TDK CSR REPORT 2015
English version

A Medium- to Long-Term Global Outlook
Is Essential

Top Commitment

By conceiving ambitious goals for the medium and longterm and building on our expertise in the materials sector,
we will continue to create values that are meaningful tosociety.

In December 2015, TDK will mark the 80th anniversary of
the company’s founding. Before embarking on this crucialyear, we were able to change course towards a successful growth strategy, with the three key segments of passive
components, magnetic application products, and film application products forming a well-balanced earnings structure.
The structural reform that we have been implementing forthe past few years is also beginning to show results, but inretrospect, I somewhat regret the fact that in the face of various adversities, a contraction has happened. An important
duty of an enterprise is of course to expand its performance,
but it is not sufficient to look only at short-term results.
Rather, we aim to be a company that takes a medium- tolong-term outlook in formulating its vision. We want to definea growth strategy inspired by the view of a bright future. To
this end, we need to closely watch the changing trends insociety, in order to give concrete shape to these developments through our business operations.
2015, in which we will celebrate the 80th anniversary of
our company, is also a new starting point for 100th anniversary. In keeping with our corporate motto of “contributing
to culture and industry through creativity,” we have newly
formulated the Corporate Vision and TDK Value, a set of action guidelines, that are destined to bring about a renewal
and solidify further growth as we move towards the next
major milestone in 2035. In order to continue to expand on a
global basis while also keeping M&As in view, we must havestrong DNA that enables us to grow into an even stronger
enterprise. In that sense, we are confident that the newly
defined Corporate Vision and TDK Value are well suitedimplementation on a worldwide scale. We shall closely
watch where society is headed, and review our stance asnecessary to always make an optimal contribution to thecurrent times.

Promoting Solid Monozukuri from theMaterials Level Up
Fiscal 2015 will also mark the start of a new three-year
medium-term management plan which encompasses thefollowing aims: “Pursue ‘zero-defect quality’ based on superior technical capabilities,” “Drive genuine globalization withspeedy management,” “Develop a new business with therevenue of over 100 billion yen following the 3 major business segments,” and “Innovate the corporate culture andcultivate courageous spirits.”

trend towards module integration. Each individual electronic
component naturally has a bearing on the reliability of theend product, but thinking carefully about quality from thematerials level upwards is at least as important. Furthermore, saving energy has become a crucial aspect of every
kind of product. The energy saving advantages of a superior
product will be lost if too much energy or too many resources
are consumed in the process of making that product. After
having successfully developed mass production technology
for magnets requiring fewer rare earth materials, we are now
promoting monozukuri techniques that focus on materials
from the viewpoint of reducing environmental impact. We
are also thoroughly reviewing the entire production process,aiming to configure optimized production lines. A pilot line forunified production from raw materials to finished products,
along with efforts to identify issues are important aspects of
our activities in this area.

Applying the Company’s Founding Spirit
towards Further Growth
About 90% of TDK’s entire output is being manufactured andmarketed overseas, and about 90% of our staff are based
overseas as well. The distinction between Japan and abroadhas become all but meaningless. We must see ourselves
as a truly global enterprise and boldly reform our corporate
culture based on this premise. In terms of human resources,
matters of nationality, race, or gender are immaterial, as we
endeavor to attract capable people and support and reward
those who show a strong motivation for growth.
Throughout its 80-year history, TDK has always placed
the utmost importance on human resources. The technologythat is our forte derives entirely from the efforts of our company members. Breakthroughs are only possible becauseof the people that make them happen. Having started out asa venture business, TDK is characterized by the bold spiritof individuals such as our founder Kenzo Saito, expressing
originality and passion through a strong dedication to finding
new ways of making things. This dedication to monozukuri
should inform the actions of all our staff members now morethan ever. Being interested in one’s task and taking pride in
determination is the keys to success.
Our aim is to be a company that is exciting to be a partof, a place where one’s daily work engenders a positive outlook towards a bright future. This is the motivation that drives
our efforts to help build a sustainable society.

