Sustainability | Sustainability Management | Key Issues (Materiality) of TDKMateriality Identification Process

Materiality Identification Process

TDK’s key issues (materiality), which plot the enhancement of corporate value and adopt the concept of synchronizing the sustainability of both society and company, comprise financial materiality (important items for TDK) and impact materiality (important items for stakeholders). After deriving financial materiality and impact materiality, we closely examined the two and selected our materiality. The materiality was discussed by the Executive Committee and, once finalized, it was submitted to the Board of Directors. To achieve the goals of our Long-term Vision, we are committed to addressing the key issues that constitute our materiality by prioritizing them when allocating the organization's management resources.

Process of identifying financial materiality

Financial materiality was derived using a backcasting perspective based on our Long-term Vision by taking into consideration the sources of long-term competitiveness that were discussed and identified by top management, corporate officers, and next-generation candidates for director positions as well as the items derived from indicators that were recognized as being significant with PBR through model analysis of the quantitative relationship between general ESG indicators and PBR, and management risks that should be emphasized in enterprise risk management (ERM).

Process of identifying impact materiality

Impact materiality was derived by creating a long list based on the European Sustainability Reporting Standard (ESRS) and narrowing down the items.

TDK’s materiality has been formulated in line with our Long-term Vision. Going forward, when drawing up our Medium-term Business Plan or annual business plan, we will adjust our materiality as necessary based on changes in the external or internal environment.

Comments of the Experts

To confirm the appropriateness of and shortages in the new materiality from the perspective of stakeholders, we conducted dialogues with three experts in February and March 2024 to obtain their wide-ranging opinions of the materiality draft under consideration by TDK.