[1/3] Shareholders arrive to attend Toyota Motor’s annual general meeting at the company’s headquarters in Toyota, central Japan on June 14, 2023. in this photo released by Kyodo. Mandatory credit Kyodo through REUTERS
TOYOTA CITY, Japan, June 14 (Reuters) – Shareholders of Toyota (7203.T) on Wednesday rejected a resolution calling for more disclosure from the climate lobby. They voted against the first investor proposal in nearly two decades that came before the automaker’s annual general meeting.
Investors also supported all 10 members of the board, including chairman Akio Toyoda, despite concerns about the board’s independence raised by prominent US proxy advisors. The breakdowns of both votes won’t be released until Thursday.
The climate resolution was introduced by Danish pension fund AkademikerPension and two other European asset managers and aimed to get Toyota to release more details about its lobbying activities related to climate change.
It was widely expected to fail after Toyota’s board of directors recommended that shareholders vote against it. The automaker’s management typically enjoys strong support from shareholders, including some of its group companies and suppliers.
Still, the proposal sharpened the focus on Toyota’s electric vehicle strategy and governance ahead of the meeting, the first under new CEO Koji Sato. Green investors and activists have said Toyota has been too slow to capitalize on the rising popularity of battery electricity.
Some influential US funds, including CalPERS, the top pension fund, were in favor of the climate resolution and opposed the re-election of board members, including Toyoda.
Toyoda, the grandson of the company’s founder, was re-elected last year with 96% support.
The shareholder meeting came just a day after the world’s top-selling automaker unveiled an ambitious electric vehicle (EV) roadmap featuring solid-state batteries and radical manufacturing changes, the strongest signal yet of its intent to phase out a major portion of EV to gain market share.
“I believe that today Toyota can manage its business with a sense of speed,” Sato told shareholders.
Toyota shares rose 6.3% on Wednesday after posting another sharp gain a day earlier, posting their best two-day performance in just over three years.
ANOTHER APPROACH
Toyota says EVs are just one element in its multi-pathway approach to carbon neutrality, which includes gasoline-electric hybrids and hydrogen fuel cells.
It says its approach is more effective at reducing carbon emissions and more practical because consumer needs, EV infrastructure and clean energy delivery vary by country.
It says the board meets Tokyo Stock Exchange governance standards and Toyoda has been nominated again because he would drive transformation into a company that provides a range of mobility services.
“Japanese like Toyota and I think they support Akio,” said Tadashi Imai, 61, an individual shareholder who said he’s had shares in the company for about a decade.
He said the previous day’s stock price rise on the roadmap news was “really impressive”.
Trustee Advisor Glass Lewis advised shareholders to vote against Toyoda, citing what he believed was responsible for a lack of sufficient board independence.
Japanese companies are under more pressure from investors, especially in environmental, social and governance (ESG) areas. Shareholders have made a record number of proposals at annual meetings this year.
One shareholder, Hiroshi Ii, 67, said he has owned Toyota shares for 14 years and traveled from Tokyo to the meeting in Toyota City, central Japan.
He voted against the climate resolution and said in favor of the board, saying he hoped Toyoda could help new CEO Sato.
“It would be good for management stability if Chairman Toyoda could support him in the background.”
Toyota also said it was developing an EV platform to reduce costs, including an assembly line that would do away with the conveyor belt system that has defined car production for more than 100 years.
Reporting by Daniel Leussink; Additional reporting by Maki Shiraki; Edited by David Dolan, Christopher Cushing and Sharon Singleton