer Voice Management throughout the dealer network. This is aimed at helping employees at dealerships to capture customer opinions about the Etios spontaneously, driving the model’s success in the Brazil market.

Incidents

45,820

46,182

47,313

Information

37,296

37,893

38,210

Complaints

8,524

8,289

9,103

The company will also hire another three engineers for its complaints team to handle the increased call volume resulting from new product launches.

44

TDB was also featured in an article in the magazine Auto Esporte, which tested the call centers of the major Brazilian automobile manufacturers, concluding that the Toyota call center provides rapid, fair and effective service.

in 2010 (95%), due to the Recall Campaign. On the other hand, clarifying consumers’ doubts, which took one day the previous year, was reduced to an average of 3 minutes. The target of a 10% reduction in the number of complaints was not reached in function of the Recall Campaign. For the coming years, the target is a 39% reduction in complaints.

Handling contacts In 2011, Toyota do Brasil received a total of 47,313 contacts. Of these, 143 came through the social networks (Complain Here project). The results overall were positive: 71% of the calls were answered in up to 20 seconds, a lower percentage than

Toyota Contact Channels

Additionally, TDB restructured its complaint flow, boosting its team of dedicated engineers by 50%.

Toyota promoted training in sales and marketing for the Etios launch to improve communication.

Call Check, which evaluated call center service quality in a number of companies. The Toyota Call Center came in second place in the automobile segment, losing only to the premium segment.

Facebook In August 2012, Toyota do Brasil inaugurated its Facebook page. This opens a new communication channel between the company and customers, enabling Toyota to understand customer needs and further improve its products and services. The page includes posts with company news and useful information about Toyota vehicles.

To get in touch with Toyota, customers may use the Call Center (0800-703-0206), the email ([email protected]) or send a letter. The company also has an institutional page on Facebook.

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| GRI PR5

Specialized service

Service Satisfaction Survey

The call center is staffed by engineers qualified to deal with more critical problems. This includes genchi genbutsu – providing personal visits for customers with safety-related issues that present risk potential and require on-the-spot examination. In 2011, there were 62 cases of this nature nationwide. The company intends to expand this specialized team in 2012 to speed up attendance and further reduce waiting times.

All this information is consolidated, providing the company with an important tool for measuring the quality of the customer service cycle. These data are used to inform new strategies to ensure continuous improvement in Toyota customer service processes.

These professionals also undergo specific training involving critical situations based on real examples in the customer service area, learning how to act, respond and handle such situations. In 2010, 314 people were trained, compared with 309 in 2011.

Customer satisfaction Toyota considers the monitoring of satisfaction rates to be fundamental for the maintenance of excellent relations with customers. Consequently, the Sales and Post-Sales areas assess each stage of the attendance and vehicle acquisition process. To support this analysis, since 2007 a Customer Satisfaction Rate has been elaborated, providing a daily rating conducted by Ibope among approximately 19% of the customers acquiring a new Toyota vehicle. The survey captures customer perceptions of the process and is made available to dealers. The survey analyzes every step of the sales process, from the customer’s first contact with the dealer, the infrastructure and service offered by the dealer, right down to the actual delivery of the vehicle.

Assessment of the service provided by the call center includes the degree of clarification provided and the outcome achieved, as well as the score attributed to the service by the customer. In 2011, the data were consolidated and cross referenced to provide a broader picture of customer relations via the call center. 46

In September 2011, Toyota initiated a service satisfaction survey whereby customers using the call center evaluated the service via the telephone keypad. By July 2012, more than 4 thousand customers had participated in the survey, with 62% indicating that they were satisfied, 24% indicating dissatisfaction and 14%, indifferent. GRI PR5

Training Dealer call center attendants and advisors (post-sales managers) receive training every two months in a unified process that covers from relationship techniques to notions of consumer rights and responsibilities.

Additionally, all employees undergo mandatory training on the products and services offered to our customers by the authorized dealer network. The subjects covered include products and specifications, as well as the information contained in owner manuals and guarantee documents.

Customer Satisfaction Rate 9.58

9.42 9.21

Índice de Satisfação do Cliente 

Objetivo – 9,3

9.24

9.33

9.37

2009

2010

2011

9.08

8.97

2007

2008 Sales

This research generates the Customer Satisfaction indicator, in which a score on a scale from 1 to 10 is attributed to each stage of the purchase process. Toyota’s target for 2012 is to achieve an average of score of 9.3 for the points analyzed, and to prepare an action plan with the dealers to drive ongoing excellence. The company has developed a specific classroom training program for the final stage of the sale. The delivery area has been trained to ensure the best possible handover of the new vehicle to the customer, because this stage has a weight of around 40% in the overall score. This average was exceeded during 2011, as shown in the graph at the side. This tool is important for speeding up decision making related to customer requirements. The survey, which is conducted by Ibope via telephone, helps TDB to anticipate customer demands and to track the evolution of its dealer network and the effectiveness of Toyota Sales Way (TSW) training, a service quality program for dealers. The items assessed by customers include

the dealer’s physical infrastructure, the performance of sales staff and consultants, vehicle delivery and service quality. Around 14 thousand people are contacted per year. The numbers show that the overall satisfaction of people acquiring a Toyota vehicle continues to grow, reaching 98% in 2011, according to Prime Action/Ibope Inteligência 2010. GRI PR5

9.56

9.31

Post-Sales

98% is the Toyota satisfaction rate

Result of 2011 Ibope Survey

9.57

9.54

9.58

jan

feb

mar apr

9.55

9.55

9.62

may jun

Customer Satisfaction Rate



9.61

jul

9.65

9.61

aug sep

Target : 9,3

9.58

oct

9.48

9.56

nov dec

47

Message from the president

Toyota 2020 Global Vision

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Product responsibility

Results and outlook

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49

Dealership quality Toyota’s 134 dealers in 25 Brazilian states, including the Federal District, are a fundamental element in maintaining the company’s image. This network plays an active role in the company’s growth, for which reason the executives, managers and consultants who work in it are subject to a series of policies and training and incentive programs aligned with the Customer First principle which is a major driver of company actions. The requirements for dealers include customer service excellence, commitment to the reduction of environmental impacts and the promotion of sustainable development in the regions in which they operate. In 2011, Toyota started tracking energy and water consumption, CO2 emission and hazardous waste generation indicators at dealers. Based on this exercise, the company intends to maintain detailed dealer environmental performance records and improve their performance. Training All 134 Toyota dealers in Brazil are aligned with the company’s sales service standards. To ensure this standard is maintained, customer-facing consultants and managers must take the Sales Training Program.

Championship

This program, aimed at improving commercial relations as well as qualifying and retaining talents at the dealers, is based on Toyota Way principles and combines classroom and internet training (e-learning).

The Skill Contest is a competition for the Post-Sales area, designed to provide recognition and motivate dealer employees. Dealer network technicians and service consultants are assessed in terms of performance, service quality and alignment with Toyota principles. The winners receive a trip to Japan.

The cost of this program is split between TDB and the dealers, represented by the Brazilian dealer association, Abradit. The subjects covered in the classes range from technical information and Toyota product differentials to negotiation techniques and how to approach and deal with customers. In 2011, 81% of the 867 consultants and 86% of the 133 managers in the authorized network received basic level certification. Expert level was taken by 59% of the consultants and 68% of the managers. Exceptionally there was no training at Master level, due to preparations for the Etios launch. The efficiency of Toyota’s integration with its dealers may be measured indirectly through the customer satisfaction rate. In 2011, the average customer rating for dealers was 9.56, compared with 9.58 the previous year. TDB trains and certifies dealer sales teams in the Toyota Sales Way (TSW). The training program, which is valid for a year, is aimed at increasing consumer

New dealers

In 2011, the 17th Skill Contest was held in São Paulo (Vila Noah), with six technicians and six service consultants receiving awards.

satisfaction, standardizing sales processes and managing the customer portfolio. Dealers undergo an annual audit to renew their certification. In fiscal 2011/2012, 48 dealers received recertification in the TSW, and six dealers were certified for the first time. Communication channels Toyota has a number of communication channels to reinforce its relationship with dealers. Dealer employees have access to company information and principles via an Internet portal. In addition to the provision of information, this is the main channel for providing dealer employees with technical training. An internal TV channel is used to transmit advertising and sales campaigns, live transmissions, institutional and sector information and messages from the board. The team may also take part in chats on TV Toyota. Radar Toyota is a video training channel, with content that covers company products and customer profiles.

In fiscal 2011/2012, Toyota inaugurated a new dealership in the city of São Paulo (SP). Before going into operation, all dealer employees are submitted to a six-month training program, aimed at generating new leaders and promoting dealer network development. The main guidelines for this relationship are set forth in the Toyota Code of Conduct adopted in the Mercosur countries.