While continuing to strengthen our traditional focus
areas including ICT, automotives, and industrial equipment& energy, we are also directing resources towards the medical and healthcare sector, aiming to contribute to a healthy
and agreeable lifestyle against the background of an aging
society. This sector is headed for significant growth in the
future, and we are exploring ways of harnessing our unique
technological expertise in a meaningful way.
This of course includes supplying the market with electronic components, but we also are going to support the

Takehiro Kamigama
President & CEO, TDK Corporation

TDK CSR REPORT 20152

Knowing TDK – 1

Editorial Policy
Each year, TDK publishes the TDK CSR Report in two
media formats, as a booklet and on its website. One purpose of publication is to give employees and students
who may be considering employment at TDK a deeper
understanding of TDK. The other main objective is toexplain to all stakeholders the TDK Group’s approachto corporate social responsibility (CSR), the progress
made during the past year, and the direction of activities
based on our understanding of the expectations andneeds of various stakeholders.
In 2015, as TDK celebrates the 80th anniversaryof its foundation, the report includes the Group’s new
Corporate Vision and TDK Value, which were adopted

to contribute to the further development of a sustainable
society and our own development. As we look back over
TDK’s 80-year history, we identified social issues thatshould be addressed in TDK’s value chain and measures that TDK is taking to address those issues, anddebated the relationships between the environmental,social, and governance (ESG) information disclosed primarily in the report and the creation of corporate value
by TDK.
Also included are reports on the status of progress
during fiscal 2014 regarding important activity areasfrom a CSR perspective and a presentation of initiatives
categorized by stakeholder (web version).

CONTENTSTop Commitment............................................................................................................. 1n Knowing TDK
Editorial Policy/ Company Profile/ Contents/ Web-Based CSR Activity Information.............. 3
TDK Progress on the Threshold of Its 80th Anniversary..................................................... 5
Consideration for Society in the Value Chain and TDK’s Initiatives..................................... 7
The TDK Group in the World............................................................................................ 9n TDK’s CSR Activities
A Society Created through CSR Undertaken in Business Activities...................................10
The TDK Group’s CSR/ CSR Promotion Structure............................................................ 11
Response to the GRI-G4 Guidelines. . ............................................................................. 12

n Report Formats
The report is available as a booklet and a collection of web
pages, in slightly different formats to match the characteristics of the respective media.

Booklet: A digest version focusing on important activity
areas from a CSR perspective
Website: Compiled with reference to the Global Report-n Major Organizational Changes during
the Covered Period
Media Tech K.K., a specified subsidiary, was liquidated in
the first quarter of the fiscal year and was excluded from thescope of consolidation.

n Date of the Report’s Issue

ing Initiative (GRI) guidelines including comprehensive
information centered on fiscal 2014 activity reports as well
as detailed data (scheduled to be available in September2015).

August 31, 2015
(Previous issue: August 2014; next issue: scheduled forAugust 2016)

n Period Covered

CSR Group, Administration HQ:+81-3-6852-7115

FY 2014 (April 1, 2014 to March 31, 2015)
Some information covers activities outside this period.

TDK Group** TDK Group: TDK Corporation and 117 consolidated subsidiaries in Japanand overseasState of Progress in Important Activity Areas from a CSR Perspective.............................. 15
Case 1: Contribution to the World by Technology. . ........................................................... 16
Case 2: Development of Human Resources.................................................................... 22
Case 3: Society and Environmental Considerations in the Supply Chain.. ......................... 26
Case 4: Symbiosis with the Global Environment.............................................................. 30
Third-Party Opinion....................................................................................................... 34

n Contact Informationn Cover Page Designn Organizations Covered

Head Office Study Meeting Convened to Enhance the Grasp of Nonfinancial Information
Disclosure.. .................................................................................................................... 13

The motif, based on the corporate vision adopted at the timeof the 80th anniversary of TDK’s foundation, represents four
categories of TDK Value: Customer Focus, Challenge, HR
Development, and Diversity (see page 6).

