Sustainability Report 2020

CONTENTSCONTENTS

Editorial Policy

About the "Sustainability" Website..........................................................................................................4
Top Commitment......................................................................................................................................6

Top
Commitment

TDK Group's Sustainability
Corporate Philosophy and Sustainability............................................................................................9TDK Group's
Sustainability

Pursuing Both a Sustainable Society and Corporate Growth...........................................................13
Sustainability Management...............................................................................................................15
Efforts to Achieve the SDGs..............................................................................................................17

Environment

Key CSR Issues (Materiality) and Finalization Process......................................................................23
Risks, Opportunities, Goals, and Achievements...............................................................................26
Society

Contribute to the World through Technology.....................................................................................32
Develop Human Resources...............................................................................................................37
Consider the Societal and Environmental Impact of the Supply Chain.............................................40

Governance

Develop and Prosper in Harmony with the Global Environment.......................................................42
Stakeholder Engagement..................................................................................................................47
How the Public
Sees Us

Environment
Environmental Policy and Environmental Vision................................................................................50

The Worldwide
TDK Group

Environmental Management System.................................................................................................54
ISO14001 Certification (As of June 30th 2020).................................................................................57

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Action Plan in TDK Environment, Health and Safety Action 2025.....................................................59
FY2019 Achievements of the TDK Environment, Health and Safety Action 2025.............................60
Climate Change Initiatives.................................................................................................................61
Third-Party Verification......................................................................................................................71
Third-Party Review of Environmental Performance Data..................................................................72
Water Resources Activities................................................................................................................73
Effective Use of Resources................................................................................................................75
Reduce Risks of Chemical Use.........................................................................................................77
Approach to Biodiversity...................................................................................................................78
Environmental Performance Data......................................................................................................80
Environmental Performance Data by Site..........................................................................................83
Cost of Environmental Protection......................................................................................................84
A History of TDK's Environmental Activities......................................................................................862

Sustainability Report 2020Society
CONTENTS

Respect for Human Rights................................................................................................................89
TDK Group Policy on Human Rights.................................................................................................96
Quality Assurance Activities..............................................................................................................97

Editorial Policy

Customer Satisfaction.....................................................................................................................103
Sustainable Procurement................................................................................................................105

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Commitment

Policy on Relations with Business Partners....................................................................................111
Responsible Sourcing of Minerals...................................................................................................112

TDK Group's
Sustainability

TDK Group Policy on Responsible Sourcing Minerals....................................................................115
Social and Environmental Consideration at Manufacturing Sites...................................................116
Global Human Resources Strategy.................................................................................................119

Environment

Develop Global Human Resources..................................................................................................120
Cultivate a Corporate Culture that Respects Diversity....................................................................124
Safety and Health............................................................................................................................131

SocietyOHSAS18001 (ISO45001) Certification (As of June 30th 2020)......................................................135
Social Contribution Activities...........................................................................................................137
GovernanceSocial and Environment Considerations in the Supply Chain:
Performance Data............................................................................................................................141
Employee Performance Data...........................................................................................................142

How the Public
Sees Us

Governance
The Worldwide
TDK Group

Corporate Governance....................................................................................................................145
Global Tax Policy.............................................................................................................................146
Corporate Ethics and Compliance..................................................................................................148

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Risk Management............................................................................................................................150
Information Security........................................................................................................................152
Governance Performance Data.......................................................................................................155

How the Public Sees Us
TDK Included in FY 2019 Social Assessment Index.......................................................................156

The Worldwide TDK Group...................................................................................................................157
GRI Standards Table............................................................................................................................158
Third-Party Opinion..............................................................................................................................166

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Sustainability Report 2020

Sustainability

About the "Sustainability" Website

CONTENTS

Editorial Policy

Segmentation of Information and Editorial Policy of the Sustainability Website
In Value Creation 2020, TDK’s Medium-Term Plan, we outlined our aim of rotating the cycle whereby theenhancement of social value leads to commercial value (corporate growth), the efficient use of the profits andTopCommitment

assets derived therefrom leads to improved asset value, and the utilization of these assets leads to further
contributions to society.

TDK Group's
Sustainability

This sustainability website (Sustainability Report) carries ESG information relevant to the enhancement of social
value. In editing this information, against the background of social issues, we have endeavored to present
information relating to key CSR issues (materiality) identified in accordance with our management strategy, theEnvironment

degree of impact of the TDK Group’s business on society, the degree of stakeholder interest, and our current
response, and taking the opinions of stakeholders into account as well, in a more detailed manner and also toreport on the progress that has been made.

Society

In addition, in the shareholder and investor information on TDK’s website, we explain our policies and strategies
relating to the optimization of commercial value and asset value through IR news, the IR calendar, latest materials,
and so on. And in the Annual Report, we introduce stories about how the TDK Group, while creating the three

Governancevalues, contributes to society and, as a result, grows its business. Please take a look at them.
Investor Relations TDK website

Annual Reports

How the Public
Sees Us

The Worldwide
TDK Group

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Sustainability Report 2020

Period covered
CONTENTSFY2019 (April 1, 2019 to March 31, 2020)• Some information covers activities outside this period.
Editorial Policy• In order to report progress in an easy-to-understand manner, data over several years is carried (excluding someparts).

Top
Commitment

Organizations covered
TDK Group (TDK Corporation and 141 consolidated subsidiaries in Japan and overseas)

TDK Group's
Sustainability• When information refers to a specific reporting range, explanations are given accordingly.

Major organizational changes during the period covered:Environment

None

Enhancing the Objectivity and Accurateness of Disclosed Information
Society

Regarding environmental performance data, TDK implements third-party verification by SGS Japan Inc. and thirdparty reviews.

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

Third-Party Verification

Third-Party Review of Environmental Performance Data

Update period
September 2020 (previous update: September 2019; next update scheduled for September 2021

Reference Guidelines
Global Reporting Initiative (GRI) Sustainability Reporting Standards "Core" compliant,

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ISO26000 (Guidance on social responsibility)

Contact
CSR Group, Sustainability Promotion HQ: tdkcsr@jp.tdk.com

Caution regarding forward-looking statements
Certain information on the Sustainability Website contains forward-looking statements such as plans, policies,
management strategies, targets, schedules, understandings, and evaluations with respect to the TDK Group. These
forward-looking statements are based on the current forecasts, estimates, assumptions, plans, understandings,
and evaluations of the TDK Group in light of information currently available to it, and contain known and unknown
risks, uncertainties, and other factors. The TDK Group therefore wishes to caution readers that, being subject torisks, uncertainties, and other factors, the TDK Group’s actual results, performance, achievements, or financial
positions could be materially different from any future results, performance, achievements, or financial positions
expressed or implied by these forward-looking statements.

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Sustainability Report 2020

Sustainability

Top Commitment

CONTENTS

Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Environment

Society

Overcoming the COVID-19 crisis to build a new society
Governance

We would first like to offer our heartfelt sympathy to those individuals and their families who have been affectedby the COVID-19, and our sincerest thoughts and prayers for those who have died in this pandemic. We would
also like to express our deep appreciation for the dedication of the many individuals working on the front lines of

How the Public
Sees Us

medicine and to everyone engaged in the work of sustaining the infrastructure of our everyday lives.
At the end of January, 2020, the TDK Group formed a team to take measures against crisis management
to address the COVID-19, and worked to ensure the safety of its employees by expanding teleworking and

The Worldwide
TDK Group

establishing rules for cross - regional business travel. Ironically, the coronavirus - a major threat to mankind - hasadvanced society's accelerated use of technology, resulting in the widening adoption of new ways of working.
Even after the pandemic's risks have been reduced through the dissemination of specific medicnes and vaccines,

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it is unlikely that people's lives will return to what they were before, and I think we will continue to redefine ourcollective "new normal" state of life.
How we deal with the crisis that we currently face will change the world after we have overcome it. For example,
if teleworking becomes established in an appropriate form, workers could take the vast amount of time previously
spent commuting and apply it to activities like exercising for better health, communicating with friends andcolleagues, and spending time with family. That will create richer, more human lives and bring greater happiness.
While the impact of the pandemic has been enormous, we also see this as an opportunity to head into a new age,
one in which we must succeed in evolving based on the assumption of a "new normal."Contributing to DX and EX with an emphasis on CX (Customer Experiences)
To date, the TDK Group has seen digital transformation (DX) and energy transformation (EX) as opportunities tocontribute to society. The COVID-19 has done nothing to impede this trend - if anything, we believe it will only
accelerate further.
In DX, it is clear that digital innovation will support new, more flexible ways of working and assist in resolving labor
shortages. EX, meanwhile, will be essential in making it possible to lead more comfortable, happier lives using lessenergy through the pursuit of more efficient energy use via "time - shift - use" - storing energy during the day for
use at night - among other methods, thus bequeathing future generations a more livable society with fewer energy- related risks.

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Sustainability Report 2020

To change the world through DX and EX, we at TDK Group must first, ourselves, change. The Group is currently
CONTENTS

advancing "Digi - TDK," a strategy for utilizing digital data to optimize manufacturing. "Eco - TDK," meanwhile, will
be our strategy for engaging in rigorous energy - saving measures and shifting to renewable energy.
The customer experience / consumer experience (CX) perspective - our ability to approach DX and EX from the

Editorial Policy

viewpoint of our customers and consumers - will be important to accomplishing these goals. An attitude thatsays that simply fulfilling the required specifications is good enough will have no place in this scenario. Only byimagining and understanding what lies behind those requirements - that the customer's specifications are basedTop
Commitment

on certain assumptions about how and why the consumer will use the finished product - can we offer solutions
that are worthy of the customer's trust and that will satisfy their needs, providing experiences that exceed their
expectations.

TDK Group's
Sustainability

This concept of CX is also essential on the front lines of development and production. Originating from theSustainable Development Goals (SDGs), the TDK Group is moving forward with efforts to encourage those
involved in product development and production to explore for themselves what kind of value their products andEnvironment

technological capabilities can deliver toward solving social issues, and to actually create that value.

Becoming a strong, flexible organization that responds quickly to change
Society

In financial terms, the worsening relationship between the U.S. and China, along with the impact of the COVID-19,
had severe consequences for the Group in fiscal 2019, but significant progress was made on the non - financial

Governanceside, which will form the foundation of future growth.
First, we established a governance structure for the global promotion of empowerment and transparency at TDK.
In April 2020, we officially began operating under our "Global Common Regulations," which we spent two years

How the Public
Sees Usputting in place. These ensure that, as the TDK Group expands worldwide through M&A, each of the companies it
acquires can make the most of their respective cultures and characteristics, while sharing TDK's corporate mottoand principles, and corporate vision and clarifying the rules and regulations each Group member should follow.

The Worldwide
TDK Group

Second, TDK created a global human resource management system, building on its strengths in global humanresources and diversity. Providing maximum opportunities for the over 100,000 employees of the TDK Group
members to contribute their talents will be key to our sustainable growth going forward. So beginning in fiscal

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2020, we launched a comprehensive framework around education, training, evaluation and other human resource
issues.
My goal is to make the TDK Group an autonomous, decentralized organization, rather than one in which authority
is centralized at the executive management and headquarter level. Without that, in fact, there is no way for
us to quickly provide value in response to changes in society. This is why we are putting such emphasis on
empowerment and transparency - trusting in people who share our corporate motto and principles, and goals andwho will work together to conduct our business while maintaining transparency - and on HR reforms designed toleverage our global human resources.
In February 2020, we also joined the Responsible Business Alliance (RBA), an organization that works to promotesustainability in global supply chains. Today, efforts to address human rights and other social issues, as well as
environmental issues, are absolutely essential to managing a global business. TDK offers its full support of the
RBA's vision, and will protect the rights, health, and safety of workers in its supply chain.

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Sustainability Report 2020

CONTENTS

Balancing a sustainable society and corporate growth by pursuing our Corporate
Motto to "Contribute to culture and industry through creativity"
There was a time when balancing economic rationality and social rationality was seen as a paradox, and the

Editorial Policy

two were thought of as a trade - off. As discussions around sustainability have intensified, however, that angle
has gradually narrowed, and today the two vectors are seen as being in complete alignment. In other words,
contributions to a sustainable society are themselves now viewed as leading to corporate growth. This perfectTop
Commitment

overlap is what will maximize the drive forward for business.
TDK marks its 85th anniversary in 2020, leading us to think ahead to our 100th year, our next major milestone.
Now is an apt time to remind ourselves of our corporate motto, "Contribute to culture and industry throughTDK Group's
Sustainability

creativity." This encompasses the full range of goals for our Group's business, while everything else is just ameans to that end. Based on that understanding, in fiscal 2019 we set forth the TDK Group's Sustainability Vision,"Technology for the well - being of all people."

Environment

I would like to make TDK a company that people get excited about. My ideal would be for our employees to work
each day full of dreams, and for society to look forward to what we, as a company, will come up with next. I would
like our employees to share a sense of fulfillment in knowing that the work they do benefits society; to have aSocietypositive impact on one another; and to take that feeling of excitement about what they might be capable of next
and turn it into productivity. Using the power of each of our passionate employees to drive our business, the TDKGroup will work to achieve a sustainable and happy society for all people.

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TDK Group

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Sustainability Report 2020

Sustainability | TDK Group's Sustainability

Corporate Philosophy and Sustainability

CONTENTS

A Sustainable Society Created through Business Activities
Editorial Policy

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TDK Group's
Sustainability

Corporate Vision

TDK Value

Corporate Philosophy

TDK Code of Conduct

A Sustainable Society Created through Business Activities
Our society is facing various issues. The TDK Group seeks to solve these issues through our business and toachieve both a sustainable society and corporate growth. As our corporate philosophy, employees of the TDKGroup abide by our corporate motto and corporate principles as the value standards for their daily conduct.
Based on our corporate philosophy, our corporate vision, Vision 2035, states clearly the ideal image that TDK

Environment

should aim for as we head toward the centennial of our founding. TDK Value outlines the stance that all employees
should adopt, regardless of their position, toward realization of the corporate philosophy and corporate vision.

Society

At the same time, we aim to achieve the targets set out in our three-year medium-term management plans. In
addition, we believe that the display in major markets of the five core technologies representing TDK’s strength willlead to the solution of social issues and corporate growth. Through these business activities, we will realize theGovernancesociety depicted in the TDK Group’s Sustainability Vision.

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Sustainability Report 2020

Corporate Philosophy
CONTENTS

In 1930 Dr. Yogoro Kato and Dr. Takeshi Takei at the Tokyo Institute of Technology invented ferrite, a magnetic
ceramic compound derived from iron and other oxides. Kenzo Saito, TDK’s first president, was deeply impressed
Editorial Policy

by Dr. Kato’s remark that “A real industry is a creative industry,” and on December 7, 1935, he founded Tokyo
Denki Kagaku Kogyo K.K. (present-day TDK) to commercialize ferrite. At that time the potential use of ferrite was
unknown, so the establishment of the company was a courageous venture in pursuit of a vision. As a result ofTop
Commitment

joint research and development by the Tokyo Institute of Technology and TDK, a component called a ferrite core
was realized, and in 1937, ahead of the rest of the world, it was put to use in Japanese wireless communicationequipment, radios, and so on. By the end of World War II, a total of five million units had been shipped, and the

TDK Group's
Sustainability

company had acquired trust. This founding spirit of creativity, of “creating values that do not yet exist in the worldfrom the level of materials,” has been inherited as TDK’s DNA. Our corporate motto, established in June 1967,reflects this founding spirit.

Environment

Society

GovernanceHow the Public
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Corporate Motto
Contribute to culture and industry through creativity

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Corporate Principles
CONTENTS

Vision: Always take a new step forward with a vision in mind. Creation and construction are not born without vision.
Courage: Always perform with courage. Performing power is born by confronting contradiction and overcoming it.
Trust: Always try to build trust. Trust is born from a spirit of honesty and service.

Editorial Policy

Corporate Vision
The Corporate Vision summarizes the founding spirit of the company, the four major innovations of the past, theTop
Commitment

contribution to utilizing global resources, and the stance towards the corporate motto. While illuminating the TDK
vision from the viewpoints of the past, the present, and the future, the vision also draws up the picture of thecompany that TDK aims to be as we move towards our 100th anniversary.

TDK Group's
Sustainability

Corporate Vision -Vision2035
TDK was founded in 1935, based on the founder's vision and belief - "contribute to the advancement of theEnvironmentsociety through the commercial production of ferrite, a magnetic material which originates from Japan".
TDK achieved four world-class innovations including "ferrite, magnetic tape, multilayer materials, magnetic
heads", and has been offering products to support the advancement of the society.

Society

TDK will continue to strive to achieve further innovation and create value for customers through the delivery ofoutstanding quality products and services, by utilizing the diverse global resources.
Based on TDK's corporate motto, TDK will continue to "contribute to culture and industry through creativity",

GovernanceHow the Public
Sees Usby revitalizing and protecting the global environment and creating a pleasant and safe society.

TDK Value
The "TDK Value" guidelines comprise four categories that describe a concrete outlook for the future, evolving fromThe Worldwide
TDK Group

the foundation and the company culture that TDK has built up over the years. The platforms will be shared and put
into practice by all members of the TDK Group.
Category

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Value
We have:- Strong determination to contribute to our customers’ successCustomer Focus- Passion to be a trusted partner for our customers

Therefore we can:- Deliver inspirational value by standing in the customer’s shoes- Offer outstanding quality products, services and technology to satisfy our customers

We have:- Culture to turn adverse challenges into chances to develop ourselves

Challenge- Strong determination to accomplish our business goals by overcoming adversity

Therefore we can:- Accept challenges to make innovative breakthroughs and continue to create new value- Lead our colleagues and collaborate as a team by sharing the same value

We have:- Aspiration to continuously improve ourselves

HR Development- Motivation to contribute to the advancement of society and growth of businesses

Therefore we can:- Define clear vision/goals and drive ourselves to achieve them
- Support the development of our colleagues and build enthusiastic teams

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Sustainability Report 2020

We have:

CONTENTS- Global network with diverse culture

Diversity
Editorial Policy- Teams which respect each other and teamwork which encourages development

Therefore we can:- Embrace different ideas and opinions- Clearly express our opinions with sincerity through open discussions

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Commitment

TDK Code of Conduct
The TDK Code of Conduct stipulates specific behavior guidelines so that the TDK Group and all of its directors

TDK Group's
Sustainability

and employees comply with the requisite laws, ordinances and social norms. In this code, the TDK Grouphas compiled the TDK Charter of Corporate Behavior outlining the universal matters that should be practiced
commonly by the Group.

Environment

Related links
TDK Code of Conduct

Society

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Sustainability Report 2020

Sustainability | TDK Group's Sustainability
CONTENTS

Pursuing Both a Sustainable Society and Corporate Growth
TDK Group’s Sustainability Vision

Medium-Term Plan “Value Creation 2020”

Editorial Policy

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Commitment

TDK Group’s Sustainability Vision
Various issues exist in the society surrounding the TDK Group, including environmental problems, such as climatechange, energy, and the exhaustion of resources, and social problems, such as aging and the digital divide. TDKTDK Group's
Sustainability

will contribute to the solution of these problems and the building of a sustainable society for future generations.
As well as aiming to solve social problems through our business on the basis of our corporate philosophy, which is
our fundamental stance, we have formulated a new TDK Group’s Sustainability Vision.

Environment

This vision proclaims that by fully utilizing TDK’s proprietary core technologies and solutions, we will “advance thedevelopment of a sustainable society and champion well-being for all people.” In the formulation of this vision, we
again assorted the social environment surrounding us from a long-term perspective and studied the potential ofSociety

the TDK Group’s strengths and resources. In the process, we heard the opinions of not only management but also
external experts.
We will continue to share this vision throughout the Group, put it into practice in our business, and consider and

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

implement specific measures toward the realization of a happy society.

TDK Group's
Sustainability Vision“Technology for well-being of all people”
TDK Group strives to restore and protect the global

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environment while promoting respect for human rights.
Through its innovative core technologies and solutions,
TDK Group advances the development of a sustainable
society and champions well-being for all people.

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Sustainability Report 2020

Medium-Term Plan “Value Creation 2020”
CONTENTS

In “Value Creation 2020,” the TDK Group’s Medium-Term Plan, we aim to contribute to society by creating thethree values making up corporate value—namely, Commercial Value (execute growth strategy), Asset Value (improve
Editorial Policy

asset efficiency), and Social Value (enhance enterprise value)—and, as a result, to grow our business.
Among these, we believe that Social Value—in other words, aiming to realize a sustainable society andcompany—is the starting point of the cycle toward other value creation. It means nothing other than practicing theTop
Commitment

Sustainability Vision’s goal of realizing a “Advancing the development of a sustainable society and promoting wellbeing for all people.” and is also consistent with our corporate motto.
By further strengthening our unique competitive advantages ((1) material and process technologies, (2) customer

TDK Group's
Sustainability

base, (3) strength in diversity, (4) global business bases, and (5) integrated production) and promoting our MediumTerm Plan, which incorporates the thinking of this Sustainability Vision, we will endeavor to contribute to both ofsustainability through our business and growth as a company.

Environment

Society

GovernanceHow the Public
Sees Us

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Related link
Medium-Term Plan “Value Creation 2020”14

Sustainability Report 2020

Sustainability | TDK Group's Sustainability

Sustainability Management

CONTENTS

Sustainability Promotion Structure
Editorial Policy

Top
Commitment

TDK Group's
Sustainability

In-house Awareness Raising

Main Initiatives and Organizations with Which TDK is Affiliated or in Agreement

Sustainability Promotion Structure
The Sustainability Promotion HQ was established directly under the president as a structure for the implementationof sustainability-related initiatives. It engages in the following activities:• Drafting of activity policies relating to sustainability

Environment• Dissemination of activity policies throughout the entire TDK Group• Monitoring of the state of progress of activities• Proposals and reports to management, including the Executive Committee and Board of Directors

Society• Disclosure of sustainability-related information and implementation of dialogue with stakeholders• Feedback regarding various opinions received from outside the Group and specific issues identified throughactivities to management, head office divisions, business companies, business groups, and business sites

Governance

Sustainability-related issues and themes proposed or reported by the Sustainability Promotion HQ are discussed
in the Executive Committee, with a final decision being made by the president.
How the Public
Sees Us

Furthermore, the CSR Group in the Sustainability Promotion HQ and head office divisions promote policies andactivities reflected in management policy on a global level, disseminating them to business companies, businessgroups, Group companies, and manufacturing sites around the world in collaboration with regional headquarters.

The Worldwide
TDK Group

In-house Awareness Raising
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For the promotion of sustainability, the TDK Group believes it is important for every employee to understandthe concept of sustainability, the background requiring efforts by companies, TDK’s approach to sustainability
activities, and so on and to incorporate it into their own work. Accordingly, we implement lecture-style training
programs geared to each employee rank, such as training for new recruits, as well as e-learning and otherschemes.
In fiscal 2019, in addition to diffusion of the Sustainability Vision using digital signage and dialogue with an asset
manager for members of management and supervising head office divisions, we devoted much effort toward
education relating to the SDGs. Specifically, we implemented e-learning for all employees, held dialogues andconsidered efforts to achieve business targets in each business group, and organized a lecture by a university
professor for the Technology and Intellectual Property HQ.
Related link
Efforts to Achieve the SDGs

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Sustainability Report 2020

Main Initiatives and Organizations with Which TDK is Affiliated or in Agreement
CONTENTSThe TDK Group respects international norms and standards, such as the Universal Declaration of Human
Rights, ISO 26000, the OECD Guidelines for Multinational Enterprises, the international labor standards of the
Editorial Policy

International Labor Organization (ILO), and the United Nations Guiding Principles on Business and Human Rights(the “Ruggie Framework”), and promotes business with the aim of realizing the common global objectives citedin the SDGs. Furthermore, in editing and issuing our sustainability website, we comply with the Core option of theTop
Commitment

GRI Standards of the Global Reporting Initiative, the international standard.

Agreement with the TCFD*TDK Group's
Sustainability

In May 2019 TDK expressed its agreement with the Task Force on Climate-related Financial Disclosures (TCFD),
which analyzes the impact of climate change on corporate finance and makes proposals recommending
information disclosure.

Environment*The TCFD was founded in 2015 by the Financial Stability Board (FSB), an international body seeking to achieve the stabilization of thefinancial system.

Related links
Society

TCFD (Link to external site)

GovernanceEfforts to Combat Climate Change

Affiliation with the RBA and RMI
In February 2020 the TDK Group joined the Responsible Business Alliance (RBA), the world’s largest industry
coalition aiming to promote CSR in the global supply chain. The TDK Group fully supports the RBA’s vision and

How the Public
Sees Us

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mission and, in accordance with the RBA’s code of conduct, makes continuous efforts to improve the humanrights, health, safety, and environment of workers in the TDK Group and at suppliers.
Related links
RBA (Link to external site)

RMI (Link to external site)

Respect for Human Rights

Sustainable Procurement

Responsible Sourcing of Minerals

Social and Environmental Consideration at Manufacturing Sites

Other Main Organizations Joined by TDK
TDK belongs to the following organizations and promotes efforts to solve social issues that cannot be effectively
tackled by single companies alone.
Name of organization

Outline of organization (links to external sites)

Japan Business Federation

http://www.keidanren.or.jp/en/profile/pro001.html

Japan Electronics and Information Technology

http://www.jeita.or.jp/english/about/what/index.htm

Industries Association (JEITA)(policy administrator)

Joint Article Management Promotion-

https://chemsherpa.net/english

consortium (JAMP)(founding member company, since 2007)

Japan Business Council in Europe (JBCE)

https://www.jbce.org/about-us/who-we-are/about-jbce/

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Sustainability | TDK Group's Sustainability

Efforts to Achieve the SDGs

CONTENTS

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Commitment

The TDK Group’s Important CSR Issues (Materiality)

The TDK Group’s Efforts to Achieve the SDGs

and the SDGs

Areas in Which the TDK Group Can Cooperate andBuilding a Setup to Address the SDGs throughthe Resulting Society

Business

Enhancing In-house Understanding of the SDGs and Dissemination Activities
TDK Group's
Sustainability

The TDK Group’s Efforts to Achieve the SDGs
To make the global environment and people’s lives sustainable, the United Nations General Assembly approved

Environmentthe 2030 Agenda for Sustainable Development in September 2015. This agenda advocates Sustainable
Development Goals (SDGs), consisting of 17 goals and 169 targets, to be achieved by all countries by 2030.
In accordance with our basic policies outlined in “Value Creation 2020,” our Medium-Term Plan beginning in

Society

fiscal 2018, TDK aims to ensure sustainable growth through the creation of three values. The realization of oneof these values—“Social Value” (enhancing the enterprise’s social value)— is closely tied to the achievement of
the SDGs. Contributing to the solution of social issues and thereby creating social value means nothing less than

Governancethe realization of TDK’s corporate motto of “contribute to culture and industry through creativity.” By contributing
through our business to the solution of the global-scale issues raised by the SDGs, TDK seeks to enhance its

How the Public
Sees Us

corporate value.

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Related link
United Nations Information Center (link to external site)

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The TDK Group’s Important CSR Issues (Materiality) and the SDGs
CONTENTSThe TDK Group, which seeks to realize a sustainable society, identifies “Contribute to the world throughtechnology,” “Develop human resources” “Consider the societal and environmental impact of the supply chain,”
Editorial Policyand “Develop and prosper in harmony with the global environment” as the important issues guiding CSR activity.
By addressing these important CSR issues (materiality), TDK aims to achieve the related SDGs.

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TDK Group's
Sustainability

Environment

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Sustainability Report 2020

Areas in Which the TDK Group Can Cooperate and the Resulting Society
CONTENTS

SDGs
Editorial Policy

Social issues

Areas in which the TDK Group can cooperate and the resulting society

Increase of health and welfare issues

Advanced medical treatment available to all people.

due to aging

Healthcare equipment, health management by smartphone, etc.

High medical expenses
Top
Commitment

enable people to easily understand their own health condition.
Through the diffusion of care robots, monitoring functions, andIncrease of population in need of carevoice-recognition technology, people in need of care can leaddue to transition to aged society
TDK Group's
Sustainability

Environment

anxiety-free lives.

Difficulty of social participation by

The diffusion of functional assistance sensors, etc. supports thedisabled persons

independence of disabled persons toward their social participation.

Traffic accidents

Safe traffic systems built to reduce traffic accidents to zero.

Obstructions to economic growth andsocial development due to gender

Gender equality, which is one of the basic human rights, andinequalities, etc.
Societysound relations of mutual trust are achieved in health, education,
protection, welfare, social advancement, and labor.

Inequalities in access to medical
treatment and nutrition by gender

Clean energy supply systems become widespread, and shift toGovernancerenewable energy underway (gasoline cars → EVs).

Climate change due to increased use offossil fuels

Efficient power generation and transmission systems become
widespread, and the use of highly efficient renewable energy is

How the Public
Sees Us

promoted.
Elimination of labor shortages and low labor productivity by

Expansion of poor conditions without
The Worldwide
TDK Group

GRI Standards
Table

increasing productivity through innovation and promoting factorystable, well-paid work

automation.

Unemployment increases or remains at

Opportunities available for everyone to enjoy reasonable income,high level.

anxiety-free workplaces, and family social security.

Fragile infrastructure in developing

Electrification of infrastructure progresses, and infrastructure

countries

foundations are strengthened.

Aging of infrastructure in developed

Infrastructure is retrofitted to make it resilient.

countries

Labor shortages are supplemented by the diffusion of work support

Labor shortages

robots, and productivity improves.

Explosive increase in amount of

Storage capacity ensured by utilizing data center HDDs.

information (IoT, autonomous driving,

Negative effects of 5G and 6G overcome to realize high-speed, high-etc.)

volume telecommunications.
Damage kept to minimum through utilization of highly accurate

Increase of natural disasters due topredictive detectors, disaster-prevention robots, and technology toclimate changetransport people and things easily in times of emergency.

Decline of local community functions
due to concentration of population in

Basic living services provided without regional discrimination.

citiesOutflow and leakage of private andSecurity improved.

personal information

19

Sustainability Report 2020

CONTENTS

SDGs

Social issues

Areas in which the TDK Group can cooperate and the resulting society

Environmental pollution

Manufacturing conducted without the use of harmful substances.

(due to electronic equipment waste)

Quantitative use of rare resources reduced by the development of

Editorial Policy

new materials.
Use of rare metals and recycled materials promoted, and resource

Exhaustion of resources

recycling system established.

Top
Commitment

Recycling-oriented society established.
Sharing economy becomes entrenched.
Responsible procurement activities conducted, including theProcurement-related environmental
TDK Group's
Sustainability

establishment of proper working environments without any childand human rights problems

labor or forced labor.
Shift to renewable energy underway (gasoline cars → EVs).

Environment

Highly efficient renewable energy used.

Climate change due to increased use ofEnergy use improved by fuel-consumption improvement technology.

fossil fuels

Resilient business model built to counter climate change.
Society

Access to judicial system guaranteed for everyone.
Disputes settled through functional political and judicial systems.

Disputes, violence, corruption,
Governancediscrimination

Functioning fair trade is maintained.
Society has good public order and enables people to live withoutanxiety.
Priority issues tackled in fragile countries, and development

How the Public
Sees Us

assistance conducted commensurate with achievements.
Innovations created in collaboration with customers and business

Widening disparities

partners.

The Worldwide
TDK Group

System of stakeholder engagement established and operated
continuously.

GRI Standards
Table

20

Sustainability Report 2020

Building a Setup to Address the SDGs through Business
CONTENTSThe TDK Group has been considering, in the following way, what solutions are possible and how TDK’s products
and technological strength can be put to use in tackling the global issues specified in the SDGs relating to
Editorial Policy“contributing to the world through technology.”First, in addition to general in-house education, in accordance with company policy, we conducted an in-house
dialogue with business groups in Japan and overseas regarding the approach to sustainability that we should beTopCommitment

aiming for and the SDGs. After that, of the issues cited in the SDGs, we summarized the discussions that took
place in each business group about what issues and targets could be addressed by their own technologies andsolutions in the medium and long term and whether there were any technologies and solutions that could be

TDK Group's
Sustainability

newly created stemming from social issues. Subsequently, the business groups and the Sustainability Promotion
HQ have been engaged in repeated discussions and considerations on priority areas and medium- to long-term
strategy to achieve the objective of “contributing to the world through technology.” Furthermore, in parallel withEnvironment

this process, of the themes that were discussed in the business groups, those that can be realized in the shortterm were incorporated in business plans for fiscal 2020.
From now on, we will continue to advance the above discussions, share results and boost communication inside

Societyand outside the company, and promote actual activities.

Process:
Governance

1. Implementation of employee educational dialogue to deepen understanding of the SDGs (since June 2018)
2. Confirmation by questionnaire or interview of what products or technologies possessed by each business group could contribute to
the achievement of goals 3, 7, 9, 11, 12, and 13 of the SDGs (May–November 2019)

How the Public
Sees Us

3. Inclusion of confirmed contents into the fiscal 2020 business plans of each business group (October 2019 – March 2020)
4. Promotion of dialogue with business groups and other related parties and consideration of TDK’s priority areas and strategy based onsocial issues (since April 2020)

The Worldwide
TDK Group

Building a Setup to Address the SDGs through Business

GRI Standards
Table

21

Sustainability Report 2020

Enhancing In-house Understanding of the SDGs and Dissemination Activities
CONTENTSThe TDK Group implements dialogue, e-learning, and lectures to promote in-house understanding of the SDGs
and to ensure that we tackle the SDGs through our business as if they were our own goals.
Editorial Policy

Implementation of E-learning for All Employees
We have implemented e-learning for all employees of the TDK Group. Employees learn about the meaning ofTop
Commitment

the SDGs, the background to their adoption by the United Nations, the 17 goals, and the reasons why privatecompanies tackle the SDGs, as well as the relationship between TDK’s business activities and the SDGs. Around
96% of targeted employees completed the course.

TDK Group's
Sustainability

Holding of Lecture for Members of the Technology and Intellectual Property HQAbout 500 members of the Technology and Intellectual Property HQ gathered to hear a lecture by Specially

Environment

Appointed Professor Kenichiro Miyama of the School of Business Administration of Senshu University titled “TDKx SDGs → Innovation.” The speaker explained that the SDGs are goals and targets to solve issues and thereby
create a sustainable society, that they are common objectives of the world that individuals can see as their own,

Societyand that by tackling these goals through its business in accordance with its corporate principles, the TDK Groupcan pave the way toward both a sustainable society and corporate growth.

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

22

Sustainability Report 2020

Sustainability | TDK Group’s Sustainability | Key CSR Issues (Materiality)

Key CSR Issues (Materiality) and Finalization Process

CONTENTSTDK Group’s Key CSR Issues (Materiality)

Key CSR Issues (Materiality) Finalization Process

Editorial Policy

Top
Commitment

TDK Group’s Key CSR Issues (Materiality)
After considering the degree of impact of background social issues from the perspectives of the Group itself andof stakeholders, the TDK Group identified four key CSR issues (materiality): “Contribute to the World throughTDK Group's
Sustainability

Technology,” “ Develop Human Resources,” “ Consider the Societal and Environmental Impact of the Supply
Chain,” and “Develop and Prosper in Harmony with the Global Environment.”
Regarding each key CSR issue (materiality), in order to promote even more effective efforts, Important Themess

Environmentthat have been stipulated are reviewed each year at the time of the formulation of business plans, taking accountof social trends and other factors, with final decisions being made after approval by the Executive Committee.

Society

Contribute to the World through Technology
Important Themes

Governance

Main Points

Addressing social issues by developing
new kinds of products the world has

TDK aims to solve social issues through unique technological development.

not yet seen
How the Public
Sees Us

The Worldwide
TDK Group

Pursue zero-defect product quality

On the basis of high level of technology, we will pursue zero-defect product quality throughuniformly managed production processes from materials to manufacturing.

Develop Human Resources
Important Themes

GRI Standards
Table

Develop global human resources

Main Points
Toward the promotion of genuine globalization, we will strive to develop the humanresources that will serve as its foundation.

Cultivate a corporate culture that

In order to continue generating innovative creativity, we will build a tolerant corporate

respects diversity

culture that respects the diversity of human resources.

Consider the Societal and Environmental Impact of the Supply Chain
Important Themes
Consider the work environment at
manufacturing sites

Consider the work environment of
suppliers

Main Points
In light of the latest requirements, we will gauge considerations for the labor environment at
production sites, which we need as a supplier, and if necessary implement education andguidance toward improvement.
In light of the latest requirements, we will gauge considerations for the labor environment at
suppliers, which we need as a buyer, and if necessary implement education and guidance
toward improvement.
We will execute our social responsibility as a midstream company appropriately throughResponsible sourcing of minerals

the continued implementation of required efforts and an understanding of the latest
requirements.

