As the first automaker to start marketing hybrid-electric vehicles, Toyota has long positioned itself as a leader in environmentally friendly technology. But that claim is coming under question by some major investors who point to its slow adoption of battery-electric vehicles and support for the Trump administration’s moves to curb fuel economy gains.
Among those criticizing Toyota are four investment funds with $235 billion in assets under management, including the Danish pension fund AkademikerPension. They are pressuring the Japanese giant to shift its position and curb lobbying efforts against steps aimed at addressing global climate change.
AkademikerPension “escalated via intense direct engagement” with Toyota, the fund’s spokesman Troels Børrild told the Reuters. The fund, he said, would consider preparing a shareholder resolution for Toyota’s next annual meeting if it “fails to deliver on its commitment” to address environmental issues.
Green leader or laggard?
Since launching the original Prius hybrid two decades ago, Toyota has frequently billed itself as a leader in green automotive technology.
“Toyota envisions a future in which carbon neutrality is achieved through the practical marketization of a portfolio of products with advanced, alternative-fuel and zero-emission powertrain technologies,” the automaker said in a statement announcing the introduction of the bZ4X battery-electric concept at the Shanghai Auto Show this week.
But, not everyone is convinced of the carmaker’s commitment to addressing climate change.
Investors threaten action
“Right up until now, the company has repeatedly undermined climate action, from opposing the U.K. government’s ban on internal combustion engines by 2030 to opposing car fuel economy standards in the U.S.,” Jens Munch Holst, CEO of AkademikerPension told Reuters.
Other large investors raising concerns about Toyota’s environmental moves include the Church of England Pensions Board, Sweden’s AP7 and Norway’s Storebrand.
Critics point to a variety of concerns. For one thing, they note that Toyota backed the Trump administration’s plan to strip California of its authority to set tougher carbon guidelines than the federal mandate. That would have allowed the state to move forward with plans to phase out gas and diesel-powered vehicles in favor of pure battery-electric models.
What critics are concerned about
Toyota was by no means alone. Others backing the Trump move included General Motors. But GM reversed course after Joe Biden won last year’s presidential election. And it has since laid out plans to abandon internal combustion technology entirely by 2035.
For its part, Toyota has laid out aggressive electrification plans — but they emphasize hybrid and plug-in hybrids more than BEVs. Company President Akio Toyoda opposed the recent move to speed up the phase out of gas and diesel vehicles in the UK, and in December spoke out forcefully against a similar proposal in Japan.
For their part, company leaders insist they will offer a broad array of electrified products, including hybrid versions of virtually every Toyota and Lexus model. Meanwhile, Toyota revealed the aforementioned bZX4 battery-electric concept vehicle at the Shanghai Motor Show this week. A production version will be one of seven new, all-electric “Beyond Zero” models coming to market, along with another eight BEVs.
But where GM, Volkswagen and some other key competitors are planning to go entirely battery electric, “The customer is our CEO and will ultimately decide which technologies will carry us toward a carbon neutral future,” Bob Carter, the executive vice president of sales for Toyota Motor North America, said in a statement announcing the bZX4 concept last weekend.
Toyota isn’t alone
Toyota appears to be concerned about the pressure it is facing from investors. It has dropped its support for stripping California of authority to set its own carbon emissions mandates.
Meanwhile, it issued a statement saying it “will review public policy engagement activities through our company and industry associations to confirm they are consistent with the long-term goals of the Paris Agreement.”
The automaker also said it will “strive to provide more information so that our stakeholders can understand our effort to achieve carbon neutrality,” Reuters noted.
A policy review
Toyota is by no means the only automaker questioning the need to switch entirely to battery-electric vehicles. Honda, which launched its own hybrid technology just months after its bigger rival, also envisions a future with a mix of different electrified vehicle options.
But with both global regulators and a growing list of investors questioning its policies, Toyota may feel it has to shift direction, both in terms of its lobbying efforts and its product line-up.
The automaker said it expects to announcement more on its climate change strategy later this year.