Web-Based CSR Activity Information
Comprehensive data with a focus on reports regarding programs undertaken during fiscal 2014 and a survey form areavailable on the web.
We look forward to receiving your opinions and suggestions so that we may improve future activities and reporting.
CSR WEBSITE

Company ProfileName:

TDK Corporation

Headquarters: Shibaura Renasite Tower,
3-9-1 Shibaura, Minato-ku,
Tokyo, Japan
Established:
Capital:151,275 million yen(14.0%)

Magnetic Application
Products:

369,221 million yen(34.1%)

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TDK CSR REPORT 2015

20,859 million yen
Consolidated
net sales:(1.9%)

1,082,560
million yen

Passive Components:

541,205 million yen(50.0%)• Development of Human Resources• Responsibility to the Local Communities(Social Contribution Activities)• Society and Environmental Considerationsin the Supply Chain• Environmental Responsibility• Dialogue with Stakeholders• Symbiosis with the Global Environment• How the Public Sees Us• CSR Philosophy• CSR Data

• Responsibility to Customers• CSR Report• Responsibility to Suppliers• Index• Contribution to the World by Technology

Other:

Film Application
Products:

December 7, 1935
32,641,976,312 yen(As of March 31, 2015)

http://www.global.tdk.com/csr/

FY 2014 Net Sales by Product Segment(by Composition)• Responsibility to Employees* Website with CSR activity information(illustration uses previous year’s page)• Responsibility to Shareholders andInvestors

TDK CSR REPORT 2015

4

Knowing TDK – 2

TDK Progress on the Thresholdof Its 80th Anniversary

Corporate Philosophy
Corporate
Motto

TDK’s History
In December 2015, TDK will celebrate the 80th anniversary of its foundation.
We look back on TDK’s history over the 80 years since its foundation in 1935
with a focus on the corporate motto: “Contribute to culture and industry throughcreativity.”
1935

1966

Second TDK world-leading
innovation
Magnetic tape technologies
that substantially changed
music enjoyment

1980

Third TDK world-leading
innovation
Fine multilayering technology that supports morecompact and lighter
electronic devices

Tokyo Denki Kagaku Kogyo K.K. established in Tamuracho, Shiba-ku, Tokyo City for commercial production of
ferrite core

1953

Synchro Tape, a magnetic recording tape introduced

1955“Ulcon” Disc capacitor introduced

1958“Paramistor” (a parametron arithmetic element using ferrite
cores) wins the Grand Prix at Brussels World Exposition

1966“Synchro Cassette Tape” introduced

1972

Winchester Heads developed

1978

VHS-format “Super AVILYN Video Cassettes” introduced

1980

Multilayering technique made from coils without winding developed

1992

Recordable CD-R compact disc with an organic colorantfilm introduced

1994

High-density recording MR heads introduced

2000

U.S. magnetic head maker Headway Technologies Inc.
acquired2005

Lambda Power Group (power-supply business) acquired
Amperex Technology Limited, a manufacturer of polymer
lithium batteries, acquired

2006

Magnecomp Precision Technology Public Co., Ltd.,a manufacturer with technological strengths in suspensions,a key component of HDD magnetic heads, acquired

2008

EPCOS, a leading German electronic device manufacturer,
acquired2009“Development of ferrite materials and their applications!”
recognized as an IEEE Milestone by the Institute of Electrical and Electronics Engineers (IEEE)

2010
2013

New recording density record set by combining vertical
TMR heads with discrete track media
Dysprosium (Dy)-free magnet developed
TDK wins Grand Prize in technology division of 2013
CEATEC Awards for thermal assisted recording heads

2014

5

TDK CSR REPORT 2015

TDK named a Top 100 Global Innovator by Thomson
Reuters for the third consecutive year

Contribute to culture and industry through creativity

1935

Corporate
Principles
First TDK world-leading
innovation
Materials technology
derived from ferrite

VisionCourage

Trust

Always take a new step
forward with a vision in mind.
Creation and construction are
not born without vision.

Always perform with courage.
Performing power is born by
confronting contradiction andovercoming it.

Always try to build trust.
Trust is born from a spirit ofhonesty and service.