48

Preparing new dealers Concerned with ensuring continuity and driving constant improvement in its dealer network, as well as developing the management skills of future leaders, in 2007 Toyota initiated its successor preparation program, the Toyota Dealer Management Program. This is a postgraduate course with the status of

a Masters in Business Administration (MBA), conducted by the Instituto de Ensino e Pesquisa (Insper) in São Paulo. The program encompasses Toyota values and guidelines to ensure the coherent application of management techniques and enable a fluid exchange of experiences and practices. The course includes classes in Los Angeles (EUA) and an immersion program in Japan. The subjects covered include strategy, corporate responsibility, macroeconomics, retail marketing management, corporate finance and sales management. The teachers are trained in the Toyota principles under the supervision of TDB. In 2011, 50 students graduated from the 2nd and 3rd groups in the program. In 2012, a 4th group with 35 students was opened. Environmental management at the dealerships Toyota has a global Dealer Environmental Risk Audit Program (Derap) aimed at helping the dealer network to manage and reduce environmental risks. Coordinated by the Post-Sales area, the program was implemented in 2006 and is designed to increase awareness of the need for environmental risk control and impact mitigation. The first step is for dealers to comply with Derap requirements, which are: • have a person responsible

for environmental matters at each dealership; • have an environmental policy, a declaration of compliance with the legislation in force and a commitment to the implementation of environmental improvements; • manage hazardous waste properly (oils, filters and batteries); • use oil and water separators; • use vehicle air conditioning gas recycling machines to prevent emissions harmful to the ozone layer. To obtain certification, dealers are also subject to training and audits to verify compliance with company requirements. If the dealer is not compliant, Toyota suggests kaizens to improve processes until compliance is obtained. Dealers who have already received certification are accompanied by a TDB environmental team by means of periodic audits. There are 12 annual audits which assess items such as effluent treatment, waste disposal and overall compliance. By March 2012, the program had been adopted by 123 of the 133 dealers in Brazil. This represents 92% of the national network, meeting the target established for the year.

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Certification Toyota incentivizes its dealers to obtain ISO 14001 certification. The main type of formal recognition of environmental management systems for companies, this certification is seen as a differential in the sector and helps boost both Toyota’s and the dealer network’s image. To facilitate certification, TDB offers two training courses per year to qualify managers and provide information on the concepts involved and the requirements necessary. By the end of fiscal 2011/2012, 56 of the 134 dealers (42% of the network) had obtained certification, six more than the number targeted.

Engaged partners The Toyota Buying area seeks to forge close links with the supply chain as a means of developing company values and sustainability principles in partners. Relations with suppliers are based on the company purchasing policy, which sets forth essential performance and continuous development guidelines, incentivizing continuous improvement in their businesses.

The Environmental Purchasing Guide and Corporate Social Responsibility Guide encourage partners to adopt best socioenvironmental practices. Before initiating a relationship with a new supplier, Toyota evaluates its quality and logistics processes, costs, management capacity and readiness to fulfill the requirements of the company’s operations in Brazil. Supplier engagement in Toyota demands occurs through monthly meetings which provide these partners with guidance on how to incorporate continuous improvement, reduce waste and monitor their environmental performance. Suppliers of parts and inputs considered essential undergo training in the Toyota Production System (TPS), as well as in

50

About the report and remissive index

safety and quality standards, logistics and the environment. This is delivered by the Toyota Suppliers’ Association, Brasa. Around 100 companies form the Toyota supplier base, represented by Brasa, which partners in executing training and mediating relations with the company. Toyota staff frequently visit partner units to exchange experiences and help implement improvements. The company also organizes an annual supplier convention, presenting awards for the best quality, improvement and cost initiatives. Themes for the award are chosen on an annual basis, the 2011 theme being CO2 reduction. Training Jishuken is a training program applied every year to encourage suppliers to adopt self-learning practices aimed at improving work routines. It also seeks to prevent waste and environmental impacts while ensuring production quality. The training is divided into three levels (basic, advanced and ji-kotei kanketsu – (JKK) –, process quality assurance) and consists of theoretical classes with practical applications and the presentation of works. In 2011, 46 companies participated in the initiative, 35 at basic level, seven at advanced level and four at JKK. The total number of companies involved in 2010 was 43.

By implementing the recommended kaizen, the companies are able to reduce costs and standardize production, solve operational problems and eliminate muda (waste), muri (overload) and mura (variation) in processes, making them lean, efficient and compliant with Toyota standards. Suppliers receive specific training to encourage the adoption of best social practices from the Automotive Industry Action Group or Aiag, which has promoted improvement processes in the automotive supply chain since its foundation in 1982. In 2011, 47 companies took part in this training, which is supported by Toyota do Brasil, Ford, General Motors and Mercedes-Benz. The focus was on raising awareness about the importance of adopting best social responsibility practices, such as the elimination of slave labor and human rights violations and the promotion of employee health and safety.

Sorocaba: positive impact The Sorocaba ecofactory was planned to permit the highest number possible of suppliers to be installed in the area around the plant. This was the way the company found to reduce logistics costs and to promote regional development while diminishing the environmental impacts caused by the transportation of parts and materials. Currently 11 major producers of high volume parts are located only 600 meters away from the Sorocaba plant, in addition to one waste and one logistics supplier. The products involved include brake hoses, exhaust systems, tires and wheels, fuel tanks, passenger and driver seats and windows. The plant is also supplied by another 63 companies installed in Indaiatuba (SP) and other municipal districts in Brazil.

51

Suppliers

ISO 14001 All Toyota suppliers should have ISO 14001 certification or another type of environmental certification that confirms that an environmental management system is in place in the company. The target for March 2012 was to have 100% of suppliers certified. The actual figure was 93%, with the remaining suppliers expected to obtain certification by the end of fiscal 2013.

Purchasing policy

Streamlining Buying area activities without compromising on quality is a challenge Toyota meets with constant innovation, Since 2011, a new system has enabled this process to be conducted online. This platform permits the online approval of purchases, quotes and price modifications. Toyota policy sets forth guidelines for the Purchasing area covering quality, logistics, management, ISO 14001 certification, CO2 reduction plans, costs and production readiness. Fair competition and open door policy The negotiation process with suppliers is open, with no restrictions on size or nationality. Selection is based on commercial considerations, taking into account quality, technological capacity and on-time delivery. Mutual benefit based on trust Toyota’s relations with suppliers are based on trust, with a view to promoting mutual development, communication and open dialog. Contributing to the vitality of the local economy through localization: good corporate citizenship Toyota uses its production to actively drive economic development in each region in which it operates by seeking to purchase parts, materials, equipment and others from local suppliers.

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Strategic stakeholders

Toyota Employees

| GRI EC7 Employees

A capital asset Toyota employees are fundamental

Planning and Development,

for the quality of Toyota products

the company also monitors the

and services. It is for this reason

fulfillment of targets by employees

that the company organizes

and the continuous development of

training and programs that

TDB employee potential.

Total employees by type of contract

2011

encourage each person to feel integrated with the organization

In 2011, Toyota contracted 1,163

and empowered to co-create and

new employees, mainly in function

implement improvements.

of the new Sorocaba plant.

2

Although there is no formal local The company constantly assesses

hiring policy, this practice is in fact

and improves employee integration

routine. Forty-five percent of senior

in the workplace and with the

managers, directors and general

principles of the Toyota Way and

managers are recruited from the

Toyota Production System. This

local community.

GRI EC7

is done through documents,

3,645 Total Men 3,647

| GRI LA1 Total employees – TDB 2011* 2011

Men 5

Women 0

Men 4

Women 0

Directors Managers Heads/coordinators Technical/supervisors Administrative Operational Third parties* Apprentices Interns

10 52 184 193 649 2.440 13 97 4

0 21 1 283 9 8 45 0 18

11 177 157 142 883 2.634 14 99 8

0 8 18 2 309 15 15 47 16

Total (by gender)

3,647

385

4,129

430

Total (for year)

policies and strategies which

4,032

4,559

* Service providers in non-core activities (restaurant, gate, cleaning).

4

are periodically reviewed by the

2012

Functional level President and Vice Presidents

company Human Resources area. Through its Human Resources

381

Induction Manual and Internal Regulations

Total Women 385

2012 0

The Induction Manual and the Internal Regulations are documents aimed at clarifying guarantees, responsibilities and working guidelines for each employee. Additionally, they outline relations and communication with leaders and managers.

4,129 Total Men 4,129 1

429

Shokuba Junkai – finger on the pulse A Toyota practice that was consolidated in 2011 is Shokuba Junkai. This involves visits by company Human Resources staff to production area employees. The purpose of the visits is to anticipate risks and identify needs and improvement opportunities for the company. This practice is in place at all company plants and occurs on a daily basis. 52

Total Women 430

 etermined period D (temporary) I ndeterminate period (permanent, Brazilian CLT labor framework)

Employees are fundamental for the quality of Toyota products and services.