23

Sustainability Report 2020

Develop and Prosper in Harmony with the Global Environment
CONTENTS

Editorial Policy

Important Themes

Main Points

Reduce environmental load throughout

We will promote environmental activities on the basis of the TDK Environmental Vision

life cycle stages

2035.

Creating a framework for gauging

Through the setting of common gauging product contributions in the industry, we willproduct contributions

promote social understanding of TDK’s environmental contribution value.

Top
Commitment

Key CSR Issues (Materiality) Finalization Process
TDK Group's
Sustainability

GRI-G4 made a revision from requiring comprehensive information disclosure to requiring information disclosure
with the focus on materiality. The objective of this revision was to encourage companies to determine theirreporting content purposefully by getting management to be more deeply involved in CSR.

Environment

TDK held discussions with stakeholders outside the company, implemented a dialogue with management, andfinalized key CSR issues (materiality) through the following process.

Society▼ Prior Stages (Fiscal 2013)

1. Analysis of current circumstances
GovernanceIn light of the GRI-G4 Guidelines, we analyzed current disclosure levels with regard to the contents and the degree of compliant andnoncompliant items.

2. Increasing understanding
How the Public
Sees Us

Relevant personnel took a GRI-G4 Certified Training Course to gain an accurate understanding of the intent of the GRI-G4
Guidelines.

The Worldwide
TDK Group

3. Organization of information sources
In order to finalize materiality and broadly identified social issues, we confirmed how we collect opinions from each stakeholder
group and how engage in dialogue with them.

GRI Standards
Table▼ Step1 (Fiscal 2014)

Identifying social issues
We confirmed the content of day-to-day communications from information sources by stakeholder group and conducted simulations ofvarious social issues in light of ISO26000 and other international standards relating to CSR.

▼ Step2 (Fiscal 2014)

Prioritizing material issues from TDK’s own perspective
We organized priorities from TDK’s own perspective into issues to be addressed with precedence (high priority), issues that be addressedwith an understanding of social demand and requirements (medium priority), and issues which we should be aware of as future topics(low priority) based on management strategies, the degree of impact that the TDK Group’s business has on society, level of interest of
stakeholders, and current responses with regard to the social issues identified above.

24

Sustainability Report 2020

CONTENTS▼ Step3 (Fiscal 2015)

Prioritization from stakeholders’ perspectives
We implemented prioritization from the stakeholders’ perspectives in two parts, a review of the CSR Report and dialogue.
Editorial Policy

In the first part, the review of the CSR Report, we selected experts in the areas where TDK operates business, that is, Asia, Europe, andthe U.S., and heard their opinions about TDK’s activities from the perspectives of “praiseworthy efforts,” “efforts that hopefully can be
improved,” and “social issues that should be aggressively addressed in the future.”Top
Commitment

In light of the opinions that emerged in the review of the CSR Report, we examined and integrated the issues and held a dialogue
between the experts and management. In the dialogue, the participants shared background information and, intermixing points thatshould be appraised or given importance from the perspective of stakeholders, discussed the issues that had been prioritized from TDK’s
own perspective.

TDK Group's
Sustainability▼ Step4 (Fiscal 2015)

Finalization of Key CSR Issues (Materiality)
Environment

We reconsidered the prioritization from the perspectives of TDK and stakeholders and, after gaining approval from the Executive
Committee, finalized the Key CSR Issues (Materiality) of TDK Group.

Related links
Society

Opinions of Experts (CSR Report 2015 Review)
Toward the Finalization of Materiality to Enhance TDK’s Value

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

25

Sustainability Report 2020

Sustainability | TDK Group’s Sustainability | Key CSR Issues (Materiality)

Risks, Opportunities, Goals, and Achievements

CONTENTS

Risks, Opportunities, Goals, and Achievements Relating to Key CSR Issues (Materiality)
Editorial Policy

Contribute to the World through Technology
Develop Human ResourcesTop
Commitment

Consider the Societal and Environmental Impact of the Supply Chain
Develop and Prosper in Harmony with the Global Environment

TDK Group's
Sustainability

Environment

Risks, Opportunities, Goals, and Achievements Relating to Key CSR Issues(Materiality)
At the TDK Group, we have considered the social issues and business environments against the backdrop of theSociety

key CSR issues (materiality) and examined and sorted the risks and opportunities. We would also like to report on
the progress of our activities relating to the key CSR issues (materiality) in the form of goals and achievements.

Governance◆ Risks and opportunities
These refer to opportunities that are created by addressing key CSR issues (materiality) relevant to SDGs and risks

How the Public
Sees Us

that are presented by not engaging in the efforts.

◆ Key themes
The Worldwide
TDK Group

GRI Standards
Table

Each year, we review key themes based on social trends at the time of formulating a business plan and make adecision after obtaining approval in the Executive Committee.

◆ Goals
The head supervising department takes the initiative and sets goals aligned with each of our Group Companies.

26

Sustainability Report 2020

Contribute to the World through Technology
CONTENTS

Editorial Policy◆ RisksTop
Commitment◆ Opportunities
Improvement of technical capabilities

TDK Group's
Sustainability

Loss of sales opportunities

Technical innovations by collaborating with customers

Deterioration of technical capabilities

Contribution to solving social issues

Inhibition of growth of Group Companies

Growth of Group Companies

Loss of trust from customers

Quality improvement in response to market changes
Improvement in credibility with customers and society

Environment◆ Key theme 1: Addressing Social Issues by Developing New Kinds of Products the World Has Not Yet Seen
Main initiative items

Society

Functions

Strengthening of basic technology
Promotion of technical developments that are conscious of Kotozukuri (integrated solutions)
Promotion of product development and sales of First to Market productsTechnology Headquarters
Each Business Group

Governance◆ Goals of FY2019
How the Public
Sees Us◆ Achievements in FY2019
In addition to promoting the SDG concepts to each BusinessTo carry out activities that aim to open up new businessGroup, we came up with medium-term business opportunities

opportunities through technologies and products in different

from a social issue perspective and included them in thebusiness groups in connection with the SDGs
The Worldwide
TDK Groupbusiness plan.

To formulate decision-making processes and procedures that

We incorporated them into the process of forming the businessincorporate the viewpoint of sustainability

plan.
◆ Goals of FY2020

GRI Standards
Table

To achieve the set goals of each Business GroupTo identify business areas and product fields that the TDK Group should aim toward in the medium to long term from a social issue
perspective.

◆ Key theme 2: Pursue Zero-defect Product Quality
Main initiative items

Functions

Construction of source control-type quality assurance system
Manufacturing process innovation using IT and robots

Quality assurance function

Continuous improvement of quality management

Each Business Group

Human resource development on a global scale◆ Goals of FY2019◆ Achievements in FY2019• Update education content to the FY2019 version• Implement FY2019 version quality education

To promote continued TDK quality education to employees◆ Goals of FY2020
To promote globalization of quality education content

27

Sustainability Report 2020

Develop Human Resources
CONTENTS

Editorial Policy◆ RisksTop
Commitment

TDK Group's
Sustainability◆ Opportunities

Lack of human resources, lack of ability (bearer), loss of human

Activation of personnel exchange among Group Companies

resources, decrease in productivity

Sources of new creativity and growth

Reduced growth

Development into a truly global company◆ Key theme 1: Develop Global Human Resources
Environment

Main initiative items

Functions

Expansion in range of collection and grasping of information on human resources

Human Resource Development

Introduction of global selection education
Societyfunction

Establishment of mechanism for fostering true global leaders◆ Goals of FY2019◆ Achievements in FY2019
Successful completion of Territorial Career Development Program

GovernanceTo continue Global Management Development Training (TCDP)(TCDP) in the four territories—Asia, Americas, Greater China,
Europe (~100 persons participate)

How the Public
Sees Us

The Worldwide
TDK Group

To introduce newly Global Management Development Training

Alignment between Global and Local development measures in(Advanced Management Program AMP)

selective regions
English test globally rolled out and global English trainings

To enhance English training program

introduced◆ Goals of FY2020

To continue Global Management Development Training (TCDP)GRI Standards
Table

To continue newly Global Advanced Management Program (Global AMP)
To introduce Global Executive Management Program (GEMP)
To enhance English training program◆ Key theme 2: Cultivate a Corporate Culture that Respects Diversity
Main initiative items

Functions

Consideration of expansion and improvement of accuracy of attribute information of humanresources to be collected by the consolidated management database in order to link tomeasures
Promotion on the understanding of various cultures through the implementation of corporate
human resource meetings globally and by area

Human Resource Development
function

Promotion of maintenance and improved workplace environments that are easy to work in fordiverse employees in each region◆ Goals of FY2019◆ Achievements in FY2019

To continue expansion of scope for talent management system.

28

Talent management system extended to the Sales function
worldwide and TDK Top Key Positions

Sustainability Report 2020

CONTENTS

To establish a diversity policy.

Established a diversity policy in April 2020

To enforce the establishment of a Human Resources network• Global Human resources meetings with participation of all
major legal entities took place in May 2018 and July 2019

through further organisation of Global and Territorial Human
Editorial Policy• Territorial HR meetings with participation of local HR managers
launched at all territories starting in 2018

Resources Meetings.
To start succession planning for identified Top Key Positions at the
TDK Group.

Top
Commitment

Succession Planning for Top Key Positions being implemented◆ Goals of FY2020
To continue expansion of scope for talent management system

TDK Group's
Sustainability

To enforce the establishment of a Human Resources network through further organisation of Global and Territorial Human Resources
Meetings
To further conduct succession planning for identified Top Key Positions at the TDK Group.

Environment

Consider the Societal and Environmental Impact of the Supply Chain
Society

GovernanceHow the Public
Sees Us◆ Risks◆ Opportunities

Occurrence of serious human rights violations in bases within
Asian regions that we operate in as a Group

The Worldwide
TDK Group

Occurrence of serious human rights violations and environmental

Risk reduction in Group Companies

pollution in bases within Asian regions of the Group’s suppliersContinuation of transactions with customers

Participation in conflicts at mining sites, serious human rights

Promotion of alternative material development

violations, and environmental destruction through the purchase
GRI Standards
Tableof metal materials and metal-containing parts◆ Key theme 1: Consider the Work Environment at Manufacturing Sites
Main initiative items

Functions

Implementation of CRS self-checks and risk assessments in all production sites
Improvement of activity levels through CSR audits by customers and voluntary CSR audits

CSR function

Continuous improvement of knowledge and ability through internal auditor training◆ Goals of FY2019◆ Achievements in FY2019

To perform 100% CSR self-checks at manufacturing sites

Achieved 100% implementation

To perform 100% labor and ethics risk assessment at

Achieved 100% implementation

manufacturing sites
To secure 100% opportunities for third-party CSR audits once

Achieved 100% implementation (high-risk countries in Asia,

every two years (High-risk countries of Asia including China)

including China)◆ Goals of FY2020
To achieve 100% implementation of CSR self-checks in production sites (TDK Group production sites)

29

Sustainability Report 2020

CONTENTS

To achieve 100% implementation of labor, human rights, and ethics risk assessments in production sites (TDK Group production sites)
To ensure audit opportunities once every two years by a third party (high-risk countries in Asia, including China)
To continually implement CSR training

Editorial Policy

Top
Commitment

To implement internal audits on workers’rights and corporate ethics by internal auditors◆ Key theme 2: Consider the Work Environment of Suppliers
Main initiative items

TDK Group's
Sustainability

Functions
Procurement function

Promotion of global understanding of CSR procurement

Each Business Group

Improvement of management level of CSR procurement

Human Resource Development

Construction of a system to understand the CSR efforts of outsourced suppliers

Environment◆ Goals of FY2019◆ Achievements in FY2019

CSR-compliant supplier ratio: over 95%
Society

CSR-compliant supplier ratio: 96.1%

To perform 100% CSR self-checks at sub-contractors and• CSR self-checks at sub-contractors: 99.1%

conduct CSR audits once every two years at major sub-• Conducted CSR audits at 3 sub-contractors upon whom TDK
has high dependence in China

contractor upon whom TDK has high dependence in China
Governancefunction

To perform 100% CSR self-checks at dispatch companies usedby manufacturing sites in high-risk countries of Asia including

Achieved 100% implementation

China
How the Public
Sees Us◆ Goals of FY2020
To achieve CSR compliant supplier rate of 97%
To achieve 100% implementation of CSR self-checks at outsourced suppliers

The Worldwide
TDK Group

GRI Standards
Table

To achieve 100% implementation of CSR self-checks at temporary staffing agencies◆ Key theme 3: Responsible Sourcing of Minerals
Main initiative items

FunctionsImprovement of supplier ratio confirmed to be DRC Conflict-freeProcurement function

Continuous participation and collaboration with industrial organizations and related

Quality assurance function

organizations◆ Goals of FY2019◆ Achievements in FY2019

To confirm DRC conflict-free supplier ratio: over 92%

Confirmed 93.1% of suppliers are DRC Conflict-free

To monitor the number of customer responses

Implemented monitoring◆ Goals of FY2020

To achieve a DRC Conflict-free supplier ratio of 92% or more
To monitor the number of customer responses

30

Sustainability Report 2020

Develop and Prosper in Harmony with the Global Environment
CONTENTS

Editorial Policy

Top
Commitment◆ Risks◆ Opportunities
Contribution to reducing environmental impact through productCreation of environmental impact at the Group’s production sites
TDK Group's
Sustainability

Creation of environmental impact through value chainssupplyResponse to and mitigation of climate change through businessactivities
Improved evaluations of product contributions

Environment◆ Key theme 1: Reduce Environmental Load throughout Life Cycle Stages
Main initiative items

Society

Functions

Understanding of the environmental impact in each stage from the life cycle perspective
Establishment of CO2 conversion methods for each environmental load

Safety and Environment function

Implementation of environmental load reduction activities in each stage of the life cycle
GovernanceHow the Public
Sees Us◆ Goals of FY2019◆ Achievements in FY2019

Refer to the achievements in FY2019 from the TDK Environment,

Refer to the achievements in FY2019 from the TDK Environment,

Health and Safety Action 2025

Health and Safety Action 2025
◆ Goals of FY2020

Refer to the action plan from the TDK Environment, Health and Safety Action 2025
The Worldwide
TDK Group

GRI Standards
Table◆ Key theme 2: Creating a Framework for Gauging Product Contributions
Main initiative items

Functions

Development and establishment of industry standards

Safety and Environment function

Awareness-raising activities for the established standards◆ Goals of FY2019◆ Achievements in FY2019

To continue activities in conjunction with industry groups andContinued activities in collaboration with industrial organizations

continue promotion of efforts to calculate internallyand promoted the spread of in-house calculation work
◆ Goals of FY2020

To continue activities in collaboration with industrial organizations and continue promotion of the spread of in-house calculation work

31

Sustainability Report 2020

Sustainability | TDK Group’s Sustainability | Key CSR Issues (Materiality)

Contribute to the World through Technology

CONTENTS

Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Environment

Materiality-Specific Background
Society

Importance in Our Company
In accordance with our Medium-Term Plan which started in fiscal 2018, we are focusing on the three priority
Governancemarkets of automotive, ICT and industrial & energy, taking advantage of our proprietary technology development
capabilities to open up new business opportunities and realize Monozukuri reform. The overall aim is to offer
products that make a meaningful contribution to society while also resulting in a sustainable improvement of

How the Public
Sees Us

corporate value.

Stakeholders’ Expectations
The Worldwide
TDK Group

Responding to climate change by harnessing TDK’s core technologies, in particular energy conservation andrenewable energy, promote the development of new technologies and the spread of products that help to bring

GRI Standards
Table

about a low-carbon society.

Basic Concept
Contribute to the world through technology is the contribution to the society by TDK’s business. Toward this end,
we are focusing on innovative technology development in our priority markets of automotive, ICT, and industrial& energy, helping to save, store, and reuse energy and solve other pressing issues that modern society is facing.
Furthermore, the pursuit of zero-defect product quality based on superior technological competence and realized
through a unified production process that extends from the raw materials to the final product will continue
unchanged in the future. Providing high quality products and services is our way of striving for the advancement ofsociety.

Detailed Activity Reports
Risks and opportunities / Goals and achievements
Quality Assurance Activities

Initiatives for SDGs

Customer Satisfaction

32

Sustainability Report 2020

TopicsCONTENTS

To realize a happy future society, TDK aims to achieve the six goals of SDGs through its technology and products:
Good Health and Well-Being for All (SDG 3), Affordable and Clean Energy (SDG 7), Industry, Innovation, andEditorial Policy

Infrastructure (SDG 9), Sustainable Cities and Communities (SDG 11), Responsible Consumption and Production(SDG 12), and Climate Action (SDG 13).
These SDGs represent areas in which we feel we can provide maximize the potential and value of TDK technology

Top
Commitment

TDK Group's
Sustainability

Environment

Society

GovernanceHow the Public
Sees Usand products to solve social issues facing us today. In our efforts to draw an ideal society where issues are
successfully solved, TDK will develop its technology and products, we aim to realize a happy future society.

Topic 1TDK Electronics challenges the SDGs throughout the value chain
TDK Electronics takes its responsibility toward society and the environment very seriously. At our facilities aroundthe world, we are constantly working on projects to further improve our energy efficiency and consume even fewer
resources. At the same time, we are cultivating employees' awareness that our behavior and our technologies andsolutions can play a part in meeting the social, economic and ecological goals of the global community. The United
Nations’ Sustainable Development Goals (SDGs) serve as guideposts along this path.
Our products are used mostly in automotive and industrial electronics, but also in household appliances andentertainment electronics, smartphones, wearables and medical technology. Our components help make vehicles
cleaner, safer and more comfortable. We also supply key components for photovoltaic installations and wind turbines,
for example, as well as for other renewable energy applications and low-loss HVDC transmission over long distances.
Many of our components and solutions are instrumental in reducing energy consumption in our customers' applications.
And we are careful to choose and deploy materials that minimize the burden on the environment. Additionally, we areworking hard to further reduce weights and volumes in order to realize savings on both production and transportation.
We are thus contributing to six SDG goals on which TDK places special emphasis: SDG 3: Good health and well-being;
SDG 7: Affordable and clean energy; SDG 9: Industry, innovation and infrastructure; SDG 11: Sustainable cities andcommunities; SDG 12: Responsible consumption and production; and SDG 13: Climate action.

The Worldwide
TDK Group

GRI Standards
Table

Special NTC thermistors to measure temperatures in heated carseats are one example. The manufacture of these products is now
completely lead-free: No lead is used in the ceramic, metallization
as well as in the solder alloy that forms the mechanical and electric
link between the metallized NTC ceramics and the connecting wires.
This alloy has a much lower melting point than leaded alloys, solowering the solder bath temperature by about 100 degrees to 250°C saves large amounts of energy at the production facility in Batam,Indonesia.

Heiner Simgen
Product Marketing Manager
Temperature & Pressure Sensors Business GroupTDK Electronics

33

Sustainability Report 2020

CONTENTS

Editorial Policy

Top
Commitment

Another example is the new PowerHap 15 G, a piezo actuator*
based on multilayer-piezoceramic plates that deliver excellent
haptic feedback. It is ideal for use in touchscreens and others invehicles, smartphones and tablets. This innovative component
boasts unrivaled performance, as well as reducing per-click power
consumption from 130 to just 8 millijoules. Its weight and volume
have also been reduced substantially. During application, the newPowerHap requires about 90 percent less energy than conventional
solutions.
*Piezo actuator use piezoelectric material that generate electrical voltage

TDK Group's
Sustainability

in response to applied mechanical stress.

Environment

Society

Dr. Andreas Pentscher-Stani
Head of Product Development Piezo
for PowerHap, Piezo Listen and Medical Products

GovernancePiezo and Protection Devices Business GroupTDK Electronics

How the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
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In production and administration too, TDK Electronics is contributing
to achievement of the SDGs. For example, more and more TDKElectronics factories now use electricity from renewable sources. All
plants in Germany plus those in Austria, Brazil, Iceland and Hungary
and our contract manufacturer in Croatia have all already switched togreen electricity. As a whole, TDK Electronics already derives morethan two thirds of the electrical power it consumes from renewablesources, and this proportion will increase as growing numbers ofplants likewise move over to green electricity. We are also running
projects such as the one in India, where our Nashik plant now
operates a photovoltaic installation covering nearly 11,000 square
meters. The Nashik facility thus aims to reduce its CO2 emissions byroughly 1,100 tons a year, as well as saving money on energy. As aresult, production at the plant will be both less expensive and kinder
to the environment.

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Topic 2InvenSense sensor technology is providing new possibilities towards a safer, healthier, and more
comfortable world

Editorial Policy

Top
Commitment

Dr. Peter Hartwell
Chief Technology Officer
InvenSense

TDK Group's
Sustainability

Environment

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

InvenSense is actively engaged in solving social and environmental issues by using its unique sensor technology.
The key technology at InvenSense is the integration of sensors for transducing physical phenomena with electronics
to capture and digitize sensor signals. The close coupling of these technologies enables small, low power, low cost,
smart sensors that are easily integrated into a myriad of devices. Our software team codes complex algorithms to takeadvantage of our sensor performance and sensing integration to inspire customers to deploy new applications andexperiences.
A society with a deep sensor infrastructure will enable more automation of menial tasks besides environmental orchemical monitoring, and thereby leave more meaningful jobs for humans. It will also improve efficiency, leading to abetter balance between work and life for people. InvenSense sensor technology has the full range of possibilities, suchas managing mental health and well-being through activity sensing and tracking, and improving safety by enabling
autonomous vehicles. In the trend of social transformation by digital transformation (DX), smart sensors that analyze
collected data and accumulate knowledge are essential. InvenSense technology and products are thus contributing
to six Sustainable Development Goals on which TDK places special emphasis: SDG 3: Good health and well-being;
SDG 7: Affordable and clean energy; SDG 9: Industry, innovation and infrastructure; SDG 11: Sustainable cities andcommunities; SDG 12: Responsible consumption and production; and SDG 13: Climate action.

As an example that is already in development as a prototype,the InvenSense sensor is included in a device that is attached tosurfboards to measure ocean chemistry and temperatures during
regular surfing sessions. Utilizing the information provided by thedevice will make it possible to address climate change issues.

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Editorial Policy

Another example is streetlights being enabled by sensors as partof a smart infrastructure deployment. Currently streetlights are on
continuously during the nighttime. A smart streetlight, with a motion
or presence sensor could dim with no one around and brighten whensomeone is present. The transformation to digital street lighting
will greatly reduce the overall energy usage. Eventually, combining
sensors with machine learning will accelerate the trend of DX.

Top
Commitment

TDK Group's
Sustainability

Environment

Society

GovernanceHow the Public
Sees Us

InvenSense seeks to contribute to solving social issues at an even higher level by reducing the energy consumption,
cost, and size of products. In order to achieve it, we need to review all of our manufacturing processes as well as the
lifecycle of our products, extend the product lifetimes, and improve the recyclability.
Since the role that companies play in society and the environment has been drawing increasing attention in recent years,
it is essential to achieve both business growth and social sustainability. This must be kept in mind when formulating abusiness plan. As a leading technology company, we make the world safer, healthier and more fun for current customers
but especially for future generations.

The Worldwide
TDK Group

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Sustainability | TDK Group's Sustainability | Key CSR Issues (Materiality)

Develop Human Resources

CONTENTS

Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Environment

Materiality-Specific Background
Society

Importance in Our Company
At TDK, we consider our employees to be one of our most important key to carry out our corporate motto of
Governance“Contribute to culture and industry through creativity,” as well as in achieving ongoing growth over the medium tolong term.
We therefore respect each of them as individuals, working to maximize their unique abilities and potential and at

How the Public
Sees Usthe same time encouraging a high level of independence.

Stakeholders’ Expectations
The Worldwide
TDK Group

In tandem with implementing systems and a corporate culture that respect the differences and values of each of
our employees, we also provide specific opportunities and the optimal environment designed to maximize the

GRI Standards
Table

individual abilities and potential of our employees and to impart them with a significant degree of independence.

Basic Concept
Our aim at TDK is growth by way of becoming a genuine global company. In this connection, human resources
development is considered a cornerstone concept. Along with identifying highly capable human resources andfostering an environment that draws out their individual abilities and potential, we also work to forge a corporate
culture that respects the diversity of our human resources and also encourages mutual respect and recognition ofefforts between our employees. Shaping a global business environment that attracts truly global personnel to the
TDK Group, we at TDK are committed to generating innovative products and services on an ongoing basis andthereby doing our part for society in general.

Detailed Activity Reports
Global Human Resources Strategy

Develop Global Human Resources

Cultivate a Corporate Culture that Respects Diversity

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Employee Performance Data

Sustainability Report 2020

TopicsCONTENTSThe TDK Group has grown as an organization with a diverse workforce globally through multiple mergers andacquisitions (M&As). With a global Human Resources strategy based on the common foundation of the entire
Editorial Policy

group, we promote the development of human resources who can continue to provide value by exploring diverse
global issues and anticipating social needs.
We would like to introduce the voice of Andreas Keller, General Manager of Human Resources HQ, regarding theTop
Commitment

TDK Group's
Sustainability

TDK Group's HR strategy that leads to the building of a sustainable society and growth of the company.

Through the Human Resources strategy from global andlocal perspectives, the TDK Group aims to become acompany that continues to provide value to society by
developing talented leaders and highly skilled employees.

Environment

Society

Andreas Keller
Corporate Officer
General Manager of Human Resources HQ

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

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Create new value by sharing a common vision within the entire group and respecting theindividuality of each otherIn the midst of the global energy transformation (EX) and digital transformation (DX) trends, the TDK Group is about toenter a new era. We continue to focus on Monozukuri (manufacturing excellence – provide high quality and value-added
products through advanced technology). Furthermore, through accelerating Kotozukuri (integrated solutions – provide
an excellent user experience that meets customer’s need through products), we will anticipate what society truly needsin the future and stay ahead of the times. To achieve success in these new challenges, we need to be more closely
connected and linked one another.
The TDK Group has a culture that values the individuality and working approach of every new consolidated subsidiarythat has joined the Group, without forcing these group companies to adopt a style similar to the Company while
respecting corporate governance. This “Cultural acceptance” has been a major reason why each Group Company
has been able to achieve growth as part of the TDK Group while leveraging its own individual strengths to the greatest
possible extent.
To realize further growth while effectively using the strength of true diversity, we will promote our Human Resources
strategy under the concept of “ONE TDK” by sharing our visions and experiences throughout the Group.

Three initiatives in the TDK Group’s Global Human Resources Strategy
The TDK Group’s Global Human Resource strategy has three objectives under the policy of putting the best people inthe best place at the best possible time.
Objective 1 is to develop future generations. We have started several programs to foster the next generation ofleaders and functional experts. Objective 2 is to improve communication skills. Training programs to enhance English
communication skills are available for employees around the world. Objective 3 seeks to establish a common Human
Resources management platform. The idea is to achieve transparency of TDK’s talent pool and undertake Human
Resources Development in the different organizations in the world.
Besides all that, several projects among others are already underway, such as creating guidelines that enable employees
around the world to be sent from one organization to another and utilize talents effectively, constructing a new digitallearning platform, a new succession planning process and global recruiting.

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Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Achieve both the global common human resources development and the employee development
system that enhances the skills and abilities required for employees at each workplace
In 2019, “Global Competencies” for Top Management positions at the TDK Group were developed in order to strengthen
our global approach as “ONE TDK”. They define behavior characteristics that lead to high business performance, andalso reflect our corporate motto, corporate principles and founding spirit.
The global management development programs, which foster the next generation of talent, consist of four different
programs from junior to senior level. In these programs, participants can acquire leadership skills and generate new
network and communication skills. It is a great opportunity to connect between the group companies, share theirpractice and vision and strengthen the interaction.

Global management development programs

Environment

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

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On the other hand, for more than 100,000 employees worldwide, there are new efforts to realize "ONE TDK" at each sitein each region.
Workers at manufacturing sites are very important for the TDK Group to make products with the high quality demanded
by society, including customers. Because the skills required for each product and manufacturing process are different,
we provide various training programs for workers at each workplace to acquire the necessary skills, in addition tocommon training such as product quality. We are also running a project to introduce a global Learning Management
System to enhance these effects. It will be available 24/7, 365 days a year on all device (PC, mobile phone and others) tobe able to cover all geographical regions. It also includes a collaboration tool around learning topics, so employees canengage and find experts groups within specific areas. This will improve individual skills of employees and also connect
employees from around the world to realize “ONE TDK."
Under the spirit of "ONE TDK", we promote our global Human Resources strategy with the full synergy of the entire
group. We believe that the TDK Group can continue to create new value in society and achieve both a sustainable
society and corporate growth.

39Sustainability Report 2020

Sustainability | TDK Group’s Sustainability | Key CSR Issues (Materiality)
CONTENTS

Consider the Societal and Environmental Impact of the Supply Chain

Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Environment

Materiality-Specific Background
Society

Importance in Our Company
TDK Group is a midstream company that performs the functions of both a supplier and buyer, and recognizes
Governancethe 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.

How the Public
Sees Us

Stakeholders’ Expectations
In addition to responding and complying with the legal system relating to the supply chain and international

The Worldwide
TDK Group

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industry norms, we carry out social responsibilities, such as supporting our suppliers. We also recognize that weare 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 andexpansion 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 content of latest requests such as
related legal systems and international industry norms, we understand that it is our responsibility as a supplierto grasp the situation of the working environments of the Group’s manufacturing, and as a buyer to grasp thesituation of the working environments of our clients, 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 theModern 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 makeefforts to improve the rights, health, safety, and environment of workers of the TDK Group and primary suppliersin accordance with the RBA Code of Conduct (labor, health and safety, environment, ethics, and management
system).
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Also, in order to implement the CSR in the supply chain reasonably and effectively, shared awareness of social
CONTENTS

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 ofsurvey methods, as well as collaborating across industries.

Editorial Policy* 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 practiceTop
Commitment

these actions.

Related link
TDK Group's
Sustainability

Environment

RBA (external website)

Detailed Activity Reports
Respect for Human Rights

Society

Sustainable Procurement

Social and Environmental Consideration at Manufacturing Sites
Social and Environment Considerations in the Supply Chain

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

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Responsible Sourcing of Minerals

Sustainability Report 2020

Sustainability | TDK Group’s Sustainability | Key CSR Issues (Materiality)
CONTENTS

Develop and Prosper in Harmony with the Global Environment

Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Environment

Materiality-Specific Background
Society

Importance in Our Company
We recognize the importance of carrying out efforts to reduce the load on the global environment to the maximum
Governancein all of our business activities together as the TDK Group, such as reducing CO2 emissions, waste water, andwaste associated with our production activities, with the aim of achieving sustainable development of society.

How the Public
Sees Us

Stakeholders’ Expectations
In addition to complying with related environmental laws and regulations, we recognize that we are expected

The Worldwide
TDK Group

to carry out basic efforts, such as minimizing environmental impact, conserving the natural environment, andconducting training in our business activities, along with contributing to the reduction of energy consumption
through products and services and implementing measures against climate change.

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Basic Concept
We recognize that coexistence with the global environment is an important management challenge for the entire
Group, as stipulated in the TDK Environmental Charter. In order to contribute to the development of a sustainable
society, we have newly established the TDK Environmental Vision 2035, and we have established and are
executing the TDK Environmental and Safety and Health Activities 2025 as an original master plan of specificactivities based on the formulated environmental vision. We will also promote a social understanding of thecompany’s environmental contribution value through the formulation of industry standards for calculating productcontributions.

Detailed Activity Report
Environmental Policy and Environmental Vision

Environmental Management System

Achievements in FY 2019 in TDK Environmental and Safety and Health Activities 2025
Action plan in TDK Environmenal and Safety and Health Activities 2025
Climate Change Initiatives

Water Resources Activities

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Use Resources Effectively

Sustainability Report 2020

CONTENTS

Reduction of Risks in the Use of Chemical Substances

Attitude toward Biodiversity

Environmental Performance Data
Editorial Policy

TopicsTop
Commitment

As the global community seeks to address
climate change with increasing urgency,
what is required of the TDK Group to balance

TDK Group's
Sustainability

corporate growth with the creation of social
value?
In an effort to gain an outside perspective

Environmentand develop more appropriate responses
and strategies, on July 8, 2020, we held a
dialogue with Keisuke Takegahara and Maiko

Society

Hachiya of the Development Bank of Japan.

The dialogue was held on July 8, 2020 with a WEB conference system.
GovernanceHow the Public
Sees Us

Balancing a Response to Climate Change with Corporate Growth
What Is Required of the TDK Group
Aiming to Integrate Sustainability and Business under the TDK Environmental Vision 2035

The Worldwide
TDK Group

The TDK Group believes that developing and prospering in harmony withthe global environment is one of key CSR issues, and is advancing efforts
to achieve the TDK Environmental Vision 2035 formulated in 2016.

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The dialogue began with a description by Sachiko Nagahara, General
Manager of the Sustainability Promotion HQ, of TDK Group policies aimed
at expanding social value under “Value Creation 2020,” the TDK Group’s
Medium-Term Plan, and its efforts to address energy and environmental
problems. The participants then affirmed an overarching theme for the
discussion: “What is important in enhancing social value in environmental
terms, and in enabling the TDK Group to achieve sustainable growth?”
Next, Mr. Takegahara offered a view of the current and future state of ESG
investing. He said, “ESG investors are focused on whether companies
can look beyond future uncertainty and grow sustainably. Their ability
to recognize long-term social issues and present a business modelthat incorporates those issues in their strategy is being challenged.”With regards to the current ongoing spread of the COVID-19, he alsocommented that, “While uncertainty about the future has only grownstronger, this basic approach to ESG investing is not going to change.
Climate change, in particular, continues to be the greatest risk factor froma long-term perspective through 2050 and beyond.”43

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Regarding the TDK Group’s own efforts, he offered a positive assessment of work being done under the TDK
Environmental Vision 2035 to calculate and disclose the Company’s environmental load across its entire productlifecycle, including Scope 1 (the Company’s own direct emissions), Scope 2 (indirect emissions associated with the use

Editorial Policyof electricity, etc. supplied by other companies), and Scope 3 (indirect emissions other than Scope 1 and 2). Ms. Hachiya
noted that, “Under its Environmental Vision 2035, TDK has set a high goal, seeking to halve its CO2 emission basic unit
from a lifecycle perspective. Their efforts to integrate sustainability and business?incorporating both a reduction in theTop
Commitment

negative environmental impact of business activity and an increase in the positive impact of environmental contributions
made through their products?represent a very advanced approach.”That said, Mr. Takegahara and Ms. Hachiya also pointed out that it was difficult to see any consistency with international

TDK Group's
Sustainability

benchmarks. “Representing everything in terms of CO2 emission basic units allows quantitative data to be collected,
but seen against global efforts toward the goal of controlling rising temperatures, it can be harder to convey TDK’s
advantage. The types of frameworks and KPIs you use will likely come into question going forward.”

Environment

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
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Keisuke Takegahara

Maiko Hachiya

Development Bank of Japan Inc.
Executive Officer, Deputy Chief Research Officer,
Chief Manager of Sustainability Management Office,Corporate Planning & Coordination Department

Development Bank of Japan Inc.
Senior Vice President, Sustainability Planning &Support Department
Joined the Japan Development Bank (now theDevelopment Bank of Japan Inc.) in 2002. Worked in
the Hokuriku Branch, the Credit Analysis Department,
before assuming current position. Member of the ESG
Finance High-level Panel Positive Impact Finance
Task Force.

Joined the Japan Development Bank (now theDevelopment Bank of Japan Inc.) in 1989. Worked
as chief representative in Frankfurt, before assuming
current position. A pioneer in environmental financein Japan, including development of the DBJ
Environmentally Rated Loan Program.
Holds numerous public positions, including ad hoc
member of the Ministry of the Environment’s Central
Environment Council and the Industrial Structure
Council of the Ministry of Economy, Trade andIndustry.

How Should a Midstream Company Work
to Reduce Emissions in the Supply Chain?
At the COP25 conference held in December 2019, a target was presented to limit global warming to 1.5 degrees Celsius,
exceeding the long-term target set by the Paris Agreement of limiting rising temperatures to within 2 degrees Celsius
above pre-industrial levels. This new target has gradually become a global standard. Tetsuya Kuwashima, General
Manager of the Safety & Environment Group of Sustainability Promotion HQ explains TDK’s policy as follows: “Asconcern about climate change grows worldwide, I think the target of 1.5 degrees Celsius is right on the nose, and issomething we should work toward aggressively in our efforts to address environmental issues. It is essential that we firsttake the initiative in pursuing reductions in our own emissions.

