Supplier Sustainability Guidelines

TOYOTA Connected supports Toyota Motor Corporation’s Supplier Sustainability Guidelines. As a member of the Toyota Group, we remain committed to advancing the quality of life through the products and services we offer.
As those guidelines require, we request that our business partners also be involved in deepening and expanding sustainability initiatives by developing and deploying individual sustainability policies and guidelines incorporating ours. We also request that they conduct awareness-raising activities so that sustainability initiatives permeate all their employees. We ask all of you, our suppliers, to carefully read and understand our guidelines below and implement any necessary initiatives to ensure that they permeate throughout your supply chain.

These guidelines have been formulated based on the Toyota Motor Corporation Supplier Sustainability Guidelines.
Toyota Motor Corporation and other companies that belong to the Toyota Group will be hereinafter referred to as “Toyota Group companies.”

1. Share Basic Management Philosophy

   We would like to adhere to the following philosophy together with our suppliers:
   ■ Creation of a Work Environment Based on Respect for Our Employees
   Organize the work environment to foster trust between workers and management and develop a culture that promotes human development.
   ■ Monozukuri Based on Genchi-Genbutsu
   Genchi-Genbutsu means focusing all corporate activity on the actual needs in the marketplace and on conditions in the workplace.
   We practice Genchi-Genbutsu, go to the source to find the facts to make correct decisions, build consensus, and achieve goals at our best speed.
   ■ Relentless Kaizen Efforts
   We improve our business operations continuously, always striving for innovation and evolution.
   ■ Two-way Communication
   We must maintain close communication, exchanging ideas frankly and coming to terms with each other on all matters of importance.

2. Our Expectations of Suppliers for Providing Products and Services

   Suppliers need to undertake product development and deploy manufacturing processes that address the customers’ needs and wants. Therefore, our main expectations are as follows:
   ■ Safety
   Manufacturing is carried out by people, so it is of the utmost importance to secure a safe environment for people to carry out manufacturing without worry. In a safe working environment, workers can concentrate their efforts on manufacturing and make products of good quality.
   ■ Quality
   The highest priority of Toyota Group companies, including ourselves, is quality. Consistently high quality is the most important reason for the excellent reputation of our products around the world and for the trust we enjoy from customers. We need to keep up with our customers’ increasing expectations of quality. We appreciate the understanding of suppliers that quality is an absolute prerequisite for our business, and we trust that all our suppliers will work with us and devote themselves to quality in development and production.
   ■ Delivery and Production
   Toyota Group companies maximize efficiency through lean manufacturing, producing what is needed, only when it is needed.
   We expect suppliers to contribute to this lean efficiency through flexible, error-free execution in preparation for mass production, in mass production, and in delivery.
   ■ Cost
   Toyota Motor Corporation expects suppliers to offer the most competitive cost in the world and requires them to develop new technologies and innovative production technologies to support their continuing cost reduction efforts.
   As a member of the Toyota Group, we work with our suppliers to achieve both value creation and cost improvements by minimizing waste, enhancing quality, and improving processes. These activities are designed to contribute to a better working environment and to investment in people with the aim of realizing fair business transactions.
   We hope to provide innovative customer experiences, thereby enhancing our competitiveness.
   ■ Technological Capabilities
   Customer and social expectations are mounting in three main areas: technologies for environmental protection, safety, and comfort.
   Our suppliers need to grasp these expectations and to address them a step ahead of their competition through innovative products and technologies. Our suppliers also need to broaden the marketability of their products through cost reduction.

3. Our Expectations of Suppliers in the Process of Developing Products and Services

   We expect suppliers to comply with the following items:

   1. Legal Compliance

      « Compliance with Laws and the Spirit Thereof »

      • Comply with applicable laws and regulations of each country and region, as well as the spirit thereof.
      • Establish and implement policies, structures, and mechanisms for ensuring and verifying legal compliance, including a code of conduct, a confidential compliance hotline, and training.

      « Management and Protection of Confidential Information »

      • Manage and protect your company’s confidential information, such as trade secrets, and use such information in an appropriate manner.
      • Obtain confidential information concerning other companies only from authorized personnel by legitimate means. Verify the permissive scope of use and other conditions concerning such confidential information and use it only within that scope, while maintaining its confidentiality and not infringing upon the rights of other companies.
      • Obtain personal information concerning employees, customers, and business partners only by legitimate means. Manage and protect such information in a secure manner and use the information only within the scope allowed.

