Toyota Shareholders, Make Good on Your Promises to Customers and Climate

Jun 17, 2024 | Blog |

by Rev. Susan Hendershot, President of Interfaith Power & Light

For two years after moving to the San Francisco Bay area, I quite happily led a car-free lifestyle. As a person of faith working for climate justice, I was concerned about pollution from gas-powered cars harming the health of our families and communities and fueling the climate crisis. By not owning a car, I was trying to do my share to cut down on both of those things.

That all changed when the COVID-19 pandemic forced me to reconsider my commitment to public transportation, at least for the short term. I decided to invest in a car for my own health, and after much research, I decided to purchase a used Toyota Prius because I thought it was a good choice for the environment. 

Since then, I have learned more about Toyota, and to say that I am disappointed is an understatement. Just last year, Toyota actively lobbied against the EPA’s new clean car standards, which are intended to clean up vehicle pollution and accelerate the transition to zero-emission vehicles. By doing so, Toyota prioritized its own short-term profits over long-term environmental benefits. Unlike many of its competitors, Toyota has not announced plans to phase out gas-powered cars and is betting long-term on hybrids, which still run on gas. And now, to promote its hybrid vehicles – including the Prius – Toyota is using misleading marketing tactics that deceive consumers into thinking that “electrified,” gas-powered cars are in fact electric vehicles (EVs).

I’m speaking out now because Toyota shareholders have an opportunity at Toyota’s Annual General Meeting (AGM) to uphold Chief Executive Officer Koji Sato’s promises from one year ago, when he committed to introduce ten new EV models and sell 1.5 million EVs a year by 2026. So far, these promises have remained empty. Toyota’s Board of Directors has already come out against a shareholder proposal requesting the automaker issue an annual report on its climate-related lobbying activities. Shareholders must focus on two main priorities as they go into Toyota’s AGM: (1) the urgent need for Toyota to do its part to mitigate the climate crisis by making the necessary transition away from dirty, gas-powered, polluting cars and (2) the company’s potential to lose out to competitors already going all-in on EVs. 

What’s at stake here is bigger than consumer trends and vehicle brands. The health and safety of our communities across the globe is at risk. As we as individuals take on the challenge of mobilizing against the climate crisis in both big and small ways, we need support and accountability from some of the climate crisis’s biggest perpetrators: automakers. Air pollution from burning fossil fuels is responsible for one in five deaths globally, and the largest industry in the U.S. contributing to this pollution is transportation. This is especially concerning for people of faith, as all religious traditions call on us to stand for justice on behalf of those who are suffering.

Shareholders should be concerned about Toyota’s financials, too. Toyota sales topped 11 million vehicles last year, but less than 1% were fully electric. For the last five years, Toyota and Volkswagen have been top contenders for the largest global automaker. Yet as Toyota doubles down on its hybrid-first strategy, Volkswagen is going all-in on electric vehicles, committing to making its future lineup entirely of EVs and doubling EV orders in the European market to meet growing consumer demand. 

50 years ago during the U.S. oil crisis in the 1970s, Toyota rose to become one of the top-selling automakers in the U.S. by producing quality, reliable vehicles at low prices. And 20 years ago they popularized hybrid models with the introduction of the Prius. They should be taking advantage of the fact that U.S. legacy automakers like GM and Ford don’t have affordable EVs on the market to meet consumer demand. 

Climate-responsible investing has long been of critical importance to investors of faith. In fact, faith-based investors have been engaging with heavy polluters such as oil and gas companies since the early 1990s. Faith investors filed “the earliest proposals citing ‘planetary global warming’ as a risk to people and the planet,” and in 2023, thirty-one faith institutions with more than $2 billion in assets announced their divestment from fossil fuel companies, including “13 Catholic institutions,…nine Church of England dioceses in the United Kingdom, and six Anglican cathedrals.”

Shareholders – especially those of faith – must take this moral opportunity to engage with Toyota and move them towards investing in the future without relying on dirty, destructive fossil fuels. While Sato entered his first AGM last year after only two months in the role, now with a full year under his belt at the helm of the world’s largest automaker, Sato must take the climate crisis as seriously as Toyota consumers like me and commit to phasing out gas-powered cars as soon as possible. 

The choice is clear: Toyota can either stubbornly hold fast to the dwindling future of gas-powered vehicles and risk obsoletion, or commit to rapidly advancing 21st-century technology and have a hand in protecting our families, our communities, and our Sacred Earth.

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