Looking ahead to TDK’s 100th anniversary, we adopted a new Corporate Vision and
TDK Value
In 2015, on the occasion of the 80th anniversary of its foundation, TDK adopted a new Corporate Vision and TDK Value.
The Corporate Vision sets the direction that the company will take leading up to its 100th anniversary in 2035. TDK
Value rigorously selects the corporate culture that has been established up to the present and indicates its possibilities
and development with specificity. All Group personnel were informed about the Vision and TDK Value, and they are used
when putting TDK’s corporate philosophy into action.

Corporate Vision Vision 2035

1994

Fourth TDK world-leading
innovation
Magnetic head technologythat achieves amazingly
high recording density

TDK was founded in 1935, basedon the founder’s vision and belief —“contribute to the advancement of thesociety 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.
TDK will continue to strive toachieve further innovation and create
value for customers through the delivery of outstanding quality products
and services, by utilizing the diverse
global resources.
Based on TDK’s corporate motto,
TDK will continue to “contribute toculture and industry through creativity,” by revitalizing and protecting the
global environment and creating apleasant and safe society.

TDK Value
Category

Value
We have;

Customer
Focus• Strong determination to contribute to our customers’ success• 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 ourcustomers

We have;
Challenge• Culture to turn adverse challenges into chances to develop ourselves• Strong determination to accomplish our business goals by overcoming adversity

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

We have;HR
Development• Aspiration to continuously improve ourselves• 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

We have;

Diversity• Global network with diverse culture• 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

TDK CSR REPORT 20156

Knowing TDK – 3

Consideration for Society in the
Value Chain and TDK’s Initiatives

Considerationfor Society

Procurement

Development

Manufacturing

Logistics

Sales

TDK procures raw materials fromaround the world. Consideration forhuman rights and the environment by
suppliers is also a part of TDK’s role.

The development process holds the
key to how TDK products can contribute to society and the environment.

TDK’s focus is on reducing the environmental load during manufacturing,eliminating quality-related incidents,and ensuring occupational healthand safety.

The mission of logistics is the stable,
reliable, and timely supply of TDK
products to customers.

We seek to maintain high productquality while providing products thatsatisfy customers through consideration for society and the environment.

• Supply useful products to customers• Supply useful products to customers• Supply useful products to customers• Ensure product quality• Supply useful products to customers• Ensure product quality• Ensure product quality• Ensure product quality• Ensure product quality• Comply with laws, regulations, and social
norms• Develop human resources• Develop human resources• Comply with laws, regulations, andsocial norms• Comply with laws, regulations, andsocial norms• Comply with laws, regulations, and social
norms• Consideration for human rights andoccupational health and safety• Consideration for human rights andoccupational health and safety• Fair corporate activities• Consideration for human rights andoccupational health and safety• Fair corporate activities• Consideration for human rights andoccupational health and safety• Ensure stable supply• Fair corporate activities• Ensure stable supply• Fair corporate activities• Fair corporate activities• Reduce the environmental load

• Ensure stable supply• Responsible sourcing of minerals• Reduce the environmental load

• Ensure stable supply• Ensure information security• Responsible sourcing of minerals• Reduce the environmental load

• Ensure information security• Responsible sourcing of minerals• Reduce the environmental load

• Ensure information security• Build good relationships with local
communities• Reduce the environmental load

• Ensure information security• Consideration for human rights andoccupational health and safety• Build good relationships with local
communities• Ensure the quality of purchased products

TDK’s
initiatives

The TDK value chain extending from procurement of raw materials to development, manufacturing, logistics, and sales
extends throughout various regions of the world and involves numerous social issues. Here we present the things we
consider for society in each stage and TDK’s initiatives.

