Sustainability | SocietyResponsible 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.These risks include OECD Annex II risks.

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 2020 Goals and Achievements / Evaluations and Future Activities

Fiscal 2020 Goals Achievements
Conflict-free supplier ratio: over 92% 94.5%
Monitor number of customer responses Implement monitoring
Fiscal 2021 Goals
Conflict-free supplier ratio: over 92%

Evaluations and Future Activities

In fiscal 2020, TDK continued to inform business partners of its expectation of conflict-free mineral use and to request unconfirmed business partners to make the utmost efforts to this end. As a result, the confirmed conflict-free supplier ratio increased further from the previous year to reach 94.5%, meaning that we had achieved our target.
In fiscal 2021 also, we have set “confirmed conflict-free supplier ratio of over 92%” and “monitor number of customer responses” as common KPIs of the TDK Group and will continue to promote Group-wide efforts. Specifically, we will continue to make requests to business partners and also respond to inquiries from customers in a precise and timely manner. Furthermore, since collaboration with industrial organizations is essential to solve the expanding problem of responsible sourcing of minerals, we will continue to participate in such industrial discussions.

Concrete Activities

■Risk Identification Process
-Implementation of surveys in Group companies and promotion of conflict-free sourcing

TDK has been conducting initiatives for risk identification measures in accordance with the OECD’s Due Diligence Guidance. To guarantee the rationality of replies, surveys use the Conflict Minerals Reporting Template (CMRT) issued by the Responsible Minerals Initiative (RMI)* to check whether products contain the so-called 3TG conflict minerals (tin, tantalum, tungsten, and gold) and identify smelters. After the retrieval of CMRT surveys, TDK compares them with the RMI’s list of smelters and evaluates the risk of conflict minerals included in production materials being used as funding for armed groups and the risk of human rights violations, including child labor.

In fiscal 2020 surveys were again implemented in Group companies, and the ratio of suppliers confirmed to be conflict-free reached 94.5%, thus achieving the target of over 92%. In addition, TDK responded in a precise and timely manner to requests from customers and implemented monitoring of the number of responses.

*The RMI, which has a membership of more than 380 companies and organizations worldwide, spearheads efforts relating to responsible mineral procurement.

-Cobalt reporting

Regarding cobalt as well, TDK continues efforts to identify smelters using the Cobalt Reporting Template issued by the RMI since 2019.

■Correction Process
-Response to identified risks

At the time of survey request, TDK expresses its hope to business partners that they use RMI conformant smelters. In the survey process, if a risk is discovered, TDK requests the business partner to remove the smelter concerned from the supply chain.

■Promotion of Troubleshooting in Collaboration with Industrial Organizations

In order to solve problems relating to responsible mineral procurement, efforts are necessary in the entire supply chain. TDK has participated in the RMI since February 2020 and in the JEITA ever since its founding, becoming a full member of the JEITA in fiscal 2013. TDK took part in the following activities in fiscal 2020:

  • TDK participated in the Education and PR Team of the JEITA Responsible Minerals Trade Working Group and cooperated in the organization of an online briefing on responsible mineral procurement aimed at raising awareness of the problem of responsible mineral procurement and deepening understanding of survey methods among secondary suppliers and others.
  • TDK participated in a joint working group (the Conflict-Free Sourcing Working Group) with automakers and gave feedback for a survey manual and tools.
  • TDK took part in the JEITA’s Smelter Support Team and jointly confirmed risks in smelters.
  • TDK called on smelters not participating in the Responsible Minerals Assurance Process (RMAP) to do so.
  • As a leader of JEITA’s Data Exchange Standard Development Team, TDK conducted hearings of related businesses regarding the inclusion of micas as conflict minerals and drafted a revision of IPC-1755, a data exchange standard for responsible mineral procurement.

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