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Laying the groundwork for its Environmental Vision 2035, the TDK Group established a carbon neutral target under
its TDK Environmental Action 2020 plan, a goal it achieved ahead of schedule in fiscal 2014. This background today
forms a foundation for ongoing efforts to aim for even higher targets. TDK has set forth a goal of contributing to energy

Editorial Policy

transformation (EX) under the internal slogan of “Eco-TDK,” and is advancing efforts to improve productivity and topromote rigorous energy savings and a shift to renewable energy.
Atsuo Kobayashi, Senior Vice President, said that, “An issue for the Company now is to promote the use of renewableTop
Commitment

energy at our sites in Japan. The cost of generating renewable energy in Japan remains high compared to international
standards. While it is relatively easy to move ahead with the shift to renewable energy at our sites overseas, Japan
continues to fall behind.” The number of global companies joining the international RE100* initiative has grown in recent
years, and TDK is also being asked to respond.

TDK Group's
Sustainability

Both Mr. Takegahara and Ms. Hachiya offered the opinion that, “While RE100 is one strategy for dealing with climatechange risk, whether membership is essential or not depends on the individual company’s position. As a midstream
company in the value chain, TDK needs to carefully consider how much of a priority it gives to the goal of achieving
100% renewable energy, and compare that goal to its other efforts, including contributing to the environment through its

Environment

products.”
Looking at the environmental load of TDK Group products across their lifecycle, the Company should also focus on thefact that there is an overwhelming environmental load generated at the product usage stage. Mr. Kuwashima said that, “AsSocietya B2B, midstream company, we need to consider how we treat and reduce environmental loads resulting from the useof our products by consumers in the form of our customers’ end products. I think that will be the key to contributing to ashift to a low-carbon society.”

Governance* RE100: Member companies of this initiative, launched in 2014, are committed to the goal of 100% renewable energy use in
their business operations.

How the Public
Sees Us

The Worldwide
TDK Group

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Atsuo Kobayashi

Sachiko Nagahara

Senior Vice President in charge of Quality Assurance
and Safety & Environment

General Manager, Sustainability Promotion HQ

Tetsuya Kuwashima

Tomohiko Yamaguchi (Facilitator)

General Manager, Safety & Environment Group,
Sustainability Promotion HQ.

Consultant, Cre-en Inc.

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Reassessing the Risks and Opportunities
Around Climate Change as They Connect to Business

Editorial Policy

During the dialogue, participants exchanged opinions on the Task Force on Climate-related Financial Disclosures(TCFD)*, for which TDK expressed its support in fiscal 2019. Mr. Takegahara said that TCFD, which requires companies
to analyze and disclose information about the impact of climate change on corporate finances, is a “tool designed tofacilitate a dialogue between companies and investors as they head into an uncertain future.” He noted that, “TCFD’s

Top
Commitment

scenario analysis emphasizes not accuracy so much as breadth. Investors are focused on whether companies are able
to incorporate every possibility in reviewing their own risks and opportunities, and whether they have strategies forsurviving in any situation.”

TDK Group's
Sustainability

Sympathizing with that approach, Mr. Kuwashima said that, “Looking across all enterprises, I think companies need totreat risks and opportunities as a central part of their business strategy itself. TDK is bringing an outside-in perspective
to thinking about technologies, solutions and products based on the social issues set out in the SDGs, and in doing so,
adds to the depth of that discussion.” Touching on the TDK Group’s existing efforts to create value through its business,

Environment

Mr. Takegahara commented that, “Recently, the impact of the COVID-19 has accelerated the Company’s shift to digital.
I think your ability to generate a diverse range of products to support that shift may make it easy for TDK to draw up avision for contributing to the more efficient use of energy.”

Society

Mr. Kobayashi described TDK’s approach, saying that, “There are many ways the Company can utilize its products andtechnologies to contribute to addressing climate change. Digital transformation (DX), such as that represented by 5G,
is—along with EX—a pillar of the Company, and it is crucial that we advance our environmental contributions throughthose two pillars.” Another participant indicated their agreement with these remarks, noting that, “As we move in that

Governancedirection, it is essential that we encourage understanding of the value TDK offers, not just outside the Company but
internally as well. We need to involve employees in every position, including workers in our manufacturing sites and otherfront-line employees, and get them to take these issues personally.”

How the Public
Sees Us

Meanwhile, the TDK Group faces a new issue with its current effort to drive business forward under the concept of
Kotozukuri (integrated solutions). Mr. Kuwashima pointed out that, “In Monozukuri (manufacturing excellence), products
have clear specifications for energy savings and so forth, making it easy to measure their impact on the environment. But
the fact is that with Kotozukuri, it is difficult to quantify the extent to which our business is helping to reduce society’s

The Worldwide
TDK Group

environmental load. I think issues remain with visualizing that impact.”
Both Mr. Takegahara and Ms. Hachiya agreed that this could be difficult, but they also expressed hope for TDK’s efforts:“The major premise is that good services and solutions can only succeed if you have high-quality, superior products.

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TDK is singular in continuing to take on the challenge of reducing environmental loads even as it shifts its businessmodel from Monozukuri to Kotozukuri in response to changes in society. The world is still searching for ways to express
social impact, and there are no clear guidelines. We look forward to seeing TDK attempt to develop new standards andbecome a global leader.”* The TCFD was founded in 2015 by the Financial Stability Board (FSB), an international body seeking to achieve the stabilizationof the financial system.

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Sustainability | TDK Group’s Sustainability

Stakeholder Engagement

CONTENTS

Purpose of Stakeholder Engagement
Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Ideal Vision, Policies, and Engagement Methods by Stakeholders

Past Stakeholder Dialogue

Purpose of Stakeholder Engagement
The TDK Group strives to earn the trust of society by correctly recognizing social issues as a company that
deploys business activities globally, respecting the International Code of Conduct and guidelines on sustainability,
and responding to stakeholders’ interests through business activities. In order to gain the trust, we actively create
opportunities for dialogue with each of our stakeholders on a daily basis.

Environment

Society

GovernanceHow the Public
Sees Us

The TDK Group believes that the purpose of stakeholder engagement is as follows.
• To apply stakeholders’ opinions in TDK Group’s business activities and translate this into the improvement ofcorporate value and social value to be created.
• To share the same values as our stakeholders and develop our business activities into essential non-complacentactivities by gaining their understanding on the TDK Group’s ideas and activity contents. Also, to continue
collaborating to achieve a sustainable society.

Ideal Vision, Policies, and Engagement Methods by Stakeholders
Shareholders and Investors

The Worldwide
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GRI Standards
Table

PolicyIdeal relationship

Engagement methods

The TDK Group will maintain management in a fair and transparent manner by disclosing information ina timely and appropriate manner to stakeholders, such as shareholders and investors.
We gain the trust of our shareholders and investors regarding TDK’s vision of “achieving sustainablegrowth by providing solutions that meet future social needs.”• Financial results briefings• General meeting of shareholders• IR meetings

Customers
PolicyIdeal relationship

Engagement methods

The TDK Group responds to changes in the business environment and social needs and provides highvalue-added products to customers by realizing QDC and First-to-Market at a high level.
We are always recognized as a partner company that exceeds customers’ expectations by leading
innovations and environmental consideration.
• Daily sales activities• CS survey• Audit from customers

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Business partners
CONTENTS

PolicyEditorial Policy

Top
Commitment

TDK Group's
Sustainability

Ideal relationship

Engagement methods

The TDK Group addresses social and environmental issues throughout the supply chain and will realize
a sustainable society with our partners based on the RBA Code of Conduct.
We build win-win situations that will develop both our business partners and TDK in the long term and
TDK and our business partners’ technologies and knowhow collaborate in various business fields.
• Daily support for business partners• Business partner briefings• Implementation of audits of business partners

Employees
The TDK Group believes that the source of eternal prosperity of companies lies in human development
PolicyEnvironment

and will continue to build relationships as described in the Corporate Code of Ethics (Corporate Code of
Behavior).
≫ Please click here for the Corporate Code of Ethics (Corporate Code of Behavior).

Ideal relationshipSociety

Engagement methods

We create an equal and happy workplace by promoting CSR, and employees and the company sharemutual respect.
• Labor-management dialogue• Feedback to in-house newsletters• Workplace communication

GovernanceCommunities
The TDK Group works and collaborates with stakeholders and potential partners, such as communities,

How the Public
Sees Us

administrations, industries, international organizations, NPOs, and NGOs, to maintain good relationships.
PolicyAlso, based on our management philosophy, we will identify areas of social issues to be prioritized andaim to be a good corporate citizen through social services such as sports, culture, artistic activities, andThe Worldwide
TDK Group

volunteer activities.
Ideal relationship

GRI Standards
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Engagement methods

The TDK brand penetrates into the region and provides quality employment to the region. We also
contribute to the reduction of environmental impact with innovative technology.
• Social gatherings at each region• Social services• Homepage answer service

Administration
PolicyIdeal relationship

Engagement methods

The TDK Group works and collaborates with stakeholders and potential partners, such as communities,
administrations, industries, and international organizations, to maintain good relationships.
We fulfill our obligations, such as legal compliance and tax payments, and play the role of a corporation
as a public institution of society through cooperation with policies to solve social problems.
• Exchange of opinions through economic and industrial organizations• Answers to surveys and questionnaires• Consultations with competent authorities• Public comments

48

Sustainability Report 2020

Consumers
CONTENTS

PolicyEditorial Policy

Ideal relationship

Engagement methods
Top
Commitment

TDK Group's
Sustainability

We contribute to improving the QOL of all people through TDK Group products and final products inwhich our products are installed.
We are recognized by many consumers as a company that contributes to society with creative andinnovative technologies.
• Acquisition of information through sales• Feedback to development

Past Stakeholder Dialogue
TDK actively creates opportunities for dialogue with each of our stakeholders.
In particular, for content that has a large impact on business activities, we hold stakeholder dialogues and utilize

Environment

them in our business activities and CSR activities through direct dialogue with outside experts.
* Clicking each theme will open dialogue articles.

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

Date of implementation

Theme

Mar. 6, 2018

Develop Global Human Resources

Apr. 14, 2017

Targeting Human Rights Reponses at the Supply Chain

Mar. 21, 2017

Develop Global Human Resources

Oct. 9, 2015

Toward the Finalization of Materiality to Enhance TDK’s Value

May. 11, 2015

CSR Promotion in the Supply Chain

May. 8, 2015

Toward Compilation of the Next Environmental Vision

Apr. 17, 2015

Thinking about Diversity as a Growth Strategy

Mar. 31, 2015

Study Meeting Convened to Enhance the Grasp of Nonfinancial Information DisclosureMar. 4, 2014

Identification of Human Rights Issues through Dialogue with Stakeholders

Apr. 18, 2013

Apr. 12, 2012

The Social Problems behind Conflict Minerals: The Human Rights Situation in the Democratic Republicof the Congo
What should today’s technological innovations look like if they are to solve social problems and bring an
ideal future into reality?

May. 27, 2011

What We Need to Do for the Environment Now

Apr. 8, 2010

Continued Expectations to TDK as a Trustworthy Company

May. 18, 2009

A Company That Earns Your Trust

49

Sustainability Report 2020

Sustainability | Environment
CONTENTS

Environmental Policy and Environmental Vision
Environmental Policy / TDK Environmental Charter

Editorial Policy

TDK Environmental Vision 2035

Basic Environmental Action Plan “TDK Environment, Health and Safety Action 2025”
Creating a Framework for Gauging Product Contributions

Top
Commitment

Environmental Policy / TDK Environmental Charter
TDK Group's
Sustainability

TDK has established the TDK Environmental Charter, consisting of the Basic Principle on the Environment and the
Basic Policy on the Environment, as our entire group's environment policy, aimed at contributing to the sustainable
development of society. In line with the Charter, TDK formulated the Environmental Vision and Environmental

Environment

Action Plan as a fundamental framework for implementing specific environmental activities.

TDK Environmental Charter

Society

This environmental charter applies to all organizations in the global TDK Group.

Basic Principle on the Environment

Governance

The TDK Group recognizes co-existing with the global environment is an important management issue andis committed to realize sustainable growth of the society through the combined efforts of all members in all
How the Public
Sees Usbusiness operations.

Basic Policy on the Environment
The Worldwide
TDK Group

Based on this principle, the TDK Group will lead society by carrying out environmental protection activities
quickly and effectively with the consideration for climate change, biodiversity and finiteness of resources to

GRI Standards
Table

hand over a healthier environment to future generations.
1. Promote activities to realize this policy by the organization with clearly defined responsibility and resources assured by Top
Management.
2. Contribute to the society by creating and supplying eco-conscious products in the lifecycle perspective to the market.
3. Conduct eco-conscious production by assessing potential environmental impact from the product designing stage.
4. Comply with national and local environmental laws, regulations and agreements with suppliers and customers, and also
correspond to social needs.
5. Act proactively with the consideration for contributions to protect environment and conserve ecosystem throughcommunication and interaction with local society.
6. Improve environmental performance continuously to achieve mid-long term targets and realize the environmental vision.
Established on March, 1st, 1993
Revised on April, 1st, 2018 (5th edition)
TDK Corporation
President & CEO

Shigenao Ishiguro

50

Sustainability Report 2020

TDK Environmental Vision 2035
CONTENTS

Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Environment

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

Halving the CO2 emission basic-unit in a life-cycle perspective by 2035
GRI Standards
Table

The TDK Group achieved its carbon neutral target, originally outlined in our third basic environmental action plan
“TDK Environmental Action 2020,” far ahead of schedule in fiscal 2014. In 2015, prior to the formulation of our next
regular environmental vision, “ Vision 2035,” a corporate commitment keyed to the Company’s centennial year
was formulated. In Vision 2035, TDK pledge to strive to achieve further innovation and create value for customers
through the delivery of outstanding quality products and se vices, by utilizing the diverse global resources. Basedon this corporate motto, TDK will continue to “contribute to culture and industry through creativity”, by revitalizing
and protecting the global environment and creating a pleasant and safe society.
Our Environmental Vision comprises one phase of Vision 2035, we envision business operations under theenvironmental load within natural circulation. According to this idea, the goal of “to halve the CO2 emission basicunit in a life-cycle perspective by 2035” has been formulated as “TDK Environmental Vision 2035.” in 2016.
This stance stems from the belief that minimizing the environmental load in business activities, and revitalizing thenatural environment, is the duty of companies that supply products designed to contribute to its customers andthe society. Moreover, modeled on the United Nations Climate Change Conference (COP 21) Paris Agreement,
which seeks to curb global warming by achieving a balance between greenhouse gas emissions and absorption
sources, this is also considered the ideal corporate posture for all TDK activities.
Within TDK Environmental Vision 2035, the declaration is made to reduce the environmental load from a lifecycle
perspective. This represents an initiative not limited to measures at the manufacturing stage in factories and theuse stage for customers, aspects outlined in the conventional TDK Environmental Action 2020 policy. To expand

51

Sustainability Report 2020in this way, we deem it critical for all TDK Group employees to share the same vision and move forward with the
CONTENTS

same objectives in mind. The “revitalizing and protecting the global environment” expressed in this corporate
vision refers to the skillful operation of our business hand in hand with the natural environment. Without thatcommitment, there will be no sustainable development on the horizon. The entire Group shares an Arubeki-Sugata

Editorial Policy(ideal process) and undertakes voluntary initiatives in pursuit of that vision.

Top
Commitment

TDK Group's
Sustainability

Environment

Society

Basic Environmental Action Plan “TDK Environment, Health and Safety Action 2025”
GovernanceConceived on the cornerstone of TDK Environmental Vision 2035 was a new basic environmental plan extending
through year 2025, namely TDK Environment, Health and Safety Action 2025. The action categories and target
figures of "TDK Environment, Health and Safety Action 2025" reflect dual consideration for "backcasting" fromHow the Public
Sees UsTDK Environmental Vision 2035, and continuity and "forecasting" from "TDK Environmental Action 2020".
At present, nine action categories have been determined. In the near future, plans call for integrating theenvironmental loads of these targets through CO2 conversion, followed by the promotion of action plans targeting

The Worldwide
TDK Group

the ideal targets enumerated in TDK Environmental Vision 2035.
With regard to safety and health as well, steps will be taken to newly stipulate original action categories and goals,
thus moving to realize truly safe and healthy workplace environments.

GRI Standards
Table

52

Sustainability Report 2020

CONTENTS

Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Environment

Society

Governance

Related links
TDK Environment, Health and Safety Action 2025—FY 2019 Achievements

How the Public
Sees UsTDK Environment, Health and Safety Action 2025—Action Plan

The Worldwide
TDK Group

Creating a Framework for Gauging Product Contributions
GRI Standards
Table

Expand reduction of CO2 emissions through products (product contributions) is one of the core initiatives within
TDK Environmental Vision 2035 and Environment, Health and Safety Action 2025. To mount potent appeals forthe social contributions by TDK products as the fruits of technical initiatives, these product contributions havebeen calculated and disclosed from TDK Environmental Action 2020 (the Company’s previous medium- to longterm plan). Public awareness activities are also being advanced to gain understanding of the contributions ofelectronic components as intermediary parts, along with moves to formulate coherent industry standards forcalculation methods positioned to serve as the basis for earning appropriate evaluations of product contributions
performance, and the results were released in the form of guidance by industry groups.
Based on these results, TDK established the Guideline for Calculation of Product Contributions, supplemented theassessment requirements during the product development stage by adding calculation of product contributions
and is promoting the spread of calculation work throughout the Group.
In fiscal 2019, we received an award from a customer for our continuous proposals of efficiency improvement of
power supplies. TDK will continue development calculation rules and will make efforts to expand and spread their
use throughout the Group.

53

Sustainability Report 2020

Sustainability | Environment
CONTENTS

Environmental Management System
Environmental Management System

Editorial Policy

Operation of the TDK Environmental Management System

EMS Assessment System and Award Program

Environmental Risk Management at Manufacturing Sites

Prevention and control of exposure to toxic substances with products as the sourceTop
Commitment

TDK Group's
Sustainability

Environmental Management System
TDK has established a platform for environmental action based on the Environmental Management System (EMS)
concept, with the CEO at the top.

Environment

The platform is designed to comprehensively address environmental issues that are becoming ever more complex
and globalized. It goes beyond the approach focusing on single sites, allowing us to respond promptly andeffectively while remaining aware of the big picture.

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

54

Sustainability Report 2020

Operation of the TDK Environmental Management System
CONTENTS

All manufacturing sites of TDK have obtained ISO14001* certification, and TDK is proceeding with the integrationof the Environmental Management System in Japan, China, and North America.
Editorial Policy

In addition, environment conferences were held in a number of locations including Japan, China, the ASEAN
region, Europe, and America. These are aimed at promoting local activities tailored to the situation in therespective region, while remaining oriented towards achieving the overall goals laid down in the TDK Environment,

Top
Commitment

Health and Safety Action 2025.
* ISO14001: International standard (IS) regulating EMS compliance

Related links
TDK Group's
Sustainability

Environment

Facilities with ISO14001 Certification

TDK Environment, Health and Safety Action 2025

EMS Assessment System and Award Program
With the aim of boosting the Environmental Management System and the performance of safety and environment

Societyrelated activities, TDK is introducing a program for assessing the degree by which both safety and environment
management related goals have been attained on a global basis.
The program covers five areas, namely energy, water, waste, safety/health, and social contributions. BusinessGovernancesites with a high overall score, and sites or departments that have conducted special activities in a specific area
are recognized with an award. Award recipients in fiscal 2019 were as follows:■ Excellent overall score

How the Public
Sees UsTDK Taiwan Corporation
TDK-Lambda Malaysia Sdn Bhd.
Kitakami Plant, TDK Akita Corporation

The Worldwide
TDK Group

Hutchinson Technology Inc.
■ Outstanding activities in a specific fieldGRI Standards
Table

EnergyAsama Techno Factory, TDK Corp.
TDK India Private Limited

Safety and HealthAmperex Technology Limited

Emissions

TDK-Lambda Americas Inc.

55

Sustainability Report 2020

Environmental Risk Management at Manufacturing Sites
CONTENTSManaging soil contamination and VOC risks
Editorial Policy

TDK has established environmental risk assessment standards and management methods for soil contamination
and VOCs,* and each site regularly conducts risk assessment. At high risk locations, a clearly defined priority
sequence of preventive measures, restoration measures etc. ensures effective management of environmental

Top
Commitment

risks.
* VOC: Volatile Organic Compounds

TDK Group's
Sustainability

Pollution prevention regulatory compliance and accidents
To prevent the contamination of atmosphere, water, soil, etc., TDK strictly complies with all relevant laws andregulations. For certain items, we have even set voluntary standards that are more stringent than the legal

Environment

requirements, and we take preventive action whenever necessary to reduce the environmental load.
In fiscal 2019, the Honjo Plant West site, TDK Akita Corp. (Japan) exceeded the standard value for drainage items(BOD), but we promptly responded in accordance with the law.

Society

Prevention and control of exposure to toxic substances with products as the source
Governance

Related links
How the Public
Sees Us

Quality Assurance Activites

The Worldwide
TDK Group

GRI Standards
Table

56

Sustainability Report 2020

Sustainability | Environment | Environmental Management System

ISO14001 Certification (As of June 30th 2020)

CONTENTS

Facility

Editorial Policy

Country

Certificate Number

Examined byJapan

3994702

BV

Japan

05672-01

Intertek

U.S.A.

US012110

BV

P.R. China

CNBJ312477-UK

BV

P.R. China

02119E10478R5L

CCCI

TDK Corp.
Head Office
Safety & Environment Group of Sustainability Promotion HQ
TopCommitment

Technical Center
Mikumagawa Plant
Asama Techno Factory

TDK Group's
Sustainability

Kofu Plant
Narita Plant
Shizuoka Plant
Inakura Plant

Environment

Nikaho Plant North Site
Nikaho Plant South Site
Honjo Plant West Site
TDK Akita Corporation

Society

Inakura Plant
Nikaho Plant North Site
Nikaho Plant South Site
Honjo Plant West Site

Governance

Kitakami Plant
Ouchi Plant
Iwaki Plant

How the Public
Sees Us

Honjo Plant East Site
TDK Shonai Corp.
Tsuruoka Plant
Sakata Plant

The Worldwide
TDK Group

Iida Plant
Tsuruoka East Plant
TDK-Lambda Corp.
Headquarters office

GRI Standards
Table

Nagaoka Technical Center
TDK Service Corp.
Head Office, Yawata Sales Office
Tokyo Sales Office
TDK Kofu Corp
TDK Precision Tool Corp.
TDK USA Corporation
TDK Components USA., Inc.
TDK Ferrites Corporation
Headway Technology, Inc.
TDK-Lambda Americas Inc.
TDK China Co., Ltd.
TDK (Suzhou) Co., Ltd
TDK Dalian Corporation
Qingdao TDK Electronics Co., Ltd.
TDK Xiamen Co., Ltd.
Guangdong TDK Rising Rare Earth High Technology Material Co., Ltd.
TDK Dongguan Technology Co., Ltd.
Dongguan Changan Huanan Electronics Factory57

Sustainability Report 2020

CONTENTS

Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Environment

Society

SAE Magnetics (Dongguan) Limited

P.R. China

02117E10966R6L

CCCI

AFI Technologies (Chang An) Ltd.

P.R. China

02120E10003R5L

CCCI

SAE Components Chang An Plant

P.R. China

02120E10003R5L-1

CCCI

SAE Technologies Development (Dongguan) Co., Ltd.

P.R. China

2117E10966R6L-1

CCCI

Amperex Technology Ltd.

P.R. China

CN09/31828

SGS

Acrathon Precision Technologies (HK) Ltd.

P.R. China

02118E10334R3M

CCCI

TDK-Lambda (China) Electronics Co., Ltd.

P.R. China

02119E10576R4M

CCCI

TDK Hong Kong Co., Ltd.

Hong Kong

12 104 40080 TMS

TUVTDK Taiwan Corporation

Taiwan20003153 UM15

DQS

InvenSense Taiwan Co., Ltd.

TaiwanTW17/00861

SGS

TDK Korea Corporation

Korea

20BK00279-UK

BV

TDK Philippines Corporation

Philippines

PH16/1410

SGS

TDK (Thailand) Co., Ltd.

Thailand

488005 UM15

DQS

Magnecomp Precision Technology Public Co., Ltd.
Rojana Factory

Thailand

Wangnoi Factory
GovernanceHow the Public
Sees Us

25884/A/0002/UK/En

URS

25884/G/0001/UK/En

URS

Hutchinson Technology Operations (Thailand) Co., LTD.

Thailand81791/C/0001/UK/EnURS

TDK (Malaysia) Sdn. Bhd.

Malaysia

01 104 1535520

TUV

Malaysia

01 104 1735507

TUV

TDK-Lambda UK Ltd.

U.K.

EMS 518156

BSI

TDK-Lambda Ltd.

Israel

87520

IQnet

TDK Electronics AG

Germany

TDK-Lambda Malaysia Sdn. Bhd
Senai Factory
Kuantan Factory

The Worldwide
TDK Group

GRI Standards
Table

58

91372-2011-AE-GERDakkS

DNV

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TDK Environment Activity: improve COHPLVVLRQVEDVLFXQLWLQDOLIHF\FOHSHUVSHFWLYHE\FRPSDUHGZLWK)LVFDO<HDU

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SURGXFWLRQDFWLYLWLHVLPSOHPHQWHQHUJ\VDYLQJDFWLYLWLHVDWHDFKPDQXIDFWXULQJVLWHHTXLYDOHQWWRRIWKHSUHYLRXV)< V&2HPLVVLRQVVHWYROXQWDU\&2HPLVVLRQVWDUJHWVFRQVLGHULQWURGXFWLRQRIUHQHZDEOHHQHUJ\UHVHDUFKRIUHQHZDEOHHQHUJ\SXUFKDVLQJVRXUFHVFRQVLGHULQJWDUJHWDQGSODQVRIUHQHZDEOHHQHUJ\LQWURGXFWLRQSXUFKDVHE\*+45+4EDVHVLPSURYH&2HPLVVLRQVEDVLFXQLW
6FRSHDQG
FRPSDUHGZLWKWKHEDVH\HDU )<

 H[SDQGUHQHZDEOHHQHUJ\XVDJH

・promote renewable energy introduction/purchase UHGXFHZDWHUXVDJHLPSURYHZDWHUXVDJHEDVLFXQLWFRPSDUHGZLWKWKH
・improve water usage basic unit 1.5% of the previous FY SUHYLRXV)<DWHDFKPDQXIDFWXULQJVLWHLPSURYHWKHUHF\FOLQJUDWLRRIZDWHU XVHUHVRXUFHVHIIHFWLYHO\

・improve waste amount basic-unit 1.5% of the previous)<LPSURYHZDVWHDPRXQWEDVLFXQLWRIWKHSUHYLRXV)<DW
each manufacturing site
SURPRWHLQWHUQDOUHF\FOHUHXVH UHGXFH&2HPLVVLRQVIURPDOLIHF\FOHSHUVSHFWLYH

・reduce environmental load by procurement resource
UHGXFWLRQ
・reduce the amount of COHPLVVLRQVLQORJLVWLFV
RI)<

HIIHFWLYHXVHRILQSXWUHVRXUFHPDWHULDOV LPSURYHPHQWRI
resource efficiency)
UHYLHZWKHLQWHUQDWLRQDOVKLSSLQJRISURGXFWVDQGPDWHULDOV H[SDQGHQYLURQPHQWDOFRQWULEXWLRQRISURGXFWV・improve COUHGXFWLRQFRQWULEXWLRQVEDVLFXQLW
2.7% compared with the previous FY

FDOFXODWHSURGXFWFRQWULEXWLRQVDPRXQWVRIQHZSURGXFWVUHYLHZRISURGXFWFRQWULEXWLRQFDOFXODWLRQJXLGHOLQHV

 H[SDQGUHQHZDEOHHQHUJ\EXVLQHVV・develop and expand sales of products for theUHQHZDEOHHQHUJ\PDUNHW

H[SDQGVDOHVLQWRWKHUHQHZDEOHHQHUJ\PDUNHWE\XVLQJ
6656 6XVWDLQDEOH6WUDWHJ\5HYLHZ6KHHW

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・reduce influence of chemicals to the human andHQYLURQPHQWSURPRWHWKHVXEVWLWXWLRQDQGUHGXFHXVDJHRIKD]DUGRXVchemicals- review and revise of the 《Chemical Substance Control
Detailed Rules》 for Japan sites

・preserve the environment and biodiversity

SURPRWHIRUHVWSURWHFWLRQDFWLYLW\
SURPRWHHQYLURQPHQWDOHGXFDWLRQDQGDZDUHQHVV
DVVHVVWKH&2FRQWULEXWLRQDPRXQWRIVRFLDODFWLYLWLHVSURPRWHIRUHVWSURWHFWLRQDFWLYLW\
SURPRWHHQYLURQPHQWDO
HGXFDWLRQDQGDZDUHQHVV
DVVHVVWKH&2FRQWULEXWLRQDPRXQWRIVRFLDODFWLYLWLHV・mitigate the significant safety risks
・promote the safety patrol by site top manager
WKRURXJKO\DFKLHYHWKH=(52VLJQLILFDQWODERUDFFLGHQW FRQWULEXWHWRHQYLURQPHQWDOVRFLHW\【2】・improve COHPLVVLRQVEDVLFXQLWIURPHQHUJ\XVHFRPSDUHGZLWKWKHSUHYLRXV)<

7'.+HDOWKDQG6DIHW\$FWLYLW\

HVWDEOLVK6FRSH&2HPLVVLRQVEDVLFXQLWWDUJHWVHDFKFDWHJRULHV

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・achieve the "ZERO significant labor accident(※)"※significant labor accident: an accident with remaining disability, required long-term nursing, or fatality

LPSURYH&2
HPLVVLRQVEDVLFXQLWLPSURYH&2
HPLVVLRQVEDVLFXQLW
LQDOLIHF\FOHSHUVSHFWLYHFY 2019 Achievements 『TDK Environment, Health and Safety Action 2025』
F is c a l Ye a r 2 0 1 9
O bj e c tiv e s
P r a c tic a l A c tiv itie s【 1 】 TD K E n v ir o n me n t A c tiv ity : impr o v e C O 2 e mis s io n s ba s ic - u n it in a life c y c le pe r s pe c tiv e 3 0 % by 2 0 2 5 , c o mpa r e d w ith F is c a l Ye a r 2 0 1 4
Assess our entire value chain emissions impact including environmental contribution, and improve the sales based basic units（1） Reduce CO2 emissions from・ Improve CO2 emissions basic-unit from・ Implement energy saving activity worth 2.0 % of the previous
FY CO2 emissions at each manufacturing site
production activities
energy use 1.8% compared with the previous
FY・ Set up the self-motivated target of CO2 emissions
・ Determine renewable energy resources
・ Instill lower energy thinking in production site・ Consider introduction of clean energy（2）・ Improve product-based CO2 reduction
・ Calculate amounts of product contributions of new products
Expand environmental contribution ofcontributions basic-unit by 2.7% compared
Integrate the guidelines for contribution amount calculation
products
・with the previous FY
intonew products assessment system
Improve water usage basic-unit by 1.5% of（3） Reduce water usage
・・ Improve water usage basic-unit by 1.5% of the previous FY at eachthe previous FY
・ Improve the rate of recycle use
・ Implement water usage CO2 calculations
at sites・ Assess CO2 emissions of water
Improve waste basic-unit by 1.5% of the
Improve waste basic-unit by 1.5% of the previous FY at each（4） Use resources effectively
・・
previous FY
manufacturing site
Establish the CO2 conversion method for・・ Use raw materials effectively
input materials
・ Promote internal recycle/reuse・ Assess CO2 emissions of input materials
Reduce the amount of CO2 emissions in
Implement the energy saving activities（5） Reduce CO2 emissions in logistics
・・(e.g. review of delivery center)logistics by 3.0% of FY 2014
・ Review the international transportation methods
・ Broaden routes calculated CO2 emissions in logistics
Reduce usage or promote the substitution of hazardous
Reduce influence of chemicals to the human（6） Reduce risks of chemicals use
・・chemicalsand environment
Broaden operation sites of "TDK chemical substances・
control DB"（7） Contribute to environmental society
・ Preserve the environment and biodiversity
・ Promote forest protection activity
・ Promote environmental education and awareness activity
・ Assess the CO2 contribution amount of social activities【 2 】 T D K He a l t h a n d S a f e t y A c t i v i t y
Take action toward to achieve "Zero labor accident", our ultimate goal
Activity for health and safety・ achieve the "ZERO significant labor
・ Mitigate the significant safety risks
accident*"
・ Promote the safety patrol by site top manager thoroughly

A c h ie v e me n ts

Statu s・

Improved by 5.4% compared with the previous FY

Achieved

・

Improved by 6.9% compared with the previous FY

Achieved

・

Improved by 0.8% compared with the previous FY・

As a result of estimated water usage calculations,decide to terminate future implementation

・

Worsened by 19.8% compared with the previous FY

・Reported the results of Scope 3 emission

Tasks*significant labor accident: an accident with remaining disability, required long-term nursing, or fatality

Not achieved

Not achieved
Achieved

calculations in environmental performance data
・

Reduced by 11.1% compared with FY2014

Achieved・

Reduce usage or promote the substitution of hazardo

Achieved

・・

No. of trees planted outside company: 940
Aggregate no. of employees participating involunteer activities: 2,945

Achieved・

Achieve "Zero significant labor accidents"

Achieved

Sustainability Report 2020

Sustainability | Environment

Climate Change Initiatives

CONTENTS

Background of Goals
Editorial Policy

Response to TCFD

Fiscal 2019 Goals and Achievements / Evaluations and Future Activities
Fiscal 2019 Concrete Progress Report

Concrete Activities

Top
Commitment

TDK Group's
Sustainability

Background of Goals
Anthropogenic greenhouse gas emissions, which contribute to global warming, are on the rise, and the sense ofcrisis about climate change is increasing as represented by the Paris Agreement that was adopted at the COP21

Environment

in December 2015. Above all, carbon dioxide (CO2) is a major emission source that makes up 76%* of greenhousegases, and it is necessary to implement reliable CO2 reduction measures in business activities.
In the TDK Group, the directors responsible for environmental matters serve as the managers of the Group's

Societyenvironmental activities, including climate change issues, and the Sustainability Promotion Division Safety andEnvironment Group leads the promotion of and support for the Group's environmental activities. We makedecisions on important contents for management of the Group's environmental activities based on deliberation

Governanceby the management meetings and, if necessary, the Board of Directors. The TDK Environmental Vision 2035 wasestablished as the goals of specific activities, and we strive to reduce the environmental impact from a life cycle
perspective, from the use of raw materials to the use and disposal of products.

How the Public
Sees Us* From the IPCC 5th Assessment Report.

The Worldwide
TDK Group

Response to TCFDIn May 2019, we expressed our approval to the TCFD (Task Force on Climate-related Financial Disclosures),GRI Standards
Tablewhich makes recommendations to analyze impacts and disclose information on the impact of climate change on
corporate finances. TCFD is a task force on climate change-related financial disclosures that was established in2015 by the Financial Stability Board (FSB), an international body that aims to stabilize the financial system, and is
expected to be a catalyst for promoting information disclosure within companies and organizations, and promotedialogue between financial institutions and business corporations.
TDK believes that assessing the risks to and opportunities for your business due to climate change andappropriately disclosing information will become essential for the coexistence of future corporate growth andsustainable society and will take actions successively.
Reduction of CO2 emissions at manufacturing sites
Energy-derived CO2 emissions at manufacturing sites have been recognized as a major environmental burden at
TDK from the past, and we continue to promote reduction activities.
Reduction of CO2 emissions from logistics activities
At TDK, we are working to reduce CO2 emissions from logistics activities for the purpose of contributing to global
warming countermeasures, improving transportation efficiency, and reducing transportation costs.
In Japan, a committee to improve energy conservation in distribution was set up in FY2006, when the revised
Energy Conservation Act was enacted, and energy reduction activities related to logistics are carried out.

61

Sustainability Report 2020

CONTENTS

Expansion of contributions to reduction of CO2 emissions from products
TDK has been conducting product assessments from 1997 where we assess the environmental impact of the
product over its entire life cycle. In the mechanism we adopt, only products approved by this product assessment

Editorial Policy

are commercialized and distributed into the market. The excellent environment-considerate products (ECO
LOVE products) accreditation system was introduced in 2008 as a measure to continuously create products withhigh environment-conscious effects based on the assessment results of the product assessment. In addition

Top
Commitment

to disclosing information about the products certified as excellent environment-considerate products on our
website, we have also been promoting the creation and dissemination of products that contribute to reducing
environmental impact.

