Toyota executives fielded challenges and reaped praise from investors at the Japanese car giant’s annual general meeting on Wednesday where shareholders ultimately rejected demands for the company to do better on fighting climate change.
The investor proposal was initiated by AkademikerPension, a 20 billion US dollar (£15.9 billion) Danish investment fund, which accused Toyota of lobbying to weaken efforts by governments around the world to phase out the internal combustion engine.
Some 3,800 shareholders packed at hall at Toyota’s HQ in Toyota city, central Japan, and there was applause when the proposal was rejected.
The exact number of the ballots cast will not be disclosed until Thursday, but were taken into account in the vote.
The majority of Toyota shares are held by the company and its group businesses, retired employees and others sympathetic to the firm’s perspective.
The shareholders’ proposal also challenged the reappointment of Toyota’s chairman, Akio Toyoda, grandson of the company founder and a board director, arguing that the company has lagged behind in the global shift to battery electric vehicles.
Mr Toyoda and other company officials defended their green record, noting that Toyota is aiming for carbon neutrality, or net zero carbon emissions, in its range by 2050.
The resolution filed by the Danish fund was also supported by Norwegian financial services company Storebrand Asset Management and a Dutch pension investment company, APG Asset Management.
“From an investment perspective, we’re concerned that Toyota is missing out on profits from soaring EV sales, jeopardising its valuable brand and cementing its global laggard status,” Anders Schelde, chief information officer at the Danish fund, said in a statement ahead of the meeting.
Others behind the proposal said Toyota needs to live up to its commitment to the Paris Agreement, an international treaty to reduce greenhouse emissions.
“Toyota plays a pivotal role in the Japanese automotive related industry, which leads the country’s manufacturing and economy,” said APG Asset Management chief information officer Herman Slooijer.
Toyota officials stressed that, instead of just focusing on battery electric vehicles, the company is pursuing multiple energy options, including hybrids, plug-ins and hydrogen-powered vehicles.
“Various options need to be readied,” said Masahiro Yamamoto, one of the executives. “What is important is to better convey our efforts to all shareholders.”
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Advertisement— Greenpeace International (@Greenpeace) June 14, 2023
The company’s president, Koji Sato, has acknowledged that Toyota has fallen behind in battery EVs and must play catch-up.
He tried to assure shareholders that the company is working hard to “move people’s hearts” based on a team-oriented style of management.
Toyota’s latest environmental initiatives include the development of the all-solid-state battery for EVs by as early as 2027.
Major US pension schemes, including the New York City Comptroller’s Office and the California Public Employees’ Retirement System, backed the climate change proposal.
“The growing battery electric vehicle market represents an opportunity for Toyota to regain its status as an innovator and leader during the historic transition of the transportation industry,” said NY City Comptroller Brad Lander.
Outside the grounds where the meeting was held, several demonstrators for Greenpeace held up signs reading: “No fossil fuel cars by 2030”. That target is two decades earlier than Toyota’s.
“Diversity of technology is certainly something that I can agree with in principle,” said Daniel Read, who oversees climate and energy campaigns at Greenpeace, “but in fact the options are quite limited.”
Battery EVs and green hydrogen, using hydrogen made with renewable energy, not fossil fuels, are the best options, he said.
Most of the shareholders who spoke at the meeting gushed praise, and Mr Toyoda’s remarks were welcomed with enthusiastic applause.
One shareholder asked him to address a claim that he lacks a love for Japan, apparently referring to the perception that Toyota is not as focused on its domestic market amid its global expansion.
“What sustained me during tough times were our workers on the ground, my love for Toyota, my love for cars and my love for Japan,” Mr Toyoda replied.
“I learned to look for what was Toyota-like within me, came up with a story and used that to relay our message.”
A recent International Council of Clean Transportation report rating the environmental records of the world’s major car manufacturers showed Japan lagging behind in some metrics, including battery EV offerings.
“All eyes are on Toyota,” said Katherine Garcia, director at the Sierra Club, a US grassroots environmental group.
“We’ve spent years advocating for Toyota to clean up its dirty act on climate, and there’s an immense opportunity right now for the automaker to shift course and go all in on electric vehicles. The pressure is on.”