53

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Strategic stakeholders

| GRI LA13

| GRI LA1

Diversity

Teams by region

By Gender 2011

Total employees by type of employment

2012

Functional level Directors Managers Heads/coordinators Technical/supervisors Administrative Production Apprentices Interns

Men 100 100 84 100 77 99.6 68 0

Women 0 0 16 0 23 0.40 32 100

Men 100 96 90 99 74 99 68 33

Women 0 4 10 1 26 1 32 67

Total

91

9

91

9

2011

4

3,643

Total men 3,647

2012

Under 30 years

30 to 50 years

Over 50 years

2011

2011

Age Group (%)

Functional Level

About the report and remissive index

Under 30 years

30 to 50 years

Over 50 years

Directors

0

70

30

0

73

27

Managers

3

79

18

4

80

16

Heads/coordinators

9

88

3

4

93

3

Technical/supervisors

13

79

8

10

82

8

Administrative

50

48

2

53

45

2

Production

48

50

2

47

51

2

Apprentices

100

0

0

100

0

0

Interns

10

0

0

100

0

0

Total

42

55

3

46

49

5

2011

Technical/supervisors Administrative

Men 2 1

Women 0 1

Production Apprentices

2 2

0 0

2 2

0 2

* Percentage in relation to total employees at each hierarchical level.

7 Men

2 Women

2 Women

Southeast

Southeast

3.641 Men

4.121 Men

383 Women

428 Women

Central-West

Central-West

0 Men

1 Men

0 Women

0 Women

Employee Turnover

Total women 385

2012

Women 0 0.15

South

6 Men

| GRI LA2

367

Employee Turnover

12

Men 0 1

South

18

2012

Blacks (%)*

2012

4,117

Number of discharges

By gender Men Women

2010

2011

2012

7.47 12.69

7.49 15.06

7.12 10.23

Total

7.89

8.21

7.41

By age group Under 30 years 30 to 50 years Over 50 years

10.22 5.57 17.53

9.09 8.68 11.21

8.56 6.46 9.52

By region Southeast

7.89

8.21

7.41

By gender Men Women

2010 225 34

2011 273 58

2012 294 44

Total

259

331

338

By age group Under 30 years 30 to 50 years Over 50 years

142 100 17

152 166 13

176 150 12

By region Southeast

259

331

338

2011

* The turnover rate for 2012 was 7.12% (men) and 10.23% (women). The turnover rate was calculated as: employees discharged/total employees.

Total men 4,129 20

Disabled Employees (%)* 2012

Functional level Directors Managers Head/coordinators Technical/supervisors Administrative Production

54

Number of employees hired

Employee hiring rate (%)

Men 9 2 0 5 6 3

Women 0 0 1 0 4 0

*Percentage in relation to total employees at each hierarchical level. The company is compliant with the minimum quota of 5% of disabled employees.

410 Total women 430

Full-time Part-time

By gender Men Women

8.03 14.93

2011 16.92 19.74

2012 24.41 39.30

Total

8.03

16.92

24.41

By age group Under 30 years 30 to 50 years Over 50 years

16.12 3.06 3.94

32.83 7.22 5.17

42.68 12.70 3.97

By region Southeast

8.6

17.19

25.82

2010

By gender Men Women

2010 242 40

617 76

2012 1,009 169

By age group Under 30 years 30 to 50 years Over 50 years

224 55 3

549 138 6

878 295 5

By region Southeast

282

693

1,177

55

Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Results and outlook

Toyota 2012 Sustainability Report

About the report and remissive index

Strategic stakeholders

Training Toyota Business Practices (TBP) is a methodology aimed at detecting, analyzing and solving problems, standardizing processes and making the employee a partner in the identification of opportunities for improvements in the company.

plant and unit routines, and the other focused on direct on-the-job application of the concept, the TBP is standardized on a global level and finalized when the employee develops a solution to a problem in his/her area of activity, with support from managers and leaders.

Comprising two stages, one more theoretical incorporating Toyota Way principles and their applicability to the

Leaders in focus Developing talents to exercise leadership roles in the areas and units is fundamental for Toyota’s future. This is why the company invests in its New Leadership Development Program, which was responsible for preparing 258 team leaders and 76 new supervisors in the Indaiatuba and Sorocaba units, and 11 team leaders and five supervisors at São Bernardo do Campo in 2011. This program, which includes theoretical training and a period of on-the-job development strives to reinforce the roles and responsibilities of leaders by providing them feedback on their performance.

Sorocaba Unit

Interchange Focused on broadening employees’ knowledge and experience, Intra-Company Transference (ICT) is an interchange program under which the employee is sent to work at the Toyota head office in Japan for a period that varies between 6 months and 3 years. In fiscal 2011/2012, 13 employees took part in the program. Interchanges also take place with the Toyota subsidiary in Argentina. In 2011, a professional from Toyota in Argentina S.A. (Tasa ) came to work in the logistics area at the Indaiatuba plant. TDB has been studying the possibility of expanding this program since the Mercosur transference policy was reviewed in 2010.

Sorocaba

Hiring for the new plant Preparing manpower for the new Sorocaba plant was one of TDB’s main concerns in 2011 and 2012. Around 400 new employees were integrated into the company, receiving training and induction into the Toyota Production System at other plants such as Indaiatuba. An example is the New Leadership Development Program undertaken at Indaiatuba, in which high potential employees were relocated to Sorocaba to oversee the integration of new employees. 56

Recruiting for the ecofactory took place mainly through contacts with organizations, teaching institutions and representatives of public authorities and sector associations in the region. This helped the company to ensure that its establishment in the city’s north side contributed and will continue to contribute to the development of the region.

QC Circle With a view to developing leaders, the QC Circle has been applied since 1980. This is training which promotes innovation, team work, improved decision making and leadership development. Based on one of the basic Toyota principles, it encourages the ongoing effort to implant kaizens to refine company routines. The QC Circle is based on the concept of Plan-Do-Check-Act or PDCA. In the circle, groups of employees meet to develop a direct improvement in their

routine activity, identifying improvement opportunities, planning and implementing actions. The results are then analyzed over a period of six months. Normally the teams address questions such as safety and product quality, as well as improved environmental management in the plants. These projects are presented at conventions in Brazil and Argentina, with the best ones in the region taking part in a global TMC encounter held in Japan.

Between 2011 and 2012, around 400 new employees were inducted into the company.

57

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Toyota 2020 Global Vision

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Product responsibility

Toyota 2012 Sustainability Report

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About the report and remissive index

Strategic stakeholders

59

| GRI 4.4

Communication

New leaders Developing talent is fundamental for the future of Toyota do Brasil. This is why the company invests in the New Leadership Development Program.

Based on the findings in 2011, measures will be implanted to improve the organizational climate in the areas considered a priority, as happened in 2009. One of the main changes was the implementation of Toyota Previ, a private pension plan which, together with other improvements in benefits, resulted in a significant score in this area.

58

The 82% participation in the survey may be considered excellent for the year end, especially with the construction of the new Sorocaba plant underway. The fact that the survey was promoted using the Toyota mascots Bob Max and Juca Zero was also instrumental in producing robust results. In overall terms, the three best results from 2009 also occupied center

Applied as a communication tool in internal TDB processes, it permits leaders and their subordinates to discuss and assess targets, facilitating consensus and the setting of targets.

Other communication instruments are the Ethics Channel – for reporting breaches of ethics to the Internal Audit area; the periodic meetings of the production areas, with the participation of leaders, and emails exchanged via the Intranet. There are also the notice boards, and the monthly publication Toyota Informa, as well as Corporate Message – an event held twice yearly by the Human Resources area. This is to inform leaders and employees about the market outlook, specific challenges and TDB’s annual hoshins (strategic planning). GRI 4.4

| GRI 4.4

Climate survey An important instrument for measuring professional satisfaction within the company is the climate survey. After the two most recent surveys held in 2006 and 2009, the Human Resources areas conducted a new survey to assess satisfaction, motivation and relations in the company in the second half of 2011. The company has a plan whereby this survey is to be conducted every two years.

To ensure communication between employees and managers, TDB has “Two-Way Communication”, one of the principles of Human Resources Planning and Development, which integrates performance appraisal and guidance on reaching targets that are established collectively. GRI 4.4

Breakfast with the president stage in 2011. Indicators increased compared with the previous survey, reinforcing certain processes that Toyota places great value on: • 87% feel that their work is important and contributes to the company’s success;

On a regular basis, the Toyota Mercosur president Shunichi Nakanishi has breakfast with groups of 12 employees to help clarify doubts and listen to their comments about the company’s development. In 2011, nine of these meetings were held in São Paulo, Indaiatuba and São Bernardo do Campo.

• 81% are proud to work at Toyota; • 79% understand the company’s business goals and targets. The hoshin and corporate messages process, which is conducted twice a year, has proved to be a key tool in consolidating this “proud to be Toyota” feeling. Additionally, this shows each employee how mutual trust ensures that individual success equates to success for the team and, consequently, for the company, and vice versa. The Human Resources area understands that more important than the actual results is the possibility of evaluating how much the concrete actions in the kaizens translate into the development of a company that is effectively better to work in.

