Sustainability | Society

Responsible Sourcing of Minerals

Our Approach

Based on concerns that minerals mined in the Democratic Republic of the Congo (DRC) and adjoining countries serve as a source of funding for armed groups provisions on conflict minerals were incorporated in the US Dodd-Frank Wall Street Reform and Consumer Protection Act, which was enacted in July 2010, and its final rule was adopted in August 2012. The TDK Group Policy on Conflict Minerals was formulated in April 2013, to promote initiatives in full compliance with the Due Diligence Guidance of the Organization for Economic Cooperation and Development (OECD).
In order to reduce involvement not only in conflicts but also serious human rights violations and environmental pollution, TDK has expanded the scope of its responsible sourcing of minerals beyond those from conflict-affected and high-risk areas. In January 2019, we revised our policy, which is now entitled the “TDK Group Policy on Responsible Sourcing Minerals.” Under this revised policy, TDK will continue to promote responsible sourcing of minerals throughout the supply chain, including minerals such as tantalum, tin, tungsten, gold and cobalt, which may be sourced from not only conflict areas but also areas with high risks of misconduct, including human rights abuses and environmental destruction.

Structure

The Headquarter Procurement Function and suppliers Quality Assurance Function supervise surveys of suppliers and replies to customers, respectively, and each Group company has installed a survey reply mechanism to respond.

Fiscal 2018 Goals and Achievements

Goal

  • Confirmed DRC conflict-free supplier ratio: over 90%
  • Monitor number of customer responses

Achievement

  • Confirmed DRC conflict-free supplier ratio: 92.6%
  • Implemented monitoring

Main activities and measures

  • Implemented surveys at Group companies and promoted DRC conflict-free initiatives based on Group common KPI
  • Promoted issue solutions in collaboration with industry associations

Future Activities

The TDK Group as a whole will continue to make efforts toward this end, including the setting in fiscal 2019 of the common KPIs of “confirmed DRC conflict-free supplier ratio of over 92%” and “monitor number of customer responses.”
TDK has the same expectations of suppliers and will urge suppliers that have not yet verified their DRC conflict-free status to make maximum efforts to do so.
TDK also will respond to inquiries from customers in a precise and timely manner.
Furthermore, collaboration with industry organizations will be essential to solve the expanding problem of responsible sourcing of minerals. TDK will continue to participate in such industrial discussions.

Concrete Activities

Responses to surveys and promotion of DRC Conflict-free at each group company

TDK uses the Conflict Minerals Reporting Template (CMRT) developed by the Responsible Minerals Initiative (RMI)* to facilitate the collection of sourcing information relating to conflict minerals.
In fiscal 2018, according to the conflict mineral survey conducted by our group companies, 92.6% of TDK's suppliers are DRC conflict-free, exceeding the year's goal of 90%. At this point in time, no minerals involved in the funding of armed forces in the DR Congo or adjoining countries have been confirmed.
Furthermore, TDK has been responding appropriately to requests from customers, and is monitoring the number of responses.

  • * An organization of over 350 companies and associations that leads the effort for responsible mineral sourcing.

Cobalt reporting

TDK uses the Cobalt Reporting Template released by RMI to identify smelters.

Issues in survey responses

Within the CFSI conflict mineral survey framework, identification of smelters is essential to truly certify such operations as being DRC Conflict-Free. However, among products unable to confirm as being DRC Conflict-Free, and notably items for which supply chains contain long stages, there are instances when product groups with diversified electronic components are traded among component manufacturers, complicating the supply chain structure, there are frequent examples when the information gathered on smelters is incomplete, rendering it difficult to fully identify the smelters. Based on that and other factors, TDK products successfully found to be DRC Conflict-Free have been limited to certain product groups for which the supply chain stages are short.

  • *The earlier Conflict-Free Smelter Program (CFSP) was changed to the Responsible Minerals Assurance Process (RMAP) in June 2018, and the scope of risks was expanded beyond conflict risks in the DRC and adjoining countries.

Collaboration with industrial organizations

Addressing the responsible sourcing of minerals issue must be a comprehensive effort undertaken by all members of the supply chain. TDK has participated in the JEITA Responsible Minerals Trade Working Group from the beginning, and since fiscal 2013, TDK is a managing company of the group. The Japan Electronics and Information Technology Industries Association (JEITA) has concluded a memorandum of understanding (MOU) with the Responsible Business Alliance (RBA) and the Global e-Sustainability Initiative (GeSI) and is jointly pursuing efforts to resolve the responsible sourcing of minerals issue. During fiscal 2018, TDK participated in the following initiatives.

  • Joined the Education and PR Team, participated as a speaker in and cooperated with operation of JEITA Responsible Minerals Sourcing Inquiry Briefings 2018 that was convened to raise awareness of the responsible sourcing of minerals issue and to promote understanding of the survey methods among secondary suppliers and others.
  • As leader of the Data Exchange Standard Developing Team, collaborated in the push to revise the IPC-1755 conflict minerals data exchange standard for exchanging data between different computer systems based on EU regulations, submitted opinions to RMI on blockchain technology and exchanged ideas with smelter as part of determining preferable data exchange methods.
  • Participation in the Japan Conflict-Free Sourcing Working Group of the automobile industry, coordinating feedback on the survey manual and its tools.
  • Participation in the “Smelter Support Team” to jointly confirm risks with smelters.

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