California Voluntary Carbon Market Disclosures Act (AB 1305) Disclosure

California Assembly Bill 1305 (AB 1305) is designed to enhance transparency and accountability in corporate environmental practices, with a specific focus on carbon-related disclosures. The legislation requires companies to publicly disclose detailed information regarding their carbon reduction goals, climate-related claims, and the use of carbon offsets to achieve those goals.

By mandating clear, verifiable reporting, AB 1305 aims to prevent greenwashing and build stakeholder trust in corporate sustainability efforts. Although the bill officially took effect on January 1, 2024, a letter from Assemblymember Jesse Gabriel—the bill’s sponsor—to the Chief Clerk of the Assembly clarified that the first annual disclosure is intended to be posted by January 1, 2025.

In accordance with this legislation, TOTO USA, Inc. provides the following information related to carbon neutrality and sustainability claims. We affirm that all disclosed details are accurate, transparent, and verifiable:

Effective Date: As of January 1, 2024

Entity: TOTO USA, Inc. a wholly owned subsidiary of TOTO Ltd. (collectively with its sister subsidiaries, hereinafter the “TOTO Global Group”)

• Use or Sale of Voluntary Carbon Offsets (Section 44475.1)
• TOTO USA, Inc., does not sell or have a history of marketing, purchasing, or otherwise using voluntary carbon offsets as defined under the California Voluntary Carbon Market Disclosures Act.
• Claims of Carbon Neutrality or Greenhouse Gas Emissions Reductions (Section 44475.2)
• TOTO USA, Inc. makes claims related to greenhouse gas (GHG) emissions reductions grounded in climate science and aligned with international climate agreements. These claims are supported by the following:
• In June 2021, the TOTO Global Group received certification from the Science Based Targets initiative (SBTi) for its 2030 GHG emissions reduction targets, meeting the “Well Below 2 degrees C” standard.
• The TOTO Global Group developed these targets based on scientific data consistent with the Paris Agreement under the United Nations Framework Convention on Climate Change (UNFCCC).
• In March 2024, the TOTO Global Group updated its 2030 greenhouse gas (GHG) emissions reduction targets and received certification from the Science Based Targets initiative (SBTi) for its enhanced commitment aligned with the 1.5°C pathway. This target supports the global effort to limit temperature rise to 1.5°C above pre-industrial levels.
  To meet these goals, the TOTO Global Group is implementing the following initiatives:
  • Energy efficiency improvements and major equipment upgrades
  • Increased adoption of renewable energy sources, targeting:
  • 90% renewable energy usage by 2030
  • 100% renewable energy usage by 2040
  • Global expansion of sustainable product offerings
  • Enhancement of product environmental performance
  All targets and actions are part of the TOTO Global Group’s verified decarbonization strategy and align with internationally recognized climate standards.
• These reduction targets apply to:
• Scope 1: Direct emissions from owned or controlled sources
• Scope 2: Indirect emissions from the generation of purchased energy
• Scope 3: Reduction in CO2 emission during product use
• Strategies to Achieve GHG Reduction Targets
• Replacing existing systems with high-efficiency equipment
• Increasing the procurement and use of renewable energy
• Aiming to operate on 100% renewable energy across its global facilities
• Energy-saving improvement / Large equipment renewal
• Introduction of renewable energy (90% by 2030, 100% by 2040).
• Spread of sustainable products
• Advances in environmental performance
• These efforts reflect the TOTO Global Group’s enduring commitment to reducing CO2 emissions from its business operations and achieving carbon neutrality over time.
• Ongoing Disclosures
• The TOTO Global Group updates information regarding its climate goals, targets, and performance on an annual basis. These updates are provided through:
• Annual climate-related or Task Force on Climate-Related Financial Disclosures (TCFD) reports
• Other relevant ESG or sustainability reports
• Direct publication on official TOTO Global Group websites
• These updates are made to comply with the VCMDA to the extent required.