Suggesting improvements Since the 1990s, Toyota has had a Suggestions Program whereby employees may propose improvements to operational processes. To participate in the program, the employee sends a proposal to his/her chief. If the kaizen is approved, it is implemented and generates extra remuneration for the creator. In the second half of 2011, the Suggestions Program for administrative employees was reformulated with a view to getting these employees to make more suggestions for optimizing the company’s administrative processes.

Principle

Stable environment A major principle for Toyota is to provide a stable environment for its employees, avoiding employee lay-offs as far as possible. In 2011, there were no significant layoffs at the Toyota do Brasil plants. This is only possible through the constant incentives for kaizens, which enable cost reductions and the optimization of processes, providing a stable environment for all the company’s employees.

Focused principally on safety, environmental improvements, productivity and cost reduction, the program is evaluated using objective criteria. In 2011, there were 44,862 suggestions for production improvements and 1,305 for administrative improvements.

Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Toyota 2012 Sustainability Report

Results and outlook

About the report and remissive index

Strategic stakeholders

Union Relations | GRI LA4, LA5

Based on the principles of transparency and consensus, Toyota maintains an ongoing dialog with the ABC Metalworkers Union, the Campinas Metalworkers Union and the Sorocaba Metalworkers union, with a view to improving working conditions and situations affecting employees. Discussions also cover salary adjustments and the company’s profit share scheme. Dialog is in the hands of TDB’s Labor Relations area, which has created a methodology for informing union leaders of any relevant decisions taken by the company, even when they do not affect union policy, such as administrative changes and employee transfers. Since this is not required by the unions, notifications periods are not specified.

However, the company makes a point of providing at least three weeks notice in the event of changes. GRI LA5 The company seeks to ensure its employees rights, including freedom of association and collective bargaining. Currently around 96% of the company’s employees are covered by union agreements. The remaining 4% work at executive level (department heads and higher levels) and have their own policy, which is a company prerogative. In 2012, no cases of threats to freedom of association were recorded. Additionally, all employees in the metalworker category may vote in negotiations, whether they are union members or not. GRI LA4

Dealer consultants and managers in Sales Training Program

Methodology adopted

Healthy employees | GRI LA6

Retirement

67% of employees joined Toyota Previ

To improve the safety and well being of its employees in the work place, Toyota adopts the international Occupational Safety and Health Management Standard or OHSAS 18001.

| GRI EC3

Private pension plan The Toyota Previ private pension plan offers new and old employees the prospect of additional financial support upon retirement. Subsidized by the company, which matches the amount the employee decides to contribute from his or her salary in accordance with internal regulations,

the program has been in place since the end of 2010.Participation is voluntary and is open to all active employees. GRI EC3 By the end of fiscal 2011/2012, 67% of company employees had joined the Toyota Previ plan.

This methodology, which sets forth a series of risk management requirements, is aimed at ensuring the health and reducing risks for employees in the work place. The process is divided into six stages: survey of activities, assessment of risks, improvements to equipment and activities, organization of

operational standards, education and training, observation of activities and feedback for employees. The process also involves safety walkabouts, in which employees and leaders go around the facility to identify risks and possibilities for kaizens. The monthly safety meetings, the accident and fire prevention commissions (Cipa in the Portuguese acronym) and events such as accident prevention week help to incorporate this methodology into TDB processes. GRI LA6

| GRI LA6

Benefits | GRI EC3

The main benefits offered to all Toyota employees are a health plan, life insurance (including coverage for invalidity), private pension plan, dental plan and internal restaurants with subsidized prices. Employees at the São Paulo and Brasilia units receive meal vouchers.

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The company also offers different benefits for interns, thirdparties and temporary or part-time employees. GRI LA3

Workers represented in formal health and safety committees (%)

Committees Internal Accident Prevention Committee (Cipa) Ergonomics Committees Safety Patrol Committees

2009

2010

2011

1.71 1.19 1.47

1.60 1.12 1.37

1.34 0.93 1.15

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Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Results and outlook

Toyota 2012 Sustainability Report

Strategic stakeholders

| GRI 4.12, 4.13, SO5

Participation in public policy Toyota do Brasil (TDB) maintains dialog with key areas in the Brazilian government with a view to contributing to discussions on public policy in the automotive area. This engagement takes place through membership of the Brazilian automobile industry association, Anfavea, and the Brazilian automotive engineering association, AEA, or even directly in specific cases. One of the company’s most recent contributions was the discussion of public policy in support of the introduction of new automotive technologies, such as hybrid technology. GRI SO5 The company is also engaged in discussion and support for public policies designed to increase industrial competitiveness, such as Brazil’s new automotive regime, or improved energy

efficiency, an initiative represented by the Brazilian Vehicle Labeling Program. GRI 4.12, 4.13, SO5

Current discussions include the reduction of vehicle emissions and industrial emissions; a bill of law about the guidelines for recycling vehicles in Brazil, which is already in the legislative sphere; and a cross sector initiative to improve air quality in large urban centers. GRI 4.13 This initiative was begun in Brazil in 2008 and involves Petrobrás, the Ministry of the Environment, the Ministry of Mines and Energy, the AEA, laboratories and research institutions, such as the University of São Paulo (USP), the objective being to develop more sustainable solutions for cars of the future.

Toyota also joined the Auto Oil program, an international initiative organized by environmental bodies, auto makers and research centers from a number of countries to gather data on vehicle performance through research and tests on the Brazilian vehicle fleet. GRI 4.12 The objective is to go beyond existing legislation and propose new reduction parameters and targets based on more technical criteria. Currently in its second phase overseas, Auto Oil has been in place in Europe, the United States and Japan since 1997, receiving support from bodies such as the Japan Petroleum Energy Center (JPEC) and the European Parliament. GRI 4.12 In Brazil, the program is coordinated by the AEA, with the participation of

a number of companies, including Toyota. Other bodies participating in the program are: Ministry of Mines and Energy, Ministry of the Environment, National Petroleum Agency (ANP), Ibama (Brazilian Institute of the Environment and Renewable Natural Resources, USP/ IAG (Institute of Astronomy, Geophysics and Atmospheric Sciences), Institute of Technology for Development (Lactec) and the Federal Technological University of Paraná (UTFPR). The funding necessary for the first phase was released by Petrobras, which will also supply the fuels to be used, at the beginning of 2012. Lactec will be responsible for the tests, while USP and UTFPR will provide the projections. Toyota plays an important role in the Auto Oil program.

Green score

Judicial settlement

Vehicle emissions Ibama promotes its Nota Verde (Green Score) program. This is an annual program that measures and classifies the pollutant emission levels of all vehicles. Based on information provided by the manufacturers, the vehicles are classified with respect to their carbon monoxide (CO), non-methane hydrocarbon (NMHC) nitrogen oxide (NOx) and CO2 emissions, as well as the type of fuel they use. Together with the Brazilian Vehicle Labeling Program, these data are used to classify vehicle fuel consumption and emission data in the country. The models commercialized by Toyota received the following classifications:

During 2008, Anfavea, together with Petrobras, the ANP (National Petroleum Agency) and Ibama, received an injunction brought by the Federal Public Prosecution department to reduce pollutant emission levels in diesel vehicles. On October 29, 2008, specific directives were imposed whereby vehicle manufacturers were obliged to seek new solutions for their products, allied with the production and distribution of better quality diesel fuel (S50). In 2011, Toyota carried out a series of technical adjustments in its diesel vehicles to ensure that sulfur emissions would be below the legal limit for 2012.

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About the report and remissive index

• Etios – 5 stars • Corolla 1.8 – 5 stars • Corolla 2.0 – 4 stars • Hilux 2.7 – 4 stars • Camry, RAV4, Lexus RX350, IS300, ES350 – 3 stars • Prius and CT200h – 4 stars

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Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Toyota 2012 Sustainability Report

Product responsibility

Results and outlook

About the report and remissive index

Strategic stakeholders

Fundação Toyota do Brasil Created in 2009 to centralize Toyota do Brasil’s socio-environmental investments and to help drive the development of the communities in which the company operates, the Fundação Toyota has been undergoing reformulation since 2010, with the objective of structuring its projects to make them more self-sustaining and less dependent on Toyota sponsorship.

Blue Macaw: project supports the biodiversity conservation in the Pantanal region and has reached positive results in 22 years

The reformulation, which is based on the PDCA or Plan-Do-Check-Act concept, established a new investment plan to ensure the development of long-term, selfsustaining programs. In fiscal 2011/2012, the foundation initiated sponsorship of three new projects: Vitrine Cultural (Cultural Showcase), Expedição Pantanal (Pantanal Expedition) and Toyota APA Costa dos Corais (Toyota Costa dos Corais Environmental Protection Area).