• Use CSR check sheets and implement CSR
audits• BCP/BCM• Investigate and avoid conflict minerals• Green procurement• Mutually beneficial relationships with local
communities• Comply with laws, regulations, andsocial norms• Ensure information security• Build good relationships with local
communities• Establish source management toprevent the planning and design ofdefective products• Ensure quality in one’s own processes• Ensure logistics quality• Customer satisfaction• Comply with logistics-related laws andregulations• BCP/BCM• Develop global human resources• Develop human resources who can makemanufacturing innovations• Develop global human resources• BCP/BCM• Appropriate responses to CSR
surveys, etc., from customers• Conduct corporate activities based on
TDK’s Code of Conduct• Reduce the environmental load inlogistics• Promote sales of products that
contribute to the environment• Prevent data breaches• Implement CSR self-check and internal
CSR audits• Prevent data breaches• Protect confidential customer
information• Social contribution activities• Reduce the environmental load of plants• Conduct corporate activities based on
TDK’s Code of Conduct• Product assessments• Properly manage environmental risks• Prevent data breaches• Social contribution activities

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TDK CSR REPORT 2015

TDK CSR REPORT 20158

Knowing TDK – 4

A Society Created through CSR Undertaken in
Business Activities
Our society is facing various issues.
TDK seeks to solve social issues through its business activities.

The TDK Group in the WorldA Society Created through CSR

Since the company’s founding in 1935, TDK’s business has expanded into various countries and regions around theworld. The TDK product lineup has also greatly diversified.
Remaining an important player on the world stage, TDK aims to keep delivering services and products that fulfill theneeds of society.

Americas

Development of
human resources

Improve the quality of life

A society where
everyone can live
safely and securely• Create advanced robots

Symbiosis with theglobal environment• Create wearable computersthat can be used while attachedto the body

• Eliminate digital divides• Expand data centers• Create transport systems thatcan supply electricity while
operating• Develop safe, secure, andcomfortable automobile-based
lifestyles• Use and expand renewableenergyAsia• Create wearable devices that
can inform users about theirhealth status at anytime• Promote the increased use of
eco-cars and hybrid vehicles• Create electric power generation systems utilizing temperature differences

Number of employees:
Consolidated subsidiaries:
Net sales:
Number of employees:
Consolidated subsidiaries:
Net sales:

3,150
17

89,871 million yen (8.3%）

69,222
55

Important Activity Areas from a CSR Perspective
Contribution
to the world bytechnology

Society and environmental
considerations in the
supply chain

Development of
human resources

753,461 million yen (69.6%）

Symbiosis with theglobal environment

TDK’s Five Core Technologies
Materials technology, processing technology, evaluation and simulation technology,
production technology, and device and module technology

Markets that TDK Focuses On

ICT

Industrial
equipment &energyAutomotive

Japan

Social Issues that TDK Addresses

EuropeNumber of employees:
Consolidated subsidiaries:

Number of employees:
Consolidated subsidiaries:
Net sales:

6,720
33

146,016 million yen (13.5%）

Net sales:

Developed
countries:

93,212 million yen (8.6%）

TDK Group consolidated net sales:

1,082,560

8,984
12

million yen

Number of TDK Group employees:

88,076

Consolidated subsidiaries:

117

Digital divides

Population of disabled people

Mobile broadband use rate (2014)

People with physical or mental disabilities
worldwide (2011)84%

Globalaverage:32%

Developing
countries:

21%

*1

Approx.

1billionpeople15%of the global
population*2

Aging of the global
population

Climate change

Energy consumption

Traffic accidents

Population of people aged
60 years and older (2050)

Increase in temperature(2100)

Global primary energy
consumption (2040)

Number of traffic fatalities
worldwide (2010)

*3

*4

2

billionpeopleMaximum

4.8 °C

19.3

billion
tons

*5

1.24

millionpeople*6Notes: *1 From the Millennium Development Goals Report 2014 / *2 United Nations Information Centres (WHO/World Bank Report) / *3 United Nations Population Fund, “Ageing in the
Twenty-First Century: A Celebration and A Challenge” (2012) / *4 IPCC 5th Assessment Report (2013) / *5 Forecast by the Institute of Energy Economics, Japan (2014) / *6 WHO’s
Global Health Observatory data on road safety

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TDK CSR REPORT 2015

TDK CSR REPORT 201510

TDK’s CSR
Activities

The TDK Group’s CSR

Response to the GRI-G4 Guidelines

By putting the TDK corporate motto into practice and rigorously complying with corporate ethics, the CSR programs of the
TDK Group seek to achieve continuous corporate development and the creation of a sustainable society. TDK’s fundamental
approach to CSR, its CSR structures and response to the GRI’s G4 Sustainability Reporting Guidelines (GRI-G4 Guidelines)
are explained below.

