Sustainability | Sustainability Management | Key CSR Issues Consider the Societal and Environmental Impact of the Supply Chain

Background of Identification of Key CSR Issues

Importance in Our Company

TDK Group is a midstream company that performs the functions of both a supplier and buyer, and recognizes the importance of strengthening the competitiveness of the supply chain with education and guidance, while simultaneously avoiding risks through social and environmental considerations in the supply chain.

Stakeholders’ Expectations

In addition to responding and complying with the legal system relating to the supply chain and international industry norms, we carry out social responsibilities, such as supporting our suppliers. We also recognize that we are expected to correct the social impact of corporate (business) activities, such as the conflict minerals problem.

Basic Concept

We recognize that “Consider the Societal and Environmental Impact of the Supply Chain” is an extremely important issue for the TDK Group, which is a midstream company. With the acceleration of globalization and expansion of target markets, customers and business partners are also diverse, and it is not rare for a company to be both a buyer and a supplier, depending on the business. Based on the current requirements of such as related legal systems and international industry norms, we understand that it is our responsibility as a supplier to grasp the situation of the working environments of the Group’s manufacturing, and as a buyer to grasp the situation of the working environments of our suppliers, and implement education and guidance toward improvements as necessary. We will build a strong supply chain from upstream to downstream and properly carry out our social responsibilities.

Supply chain legal systems and international industry initiatives are strengthening, with examples being the Modern Slavery Act 2015, which was established in the United Kingdom in March 2015, and the change of EICC (Electronic Industry Citizenship Coalition) to the RBA* (Responsible Business Alliance), which transcends industry boundaries, in October 2017. These movements greatly impact TDK’s business environment, and responses based on trends are essential for continuing transactions, so in February 2020 we joined the RBA. By doing so, the TDK Group fully supports the RBA’s vision and mission and is committed to society to continuously make efforts to improve the rights, health, safety, and environment of workers of the TDK Group and primary suppliers in accordance with the RBA Code of Conduct (labor, health and safety, environment, ethics, and management system).

Also, in order to implement the CSR in the supply chain reasonably and effectively, shared awareness of social issues and shared surveys are essential. In order to contribute to the improvement of efficiency in the entire supply chain, TDK participated in various group activities from the rulemaking stage and proposed the standardization of survey methods, as well as collaborating across industries.

RBA is a global business alliance comprised of more than 150 electronics, retail, automotive, and toy companies. Improving occupational health and safety in the supply chain, protecting human rights, taking the environment into consideration, and fulfilling ethical responsibilities are established in the code of conduct, and member companies and their suppliers are requested to practice these actions.

Fiscal 2020 Goals and Achievements

Key theme 1: Consider the Work Environment at Manufacturing Sites

Goals of FY2020	Achievements in FY2020
To achieve 100% implementation of CSR self-checks at manufacturing sites (TDK Group manufacturing sites)	Achieved 100% implementation
To achieve 100% implementation of labor, human rights, and ethics risk assessments at manufacturing sites (TDK Group manufacturing sites)	Achieved 100% implementation
To ensure audit opportunities once every two years by a third party (high-risk countries in Asia, including China)	100% implementation except for one site, due to repercussions from Covid-19
To continually implement CSR training	Training conducted remotely for ASEAN-area HR meetings
To implement internal audits on workers' rights and corporate ethics by internal auditors	Achieved 100% implementation at targeted sites

Key theme 2: Consider the Work Environment of Suppliers

Goals of FY2020	Achievements in FY2020
To achieve CSR compliant supplier rate of 97%	98%
To achieve 100% implementation of CSR self-checks at sub-contractors	88.5%
To achieve 100% implementation of CSR self-checks at dispatch agencies	100%

Key theme 3: Responsible Sourcing of Minerals

Goals of FY2020	Achievements in FY2020
To achieve a Conflict-free supplier ratio of 92% or more	94.5%
To monitor the number of customer responses	Implemented monitoring

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