Atlantic Rainforest A priority for the Foundation since its creation has been the preservation of the Atlantic Rainforest – one of the most degraded biomes in Brazil. In 2011, the foundation opted to finalize its existing Toyota and the Atlantic Rainforest program and initiate sponsorship of a new more extensive project, the Toyota APA Costa dos Corais. The project is conducted by ICMBio, with support from SOS Mata Atlântica. Involving a listed protected area of more than 413,000 hectares located between the states of Alagoas and Pernambuco, the initiative will have a direct impact on the population of 11 municipal districts, eight in Alagoas and three in Pernambuco. This protection area includes the second most important coral reef in the world, mangrove swamps, fisheries and tourist spots and is home to an important population of manatees and 185 species of fish.

CONSERVATION BYLAWS

Principles and policies The Fundação Toyota do Brazil ensures alignment with TDB and TMC environmental guidelines through a series of principles. These are set forth in the foundation’s bylaws which define its social investment policy and guide the decisions taken by the curatorship council and executive board of the institution. •D  efense of the environment and Brazilian biomes, in particular the Atlantic Rainforest. • Education and promotion of citizenship and environmental responsibility. 64

•C  ooperation and provision of relief in natural catastrophes and public calamites affecting the country. For the future, the foundation intends to expand its network of partners, strengthening each of its projects. Currently, the main partnerships are with the Fundação SOS Mata Atlântica, Instituto Arara Azul, Museu da Pessoa, Instituto Chico Mendes de Conservação da Biodiversidade (ICMBio), Instituto SOS Pantanal and local governments.

Blue Macaw The main goal of this project is to conserve diversity in the Pantanal region, in particular the blue macaw. Idealized by the biologist Neiva Guedes and sponsored by the Fundação Toyota do Brasil since 2009, the program monitors the activities of around 5 thousand birds on 47 farms in the region. Due to illegal traffic in the species and environmental damage, the number of blue macaws in the region monitored was as low as 1,500 when the project began in 1990. In addition to providing support and sponsorship, the Fundação Toyota is instrumental in logistics for the teams of biologists. In 2009, the company provided them with three 4-wheel drive Hilux vehicles which can negotiate the dirt roads in the region. The fleet is serviced periodically.

5,000 blue macaws now live in the project area, 3,500 more than in 1990.

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Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Toyota 2012 Sustainability Report

Results and outlook

About the report and remissive index

Strategic stakeholders

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2

1. Local Memory: the project promotes the revival of local memory and culture among students 2. Environmental Awareness Project: in 2011, more than 56 thousand people were reached 3. Toyota Nature Trails: the project, run in Guaíba, Indaiatuba and São Bernardo do Campo, is focused on preserving the Atlantic Rainforest

1

3

Pantanal Expedition

Communities The foundation is engaged in a number of activities in the communities in which Toyota has units. These are dedicated to areas like education, environment and culture. The main projects are:

A specialized team will cover ten different routes in the region using a Hilux SRV pickup truck SUSTAINABLE PRACTICES

In the heart of the Pantanal In 2011, the Fundação Toyota announced its support for the Pantanal Expedition project, created by the Instituto SOS Pantanal. The project will cover ten different routes in the region, mapping sustainable practices in the areas of education, health, tourism, the environment and economy.

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Working from a crew cab Hilux SRV truck, the team of environmental technicians, biologists and journalists will

record and publicize the most important initiatives. The group will also include chefs, whose mission will be to study and document the local cuisine. The data collected during the course of the trip will be used to inform strategies to protect the Pantanal region, diagnose potential social and environmental problems and create new ecotourism destinations.

Ambientação (Environmental Awareness) Project Conducted with support from the local government, the project applies Toyota Business Practices (TBP) methodology in 48 municipal schools. The initiative helps principals of local schools to appreciate the importance of the conscious consumption of natural resources and to identify and solve problems related to excessive consumption of energy and water, as well as to implement waste management measures. The results are assessed by representatives of Toyota, the local government and water

and power utilities. In 2011, 89% of the schools participating in the project achieved or exceeded their targets, 20% more than the previous year. More than 56 thousand people were reached by the project, including students, the school community and the local population. Local Memory Initiated in 2007, the project promotes the revival and appreciation of local culture and communities among primary and secondary school students in São Bernardo do Campo (SP), Guaíba (RS), Indaiatuba (SP) and Sorocaba (SP). Based on a partnership between the Fundação Toyota do Brasil and the Museu da Pessoa, the project has already benefited more than 500 teachers and 7,350 students, with activities designed to improve research

and critical reading skills and promote digital inclusion during the school year. All the material produced by the students is transformed into an exhibition at the end of the year. In 2011, the project benefited 276 teachers and 5,375 students at 162 schools. Toyota Nature Trails Organized annually in Guaíba, Indaiatuba and São Bernardo do Campo, the project entails cultural activities and socioenvironmental workshops focused on preserving the Atlantic Rainforest. The activities include planting native trees and visits to a sense tent to stimulate contact with local flora and fauna. In fiscal 2011/2012, 119,000 people participated in the four versions of the event held in: Guaíba, Indaiatuba, São Bernardo do Campo and, for the first time, in Sorocaba. In 2012-2013 the event will be held in these cities and also in the city of São Paulo.

Toyota 2012 Sustainability Report

Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Results and outlook

Product responsibility

Toyota is committed to quality, reliability and durability in the vehicles it produces. To ensure each car it makes comes up to this standard, the company strives to make its production system fail-safe by preventing errors that might compromise the entire production chain. The company

is also focused on the risks inherent to the automotive sector, such as accidents and mechanical failure, as well as environmental impacts. To minimize potential impacts, Toyota continuously improves its processes to ensure product quality, performance and safety.

Global Quality Committee After several recalls in many countries, in 2010, the Toyota Motor Corporation (TMC) created the Special Committee for Global Quality to upgrade production processes in function of the recalls and to reinforce relations with major stakeholders. The areas involved, ranging from Quality and Regulation to Post-Sales and Customer Relations, are charged with putting the principles of continuous improvement and respect for people into practice. Another consequence of the recalls was the implementation of the Swift Market Analysis Response Teams, (Smart), comprising consultants and engineers specialized in genchi genbutsu and identifying user needs. Since it was created, the Special Committee for Global Quality has been working during one year in all the company´s areas and affiliates. One of the results was the development of MST Quality Special Committee, also in 2010, which meets periodically to review the quality processes and implement improvements. In Brazil, for example, projects were implanted in the production and sales areas to check critical stages in plant processes and improve product delivery, with a focus on safety information; relations with regional organizations and authorities have also been improved. For the coming years, the focus will be on consolidating the committee’s measures into company routines and formalizing quality directives for Toyota products.

Product responsibility Quality: a Toyota hallmark | GRI PR1

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About the report and remissive index

Toyota Cars: quality and innovation Corolla, the sedan The best selling car in the world in 2011 with 1,020,000 units commercialized in 150 countries, according to Forbes magazine, the Toyota Corolla has been in production since 1966 and is currently in its tenth generation. Renowned for its quality and durability, a sports version of the model was launched in 2011, the Corolla XRS. In 2011, the vehicle was leader in the midsize sedan segment with 53,150 units sold and a market share of 26.6%. The name is Latin in origin and means Crown of Flowers.

Etios, the compact The first Toyota compact in the Brazilian market, the Etios signals the arrival of Toyota quality in a new category. Launched in Brazil in September 2012, the main differentials of the Etios are safety, economy and internal space. The five letters that make up the Etios’ name are highly meaningful. The “E” stands for economy, the “T” for Toyota quality, the “I”, for spacious Interior; the “O” for optimized performance, and the “S” for safety. Etios is derived from the Greek word Ethos, meaning Original Essence.

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Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Results and outlook

Toyota 2012 Sustainability Report

Product responsibility

Prius, the hybrid The Prius is the first mass-produced Toyota hybrid vehicle in the world. Launched in Japan in 1997, the model is a sales success and will be available in Brazil in October 2012. Powered by two engines, one electric and the other combustion, the model emits 44% less CO2 than conventional vehicles and has sold 2.3 million units worldwide. The name is also of Latin origin, meaning “before”. This is because the vehicle was launched before environmental awareness became so widespread. Hilux, the pickup The Hilux is Toyota’s pickup truck. The diesel-powered vehicle is available in standard and crew cab versions. The latest model received improvements such as a new automatic transmission,

Drivers and passengers: safe driving

new headlights and front grill, alloy wheels and built-in GPS system. All these features allow the driver to tackle the most diverse types of terrain with full Toyota comfort, safety and performance.

To guarantee driver and passenger safety, Toyota invests in a series of procedures and optional and mandatory items in its vehicles. The Toyota Etios, for example, comes with double airbags and seatbelt alert to boost safety levels for occupants. The Corolla, the first sedan in the market

Camry, the V6 sedan Famous in the United States where it was the best selling passenger car for a number of years, the Camry offers high standards of finish, style and quality. The vehicle is equipped with a powerful V6 Dual VVT-i 24V engine delivering 277 hp at 6.200 rpm. In Brazil it comes with dual zone air conditioning, headlight washers, xenon headlights, reclining back seats, power front seats, wood finish and six airbags as standard. The name of the vehicle is derived from the Japanese work kanmuri, which means crown.

