Environment and eco-efficiencyIn the value chain: suppliers and dealers

TDB has sought to integrate and engage its value chain partners in the company's sustainability commitments. Toyota encourages the dealership network and suppliers of materials, products and services essential for the business to adopt risk management, the kaizen culture, as well as to control waste and use resources responsibly.

As a result of the five cycles of the Toyota Environmental Action Plan – five-year plans with environmental targets – and the Toyota 2050 Environmental Challenge, the company is fully engaged in forging closer relations with its business partners and persuading them to adopt environmental management systems. It monitors key indicators and seeks to develop these partners, key links between TDB and the ends of the value chain: the steel industry and end consumers.

Dealers

At the end of fiscal 2015/2016, the TDB dealership network comprised 218 units, spread over 26 states and the Distrito Federal (this number does not include the Lexus division). To develop relations built on trust, the company participates in the Toyota Dealers' Association (Abradit), providing management initiatives  and training programs (read more in Customers), as well as communication tools, with an internet portal,  a TV network, a chat system, and a video training channel (Radar Toyota).

Worthy of note during the year were the activities of the Abradit Environmental Committee, comprising Toyota staff and association members. This organizes semi-annual meetings to promote and assess activities, as well as management certification and audits. Another working group is dedicated to corporate social responsibility activities, with the participation of teams from different TDB areas  – such as the Fundação Toyota do Brasil, Marketing and Commercial.

Three measures have been implanted to reinforce risk management and the adoption of best practices throughout the dealership network. The first is the Dealer Environmental Risk Audit Program (Derap), in place in Brazil since 2006, which engaged 100% of the dealers in fiscal 2015/2016. During the year, the Abradit system incorporated administration of Derap forms, providing greater control over information and key indicators.

Another pillar is ISO 14001 certification for dealers. At the end of the fiscal year, 100 dealers had this certification. This is equivalent to 65% of the network, with one dealer receiving certification during the last year. The main challenge in increasing this percentage is the elevated cost of adapting to the standard – particularly difficult given the tough economic conjuncture in Brazil since 2014.

In third place, TDB monitors the indicators of its ISO 14001 certified dealers – such as waste generation, CO₂ emissions, water and energy consumption.

Supplier chain     G4-12, G4-EC8

In Brazil, Toyota has a supplier chain comprising around 100 significant partners, divided into the categories materials and components. Faced with the challenge of engaging different-sized companies from different industries and regions in meeting its requirements and assuming its commitments, in fiscal 2015/2016 TDB mobilized 72 suppliers in environmental, safety, productivity and quality actions.

 Relations with suppliers are governed by the three key company documents: the Procurement policy, based on the principles of fair competition and an open door policy, mutual benefit based on trust and contribution to the vitality of the local economy; the Environmental Purchasing Guide, revised in 2013, which sets forth the standards for partners in negotiations with TDB; and the Corporate Responsibility Guide.

Supplier selection and assessment take into account criteria such as quality, logistics processes, service capacity, the cost of inputs and services and alignment with the Environmental Purchasing Guide. One indicator of the effectiveness of these practices is supplier adoption of ISO 14001 certification. At the end of the fiscal year, 96% of the company's partners were certified. The target had been to reach 100% certification in 2015. This was not reached due to cost issues and to the economic situation in certain regions.