Sustainability | SocietyRespect for Human Rights

Understanding of global trends on human rights issues

Since the UN Human Rights Council adopted the “protect, respect, and remedy” framework, known as the Ruggie Framework, with regard to business and human rights in 2008, a series of international Corporate Social Responsibility (“CSR”) guidelines and UN and EU policies have been introduced in accordance with the framework, and several jurisdictions around the world have enacted laws addressing human rights in the context of international business. Specifically, these include the conflict minerals clause in the US Dodd-Frank Wall Street Reform and Consumer Protection Act enacted in 2010, the Transparency in Supply Chains Act enacted in the US State of California in 2010, the UN Guiding Principles on Business and Human Rights in 2011, the Modern Slavery Act in the United Kingdom in 2015, the EU regulation on conflict minerals in 2017, the Child Labor Due Diligence Act in the Netherlands in 2019, the Due Diligence in the Supply Chain Act in Germany in 2021, the Transparency Act in Norway in 2021, and the EU Batteries Regulation in 2023. This trend represents a strong appeal to companies to specifically identify human rights issues in their business activities and take appropriate action.

Our policies for respecting human rights

The TDK Code of Conduct states that “The TDK Group will continue to respect human rights, comply with relevant laws and regulations and international rules, and discharge its social responsibility with a strong sense of ethical values for the purpose of creating a sustainable society.”
For this purpose, we prohibit any form of child labor, forced labor including human trafficking, and unreasonable movement restrictions that lead to bonded labor in our supply chain. We also respect internationally recognized human rights, such as freedom of association and the right to collective bargaining. Furthermore, the TDK Code of Conduct also requires compliance with all relevant human rights laws and regulations including those prohibiting child and forced labor in the supply chain, such as Section 307 of the US Tariff Act of 1930, as amended, and the other laws identified above.
The TDK Group Policy on Human Rights was formulated in 2016. We respect and support international norms on human rights including the International Bill of Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, the OECD Guidelines for Multinational Enterprises, and the Children’s Rights and Business Principles. Based on the framework of the UN Guiding Principles on Business and Human Rights, TDK promotes the correct understanding of potential human rights issues and takes steps to address them, not only within the business operations of the TDK itself but also throughout the value chain.
The "TDK Group Human Rights Policy" is published on our website and communicated to internal and external stakeholders. We expect all stakeholders, including our business partners and suppliers, to understand and support this policy, and we request that their responses be in compliance with the TDK Supplier Code of Conduct, including the prohibition of unreasonable restrictions on movement leading to child labor, forced labor, or compulsory labor, and the respect for freedom of association and the right of collective bargaining.

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At TDK, the Sustainability Promotion HQ—with the Chief People and Sustainability Officer (CPSO) in place as the responsible party—promotes day-to-day human rights responses while coordinating with related functions. The Sustainability Promotion HQ issues reports at Board of Directors meetings at least twice a year regarding the status of sustainability initiatives for the entire Group including those with respect to human rights. The Board of Directors reviews and decides on these reports as necessary.

Due Diligence Process

The TDK undertakes human rights due diligence processes and promotes its due diligence activities in line with the procedures set out in the UN Guiding Principles on Business and Human Rights. We also continue to dialogue with internal/external parties including human rights specialists and stakeholders to make our activities more effective.

Human Rights Due Diligence Process of TDK Group

• TDK Code of Conduct
• TDK Group Policy on Human Rights
• TDK Supplier Code of Conduct

• Identify potential human rights issues in the value chain
• Evaluate risks by probability, human rights impact, and scale of our company’s leverage
• Prioritize key themes based on risk evaluation result
• Assess detailed risks for each key theme
• Assess potential human rights risks in potential new business relationships created through M&A and similar transactions

• Implement measures for each key theme and periodic review
• Training

• Sustainability Website
• Human Rights Statement

Next, we did scoring and assigned prioritizations from the perspectives of severity of impact and probability of occurrence, and confirmed that they matched with "priority issues on which to focus." Furthermore, based on the results of reports from international human rights groups; the risk assessments for labor and business ethics, CSR self-checks, and audits at manufacturing sites; and reviews by external experts, we redefined our "priority issues on which to focus." As a result, we recognized three priority issues: "responsible mineral sourcing," "consideration of employee human rights at our manufacturing sites," and "consideration of employee human rights at suppliers (including contract manufacturers and staffing agencies)." We identified specific human rights issues (key human rights issues) to address within these three priority issues and are working on preventive and mitigation measures and monitoring progress. We will continue to conduct regular reevaluations.