Protective structure To minimize injuries to driver and passengers in the event of an accident, the structure of the Corolla and the Etios deforms progressively in a collision. This means that the passenger cell is protected since the impact is absorbed by the side columns and the roof. The steering column also has this absorption system. External victims are protected by this deformation in consequence of the reduced impact.

with double front airbags (before this was mandatory), also offers innovations. The 2012 model has disc brakes on all four wheels, as well as ABS and EDB brakes on the GLi, XEi and Altis versions, ensuring even distribution of braking power and control in emergency stops.

Corolla Main safety items

• Disc brakes on all four wheels • ABS and EBD brakes (Altis, XEi and GLi) • Side airbag (Altis and XEi) • Xenon low beam headlights (Altis) • Parking sensor (Altis) • Progressive deformation of bodywork • Anti-crush window sensor • Pretensioned seatbelts

1

2

Support

Vehicle warranty 1Prius, the hybrid arrives in Brazil in October 2012 2. The Hillux Pickup, imported from Argentina

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About the report and remissive index

3

3. Corolla, sedan manufactured in Brazil since 1998

All Toyota customers receive a threeyear warranty (100,000 km for corporate customers) and a free 24-hour Assistance Serve for 12 months, extendable for a further 12 or 24 months. Lexus customers have a 48 month warranty (100,000 km for corporate customers) and free 24-hour Assistance

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Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Results and outlook

Toyota 2012 Sustainability Report

Product responsibility

Vehicle recycling

Program

Tire disposal

Reverse Logistics

To ensure compliance with the national solid waste policy sanctioned in August 2010, Toyota is undertaking a series of improvements and kaizens which will enable the company to reduce waste generation in line with legal requirements by August 2014. For example, all the interior fittings of the Corolla are made of resin and the central console is made of TSOP (Toyota Super Olefin Polymer), a recyclable material developed especially by Toyota to reduce environmental impacts.

Recyclable components in the Corolla

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About the report and remissive index

Material

Most common use

Seats (urethane foam and fiber)

Acoustic isolation material for vehicles

Windows (glass)

Tiles

Hood (steel)

Engines and aluminum products

Wiring (copper)

Copper products, engines (cast aluminum supports)

Engine oil (oil)

Alternative fuel for boilers and incinerators

Radiator (aluminum)

Industrial ingots, aluminum products

Cooling liquid (ethanol)

Alternative fuel for boilers and incinerators

Fenders (resin)

Fenders, internal fittings, toolboxes, etc.

Battery (steel and aluminum)

Steel and aluminum products

Bodywork (steel)

Automobile parts and steel products

Trunk (steel)

Automobile products, general products

Tires (rubber)

Raw material, alternative fuel for cement kilns

Doors (steel)

Automobile parts, steel products

Catalytic converter (precious metals)

Catalytic converters

Transmission oil

Alternative fuel for boilers and incinerators

Wheels (steel and aluminum)

Automobile parts, general steel products, aluminum

Suspension (steel and aluminum)

General steel products, aluminum products

Since 2008 Toyota has been implanting a reverse logistics program in partnership with its dealers to ensure the proper disposal of batteries and oil filters. When changed at a Toyota dealer, these items are returned to the manufacturer, which arranges for their disposal. Some dealers also have systems for disposing of air conditioning gas - which is collected with specific equipment.

Toyota do Brasil intends to extend its reverse logistics to the tires replaced at authorized dealerships.

| GRI PR1, EN6

Vehicle emission control Toyota engines constantly undergo improvements to refine environmental performance. For example the VVT-i Flex (Variable Valve Timing with Intelligence) uses a computer to vary the timing of the intake valves according to driving style and engine load, combining optimized performance with fuel economy and lower emissions. Used in the Corolla, in 2012 this engine received an A rating in the Inmetro Brazilian labeling program (PBE) for both the manual and automatic versions of the GLi and XLi models. This enabled the vehicle to maintain its previous rating. Another vehicle evaluated, the Camry, received an E, while the RAV4 was rated C. By current labeling program rules, these models were compared with vehicles from very different categories. The Camry, for example, was assessed in the same category as

the Corolla and the Civic, which have 1.8 and 2.0 liter engines. In 2011, the Hilux pickup was subject to modifications to meet the reduced emissions required under the commitment negotiated between government bodies, the automotive industry and the Federal Public Prosecution Ministry. The improvements implemented include changes in engine systems and technical adjustments to ensure the sulfur in the diesel available in Brazil is catalyzed in a different manner. TMC has technologies that permit the Hilux to use both diesel containing up to 500 parts per million (PPM) of sulfur or less than 50 PPM. From 2012, it is expected that filling stations in Brazil will sell diesel with up to 50 PPM, replacing the current fuel which has 500 PPM in large cities and 1,800 in rural areas.

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Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Results and outlook

Toyota 2012 Sustainability Report

Product responsibility

Safety

etios

of Toyota models are equipped with airbags

highway gasoline consumption for the 1.3l hatch model

Toyota cars are a benchmark in emissions because the company uses advanced technologies such as VVTi, hybrid technology, aluminum engine blocks and electric steering, among others.

manufacturers to improve the safety performance of their vehicles –,Corolla received 4 stars (the maximum score is 5). To obtain 5, the vehicles must have a knee protection system.

In Latin NCAP – an initiative aimed at offering consumers in Latin America and the Caribbean independent and impartial safety assessments of new cars, as well as encouraging

Currently, all Toyota models (excepting the Hilux CS Chassis and the Hilux CS) are equipped with airbags, ahead of the mandatory requirement that will come into force in 2014.

100%

13km/l

Hybrid

95%

Prius in Brasil Toyota do Brasil starting importing the Prius in 2012. the first models, which arrived in August of this year, are the third generation of the model and have been adapted for the gasoline used in Brazil, which contains up to 25% ethanol. In production since 1997, the vehicle has sold over the 2.7 million units worldwide, of which more than 1 million in the USA alone.

| GRI PR1 Evaluation of impacts during product and service life cycle

Vehicle Etios 1.3l Etios 1.5l

Corolla 1.8l

Corolla 2.0l Hilux 3.0l

Hilux 2.7l

Prius 1.8l

CO2 (trial fuel)*

Transmission

141.8 g/km (E-22)

5 M/T

137.7 g/km (E-100) 145.4 g/km(E-22)

5 M/T 5 M/T

141.3 g/km (E-100) 167.0 g/km (E-22)

5 M/T 6 M/T

159.3 g/km (E-22)

6 M/T

162.6 g/km (E-100)

4 A/T

157.4 g/km (E-100) 187.2 g/km (E-22)

4 A/T 4 A/T

179.6 g/km (E-100) 233.8 g/km (diesel)

4A/T 5 M/T

247.1 g/km (diesel) 253.4 g/km (E-22)

5 A/T 5 M/T

242.9 g/km (E-100)

5 M/T

270.4 g/km (E-22)

4 A/T

257.8 g/km (E-100)

4 A/T

110.9 g/km (E-22)

CVT

* E-22 = gasoline/ E-100 = ethanol. 74

About the report and remissive index

Engine (fuel) 1NR-FBE (flex)

of the Prius is recoverable and 85% is recyclable

Powered by two engines, a 1.8 gasoline-powered unit and an electric motor which can do up to 50 km/h, the Prius emits approximately 40% less carbon gas than normal cars. Other innovations further improve its environmental performance, for example, the combustion engine is deactivated at low speeds, and the kinetic energy generated in braking is used to recharge the battery.

2NR-FBE (flex)

2ZR-FBE (flex)

Emissions laboratory

3ZR-FBE (flex) 1KD-FTV (diesel)

2TR-FBE (flex)

2ZR-FXE (gasolina)

The Toyota Emissions Laboratory, inaugurated in 2010, received official approval from the environmental authorities Cetesb and Ibama in 2011. The US$10 million laboratory located in Indaiatuba (SP) is responsible for developing new technologies, certifying products, developing and controlling production processes and checking gas emissions. The laboratory operates in two shifts and was responsible for the emissions tests to certify the Etios and the Prius.

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Toyota 2020 Global Vision

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Corporate governance

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Environmental management

Strategic stakeholders

Product responsibility

Results and outlook

Toyota 2012 Sustainability Report

About the report and remissive index

Product responsibility

To publicize the new model, Toyota invested in mailing and a hotsite, which in addition to providing information about the vehicle, also offers suggestions of routes and locations in Brazil to test the car’s performance. The Toyota dealer network also prepared an exclusive interactive showroom area to receive customers interested in the new Etios. At the dealers, consumers could sign up to receive information on new products from the brand in the future.