TDK Group's
Sustainability

In addition to these usual activities, we focused on the reduction of CO2 emissions achieved by products andknow-how. From FY2011, we have been developing calculation standards to quantify them as environmental
contributions, and in FY2015, we established guidelines for assessing the contribution of products that summarize

Environment

these results. We are promoting activities to reduce CO2 emissions from products through operation using productassessment.

Society

GovernanceHow the Public
Sees Us

Indicators and Goals
We have set the indicators and goals used when assessing and managing climate-related risks and opportunities
in line with the concept of "reducing CO2 emissions intensity by half by 2035 from a life cycle perspective," which

The Worldwide
TDK Group

was stated in the TDK Environmental Vision 2035.
Please see here for specific details.

GRI Standards
Table

FY2019 Results of the TDK Environment, Health and Safety Action 2025
Action Plan in TDK Environment, Health and Safety Action 2025

62

Sustainability Report 2020

Fiscal 2019 Goals and Achievements / Evaluations and Future Activities
CONTENTS

Fiscal 2019 Goals
Editorial Policy

Achievements

To improve energy-derived CO2 emissions intensity in manufacturing sites by
1.8% from the previous year
To reduce CO2 emissions from logistics activities by 3.0% from FY2014

Top
Commitment

To improve product CO2 emissions intensity by 2.7% from the previous year

Improved by 5.4% from the previous year
Reduced by 11.1% from 2014
Improved by 6.9% from the previous year

Breakdown of environmental load (CO2 emissions)
TDK Group's
Sustainability

Environment

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

Third-Party Verification
GRI Standards
Table

63

Sustainability Report 2020

CO2 Emissions by Category and Scope
CONTENTS

Scope
Outline(t-CO2)(Category)
Editorial Policy

CO2 emission

Scope1

Production

111,341

Scope2

Production

1,446,346

1

Purchased goods & services

6,255,2142

Capital goods

697,9383

Fuel- and energy-related activities

695,845

4

Upstream transportation & distribution

274,876

5

Waste generated in operations

6,019

6

Business travel

46,890

7

Employee commuting

7,427

8

Upstream leased assets

Not a subject in terms of business

9

Downstream transportation & distribution

Not a subject in terms of business

10

Processing of sold products

Not a subject in terms of business11

Use of sold products

12End-of-life treatment of sold products

Not a subject in terms of business

13

Downstream leased assets

Not a subject in terms of business

14

Franchises

Not a subject in terms of business

15

Investment

Not a subject in terms of businessTop
Commitment

TDK Group's
Sustainability

Environment

Scope3Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

Third-Party Verification
GRI Standards
Table

64

6,265,954

Sustainability Report 2020

Methods of Calculating CO2 Emissions in Scope 3
CONTENTS

Category

OutlineCalculation method
Products purchased in the fiscal year concerned multiplied by the emission

Editorial Policy

1

Purchased goods & services

intensity for each purchase price. Regarding materials, the purchase priceof the main constituent materials in each product (excluding semifinishedproducts) multiplied by the emission intensity.

Top
Commitment

2

Capital goods

The price of equipment and other capital goods acquired in the fiscal year
concerned multiplied by the emission intensity for each investment amount.
Calculated according to emissions in the extraction, production, and

TDK Group's
Sustainability

transportation of purchased fuel and fuel used when purchased electricity is
3

Fuel- and energy-related activities

generated. Fuel: Each fuel purchased in the fiscal year concerned multipliedby the emission intensity. Electricity: Purchased electricity quantity
multiplied by the emission intensity.
Calculated according to emissions involved in the procurement of purchased

Environment

products and services and emissions involved in the transportation of
4

Upstream transportation & distribution

Society

manufactured products. Regarding purchased products and services, eachof the same items as in Category 1 multiplied by the emission intensity
involved in procurement. Regarding manufactured products, expenses
involved in shipment multiplied by the emission intensity.

Governance5

Waste generated in operations

Regarding waste at manufacturing sites excluding valuables, financial valueof the waste multiplied by the emission intensity.
Business travel expenditure is calculated by multiplying expenses involvedin employee travel by the domestic employee commuting/business travel

How the Public
Sees Us

6

Business travel

expense ratio. Emissions are then calculated by multiplying this businesstravel expenditure by the emission intensity taking account of the content ofbusiness travel.
Commuting expenditure is calculated by multiplying expenses involved

The Worldwide
TDK Groupin employee travel by the domestic employee commuting/business travel
7

Employee commuting

expense ratio. Emissions are then calculated by multiplying this commuting
expenditure by the emission intensity assumed from the means of

GRI Standards
Tablecommuting.
8

Upstream leased assets

Not applicable9

Downstream transportation & distribution

Not applicable

10

Processing of sold products

Not applicable11

Use of sold productsElectricity consumed by TDK products (components) multiplied by the
lifelong operating time of set items contained in the product, conversion
coefficient, and quantity of TDK products (components) sold.
12

End-of-life treatment of sold products

Not applicable13

Downstream leased assets

Not applicable

14

Franchises

Not applicable

15

Investment

Not applicable65

Sustainability Report 2020

Evaluations and Future Activities
CONTENTS

Reduction of CO2 emissions at manufacturing sites
Editorial Policy

The amount of CO2 emissions at manufacturing sites in FY2019 was 1,558,000 tons, a 6.7% reduction from theprevious year. Emissions intensity improved by 5.4% over the previous year, and we were able to reach the goal.
In the future, we will continue promoting CO2 reduction activities that are more closely attached to production

Top
Commitment

activities through Monozukuri reform that combines TDK's original pursuit of zero defects quality.
Reduction of CO2 emissions from logistics activities

TDK Group's
Sustainability

The CO2 emission from logistics activities in FY2019 was 4,445 tons, a 12.8% decrease from the previous year
and 11.1% from FY2014, and we were able to reach the goal.
In the future, we will continue to grasp the CO2 emissions from logistics activities in overseas sites and promote

Environment

reduction activities throughout the TDK Group.
Expansion of contributions to reduction of CO2 emissions from productsSociety

The amount of CO2 reduction contributions through products in FY2019 was 2,267,000 tons, a 5.4% increase fromthe previous year. Emissions intensity improved by 6.9% over the previous year, and we were able to reach thegoal.

GovernanceIn the future, we will strive to develop environment-contribution products that will contribute to reducing theenvironmental impact of customers and society and promote the spread of our products by appealing their value.

How the Public
Sees Us

The Worldwide
TDK Group

Fiscal 2019 Concrete Progress Report
Reduction of CO2 emissions at manufacturing sites
Changes in CO2 emissions at manufacturing sites (global)*

GRI Standards
Table* The measurement and calculation method and the numerical results of FY2019 were verified by a third party.

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Sustainability Report 2020

CONTENTS

Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Environment* *Scope: Emission range defined by the GHG Protocol, an international calculation standard for greenhouse gas emissions. We referto direct emissions from facilities owned and controlled by the company as Scope 1 and emissions from the production of energy
Societyconsumed at facilities owned and controlled by the company as Scope 2.
* *TDK's CO2 emissions calculation standard• CO2 emissions is calculated by multiplying the CO2 conversion factor to the amount of electricity purchased and fuel(such as gas and oil) used at each business site.

GovernanceHow the Public
Sees Us• The factors defined in the Act on Promotion of Global Warming Countermeasures are used for the CO2 conversion
factor for fuel.
• The latest conversion factor that was publicly known at the time of planning in the beginning of the term is used for
the CO2 conversion factor for purchased power.
• The published value has been certified by a third-party verification.

Reduction of CO2 emissions from logistics activities
The Worldwide
TDK Group

Changes in CO2 emissions from logistics activities (Japan)*GRI Standards
Table* *The FY2018 data have been revised.
* *Calculated based on Japan's Energy Conservation Act.

67

Sustainability Report 2020

CONTENTS

Expansion of contributions to reduction of CO2 emissions from products
Changes in CO2 emissions from products*

Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Environment

Society* *The calculation method was reviewed by a third party.
* *The product contributions have been calculated based on the internal guidelines compliant with IEC's "TR62716 Guidance on
Quantifying Greenhouse Gas Emission Reductions from the Baseline for Electrical and Electronic Products and Systems"; The Instituteof Life Cycle Assessment, Japan's "Guidelines for Assessing the Contribution of Products to Avoided Greenhouse Gas Emissions"; andJEITA's "Guidance on Calculating GHG Emission Reductions Contribution of Electronic Components."

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

Related links
Third-Party Verification

Third-Party Review of Environmental Performance Data

68

Sustainability Report 2020

Concrete Activities
CONTENTS

Reduction of CO2 emissions at manufacturing sites
Editorial Policy

The TDK Asama Techno Factory received The Energy Conservation Center, Japan Chairman's Awardin the Energy Conservation Best Practice Category of the FY2019
Top
Commitment

At the Asama Techno Factory, small cross-functional groups including management
engaged in continuous energy-saving activities that implement diverse ideas andrequire low investment such as the efficient equipment operation linked to production

TDK Group's
Sustainability

planning, introduction of a waste heat recovery chiller, air-conditioning optimizationaccording to applications, and power leveling, and have achieved a 25.3% reduction infactory energy consumption (results from the end of June 2019, compared to FY2015).

Environment

These initiatives were highly commended, and they received The Energy Conservation
Center, Japan Chairman's Award in the Energy Conservation Best Practice Categoryof the FY2019 Energy Conservation Grand Prize for excellent energy conservation

Societyequipment (sponsored by The Energy Conservation Center, Japan, supported by The
Ministry of Economy, Trade and Industry). This award commends excellent energy
conservation efforts implemented by business operators and in workplaces that

Governanceserve as a model for others as well as excellent energy-saving products and businessmodels for the purpose of contributing to the development of an energy-saving society
with the spread of energy-saving products and promotion of awareness of energy

How the Public
Sees Us

conservation throughout Japan.
Asama Techno Factory's challenge was not carried out overnight; they have a historyof engaging in energy-reduction activities, starting from a project that kicked off in

The Worldwide
TDK Group

2007. As a result, they were able to halve the amount of energy used annually in thepast 10 years. Management and all factory members will work together to continue
tackling this challenge.

GRI Standards
Table

Promotion of the Introduction of Renewable Energy at Production Sites
The sites where 100% of electricity used is procured as renewable energy are as follows.
• TDK-Lambda UK Ltd.
• TDK-Lambda Ltd. (Israel)• Headway Technologies, Inc.
• TDK Electronics (two sites)
The global renewable energy (electric power only) usage rate is 22.7%.

Reduction of CO2 emissions from logistics activities
The following initiatives are promoted to reduce CO2 emissions in the logistics stage.
• Modal shift• Streamlining inter-factory transportation by consolidating production sites

69

Sustainability Report 2020

CONTENTS

Expansion of contributions to reduction of CO2 emissions from productsAwarded the "Partner of the Year 2019" by NEC
Editorial Policy

The TDK Group received the Partner of the Year 2019 in the two categoriesof "Co-creation" and "Environment" in the supplier assessment and wasTop
Commitmentcommended at the NEC New Year partner exchange meeting.
In the "Environment" department, the TDK Group was recognized forsignificantly reducing CO2 emissions of conventional products, such as by

TDK Group's
Sustainability

reducing approximately 40,000 tons of CO2 emissions per year from TDKLambda's power supply products for industrial equipment.
The calculation of CO2 emission reduction contributions of power supply
products started from FY2011, and we have been continuously striving toEnvironment

achieve greater CO2 reductions every year. We will continue to promotelarger contributions in the future by improving efficiency.

Society

GovernanceHow the Public
Sees Us

CC-E

ZWS-BAF

The Worldwide
TDK Group

GRI Standards
Table

70

HWS-A

Sustainability Report 2020

Sustainability | Environment | Climate Change Initiatives
CONTENTS

Third-Party Verification
TDK calculates direct GHG emissions (Scope 1), indirect GHG emissions from energy sources (Scope 2), andEditorial Policy

other indirect GHG emissions (Scope 3), and undergoes a third-party verification by SGS Japan Inc.

Top
Commitment

TDK Group's
Sustainability

Environment

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

71

Sustainability Report 2020

Sustainability | Environment | Climate Change Initiatives
CONTENTS

Third-Party Review of Environmental Performance Data
In order to improve the objectivity of environmental performance data, the following items were subject to a third-

Editorial Policy

party review by SGS Japan Inc.
• Calculation method for CO2 emissions from production activities

Top
Commitment• Calculation method for reduction of CO2 emissions through products

TDK Group's
Sustainability

Environment

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

72

Sustainability Report 2020

Sustainability | Environment

Water Resources Activities

CONTENTS

Background of Goals
Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Fiscal 2019 Goals and Achievements / Evaluations and Future Activities

Fiscal 2019 Concrete Progress Report

Concrete Activities

Background of Goals
Usable water resources on the planet are limited. In view of the expected future rise in water use due to economic
growth and population increases in developing countries, the availability of water has been cited as a global risk.
In response to this trend, TDK set a target for reducing the volume of water used in production activities and is
striving to gauge the water risk

Environment

Fiscal 2019 Goals and Achievements / Evaluations and Future Activities
Society

Fiscal 2019 Goal
GovernanceAchievement

Improve water usage basic-unit by 1.5% of the previous FY

Improved by 0.8% compared with the previous FY

Evaluations and Future Activities
How the Public
Sees Us

The total amount of water usage in fiscal 2019 declined by 2.2% compared to the previous fiscal year to
16,338,000 m3. In addition, though water usage basic-unit improved by 0.8% compared to the previous fiscal
year, our target was not achieved here.

The Worldwide
TDK Group

From now on, TDK will conduct water-risk surveys in each country and region, consider the establishment ofwater-risk indicators in site catchment areas, and in particular endeavor to promote the reduction of water use inwater-shortage regions.

GRI Standards
Table

Fiscal 2019 Concrete Progress Report
Trend of amount water usage (global)

73

Sustainability Report 2020

Concrete Activities
CONTENTS

TDK is promoting the effective utilization of water resources through the following activities:• Cyclic usage of cooling water
Editorial Policy• Reuse of pure water from used vacuum pumps in cooling towers• Use of rainwater as toilet cleansing water, etc

Top
Commitment• Use of recycled water in production processes• Reuse of water through the introduction of sand filters

TDK Group's
Sustainability

Environment

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

74

Sustainability Report 2020

Sustainability | Environment

Effective Use of Resources

CONTENTS

Background of the Goals
Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Fiscal 2019 Goals and Achievements / Evaluations and Future Activities

Specific Progress Report for FY2019

Concrete Activities

Background of the Goals
While we are required to effectively use limited resources and contribute to a recycling-oriented society, weachieved TDK’s zero emissions* by FY2006 and have been continuing the promotion of efforts to maintainthat level. Also, from the viewpoint of the effective use of resources, we are promoting initiatives to control thegeneration of waste at TDK.

Environment* At TDK, zero emission is defined as not processing any waste discharged from business sites by simple incineration treatments
or placing it into landfills and eventually recycling 100% of resources (excluding items that cannot be recycled alone due to legal
restrictions).
Society

Fiscal 2019 Goals and Achievements / Evaluations and Future Activities
GovernanceHow the Public
Sees Us

Fiscal 2019 Goals

Achievements

To improve waste intensity by 1.5% from the previous year

Worsened by 19.8% from the previous year
Disclosed Scope 3 emission calculation results as environmental

To establish CO2 conversion method for input resources
The Worldwide
TDK Group

performance data

Evaluations and Future Activities
In FY2019, the total waste increased by 18.2% from the previous year to 108,874 tons. Waste intensity worsened

GRI Standards
Table

by 19.8% from the previous year, and we were unable to reach the goal.
In the future, we will continue to promote thorough process improvements and strive to control the generation ofwaste from the perspective of both input resource efficiency and yield improvement rate.

75

Sustainability Report 2020

Specific Progress Report for FY2019
CONTENTS

Trend of amount of waste (global)
Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Environment

Society

GovernanceConcrete Activities
Commendation from the U.S. Environmental Protection Agency for Reduction Efforts of Metal Waste(Lead and Copper)
TDK-Lambda America was recognized for their

How the Public
Sees Us

achievement of waste reduction with the introductionof efficient production methods and received an award
from the U.S. Environmental Protection Agency (U.S.

The Worldwide
TDK Group

EPA). They were praised for cutting down on theamount of metal waste produced by changing the metal
sheet design used during the process and significantly

GRI Standards
Table

reducing unnecessary parts that would not be used in
final products.

76Sustainability Report 2020

Sustainability | Environment

Reduce Risks of Chemical Use

CONTENTS

Background of Goals

Fiscal 2019 Goals and Achievements

Editorial Policy

Top
Commitment

Background of Goals
TDK is promoting reduction of the use and discharge of chemical substances in order to curtail environmental
impact as well as health risks to employees and the risks of fire and explosion.

TDK Group's
Sustainability

Fiscal 2019 Goals and Achievements
Environment

Fiscal 2019 Goal

Achievement

Reduce influence of chemicals to the human and environment

Reduce usage or promote the substitution of hazardous chemicals

Society

Future Activities
GovernanceFiscal 2020 Goal
Promote globally unified chemical substance management to improve handling safety which is based on laws of each country byunderstanding hazards and dangers of chemical substances

How the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

77

Sustainability Report 2020

Sustainability | Environment

Approach to Biodiversity

CONTENTS

Protecting Nature and Biodiversity
Editorial Policy

About the Guidelines for Action by the Electrical and Electronics Industries concerning Biodiversity Conservation
Concrete Activities

Top
Commitment

TDK Group's
Sustainability

Protecting Nature and Biodiversity
In order to make its products, TDK uses various metals and oxides as raw materials. These come from mineralore and other sources mined all over the world. Mining for ore involves the risk of damage to the environment,

Environment

including landscape damage, clearing of forests, changes in water sources, and possible effects on theecosystems. As a manufacturer of components, we cannot simply stop using raw materials, but we can try to
mitigate adverse effects. We actively promote not only raw material resource savings by improving production

Societyefficiency, we also engage in activities aimed at protecting forest resources, water resources, and more.
All TDK employees are aware of the impact on the environment from production activities. We consider the
relationship between business operations and the environment and strive to protect a diverse global environment.

Governance

The TDK Environmental Charter, revised in April 2018, expressly provides that employees are to consider
contributions to ecosystems and take proactive action at all times.

How the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

TDK Environmental Charter

About the Guidelines for Action by the Electrical and Electronics Industries
concerning Biodiversity Conservation
In March 2015, the "Environmental Strategy Liaison Committee Biodiversity Working Group" formed by fourindustry associations in Japan* published the "Guidelines for Action by the Electrical and Electronics Industries
concerning Biodiversity Conservation (2nd issue published August, 2018)." TDK is fully supporting this initiativeand is implementing the guidelines through our activities aimed at protecting biodiversity.
* JEMA: The Japan Electrical Manufacturers' Association* JEITA: Japan Electronics and Information Technology Industries Association* CIAJ: Communications and Information Network Association of Japan* JBMIA: Japan Business Machine and Information System Industries Association

Guidelines for Action by the Electrical and Electronics Industries concerning Biodiversity Conservation(Link to external site)
Major Nature Protection Activities by TDK (Social Contrubution Activities)

78

Sustainability Report 2020

Concrete Activities
CONTENTS

Raising of Japanese Rice Fish, an Endangered Species, at TDK Akita’s Kitakami Plant
As part of activities to protect biodiversity, TDK Akita’s Kitakami Plant has been raising Japanese rice fish (Oryzias
Editorial Policy

latipes), an endangered species listed in Category II of the Japanese Ministry of the Environment’s Red List. This
activity began when the Kitakami Plant accepted about 30 Japanese rice fish from Chemi-con Iwate Corporation,
which is located in the same area and had begun raising the fish as an initiative to protect biodiversity through aTopCommitment

biotope. At first the Kitakami Plant raised the fish in an indoor tank. But in order to raise as many Japanese rice
fish as possible, it moved them to an outdoor pond in 2017. There are now about 600 Japanese rice fish in thepond. In October 2019 some fish were returned to Chemi-con Iwate’s pond. In this way, this activity has also

TDK Group's
Sustainability

widened the circle of exchange with other companies and residents in the local community.

Environment

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

79

Sustainability Report 2020

Sustainability | Environment

Environmental Performance Data

CONTENTS

Unit

FY2015FY2016FY2017FY2018FY2019CO2 emissions

t-CO2

1,474,119

1,463,396

1,647,096

1,669,733

1,557,687(Scope1)t-CO2

95,912

78,795

127,660

120,978

111,341(Scope2)t-CO2

1,378,207

1,384,601

1,519,436

1,548,755

1,446,346

Total energy consumption

GJ

9,416,655

9,613,075

13,187,928

13,417,536

13,507,948

MWh473,360

435,156

664,242

635,027604,262MWh

2,101,671

2,190,245

2,384,335

2,452,735

2,526,614

MWh

0

0

0

0

0

MWh

40,70744,897614,737

639,331

572,764

MWh

0

0

0

0

0

MWh

2,575,031

2,625,401

3,048,577

3,087,762

3,130,876

thousand m3

14,296

13,701

16,957

16,704

16,338thousand m3

12,131

11,33911,472

11,631

11,399thousand m3

0

0

0

0

0

Withdrawal: Fresh groundwater (C) thousand m3

2,165

2,362

5,485

5,073

4,939

0

0

0

0

0

Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Non-renewable fuels purchasedand consumed (A)Non-renewable electricity

Environment

Energypurchased (B)(Manufacturing) Steam/heating/cooling and otherenergy (non-renewable) purchased(C)

Society

Total renewable energy purchased
or generated (D)Total nonrenewable energy

Governance(electricity and heating & cooling)sold (E)
Total non-renewable energy

How the Public
Sees Us

consumption (A+B+C-E)
Total net fresh water consumption

The Worldwide
TDK Group

Withdrawal: Total municipal watersupplies (or from other water
utilities) (A)GRI Standards
Table

Withdrawal: Fresh surface water
Water(lakes, rivers, etc.) (B)

Discharge: Water returned to thesource of extraction at similar
or higher quality as raw water

thousand m3

extracted (only applies to B and C)
(D)

Waste

Total waste generatedt

78,487

77,91592,414

92,137

108,874

Total waste used/recycled/soldt

64,74566,53878,13978,12896,089Total waste disposed*

t

0

0

0

0

6,934

80

Sustainability Report 2020

Number of violations or accidents

No.

1

0

0

0

1

No.

0

0

0

0

0

USD

0

0

0

0

0

PRTR substance emissions

t

80

100

76

85

78

AtmosphereSOx emissions

t

3

2

2

2

1

(Japan)NOx emissions

t

38

43

42

17

18

Dust emissions

t

1

3

2

3

3

2,111

2,148

2,305

2,226

2,325

CONTENTSof legal obligations/regulations
Environmental

Editorial Policy

Violations

Number of violations or accidents
with significant fines (> USD$10,000)
Amount of fines/penalties related
to the above (> USD $10,000)

Top
Commitment

TDK Group's
Sustainability

Water quality
Environment(Japan)Waste water discharged

thousand m3* TDK is promoting zero emissions, but Waste is disposed at newly joined subsidiaries.
Society

CO2 Emissions in Value Chain (FY 2019)
Governance

CO2 Emissions by Category and Scope
Category

How the Public
Sees Us

The Worldwide
TDK Group

OutlineCO2emissions
t-CO2

Scope 1

Production

111,341

Scope 2

Production

1,446,346

1

Purchased goods & services

6,255,2142

Capital goods

697,9383

Fuel- and energy-related activities

695,845

4

Upstream transportation & distribution

274,876

5

Waste generated in operations

6,019

6

Business travel

46,890

7

Employee commuting

7,427

8

Upstream leased assets

Not applicable9

Downstream transportation & distribution

Not applicable

10

Processing of sold products

Not applicable11

Use of sold products

12End-of-life treatment of sold products

Not applicable13

Downstream leased assets

Not applicable

14

Franchises

Not applicable

15

Investment

Not applicable

GRI Standards
Table

Scope 381

6,265,954

Sustainability Report 2020

Methods of Calculating CO2 Emissions in Scope 3
CONTENTS

Category

OutlineCalculation method
Products purchased in the fiscal year concerned multiplied by the emission

1

Purchased goods & services

Editorial Policy

intensity for each purchase price. Regarding materials, the purchase priceof the main constituent materials in each product (excluding semifinishedproducts) multiplied by the emission intensity.

2

Capital goods

Top
Commitment

The price of equipment and other capital goods acquired in the fiscal year
concerned multiplied by the emission intensity for each investment amount.
Calculated according to emissions in the extraction, production, andtransportation of purchased fuel and fuel used when purchased electricity is

TDK Group's
Sustainability

3

Fuel- and energy-related activities

generated. Fuel: Each fuel purchased in the fiscal year concerned multipliedby the emission intensity. Electricity: Purchased electricity quantity
multiplied by the emission intensity.
Calculated according to emissions involved in the procurement of purchased
products and services and emissions involved in the transportation ofEnvironment

4

Upstream transportation & distribution

manufactured products. Regarding purchased products and services, eachof the same items as in Category 1 multiplied by the emission intensity
involved in procurement. Regarding manufactured products, expenses
involved in shipment multiplied by the emission intensity.

Society5

Waste generated in operations

GovernanceRegarding waste at manufacturing sites excluding valuables, financial valueof the waste multiplied by the emission intensity.
Business travel expenditure is calculated by multiplying expenses involvedin employee travel by the domestic employee commuting/business travel

6

Business travel

expense ratio. Emissions are then calculated by multiplying this businesstravel expenditure by the emission intensity taking account of the content of

How the Public
Sees Usbusiness travel.
Commuting expenditure is calculated by multiplying expenses involved

The Worldwide
TDK Groupin employee travel by the domestic employee commuting/business travel
7

Employee commuting

expense ratio. Emissions are then calculated by multiplying this commuting
expenditure by the emission intensity assumed from the means ofcommuting.

GRI Standards
Table

8

Upstream leased assets

Not applicable9

Downstream transportation & distribution

Not applicable

10

Processing of sold products

Not applicable11

Use of sold productsElectricity consumed by TDK products (components) multiplied by the
lifelong operating time of set items contained in the product, conversion
coefficient, and quantity of TDK products (components) sold.
12

End-of-life treatment of sold products

Not applicable13

Downstream leased assets

Not applicable

14

Franchises

Not applicable

15

Investment

Not applicable82

Sustainability Report 2020

Sustainability | Environment

Environmental Performance Data by Site

CONTENTS

Editorial Policy

Environmental Performance Data by Site
Plant nameTop
Commitment

TDK Group's
Sustainability

Environment

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

J a pa n
TDK Corporation
Chokai Plant
Inakura Plant
Nikaho Plant North Site
Nikaho Plant South Site
Narita Plant
Kofu Plant*1
Chikumagawa Techno Factory
Asama Techno Factory
Shizuoka Plant
Mikumagawa Plant
TDK Akita Corporation
Honjo Plant West Site
Honjo Plant East Site
Kitakami Plant
Ouchi Plant
Konoura Plant
Iwaki Plant
TDK Shonai Corporation
Tsuruoka Plant
Sakata Plant
Iida Plant
Tsuruoka East Plant
TDK-Lambda Corporation*2
TDK Precision Tool Corporation（Development and office sectors）
Ea s t A s ia
TDK Dalian Corporation
Qingdao TDK Electronics Co., Ltd.
TDK (Suzhou) Co., Ltd.
TDK Xiamen Co., Ltd.
SAE Magnetics (H.K.) Ltd.
Amperex Technology Ltd.
Acrathon Precision Technologies (HK) Ltd.
Wuxi TDK-Lambda Electronics Co.,Ltd.
TDK Dongguan Technology Co., Ltd.
Guangdong TDK Rising Rare Earth High Technology
TDK Korea Corporation
TDK Taiwan Corporation
InvenSense Taiwan Co.,Ltd. InvenSense Taiwan
Oth e r A s ia
TDK Philippines Corporation
TDK (Malaysia) Sdn. Bhd.
TDK (Thailand) Co., Ltd.
Magnecomp Precision Technology Public Co., Ltd.
TDK-Lambda Malaysia Sdn. Bhd.
Hutchinson Technology Operations (Thailand), Co., Ltd.
EM EA
TDK-Lambda Ltd.
TDK-Lambda UK Ltd.
T h e Ame r ic a s
TDK Components U.S.A., Inc.
TDK Ferrites Corporation
Headway Technologies, Inc.
TDK-Lambda Americas Inc.
Hutchinson Technology Inc.
T DK Ele c tr on ic s
TDK Electronics Group*3

Apr. 2019 - Mar. 2020
EnergyWater

Electricity use(Purchased)

Fuel use

: MWh

: GJ

Waste

Water
Total waste
consumption: thousand m3:t

Outsourced
recycling:t

1,687
23,47020,643
11,521
67,63033,503
5,560
35,037
46,996
15,813028,38350,212
5,164
6,910
53,671
17,631
27,461
66,95189,534

5
113
168
17
254
546
16
131
118
562

790
1,572
1,880
426
1,296
914
82
340
4,187
1,393

790
1,572
1,880
426
1,292
914
82
340
2,428
1,393

110,919
26,98690,926
36,696274
2,934

117,575
48,257106,078
51,061
0
1,769

497
33
487
77
2
58

6,390
270
4,990
610
112
283

6,390
266
4,990
600
112
283

9,653
16,901
4,886
7,138
3,017
621
13,893

2,643
8,583
44
20,21653
232,332

9
107
0
167
5
0
48

269
436
188
552
63
7
128

269
436
188
552
63
7
126

41,535
10,895
3,209
103,145
200,211859,766
6,662
2,405
58,261
3,655
16,357
15,886
12,547194429
061,2704,860
354,2320054,698
0
556
917
0

168
32
7
618
1,612
2,871
72
8
331
25
50
92
18

395
122
194
2,064
1,898
46,996
536
63
3,319
45
315
207
35

371
122
184
1,712
1,898
41,373
457
63
3,319
45
265
207
35

22,08010,002
12,30966,608
7,079
24,491

34,914
0
1,296
28
454
0

269
38
171
619
41
195

379
288
975
365
137
281

313
288
975
365
126
281

2,229
1,573

0
583

2
3

93
143

93
111

2,187
21,80350,385
1,975
63,660486
66,97742,4372,360
175,967

1
175
112
2
508

35
1,668
444
15
2,180

35
1,230
415
5
1,144

940,326

638,154

4,857

18,502

15,255*1: Includes TDK Kofu Corp.
*2: Figures are for the Nagaoka Technical Center.
*3: The Electronics Group includes TDK Electronics AG and its subsidiaries.

83Sustainability Report 2020

Sustainability | Environment

Cost of Environmental Protection

CONTENTS

Editorial Policy

Environmental Accounting (Japan)
TDK has historically monitored both the cost of its environmental protection efforts and the burden its activities

Top
Commitment

place on the environment. In FY 2001, to clarify the relationship between burden and cost, and to promote more
effective environmental measures, TDK introduced environmental accounting for all of its facilities in Japan.
A summary of FY 2019 results is given below.

TDK Group's
Sustainability

Environment

Category

Society

Environmental costs

Economic effects

Total
environmental
conservation,
Total
maintenance andinvestment
management(unit:
thousand yen) costs(unit: thousandyen)

Amount of reduction
achieved due toenvironmental conservation
activities(unit: thousand yen)

Positive environmental impact

Improvement in environmental burden due
to environmental conservation activities,
observance of laws/regulations and otherresults

1. In-plant area costs
GovernanceHow the Public
Sees Us

Pollution
prevention(Regulatory
controls)

21,198941,220• Complaints regarding vibrations/noise/odor:
0

Globalenvironmental
protection

326,732

Electricity and fuel441,694 •savings: 7,468• CO2 emissions reduction: 269t-CO2

Resource
recycling

103,440• Materials usage savings:
30,753• Materials usage reduction: 2,154t - Service
water use reduction: 0m3
Service water usage•569,428
savings: 408• Volume of valuable materials sold: 9,690t• Profit from sale of valuable • Company-external recycling volume: 15,601t
materials: 760,024

Risk management

62,545

17,401

2. Upstream anddownstream costs

00

3. Cost of
management
activities

0

8,801

4. Cost of R&D00• Environment-conscious products research/development projects: 22

The Worldwide
TDK Group

GRI Standards
Table• PRTR controlled substances emissions: 87t• Soil contamination risk countermeasurestaken: 0

5. Cost ofcommunity
activities

0400• Trees planted outside of company premises:
940• Cumulative total of staff taking part involunteer activities: 2,945

6. Cost ofenvironmental
damages03,181• Repair/restoration actions (incurring costs): 0

513,916

1,982,104

Total

798,65384

Sustainability Report 2020

CONTENTS* The investment amount for the fiscal year is the amount paid in FY 2019.
* Equipment depreciation costs (as defined by law) are included as part of environmental conservation, maintenance, and management
costs, but personnel costs are not included as they are determined by the actual number of staff in any given year.
* Only the actual impact is addressed. Hypothetical impacts (risk-avoidance impact or presumed impact) are not included.

Editorial Policy

Top
Commitment

TDK Group's
Sustainability

FY 2019 Totalled Results• Environment-related capital investment amounts decreased on the previous year from ¥1,708 million to ¥514
million.
• Environmental conservation maintenance costs rose on the previous year from ¥1,295 million to ¥1,982 million.
• The economic effects of environmental conservation activities rose from ¥737 million in the previous fiscal yearto ¥799 million.

Environment

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

85

Sustainability Report 2020

Sustainability | Environment

A History of TDK's Environmental Activities

CONTENTSTDK Environmental Voluntary Plan formulated
Editorial Policy

Top
Commitment

1993
Total elimination of ozone depleting substances*1
1995

Start of ISO 1400 implementation

1996

Start of consolidated control of chemical substances
Safety & Environment Office established

TDK Group's
Sustainability

1997

ISO 14001 certification obtained by Mikumagawa Plant, first in TDK Group
Introduction of product assessment
ISO 14001 certification obtained by all TDK Parent Company manufacturing and R&D facilities

Environment

1998
Total elimination of trichloroethylene and tetrachloroethylene
Green procurement starts (Japan sites)

Society1999

Lead-free project inaugurated
Regular release of Environmental Report begins
Zero Emission Project launched

Governance2000

ISO 14001 certification of all manufacturing and R&D facilities of TDK Group in Japan completed
In-house environmental newsletter "TDK ECOPLUS" launched

How the Public
Sees Us

Feb. Incinerators eliminated at manufacturing plants in Japan
Mar. TDK Green Purchasing Guide (Office Edition) published2001
Mar. Technical development completed for lead-free soldering

The Worldwide
TDK Group

Apr. Trial introduction of environmental accounting started (Japan sites)
Apr. Mass production technology for electronic components compatible with lead-free solder developed

GRI Standards
Table

Apr.
2002

EMS Integration Preparation Committee inaugurated (committee name changed to EMS Integration Promotion Committee
in April 2003)

May Product Environment Committee inaugurated
Oct. Fundamental environmental plan, TDK Environmental Action 2010, drafted (started from April 2003)
Jul. TDK Chemical Substance Contained for Product Standards established2003 Sep. Safety & Environment Office obtains ISO 14001 certification (as a first step toward company-wide EMS integration)
Oct. Zero emissions achieved at all TDK sites in Japan
Oct. Environmental risk management activities (for soil contamination) started at all manufacturing facilities in Japan
2004 Nov. Environmental Product Quality Management System established and implemented
Dec. All general-purpose electronic components conform to RoHS Directive
Jul. Environmental risk management activities (for VOC) started at all manufacturing facilities in Japan2005
Dec. Fundamental environmental plan, TDK Environmental Action 2015, drafted (started from April 2006)

86

Sustainability Report 2020

Feb.

CONTENTS2006

NEDO*2)Mar. EMS integration for all manufacturing facilities in Japan completed
Apr. Quality Management System (QMS) and Environmental Product Quality Management System integrated

Editorial Policy

Jan.
Top
Commitment

300-kW solar power generation system introduced at Kofu Plant (selected for field testing of solar power technologies by

2007

Chinese headquarters obtained ISO14001 certification (first step toward integration of EMS in China into company-widesystem)Mar. Zero emissions achieved for manufacturing facilities of all overseas subsidiaries
May Participated in Japan Article Management Promotion (JAMP) consortium as a promoter
Feb. Received Grand Prize in 17th "Global Environment Awards"

TDK Group's
Sustainability

May First Global Warming Countermeasure Summit held (energy-saving technology work groups launched)
2008
Sep. Start of environment-conscious product certification system (Eco Love products)

Environment

Dec. Participation in CO2 emissions trading scheme in Japan
Sep. TDK establishes Biodiversity Action Agenda

Society2009
Dec.

