Sustainability | Governance | Supply Chain ManagementSustainable Procurement

Framework for Sustainable Supply Chain Management

Within the TDK Group, to fulfill TDK’s social responsibility across the entire supply chain, the Procurement headquarter function, Business Groups, the HR education headquarter function, and the Sustainability headquarter function work collaboratively to promote related activities. With the Corporate Planning Group playing a leading role, key issues (materiality) have been set for each function, and the progress made on key themes is discussed and reported by each function at monthly review meetings. Additionally, quarterly reports are made to the Corporate Planning Group, which then provides an annual report to the Board of Directors.

Membership of the RBA

In February 2020, the TDK Group joined the Responsible Business Alliance (RBA), ^* the world’s largest industrial coalition dedicated to CSR in the global supply chain. Accordingly, the TDK Group made a commitment to society that it fully supports the RBA’s vision and mission and, in accordance with the RBA’s code of conduct (labor, health and safety, environment, ethics, management systems), will continuously improve the human rights of workers, health and safety, and the environment in the TDK Group and primary suppliers.
In accordance with the RBA standards, the TDK Group will endeavor to make continuous improvements in two stages, self-assessment and audit, depending on the transaction status with suppliers (production materials), sub-contractors, and worker dispatch and labor agencies and the nature of their business.

• RBA : The Responsible Business Alliance (RBA) is a global industrial coalition embracing over 200 companies dealing in electronics, retail, automobiles, and toys. It stipulates standards of conduct related to the improvement of industrial health and safety, the protection of human rights, consideration of the environment, and fulfillment of ethical responsibilities in the supply chain and calls on affiliated companies and their suppliers to practice these standards.

• Vision:
  A coalition of companies driving sustainable value for workers, the environment and business throughout the global supply chain.
• Mission:
  Members, suppliers and stakeholders collaborate to improve working and environmental conditions and business performance through leading standards and practices.

TDK Group Supply Chain

As of March 2026, TDK Group conducts business with approximately 4,200 material suppliers worldwide (excluding businesses from which we procure non-production materials such as office supplies and equipment), with an annual procurement amount of approximately 8,000 billion yen.

TDK’s Sustainable Supply Chain Management

(2) Supplier Screening

TDK Group identifies key suppliers for each business, taking into account the following requirements:

• Suppliers with large purchase amounts
• Suppliers providing materials or components that are difficult to substitute
• Suppliers providing materials or components critical to the business
• Suppliers selected from an ESG perspective, etc.
• Country-specific risk etc. relating to national economic security

As of March 2026, we have identified approximately 600 companies as key suppliers, accounting for 78% of the total annual purchase amount across the group. Additionally, we have identified 40 secondary and subsequent suppliers as key suppliers. The review of key suppliers is conducted annually.

(3) Assessment

TDK Group conducts CSR self-checks for all suppliers at the start of business relationships to confirm their CSR initiatives, and only begins business with companies that pass the evaluation. From 2024, we have been conducting evaluations of critical suppliers in principle once every two years to determine whether to continue business relationships.
Regarding implementation methods, each company adopts appropriate techniques. The CSR self-check sheet created by the headquarters' procurement function consists of 63 items based on RBA standards, focusing on areas that TDK considers particularly important: "Human Rights and Labor," "Environment," "Safety and Health," "Fair Trade and Ethics," "Information Security," and "Management Systems." We request reports on management systems and implementation status for each item.
In FY March 2026, we conducted CSR self-checks on 1,300 companies (including 341 key suppliers) and confirmed that approximately 4,200 material suppliers (excluding non-production material suppliers such as office supplies) are CSR-compliant suppliers.
In addition, starting from 2026 (on a trial basis), we have started asking around 40 of our key suppliers in Japan to undergo EcoVadis rating assessment, so as to enhance the transparency of assessment and expand assessment scope.

(4) Audit (5) Corrective Actions and Improvement Plans (6) Capacity Building

TDK conducts the CSR-specific on-site auditing of key suppliers based on RBA auditing standards.
When violations of laws and regulations are discovered, we require suppliers to take “corrective actions” and monitor them from the development of corrective action plans to their completion. If necessary, we also provide support on implementation of corrective actions. If there are opportunities for improvement that do not result in legal violations, we make a "request for improvement".
In 2025, we implemented audits at approximately 50 companies in and outside Japan, and discovered two instances of non-conformity. Having identified failings in the management of younger workers, we provided guidance to the suppliers in question, and got them to make changes to the relevant internal rules. We subsequently confirmed the status of implementation of corrective measures, verifying that the problems had been remedied.

For some audits, suppliers undergo RBA VAP audits conducted by third-party organizations and share the reports through RBA-Online, which helps improve efficiency.