ECO-EFFICIENCY

129 g/km is the emission level of the ethanol-powered Etios, below the average for Brazilian vehicles

Etios

A new car for a new public The Etios is aimed at expanding the public for Toyota cars while maintaining the company’s quality and safety standards. With a differentiated design, the vehicle is produced in both a hatchback version, with 1.3l and 1.5l flexible fuel engines, and a sedan, available only with the 1.5l engine. Both engines are 16 valve and the cars have a manual 5-speed transmission. Differentials include internal space, with a 270 liter trunk in the hatchback and 562 liters in the sedan, and low fuel consumption. Safety is also a highlight: in addition to a body

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conceived in line with the most rigorous quality standards, the Etios has double airbags and seatbelt alert as standard. The Etios has the lowest fuel consumption in its category. The 1.3 hatchback, for example, consumes less on the highway (13 km/l for the gasoline model and 9 km/l for ethanol) and in town (12.5 km/l with gasoline and 8.5 km/l with ethanol). It was rated “A” in the Inmetro Brazilian Vehicle Labeling Program (http://www. inmetro.gov.br/consumidor/tabelas_ pbe_veicular.asp). The Etios’ lower fuel consumptions also contributes to reduced CO2 emissions.

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About the report and remissive index

Toyota 2012 Sustainability Report

Product responsibility

Innovative in design and reliable Etios (modelo hatch 1.3l)

Low emissions

Production process

Interior design

The Etios is produced in Toyota’s Sorocaba ecofactory, with a lean process focused on reduced resource consumption. Energy consumption is up to 40% lower than in conventional plants.

1. Design The design has a strong front grill, sidelines that transmit sophistication and 14” inch wheels, which highlight the car’s youthful appearance.

2. Engine technology Available in the 1.3l and 1.5l versions, both 16 valve, the Etios engine is flex fuel, ensuring a low level of CO2 emissions (132 g/km for the 1.3l gas engine and 129 g/km for the ethanol model) in the city. Built with Toyota quality, engine maintenance costs are low.

People involved

Inspired by aircraft cockpits, the speedometer and rev counter are positioned in the center of the dashboard. The car also has numerous compartments and object holders, as well as two-tone upholstery.

Approximately 1,500 employees are involved in producing the Etios. They will alternate on two shifts to produce around 70 thousand vehicles a year.

3. Power Offering 84 hp (gasoline) and 90 hp (ethanol), the 1.3l model accelerates from 0 to 100 km/h in 12.49s and 11.87s, respectively.

6

4. Light The car weighs only 945 kg, meaning better performance on the highway (13 km/l, for gasoline and 9 km/l for ethanol) and in the city (12.5 km/l for gasoline and 8.5 km/l for ethanol), leading to an “A” rating in the Inmetro Brazilian Vehicle Labeling Program (http://www.inmetro. gov.br/consumidor/tabelas_pbe_veicular.asp).

5

5. Trunk At 270 liters, the trunk is one of the largest in its category.

2

4 3

6. Safety and comfort The items available in the Etios family ensure comfort and safety for the driver. In terms of comfort, the car comes with electric steering, air conditioning, power windows and locks, CD player with MP3 and USB slot. Safety items include rear window demister, double airbags and ABS brakes.

7. Recycling The Etios was designed to be disassembled at the end of its working life, enabling a series of parts to be reused by Toyota and dealers. The recyclable parts include: • fenders (front and rear); • fender components (perforation cover and aerodynamic fins); • lower grill; • radiator support cover.

8. Confort With a wheelbase of 2.46 m wheelbase and length of 3.78 m, the large internal space in the Etios offers comfort for both driver and passengers. Even the glove compartment (conditioned in the versions with air conditioner) is large, with 13 liters. 78

8

1

7

79

Wheelbase

Lowest consumption in category

ABS brakes guarantee safety Highest consumption in category

Toyota 2012 Sustainability Report

Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Results and outlook

Results and outlook

Although Toyota had an extremely challenging year in consequence of the natural disasters in Japan in March 2011, the dedication and drive of its employees enabled the company to end the year with robust results.

The vehicles produced by Toyota in Mercosur led all their segments in Brazil This is exemplified by the Corolla, manufactured in Indaiatuba (SP), with 53,150 units registered and a 26.6% share in the medium sedan segment. The Hilux pickup truck, produced at the Zárate plant in Argentina, ended 2011 with 33,261 units commercialized, consolidating its outright leadership in the midsize diesel pickup market with a 35.6% share.

The SW4 sports utility vehicle totaled 8,197 units registered in 2011 – a historical record –, giving it a 49.5% share in the midsize diesel SUV segment. The star among the imports was the RAV4. The compact sports utility sold 4,225 units in 2011, 219% up on the 1,219 units commercialized in 2010. Toyota commercialized a total of 99,236 automobiles and light commercial vehicles in Brazil, very close to the 2010 figure (99,585). The company produced 60,456 vehicles in 2011, below the 2010 figure of 64,588 units. However, exports increased from 10,982 units in 2010 to 12,652 in 2011. The series of difficulties in 2011 did not prevent Toyota from ending the year in second place, even with a 7.9% drop in unit sales. Sales decreased from 55,030 units commercialized in 2010 to 53,159 in 2011.

Automotive industry

Results and outlook Leader in 2011

Currently Brazil has 19 vehicle and 7 agricultural machinery manufacturers, operating 53 engine, component and other plants in automotive production centers in nine states. There are also some 500 auto part suppliers based in the country. The automotive sector is an important generator of wealth and has grown significantly in recent years. According to the automotive sector association Anfavea, in 2011 automotive and agricultural machinery accounted for 18.2% of the nation’s industrial GDP, compared with 12.9% in 2001. Ten years ago the sector had net revenues of US$ 55.740 billion, a number which had practically doubled by 2011, reaching US$ 105.375 billion.

80

About the report and remissive index

Investments have also had a significant performance in the last ten years, increasing from US$ 1.825 billion in 2001 to more than US$ 5 billion. According to Anfavea projections, the new investments programmed by auto makers by 2015 will total US$ 22 billion, and should generate further investments throughout the automotive supply chain totaling US$ 100 billion. The number of automobiles assembled in 2011 totaled 3,407,861, higher than the 2010 figure of 3,382,143. Vehicles sales totaled 3.63 million, compared with 3.52 million in 2010.

81

Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Results and outlook

About the report and remissive index

Toyota 2012 Sustainability Report

Results and outlook

The automotive industry is one of the main generators of tax income in the country. Direct taxes (IPI, ICMS and PIS/Cofins) on vehicles alone generated R$ 137 billion in the last three years, from 2009 to 2011, with an annual average of R$ 46 billion, in addition to other taxes and charges on products and companies in the sector, such as vehicle road tax

(IPVA), income tax and social security charges. The extensive capillarity of the sector also generates indirect tax income in other segments (automotive products and services, trade, insurance, finance etc.). The tax incentives currently in place for consumers in the market will generate increased demand and, consequently, production.

framework

Changes in 2013

26.6% Corolla share in the midsize sedan market

The goals of the new framework are: to increase the regional content of vehicles measured by the volume of parts acquired from companies established in the country; investments in engineering and innovation; and increased energy efficiency in vehicles, factors which will give the manufacturer a lower IPI tax rate. In 2012, there will be no alteration in the IPI rate, which stands at 30 percentage points for vehicles imported from outside Mercosur.

82

From 2013, the incentive of reduced IPI up to the limit of 30 percentage points will be calculated based on the volume of parts and materials purchased in the country. There will be an additional reduction of up to two percentage points in the IPI conditional on fulfillment of R&D and engineering investment targets.

Tax generation* 52.5

2010

2011

35.7

For the sector association Anfavea, this new framework will help drive domestic production, increasing innovation and technological development, and boosting investment in the automotive segment in the country. Brazil is one of the major automotive markets worldwide, with potential to expand in coming years. Anfavea expects that the new automotive framework, in conjunction with sector policies and structural modifications to boost competitiveness, will strengthen and consolidate the automotive

48.8

2009

Source: Anfavea

market

Growth prospects for the Brazilian automotive industry are good, but it will have to overcome major challenges in the coming years. The new automotive framework established by the federal government will be in force from 2013 to 2017. This establishes new ground rules for auto makers, as well as new IPI industrial sales tax rates and transition rules to attract investments in vehicle production to the country.

Total 137.0 *IPI, ICMS, PIS/Cofins.

Leadership

SUV

Hilux share in midsize diesel pickup sales

SW4 share in midsize diesel SUV sales

35.5% 49.5%

83

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Strategic stakeholders

Environmental management

Product responsibility

Results and outlook

About the report and remissive index

About the report and remissive index 85

Toyota 2012 Sustainability Report

Message from the president

This is the fourth year running that Toyota do Brasil (TDB) is publishing its Sustainability Report. The publication presents the company’s main measures to increase production efficiency and offer quality vehicles with a lower environmental impact, as well as the socio-environmental initiatives it supports through the Fundação Toyota do Brasil. GRI 3.2, 3.3 The report is in accordance with Global Reporting Initiative (GRI) guidelines, at self-declared application level B. This year 32 indicators were collected: 13 environmental, 16 social and 3 economic.