The installation of the solar power system at the Kofu Plant wins a Ministry of Economy, Trade and Industry 14th New
Energy Award Review Board Chair's Prize

Mar. TDK discloses chemical substance information on the "JAMP-GP chemical substances in products information system"
Governance

2010

Mar.

Sep.

How the Public
Sees Us

TDK-Lambda Corporation concluded a comprehensive "corporate hometown building agreement" with Shinano-machi in
Nagano Prefecture and the Mountain Village Revitalization Support Center
TDK became the first electronic components maker to receive a special award under the environmental assessment
scheme of the Development Bank of Japan

2011 Feb. Fundamental environmental TDK Environment Action 2020, drafted (started from April 2011)
The Worldwide
TDK Group2012 Sep. TDK receives special award under environmental assessment scheme of Development Bank of Japan for second time in a row
Oct. Akita Prefecture Mount Chokai beech forest planting drive enters 10th year
2013
Dec.

GRI Standards
Table

Apr.

ISO 14001 and OHSAS 18001 certifications in Japan changed to Bureau Veritas Certification, to unify certifications ofdomestic sites
TDK Corporation establishes a special agreement ("Corporate-Regional Collaboration Agreement") together with themunicipality of Shinanomachi, Nagano Prefecture, and the Mountain Village Revitalization. Center (three parties).

2014
Dec.

2015 Mar.

Mar.

2016

Apr.

Apr.

Jul.
2017

U.S. ISO14001 certifying organization changed to Bureau Veritas Certification; process integrated partially with Japanese
domestic certification
Achieved the fundamental environmental plan "TDK Environmental Action 2020" goal of a one million-ton environmental
contributions
TDK Environment, Safety and Health Action 2025 formulated as basic environmental plan in accordance with the TDK
Environmental Vision 2035 (implemented from April 2016)"Guidelines for Calculation of Product Contributions" published with the aim of enhancing the reliability of productcontribution calculations
Biomass boiler at Honjo Plant of TDK-MCC Corporation taken into operation. Use of biomass fuel is a first for the TDKGroup.
Raising of Japanese rice fish (Oryzias latipes), an endangered species, begun at TDK Akita's Kitakami Plant as a
biodiversity protection activity

Aug. Received special award in the Development Bank of Japan’s environmental ranking for the third consecutive year.
Aug. Total abolition of high-concentration PCB equipment in Japan87

Sustainability Report 2020

CONTENTS

Apr. Revision of the TDK Environmental Charter (fifth edition)
2018
Oct. Clean energy purchasing promoted primarily at European business sites of TDK Electronics AG
2019 May. TDK expressed support for the recommendations of the TCFD*3 (Task Force on Climate-related Financial Disclosures)

Editorial Policy

Jan.

The TDK Asama Techno Factory receives the Energy Conservation Center, Japan Chairperson’s Prize in the Energy
Conservation Best Practices Category of the FY 2019 Energy Conservation Grand Prize.

2020
Top
Commitment

TDK Group's
Sustainability

Feb.

TDK-Lambda Americas Inc. is commended by the US Environmental Protection Agency for its significant reduction of anenvironmentally harmful substance (lead) and industrial waste (copper).

*1. Limited to ozone-depleting substances regulated by the 1993 Ozone Layer Protection Law (except for air conditioning equipment
which is outside the scope of the law).
*2. NEDO: New Energy and Industrial Technology Development Organization*3. The TCFD was founded in 2015 by the Financial Stability Board (FSB), an international body seeking to achieve the stabilization of thefinancial system.

Environment

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

88

Sustainability Report 2020

Sustainability | Society

Respect for Human Rights

CONTENTS

Our Approach
Editorial Policy

Due Diligence Process

Identification and Evaluation of Human Rights Risks

Initiatives for Prevention and Reduction of Human Rights Risks

Communication with external parties

Collaborative Initiatives
Top
Commitment

TDK Group's
Sustainability

Our Approach
Understanding of global trends on human rights issues

Environment

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 theSocietyframework, 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

Governance

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, EU regulation on conflict minerals in 2017, and Dutch Child Labor
Due Diligence Act in the Netherlands in 2019. This trend represents a strong appeal to companies to specifically

How the Public
Sees Us

identify human rights issues in their business activities and take appropriate action.

Our policies for respecting human rights
The Worldwide
TDK Group

The TDK Code of Conduct states that "The TDK Group will continue to respect human rights, comply with relevantlaws and regulations and international rules, and discharge its social responsibility with a strong sense of ethicalvalues for the purpose of creating a sustainable society." To this end, the TDK Code of Conduct requires respect

GRI Standards
Table

for human rights. The TDK Group Policy on Human Rights was formulated in 2016. Based on the framework of the
UN Guiding Principles on Business and Human Rights, TDK promotes the correct understanding and awarenessof human rights issues, not only within the business operations of the TDK Group itself but also throughout thevalue chain. We expect our business partners and suppliers to understand and support the TDK Group Policy on
Human Rights, and we also formulated the TDK Supplier Code of Conduct and require our business partners andsuppliers to comply with it.
Related links
TDK Code of Conduct

TDK Group Policy on Human Rights

89

TDK Supplier Code of Conduct

Sustainability Report 2020

Due Diligence Process
CONTENTSThe TDK Group undertakes human rights due diligence processes and promotes its due diligence activities in linewith the procedures set out in the UN Guiding Principles on Business and Human Rights. We also continue to
Editorial Policy

dialogue with internal/external parties and stakeholders to make our activities more effective.
Human Rights Due Diligence Process of TDK GroupTop
Commitment

TDK Group's
Sustainability

Environment

Society• Identify potential humanrights issues in the value
chain• Evaluate risks by probability,
human rights impact, andscale of our company’s
leverage• Prioritze key themes basedon risk evaluation result• Assess detailed risks foreach key theme• TDK Code of Conduct• TDK Group Policy on
Human Rights• TDK Supplier Code of
Conduct

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group• Implement measuresfor each key theme andperiodic review• Training• Sustainability Website• HumanRights Statement

Identification and Evaluation of Human Rights Risks
Human rights key themes of TDK GroupThe TDK Group periodically assesses the issues which could become potential human rights risks and the groups

GRI Standards
Tableof people who might be vulnerable to such risks through dialogues with external parties, reports from international
human rights organizations and conducting risk assessments and CSR self-checks.
In fiscal 2019, we reviewed our ongoing operations, to continue to identify potential human rights risks that could
arise in connection with our business activities and any potential impact on stakeholders.
(See the figure below)
Potential human rights risks that may be addressed by the TDK Group
Value chain

Procurement
Potentially affected stakeholders

Development andManufacturing

Sales

Employees of sub-contractors,

Groupsuppliers and labor agencies

employees

-

-

-

〇

-

-

-

〇

Protection of personal information and privacy

〇

〇

-

〇

Child labor and forced labor

〇

〇

-

-

Potential human rights issue
Product safety
Human rights infringement by unintended use of
products and services

90

Communities

Customers/End
users

Sustainability Report 2020

CONTENTS

Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Working hours and fair wage management

〇

〇

-

-

Occupational safety and health

〇

〇

-

-

Unfair treatment of foreign workers

〇

〇

-

-

Discrimination

〇

〇

-

-

Freedom of association

〇

〇

-

-

Harassment

〇

〇

-

-

Responsible sourcing of minerals

〇

-

-

-

-

〇

〇

-

-

-

〇

-

Impact on employment by establishment, closing
and consolidation of facilities
Infringement of local residents' rights byinappropriate environmental management in a factory

Environment(health hazard, degradation of daily life environmentand decrease in assets, etc.)

Then we evaluated the identified potential human rights risks above by considering the risk of occurrence ofSocietyhuman rights infringement, the impact on human rights should the infringement occur, and the scale of impactthat our company can leverage, considering our ongoing due diligence activities such as CSR self-check, risk
assessment etc. As a result, we prioritized the following three human rights key themes, focusing on preventive/

Governanceremediation measures and their monitoring. In addition, we periodically review these human rights key themes.
• Responsible sourcing of minerals

How the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table• Respecting human rights of employees at our manufacturing sites• Respecting human rights of employees at suppliers (including sub-contractors and labor agencies)

Our Approach for Each Human Rights Issue
Prohibition of Child Labor and Forced Labor
The TDK Code of Conduct strictly prohibits the use of child labor and forced labor throughout the supply chain,
and we conduct various measures to prevent their occurrence. We also prohibit child labor and forced labor in the
TDK Supplier Code of Conduct and require our suppliers to be aligned with us in these efforts.
Working Hours and Fair Wage Management
We use dedicated labor management systems at each of our sites and pay wages based on appropriate work
performance management. In the TDK Supplier Code of Conduct, we state our approach regarding long working
hours, overtime work, compensation and minimum wage etc.
Occupational Safety and Health
Recognizing that a safe and healthy working environment is critical for protecting our employees and thereforeof the utmost importance to TDK, TDK has established the TDK Occupational Health and Safety Charter andpromotes safe and healthy working conditions. We also established a 'Health and Safety' agenda in the TDK
Supplier Code of Conduct and indicate our approach for identification and reduction of potential safety risks in theworking environment, response to emergencies, occupational accidents and diseases, internal communication forsafety and health, etc.
Related link
Safety and Health91

Sustainability Report 2020

Protection of foreign workers
CONTENTS

Foreign workers are susceptible to becoming victims of forced labor and human trafficking, due to their low socialand economic position, especially non-skilled workers. We take necessary measures in terms of the respect ofhuman rights to prevent such abuses and to remediate them in the supply chain if necessary.

Editorial Policy

Prohibition against discrimination
The TDK Code of Conduct ensures equal opportunities for all employees by prohibiting all forms of discrimination

Top
Commitment

in respect of employment, treatment (compensation, opportunities for trainings and advancement etc.) andother similar matters based on race, beliefs, gender, religion, nationality, ethnicity, age, marital status, disability,
sexual orientation, gender identity, military status, genetic information, social status etc. We also require the same

TDK Group's
Sustainability

protections in the TDK Supplier Code of Conduct. The TDK Group's business activities (including contracts andsubcontracting) are carried out not only on the basis of economic rationales, but in an effort to fulfill our social
responsibility in complying with laws and regulations, and respecting human rights and labor rights.

Environment

Freedom of association
TDK and some of our subsidiaries have labor unions.
In addition, in countries where labor unions are not permitted under local laws, regulations, and labor customs,

Societyand in TDK Group companies where there are no unions, TDK holds sincere dialogues directly with employees
or employee representatives based on the TDK Code of Conduct. In this manner we work to build soundrelationships and resolve issues regardless of the circumstances. In all cases, we respect our workers' rights toGovernancefreely form or join organizations of their choosing, and we do not discriminate or retaliate against workers who
participate or seek to participate in organizations which bargain collectively or seek to bargain collectively such aslabor unions.

How the Public
Sees Us

Related links
TDK Code of Conduct

The Worldwide
TDK Group

GRI Standards
Table

Safety and HealthResponsible Sourcing of Minerals

TDK Supplier Code of Conduct

Sustainable Procurement

Social and Environmental Consideration at Manufacturing Sites

Initiatives for Prevention and Reduction of Human Rights Risks
In 2020, TDK joined the Responsible Business Alliance (RBA), an organization which is dedicated to improvingsocial, environmental and ethical conditions in the global supply chains. TDK utilizes the RBA code of conduct as
the standard to promote our CSR activities in manufacturing sites. For the prioritized 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.

Responsible Sourcing of Minerals
TDK started its response to the problem of conflict minerals following the enactment of the US Dodd-Frank WallStreet 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 conflictaffected and high-risk areas for serious human rights violations or environmental pollution, to avoid being complicit

92

Sustainability Report 2020in these problematic activities we revised our policy, which is now entitled the "TDK Group Policy on Responsible
CONTENTS

Sourcing Minerals" in January 2019. Under this revised policy, TDK continues to promote responsible sourcing ofminerals 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

Editorial Policy

abuses and environmental destruction.
In fiscal 2019, according to the conflict mineral survey conducted by the TDK Group, no minerals involved in thefunding of armed forces in the DR Congo or adjoining countries have been found. We also conducted a survey toTopCommitment

identify cobalt smelters considering child labor risk in cobalt mines of DR Congo.
Related links

TDK Group's
Sustainability

TDK Group Policy on Responsible Sourcing Minerals

Responsible Sourcing of Minerals

Respecting human rights of employees at our manufacturing sites
Environment

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 TDK's CSR

Societyheadquarters. In addition, we conduct CSR audits by third parties in manufacturing sites located in China andthe high-risk countries of Asia approximately every two or more years, including customer audits. In fiscal 2019,
TDK implemented CSR self-checks at all of its 78 manufacturing sites. Among 36 sites in China and Asia, weGovernanceconducted the CSR audits by third-parties at 5 eligible sites that had not undergone customer CSR audits overthe last two years. During the risk assessments for labor and business ethics at all of our 78 manufacturing sites,
we assessed the human rights risks on forced labor, young workers, long working hours and dispatched workers

How the Public
Sees Usetc, and found no untreated risks. 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

The Worldwide
TDK Group

2019, no case of child labor was discovered. We began in 2015 to strengthen the monitoring of working hours
by headquarters at manufacturing sites in China, where extended continuous working hours of employees has
become a problem for some companies. The high-risk countries in Asia have been included in the monitoring

GRI Standards
Tablesince fiscal 2017. In Malaysia, where forced labor involving foreign workers became a social issue, we began toassess the issue in fiscal 2013, and since then have continued to monitor the status and to devise and implement
countermeasures based on the results.
Related link
Social and Environmental Consideration at Manufacturing Sites

Respecting human rights of employees at suppliers (including sub-contractors and labor agencies)
Initiatives for material suppliers
In order to promote CSR procurement, TDK implements annual CSR self-checks of its suppliers on the basisof items required by the RBA. These self-check items include labor and human rights, safety and health, andother human rights related issues. Furthermore, TDK has been conducting CSR audits of its suppliers, selecting
targeted suppliers in consideration of their importance in the delivery of products to customers and our relianceon them. In fiscal 2019, CSR self-checks confirmed that 96.1% of suppliers of our TDK Group companies were
CSR compliant, a 1.7% improvement over fiscal 2018. We will continue to strengthen our efforts regarding Group
companies and suppliers.

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Initiatives for sub-contractors
CONTENTSTDK has started CSR self-checks of its sub-contractors beginning in fiscal 2019. In fiscal 2019, we implemented
CSR self-checks on 99.1% of our 231 targeted sub-contractors. For sub-contractors in China, we conduct childlabor monitoring by headquarters as we do for our manufacturing sites. In fiscal 2019, no case of child labor was

Editorial Policy

discovered. Furthermore in fiscal 2019, in China, we conducted CSR audits on 3 significant sub-contractors for
TDK. For any nonconformities found during these audits, improvements have been completed.

Top
Commitment

Initiatives for labor agencies
In the high-risk countries of Asia, including China, human rights and recruitment risks are considered to be highand improper management practices by labor agencies are frequently discovered. Therefore, we conduct CSR

TDK Group's
Sustainability

self-checks for labor agencies used by manufacturing sites in the high-risk countries of Asia including China.
In fiscal 2019, we conducted CSR self-checks on all of our targeted 73 labor agencies.
Related links

Environment

Sustainable Procurement
Social and Environment Considerations in the Supply Chain: Performance Data

Society

Training
TDK raises awareness of human rights issues through e-learning or in person training that is given to all of our
Governanceemployees including those in the UK. In addition, we have also been able to identify issues through trainingof internal auditors based on RBA requirements and by CSR training that takes regional characteristics into
consideration. In the supply chain, TDK provides educational tools to promote awareness at the time of

How the Public
Sees Us

implementing CSR self-checks.
In fiscal 2019, we conducted the following training sessions:

The Worldwide
TDK Group• Explanation of revision of RBA Code of Conduct in China (32 persons participated)• Explanation of RBA audit requirements in U.S.A. (14 persons participated)• Fostering internal CSR audit personnel in Japan (18 persons participated)

GRI Standards
Table• Explanation focusing on labor agency management in Asian region (held in the Philippines, 31 persons
participated)
Grievance mechanisms and communications on human rights issues
The TDK Group has established a global whistle-blowing system that allows TDK Group employees to seek
guidance on or report any corporate ethics issues, including potential human rights concerns. These reports may
be made directly or through internal or external help lines that are independent from employees' own reportinglines.
For outside stakeholders, we communicate and respond through the inquiry contacts on the website. In response
to inquiries on human rights issues described in an external organization's report in fiscal 2019, we explained
TDK's policies on human rights and activities taken to ensure that TDK conducts business operations inaccordance with these policies.

94Sustainability Report 2020

Communication with external parties
CONTENTS

Dialogue
Editorial Policy

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:Top
Commitment

2017
Targeting Human Rights Responses at the Supply Chain
Invited two outside experts to attend a study session on the role required of TDK in response to human rights in

TDK Group's
Sustainability

the supply chain.
Targeting Human Rights Reponses at the Supply Chain
Consider the Societal and Environmental Impact of the Supply Chain

Environment

2015
CSR Promotion in the Supply Chain
Society

Invited Mr. Masaki Wada of Energetic Green for an exchange of opinions concerning what is expected of TDK topromote CSR in the supply chain.

Governance

CSR Promotion in the Supply Chain

CSR Promotion in the Supply Chain

2014
How the Public
Sees Us

Identification of Human Rights Issues through Dialogue with Stakeholders
Engaged in a dialogue with experts to identify human rights issues relevant to TDK.
Identification of Human Rights Issues through Dialogue with Stakeholders

The Worldwide
TDK Group

2013
Human Rights Due Diligence Workshop (Caux Round Table Japan)

GRI Standards
Table

Participated in the Human Rights Due Diligence Workshop, organized by the Caux Round Table Japan. We
contributed to identifying human rights issues related to the manufacturing sector, while sharing expertise withmembers from nine other companies, NGOs, and experts (10 associations).
Stakeholder Engagement Program

Collaborative Initiatives
In February 2020, the TDK Group joined the Responsible Business Alliance (RBA) and committed to society that
we will continuously work to improve our activities throughout our supply chains, including those involving humanrights issues, in line with the RBA code of conduct.
For responsible sourcing of minerals, the TDK Group has been participating in the Responsible Minerals Initiative
and the Responsible Minerals Sourcing Trade Working Group of JEITA (Japan Electronics and Information
Technology) [since 2011], and has been working on solving the issue throughout the whole supply chain.
Related link
Sustainability Management95Sustainability Report 2020

Sustainability | Society | Respect for Human Rights

TDK Group Policy on Human Rights

CONTENTSThe TDK Group aims to "Contribute to culture and industry through creativity" by directly engaging in revitalizing
Editorial Policy

and protecting the global environment and creating a pleasant and safe society. Based on the values represented
in the TDK Code of Conduct, we respect the human rights of our stakeholders and recognize the potential impact

Top
Commitmentof our various corporate activities on human rights. We also recognize the need for carrying out business in sucha way as to reduce that impact. Based on this understanding we commit to respect for human rights through thefollowing efforts.

TDK Group's
Sustainability(1) We respect international standards of human rights including the International Covenants on Human Rights
and the International Labor Standards and strive to uphold them.
(2) If domestic laws in the applicable region are incompatible with the International Covenants on Human Rights,

Environment

we will do our best to resolve issues so that international principles of human rights are respected.
(3) human rights are respected. We take measures to raise awareness of human rights, provide education anddevelop competency among all of our directors and employees.

Society(4) We carry out due diligence to address actual or potential impact on human rights due to our corporate
activities.

Governance(5) If our corporate activities have caused a negative impact on human rights, either directly or indirectly, we will
redress the situation or do our best to cooperate in redressing the situation so that it does not occur again.
(6) We ask our business partners and other stakeholders involved in the value chain to fulfill their responsibility

How the Public
Sees Us

to respect human rights and ask them through dialogue and discussion to take appropriate measures if thoseefforts are insufficient, based on the TDK Code of Conduct.
Established on August 2, 2016

The Worldwide
TDK Group

TDK Corporation
President & CEO
Shigenao Ishiguro

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Sustainability Report 2020

Sustainability | Society

Quality Assurance Activities

CONTENTS

Our Approach
Editorial Policy

Structure

Fiscal 2019 Goals and Achievements / Fiscal 2020 Goals

Top Priority Measures in the "Advance to Zero Defects"
Prevention and Control of Exposure to Toxic Substances with Products as the SourceTop
Commitment

TDK Group's
Sustainability

Our Approach
TDK pursues the corporate mission of contributing to society through the manufacture and supply of outstanding
electronic components.

Environment“Quality” is the key management axis in this quest, positioned as the top priority in activities aimed at realizing
top-caliber products built to consistently live up to customers’expectations.

Basic Philosophy

Society"Advance to Zero Defects"
TDK advocates the “Advance to Zero Defects” as its basic philosophy. This is manifested as to efforts
Governanceto eliminate defects not only at the shipment stage, but also throughout the product life cycle spanning
distribution, assembly by set manufacturers, application by end users and disposal.

How the Public
Sees Us

Quality Policy"Quality cannot be assured by final inspection!"

The Worldwide
TDK Group

TDK firmly believes that “Quality cannot be assured by final inspection.”
This policy stems from the idea that simply removing defective items at final stage inspection cannot
ensure sufficient product quality. Rather, the goal is to firmly instill the attitude of “building in” quality at

GRI Standards
Tableeach process to assure the excellence of 100% “good products.”
Therefore, TDK improves quality from the upstream level at the product design, process design, equipment
development and all other stages. The goal is to eradicate defects and realize high-quality products that
constantly earn customer satisfaction and trust.

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CONTENTS

Quality Targets"Achieve Zero Defects" "Make TDK the leading quality-oriented company in the industry"
To ensure full satisfaction for customers using its products, TDK works to faithfully supply top-quality goods

Editorial Policy

on a continuing basis. Quality assurance activities are advanced on the cornerstone of the three pivotal
themes of “Personnel Quality,” “Technical Quality” and “System Quality.” This stance is marshaled to firmly

Top
Commitment

address the targets of achieving zero defects and making TDK the leading quality-oriented company in theindustry.

TDK Group's
Sustainability

Environment

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

Structure
General Manager of Head Office Quality Assurance Function supervises QA activities in the Group as a whole,endeavors to share and develop principles and policies, and promotes activities by the entire Group toward theirrealization. In addition, each business division has a QA Function, the head of which supervises and executes QA
activities in the division.

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Sustainability Report 2020

Fiscal 2019 Goals and Achievements / Fiscal 2020 Goals
CONTENTS

Fiscal 2019 Goal
Editorial Policy

Achievements• Update education content to the FY2019 version

To promote continued TDK quality education to employees• Implement FY2019 version quality education

Fiscal 2020 GoalTop
Commitment

TDK Group's
Sustainability

To promote globalization of quality education content

Top Priority Measures in the "Advance to Zero Defects"
At TDK, our basic philosophy “Advance to Zero Defects” is being advanced through the following focal strategies.

Environment(1) Strengthened design development processes
In its quest for zero defects, TDK thinks it is necessary to build product-manufacturing systems capable of turning
Societyout 100% good products in design activities. More specifically, steps are taken to define risks prone to occur ineach process at an early stage, thereby creating and applying an upstream management type quality assurance
system to eliminate such problems at the design phase.

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table(2) Strengthened product manufacturing processes
To achieve “Zero Defect Quality,” product design must be accompanied by worksite competence to establish
reproducible manufacturing processes that eliminate variations. The main aspects that result in quality variations
are “Equipment” and “Operations.” Variations caused by equipment were reduced by the introduction of the“Equipment Variation Assessment Method.” Variations caused by operations were addressed by the “Co-creation
Challenge Activities” implemented as a small group activity. Along with this, steady endeavors to raise quality
awareness and furnish quality education through small group activities are mustered to forge and uphold a “Quality
First” corporate organization and culture.
TDK continues to enhance its engineering and Monozukuri power with further strengthening of its design
development and product manufacturing processes. This is all part of the company’s relentless push to supply
customers with higher quality products in more timely fashion.

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(3) Strict compliance for quality assurance
CONTENTS

We strive to fulfill our social responsibilities with high ethical standards in conducting corporate activities incompliance with laws and social norms. Toward this end, we continue working to improve product quality through

Editorial Policy

Top
Commitment

the pursuit of zero defects, try to foster an awareness of what it means to place top priority on quality, and perform
checks through compliance audits for quality.

(4) Responses to product security
In recent years, there have been incidents of new types of problem relating to IoT products that connect tonetworks including not just harm caused by cyber-attacks that exploit vulnerabilities via networks such as leaks of

TDK Group's
Sustainability

handled data or data tampering but also the use of hacked devices by attackers to cause harm.
In light of the circumstances, TDK implements countermeasures in our IoT products according to the productfunctions, features, sales format, and other conditions. For example, it is necessary to take into consideration

Environment

security in various stages such as using secure development methods and function safety structures from thecomponent purchasing and production processes to the design stage, and after products are sold, maintenancemethods such as firmware updates throughout operation and maintenance of applications that are installed onSocietyuser devices.
Security measures for IoT products will be an essential technology for the coming era of digital transformation, and
TDK has positioned IoT product security as an issue of product quality. In cooperation with relevant Functions,

GovernanceHow the Public
Sees Us

TDK has established implementation structures and rules to respond to cyber security issues including incidents
involving TDK IoT products and will strive to provide products that gain the trust and confidence of customers.

(5) TDK’s continuous implementation of quality education to employees
Learning lessons from a past humidifier accident, TDK regularly implements education for all employees of the
TDK Group to raise their awareness of the top priority that must be given to product safety and quality. The

The Worldwide
TDK Group

content of videos used as materials in this educational program is regularly updated to take account of incidents
occurring and requirements in the market.
In addition, to advance the program globally, TDK is promoting expansion in terms of its availability in multiple

GRI Standards
Tablelanguages and various methods of transmission.
Related links
Quality Assurance HQ General Manger's comment (In Pursuit of Zero-Defect Product Quality)100

Sustainability Report 2020

Prevention and Control of Exposure to Toxic Substances with Products as the Source
CONTENTS

To prevent and control exposure to toxic substances that originate with our products and that could threaten
people's health and the environment, in 2004 TDK introduced an Environmental Product Quality Management
Editorial Policy

system that is today operated under our Quality Management System (QMS). As a components manufacturer inthe middle of the supply chain, we implement this system thoroughly for prevention and control at each of thesestages purchasing, manufacturing, and selling.

Top
Commitment

TDK Group's
Sustainability

Environment

Society

Governance

Environmental Product Quality Management overview

How the Public
Sees Us

Purchasing (1) — Green procurement
The Worldwide
TDK Group

We established the TDK Chemical Substance Contained for Product Standards to ensure that no regulated
chemical substances are contained in our products. We also established the TDK Green Procurement Standards,
requiring of suppliers that materials, parts, and packaging contain no regulated chemical substances. We also

GRI Standards
Tablerequire information on Substances of Very High Concern (SVHC) listed under the REACH (Registration, Evaluation,
Authorization and Restriction of Chemicals) regulation.
Related link
The TDK Green Procurement Standards

Purchasing (2) — Incoming inspection
TDK carefully audits information provided by suppliers regarding chemical substances contained in materials,
parts, and packaging, to verify compliance with the TDK Chemical Substance Contained for Product Standards.
To prevent the possibility of regulated chemical substances being present due to human error or other causes,
high-risk articles have been identified. For these we measure at acceptance the content of identified chemical
substances using methods such as X-ray fluorescence analysis (XRF) to eliminate the possibility of a restricted
substance being introduced into a work process.
The definition of a high-risk product and the frequency of measurement are reviewed on a continual basis withreference to actual results.

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Sustainability Report 2020

Manufacturing (1) — Environment-conscious design and product assessment
CONTENTS

As an industrial manufacturer, our basic approach to protecting the environment is to carefully assess all aspectsof a product in the design and development stage to prevent problems from arising later related to the product or

Editorial Policy

any environmental impact.
Environmental considerations are a key aspect of elevating quality. We see environment-conscious design andproduct assessment as a way to prevent later claims and complaints. In each of the various processes fromTop
Commitment

procurement of parts and materials, to manufacturing, distribution, usage, and disposal, we identify elements thathave particular bearing on the environment, and we promote the development of new and sometimes revolutionary
technologies to realize improvements.

TDK Group's
Sustainability

Manufacturing (2) — Preventing misuse, mix-ups and contamination
TDK has a framework in place to ensure that the use of banned substances is not tolerated, and to minimize theEnvironment

risk of misuse, mix-ups, and contamination at mass production sites, such as in manufacturing processes, or atstorage areas or warehouses. The measures taken consist of careful identification and control, separation, theestablishment of procedures and standards, first-in and first-out practices, and controls for warehouse acceptanceSocietyand dispatching.
In processes involving such equipment as solder tanks, where there is a possibility of contamination, we control
lead levels using simplified test methods that have been developed jointly with solder manufacturers.

Governance

Selling (1) — Preventing shipment of non-compliant products
TDK supplies electronic components to customers in a wide range of industries, not only electronics and electrical

How the Public
Sees Usequipment an industry in which the RoHS Directive is applicable. Others include the automobile, medical devices,
and aerospace industries.
Some customers require products in compliance with the RoHS Directive (such as lead-free solder products),

The Worldwide
TDK Group

while others request products that do not conform to the RoHS Directive (such as lead-based solder products) forthe purpose of securing higher levels of product reliability.
To prevent non-compliant products from being shipped erroneously, we have registered RoHS Directive

GRI Standards
Table

compliance data for all of the products in our sales management computer system. This system automaticallychecks orders against customer specifications both at the time of order acceptance and when issuing shipping
instructions. When a product that does not comply with the RoHS Directive is to be shipped, an electronic“customer confirmation received” form must be completed before the product can be shipped.

Selling (2) — Information disclosure
TDK has in place a framework for disclosing information on chemical substances contained in its products that istied to our efforts to ensure the non-use of chemical substances that TDK has banned.
To respond promptly and accurately to inquiries from customers on chemical substances contained in products,
we have implemented groupware to consolidate the management of processes extending from acceptance ofcustomer inquiries by the sales departments to providing replies by the technical departments.

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Sustainability Report 2020

Sustainability | Society

Customer Satisfaction

CONTENTS

Our Approach/CS (Customer Satisfaction) Activities Related to Electronic Components
Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Customer Recognition of TDK Quality

Our Approach/CS (Customer Satisfaction) Activities Related to Electronic Components
TDK supplies electronic components not only to electronic device set manufacturers directly linked to end
consumers, but also to electronic assembly manufacturers and component manufacturers. In doing so, TDK
makes every effort to ensure customer satisfaction (CS), through following measures, and strives to achieve
general satisfaction, encompassing quality, cost, delivery, technical supports and services, in order to become theEnvironment

company of choice for potential customers.
Please see here for the % of customers covered by the satisfaction evaluation and the % of A rank customers.

SocietySocial and Environment Considerations in the Supply Chain: Performance Data

• Questionnaire, whereby TDK compiles questions and requests replies from customers
GovernanceHow the Public
Sees Us

The Worldwide
TDK Group• Supplier evaluation information, whereby customers regularly evaluate TDK products by their own
evaluation methods• Product-related complaint information from customers• CS evaluation, whereby sales staff members evaluate TDK products from a customer's point of view

Questionnaire
TDK has organized a setup by which it requests customers to complete a questionnaire, summarizes
requests and comments from customers, and provides feedback to related divisions in the company.

GRI Standards
Table

Supplier evaluation information
TDK obtains the results of supplier evaluations as completed by its customers. The evaluation ranks thedifferent levels of customer satisfaction, with an "A" indicating that the customer is fully satisfied. TDK
keeps track of changes in the percentage regarding the A rank, and passes this information to the relevant
division responsible to improve CS.

Product-related complaints
TDK maintains a database of product-related complaints filed by customers around the world. Informationis sent online to the involved departments without delay, so that swift action can be taken to improve CS.
In addition, this system is designed to automatically send significant complaints to top management.

CS evaluation
In order to become the supplier of choice for our customers, our sales staff members make sure that they
understand the needs of our customers. TDK makes every effort to improve CS by quickly understanding
the details of customer complaints, and providing feedback to the relevant divisions so that they may takenecessary remedial action.

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Sustainability Report 2020

Customer Recognition of TDK Quality
CONTENTS

Supplier Quality Excellence Award Received from General Motors
Editorial Policy

In October 2019 TDK Shonai Corporation received the 2018 GM Supplier Quality Excellence Award from General
Motors Company. The GM Supplier Quality Excellence Award is presented to suppliers who fulfilled all of 13 items,
including delivery, quality, and development, over the previous year. It targets the manufacturing sites of suppliersTop
Commitment

around the whole world, with performances assessed according to GM’s own evaluation system.
A total of 1,161 companies worldwide, and 22 companies in Japan, were awarded. TDK has now received GM’saward five times.

TDK Group's
Sustainability

Supplier of the Year Award Received from Skyworks Solutions
In 2019 TDK Corporation of America (TCA) received the Supplier of the Year Award from Skyworks Solutions,

Environment

Inc. Based in Woburn in the state of Massachusetts in the United States, Skyworks is a manufacturer ofsemiconductors for radio-frequency systems and mobile telecommunication systems.
TCA received the Passives Vendor of the Year Award, which is presented to the best supplier of passive

Societycomponents. In particular, TCA’s excellent customer service was highly evaluated. TCA received the award for thesecond year running.

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
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Sustainability | Society

Sustainable Procurement

CONTENTS

Our Approach
Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Environment

Structure

Fiscal 2019 Goals and Achievements / Evaluations and Future Activities

Concrete Activities of Sustainable Procurement

Our Approach
As an enterprise with a global range of production sites, the TDK Group stipulates the TDK Purchasing Policy torealize its Purchasing Principles and conducts purchasing activities in accordance with these principles.

"Global Partnership Purchasing" — Purchasing Principles
TDK engages in global production with production bases in Japan, Asia, Europe and the Americas. Within
the procurement activities that support production, the development of global procurement structures isSociety

crucial, and we strive to use those systems to develop products rapidly to remain competitive in the race tobe first to market in the electronics industry.
Production bases engage in local procurement, but in today's society with ubiquitous IT networks, materials

Governanceprocurement activities require close collaboration with suppliers in ways that overcome time and distance.
In addition, measures to fulfill corporate social responsibilities such as compliance with applicable laws andregulations, observance of social norms, and preservation of the global environment are promoted actively

How the Public
Sees Usthrough partnerships between TDK and its suppliers.

Purchasing Policies
The Worldwide
TDK Group

Compliance
All applicable laws and regulations are followed in purchasing activities. Moreover, TDK strives not only tofollow the letter of the law, but its spirit as well.

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Respect for Human Dignity
TDK respects the human dignity of workers who are active in all stages of the supply chain.

CSR
The procurement divisions of the TDK Group implement CSR activities on a continuous basis, while
performing evaluations of suppliers at regular intervals using the CSR Check Sheet, to promote
understanding of our CSR concept and raise recognition of our initiatives. In addition, as part of thecommon understanding of social issues, we have established the TDK Supplier Code of Conduct.

Green Procurement
As one aspect of its companywide environmental protection activities and in the pursuit of harmony withthe global environment, TDK engages in green procurement, i.e., the purchase of environment-conscious
products.

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CONTENTS

Fair and Open Business
TDK conducts fair business regardless of company size or nationality. TDK bases its purchasing decisions
on comprehensive evaluations of quality, price, delivery time, ability to provide a stable supply, and other

Editorial Policy

factors.
TDK does not accept gifts of any kind from business partners.

Top
Commitment

As a general rule, TDK does not accept dining or other forms of entertainment from business partners.

Partnership
TDK Group's
Sustainability

TDK seeks to build mutually beneficial relationships with suppliers based on shared goals.

VA*Activities
Environment

TDK values suppliers that can lower costs and provide new materials and technologies through VA
activities.

Society

IT Utilization
Information exchanges with suppliers using IT and networks are essential for accelerating the pace ofbusiness and reinforcing ties.

Governance

Quality, Delivery Time and Stable Supply
How the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

TDK always considers quality, delivery time and stable supply by establishing solid partnerships with its
suppliers.
* VA (Value Analysis) is a concept developed by the GE Company in 1947. VA provides a method to increase the value of a
product or service, specifically by analyzing various factors associated with the value relative to the minimum resources
necessary to produce said product or service (its cost). TDK uses the terms VE (Value Engineering) and VA synonymously.

Related links
Materials procurement (Purchaing Policy, Purchasing Principles, TDK Supplier Code of Conduct)
Approach to relations with business partners

TDK Group Supply Chain
On a global basis, the TDK Group does business with approx. 4,500 suppliers, with a purchase value of more than
400 billion yen (as of January 2020).

