SustainabilityMessage from the President and CEO

Our business environment today can be characterized by one word: turbulence. In fiscal 2023, as the impact of the COVID-19 pandemic lingered around the world, geopolitical risks rapidly escalated, including the volatile situation in Ukraine. In addition, a variety of other problems have erupted simultaneously, including supply chain disruptions, soaring energy prices, and global financial uncertainty resulting in rising interest rates and economic stagnation―engendering growing concerns about the fragmentation of the international community.
In this rapidly changing world, TDK is working to strengthen the functions of its regional headquarters in Japan, Europe, the Americas, and China so that we can quickly and precisely identify opportunities and respond flexibly to risks. Having grown aggressively through mergers and acquisitions, TDK has become “TDK United,” a fusion of multiple companies with diverse personalities. Standing on the principle of “Empowerment and Transparency,” authority is delegated, each company's culture is respected, and transparency is ensured. This has enabled us to put in place a structure that allows the regional headquarters―which until now have primarily been responsible for business management functions in each region―to dynamically devise growth strategies that leverage characteristics unique to those regions. At the same time, we are endeavoring to create new value while bolstering our information collection capabilities in each region and preparing for geopolitical risks.

Further, to ensure that we are able to bring strong momentum and flexibility to tackling the increasingly complex issue of sustainability in these turbulent times, in April 2023, we established the new position of Chief People and Sustainability Officer (CPSO) with Senior Vice President Andreas Keller, general manager of our Human Resources HQ, assuming the post. Sustainability is a vital component of TDK's strategy. Our efforts to create social value by connecting things organically and striving tirelessly to solve social issues are driven entirely by human resources. We believe it is only natural that the individual responsible for human resources should lead these efforts.

One thing I have long emphasized is the importance of human resources. TDK is a technology company, but it is our people―team members of TDK―who are responsible for everything from developing technology to commercialization, marketing, and sales. Human resources are everything.
I believe the key to elevating the quality of human resources, in addition to the provisioning of surrounding environments such as programs and facilities, lies in the mindset of each individual.
Since becoming president, I have continued to travel around the world to visit and interact with our employees―our team members. What I felt on these visits is this: the understanding by our team members of how their work benefits the world has a significant impact on individual motivation―and that, in turn, is a major contributor to improving the quality of our human resources. The total sum of the value created by each of our more than 100,000 high-quality team members worldwide is itself the value of TDK.
Team member health is also a critical underpinning of the quality of human resources. Under the TDK Health Declaration announced in April 2023, we clarified our intention to be proactively involved in the health of our team members, and we also joined the Health & Productivity Management Alliance, whose aims are to create a model for health and productivity management in Japan and to work together to develop solutions. Team members' physical and mental health are deeply important management issues we care about sincerely.

Another management issue we have raised is our efforts to address climate change. TDK has set forth a goal of achieving net zero CO₂ emissions by 2050, an effort we are approaching from both lower energy and renewable energy initiatives. One step toward achieving that goal came in July 2023, when we converted 100% of the electricity used at all of our manufacturing sites in Japan to renewable energy sources. Progress in the utilization of renewable energy in Japan, which had lagged behind other regions, will accelerate the Group's overall shift to renewable energy, and we now expect to achieve our goal of reaching a renewable energy utilization rate of 50% by the end of fiscal 2025―earlier than the originally-planned fiscal year 2026. As for lowering energy use, we are already using solar power generation at several manufacturing sites in Japan and overseas to supplement the power needed for production while reducing CO₂ emissions through energy management systems that integrate power generation and storage technologies.

As we approach our 100th anniversary in 2035, our goal is to see TDK become indispensable to society. While the products created from our technologies are seldom directly visible to the everyday consumer, many have been the core electronic component for a diverse collection of products across a vast range of fields.

Many of our capacitors and magnetic products are found in xEVs, which are growing in popularity worldwide. Our products are also incorporated into everyday life and public infrastructures, proliferating worldwide in smartphones, smart watches, wireless earphones, solar and wind power generation, and innumerable other examples. They offer unlimited possibilities, with technologies and products being utilized in applications that were inconceivable just a few years ago. Without TDK's technologies and products, our customers' products would not work, and society would cease to function; because of TDK, people can live enjoyable, fulfilling lives: That is the kind of bedrock presence we want to become.
Going forward, a variety of advanced technologies will make our society more convenient and efficient, and restrictions based on time or distance will be fewer. That said, we cannot deny the possibility of economic disparity widening among those who are unable to benefit from such technological developments or in regions where the impact of climate change is particularly severe. The question, then, is what TDK can do to address these issues. While our Sustainability Vision calls for “Technology for the well-being of all people,” I believe “well-being” is a state in which people from all walks of life can live vibrant, happy lives and are free to take on any number of positive challenges. And it is crucial that each individual be able to envision a bright future.

In the Analects, Confucius said, “The superior man seeks righteousness; the worthless man seeks benefit.” The meaning is that a virtuous person acts first by considering whether or not the action is just, while a non-virtuous person thinks first of loss or gain. I have developed my own interpretation: profit will follow from the pursuit of righteousness, not the other way around. Applied to TDK, this translates to focusing on refining―then providing products based on―technological strengths that will contribute to a sustainable society. As a result, social issues will move toward resolutions, and the economy and society will flourish, which will lead to TDK's own growth―positioning us to become an indispensable existence in society. This is how TDK will pursue the well-being of all people in society and how I would like us to continue working together as TDK United to take on these challenges.