      « Protection of Intellectual Property »

      • Continually monitor and protect all intellectual property of your company against any infringement by others.
      • Do not infringe the intellectual property (such as patents, utilities, designs, and trademarks) of others, illegally use such intellectual property, or make illegal copies of software or publications.

      « Compliance with Competition Laws »

      • Do not engage in illegal acts in violation of the competition laws and regulations of each country and region, including private monopolies, unreasonable restraint of trade (cartels, collusive bidding, etc.), unfair trade practices, or abuse of dominant bargaining position.

      « Export Controls »

      • Comply with laws and regulations concerning export controls and thoroughly implement measures for such controls, including confirming whether products, technologies, or other exports are subject to regulations and then preparing and providing documentation of such confirmation.

      « Anticorruption Measures »

      • Comply with applicable laws and regulations concerning political donations or contributions and strive to build transparent and fair relationships with political parties or administrative bodies.
      • Do not engage in giving or receiving gifts, entertainment, or money with customers, suppliers, or other business partners in order to acquire or maintain unjust benefits or wrongful preferential treatment.
      • Do not conduct off-the-book, fictitious, or otherwise falsified transactions or any other similar acts prone to be misconstrued as such. Make and keep books, records, and accounts (ledger sheets, account ledgers, etc.) that, in reasonable detail, accurately and fairly reflect all transactions and disposition of assets.

   2. Labor and Human Rights

      Understand and agree with Toyota’s Human Rights Policy and the TOYOTA Connected Human Rights Policy and work with us to promote those policies.
      [Link] Toyota’s Human Rights Policy
      [Link] TOYOTA Connected Human Rights Policy

      • Respect and refer to international norms, such as the Universal Declaration of Human Rights and the United Nations Guiding Principles on Business and Human Rights (UNGPs), and also promote activities related to human rights based on them.
      • Establish and continuously implement a human rights due diligence system^* in order to fulfill the responsibility to respect human rights.
        (* A process implemented for the identification, prevention, and mitigation of negative human rights impacts)
      • Strive to disclose the actions taken for respecting human rights and monitor the progress of those actions.
      • Develop and operate a practical remediation mechanism or expand the functions of existing grievance mechanisms within Japan and in other regions.

      « No Discrimination, and Diversity & Inclusion »

      • Do not tolerate any form of discrimination relating to gender, age, nationality, race, ethnicity, creed, religion, sexual orientation, gender identity, disability, marital status, or the presence of children with regards to all aspects of employment, including the application process, hiring, promotion, compensation, access to training, job assignment, wages, benefits, discipline, termination, and/or retirement.

      « Harassment »

      • Do not condone harassment, which, among others, includes sexual harassment, power harassment (abuse of authority), peer pressure, or any form of harassment that lowers the dignity of an individual.
      • Harassment may include verbal, visual, or physical conduct toward employees or business partners that negatively interferes with their work performance, diminishes their dignity, or creates an intimidating, hostile or otherwise offensive work environment.
      • Implement procedures for prompt reporting and examination of any harassment complaints and enable employees to report any instances of harassment without fear of reprisal, intimidation, or harassment.

      « Child Labor »

      • Do not tolerate child labor, which deprives children of a childhood and access to education and restricts their development.
      • The minimum age for employment shall be 15 years of age, the legal minimum age for employment, or the age for completing compulsory education, whichever is greatest under local applicable laws, regulations, etc.
      • Do not use employees under 18 years of age for hazardous work.
      • Bona fide job training or apprenticeship programs permitted under local applicable laws, regulations etc. may be allowed.

      « Migrant Labor and Forced Labor »

      • Do not tolerate forced labor, which is often extracted through violent and threatening means or by debt entrapment, or any form of modern slavery, including human trafficking.
      • Ensure that all work is voluntary and that employees are free to leave work or terminate their employment.
      • Do not require employees to surrender passports, government-issued identification, or work permits as a condition of employment.
      • Do not exploit employees with high recruitment fees or other costs that are considered unreasonable by international norms.