Process of identifying critical suppliers
The TDK Group identifies critical suppliers for our business sustainability by business unit, considering thefollowing elements.
• High-volume: suppliers that supply large quantities of materials or parts• Non-substitutable: suppliers that supply materials or parts that are difficult to find alternatives• Critical component: suppliers that supply important materials or parts
Critical suppliers are reviewed on an annual basis.

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Sustainability Report 2020

Membership of the RBA
CONTENTSIn February 2020, the TDK Group joined the Responsible Business Alliance (RBA),* the largest industrial coalitionin the world aiming to promote CSR in the global supply chain. Accordingly, the TDK Group made a commitment
to society that it fully supports the RBA’s vision and mission and, in accordance with the RBA’s code of conduct

Editorial Policy(labor, health and safety, environment, ethics, management systems), will continuously improve the human rights
of workers in the TDK Group and primary suppliers, their health and safety, and the environment.
From now on also, complying with the RBA’s standards, the TDK Group will endeavor to make continuous

Top
Commitment

improvements through the two stages of self-assessment and auditing in accordance with the contents oftransactions and the business of suppliers (primary production materials, consigned processing companies,
worker dispatch and job-placement agencies).

TDK Group's
Sustainability* RBA: The Responsible Business Alliance (RBA) is a global industrial coalition embracing about 150 companies dealing in electronics,
retail, automobiles, and toys. It stipulates standards of conduct related to the improvement of industrial health and safety, the protectionof human rights, consideration of the environment, and fulfillment of ethical responsibilities in the supply chain and calls on affiliatedcompanies and their suppliers to practice these standards.

Environment• Vision: A global electronics industry that creates sustainable value for workers, the environment, and business.
• Mission: Members, suppliers and stakeholders collaborate to improve working and environmental conditions through leading
standards and practices.

Society

Related site
RBA (Link to external site)

Governance

Structure
How the Public
Sees Us

The Worldwide
TDK Group

The head office materials function, business groups, the head office human resources education function, and the
CSR function cooperate in promoting activities.

Fiscal 2019 Goals and Achievements / Evaluations and Future Activities
Fiscal 2019 Goals

GRI Standards
Table

Achievements

CSR-compliant supplier ratio: over 95%

CSR-compliant supplier ratio: 96.1%

To perform 100% CSR self-checks at sub-contractors andCSR self-checks at sub-contractors: 99.1%

conduct CSR audits once every two years at major sub-Conducted CSR audits at 3 sub-contractors upon whom TDK

contractor upon whom TDK has high dependence in China

has high dependence in China

To perform 100% CSR self-checks at dispatch companies usedby manufacturing sites in the high-risk countries of Asia including

Achieved 100% implementation

China

Evaluations and Future Activities
In fiscal 2019, the CSR-compliant supplier ratio, including companies that newly joined the Group, was 96.1%, so
we were able to exceed our target.
Fiscal 2020 Goals
To achieve CSR compliant supplier rate of 97%
To achieve 100% implementation of CSR self-checks at outsourced suppliers
To achieve 100% implementation of CSR self-checks at temporary staffing agencies

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Sustainability Report 2020

Concrete Activities of Sustainable Procurement
CONTENTS

CSR self-checking by suppliers, etc.
Editorial Policy

Implementing supplier• Material suppliers(excluding suppliersTop
Commitmentof nonproduction
materials, such as
office equipment)

TDK Group's
Sustainability

CSR• Sub-contractors

Frequency

Content

At the timeof beginningtransactions andonce every two–
three years thereafter• Compiled on the basis of the RBA’s checklist (specificcontent related to the prevention of forced labor, illegal

self-check• Worker dispatch
and job-placement
Environment

agencies (high-risk• Compiled on the basis of the RBA’s checklist.
• After replies have been received, improvements are requested
if necessary.

exploitation, and child labor; prevention of corruption andethical violations; prevention of information leakage and risk

Every year

countries in Asia,

avoidance; etc.)• After replies have been received, improvements are requested
if necessary.

including China)
Society

The CSR self-check list, which is based on items required by the RBA, consists of a total of 56 items consideredespecially important by TDK, including the categories of human rights and labor, the environment, health andGovernancesafety, fair trade and ethics, and information security. In fiscal 2019 it was confirmed that 4,323 material suppliers(excluding suppliers of nonproduction materials, such as office equipment) were CSR-compliant suppliers. Selfchecking was implemented at 99.1% of the targeted 231 consigned processing companies.

How the Public
Sees Us

Regarding worker dispatch and job-placement agencies, it was recognized that inappropriate responses in suchagencies were an issue in certain countries in Asia, including China, where risks relating to human rights andrecruitment are thought to be high. For this reason, the CSR self-check is implemented for dispatch agencies used

The Worldwide
TDK Group

by manufacturing sites in high-risk countries in Asia, including China. With the aim of confirming management
control relating to human rights and ethics, the self-check list consists of specified content related to theprevention of forced labor, illegal exploitation, and child labor; prevention of corruption and ethical violations;GRI Standards
Table

prevention of information leakage and risk avoidance; etc. In fiscal 2019 the self-checking was implemented at all
73 targeted agencies.

Supplier Partnership System
TDK requires its suppliers to reply to a CSR check sheet through the Supplier Partnership System. This SupplierPartnership System is a mechanism by which the management of company information, distribution of purchasespecification forms, sharing of agreement documents, and so on, which previously was conducted by paper ormagnetic recording media, are managed uniformly online. It benefits both sides by speeding up and boosting
the efficiency of work. To raise both supplier awareness and motivation to make improvements, the check sheet
is designed to immediately display the results on-screen when answering questions. If problems occur withresponses, individual requests are issued for improvements.

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CONTENTS

Editorial Policy

Top
Commitment

TDK Group's
Sustainability

CSR audits of major sub-contractors
Environment

Since fiscal 2015, TDK has been conducting biennial CSR audits base on RBA base items of major subcontractors upon whom TDK has high dependence in China, a country in which there is high risk in the labor

Societyenvironment. In fiscal 2019, three CSR audits were conducted in China. One item was a deficiency in storing ofprotective equipment, and improvements for it was confirmed. For the future, we will further proceed the audits forsun-contractors by expanding targeting scope.

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

Supplier evaluations
With the aim of ensuring sound business conduct, TDK implements regular supplier examinations. An examinationis always conducted when newly registering a company as a supplier, and at regular intervals thereafter to decide
whether to continue the relationship. The main categories covered by the examination are quality management,chemical substances* management, environmental management, and corporate social responsibility (CSR)
including strict observation of human rights and other legal obligations as well as compliance with social
norms. Any problems that come to light through the examination are disclosed to the supplier with a request forcorrections or improvements.
* Survey items for chemical substances are based on the “TDK Green Procurement Standards.”

Related link
TDK Green Procurement Standards

109Sustainability Report 2020

Green procurement
CONTENTS

In order to promote green procurement aimed at the priority purchase of products that contribute to reducing
the environmental load and fulfill social responsibility, TDK has been implementing Green procurement, and each

Editorial Policy

group company has been taking their own appropriate measures. In April 1999, TDK established the TDK Green
Procurement Standards. These standards are revised as necessary to take account of laws and regulations inJapan and other countries, changes in social requirements, and other factors. They can be viewed on the TDKTopCommitment

website.
In April 2018 TDK issued version 9 of the TDK Green Procurement Standards and distributed copies to all
suppliers. The main revisions involve reviews of modifications to laws and regulations related to the regulation of

TDK Group's
Sustainability

chemical substances, as well as our response to conflict minerals. The survey format was also brought into linewith chemSHERPA,* a new tool that facilitates sharing information on chemical substances in products being
developed by the Ministry of Economy, Trade and Industry.
TDK’s procurement master provides links to data consistent with TDK’s green procurement standards, firmly

Environment

controls the content of prohibited substances and chemical substances requiring content management, anddiscloses and provides information as necessary.

Society* A scheme for communicating information on chemical substances contained in products that can be used throughout a supply chain.

Strengthening of BCP/BCM in the supply chain
GovernanceIn unforeseen circumstances, such as the outbreak of a large-scale natural disaster, TDK, as a member of the
supply chain, has a duty to share social responsibility with suppliers and meet demands so as to ensure the

How the Public
Sees Us

stable supply of products required by customers. Recognizing that the securing of stable supplies is an important
responsibility, TDK addresses this issue in three main ways:
1. BCP/BCM surveys of suppliers

The Worldwide
TDK Group

GRI Standards
Table

2. Advance collection and arrangement of information to use in an emergency
3. Prompt initial responses using a BCP Confirmation System
Especially with regard to BCP/BCM surveys of suppliers, as per item 1, initiatives based on industry-wide
consultations have begun to emerge. A subcommittee tasked with examining the issue was formed in 2013
under the umbrella of the JEITA Materials Committee, and a "Supply Chain Business Plan Survey" has beenformulated. A total of 17 set manufacturers and parts manufacturers are participating in the subcommittee,
which has identified a number of risk management items from the procurement viewpoint for dealing with various
disaster and accident possibilities. TDK is an active participant in this endeavor, and we intend to make full useof the survey that was published by the JEITA Materials Committee in September 2014, and carry out BCP/BCM
surveys.

Strengthening of compliance (TDK Corporation)
TDK has clarified a company-wide policy regarding offers of gifts and entertainment from suppliers, publicized thatpolicy throughout the Group, and requested the understanding and cooperation of suppliers.
Furthermore, regarding the exclusion of antisocial forces, TDK conducts preliminary surveys of suppliers whenstarting or restarting business with them.

110Sustainability Report 2020

Sustainability | Policies

Policy on Relations with Business Partners

CONTENTS

In building sound and favorable relations with customers, suppliers, and other business partners, the TDK Group
Editorial Policy

promotes the revision (simplification, rationalization) of traditional etiquette and customs between companies andacts accordingly.

Top
Commitment• Refrainment from participation in and attendance at individual celebratory and funeral events, such ascelebratory parties, wedding receptions, and wakes• Refrainment from giving and receiving money, etc. at times of promotion and preferment

TDK Group's
Sustainability• Refrainment from giving and receiving summer gifts, year-end gifts, etc.

Environment

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

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Sustainability | Society

Responsible Sourcing of Minerals

CONTENTS

Our Approach
Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Structure

Fiscal 2019 Goals and Achievements / Evaluations and Future Activities

Concrete Activities

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 DoddFrank Wall Street Reform and Consumer Protection Act, which was enacted in July 2010, and its final rule wasadopted in August 2012. The TDK Group Policy on Conflict Minerals was formulated in April 2013, to promote

Environment

initiatives in full compliance with the Due Diligence Guidance of the Organization for Economic Cooperation andDevelopment (OECD).
In order to reduce involvement not only in conflicts but also serious human rights violations and environmental

Societypollution, TDK has expanded the scope of its responsible sourcing of minerals beyond those from conflictaffected 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

Governanceof 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

How the Public
Sees Usabuses and environmental destruction.
Related link
TDK Group Policy on Responsible Sourcing Minerals

The Worldwide
TDK Group

Structure
GRI Standards
Table

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 torespond.

Fiscal 2019 Goals and Achievements / Evaluations and Future Activities
Goals

Achievements

DRC conflict-free supplier ratio: over 92%

DRC conflict-free supplier ratio: 93.1%

Monitor number of customer responses

Implement monitoring
Fiscal 2020 Goals

DRC conflict-free supplier ratio: over 92%
Monitor number of customer responses

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Sustainability Report 2020

Evaluations and Future Activities
CONTENTS

In fiscal 2019, TDK continued to inform business partners of its expectation of DRC conflict-free mineral use andto request unconfirmed business partners to make the utmost efforts to this end. As a result, the confirmed DRC

Editorial Policy

conflict-free supplier ratio increased further from the previous year to reach 93.1%, meaning that we had achieved
our target.
In fiscal 2020 also, we have set “confirmed DRC conflict-free supplier ratio of over 92%” and “monitor number

Top
Commitmentof 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

TDK Group's
Sustainability

Environment

Society

the expanding problem of responsible sourcing of minerals, we will continue to participate in such industrial
discussions.

Concrete Activities
Responses to surveys and promotion of DRC Conflict-free at each group company
TDK uses the Conflict Minerals Reporting Template (CMRT) developed by the Responsible Minerals Initiative (RMI)*
to facilitate the collection of sourcing information relating to conflict minerals.

GovernanceIn fiscal 2019, according to the conflict mineral survey conducted by our group companies, 93.1% of TDK's
suppliers are DRC conflict-free, exceeding the year's goal of 92%. At this point in time, no minerals involved in thefunding of armed forces in the DR Congo or adjoining countries have been confirmed.

How the Public
Sees Us

The Worldwide
TDK Group

Furthermore, TDK has been responding appropriately to requests from customers, and is monitoring the numberof responses.
* An organization of over 380 companies and associations that leads the effort for responsible mineral sourcing.

Cobalt reporting
GRI Standards
Table

TDK uses the Cobalt Reporting Template released by RMI to identify smelters.

Issues in survey responses
Within the RMI conflict mineral survey framework, identification of smelters is essential to truly certify suchoperations as being DRC Conflict-Free*. However, among products unable to confirm as being DRC ConflictFree, and notably items for which supply chains contain long stages, there are instances when product groups
with diversified electronic components are traded among component manufacturers, complicating the supply
chain structure, there are frequent examples when the information gathered on smelters is incomplete, rendering it
difficult to fully identify the smelters. Based on that and other factors, TDK products successfully found to be DRC
Conflict-Free have been limited to certain product groups for which the supply chain stages are short.
* The earlier Conflict-Free Smelter Program (CFSP) was changed to the Responsible Minerals Assurance Process (RMAP) in June 2018,
and the scope of risks was expanded beyond conflict risks in the DRC and adjoining countries.

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Sustainability Report 2020

Collaboration with industrial organizations
CONTENTS

Addressing the responsible sourcing of minerals issue must be a comprehensive effort undertaken by all membersof the supply chain. TDK has participated in the RMI in February, 2020, and TDK has participated in the JEITA

Editorial Policy

Responsible Minerals Trade Working Group from the beginning, and since fiscal 2013, TDK is a managing
company of the group.
The Japan Electronics and Information Technology Industries Association (JEITA) has concluded a memorandum

Top
Commitmentof understanding (MOU) with the Responsible Business Alliance (RBA) and the Global e-Sustainability Initiative(GeSI) and is jointly pursuing efforts to resolve the responsible sourcing of minerals issue. During fiscal 2019, TDK
participated in the following initiatives.

TDK Group's
Sustainability• Joined the Education and PR Team and participated as a speaker in and cooperated with operation of the
JEITA Responsible Minerals Sourcing Inquiry Briefings 2018, which was convened to raise awareness of the
responsible sourcing of minerals issue and promote understanding of survey methods among secondary

Environment

suppliers and others.
• As leader of the Data Exchange Standard Developing Team, collaborated in the push to revise the IPC-1755
responsible minerals sourcing data exchange standard for exchanging data between different computer systems

Societybased on EU regulations and submitted opinions to RMI on blockchain technology as part of determining
preferable data exchange methods.

Governance• Participated in the Japan Conflict-Free Sourcing Working Group of the automobile industry, coordinating
feedback on the survey manual and its tools.
• Participated in the Smelter Support Team to jointly confirm risks with smelters.

How the Public
Sees Us

The Worldwide
TDK Group

Related link
JEITA Responsible Minerals Trade Working Group (Link to external site)
RBA (Link to external site)

RMI (Link to external site)

GRI Standards
Table

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Membership of the RBA and RMI

Sustainability Report 2020

Sustainability | Society | Responsible Sourcing of Minerals
CONTENTSTDK Group Policy on Responsible Sourcing Minerals
This policy shall apply to the worldwide organization of the TDK Group and implements the TDK Group’s goal of

Editorial Policy

establishing responsible supply chains for sourcing minerals.
Reflecting the values embodied in the TDK Code of Conduct, the TDK group affirms the purpose of sustainable

Top
Commitment

and responsible sourcing minerals that originate in conflict-affected and high-risk areas, which is to mitigate thecontribution of conflict, serious human rights abuses or environmental threats.
The TDK Group hereby adopts this policy for responsible supply chain operation.

TDK Group's
Sustainability• The TDK Group recognizes that due diligence for responsible supply chains of minerals from conflict-affected
and high risk areas is an ongoing process. Accordingly, the TDK Group will use its commercially reasonable best
efforts to ensure only sustainable and responsible minerals are used in its supply chain.

Environment

Society• To achieve this end, the TDK Group shall institute a due diligence sourcing mineral program. The TDK Group
expects that its suppliers source all inputs, including minerals, responsibly.
• TThe TDK group will communicate to its suppliers TDK Group's requirements to conduct reasonable due
diligence of their own supply chains of minerals from conflict-affected and high-risk areas. The TDK Group will
incorporate its supply chain policy and due diligence processes into commercial contracts, written agreements
and supplier evaluations with its suppliers which can be applied and monitored, including, if deemed necessary,

GovernanceHow the Public
Sees Usthe right to conduct unannounced spot-checks on suppliers and have access to their documentation.
• The TDK Group will work in tandem with its suppliers to implement reasonable controls within the supply chain
to trace the origin of minerals from conflict-affected and high risk areas in order that contribution of conflict,
serious human rights abuses or environmental threats minerals are not included within the products or materials
they sell to the TDK Group. Furthermore, in the event that TDK Group discovers suppliers are not in compliance

The Worldwide
TDK Groupwith its supply chain policy and due diligence processes, its first step is to work with them to bring them into
compliance through corrective action plans. The TDK Group will not work with those who do not work to meetits standards.

GRI Standards
Table• Reaching full traceability of minerals requires time and effort across industries and collaboration from all sectors
in the supply chain. This is due, in a large part, to the complexity in the way that metals are produced and soldand the fact that ores from many different sources can be combined, thus multiplying the diligence necessary to
trace the products. All of this is complicated by the geopolitical forces at work in the region. These factors makeindustry-wide cooperation of the utmost importance in achieving socially responsible sourcing. The TDK Groupstrongly encourages its suppliers to comply with available international frameworks governing responsible
sourcing minerals matters.
• The TDK Group is committed to the objectives of implementing responsible supply chains for minerals fromconflict-affected and high-risk areas. As such, the TDK Group is working diligently to put the systems andprocesses into place that will enable us to ensure that the TDK Group is supporting responsible suppliers.
Established on April 1, 2013
Revised on January 18, 2019 (2nd edition)

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Sustainability | Society
CONTENTS

Social and Environmental Consideration at Manufacturing Sites
Our Approach

Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Structure

Goals and Results of FY2019 and Goals of FY2020

Concrete Activities

Our Approach
TDK recognizes that striving for social and environmental consideration at the Group’s production sites andfulfilling our social responsibilities is important as a supplier to continue our business. We strive to understandissues and make continuous improvements in a three-stage framework comprising self-assessments, audits, andtraining and dialogue.

Environment

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

CSR management framework at our manufacturing sites

Structure
We have specified a person in charge at each manufacturing site to promote this approach, with the Headquarters
CSR function providing supervision.

Goals and Results of FY2019 and Goals of FY2020
Fiscal 2019 Goals

Achievements

To perform 100% CSR self-checks at manufacturing sites

Achieved 100% implementation

To perform 100% labor and ethics risk assessment at

Achieved 100% implementation

manufacturing sites
To secure 100% opportunities for third-party CSR audits once

Achieved 100% implementation (high-risk countries in Asia,

every two years (High-risk countries of Asia including China)

including China)

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Sustainability Report 2020

Future Activities
CONTENTS

We will improve and strengthen our conventional activities and continue striving to understand and improveissues.
Goals of FY2020

Editorial Policy

To achieve 100% implementation of CSR self-checks in production sites (TDK Group production sites)Top
Commitment

To achieve 100% implementation of labor, human rights, and ethics risk assessments in production sites (TDK Group production sites)
To ensure audit opportunities once every two years by a third party (high-risk countries in Asia, including China)
To continually implement CSR training

TDK Group's
Sustainability

Environment

Society

To implement internal audits on workers’ rights and corporate ethics by internal auditors

Concrete Activities
Self-assessments
Frequency

Implementation site

Content
Personnel in charge at the sites will answer questionnaires regarding

Governance

CSR self-checks

Every year

All TDK Groupthe RBA check items (human rights, health and safety, environment, andproduction sites

ethics). We will give feedback on the results and implement improvement
measures at each site.

How the Public
Sees Us

Risk assessments

Every year

All TDK Group
production sites

The check items are updated every year based on social trends.
Personnel in charge at the sites will answer questionnaires. We willdevelop and execute improvement plans based on analysis results.

The Worldwide
TDK Group

CSR Self-Checks
GRI Standards
Table

At TDK, we create a TDK CSR self-check sheet concerning human rights, health and safety, environment, andethics by adding questions specific to TDK to the RBA check items, which is a global standard, and conduct a
self-diagnosis at all production sites every year. This is intended to let us grasp the current situation at production
sites, extract potential issues and their responses, and provide quick responses to customers’ CSR survey
requests.
After the personnel in charge at the sites answer the questionnaires, we analyze their answers at the Sustainability
Promotion Headquarters and provide feedback to each site.
In FY2019, we made improvements at some of the sites where responses were delayed, such as production sitesthat were recently put into operation.

Risk Assessments
Regarding the risk assessments, we clarify the risks in labor and corporate ethics, take measures to make
improvements and corrections if there are residual risks, and implement the assessment every year at
all production sites for the purpose of carrying out the PDCA cycle at each base and making continuous
improvements.
We update the check items every year based on social trends, and after the personnel in charge at the sites
answer the questionnaires, we analyze the answers at the Sustainability Promotion Headquarters and provide
feedback to the sites. Based on that, the sites establish and execute improvement plans.

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Sustainability Report 2020

In FY2019, we added items related to temporary staffing agencies and temporary employees and check items
CONTENTS

related to bribery cases. The risk assessment results showed that there were issues identified as risks, but
measures have already been taken, and there were no residual risks.

Editorial Policy

AuditsFrequency

Top
Commitment

Self-audits

TDK Group's
Sustainability

Simple CSR audits

Once every

Implementation site

Content• High-risk countries/regions

two years• Sites where customers have notconducted audits

Once every• Low-risk countries/regions• Sites that are not audited by a third-

two years

party organization

Environment• Conduct audits on important matters based on
the RBA audit items• Implement audits at the Sustainability Promotion
Headquarters• Consider audit items related to labor, humanrights, and corporate ethics taking risks into

Corporate internal
Society• Implemented for RBA audit items• Conduct audits by external auditing firms

auditsconsideration
Every year

Sites that support audits by customers• Audits conducted by the people in charge of the
CSR groups and people in charge of other sites
within the areas who have completed training
for CSR auditors

Governance

Audits bycustomers

How the Public
Sees UsAs necessary

Implemented according to customer
requests

Implemented according to customer requests

The four types of audits are self-audits, simple CSR audits, corporate internal audits, and audits by customers.
TDK-led Audits that are not conducted by customers are conducted based on the RBA audit items and haveestablished a mechanism that can maintain the level of labor, safety and health, environment, ethics, andThe Worldwide
TDK Group

management systems at global standards. Audits by external auditing firms are implemented once every two
years in countries and regions that we recognize as high risk according to our own standards.
In FY2019, we strengthened health and safety management in CSR, leading to fewer issues that are pointed out in

GRI Standards
Tablecustomer audits.

Trainings and Dialogues
We believe that systematically understanding customers’
requirements regarding CSR and acquiring a foundation
to evaluate own CSR activities are important for improving
the level of future CSR activities, and we implement CSRinternal auditor training taking into account the availabilityof human resources at the sites.
We also implement training with contents according tolocal needs for the purpose of further improving the levelof our CSR activities. In FY2019, we implemented CSR
training tailored to the actual conditions of each area.
Training regarding the revised parts of the RBA Code of

CSR internal auditor training by an external auditing

Conduct was conducted in China, the management offirm (China)

recruitment agencies in area corporate human resource
meetings in Asia (excluding China), RBA requirements in
the United States, and internal auditor training in Japan.

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Sustainability | Society

Global Human Resources Strategy

CONTENTS

Editorial Policy

Our Approach
The TDK Group has grown rapidly through multiple mergers and acquisitions (M&As). Today the group boasts aTopCommitment

portfolio of more than 100 companies and over 100,000 group employees. Moreover, only 10% of TDK personnel
are now located in Japan and roughly 80% have joined the group through M&As. This growth has been followedby new needs in the area of Human Resources. Key challenges include establishing a platform to ensure

TDK Group's
Sustainability

that diverse entities and talented individuals can fully engage as group members rooted in a core concept ofharnessing diversity for greater resilience and global success. For the above, we made with the HR Vision andMission Statement.

Environment

VisionTransform TDK into a more resilient company, prepare as ‘trusted enabler’ for the future through highly
Societyengaged employees.

Mission Statement
Governance

We will connect TDK Group companies and employees by utilizing their unique strength of diversity.

How the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

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Sustainability Report 2020

Sustainability | Society

Develop Global Human Resources

CONTENTS

Our Approach

Structure

Fiscal 2019 Goals and Achievements

Concrete Activities

Editorial Policy

Top
Commitment

Our Approach
TDK conducts its business together with numerous Group companies operating worldwide. To supply optimum
values and solutions to customers located around the world, we believe it is important for the TDK Group to

TDK Group's
Sustainability

maximize its synergy and transcend the limitations of time, geography, and culture. In order to promote the true
globalization of TDK in this way, the most important thing, we believe, is to foster the human resources that are
fundamental for this purpose.

Environment

In addition, we are promoting the Global Management Development Programs, which seek to develop the next
generation of human resources that will support TDK, based on the system shown below.
Global Management Development Training

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

Structure
TDK has established the Global HR Department within the Global Human Resources Division to develop various
policies on a global scale.

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Fiscal 2019 Goals and Achievements
CONTENTS

Fiscal 2019 Goals
Editorial Policy

Continue Global Management Development
Training (TCDP)Top
Commitment

TDK Group's
Sustainability

Achievements
Successful completion of Territorial Career Development Program (TCDP) in
the four territories—Asia, Americas, Greater China, Europe (~100 persons
participate)

Introduce newly Global Management Development

Alignment between Global and Local development measures in selective

Training (Advanced Management Program AMP)

regions

Enhance English training program

English test globally rolled out and global English trainings introduced

Please see here for the main training and system achievements.
Employee Performance Data

Environment

Future Activities
Fiscal 2020 Goals

Society

Continue Global Management Development Training (TCDP)
Continue newly Global Advanced Management Program (Global AMP)

GovernanceIntroduce Global Executive Management Program (GEMP)
Enhance English training program

How the Public
Sees Us

The Worldwide
TDK Group

Concrete Activities
TCDP (Territorial Career Development Program)
The Territorial Career Development Program (TCDP) is built on a program of the same name, which TDKGRI Standards
Table

Electronics started in China more than twelve years ago. TCDP on a territorial scale (Greater China, Asia,
Americas, and Europe) was introduced in fiscal year 2018.
TCDP consists of several face-to-face modules, covering topics such as Leadership and Self-awareness, People
management, Driving change, Presentation and Communication, Learning Integration and final Appreciation.
The goal of TCDP is to strengthen performance, motivation and professional maturity of talented employees, todevelop leadership and management competencies as to ensure the continuity of talented management within
the TDK Group. The objective is also to create a strong bond and partnership between TDK members fromdifferent sites, cultures, and experience. Participants work on a “real-life” team project throughout the program.
The projects provide participants the opportunity to apply what they are learning in each face-to-face module.
At the last module of TCDP, they present the culmination of their efforts to a TCDP Committee and get a final
appreciation for their work and overall learning journey. This active learning is a crucial part of the program’s DNA.
The program consists of five training sessions (four modules in Americas with same training contents) over a
9-month period. It takes place at different TDK companies and sites in the respective territory. TCDP is aimed
for talented employees, having managerial or supervisory experience and high potential for future growth, of any
function from any location within the TDK group. Each cohort in each territory is limited to 25 participants. The
program is held in English.
For more information on TCDP, please see here as well.
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Sustainability Report 2020

Business benefits :CONTENTS

Editorial Policy• TCDP develops the next generation leaders.
• TCDP supports global succession planning for key positions and the development of globally capable leaders
who can contribute in diverse fields and cultures.
• TCDP enables deepen understanding of management methods and principles, develop leadership skills,
increases employee engagement and self-awareness.

Top
Commitment• TCDP participants build stronger bonding and partnership among TDK members.

Global AMP (Global Advanced Management Program)
TDK Group's
Sustainability

Global Advanced Management Program (Global AMP) was introduced in 2019.
The Global AMP develops future leaders and strengthens their competences around strategy, change
management & innovation management.

Environment

The goal of the program is to support & empower participants in their transition to executive level roles, to learn
and practice the tenets of transformational and inspirational leadership and to create stronger bonding andpartnership among TDK Group companies.

Society

An integral part of the Global AMP journey is the project based learning approach which is linked to TDK strategic
issues and which enables an immediate learning application and knowledge sharing in the TDK context. At theend of the Global AMP journey, the participants present their project to the TDK Top Management.

Governance

Global AMP is offered yearly. It is a 7-month program, encompassing 3 face-to-face modules and one online
module, in total 14 training days. The face-to-face modules take place in Singapore, Lausanne and Tokyo.
Participants are either GMs or newly appointed GMs and DGMs (or candidates who are newly promoted to such

How the Public
Sees Us

positions). Each cohort is limited to 20-25 participants. The program is held in English.
Business benefits :The Worldwide
TDK Group• Global AMP is build upon and serves the TDK Corporate values, culture and mid-term plan.

GRI Standards
Table• Global AMP develops ability for strategic vision and thinking, innovation and strategy execution.

• Global AMP supports global succession planning by empowering participants in their transition to executive
level roles.

• Global AMP participants create stronger bonding and partnership among TDK Group companies.

GEMP (Global Executive Management Program)
The Global Executive Management Program (GEMP) was introduced in 2020.
The GEMP program is about leveraging diversity and becoming a “top manager of change” and about detecting
and managing innovation, that leads to business development strategies.
The goal of GEMP is to create stronger bonding and collaboration among TDK Group companies and corporate
functions starting at the highest levels of the hierarchy. This will support us in our mission of creating a stronger
company resilience through the deployment of inspiring top class leadership crossing borders and cultures.
GEMP bridges the Eastern and Western Leadership Philosophy and contributes to develop the new generation of
TDK Group Executives. Strategic issues are brought into projects with the objective of preparing the foundation for
the next mid-term plan and of presenting it to TDK’s Top Management. Individual coaching sessions support theparticipants in their development journey to become inspiring Global Leaders.
The journey is designed in 3 face-to-face modules of 5/4/4 days, in total about 7 months. The opening module
takes place in Barcelona, the final module in Tokyo. Location of Module 2 can change every cohort in order toadapt to the TDK context and to serve the GEMP journey appropriately.

122Sustainability Report 2020

Participants are either potential or newly appointed Corporate Officers. Each cohort is limited to 10–15
CONTENTS

participants. The program is held in English.
Business benefits :Editorial Policy

Top
Commitment

TDK Group's
Sustainability• The GEMP program reinforces TDK’s sustainable strategy, speed and value creation approach among theparticipants, related group companies, and corporate functions.
• GEMP brings the participants to a higher level of awareness regarding the mega trends and majortransformations; creates synergies to increase business, cost efficiency and overall resilience of TDK.
• GEMP brings the participants in the position of envisioning TDK’s sustainable growth and contribution to theworld, and preparing the foundation for the next mid-term plan (and potentially beyond).

Introduce English training programs globally
The goal of the Global Communication & English project is to enhance the fluency of communication within theEnvironment

TDK group world-wide. It does so, by introducing selected and recommended English training programs aroundthe world. The first phase, which was a standard English speaking test for our employees, was implemented in2018 with the aim of establishing the English training requirement of individual employees. People who needSociety

to improve their English language skills are guided to suitable training through the Global HR department uponcompletion of the test. This repeating process will improve our communication around the world and prepare us
for future challenges.

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

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Sustainability | Society

Cultivate a Corporate Culture that Respects Diversity

CONTENTS

Our Approach
Editorial Policy

Structure

Fiscal 2019 Goals and Achievements

Concrete Activities

Respecting the Individual and Providing a Worry-Free Work Environment (TDK Corporation)
Organizational Structure for Maximizing the Potential of Each Employee (Human Resources Institutions)Top
Commitment

TDK Group's
Sustainability(TDK Corporation)

Our Approach
The TDK Group comprises numerous affiliated companies with business operations around the globe. We believe

Environmentthat we can continue generating innovative creativity by establishing an environment in which employees withdiverse backgrounds can display their skills. This is crucial for realizing corporate growth.

TDK – Diversity & Inclusion Policy

Society

At TDK, we must have a diverse workforce to achieve our mission to contribute to industry and culture
through creativity. Our broad range of products and solutions in electronics, energy, materials, and sensors
Governanceare complex, pervasive and help make our daily lives better across the world that we share.
TDK's people imagine, design, develop, manufacture, and bring these products and solutions to life.

How the Public
Sees Us

We can achieve our mission because we welcome a global pool of cultures, disciplines, perspectives,
languages, ideas, skills, and experiences.
Target of TDK Diversity & Inclusion Policy is to create as much value as possible for the company and

The Worldwide
TDK Group

the society out of such a unique global pool of human resources. We foster the talent of the people in the
TDK Group by strengthening the links between them and by supporting a vivid exchange of thoughts andexperiences.

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As stated in our TDK Code of Conduct, we are committed to respect each employee’s individuality andshall establish reasonable and fair systems for human affairs and treatment of employees. The diversity of
our employees - their cultures, nationalities, ages, genders, backgrounds, religions, beliefs, races, sexual
orientations, disabilities, and characteristics - are a major driving force for our success.
To date:• TDK was founded in Japan and its headquarters are located in Tokyo, Japan, yet a big majority of ouremployees are situated outside of Japan.
• TDK unites people from many different cultural origins, located in many countries.
• TDK has employees in all age groups.
• Woman represent a very important part of our workforce.
• Continually support programs to improve our ability to communicate and collaborate.
Diverse teams help embrace different ideas and opinions, listen to each other, encourage development
and lead to quality products and solutions that we all enjoy. We are strongly committed to building diverse
teams that include all people.
As of April 2020124

Sustainability Report 2020

Structure
CONTENTS

TDK is promoting activities according to the situation of each site or legal entity under the support of the Human
Resources Function.
Editorial Policy

Fiscal 2019 Goals and Achievements
Fiscal 2019 Goals

Achievements

To continue expansion of scope for talent

Talent management system extended to the Sales function worldwide and TDK

management system.

Top Key Positions

To establish a diversity policy.

Established a diversity policy in April 2020

To enforce the establishment of a Human• Global Human resources meetings with participation of all major legal entities
took place in May 2018 and July 2019

Top
Commitment

TDK Group's
Sustainability

Resources network through further organisation
Environmentof Global and Territorial Human Resources
Meetings.
To start succession planning for identified Top

Society

Key Positions at the TDK Group.

• Territorial HR meetings with participation of local HR managers launched at all
territories starting in 2018
Succession Planning for Top Key Positions being implemented

Future Activities
GovernanceFiscal 2020 Goals
To continue expansion of scope for talent management system.

How the Public
Sees UsTo enforce the establishment of a Human Resources network through further organisation of Global and Territorial Human Resources
Meetings.
To further conduct succession planning for identified Top Key Positions at the TDK Group.

The Worldwide
TDK Group

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Concrete Activities
CONTENTS

Voices of staff working outside of their home country share their background
Editorial Policy

Technical Collaboration and Respecting Local Business Culture
I work in Israel, a country that has many innovative startups and prestigious universities. My job is to assess promising local
Top
Commitment

technologies and to plan and promote collaboration with TDK's technology and products.
When having a discussion, if you have an opinion to express, you sometimes have to interrupt others to get it out. That is a
big difference from how things are done in Japan, so I appreciate the effort it takes to adapt to a different business culture.
Our office has opened only recently, so we have no storehouse of know-how, and there are still many problems we face trying

TDK Group's
Sustainability

to communicate with each other in English, but we have been getting tremendous assistance from the folks at TDK-Lambda
in Israel. While enjoying myself on the job, I will continue exploring ways to achieve better collaborations that will lead tooutstanding new TDK products and services.

Environment

TDK Corporation
Israel R&D Office, Technology Planning Group

Society

Technology and Intellectual Property HQManager

Narutoshi Fukuzawa
GovernanceHow the Public
Sees Us

Meeting People of All Kinds Leads to Personal Growth
My job is to customize software products to meet the needs of customer around the world and to support resolving issues prior
to the start of production. The most exciting things are learning a wide range of things both through my job and by working with

The Worldwide
TDK Group

others, plus working with new technologies.
When you work overseas, it is important to step out of your personal comfort zone. In San Jose I am able to encounter people
who have different cultures, languages and styles of working.