The TDK Group’s CSR

Continued evolvement ofbusiness

Creation of a sustainable
society

Implement the Corporate Motto
Contribute to culture and industry
through creativity

Enhance
corporate
value

Employees

CSR Activities

TDK’s Business Activities
TDK’s Code of Conduct
Local communities

Suppliers
Shareholders/
Investors* For the complete text of the TDK Code of Conduct, please refer to the following URL:
http://www.global.tdk.com/about_tdk/code_of_conduct/

CSR Promotion Structure

Business Ethics & CSR Committee
The Business Ethics & CSR Committee is headed by a director or corporate officer appointed by the Board of Directors
and is made up of the members appointed by chair personof the committee in addition to the heads of key headquarters
divisions. The mission of the committee is to solve issues
relating to the TDK Code of Conduct involving employees of
TDK Group companies around the world.
In addition, internal and external help lines have been established as a means for all TDK Group employees to reportcompliance violations, contributing to rigorous complianceBusiness Companies& Business Groups

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TDK CSR REPORT 2015

CSR Group
The CSR Group has in-depth knowledge of social issues andrequirements and promotes CSR programs in a professionalmanner. The CSR Group strategically examines the various
demands received from customers and society from such
perspectives as their urgency and importance, their impact
on TDK, the capabilities of TDK, and the degree of contribution to society. Working closely with other departments inthe company, the CSR Group formulates policies and implements responsive actions. The CSR Group also promotes
CSR awareness in TDK and organizes training programs.
The CSR Group is currently organized as a part of the Corporate Administration Headquarters.

Business
Ethics & CSR
Commit tee

Corporate
Administration HQ

HQFunctions

Business Ethics & CSR Commit tee

Manufacturing
HQ

Corporate
Strategic HQ

CSR Group

Board of Directors

Asia

Executive Commit tee

Electronic
Components
Sales & MarketingGroup

within the Group and preventing compliance violations for
identifying and addressing them in a timely manner.

Structure of Whistleblowing System

Organization

President & CEO

1. Analysis of current
circumstances

2. Increasing
understanding

3. Organization of
information sources

We analyzed current disclosure levels withregard to compliant items, noncompliant
items, and the degree of noncompliance inlight of the GRI-G4 Guidelines.

Relevant personnel took a GRI G4 certified training course to gain an accurate
understanding of the intent of the GRI-G4
Guidelines.

In order to identify material issues and broadly identify social issues, we confirmed how
we collect opinions from each stakeholder
group and how we engage in dialogue withthem.

Steps 1 and 2 (Implemented in FY 2014)

Based on the activities of the Business Ethics & CSR Committee, which reports directly to the Board of Directors, theentire TDK Group acts in concert to address a wide rangeof CSR topics through collaboration with the CSR Group andother departments and business groups at TDK headquarters and TDK sites around the world.

Board of Directors

consequently, TDK is implementing the following processes
to identify material issues.
Identifying social issues and prioritizing material issues
from TDK’s own perspective (steps 1 and 2) was completed
in fiscal 2014. Going forward, we will examine priorities fromthe perspectives of stakeholders with the aim of reporting theresults in 2016 and disclosing information in compliance with
the GRI-G4 Guidelines.

Prior Stages (Implemented in FY 2013)

Social aspect

Customers

Economic
aspectEnvironmental
aspectThe TDK Group’s approach to CSR is based on the practiceof the TDK corporate motto and the thorough implementationof corporate ethics. Recognizing that TDK is a social entity
supported by stakeholders, such as customers, suppliers,
employees, shareholders, investors, and local communities,
we promote CSR activities through our business activities on
the basis of the TDK Code of Conduct and maintain communication with these stakeholders.
By carrying out the TDK corporate motto, we increase
corporate value, and subsequently contribute to continuous
corporate development and the creation of a sustainable
society.

