ISS backs Toyota shareholder proposal on local weather disclosure By Reuters


© Reuters. FILE PHOTO: Toyota Motor Company’s bZ Compact SUV is pictured after a briefing on the corporate’s methods on battery EVs in Tokyo, Japan, Dec. 14, 2021. REUTERS/Kim Kyung-Hoon/File Picture

By Daniel Leussink and Makiko Yamazaki

TOKYO (Reuters) – Proxy adviser Institutional Shareholder Providers (ISS) has advisable that shareholders of Toyota Motor (NYSE:) Corp vote in favour of a decision urging the automaker to enhance disclosure of its lobbying associated to local weather change.

The advice comes as Japan’s largest firm by market capitalisation faces strain from inexperienced traders and local weather activists which have criticised it for being slower than rivals to embrace all-battery electrical automobiles (EVs).

ISS in a report additionally stated it regarded three of Toyota’s 4 outdoors board director nominees as not really impartial.

A Toyota spokesperson was not instantly capable of remark.

Involved that Toyota is lacking out on revenue from hovering EV gross sales, Danish pension fund AkademikerPension, Norway’s Storebrand Asset Administration and Dutch pension investor APG Asset Administration need Toyota to decide to a complete, annual assessment of climate-related lobbying.

Toyota’s board stated the fluidity of such disclosure made the proposal unsuitable for enshrining within the articles of incorporation. A spokesperson beforehand stated few corporations globally have made local weather coverage engagement-related disclosure to the extent of Toyota.

“Toyota doesn’t present shareholders with sufficient data to judge its lobbying actions,” ISS stated.

“Shareholders would profit from the corporate disclosing details about direct, oblique, and grassroots lobbying within the numerous areas the place it operates.”

Hurdles are excessive for the decision to move as a result of it requires a two-thirds majority and Toyota’s shareholder base contains suppliers and different enterprise companions.

Proxy adviser Glass Lewis has not backed the decision, saying Toyota has proven “important responsiveness” to shareholders.

Toyota, which seeks to promote 1.5 million all-battery EVs by 2026, has lengthy argued {that a} vary of energy options, akin to battery-petrol hybrid and hydrogen gas cells, might be crucial to succeed in carbon neutrality.

This month, Toyota’s prime scientist stated specializing in all-battery EVs might encourage some drivers to carry onto polluting automobiles, and {that a} lack of assets means battery-only automobiles can’t be the business’s sole response to local weather change.


ISS additionally argued that three of 4 nominees to Toyota’s 10-member board that the automaker stated are impartial must be thought of “affiliated” as a result of agency’s relationships with the nominees’ present or former organisations.

Such organisations embody the Worldwide Paralympic Committee, with which Toyota has mobility partnership, and the agency’s important lender, Sumitomo Mitsui (NYSE:) Monetary Group Inc.

Toyota stated in its assembly convocation discover that the candidates are thought of impartial as a result of there aren’t any conflicts of curiosity with common shareholders.

Japan’s company governance code requires not less than one-third of administrators be impartial at corporations listed on the Tokyo Inventory Trade’s important part.

However, ISS advisable a vote in favour of the candidates as voting in any other case “could run the chance of truly growing administration dominance of the board”.

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