GRI Standards
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Meeting those people and building trust have helped me to grow as a person. I will do my best to support customers with theidea of seeing things from “customer focus” in our TDK Value.

InvenSense, Inc.
Sensor Systems Business Company
MEMS Sensor Business Group
Sr. Staff Application Engineer
Suma Veerabhadrappa

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Respecting the Individual and Providing a Worry-Free Work Environment (TDK Corporation)
CONTENTS

Efforts to Respect Human Rights and Equal Opportunity—Diversity Promotion Action Plan
Editorial Policy

TDK includes provisions regarding respect for human rights and prohibiting discrimination into the TDK Code of
Conduct.
We implement specific initiatives on respecting human rights, equal opportunity, etc., including awareness-Top
Commitment

raising education for employees, and special counseling services including a telephone "help line." We have alsoestablished an array of systems designed to facilitate childcare and nursing care (childcare leave system, nursing
care leave system, short-time work system, etc.).

TDK Group's
Sustainability

As a result of creating environments that facilitate work and promote workstyles that maintain a good work-lifebalance, TDK was certified by the director of the Tokyo Labor Bureau as a Compliance General Business Operator
pursuant to the Act on Advancement of Measures to Support Raising Next-Generation Children and acquired theEnvironment

next-generation certification mark (commonly known as the ?urumin mark) in fiscal 2014.
In addition, we have devised and have been carrying out the following two Action Plans in regard to the Act toAdvance Women’s Success at Work, which was enacted in April 2016, as follows:

Society(1) The goal for the average percentage of women joining the company from 2020 to 2022 is a minimum of 30%.
(2) Established a specialized department to promote the empowerment of women.

GovernanceOur plan is to continue to develop systems that are useful to our employees in their course of growth, and to
implement new systems that are tailored to developing social trends as well as to the needs of our employees.

How the Public
Sees Us

The Worldwide
TDK Group

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Related link
Employee Performance Data

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Voice of an Employee about TDK’s Childbirth and Child-Care Support System
CONTENTS

The period of childbirth and child-care leave was very precious for me, because it enabled me to spend more time with myfamily and watch my child growing and smiling every day. Although we still faced the problem of waiting for an opening at a dayEditorial Policy

care facility, after 16 months I returned to work. Before taking child-care leave, I had been worried about whether I would be
able to do my job properly after my return, but the people around me have been very supportive. Little by little I am becoming
accustomed to my new job and recovering my pace. At the moment I am making use of the flextime system, which is veryTop
Commitment

helpful, because I have to take my child to and from the nursery.
Since my child was born, I have to take more care about my use of time. When I get to work, the first thing I do is compile
a schedule for the day, calculating backward from my finishing time. Time is limited, so I want to make sure that I can work
efficiently and not be a nuisance to others. But everyone is very understanding. It’s a wonderful environment. The problem of

TDK Group's
Sustainability

children having to wait to gain admission to day-care centers is continuing, so I hope that the period of child-care leave can bemade longer in the future.
At the moment I am enjoying a very well-balanced life every day. I hope that other employees also who are thinking about how tobalance child raising and work can make the most of the various schemes available and, with the support of those around them,

Environment

enjoy a work-life balance.

TDK Corporation

Society

Technology and Intellectual Property HQMaterial Development Center Development Office 4

Tomomi Iwamoto
GovernanceHow the Public
Sees UsI decided to take child-care leave half a year before my second child was born. Because both my wife and I work, I planned totake the leave and dedicate myself to child-care for six months up to our child’s first birthday, which is the limit for eligibility.
This would allow my wife to return to work. I had planned and prepared for this long before because I needed to prepare fordoing household chores and child-rearing. I wanted to be able to handle the sudden increase in time I spent on child-care. Also,

The Worldwide
TDK Group

preparing would help me not to panic in an emergency such as a sudden illness.
In the beginning I was unsure if I would be able to handle two things simultaneously that were unfamiliar to me?housework andchild-care. The first two or three months were tough, but gradually I began to find my rhythm, and in the end I felt it was a very

GRI Standards
Tablemeaningful time spent with my young children. When my older kid’s nursery school was on spring break, I had two kids to takecare of, and it was really hard to find the time to do the housework, but the experience gave me the confidence that now I could
handle anything even if my wife wasn’t home. After returning to work, I used the flextime system, which allows me to take my kid
to nursery school before work.
I informed my boss six months in advance before taking child-care leave and handed over my work to others for the periodof my absence. Everyone in the office was on board with my child-care leave, and it couldn’t have happened without that
understanding. I’m sure that my boss and colleagues, and my section had to do more work because I wasn’t there, or at least
they felt the impact of my absence during that time period. In an aging society with declining birthrate like ours, finding a balance
between work and child-rearing is important. I hope there comes a day when technology advances enough that things likerobots and artificial intelligence help us to overcome difficulties, especially in terms of labor.
TDK Corporation
Thin Film Wafer Foundry Business Division
Process Technology Group ATF Operation
Process Development Team
Process Development Section2

Takayasu Kanaya

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The TDK Rehiring System
CONTENTSIn April 2017 TDK revised its reemployment system, by which it had been rehiring employees after their mandatory
retirement, and began the operation of a new “second-career system.” The purpose of this system is to make

Editorial Policy

further effective use of the knowledge and experience possessed by senior employees and to fulfill TDK’s social
responsibility as a corporation in response to revision of the Act Concerning Stabilization of Employment of Elderly
Persons. In addition, this system is also being introduced at affiliated companies in Japan with a view to promoting

Top
Commitment

the reemployment of employees reaching mandatory retirement age.
A “Welcome Back” system was instituted in October 2017 to rehire employees who had to quit due to unavoidable
circumstances, such as childbirth or child-care, or elderly care situations.

TDK Group's
Sustainability

Work Style Options to Accommodate Spousal Relocation
In October 2017, we introduced two new systems?a relocation system for employees whose spouses have been

Environment

relocated in Japan and a leave system for employees whose spouses have been relocated overseas. With thesesystems in place, even if it becomes difficult to continue working in one’s current workplace due to the relocationof one’s spouse, employees can now choose to relocate or take a leave to be with their spouse. The work style

Society

options provided by TDK are designed to allow employees to balance work with various events in their lives, a
policy that aims to make TDK a company where people feel safe working at for a long time.

GovernanceHow the Public
Sees Us

Organizational Structure for Maximizing the Potential of Each Employee(Human Resources Institutions) (TDK Corporation)
TDK has a number of systems in place which are geared to helping each and every employee member discoverand develop their true potential.

The Worldwide
TDK Group

In-house Recruiting System
In 2000, we introduced an active in-house hiring system under which employees can apply for new positions

GRI Standards
Tableposted on the internal recruitment board directly with the Human Resources Department, without going throughtheir superiors. This system aims at promoting the principle of "the right person for the right job" throughout the
TDK Group, to respond in a timely manner to changes in the organizational makeup and staffing requirements of
the organization. The system provides opportunities for career development to employees who have the desire
and ability to try and shape their careers on their own initiative. As of March 2019, 215 applicants had fulfilled therelevant requirements and taken on new positions.

Career Option System
In addition to the in-house hiring system, TDK introduced the career option system in January 2006, giving
employees the opportunity to apply for transfer to a desired department or position. This system is designed toprovide incentives for further self-growth and for making a positive contribution to the development of TDK. It also
aims at stimulating employees to reassess their career plans from various perspectives.

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Self-Determined Reporting System
CONTENTS

A self-determined reporting system has been introduced for the purpose of supporting efforts by individual
employees to develop their own careers and abilities, as well as to help ensure the best possible match between

Editorial Policy

each job and the person performing it. Once a year, employees can report directly to the Human Resources
Department, indicating which positions they want and which business sites they would like to work at, as wellas the extent to which they are satisfied with their current positions. Employees desiring an interview have theTop
Commitment

opportunity to directly explain their choices during a session at the Human Resources Department.
The opportunity to have a dialog with the Human Resources Department on a regular basis encourages employees
to think seriously about their own careers, and also supports efforts such as transfer and participation in education

TDK Group's
Sustainability

and training for new positions. In this way, it helps employees shape their own career.

Business Creation and Proposal Framework
Environment

TDK was born as a type of venture company with the aim of commercializing the ferrite material that had beendeveloped at the Electrical Department of the Tokyo Institute of Technology.
Right from the outset, the concept of creating an enterprise through new products and ideas realized bySocietychallenging difficult tasks, and thereby contributing to culture and industry was central to TDK, and we believe that
we continue in this vein. The Business Creation and Proposal Framework was created in April 2015 as a means
to support the spirit of challenge. The idea is to provide the necessary resources for new business areas with theGovernancepotential to enhance the corporate value of TDK, thereby helping to launch in-house ventures. In addition, theNew Business Creation Training Program for supporting the devising of business plans also was established withsimilar aims.

How the Public
Sees Us

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Sustainability | Society

Safety and Health

CONTENTS

Our Approach / TDK Occupational Health and Safety Charter
Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Structure

Fiscal 2019 Goals and Achievements / Evaluations and Future Activities

Concrete Activities

Our Approach / TDK Occupational Health and Safety Charter
As the health and safety policy of the Group as a whole, TDK has compiled the TDK Occupational Health and
Safety Charter, consisting of the Basic Principle of Occupational Health and Safety and the Occupational Healthand Safety Policy with the aim of forming safe and healthy workplace environments. On the basis of this charter,
as a basic plan for specific activities, TDK has formulated the Health and Safety Basic Plan, which it strives toEnvironment

implement with the aim of reducing the number of significant labor accidents to zero.

TDK Occupational Health and Safety Charter

Society

TDK occupational health and safety charter applies to every organization in the TDK Group worldwide.

Basic Principle of Occupational Health and Safety

GovernanceIn order for our employees to perform their duties under the best conditions, the TDK Group is committed
to occupational health and safety management by working together to ensure a safe and healthy working
How the Public
Sees Us

environment as the primary responsibility of our business.

Occupational Health and Safety Policy
The Worldwide
TDK Group

Based on the basic principle of occupational health and safety, the TDK Group shall enhance occupational
health and safety actions that will enable the proper response to changes in production patterns, new

GRI Standards
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technology, and working environment, in order to promote "zero" risk in the workplace and prevent jobrelated injury and ill health with the participation of all employees.
1. We shall provide necessary management resources and assure continual improvement in the occupational health and safety
management system and related performance which shall be reviewed regularly or as necessary.
2. We shall establish voluntary standards for improving our management system to comply with all regulations and otheragreements relating to occupational health and safety.
3. We shall continuously reduce risks by evaluating risks arising from hazards, setting objectives, and making efforts to minimizerisks within the scope of our activities.
4. We shall build a framework for achieving the effective functioning of the occupational health and safety management systemwith clearly defined responsibilities.
5. We shall educate and train each level of employee to enhance all employees' comprehension and awareness in making a safeand healthy working environment.
6. We shall respect employees' opinions concerning occupational health and safety through effective communication, andprovide necessary information and assistance to suppliers and subcontractors about occupational health and safety while
they are on TDK premises.
7. We shall improve the work environment and assist toward employees' health maintenance and enhancement of employees
livelihood by promoting "physical and mental health" as essential elements for employees' wellbeing.
Established July 1, 2003
Revised April 1, 2011 (Rev. 4)131

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Structure
CONTENTSTDK has set up a promotional structure based on the Occupational Health and Safety Management System
headed by the president.
Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Environment

Society

Governance

Promoting an Occupational Health and Safety Management System (OHSMS)
How the Public
Sees Us

TDK has established an Occupational Health and Safety Management System (TDK OHSMS) as an effective way
to reduce latent risks and hazards at the workplace and create a safe and healthy work environment. This system
is also seen to contribute to efficiency and productivity and to enhanced product quality. It has been implemented

The Worldwide
TDK Groupat all TDK manufacturing sites.
TDK is now in the process of updating the certification for sites that have OHSAS 18001* certification to the new
ISO 45001 certification issued in March 2018, one by one.

GRI Standards
Table* OHSAS 18001: Occupational Health and Safety Assessment Series created by an international consortium as standard specifications
for managing health and safety in the workplace. The consortium consists of standards associations and evaluation organizations in
Ireland, South Africa, and Britain.

Related Links
Facilities with OHSAS18001 (ISO45001) Certification132

Sustainability Report 2020

Fiscal 2019 Goals and Achievements / Evaluations and Future Activities
CONTENTS

Fiscal 2019 Goal
Editorial Policy

Achievement

Achieve the "ZERO significant labor accident"

Achieve the "ZERO significant labor accident"

Evaluations and Future Activities
Top
Commitment

With the goal of creating safe, healthy working environments, we are implementing thorough safety measures atfacilities to improve working conditions, establishing basic safety procedures, and working to reduce risks basedon risk assessments. We will also work to maintain a record of zero significant labor accidents.

TDK Group's
Sustainability

In addition, we have appointed safety and health activity promoters (EHS coordinators) for each region, such as
Japan, China, ASEAN, Europe, and the United States, so that we can develop safety and health activities which
is suitable for the circumstances of each region. We keep improving the level of safety and health activities byEnvironment

conducting factory safety tests and sharing best practices at safety and environment meetings.
Fiscal 2020 Goal

Society

Achieve the "ZERO significant labor accident"

Related Links
GovernanceOccurrence of Accidents at Work: Employee Performance Data

Concrete Activities
How the Public
Sees Us

Safety Training Center Opening (South Site of Nikaho Plant)
The Worldwide
TDK Group

On September 1, 2017, we opened the Safety Training Center at the South Site of Nikaho Plant. The center
provides experience-based hazard training based on the concept of “look, listen and feel” to raise workers’
sensitivity to risk factors. As of March 31, 2019, a total of 4,644 employees had attended the training in the Akita

GRI Standards
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district. Plans call for 5,000 employees to complete the training by the end of September 2019, and starting in
October, the training will be conducted at sites outside the Akita region using a traveling caravan and other means.

Employee Health Management (TDK Corporation)

Working to Ensure Good Health
The company considers the health of employees and their families to be a top priority. We recognize the creation of a safe,
healthy work environment as a key management issue for enabling employees to carry out their duties under the best working
conditions. We will take action to ensure that such an environment is created.

To keep our staff healthy, we not only conduct physical examinations of employees on a regular basis, we also
have industrial physicians, health maintenance technicians, and dentists on staff at our major locations, creating
an environment in which employees can address their health concerns and have dental checkups on an everyday
basis. Also, the employee health insurance union has arranged for an outside service that offers telephone healthconsultations 24 hours a day, besides implementing various initiatives such as the "Health Challenge Campaign"
aimed at supporting lifestyle improvements among employees.
In the Akita region, the company is implementing a Total Health Promotion (THP) Plan, mainly through its health133Sustainability Report 2020

management centers. Through this program, which offers employees health guidance and exercise programs
CONTENTS

tailored to their individual needs, we are boosting awareness of health-related matters, such as the importance of
exercising and leading a healthy lifestyle.
Furthermore, in fiscal 2018 we set up a health management project promotion committee that is composed of

Editorial Policy

people from the company, health insurance associations, occupational health workers, and labor unions. The
committee will study various proposals and will develop activities to promote health.

Top
Commitment

Mental health care
Besides regular health management, we take an active interest in mental health issues, a subject that has become

TDK Group's
Sustainability

a focus of social concern in recent years. We have implemented a “return to the workplace support program,”
which includes measures to facilitate rehabilitation and enable a smooth transition for returning employees.
Also, to make counseling more accessible, we have established mental health consultation centers staffed by
specialists at major locations, and we hold periodic seminars for employees concerning mental health.

Environment

TDK will continue to conduct stress checks and mental health related training programs for its employees.
As of fiscal 2016, we are conducting stress checks to assess stress levels of individual employees and to prevent
mental health issues before they have a chance to happen. Through stress checks and various kinds of training,

Society

the goal is to foster a dynamic workplace where each and every employee is able to deal effectively with stress.

GovernanceHow the Public
Sees Us

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TDK Group

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Sustainability Report 2020

Sustainability | Society | Safety and Health
CONTENTSOHSAS18001 (ISO45001) Certification (As of June 30th 2020)
FacilityCountry

Certificate Number

Examined byJapan

3994704

BV

P.R. China

CNBJ312478-UK

BV

SAE Magnetics (Dongguan) Limited*

P.R. China

02117S10810R3M

CCCI

AFI Technologies (Chang An) Ltd.*

P.R. China

02119S10030R4L

CCCI

Amperex Technology Ltd.*

P.R. China

CN18/30212

SGS

P.R. China

02118S10383R1L

CCCI

TDK Taiwan Corporation

Taiwan20003153 BSOH

DQS

InvenSense Taiwan Co., Ltd.

TaiwanTW17/00862

SGS

TDK Korea Corporation

Korea

IND17.6210U/HS

BV

TDK Philippines Corporation

Philippine

CH16/1094.00

SGS

TDK (Thailand) Co., Ltd.

Thailand

488005 BSOH

DQS

Thailand25884/E/0002/UK/En

URS

URS

81791/D/0001/UK/En

URSThailand81791/D/0001/UK/En

URS

Editorial Policy

TDK Corp.
Safety & Environment Group of Sustainability Promotion HQ
Mikumagawa Plant
Top
Commitment

Kofu Plant
Narita Plant
Shizuoka Plant

TDK Group's
Sustainability

Inakura Plant
Nikaho Plant North Site
Nikaho Plant South Site
Honjo Plant West Site

Environment

TDK Akita Corporation
Inakura Plant
Nikaho Plant North Site
Nikaho Plant South Site

Society

Honjo Plant West Site
Kitakami Plant
Ouchi Plant
Iwaki Plant

Governance

Honjo Plant East Site
TDK Shonai Corp.
Tsuruoka Plant

How the Public
Sees Us

Sakata Plant
Iida Plant
Tsuruoka East Plant
TDK-Lambda Corp.

The Worldwide
TDK Group

TDK China Co., Ltd.
TDK (Suzhou) Co., Ltd.
TDK Dalian Corporation

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Qingdao TDK Electronics Co., Ltd.
TDK Xiamen Co., Ltd.

TDK Dongguan Technology Co., Ltd.
Dongguan Changan Huanan Electronics Factory

Magnecomp Precision Technology Public Co., Ltd.
Rojana Plant Wangnoi Plant
25884/K/0001/UK/En
Hutchinson Technology Operations (Thailand) Co., LTD.

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CONTENTS

Editorial Policy

TDK (Malaysia) Sdn. Bhd.

Malaysia

01 113 117285

TUV

TDK-Lambda EMEAUK

OHS609627

BSI

TDK-Lambda Ltd.*

Israel106055

IQNet* Facilities with ISO 45001 certification

Top
Commitment

TDK Group's
Sustainability

Environment

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

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Sustainability | Society

Social Contribution Activities

CONTENTS

Our Approach / Basic Concept of Contributing to Society
Editorial Policy

Academic, Research and Education Activities
Environmental Conservation Activities

Top
Commitment

TDK Group's
Sustainability

Structure

Sports, Art and Culture Activities

Social Welfare and Local Community Service Activities

Disaster Area AssistanceOur Approach / Basic Concept of Contributing to Society
As a corporate citizen, TDK recognizes the importance of coexisting with the community and, thinking about what

Environment

we can do for society as a company, promotes various original social contribution activities.

Principle

Society

Based on TDK's corporate motto of "Contribute to culture and industry through creativity," the TDK Groupaspires to foster the development of a healthy and prosperous society by implementing various activities in
Governancewhich all TDK employees can feel committed and connected to the community.

PolicyHow the Public
Sees Us

The TDK Group will utilize its various resources (employees, products, capital, information, etc.) to globally
implement proactive community activities - both alone and working alongside NPOs and NGOs - that
contribute to the betterment of society in the areas of (1) academic, research, and education, (2) sports, art,

The Worldwide
TDK Group

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and culture, (3) environmental conservation, and (4) social welfare and local community service activities.

Structure
In accordance with the above policy, TDK creates and implements plans for social contribution activities in various
regions.

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Academic, Research and Education Activities
CONTENTS

TDK is willing to return the profits of its activities tolocal communities by utilizing our accumulated product
Editorial Policy

technologies and human resources. Specifically, TDK wishes
to offer opportunities for young people who will lead thenext generation to acquire a wide range of knowledge,

Top
Commitment

experiences, and skills.
One specific example is the TDK Museum, which reopenedin October 2016. The museum introduces the history

TDK Group's
Sustainabilityof TDK’s products utilizing magnetic technology and its
technologies and also, as a new aspect, its efforts toward

An electronics workshop

the future, the aim being to support the science andEnvironment

technology studies of the young people who will be theleaders of society in the next generation. The museum also
continuously conducts electronics workshops.

Society

TDK Museum

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

Sports, Art and Culture Activities
TDK strives to be an “exciting company,” capable of providing quality and excitement to stakeholders. TDK
provides support in inspirational sports and art activities that uplift people's hearts.
Some specific examples are sponsorship since 2001 of the TDK Orchestra Concerts, performance in Japan ofworld-renowned orchestras from around the world, as well as Outreach Mini-Concerts and Open Rehearsals forthe education and development of elementary and junior high school students and students of music.
TDK Orchestra Concert 2019138

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Environmental Conservation Activities
CONTENTS

TDK is engaged in R&D activities to provide products that make people's lives more convenient. But we also
work earnestly on various environmental conservation activities to contribute to the symbiosis with the global
Editorial Policy

environment.
One example from plants in the Akita region is The TDK Beech Forest tree-planting event, which has been
held every year since 2004. Even after the tree planting the trees are given fertilizer as part of reforestation andTop
Commitment

beautification activities at various sites.

TDK Group's
Sustainability

Environment

Society

Fertilizing trees in the TDK Beech Forest in June

The TDK Beech Forest tree planting activity in October

GovernanceSocial Welfare and Local Community Service Activities
How the Public
Sees Us

TDK conducts its business activities on a global basis. We endeavor to apply our resources in a positive mannerand provide help in solving various issues in local communities, in order to realize a better society.

The Worldwide
TDK Group

An example in Europe is support making repairs at the Munich Immigration Center as a part of a pilot project forjoint volunteer activities. Various activities are undertaken according to the specific needs in each region.

GRI Standards
Table

Volunteer activities at the hospital and participating staff

139

Sustainability Report 2020

Disaster Area Assistance
CONTENTS

Employees from the TDK Akita Kitakami Plant have participated in volunteer programs to support recovery
operations in Iwate Prefecture each year following the 2011 Great East Japan Earthquake.
Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Environment

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

140

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Sustainability | Society
CONTENTS

Social and Environment Considerations in the Supply Chain:
Performance Data

Editorial Policy

CategoryTop
Commitment

Item

Unit

FY2015FY2016FY2017FY2018FY2019Number of manufacturing sites

Site

74

78

82

81

78

covered by CSR self-checks*

%

99

100

100

100

100

Site

74

78

82

81

78

%

99

100

100

100

100

4

8

5

5

1

Number of manufacturing sites

TDK Group's
Sustainability

covered by human rights andethics risk assessment*1
Number of manufacturing sites

Environment

Initiatives as a SupplierSiteperformed CSR voluntary audits
by third-party organizations*2
Number of employees participated

Person

171

198

217

253*7

303

%

6.3

6.1

7.2

7.0

7.3

%

91.8

90.7

89.7

89.8

93.8

Company

27

81

73

%

100

100

100

in CSR internal auditor training

Society(accumulated)% of customers covered by thesatisfaction evaluation*3

Governance% of A rank customers*4
Number of dispach companies
How the Public
Sees Us

covered by CSR self check(dispatch companies used by
Initiatives as a Buyer

manufacturing sites in high-riskcountries of Asia including China)*5

The Worldwide
TDK Group

CSR-compliant supplier ratio*2
Ratio of suppliers confirmed DRC

GRI Standards
Table

conflict-free*2

%

82.4

91.2

94.4

96.1

%

83.2

92.3

92.6

93.1

2,389

2,427

2,381

2,423

Conflict Minerals
Number of conflict minerals

Numbersurvey*6

2,505*1 All manufacturing sites have been assessed since FY 2015.
*2 Data collected from FY 2016.
*3 % of sales amount (consolidated)*4 % of customers who evaluated their satisfaction as "A rank" (fully satisfied), calculated by aggregating satisfaction evaluations
provided by customers (based on the data as of April 2019)*5 The scope of survey was expanded in fiscal 2018.
*6 Number of responses that were generated by TDK Corporation*7 Data has been revised141

Sustainability Report 2020

Sustainability | Society

Employee Performance Data

CONTENTS

Editorial Policy

Category

Item

Unit

Consolidated number of employees
Japan
AmericasTop
Commitment

EuropePersons

Asia except JapanMen*

TDK Group's
Sustainability

FY2016FY2017FY2018FY201991,64899,693102,883

104,781

107,138

8,920

9,308

9,590

9,777

10,080

3,198

4,216

5,123

4,738

4,465

7,763

7,674

8,045

8,205

7,969

71,76778,49580,12582,061

84,62453,71056,37559,17149,173

48,40647,967

47.8

46.2

44.8

31,831

28,70525,173

1

Women*1%

Women ratio*1
Consolidated number of emplovees(non-regular)*2

Environment

Persons

39,352
4,542

4,644

5,055

5,330

5,523

Persons

3,888

3,972

4,284

4,497

4,628

654

672

771

833

895

Number of employees (TDK Corporation)
Men
Women
Society

Women ratio%

Average age (TDK Corporation)
Men
Governance

FY2015

Employment

Years

Women
Continuous service (TDK Corporation)
Men

Years

Women

How the Public
Sees Us

Recruitment of new graduates(TDK Corporation)*3

PersonsMen
The Worldwide
TDK Group

Women
Women ratio%

GRI Standards
Table

Number of employees taking nursing careleave (TDK Corporation)

142

44.4

44.1

40.2

39.9

20.4

20.8

19.8

18.9

17.8

20.8

21.3

20.2

19.3

18.2

18.2

18.4

17.4

17.2

16.0

140

158

177

225

145

112

121

133

184

136

28

37

44

41

9
6.2
98

38

69

70

100

85

3

12

12

10

13

7.3

14.8

14.6

9.1

13.3

48

63

60

73

81

Persons

39

49

50

57

74

9

14

10

16

7

%

18.8

22.2

16.7

21.9

8.6

24

18

27

23

35

3

0

5

4

11

Women
Paid leave acquisition rate (TDK Corporation)

44.3
40.1

110

Persons

Ratio of employees returning to work

45.4
41.3

18.2

Employees taking child care leave

Work-life balance

43.8
39.9

82

Women

Men

16.2
43.4

24.9

%

(TDK Corporation)

15.6
43.8

81

Job leavers/dismissals (TDK Corporation)*4

Women ratio

15.3
43.7

23.4

Women

Men

14.5
44.8

20

Persons

Women ratio

14.4
43.3

41

Mid-career recruitment (TDK Corporation)
Men

33,614%
Persons

21

18

22

19

24

100

100

100

100

100

56

58.9

60.4

60.7

62.5

2

0

0

3

3

Sustainability Report 2020

Ratio of women in managerial posts
CONTENTS

3(TDK Corporation)*5

3.9

4.1

Ratio of women in junior management
Diversity
Editorial Policy

positions (TDK Corporation)*6

4.4

1.6*17

2.2

0.9

0.7

2.19

2.16

17.4

49.0

96

101

%

Ratio of women in senior management
positions (TDK Corporation)*6
Ratio of employees with disabilities

2.55(TDK Corporation)Top
Commitment

3.9

Annual training hours per employee*6,*7

2.45

2.28

Hours

Number of employees who completed
Territorial Career Development Program
TDK Group's
Sustainability

Staff training(TCDP)*6,*8
Number of GAMP, global management

Persons

17

program graduates*6,*9
Number of participants in the global English
training program*6,*8

Environment

million

Education and training expenses

yen

Cumulative total of participants in crossSociety

cultural communication programs
Staff training

Cumulative total of participants in IMD(TDK Corporation) training
Cumulative total of participants in overseas

Governancetrainee program
overseas universities
Freedom of
Association

The Worldwide
TDK Group

Engagement

239

239

285

473

506

525

525

525

307

328

350

373

373

23

28

32

35

40

42

44

47

49

49

75.1

72.3

93.4

93.6

agreements*6,*10
94.9(TDK Corporation)*11%

Men
Number of on-the-job Accidents (Japan) Lost
Time Work Accident Case
Number of accidents not requiring time off
work
Number of accidents requiring time offwork*12

Health and safety242%

union or covered by collective bargaining

Women
GRI Standards
Table

214

Ratio of employees represented by a

Ratio of employee job satisfaction
Employee

3,613

Persons

Cumulative total of engineers sent to
How the Public
Sees Us

2,442

93.8

94.8

94.9

93.7

93.3

93.7

95.1

96.1

94.3

93.6

93.2

379

362

336

318

212

106

99

141

129

72

273

263

195

189

140

16

19

21

20

Cases

Japan

95.1

China

203

164

139

94

60

Asian (other than Japan and China)

45

48

48

58

20

Americas/EU

29

38

41

52

48

TDK Electronics (previously EPCOS)

89

96

89

93

64

0

0

0

0

Number of significant labor accidents*13,*14
Ratio of accidents per 1,000 employees*15

3.42

3.21

3.00

2.79

1.80

Accident Severity Rate (Japan)*16

0.016

0.007

0.005

0.004

0.017

*1 Data collected from FY2017 onward.
*2 Coverage is part time workers, temporary workers and manufacturing staff who work for subcontractors.
*3 Employees who joined the company in April of the following year
*4 Regular employees only (excluding retirees)*5 Managerial posts defined as posts having subordinates, or equivalent posts*6 Data collected from FY2018 onward.
*7 Covers programs run by the Global Human Resources Division

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Sustainability Report 2020

*8 The program was started from FY2018.
CONTENTS*9 The program was started from FY2019.
*10 Some countries and regions where it is difficult to know whether employees are represented by a union are not included.
*11 Percentage of employees who chose the top two grades (2-3) on a three-point scale based on the job satisfaction survey.
*12 One day or more off from work required.

Editorial Policy*13 Data collected from FY2016 onward.
*14 Significant labor accident: an accident with remaining disability, required long-term nursing, or fatality*15 Covers employees including dispatch workers*16 Number of days lost per 1,000 hours worked

Top
Commitment*17 FY2018 data has corrected due to mistake

TDK Group's
Sustainability

Environment

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

144

Sustainability Report 2020

Investor Relations | Management Policy

Corporate Governance

CONTENTSTDK Basic Policy on Corporate Governance
Editorial Policy

Audit System

Management and Execution Structure

Remuneration for Directors and Audit & Supervisory Board Members

Directors, Audit & Supervisory Board Members and Corporate Officers
Top
Commitment

Basic Policy for Internal Control

Disclosure

Excerpt from Corporate Governance Report (PDF: 197KB)

Effectiveness Evaluation of the Board of Directors
TDK Group's
Sustainability

Environment

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

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Sustainability Report 2020

Sustainability | Governance

Global Tax Policy

CONTENTS

Compliance
Editorial Policy

Top
Commitment

Corporate Activities and Taxes

Tax Risk Management

Organization, Roles, and Responsibilities

Tax Strategy and Tax Planning

Relationship with Tax Authorities

TDK Group herein sets forth the Global Tax Policy in accordance with the TDK Code of Conduct, established toreflect and implement the corporate philosophy and the management policy of TDK Group. The Global Tax Policy
is applicable to TDK Group consisting of TDK Corporation (TDK) and its consolidated subsidiaries (collectively “TDKTDK Group's
SustainabilityGroup” or “the Group”).

Compliance
Environment

Society• TDK Group as a good corporate citizen complies fully with all applicable tax laws and regulations establishedin all countries and regions where it operates. The Group respects legislative intent behind those laws andregulations, and further seeks to comply with international guidelines and proposals provided by public interest
organizations such as the OECD. The Group believes compliance is always an essential prerequisite for any
corporate business activities.

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table• The Group strives to fulfill its commitments by establishing strong compliance procedures to ensure accuracy
and completeness.

Corporate Activities and Taxes• TDK Group, in the conduct of its corporate activities based on the corporate philosophy and the management
policies of the Group, is particularly engaged in the following activities with regard to tax practices:- The Group computes taxes, files all necessary tax returns and tax declarations, and makes tax payments in all
relevant jurisdictions in a proper and timely manner in accordance with applicable tax laws and regulations- The Group improves tax efficiency and maximizes corporate value by proactively utilizing tax incentives
established by countries and regions to the extent that the incentive utilization follows the legislative intent
behind the rules and regulations.
- The Group analyses tax events, tax attributes, and tax expense and provides appropriate and concise
information to stakeholders, in accordance with applicable tax laws and regulations.

Organization, Roles, and Responsibilities• Corporate governance of TDK Group relevant to taxes is embedded within its overall governance system. The
system provides a framework for compliance of applicable tax laws and regulations, minimization of tax risks,maximization of corporate value, and growth of the Group.
• The corporate governance of the Group relevant to taxes is executed under the responsibility of the CFO of theGroup who delegates certain portion to subgroup tax departments and persons in charge of taxes at each group
entity.

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Sustainability Report 2020

Tax Risk Management
CONTENTS• The tax function minimizes tax risk by working closely with business and other departments and sharing
information of transactions. It strives to prevent unnecessary disputes by building strong technical positions
Editorial Policy

through planning, implementation, and documentation.
• TDK Group makes all decisions through the analysis of other factors including financial return, financial risk, andpotential reputational risk as well as taxes.

Top
Commitment

TDK Group's
Sustainability• In cases where the Group identifies tax uncertainties, the cases shall be appropriately reported to the managerial
decision-making bodies and the CFO of the Group. Decisions to be taken follow usual Group procedures.
• In cases of significant transactions where applicable tax laws and regulations could be interpreted in a broad
range of meanings or there are no clear regulations, the Group seeks to minimize tax risks through actions suchas seeking advice from external advisors, obtaining advance pricing arrangements/agreements or rulings fromtax authorities where necessary.

Environment• The Group regularly monitors compliance in accordance with laws and regulations relevant to tax risk
management.

SocietyTax Strategy and Tax Planning
Governance• As mentioned above, TDK Group seeks to maximize corporate value while maintaining full compliance with allapplicable tax laws and regulations. The Group continuously monitors the changing tax environment as well as
its evolving business models, identifies both tax risks and benefits under the changes of tax environment andHow the Public
Sees Us

The Worldwide
TDK Groupbusiness models, and adapts to changes as necessary to achieve its business objectives.
• With regard to transactions where a significant level of tax impact is expected and/or which show a high degreeof tax uncertainty, the Group managerial decision-making bodies and procedures generally seek external tax
advice to decide how the Group responds.
• As a matter of principle, the Group does not intentionally implement artificial tax avoidance structures.

GRI Standards
Table

Relationship with Tax Authorities• TDK Group seeks to build a good, faithful, and professional relationship with tax authorities of countries andregions.
• The Group responds to tax audit inquiries and requests from the tax authorities in accordance with applicable
tax laws and regulations and in a faithful, courteous, professional, and timely manner.
• In cases where conflicts with the tax authorities occur, the Group defends its position professionally and in goodfaith, and seeks to achieve a rational and transparent audit resolution in accordance with applicable tax laws
and regulations.

147

Sustainability Report 2020

Sustainability | GovernanceCorporate Ethics and Compliance

CONTENTS

Basic Policy

ComplianceHelp Lines

Spreading Awareness of Corporate Ethics

Editorial Policy

Top
Commitment

Basic Policy
The TDK Group bases its corporate ethics and compliance on top management demonstrating leadership in
raising awareness among officers and employees and comprehensively ensuring proper action.

TDK Group's
Sustainability

To ensure that all personnel are aware of the corporate philosophy, TDK Code of Conduct, and TDK Charterof Corporate Behavior, the chairman of the Business Ethics Committee, who was appointed by the Board of
Directors, creates opportunities for direct education and training of Group employees. In addition, the TDK Group

Environment

conducts group training, E-learning, and other programs every year to inform all Group employees around theworld about the fundamentals of corporate ethics.
Global corporate ethics structures centered on the Business Ethics Committee have been established to perform

Societyperiodic monitoring regarding the status of compliance with corporate ethics, and reports are made to the Boardof Directors via the Corporate Ethics Business at the beginning of each quarter regarding the status of compliance.
TDK Code of Conduct

GovernanceCompliance
How the Public
Sees Us

The TDK Group has appointed a Global Chief Compliance Officer and Regional Chief Compliance Officers foreach of the five regions worldwide and established the Legal & Compliance HQ directly under the President.