Approach to Key Human Rights Issues

Goals and Achievements in Fiscal 2024

Initiatives

Initiatives for Prevention and Reduction of Human Rights Risks

In 2020, TDK joined the Responsible Business Alliance (RBA), an organization which is dedicated to improving social, environmental and ethical conditions in the global supply chains. TDK utilizes the RBA Code of Conduct as the standard to promote our CSR activities at manufacturing sites. To prioritize the human rights key themes described above, we conduct activities to prevent and reduce risks in alliance with the RBA’s Code of Conduct, assessment items and audit frameworks.
The details are as follows.

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Responsible Sourcing of Minerals

TDK started its response to the problem of conflict minerals following the enactment of the US Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. 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).
Considering that the scope of discussions on responsible sourcing of minerals has recently expanded to conflict-affected and high-risk areas for serious human rights violations or environmental pollution, to avoid being complicit in these problematic activities we revised our policy, which is now entitled the “TDK Group Policy on Responsible Sourcing Minerals” in January 2019. Under this revised policy, TDK continues to promote responsible sourcing of minerals throughout the supply chain, including minerals such as tantalum, tin, tungsten, gold, cobalt and mica, which pose an increased risk of being sourced from conflict areas and regions with high risks of misconduct, including human rights abuses and environmental destruction. In fiscal year 2024, according to the conflict mineral survey conducted by the TDK, no minerals involved in the funding of armed forces in the DR Congo or adjoining countries were found. In addition, we conducted surveys to identify (a) cobalt smelters considering child labor risk in cobalt mines of DR Congo, and (b) mica processors considering child labor risk and unsafe working conditions in mica mines in India and Madagascar.

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Respecting human rights of employees at our manufacturing sites

TDK implements annual CSR self-checks and risk assessments for labor, human rights and business ethics based on the RBA code of conduct at all Group manufacturing sites. These are supervised by Sustainability Promotion HQ. In addition, in fiscal year 2022, we established a plan to conduct an RBA-authorized audit, customer CSR audit, or brief CSR assessment based on the RBA VAP Operations Manual at each of our manufacturing sites at least once every three years. In the course of these activities, for any sites where any issues might be identified, we prepare corrective action plans and implement them.
In fiscal year 2024, all 78 of our manufacturing sites conducted CSR self-checks using RBA self-assessment questionnaire which included risk assessments for labor, human rights and business ethics issues. Our risk assessments relating to human rights risks included forced labor, harassment, and management of labor agencies and service providers such as cafeteria operators, security companies etc. Through the risk assessment for labor, human rights and business ethics, potential risks were identified in 21 manufacturing sites, and corrective actions to mitigate the risks were completed at all those sites at the end of fiscal year 2024. We will continue our efforts to reduce the risk of human rights violations through the above measures. In addition, from fiscal year 2022 through fiscal year 2024, 100% of our manufacturing sites implemented an RBA-authorized audit, customer CSR audit, or brief CSR assessment based on the RBA VAP Operations Manual.
We also promote additional activities by taking into account the types of risks, countries and regions. For example, to prevent child labor, we adhere to strict age check procedures to prevent any use of child labor at our manufacturing sites in China and implement monitoring by headquarters. In fiscal year 2023, no case of child labor was discovered. We also began to strengthen the monitoring of working hours by headquarters at manufacturing sites in high-risk countries in Asia in fiscal year 2018.

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Respecting human rights of employees at suppliers (including manufacturing sub-contractors and labor agencies)

Training

TDK raises awareness of human rights issues through e-learning or in person training that is given to all of our employees, including those in the UK. In addition, we have also been able to identify issues through training of internal CSR auditors based on RBA requirements and by CSR training that takes regional characteristics into consideration. In the supply chain, TDK provides educational tools as necessary to promote awareness at the time of implementing CSR self-checks.
In fiscal year 2024, too, TDK worked to enhance our employees’ understanding of basic human rights issues through training based on the TDK Code of Conduct.
In addition, a total of 158 employees participated in training programs for internal CSR auditors in Japan, ASEAN, and China.

Grievance mechanisms and communications on human rights issues

TDK has established a global whistle-blowing system that allows TDK employees to speak-up or report any corporate ethics issues, including potential human rights concerns. These may be made directly or through internal or external help lines that are independent from employees’ own reporting lines.
For outside stakeholders, we communicate and respond through the inquiry contacts on the website. In response to inquiries on human rights issues made by some external organizations in fiscal year 2024, we explained TDK's policies on human rights and activities taken to ensure that TDK conducts business operations in accordance with these policies.In response to all inquiries and reports, relevant departments of TDK Group companies, independently or together, work to investigate, take necessary remedial actions and prevent recurrence of such issues.

Dialogue

TDK has engaged in dialogues with several third-party experts in order to better understand human rights issues that could impact our activities, including the following.