Toyota Shareholders Reject Demands for Stronger Climate Change Action by Automaker
Toyota executives faced challenges and received praise from investors during their annual general meeting on Wednesday. However, shareholders ultimately rejected demands for the automaker to take stronger action against climate change.
The investor proposal was brought forth by AkademikerPension, a Danish investment fund worth $20 billion. The fund accused Toyota Motor Corp. of lobbying to undermine global efforts to phase out internal combustion engines.
As expected, shareholders applauded the rejection of the proposal during the meeting held in Toyota City, Japan. Approximately 3,800 shareholders attended the gathering at Toyota headquarters. The exact number of ballots cast will be disclosed on Thursday but were taken into account during the vote.
The majority of Toyota shares are held by the company itself, its group companies, retired employees, and individuals sympathetic to the company’s position. The shareholders’ proposal also challenged the reappointment of Akio Toyoda, Toyota’s chairman, who is the grandson of the company’s founder, and serves as a board director. The proposal argued that the company has not kept up with the global transition to battery electric vehicles.
Toyoda and other company officials defended Toyota’s environmental efforts, emphasizing their commitment to achieving carbon neutrality, or net-zero carbon emissions, in their vehicle lineup by 2050.
The resolution put forward by the Danish fund received support from Storebrand Asset Management, a Norwegian financial services company, and APG Asset Management, a Dutch pension investment company.
“From an investment perspective, we’re concerned that Toyota is missing out on profits from soaring EV sales, jeopardizing its valuable brand and cementing its global laggard status,” Anders Schelde, CIO 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 Herman Slooijer, CIO a APG Asset Management
Toyota officials highlighted their pursuit of multiple energy options, including hybrids, plug-in hybrids, and hydrogen-powered vehicles, in addition to battery electric vehicles.
Masahiro Yamamoto, one of the executives, emphasized the importance of being prepared with various options and effectively communicating their efforts to shareholders. The company’s president, Koji Sato, acknowledged Toyota’s need to catch up in the field of battery electric vehicles and assured shareholders that the company is working hard to inspire people through a team-oriented management approach. Toyota’s recent environmental initiatives include the development of all-solid-state batteries for electric vehicles, expected to be introduced as early as 2027.
Several major U.S. pension funds, including the New York City Comptroller’s Office and the California Public Employees’ Retirement System, supported 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,” NY City Comptroller, Brad Lander said.
Outside the meeting venue, Greenpeace demonstrators held a sign calling for a complete phase-out of fossil fuel cars by 2030, which is two decades earlier than Toyota’s target.
“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.” Read highlighted non-fossil fuel propulsion options being limited to battery electric vehicles and green hydrogen produced using renewable energy.
The majority of shareholders who spoke at the meeting praised Toyota, and Toyoda’s remarks were met with enthusiastic applause. One shareholder raised a claim about Toyoda’s alleged lack of love for Japan, implying that Toyota’s focus on global expansion had diverted attention from the domestic market.
“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,” Toyoda said.
Yozo Kamiya, a former public servant who owns 1,000 Toyota shares, said he was generally happy with what the company was doing, adding that his main issue was with what he saw as its meager dividends, now at 60 yen (43 cents) a share.
A recent International Council of Clean Transportation report that rates the world’s major automakers’ environmental records shows Japan lagging in some metrics, including battery EV offerings.
“All eyes are on Toyota,” said Katherine Garcia, director at the Sierra Club, a U.S. 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.”
Source: AP News
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