The Worldwide
TDK Group

We are taking measures to further reinforce structures so that all Group personnel can act in strict compliance withshared global norms while working to develop an honest, fair, and transparent corporate culture and respond to
the trust and expectations of customers in society.

GRI Standards
Table

We have identified group compliance risks that are believed to be significant from the perspective of legal risk
management. The divisions responsible for the various compliance-related issues that arise confirm the facts,
take appropriate action, and report to the Board of Directors in a timely manner. In addition, the relevant divisions
cooperate with the Legal & Compliance HQ to analyze the causes and take measures to prevent reoccurrence ateach Group company.

Help Lines
The TDK Group has established structures to enable employees and others to make internal reports and consult
regarding issues of corporate ethics through channels other than their regular work chain of command. Each
Ethics Council has a consultation hotline and internal helplines have been established on a regional basis forthe direct collection of information and opinions relating to corporate ethics and other issues within the Group.
In addition to the regular reporting routes within the Group, alternate reporting routes that provide access to
outside law firms and other third parties have also been established in the Americas, Europe, and Asia. As a result,
employees and others making reports can select the reporting route that they believed to be the most appropriate.
The TDK Code of Conduct Program stipulates the protection of informants so that they do not suffer any unfair
treatment or disadvantages.

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Sustainability Report 2020

CONTENTS

Editorial Policy

Top
Commitment

TDK Group's
Sustainability

Environment

Society

Governance

As of March 31, 2020
How the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

Number of Consultations and Reports to Help Lines (Global)
FY 2015300

FY 2016

192

FY 2017

121

FY 2018

115

FY 201946

The scope of figures includes the Ethics Councils of affiliates.

Spreading Awareness of Corporate Ethics
TDK provides every TDK Group employee with a copy of the TDK Code of Conduct Handbook, which they canuse as a guide for their individual business activities, and also endeavors to spread awareness by, for example,
displaying posters.
Also, in order to deepen employees’ understanding of corporate ethics, TDK implements training for specific ranksof employees and e-learning for all employees, as well as lectures for management by responsible directors andoutside speakers.
During fiscal 2019, corporate ethics e-learning programs were arranged for 98% of all TDK Group employees.

149Sustainability Report 2020

Sustainability | GovernanceRisk Management

CONTENTS

Structure

Business Risks

Business Continuity Plan (BCP)

Risk Management Education

Editorial Policy

Top
Commitment

Structure
In aiming for sustainable growth, TDK promotes company-wide measures against factors (risks) that hinder theachievement of organizational goals and has established the ERM Committee to properly manage these factors.

TDK Group's
Sustainability

Similarly, the Crisis Management Committee, Information Security Committee, and Information Disclosure
Committee that report directly to the Management Council have been established to respond to and takemeasures against each issue. The Corporate Officers appointed by the President serve as the chairpersons forEnvironment

each committee.
Regarding the activity status of each committee, in addition to securing a system for receiving advice to effectively
operate the execution of duties by having regular confirmations by the Audit & Supervisory Board Members andSociety

Corporate Internal Audit Department, we regularly receive advice from experts such as legal advisors about new
obstacles the Group faces.

Governance

ERM (Enterprise Risk Management) Committee
We promote company-wide risk management by conducting risk analysis evaluation, identifying risks that need tobe addressed across departments, and introducing measures taken in close liaison with related departments. We

How the Public
Sees Usdiscuss the risk analysis evaluations and countermeasure situations at the management meetings and report them

The Worldwide
TDK Group

Crisis Management Committee

to the Board of Directors.

We conduct activities such as BCP training and regular operation status checks centered on domestic basesso that the BCP of each business department established based on the company-wide basic policy functions
GRI Standards
Table

properly in case of an emergency.

Information Security Committee
To prepare for the risks of cyberattacks, we continuously verify and take measures against information security
risks by implementing information security education for employees and taking measures such as defense,
detection, and restoration.

Information Disclosure Committee
In order for appropriate information to be disclosed, we discuss and carefully examine important disclosure
documents regarding investment decisions of shareholders and investors, such as notes on financial statements.

Business Risks
Please see here for the contents.
Business Risks

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Sustainability Report 2020

Business Continuity Plan (BCP)
CONTENTSTDK has established a crisis management system to prevent secondary disasters and to ensure the safety of
employees in the event of a crisis for the purpose of business continuity.
Editorial Policy

We have established a BCP that does not depend on the type of disaster or the cause event. We will conduct
regular training so that prioritized works are not interrupted in an emergency, or if they are, they can be restarted
as quickly as possible. In addition, we will promote activities that will increase effectiveness in case of emergency.

Top
Commitment

In addition to preventing COVID-19 infections by taking appropriate measures, such as working from home andavoiding closed spaces, crowded places, and close-contact settings (Three Cs), we recognize that responding tocases of infections or suspected infections is a priority issue that should be strengthened, and we will continue to

TDK Group's
Sustainability

Environment

make improvements in that regard.

Risk Management Education
We have implemented individualized education on topics, such as corporate ethics, information security, importand export control, and compliance, to improve an understanding of risk management.

SocietyIn FY2019, we implemented education on corporate ethics for directors and employees of the TDK Group in Japanand overseas and achieved a 98% participation rate.

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

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Sustainability Report 2020

Sustainability | Governance

Information Security

CONTENTS

Our Approach

Structure

Specific Measures in Fiscal 2019

Future Activities

Editorial Policy

Top
Commitment

Our Approach
In order to ensure the continuous improvement of information security, the TDK Group has built a global
information security management structure based on its Basic Policy on Information Security and conducts

TDK Group's
Sustainability

activities accordingly.

Basic Policy on Information Security
Environment

General Direction
This Policy shall apply to the TDK Group.
Society

The TDK Group shall work on maintenance and enhancement of the security of information, recognizingthat it is indispensable to secure personal information and trade secrets (including information on orreceived from customers) appropriately, and ensure the correctness and accuracy of financial information

Governanceas well as business continuity in order for us to make ourselves highly reliable and more satisfactory to ourstakeholders.
We all shall execute the following six actions as the concrete guidelines of actions.

How the Public
Sees Us

The Worldwide
TDK Group

Action Guidelines
1. Observance of Laws and Regulations
In the handling of information, we shall observe laws and regulations concerning “the prevention of alteration, leakage,
unauthorized access, and unlawful use of information”, “requiring reliability of information and correctness in disclosure”, and“protecting personal information”, and “business requirements including terms and conditions of contracts with customers”
in the respective countries and regions.

GRI Standards
Table

2. Information Security Management System
We shall establish a system to manage and govern information security organically and define its role and responsibility.
3. Implementation of Measures for Risk Management
We shall find out threats and vulnerability in light of confidentiality, completeness and availability, and implement sufficientmeasures in response to the risks. In addition, we shall make sure to implement the measures for information security withthe company regulations set in accordance with this Policy.
4. Provision of Resources
The management shall provide management resources necessary to execute this Policy.
5. Continuous Improvement of Information Security
We all shall endeavor to continue to improve the information security in response to changes in risks arising fromtransformation in internal and external circumstances.
6. Strict Actions
Should there be a violation of this Policy or the company regulations, the management shall take a strict action in accordancewith the Code of Conduct and the Work Rules.
Established July 1, 2005
Revised on April 15, 2016 (2nd edition)

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Sustainability Report 2020

Structure
CONTENTS

Under the Executive Committee, TDK has set up the Information Security Committee, which adopts measuresin response to information security risks in the Group as a whole. By establishing deliberative bodies made up
Editorial Policyof representatives from each region around the world, we are reinforcing global information security governance.
Through the Information Security Administration Managers Meeting and other channels, the Information Security
Committee endeavors to implement measures for each division.

Top
Commitment

TDK Group's
Sustainability

Environment

Society

GovernanceHow the Public
Sees Us

Information security management organization (As of April 1, 2020)

The Worldwide
TDK Group

GRI Standards
Table

Specific Measures in Fiscal 2019
In fiscal 2019, we focused on countermeasures against
increasingly sophisticated cyberattacks and conducted
trials worldwide.
[Main Measures]• Reinforced countermeasures against cyberattacks on
worldwide Group company websites• Strengthened management of worldwide Group
company websites.
• Strengthened control and management of incoming
telecommunications.
• Global response to cyber-risk insurance

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At the global meetingSustainability Report 2020

Information Security Education
CONTENTS

In order to maintain and enhance information security throughout the entire TDK Group, we implement information
security education and email training for all employees more than once a year.

Editorial Policy

Information security education is conducted at Group sites for computer users. Regarding content of theeducation and frequency, each site incorporates appropriate content in accordance with its environment andconditions.

Top
Commitment

TDK Group's
Sustainability

In the email training at each site, emails resembling actual targeted email attacks are sent to employees to checkthe number of people who open the attached file and the number of people who click on the URL.

Future Activities
In order to respond to cyberattacks, which are becoming an increasingly serious threat, TDK will reinforce

Environment

internal information security countermeasures and strengthen measures regarding cloud services, use of which isincreasing, on a global level.
In addition, TDK will continue to enhance employee education and training, including training to handle targetedSocietyemail attacks, thereby responding to risks in the Group as a whole that cannot be fully handled by the system.

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

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Sustainability Report 2020

Sustainability | Governance

Governance Performance Data

CONTENTS

Editorial Policy

GovernanceCategory

Item

Unit

No. of directors

Top
Commitment

Men

PersonWomen
Outside directors

TDK Group's
Sustainability

Women ratio%

No. of audit & supervisory board members
Men

Environment

Directors

PersonWomen
Outside audit & supervisory board members

Society

Women ratio%

No. of corporate officers
Men
Governance

PersonWomen
Non-Japanese

How the Public
Sees Us

Board of Directors
The Worldwide
TDK Group

GRI Standards
Table

Board of Audit &Supervisory Board
Members

FY2016FY2017FY2018FY2019

7

7

7

7

7

7

7

7

7

7

0

0

0

0

0

3

3

3

3

3

0

0

0

0

0

5

5

5

4

5

5

5

5

5

4

0

0

0

0

1

3

3

3

2

3

0

0

0

0

20

19

17

18

17

18

19

17

18

17

18

0

0

0

0

0

7

7

6

6

7

Women ratio

%

0.0

0.0

0.0

0.0

0

No. of times held

No.

16

14

15

13

13

95

100

100

97

100

98

95

100

100

97

Outside director attendance ratio
Outside audit & supervisory board member
attendance ratio%

No. of times held

No.

15

15

14

15

14

Independent auditor attendance ratio

%

97

98

100

100

97

367

377

477

315

268

51

45

42

46

55

58

58

58

57

58

27

27

29

24

30

Unit

FY2015FY2016FY2017FY2018FY2019

call

300

192

121

115

46

Directors (excluding outside directors)
Director
Remuneration

FY2015

Outside directors
Audit & supervisory board members (excluding
outside audit & supervisory board members)

Millionyen

Outside audit & supervisory board members

Compliance
Category

Item

SystemNo. of Help Line calls

Business Ethics

Number of instances of material noncompliance with TDK Code of Conduct*1

instance00

Political
Contributions

Total amount of political contribution (Japan)*1

Millionyen

00*1 Data collected from FY2018.

155

Sustainability Report 2020

Sustainability | How the Public Sees Us

TDK Included in FY 2019 Social Assessment Index

CONTENTS

Social Assessments by Investors and Rating Agencies
Editorial Policy

TDK Named to Derwent Top 100 Global Innovators 2020
Top
Commitment

Social Assessments by Investors and Rating Agencies
TDK Group's
Sustainability

ESG investment and socially responsible investment (SRI), which consider not just financial aspects, butalso investment that takes into consideration social aspects including environmental initiatives, is spreading,particularly in Europe and the U.S. TDK is included in the following indexes.

Environment• FTSE4 Good Index Series
An index provided by FTSE Russell (based in the U.K.) that was designed to measure the performance ofcompanies that implement strong ESG measures.

Society• FTSE Blossom Japan Index
An index provided by FTSE Russell (based in the U.K.) that was designed to measure the performance ofJapanese companies with outstanding ESG responses.

GovernanceHow the Public
Sees Us• MSCI Japan ESG Select Leaders Index
An index provided by MSCI (based in the U.S.) that selects companies with outstanding ESG assessments.
• Ethibel Investment Register "Ethibel EXCELLENCE"
An investment universe of Forum ETHIBEL, a socially responsible investment advocacy group headquartered in
Belgium.

The Worldwide
TDK Group

GRI Standards
Table• ECPI Index
A global ESG index created by ECPI.
TDK has also received assessments of A- in both the climate change and water security categories from CDP, aninternational non-profit organization headquartered in London.

TDK Named to Derwent Top 100 Global Innovators 2020
TDK was selected for the Derwent Top 100 Global Innovators 2020 byClarivate Analytics (headquarters in Philadelphia in the U.S. and a Japan
office in Minato-ku, Tokyo). This marks the sixth time that TDK has been
named to the list.
For this list, intellectual property and patent trends are analyzed basedon patent data from Clarivate Analytics, and companies and researchorganizations are selected for the Derwent Top 100 Global Innovators
based not just on patent applications, but also on outstanding, global-scaleinventions. To determine the world's most innovative companies, Clarivate
Analytics uses four screening criteria: total patent volume (a minimum of
100 patents in the past five years), success rate, globalization (the numberof basic patents filed in four key markets: China, Europe, Japan and the U.S.),
and the number of citations by other organizations as evidence of patentinfluence. This year, TDK scored highly on success rate and globalization.
156

Sustainability Report 2020

Sustainability

The Worldwide TDK GroupCONTENTS

Editorial Policy

The Worldwide TDK Group
Since its founding in 1935, the TDK Group has been expanding to countries and regions worldwide. We have aTop
Commitment

great diversity of suppliers and products. TDK aims to continue supplying products and services that people needin societies across the globe.

TDK Group's
Sustainability

Environment

Society

Governance(As of March 31, 2020)
How the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

157

Sustainability Report 2020

Sustainability | Index

GRI Standards Table

CONTENTS

The "Sustainability" Website conformd to the "core" option of the GRI Standards. (Global Reporting Initiative: GRI)
Editorial Policy
GRI Items

Top
Commitment

Location on "Sustainability" website(includes TDK Global website)

Disclosure

Geneal Disclosures
Organizational profile

TDK Group's
Sustainability

Environment

102-1

Name of the organization

About TDK TDK at a Glance (Homepage)

102-2

Activities, brands, products, and services

About TDK TDK at a Glance (Homepage)
Products (Homepage)102-3

Location of headquarters

About TDK TDK at a Glance (Homepage)

102-4

Location of operations

TDK Worldwide (Homepage)102-5

Ownership and legal form

About TDK TDK at a Glance (Homepage)

Markets served

About TDK TDK at a Glance (Homepage)
TDK Worldwide (Homepage)
Investor Relations Sales by Region (Homepage)
Investor Relations Sales by Segment (Homepage)102-7

Scale of the organization

About TDK TDK at a Glance (Homepage)
Products (Homepage)
TDK Worldwide (Homepage)
Investor Relations Securities Reports (Homepage)
Investor Relations Sales by Segment (Homepage)

102-8

Information on employees and other workers

Employee Performance Data

102-9

Supply chain

Sustainable Procurement
Social and Environment Considerations in the
Supply Chain: Performance Data

102-10Significant changes to the organization and its supply
chain

About the "Sustainability" Website

Precautionary Principle or approachSocial and Environmental Consideration at
Manufacturing Sites
Sustainable Procurement
Corporate Ethics and Compliance
Risk Management
Quality Assurance Activities
Environmental Management System102-12External initiatives

Sustainability Management
Respect for Human Rights
Safety and Health
A History of TDK's Environmental Activities

102-13

Membership of associations

Sustainability Management
Responsible Sourcing of Minerals
A History of TDK's Environmental Activities

102-6
Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

102
General Disclosures(2016)

102-11Strategy102-14102-15

Statement from senior decision-maker

Top Commitment

Key impacts, risks, and opportunities

Top Commitment
Efforts to Achieve the SDGs
Risks, Opportunities, Goals, and Achievements
Risk Management
Investor Relations Operational Risks (Homepage)158

Sustainability Report 2020

Ethics and integrity
CONTENTS
102-16

Values, principles, standards, and norms of behavior

Corporate Philosophy and Sustainability
About TDK TDK Code of Conduct (Homepage)102-17

Mechanisms for advice and concerns about ethics

Corporate Ethics and Compliance

Editorial Policy

GovernanceTop
Commitment

102-18Governance structure

Corporate Governance
Governance Performance Data

102-19Delegating authority

Sustainability Management102-20Executive-level responsibility for economic,
environmental, and social topics

Sustainability Management
Environmental Management System
Safety and Health102-21

Consulting stakeholders on economic, environmental,
and social topics

Stakeholder Engagement
Respect for Human Rights
Corporate Governance102-22Composition of the highest governance body and its
committees

Corporate Governance
Governance Performance Data102-23Chair of the highest governance body

Corporate Governance102-24

Nominating and selecting the highest governance body

Corporate Governance102-25

Conflicts of interest

Corporate Governance
About TDK TDK Code of Conduct (Homepage)102-26

Role of highest governance body in setting purpose,values, and strategy

Corporate Philosophy and Sustainability

102-27

Collective knowledge of highest governance body

Sustainability Management102-28

Evaluating the highest governance body’s performance

Corporate Governance102-29Identifying and managing economic, environmental, andsocial impacts

Key CSR Issues

102-30Effectiveness of risk management processes

Risk Management102-31

Review of economic, environmental, and social topics

102-32Highest governance body’s role in sustainability
reporting102-33

Communicating critical concerns

Corporate GovernanceCorporate Ethics and Compliance
Risk Management102-34Nature and total number of critical concerns

Corporate Ethics and Compliance102-35

Remuneration policies

Corporate Governance102-36

Process for determining remuneration

Corporate Governance102-37

Stakeholders’ involvement in remuneration

Corporate Governance102-38Annual total compensation ratio

102-39Percentage increase in annual total compensation ratio

TDK Group's
Sustainability

Environment

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

102
General Disclosures(2016)

Stakeholder enagagement102-40

List of stakeholder groups

Stakeholder Engagement102-41

Collective bargaining agreements

Respect for Human Rights

102-42

Identifying and selecting stakeholders

Stakeholder Engagement102-43

Approach to stakeholder engagement

Stakeholder Engagement
Develop and Prosper in Harmony with the Global
Environment

102-44

Key topics and concerns raised

Stakeholder Engagement

159

Sustainability Report 2020

Reporting practice
CONTENTS

Editorial Policy

Top
Commitment

TDK Group's
Sustainability

102
General Disclosures(2016)

Environment

Society102-45

Entities included in the consolidated financial
statements

TDK Worldwide (Homepage)
About the "Sustainability" Website

102-46

Defining report content and topic Boundaries

Key CSR Issues
About the "Sustainability" Website

102-47

List of material topics

Key CSR Issues

102-48

Restatements of information(N/A)

102-49Changes in reporting(N/A)

102-50

Reporting period

About the "Sustainability" Website

102-51

Date of most recent report

About the "Sustainability" Website

102-52

Reporting cycle

About the "Sustainability" Website
Past Report102-53

Contact point for questions regarding the report

About the "Sustainability" Website

102-54Claims of reporting in accordance with the GRI
Standards(GRI Standards Table)

102-55

GRI content index(GRI Standards Table)

External assurance

About the "Sustainability" Website
Third-Party Review of Environmental Performance
Data
Third-Party Verification

102-56

Material topics
GovernanceHow the Public
Sees Us

Contribute to the World through Technology

103Management
Approach (2016)

The Worldwide
TDK Group

GRI Standards
Table

416
Customer Healthand Safety (2016)

103-1

Explanation of the material topic and its Boundary

Risks, Opportunities, Goals, and Achievements
Contribute to the World through Technology

103-2

The management approach and its components

Risks, Opportunities, Goals, and Achievements
Quality Assurance Activities
Customer Satisfaction

103-3

Evaluation of the management approach

Risks, Opportunities, Goals, and Achievements
Customer Satisfaction
TDK Included in FY 2019 Social Assessment Index

416-1

Assessment of the health and safety impacts of productand service categories

Risks, Opportunities, Goals, and Achievements
Quality Assurance Activities
Customer Satisfaction

416-2

Incidents of non-compliance concerning the health andsafety impacts of products and services

(N/A)

103-1

ManagementApproach (2016)

Risks, Opportunities, Goals, and Achievements
Develop Human Resources

103-2

The management approach and its components

Risks, Opportunities, Goals, and Achievements
Develop Global Human Resources
Cultivate a Corporate Culture that Respects
Diversity

103-3

Evaluation of the management approach

Risks, Opportunities, Goals, and Achievements
Develop Global Human Resources
Cultivate a Corporate Culture that Respects
Diversity

404-1

Average hours of training per year per
employee

Employee Performance Data

404-2

Programs for upgrading employee skills and transition
assistance programs

Develop Global Human Resources
Cultivate a Corporate Culture that Respects
Diversity

404-3

Percentage of employees receiving regular performanceand career development reviews

Develop Global Human Resources

Develop Human Resources

103
Management
Approach (2016)

404
Training and
Education (2016)160

Sustainability Report 2020

CONTENTS

Editorial Policy

405
Diversity and Equal
Opportunity (2016)405-1

Governance Performance Data

Governance Performance Data
Employee Performance Data

405-2

Ratio of basic salary and remuneration of women tomen

Investor Relations Securities Report (Homepage)

Consider the Societal and Environmental Impact of the Supply Chain
Explanation of the material topic and its Boundary

Risks, Opportunities, Goals, and Achievements
Consider the Societal and Environmental Impact of
the Supply Chain

The management approach and its components

Risks, Opportunities, Goals, and Achievements
Social and Environmental Consideration at
Manufacturing Sites
Sustainable Procurement
Responsible Sourcing of Minerals

103-3

Evaluation of the management approach

Risks, Opportunities, Goals, and Achievements
Respect for Human Rights
Social and Environmental Consideration at
Manufacturing Sites
Sustainable Procurement
Responsible Sourcing of Minerals

308-1

New suppliers that were screened using environmental
criteria

Sustainable Procurement

308-2

Negative environmental impacts in the supply chain andactions taken

Sustainable Procurement

Operations and suppliers at significant risk for incidents
of child labor

Respect for Human Rights
Sustainable Procurement
Social and Environmental Consideration at
Manufacturing Sites
Responsible Sourcing of Minerals
About TDK TDK Code of Conduct (Homepage)409-1

Operations and suppliers at significant risk for incidents
of forced or compulsory labor

Respect for Human Rights
Sustainable Procurement
Social and Environmental Consideration at
Manufacturing Sites
About TDK TDK Code of Conduct (Homepage)414-1

New suppliers that were screened using social criteria

Sustainable Procurement

414-2

Negative social impacts in the supply chain and actions
taken

Respect for Human Rights
Sustainable Procurement
Responsible Sourcing of Minerals

103-1
Top
Commitment

TDK Group's
Sustainability

103Management
Approach (2016)

103-2

Environment

Society

308
Environmental
Assessment (2016)

Governance
408Child Labor (2016)

408-1

How the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

409
Forced orCompulsory Labor(2016)

414
Supplier Social
Assessment (2016)

Develop and Prosper in Harmony with the Global Environment
103-1

103-2

Explanation of the material topic and its Boundary

Risks, Opportunities, Goals, and Achievements
Develop and Prosper in Harmony with the Global
Environment

The management approach and its components

Risks, Opportunities, Goals, and Achievements
Develop and Prosper in Harmony with the Global
Environment
Environmental Policy and Environmental Vision
Environmental Goals and Achievements
Environmental Management System

Evaluation of the management approach

Risks, Opportunities, Goals, and Achievements
Develop and Prosper in Harmony with the Global
Environment
Environmental Goals and Achievements
Environmental Management System
Third-Party Review of Environmental Performance
Data
Third-Party Verification

103
Management
Approach (2016)

103-3

161

Sustainability Report 2020

305-1

Direct (Scope 1) GHG emissions

Climate Change Initiatives
Environmental Performance Data
Environmental Performance Data by Site

305-2

Energy indirect (Scope 2) GHG emissions

Climate Change Initiatives
Environmental Performance Data
Environmental Performance Data by Site

305-3

Other indirect (Scope 3) GHG emissions

Climate Change Initiatives
Environmental Performance Data

305-4

GHG emissions intensity

Climate Change Initiatives

305-5

Reduction of GHG emissions

Climate Change Initiatives
Cost of Environmental Protection

305-6

Emissions of ozone-depleting substances (ODS)

A History of TDK's Environmental Activities

305-7

Nitrogen oxides (NOx), sulfur oxides (SOx), and othersignificant air emissions

Environmental Performance Data

201-1

Direct economic value generated and distributed

201-2

Financial implications and other risks and opportunities
due to climate change

Investor Relations Securities Report (Homepage)

201-3

Defined benefit plan obligations and other retirement
plans

Investor Relations Securities Report (Homepage)

201-4

Financial assistance received from government

202
Market Presenc(2016)

202-1

Ratios of standard entry level wage by gender comparedto local minimum wage

202-2

Proportion of senior management hired from the local
community

203
Indirect Economic
Impacts (2016)

203-1

Infrastructure investments and services supported

203-2

Significant indirect economic impacts

204-1

Proportion of spending on local suppliers

205-1

Operations assessed for risks related to corruption

Corporate Ethics and Compliance

205-2

Communication and training about anti-corruption
policies and procedures

Corporate Ethics and Compliance

205-3

Confirmed incidents of corruption and actions taken

(N/A)

206-1

Legal actions for anti-competitive behavior, anti-trust,and monopoly practices

(N/A)

207-1

Approach to tax

Global Tax Policy

207-2

Governance, Administration and Risk Management

Global Tax Policy

207-3

Addressing tax-related stakeholder engagement andconcerns

Global Tax Policy

207-4

Report by country301-1

Materials used by weight or volume301-2

Recycled input materials used

301-3

Reclaimed products and their packaging materials

CONTENTS

Editorial Policy
305
Emissions (2016)
Top
Commitment

TDK Group's
Sustainability

Economic
Environment

Society

GovernanceHow the Public
Sees Us

201
Economic
Performance (2016)

The Worldwide
TDK Group

204
Procurement
Practices (2016)

GRI Standards
Table

205
Anti-corruption(2016)

206
Anti-competitive
Behavior (2016)

207
Tax

Environmental

301
Materials (2016)162

Social Contribution Activities

Sustainability Report 2020

CONTENTS

Editorial Policy

302
Energy (2016)

Top
Commitment

302-1

Energy consumption within the organization

Environmental Performance Data
Environmental Performance Data by Site

302-2

Energy consumption outside of the organization

Climate Change Initiatives
Environmental Performance Data

302-3

Energy intensity

302-4

Reduction of energy consumption

302-5

Reductions in energy requirements of products andservices

303-1

Water withdrawal by source

Water Resources Activities
Environmental Performance Data
Environmental Performance Data by Site

303-2

Water sources significantly affected by withdrawal ofwater

Effective Use of Resources
Environmental Performance Data

303-3

Water recycled and reused

Water Resources Activities

303-4

Drainage

Effective Use of Resources

303-5

Water consumption

Water Resources Activities

304-1

Operational sites owned, leased, managed in, or
adjacent to, protected areas and areas of highbiodiversity value outside protected areas

304-2

Significant impacts of activities, products, and services
on biodiversity

304-3

Habitats protected or restored

304-4

IUCN Red List species and national conservation list
species with habitats in areas affected by operations

305-1

Direct (Scope 1) GHG emissions

Climate Change Initiatives
Environmental Performance Data
Environmental Performance Data by Site

305-2

Energy indirect (Scope 2) GHG emissions

Climate Change Initiatives
Environmental Performance Data
Environmental Performance Data by Site

305-3

Other indirect (Scope 3) GHG emissions

Climate Change Initiatives
Environmental Performance Data

305-4

GHG emissions intensity

Climate Change Initiatives

305-5

Reduction of GHG emissions

Climate Change Initiatives
Cost of Environmental Protection

305-6

Emissions of ozone-depleting substances (ODS)

A History of TDK's Environmental Activities

305-7

Nitrogen oxides (NOx), sulfur oxides (SOx), and othersignificant air emissions

Environmental Performance Data

306-1

Water discharge by quality and destination

Environmental Performance Data

306-2

Waste by type and disposal method

Effective Use of Resources
Environmental Performance Data
Environmental Performance Data by Site

306-3

Significant spills

Environmental Management System

306-4

Transport of hazardous waste

306-5

Water bodies affected by water discharges and / or
runoff307-1

Non-compliance with environmental laws andregulations

TDK Group's
Sustainability
303
Water (2016)
Environment

Society

304
Biodiversity (2016)
GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

305
Emissions (2016)306
Effluents and Waste(2016)

307
Environmental
Compliance (2016)

163

Climate Change Initiatives
Cost of Environmental Protection

Environmental Policy and Environmental Vision

Environmental Management System

Sustainability Report 2020

CONTENTS

Editorial Policy

Top
Commitment

TDK Group's
Sustainability

308-1

New suppliers that were screened using environmental
criteria

Sustainable Procurement

308-2

Negative environmental impacts in the supply chain andactions taken

Sustainable Procurement

401-1

New employee hires and employee turnover

Employee Performance Data

401-2

Benefits provided to full-time employees that are notprovided to temporary or part-time employees

401-3

Parental leave

402-1

Minimum notice periods regarding operational changes

403-1

Occupational safety and health management system

Safety and Health403-2

Hazard identification, risk assessment, accident
investigation

Safety and Health403-3

Occupational health service

Safety and Health403-4

Worker participation, consultation and communicationin health and safety

403-5

Worker training on occupational safety and health

Safety and Health403-6

Promoting worker health

Safety and Health403-7

Preventing and mitigating the impact of occupational
health and safety directly linked to business
relationships

Safety and Health403-8

Workers subject to occupational safety and healthmanagement system

Employee Performance Data

403-9

Labor-related injuries

Employee Performance Data403-10Labor-related illness / poor physical condition

Employee Performance Data

404-1

Average hours of training per year per employee

Employee Performance Data

404-2

Programs for upgrading employee skills and transition
assistance programs

Develop Global Human Resources
Cultivate a Corporate Culture that Respects
Diversity

404-3

Percentage of employees receiving regular performanceand career development reviews

Develop Global Human Resources

405-1

Diversity of governance bodies and employees

Governance Performance Data
Employee Performance Data

405-2

Ratio of basic salary and remuneration of women tomen

Investor Relations Securities Report (Homepage)406
Non- discrimination(2016)

406-1

Incidents of discrimination and corrective actions taken

407
Freedom of
Association
and Collective
Bargaining (2016)

407-1

Operations and suppliers in which the right to freedomof association and collective bargaining may be at risk

Respect for Human Rights

Operations and suppliers at significant risk for incidents
of child labor

Respect for Human Rights
Social and Environmental Consideration at
Manufacturing Sites
Sustainable Procurement
Responsible Sourcing of Minerals
About TDK TDK Code of Conduct (Homepage)308
Environmental
Assessment (2016)
Social

401
Employment (2016)

402
Labor / Management
Relations (2016)

Environment

Society403
Occupational Healthand Safety (2016)

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group404
Training and
Education (2016)

GRI Standards
Table
405
Diversity and Equal
Opportunity (2016)

408
Child Labor (2016)

408-1

Employee Performance Data

164

Sustainability Report 2020

CONTENTS

Editorial Policy

Top
Commitment

409-1

Operations and suppliers at significant risk for incidents
of forced or compulsory labor

410
Security Practices(2016)

410-1

Security personnel trained in human rights policies orprocedures

411
Rights of Indigenous
Peoples (2016)

411-1

Incidents of violations involving rights of indigenous
peoples412-1

Operations that have been subject to human rights
reviews or impact assessments

Respect for Human Rights
Social and Environmental Consideration at
Manufacturing Sites
Sustainable Procurement

412-2

Employee training on human rights policies orprocedures

Respect for Human Rights

412-3

Significant investment agreements and contracts that
include human rights clauses or that underwent humanrights screening

413-1

Operations with local community engagement, impact
assessments, and development programs

413-2

Operations with significant actual and potential negative
impacts on local communities

414-1

New suppliers that were screened using social criteria

Sustainable Procurement

414-2

Negative social impacts in the supply chain and actions
taken

Respect for Human Rights
Sustainable Procurement
Responsible Sourcing of Minerals

415-1

Political contributions

Governance Performance Data

416-1

Assessment of the health and safety impacts of productand service categories

Quality Assurance Activities
Customer Satisfaction

416-2

Incidents of non-compliance concerning the health andsafety impacts of products and services

(N/A)

417-1

Incidents of non-compliance concerning product andservice information and labeling

Environment-Conscious Products
Quality Assurance Activities

417-2

Incidents of non-compliance concerning product andservice information and labeling

417-3

Incidents of non-compliance concerning marketing
communications

418
Customer Privacy(2016)

418-1

Substantiated complaints concerning breaches ofcustomer privacy and losses of customer data

419
Socioeconomic
Compliance (2016)

419-1

Non-compliance with laws and regulations in the socialand economic area

TDK Group's
Sustainability
412
Human Rights
Assessment (2016)
Environment

Society

GovernanceHow the Public
Sees Us

The Worldwide
TDK Group

GRI Standards
Table

Respect for Human Rights
Social and Environmental Consideration at
Manufacturing Sites
Sustainable Procurement
About TDK TDK Code of Conduct (Homepage)

409
Forced orCompulsory Labor(2016)

413
Local Communities(2016)

414
Supplier Social
Assessment (2016)
415
Public Policy (2016)
416
Customer Healthand Safety (2016)417
Marketing andLabeling (2016)

165

(N/A)

Sustainability Report 2020

Sustainability

Third-Party Opinion

Toshihiko Fujii
Visiting Professor
Tama Graduate School of Business

TDK's Sustainability Report 2020 presents the most substantial content of any such report to date. In his Top Comment,
TDK President Shigenao Ishiguro expresses a commitment to integrate the two vectors of economic and social rationality.
Bringing these vectors into alignment will require input from multiple viewpoints, including digital transformation (DX), energy
transformation (EX), and also customer experience/consumer experience (CX). This indicates that the company's sustainability
initiatives have advanced to a new stage. I would like to comment on what I see as the central issues facing TDK's initiatives
from this point forward.
My first suggestion would be that TDK could rethink the notion of materiality so that it more clearly provides a basis for economic
and social rationality. Such an "Integrated Materiality" would identify areas and markets where management resources are to befocused to align business goals and the resolution of social and environmental issues through its business activities.
As TDK is a company in possession of many latent and emergent technologies that could give rise to entirely new applications
or use cases, a certain amount of serendipity may facilitate unexpected innovations. Exercising caution, therefore, may benecessary to reduce the tendency to set rigid limits and impose wide buffer zones. TDK would be well-served to maintain afocus on its North Star. This could be its vision of the world wherein business logic and social rationale are one and the same.
I believe that companies need to maintain open space to develop into, so that people will ask with anticipation: "What is thatcompany going to do next?"
I would like to bring up another point regarding "Integrated Materiality", that of prioritization. It is no easy task to prioritize themateriality of social and environmental impact. The degree of difficulty is compounded when integrating business logic. No one
way is the "correct" answer. All employees must participate in thinking about this, and perhaps this process of thinking itself
is, in itself, the reason why prioritizing has meaning. This could help in the self-transformation that Mr. Ishiguro means when hesays, "We ourselves must change."
Next, I want to discuss creating a system in which SDGs inform the company's core business. Each TDK Group company should
think of stories of how its technologies, products, and solutions help resolve issues. This is a wonderful initiative. The effort
invested in describing a comprehensive story should greatly contribute to the management of integrated goals.
In addition, TDK's strengths in its global human resource policies have always been a noteworthy part of its sustainability
initiatives, but I would like to highly praise the advances TDK has made: In the harmonization of its global evaluation systemamong all groups and to publicize this matter. This program offers a model for other Japanese businesses.
In closing, I would like to state my expectations of TDK in the context of the Covid-19 crisis. This global pandemic has madeclear that people do not act rationally, in the true meaning of that term. Rationality is, at best, an instrument of reason to realize
one's goals. However, when the future becomes completely unknowable, or when we learn that our society can suddenly
change on such a massive scale, we must revise the way we think about our world. Under these circumstances, the most'rational' stance we can now take is to keep an open attitude about our future. I expect that TDK, with the myriad possibilities of
its technologies and products, can contribute to the creation of a new post-corona world.
To be sure, today's businesses must consider the evolution of society. While rationality still has value, as management moves
forward the limits of rationality must be considered as well as the relationship between constructivist approaches and theinherent randomness of the world. I offer my most sincere support for TDK's quest to explore how it can "create value among
our products and technologies to help solve society's problems" in this very difficult world.

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