Japanese automakers Toyota and Honda are at the bottom of the Second Annual Lead the Charge Industry Leaderboard, released today, falling way behind sector leaders Ford, Mercedes, and Tesla on greenhouse gas emissions reductions, environmental protection, and elimination of supply chain human rights violations.
Japanese automakers Toyota and Honda are at the bottom of the Second Annual Lead the Charge Industry Leaderboard, released today, falling way behind sector leaders Ford, Mercedes, and Tesla on greenhouse gas emissions reductions, environmental protection, and elimination of supply chain human rights violations.
Ford topped this year’s ranking due to its industry-leading responsible minerals policy and due diligence processes, surpassing last year’s winner, Mercedes. Meanwhile Tesla received the largest overall score increase, moving from ninth to third in the leaderboard, due to it being the first automaker to disclose disaggregated Scope 3 supply chain emissions, as well as its work strengthening performance on battery recycling, and improving human rights due diligence and responsible transition mineral sourcing processes (1).
Honda and Toyota are not only the worst performers on the transition to electric vehicles, they are also performing poorly on supply chain decarbonization indicators and ensuring respect for human rights. Toyota was the only company that did not achieve a score increase across any of the four subsections of the fossil-free and environmentally sustainable supply chains section of the Leaderboard. Toyota’s lack of progress within the year saw its ranking drop from 12 to 15. Honda also ranked near the bottom with a total score of 8% compared to Toyota’s 7%. Nissan performed slightly better, but lagged behind the European and American automakers.
“With every American, European and Korean automaker outperforming Honda and Toyota, we hope this ranking serves as a wakeup call to the Japanese Auto Industry. If Toyota and Honda don’t start taking action to clean up their supply chains, they risk being overtaken by rapidly improving Chinese automakers in addition to those in Korea, the US and Europe, who are already well ahead,” said Chris Alford with the Sunrise Project. (1)
There was also notable momentum to decarbonize the steel used in automakers’ vehicles. Steel continues to be one of the highest polluting industries, responsible for between 7-9% of global GHG emissions, and in 2024, over two-thirds of automakers took steps towards green steel. Honda and Toyota were not among them, scoring zero on decarbonizing their steel supply chain. Automakers won’t meet their climate goals unless supply chain emissions are also tackled with urgency, and Japan’s steel industry remains wedded to coal (2).
“The decisions made by Japan’s steel industry this decade will either be a great asset, or a tremendous liability for Japan’s automakers,” said Toko Tomita, SteelWatch Campaigns Director. “The key question is whether Nippon Steel and others will continue to rely on polluting coal-based steel production, giving Toyota and Honda the choice of looking beyond Japanese suppliers, or failing to decarbonize and becoming shut out of changing global markets. Japan’s automakers and steelmakers will either evolve together or stagnate together.”
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Link to the report: https://leadthecharge.org/resources/2024-report-leading-the-charge/
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Shiori Matsumoto
Asia Communications and Research Officer of SteelWatch
media@steelwatch.org, 070-8411-0256
Notes
- Chinese automakers are rapidly adapting to EU regulations, including the European Due Diligence regulation and Carbon Border Adjustment Mechanism (CBAM). This underlines the fact that time is running out for the Japanese auto industry. As world efforts to hold climate change under 1.5 C ramp up, Japanese export markets will shrink if automakers don’t move.
- “Auto industry risks missing climate goal by 75% -industry-backed study.” Reuters. Feb 8, 2023. https://www.reuters.com/business/autos-transportation/auto-industry-risks-missing-climate-goal-by-75-industry-backed-study-2023-02-08/