Efforts by four major European pension funds and providers to persuade Toyota Motors to turn its back on negative climate lobbying have worked, two of the funds said, after an announcement from the Japanese car firm.

The Toyota Motor Corporation announced this morning that it would “continue to do its utmost to take on the challenge of achieving carbon neutrality by 2050”, by taking action such as promoting electric vehicles and electrification strategies.

“In addition, we 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, and disclose our assessment and actions by the end of this year,” the company said.

Swedish national pension fund AP7 said the joint dialogue it had been conducting with Toyota alongside the UK’s Church of England Pensions Board (CEPB), Norwegian financial services group Storebrand and Danish labour-market pension fund AkademikerPension, had been successful regarding the car firm’s climate commitments and its climate lobbying.

Charlotta Dawidowski Sydstrand, sustainability strategist at AP7, said: “We have appreciated the constructive dialogue between Toyota and the investor group, and the openness shown by the company to collaborate.

“The auto industry is central to achieving the goals of the Paris agreement, and needs to take its foot off the brake,” she said.

Dawidowski Sydstrand said the SEK722.5bn (€71.6bn) pension fund thought more auto makers would follow Toyota and “acknowledge the benefits of a robust management of their climate lobbying.”

Clare Richards, senior engagement manager within the CEPB’s investment team, told IPE the Toyota announcement was an “excellent” example of how collaboration could encourage progress.

“The Church of England Pensions Board has a long-standing close partnership with AP7 that has driven significant progress on the issue of corporate climate lobbying,” she said.

In recent months, the pension fund pair had worked closely with AkademikerPension which, together with Storebrand, had led a constructive dialogue with Toyota Motors, she said.

“The Pensions Board commends Toyota’s willingness to engage on this issue and their positive step in making this public commitment,” she said, adding that it looked forward to seeing the carmaker’s review process develop.

“Ultimately we expect Toyota to show leadership to others in the auto industry by ensuring that their policy engagement activities are aligned with the Paris goals,” she said.

The Toyota Motors announcement was a significant moment, she said, adding: “With the recently published CA100+ Net Zero Benchmark providing ever greater clarity on investors’ expectations of companies, we expect to see more in the way of positive lobbying commitments from other companies in the coming months.”

Kamil Zabielski, head of sustainable investment at Storebrand, said the firm always tried to engage with its portfolio companies before escalating its engagement with other tools, if it was not producing results.

“Divestment is the last resort if we do not feel that companies are willing to improve or listen to our concerns,” he told IPE.

Two years ago, led by industry group the Association of Global Automakers, Toyota – alongside General Motors and Fiat Chrysler – intervened on the side of the Trump administration in a disagreement with California over fuel economy standards for cars, according to reports in the New York Times.

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