      « Wages and Benefits »

      • Pay wages in compliance with local applicable laws, regulations, etc., including those relating to minimum wages, overtime hours, deductions from wages, piece rates, and other elements of compensation.
      • Provide legally mandated benefits.
      • Ensure that wages, other compensation, benefits, and deductions are clearly and regularly detailed and explained to employees in compliance with local applicable laws and regulations.

      « Working Hours »

      • Comply with local applicable laws, regulations, etc. which govern employees working hours, including overtime work.

      « Freedom of Association »

      • Recognize the employees’ right to freely associate, or not to associate, complying with local applicable laws, regulations, etc.
      • Ensure that employees are able to communicate openly and directly with management without fear of reprisal, intimidation, or harassment.

      « Safe and Healthy Working Environment »

      • Place the highest priority on safety and health programs and policies at work, so that each employee is able to work without undue concerns and strive to prevent accidents and injuries from happening at work.
      • Support efforts to improve the health of employees through health promotion activities at work, guidance for preventing illness, and other means.

   3. Environment

      « Environmental Management System »

      • To support a sustainable relationship between human society and our planet, establish an environmental management system that will help carry out continuous improvement to comply with the applicable environmental laws and regulations of each region and country and to implement initiatives to maximize our environmental performance.

      « Reduction of Greenhouse Gas (GHG) Emissions »

      • Develop products and services that will reduce GHG emissions and work to reduce GHG emissions at your operation bases and throughout the entire product life cycle.
      • In aiming to achieve carbon neutrality, not only strive to identify the details of challenges in operations, materials, etc. in addition to tracking GHG emissions, but also develop and promote proposals for all possible reduction measures, including energy savings, equipment improvement, material replacement, and the introduction of renewable energy under a united effort with your suppliers.

      « Reduction of Impacts on the Water Environment »

      • Taking the water environment of each country and region into consideration, continuously evaluate environmental impacts and implement initiatives to thoroughly reduce water usage and manage wastewater.

      « Contribution to Establishing a Recycling-based Society and Systems »

      • When designing and developing products, reduce consumption of exhaustible resources and utilize recycled materials, while considering their appropriate disposal and recyclability. If requested, report the actual use of recycled materials.
        In addition, pursue initiatives to reduce and recycle waste at your operation bases and in logistics.

      « Management of Chemical Substances »

      • Comply with the relevant laws and regulations of each country and region, manage chemical substances (i.e., elimination, reduction in use), and especially ensure that prohibited substances are not used in products, production processes, etc. In addition, report appropriately to governmental agencies as required by laws and regulations.

      « Establishment of a Society in Harmony with Nature »

      • Based on the recognition that biodiversity is a prerequisite for continuation of business operations, implement initiatives that will help realize a sustainable society in harmony with nature.

   4. Responsible Material Procurement

      • Obtain materials with full deliberation and care to avoid the procurement or usage of materials that are unlawful or which are obtained through unethical or otherwise unacceptable means (such as conflict minerals, cobalt, or natural rubber). We expect suppliers to take appropriate steps to discontinue procurement of these materials if usage is detected.

   5. Local/Global Community

      « Social Contribution »

      • Strive to pay attention to the societal challenges of each community in order to promote its prosperity and development, and to conduct social contribution activities leading to the solution of such challenges in cooperation with the local communities.

      « Disclosure of Information to Stakeholders »

      • Strive to disclose to stakeholders such information as is pertinent to them, including information about management, financial conditions, environmental preservation, communities, and social contribution, in a timely and fair manner and to build and maintain positive relationships with stakeholders through open and fair communication.

   6. Developing and Deploying Policies and Guidelines for Business Partners

      • Request your business partners (e.g., tier-2 suppliers) to deepen and expand sustainability initiatives by developing and deploying individual sustainability policies and guidelines incorporating our guidelines outlined above. Also, ensure that your business partners conduct awareness-raising activities so that sustainability initiatives permeate all their employees.
      • Promote the above activities in consideration of the entire supply chain and adopt follow-up and/or improvement measures for business partners if necessary.

   7. Confirmation of the Sustainability Guidelines

      • We at TOYOTA Connected hope that compliance with these guidelines is achieved through close collaboration throughout the entire supply chain, which supports our manufacturing efforts. We ask all of you, our suppliers, to understand these guidelines and implement necessary initiatives to ensure that they permeate throughout your supply chain.
      • If a problem that violates these guidelines should occur, we ask that you report it immediately and take steps to make the necessary improvements.