Environmental and Social Impacts of Toyota Corporation

RUNNING HEAD: FINANCIAL AND MANAGEMENT ACCOUNTING
Financial accounting

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Executive summary
The report focuses on the environmental and social factors of Toyota Corporation. It provides a
brief introduction about the company and later on discusses the positive and negative impacts of
the company’s operations on society and environment. In the later part, it explains about the GRI
disclosures of the company and compares the quality and depth of its environmental performance
with BMW. The report also explains the reasons for the fact that the shareholders of Toyota will
not be benefitted with the GRI compliance of other motor companies. It will increase the
competition and influence them to a great extent. At the last, a conclusion has been provided
summarising all the findings of the report.

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Contents
Part A..........................................................................................................................................................4
Introduction.................................................................................................................................................4
Environmental and social impacts of Toyota’s operations...........................................................................4
Positive impacts.......................................................................................................................................5
Negative impacts.....................................................................................................................................6
Four key GRI disclosures............................................................................................................................6
Comparison of quality and depth.................................................................................................................8
Benefits to the shareholders from the compliance of GRI Reporting standards.........................................10
Conclusion.................................................................................................................................................11
Part B.........................................................................................................................................................11
Part C.........................................................................................................................................................15
References.................................................................................................................................................20

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Part A
Introduction
Toyota Motor Corporation is a Japan based multinational automotive company engaged in the
manufacturing of motor cars and vehicles. It was incorporated on 27 August 1937 having its
headquarters situated in Toyota, Aichi. Apart from automotive sector, the company also operates
in finance and other industries. It segments include automotive, financial services and others.
The company covers the market of North America, Japan, Asia and Europe in automobile sector.
It produces its automobile and other related parts through 50 overseas manufacturing companies
and in over 30 countries apart from Japan. As of 2017, the company has 364,445 employees and
was considered as the fifth largest company in terms of revenue. It has also been ranked second
in the list of largest automotive manufacturer. It is the largest listed company in Japan as per its
market capitalization and revenue. Toyota is also listed on London Stock Exchange and New
York Stock Exchange (Reuters. 2018).
This report focuses on the overall evaluation of company’s activities from environmental and
legal aspects. It covers the positive and negative impact of its operations along with the benefits
of GRI disclosures. It also compares the quality and depth of the environmental performance of
Toyota and BMW.
Environmental and social impacts of Toyota’s operations
Being the leading company in automotive sector, the company has a great responsibility towards
the society and environment. The manufacturing of automobiles affects the environment and
society to a great extent. The objective of Toyota is to carry out its activities by keeping two

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things in mind which are customers and concern for the environment. However, despite working
with such objective, the manufacturing operations do left a positive and negative impact on the
society and the surroundings. All such impacts are been disclosed in the sustainability report of
the company and also the compliance with GRI disclosures act as the pioneers of environment
and assist in having better understanding about the social and environmental impact of business
activities.
Positive impacts
The following section explains in detail about the positive effects of Toyota’s manufacturing
activities on both the society and the concerned environment. They are as follows:
 It has taken suitable measures and initiatives for the purpose of ownership and protection
of forest. The activities include ToyotoShirakawa-Go-Eco-Institute, Toyota
Environmental Activities Grant Program, Toyota Mie Miyagawa Forest Project and
Toyomori. Along with this, it has also conducted a Smart Eco Drive in countries like
Korea (Crane & Matten, 2016).
 Showing the concern towards society, the company is involved in promoting the
development of human management and enhancing the living standards of the people. in
lieu of keeping a clean environment, it is addressing the safety of traffic by integrating
cars, traffic and people in order to avoid the traffic casualties as a whole.
 Toyota also supports various programs related to dance and music in order to promote
local culture in the society and enhance the youth to be familiar with the society and
culture. The company is also involved in developing and expanding the social welfare
programs (Epstein, 2018).

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 As per its sustainability report, there are 83 distributers and 4233 dealers across 80
countries who participated in the Dealer Environmental Risk Audit, conducted on global
level.
Negative impacts
Despite taking such positive measures, there are some operations also which have impacted the
society and environment negatively. They are as follows:
 The manufacturing of motor vehicles involves the huge dependence and consumption of
fossil fuels that affect the environment severely. Such strong use of fuels leads to several
environmental problems among which the most common is pollution. Increasing content
of pollution in the air will eventually affect society to a great extent. It may cause
breathing problems, global warming and increase the demand of petrol and diesel.
Upsurge in prices of gasoline will surely impact the economy and result in environmental
problems (Globalreporting. 2016).
 Increase in number of cars on land will results in congestions and hindered mobility.
Moreover, disposal of the same will increase the fleet and become more costly as
compare to landfill.
So, above discussed are some positive and negative effects of the operations and business
activities carried out by Toyota within its organizations.
Four key GRI disclosures
Global Reporting Initiative is an independent standards organization operating on international
level. It helps the government, organizations and businesses to understand the impacts of their
activities on climate change, human rights and corruption. GRI 102: General Disclosures deal