Re-evaluation

As part of our series of initiatives, we terminate contracts with suppliers who are unable to meet minimum requirements within a specified period.

Goals and Achievements in FY March 2026

Evaluations and Future Activities

We have maintained a supplier CSR conformity rate of 100%. In addition, from FY March 2025 to FY March 2026, we have completed the implementation of self-assessment by all key suppliers using a new checklist.
In FY March 2026, we achieved our goal of implementing on-site CSR surveys at 50 suppliers. In 2026, we planned to implement on-site CSR surveys at 42 suppliers.

Supplier Evaluations

In addition to CSR self-checks focused on CSR, the TDK Group conducts management system assessments of material suppliers at the time of new registration and periodically to ensure healthy transactions. These assessments determine whether to initiate or continue transactions. Each company adopts appropriate methods, and transactions are conducted only with companies that have no issues based on the assessment results.
The main categories covered by the evaluation are quality management, chemical substances^*management, environmental management, and corporate social responsibility (CSR) including strict observation of human rights and other legal obligations as well as compliance with social norms. Any issues that come to light through the evaluation are disclosed to the supplier with a request for corrections or improvements.

• The chemical substances in the evaluation are based on the “TDK Green Procurement Standards.”

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Supplier Partnership System

TDK requires its suppliers to reply to a CSR check sheet through the Supplier Partnership System. This Supplier Partnership System is a system by which the management of company information, distribution of purchase specification forms, sharing of agreement documents, and so on, which previously was conducted by paper or magnetic recording media, are managed uniformly online. It benefits both sides by speeding up and boosting the efficiency of work. To raise both supplier awareness and motivation to make improvements, the check sheet is designed to immediately display the results on-screen when answering questions. If problems occur with responses, individual requests are issued for improvements.

Green Procurement

We promote green procurement aimed at prioritizing purchase of products that contribute to reducing the burden on the environmental and that fulfill social responsibility. TDK’s Green Procurement Standards are revised as necessary to take account of laws and regulations in Japan and other countries, changes in social requirements, and other factors. They can be viewed on the TDK website. In January 2026, we revised the annexes to the Standards, updating the statutorily required information regarding chemical substances contained in purchased materials.
TDK’s purchased materials master database is linked to TDK’s Green Procurement Standards, ensuring reliable management of prohibited substances and chemicals that require content reporting, and enabling the disclosure and provision of information as needed.

Responsible Raw Materials Procurement

In line with the TDK Group Occupational Health/Safety and Environmental Charter, we strive to reduce the burden on the environment, by reducing CO2 emissions, energy use, resource consumption and water use throughout the product lifecycle, from procurement through development, manufacturing, delivery, and use to disposal. To promote these efforts, we have put in place a framework, under the supervision of the responsible director, to clarify roles and responsibilities in regard to environmental activities. By means of awareness-raising activities and environmental education activities for our team members (employees), we are working to cultivate awareness of the need for efficient resource usage and the need to reduce waste.
These activities have positive spillover effects on suppliers throughout the value chain, on external contractors and other business partners, and on our customers. “Resources,” as defined in our basic policy for this area, includes raw materials. By enhancing the efficiency of resource utilization throughout the product lifecycle, we are making progress in reducing the amount of resources consumed and in turning waste into new resources. In this way, we are reducing our dependence on natural capital, minimizing the negative impact that we have on natural capital, and contributing toward the building of a resource-circulating society.
For example, our procurement function has been collaborating with suppliers and other external stakeholders, and has succeeded in building the electronics industry’s first recycling system for reusing the PET film used in the production of multilayer ceramic chip capacitors (MLCCs).

In 2023, TDK Group company Amperex Technology Ltd., which manufactures batteries, launched a new business in which it has been collaborating with recycling firms, refining companies, and cathode materials makers to realize the use of recycled cobalt and lithium as raw materials for new batteries.
In addition, we perform risk assessment in relation to raw materials suppliers using CSR assessment, to verify that suppliers’ production processes do not have negative impacts on the environment or on society. If serious negative impacts on the environment or on society are identified, we arrange for corrective measures to be taken promptly and strive to address the problem and mitigate its impact, thereby contributing toward the realization of a sustainable society.

Strengthening of BCP/BCM in the Supply Chain

In unforeseen circumstances, such as the outbreak of a large-scale natural disaster, TDK, as a member of the supply chain, has a duty to share social responsibility with suppliers and meet demands so as to ensure the stable supply of products required by customers.
Recognizing that the securing of stable supplies is an important responsibility, TDK addresses this issue in three main ways:

1. BCP/BCM surveys of suppliers
2. Advance collection and arrangement of information to use in an emergency
3. Prompt initial responses using a BCP Confirmation System

In particular, regarding BCP/BCM surveys of suppliers, a joint industrial initiative has begun, and TDK implements the supplier BCP/BCM surveys utilizing the Supply-Chain Business Continuity Questionnaire of the Japan Electronics and Information Technology Industries Association (JEITA). Furthermore, TDK endeavors to strengthen supply chain BCP/BCM by, among other activities, holding BCP/BCM seminars for business partners. Additionally, we send individual feedback sheets to each company to encourage improvement.