GRI, an international non-governmental organization that
formulates and issues international guidelines on sustainability reporting, issued the GRI-G4 Guidelines in May 2013
with revised content that shifts the requirements from comprehensive information disclosures to material issues. The
objective is to allow management to participate more deeply
in CSR and for companies to determine reporting content
with certain intentions. The GRI will require reporting in accordance with the GRI-G4 Guidelines starting in 2016, andTechnology
HQ

Americas
Help Line

Help Line

Japan (Audit& Super visor y
Board Members
Of fice)

Americas(CCOs)

EuropeHelp Lines
Subsidiaries
Ethics Council(consultation
hotline)We confirmed the content of day-to-day communications
from information sources by stakeholder group and conducted simulations of various social issues in light of ISO
26000 and other international standards relating to CSR.

2 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 should be addressed with an understanding of social
demands 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 interestof stakeholders, and current responses with regard to thesocial issues identified above.
To the right are issues to be addressed with precedence
based on the results of prioritization from TDK’s own perspective. As a result of simulations, we reconfirmed ourawareness of the importance of key activity items undertaken in the past from four CSR perspectives.

1. Contribution to the world by technology• Develop and expand sales of new products in three priority
markets• Pursue zero-defect quality based on advanced technologicalcapabilities• Expand sales of products that contribute to the environment

2. Development of human resources• Develop global human resources• Promote a corporate culture that respects diversity

3. Society and environmental considerations inthe supply chain• Work Environment considerations at manufacturing sites• Work Environment considerations in supply chains• Respond to conflict minerals• Provide a stable supply of products

4. Symbiosis with the global environment• Respond to energy issues• Reduce CO 2 emissions• Effectively use resources

EuropeHelp Line

Japan,South Korea,
China,
Taiwan,SoutheastAsia

1 Identifying social issues

Subsidiaries

Subsidiaries

Ethics Council(consultation
hotline)Ethics Council(consultation
hotline)Steps 3 and 4(Scheduled for Implementation in FY 2015)

3 Prioritization from the stakeholders’ perspectives

4 Finalization of material issues

Prioritization from the stakeholders’ perspectives based on
the opinions of experts and other factors.

Finalization of material issues for the TDK Group with theapproval of management.

TDK CSR REPORT 2015

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TDK’s CSR
Activities

Study Meeting Convened to Enhance
the Grasp of Nonfinancial Information
Disclosure
The question is emerging of how to interpret recent moves concerning the disclosureof nonfinancial information, an area in which importance is mounting on a global
scale, and what responses the TDK Group needs to take. A study meeting was held
this March at the TDK Head Office, to which two experts were specially invited to address this very topic. On hand for the gathering were 14 TDK Directors, Corporate Officers and other Group-level management staff members. The meeting commenced
with talks from the two experts followed up with brisk discussions including the TDK
participants.

Opinions and Proposals from the Experts
Eiichiro Adachi

George IguchiCounselor
The Japan Research Institute, Limited

Corporate Governace Officer
General Manager of Equity Investment
Depertment
Nissay Asset Management Corporation

The scale of responsible investment has charted steady expansion,

The premise for long-term investment grounded in the Stewardshipwith worldwide outlays by institutional investors accounting for

Code is multidimensional understanding of corporate activity. In myaround 30% of the total of such investment at the end of 2013. It hasview, incorporating ESG evaluations into the management process

become imperative to grasp the essence of this trend, while moving

in implementing corporate assessments serves to accelerate theto actively disclose nonfinancial information and reflect that intel-

grasp of such multidimensional activity, thereby contributing toligence in corporate management and IR activities. Against such

improved investment performance over the long term. Within thisa backdrop, there is considerable significance in the fact that theprocess, harboring greater importance than short-term sales, earn-

Financial Service Agency is using the Stewardship Code to demandings and other financial data, is a solid grasp of corporate ideology,

institutional investors to form a greater grasp of the responses tomanagement strategies, responses to environmental regulations,social and environmental issues at the companies in which they

relationships between management and employees and other suchinvest. The formulation of the Corporate Governance Code also

nonfinancial information. Of particular importance is the “S” forrepresents a landmark move in that vein, in terms of its recognition“Society” in “ESG,” which is tantamount to corporate DNA and theof the structural elements of corporate governance in addressing

wellspring of any company’s inherent value. In the eyes of investors,social and environmental problems.

this area holds the highest priority of all. Investor activities chan-

For investors, it is not only important to examine the overall flowof CSR, but also to discern the ESG factors, which comprise parThe meeting was held on March 31, 2015.

