Sustainability | Governance | Supply Chain ManagementResponsible 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.
Roles and Responsibilities
Supplier surveys are managed by the headquarters procurement function and responses to customers are managed by the headquarters quality assurance function, and each group company has established its own survey response system.
Goals and Achievements
| Fiscal 2023 Goals | Achievements |
|---|---|
| A ratio of at least 92% of suppliers whose procurement of conflict minerals (3TG: tantalum, tin, tungsten, and gold) is confirmed as being from RMAP*-compliant smelters | 86.5% |
*The Responsible Mineral Assurance Process (RMAP) is a program that verifies compliance with responsible sourcing of minerals. The program uses an independent third-party organization to evaluate smelters' and refiners' management systems and procurement practices.
Evaluations and Future Activities
In fiscal 2023 as in past years, we requested that suppliers continue to make procurements from RMAP-compliant smelters. We requested maximum efforts from suppliers whose compliance we could not confirm. Unfortunately, however, we were unable to achieve our target, with 86.5% of suppliers confirmed as procuring from RMAP-compliant smelters. This is attributable to significant changes in societal circumstances including those precipitated by Russia's invasion of Ukraine.
In fiscal 2024, we have again set “a ratio of at least 92% of suppliers whose procurement of conflict minerals (3TG) is confirmed as being from RMAP-compliant smelters” as a common KPI for the TDK Group and will become more proactive in promoting Group-wide efforts, specifically those to make continued requests to suppliers while responding 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.
| Fiscal 2024 Goals |
|---|
| A ratio of at least 92% of suppliers whose procurement of conflict minerals (3TG) is confirmed as being from RMAP-compliant smelters |
Initiatives
－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 Smelters & Refiners Lists 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 2023 surveys were implemented at Group companies, and the ratio of suppliers confirmed to be conflict-free was 86.5%, meaning our target of over 92% was unfortunately not achieved.
*The RMI, which has a membership of more than 400 companies and organizations worldwide, spearheads efforts relating to responsible mineral procurement.
－Cobalt / Mica Survey
We are proceeding with the identification of cobalt smelters and mica processors using the Extended Minerals Reporting Template (EMRT) issued by RMI since December 2021.
In addition, we have made a condition of procurement from RMAP-compliant refineries.
■Correction Process
－Response to identified risks
When we request a survey of suppliers, we clarify to them our policy that they use RMI-conformant smelters, that is, smelters that appear on RMI's Conformant Smelters & Refiners Lists. In the survey process, if a risk is discovered, TDK requests the supplier 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's Responsible Minerals Trade Working Group ever since its founding. TDK took part in the following activities in fiscal 2023:
- 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 also participated in the capacity of consultants at individual consultation sessions that followed the online briefing.
- 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 submitted a response to RMI's solicitation for comments on revisions to the EMRT.
- As the leader of JEITA's Data Exchange Standard Development Team, TDK conducted hearings at which involved companies addressed the expansion of regulated minerals in the mica category, and followed-up on trends in revisions to IPC-1755 data exchange standard for responsible mineral procurement.