Sustainable-Procurement Education

The procurement department has created an e-learning course titled "Sustainability and CSR" that is available to all team members. This course aims to promote understanding of the importance of sustainable procurement among procurement stakeholders.
In addition, in 2024, we invited instructors from third-party organizations to give lectures to help cultivate personnel able to perform on-site CSR audits on suppliers’ premises.
For those personnel working in procurement-related units, both in Japan and overseas, we have provided a webinar on data management for promoting the reduction of Scope 3 CO2 emissions. Those personnel who successfully completed this training are deemed to possess the skills required for their respective roles.

Strengthening of Compliance (TDK Corporation)

TDK has clarified a company-wide policy regarding offers of gifts and entertainment from suppliers, publicized that policy throughout the Group, and requested the understanding and cooperation of suppliers.
Furthermore, regarding the exclusion of antisocial forces, TDK conducts preliminary surveys of suppliers when starting or restarting business with them.

Supplier Education and Capacity Building

TDK organizes seminars and offers individual support on several CSR-related topics with the aim of strengthening the initiatives of our suppliers.

• Individual support to strengthen information security at suppliers and contract manufacturers has been provided to approximately 15 companies, with support continuing for several months for each company. In this way, we have been able to use third-party assessment to ensure that these companies have the technology in place to make them more resilient to cyber-attacks. This activity has been implemented for four consecutive years since 2022.
• TDK also conducts surveys of suppliers’ environmental initiatives to reduce CO2 emissions, etc. Based on the results obtained in these surveys, we have for six years now been holding supplier award activities and providing feedback on the survey results. This feedback includes not only the assessment results, but also information on where each company’s performance stands within its peer group. We have also been arranging for lecturers from CDP to provide webinars for a total of approximately 150 companies to explain the CDP Supply Chain Program. By striving to realize two-way communication, in which suppliers share their CO2 emissions reduction plans with us and we provide them with case studies of measures adopted at TDK, we are able to effectively monitor the progress being made. These activities have been recognized, with TDK receiving an A rating in the CDP Supplier Engagement Assessment for six consecutive years.

Declaration of Partnership Building

In May 2021 TDK issued its "Declaration of Partnership Building" as a means of building relationships of coexistence and co-prosperity with its suppliers. "Declaration of Partnership Building," used as a general term, is an initiative launched by the Council on Promoting Partnership Building for Cultivating the Future, whose membership consists of the chairman of the Japan Business Federation (Keidanren); the chairman of the Japan Chamber of Commerce and Industry; the president of the Japanese Trade Union Confederation; the Minister of State for Economic and Fiscal Policy ; the Minister of Economy, Trade and Industry; the Minister of Health, Labour and Welfare; the Minister of Agriculture, Forestry and Fisheries; and the Minister of Land, Infrastructure, Transport and Tourism. Each participating company issues its own declaration under the name of a corporate representative, the aim of each declaration being to build new partnerships by promoting cooperation, co-existence, and co-prosperity between the issuing company and its suppliers and other business partners seeking to create added value. A company issuing a declaration states that it will seek coexistence and co-prosperity across its supply chain, promote new forms of cooperation irrespective of such factors as size or relationship to the supply chain, and observe appropriate transaction practices between contracting entities and small and medium-sized contractors, all in an effort to boost the added value of the entire supply chain.

2026 Supplier Sustainability Summit: Building Stronger Partnerships

TDK held the 2026 Supplier Sustainability Summit (SSS). This summit is held annually to share TDK’s long-term vision and ESG policy with our business partners around the world and to build a shared understanding.
At the outset, TDK’s management delivered a message on the vital role of the supply chain in TDK’s long-term growth. In the sessions that followed, we shared our expectations primarily regarding the following three areas:
Standards and Ethics: We explored compliance with the Responsible Business Alliance (RBA) and respect for human rights, reaffirming our commitment to ethical labor practices.
Environmental Initiatives: We presented our roadmap for reducing greenhouse gas (GHG) emissions and called for concerted efforts across the entire supply chain toward achieving net zero.
Resilience: We shared our strategy for building a robust and flexible supply chain that can adapt to global challenges.
The summit concluded with a Q&A session, fostering a highly transparent dialogue between TDK’s management and our partners.
Guided by the spirit of “In Everything, Better,” TDK will continue to contribute to the realization of a sustainable society throughout its entire value chain.