THE IMPACT OF CARBON EMISSION REDUCTION ON FINANCIAL PERFORMANCE: A CASE STUDY OF TOYOTA MOTORS

Abstract

This study investigates the impact of carbon emission reduction on the financial performance of Toyota Motors through a quantitative research approach. Using Return on Assets (ROA) as a proxy for financial performance and Toyota's carbon emission data from 2005 to 2020, the research employs a single-case study design focused on the North American region. Statistical analysis, including regression modeling, reveals a significant positive relationship between carbon emission reduction and ROA. The findings suggest that Toyota's efforts in reducing carbon emissions positively influence its financial performance, highlighting the strategic importance of sustainability initiatives in enhancing corporate profitability and resilience amidst global regulatory pressures. This study contributes to both environmental management and corporate finance literature by demonstrating the financial benefits of carbon efficiency in the automotive industry.