As in previous years, the content took into account sector publications and the annual report of the Toyota Motor Company (TMC), TDB’s parent company in Japan. GRI 3.5 The scope for the indicators included all the company’s operating units during the period from April 1st, 2011 to March 31st, 2012. When a different period is referred to, this is informed in footnotes or the text. The information covers all the company’s activities in the country and does not present limitations or reformulations that could significantly affect understanding. GRI 3.1, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11

Remissive Index

GRI Indicators The 2012 Toyota do Brasil GRI Sustainability Report meets GRI application level B requirements according to the parameters set forth in the following table:

C

C+

B

B+

A

A+

Respond to items: 1.1; G3 Profile

2.1-2.10; 3.1-3.8; 3.10-3.12;

All profile and governance indicators: 1.1-4.17

All profile and governance indicators: 1.1 – 4.17

Information about management form for each indicator category

Management form disclosed for each indicator category

84

Respond to a minimum of 10 Performance Indicators including at least one from each of the following performance areas: social, economic and environmental. If available, sector indicators may be reported, as long as seven are not sector indicators.

Respond to a minimum of 20 Performance Indicators (essential or additional) including at least one in each dimension. If available, sector indicators may be reported, as long as 14 are not sector indicators.

Mandatory report of sector indicators one year after the launch of the final version of the sector supplement.

With External Verification

G3 Performance Indicators and Sector Supplement Performance Indicators

Not required

With External Verification

| GRI 3.1, 3.2, 3.3, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11

G3 form of management

With External Verification

About the report and remissive index Reporting process

Report Content

4.1-4.4; 4.14-4.15

Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Strategic stakeholders

Environmental management

Product responsibility

Toyota 2012 Sustainability Report

Organizational Profile

Report parameters

Governance, Commitments and Engagement

86

Performance Indicators

Indicator

Description

Page

1.1

Declaration by president

5

1.2

Declaration of main impacts, risks and opportunities

5

Indicator

Description

Page

2.1

Name of organization

11 and 13

2.2

Main, brands, products and services

13

2.3

Operational structure

13

2.4

Location of organization’s headquarters

12 and 13

2.5

Countries in which organization and its main operations are located

14

2.6

Nature of ownership and legal form

12

2.7

Markets served

14

2.8

Scale of organization

13 and 14

2.9

Main changes in reporting year

11

2.10

Awards received in reporting period

14

ECONOMIC PERFORMANCE

Indicator

Description

Page

DMA

Management approach to economic performance

77

EC3

Fulfillment of pension plan and benefits obligations.

60

EC6

Policies, practices and proportion of spending on local suppliers.

The location of suppliers is not a formal criterion. Toyota understands local suppliers to be those based in Brazil.

EC7

Local hiring

52

Economic Performance

Market Presence

Indicator

Description

Page

3.1

Reporting period

81

3.2

Date of previous report

81

3.3

Reporting cycles

81

3.4

Contact details

86

3.5

Process for definition of content of report

81

3.6

Report boundary

81

Indicator

Description

Page

3.7

Declaration about specific limitations to scope or boundary of report

81

DMA

Management approach to environmental performance

29 to 41

3.8

Basis for elaboration of report

81

3.9

Data measurement techniques and bases of calculations

81

3.10

Restatement of information from previous reports

81

EN4

Indirect energy consumption by primary source

30

3.11

Significant changes in comparison with previous years

81

EN5

Energy saved due to improved conservation and efficiency

30 and 31

3.12

GRI summary

81

EN6

71

External assurance

This report was not assured externally

Initiatives to supply low energy consumption products and services and resulting reductions

EN7

Initiatives to reduce indirect energy consumption and reductions obtained

31

EN8

Total water withdrawn by source.

32

EN16

Total direct and indirect greenhouse gas emissions

35

3.13

About the report and remissive index

About the report and remissive index 87

Profile Information

Strategy and Analysis

Results and outlook

ENVIRONMENTAL PERFORMANCE

Energy

Indicator

Description

Page

4.1

Governance structure of organization, including committees of highest governance body

17

4.2

Presidency of governance body

17

4.3

Non-executive independent members of highest governance body

17

4.4

Mechanisms for shareholders to make recommendations to board

21 and 59

EN18

Initiatives to reduce greenhouse gas emissions and reductions obtained

35

4.5

Relationship between remuneration and economic and socio-environmental performance

18

EN19

Emissions of substances harmful to the ozone layer, by weight

34

4.6

Processes to prevent conflicts of interest

21

EN21

Total water discharged, by quality and destination

32

4.7

Qualifications of members of highest governance body

18

4.8

Relevant declarations of mission, values, codes and principles

7, 20, 21, 23, 26 and 27

EN22

Total weight of waste, by type and disposal method

34 and 36

4.9

Responsibility for implanting economic, environmental and social policies

17

4.10

Self-assessment processes of highest governance body

18

EN23

Number and total volume of significant spillages

In 2011, there were not significant spillages at TDB plants.

4,11

Explanation of whether and how the organization applies the precautionary principle.

23, 24 and 25

4.12

Charters, principles and initiatives developed externally

62

4.13

Memberships of domestic / international associations

62

Products and Services

EN26

Initiatives to mitigate environmental impacts.

33, 34 and 38

4.14

List of stakeholders engaged by organization

43

4.15

Basis for identification and selection of stakeholders engaged

43

4.16

Approach to engaging stakeholders.

43

General

EN30

Total investment and spending on environmental protection

39

4.17

Main themes and concerns raised by stakeholder engagement.

43

Water

Emissions, effluents and waste

Message from the president

Toyota 2020 Global Vision

Profile

Corporate governance

Strategy (Toyota Way)

Strategic stakeholders

Environmental management

Product responsibility

Toyota 2012 Sustainability Report

Relationship between Labor and Governance Diversity and equality of opportunity

SOCIETY

Indicator

Description

Page

Indicator

Description

Page

DMA

Management approach to employee performance management

52 to 61

DMA

Management approach to social performance

62

LA1

Total number of workers, by type of job, work contract and region

53

SO5

Positioning on public policy

62

LA2

Total number and turnover rate of employees by age group, gender and region

55

LA3

Comparison of benefits provided for full time employees and temporary employees

60

SO6

Policy on financial contributions to political parties or institutions

Toyota do Brasil does not make financial contributions to political parties, politicians or associated institutions.

LA4

Percentage of employees covered by collective bargaining agreements

60

LA5

Description of notices provided (times and procedures)

60 SO8

Monetary value of significant fines and total number of non-monetary sanctions resulting from non-compliance with laws and regulations

No significant fines or non-monetary administrative or judicial sanctions were imposed upon Toyota do Brasil.

88

Public Policy

LA6

Percentage of employees represented in formal health and safety committees

61

LA13

Breakdown of senior management and boards, and proportion by group and gender

54

Indicator

Description

Page

Indicator

Description

Page

DMA

Management approach to human rights performance

50 and 51

DMA

Management approach to product responsibility

62 a 75

Percentage of contracted companies and critical suppliers submitted to human rights related assessment

Toyota does not have human rights clauses in the General Purchase Contract, applied to around 100 significant suppliers.

PR1

Assessment of impacts to health and safety during product and service life cycle

71

Práticas relacionadas à satisfação do cliente, incluindo resultados de pesquisas

46 and 47

SOCIAL – HUMAN RIGHTS

Purchasing process

HR2

About the report and remissive index

About the report and remissive index 89

SOCIAL PERFORMANCE – LABOR

Employment

Results and outlook

Compliance

PRODUCT RESPONSIBILITY

Nondiscrimination

HR4

Total number of cases of discrimination and measures taken

There are no cases of discrimination based on ethnic origin, color, gender, religion, ideology, nationality or social origin to report

Child Labor

HR6

Measures taken towards abolishing child labor

The risk of occurrence of child labor was not monitored.

Forced/ Slave Labor

HR7

Measures taken towards abolishing forced labor

The risk of occurrence of forced or slave labor was not monitored.

Customer health and safety

Product and PR5 service labeling

Message from the president

Toyota 2020 Global Vision

Toyota 2012 Sustainability Report

Credits Overall report coordination Toyota do Brasil

Corporate Communication Manager George Alberto da Costa e Silva

Project coordinator Juliana Dias

Copy, GRI consulting, texts and editing Report Sustentabilidade

Revision Assertiva Produções Editoriais

Graphic design, layout and graphic production Report Sustentabilidade

Photography Ricardo Corrêa

Printing and finishing Printshop: D’Lippi Print Print run: 500 copies Paper: inside text Couché Fosco Matte, 115 g/m2 and cover Duodesign, 300 g/m2

Fonts Univers (1957), Adrian Frutiger

Corporate information Toyota do Brasil Address: Av. Piraporinha, 111 – Bairro Planalto 09781-000 – São Bernardo do Campo – SP – Brazil Telephone: (55 11) 4390-5100 90

http://www.toyota.com.br

Profile

Corporate governance

Strategy (Toyota Way)

Environmental management

Strategic stakeholders

Product responsibility

Results and outlook

About the report and remissive index