Defining the Importance of Nonfinancial Information, an Area Marked by
Rising Expectations for Disclosure
The study meeting featured presentations by SRI and CSR expert Mr. Eiichiro Adachi of The Japan Research Institute, Limited
and Mr. George Iguchi of Nissay Asset Management Corporation, an institutional investment firm. Both gentlemen delivered
thought-provoking talks on recent trends surrounding disclosureof nonfinancial information.
In the EU, amendments have been passed that call for additional disclosure of nonfinancial information, as that region
gears up for long-term economic growth and improvements in
employment, In place in Japan since last year as dual measuresserving the same basic end are the Corporate Governance
Code (documenting guidelines for raising corporate value overthe medium to long term) and the Stewardship Code (positioned
to encourage responsible outlays by institutional investors).

During the first half of the meeting, the two experts particularly focused their explanations on the so-called “ESG
factors” (referring to the Environment, Society, and Governance), which are drawing increasing interest and attention.
The second half evolved into a Q&A session with TDK participants. The exchanges were instrumental in confirming areasthat included the following themes:

13

TDK CSR REPORT 2015

• “Vigorous debates are emerging on the proper approaches
to corporate conduct for the purpose of creating corporate
value, prompting the need to promote dialogue between
investors and companies,”

neled through this caliber of ESG analysis will lead to constructive
dialogue with target companies.

ticularly important elements in both risk and opportunity, linking theAnnual reports compiled from medium- to long-term perspec-

businesses at each company. The majority of investors are startingtives rank as an extremely major presence. This is because theto take greater notice of the strengths and distinguishing character-inclusion of ESG standpoints in the preparation of such reports

istics of each company, rooted in the various different backgrounds

positioned to integrate financial and nonfinancial information isthat define those companies. It is precisely for this reason that thedestined to become an indispensable element in illustrating theneed has emerged to consider the disclosure of such information

process used to create corporate value. The dissemination of infor-

on a management basis. In that sense, it has become tremendously

mation regarding TDK’s business and products is truly top caliber.

important to not merely consign such work to the divisions in charge

I have high hopes for redoubled progress in that direction goingof CSR, but instead organize moves for promotion on a company-

forward, aimed at attaining ample communication of the company’s

wide scale.

ideology, long-term vision and its other qualities.

• “For the sake of precision ESG evaluations, company-investor
discourse will take on increasing importance over the years
to come,”• “It will be vital to devise disclosure methods that function
to shift investor attention from the short term to medium- to
longer-term perspectives,” andFollowing the Study Meeting
If we equate companies to “people,” financial information can be said to represent scholastic or physical energy• “In the quest to sustain global progress, it will be imperative
to adopt appropriate approaches and information disclosurefor the labor and production systems at overseas bases, aswell as on other key fronts.”
TDK attendees also took the time to note areas in which they
have developed greater awareness. As one case in point: “I feelfrom my daily experiences that greater stress is being placed on
ESG, pointing to the need for TDK to also review our approach to
how information is disseminated.”

capable of being numerically expressed in examinations, while nonfinancial information takes on the image ofcharacter traits, dispositions, or other elements that can only be ascertained through the accumulation of actual
sustained dialogue. In recent years, at Board of Directors’ evaluations of the company and other occasions, wehave faced increasing questions along the lines of, “Just what is the DNA of the TDK Group, and what can be done
to permeate those qualities throughout the Group?” More so than financial information, I am sensing a pronounced

Junji Yoneyama

trend to measure the company in terms of its “character,” whether it offers ample trust over the long term and can be

Director &Senior Vice President,
TDK Corporation

advantage of our outstanding traditions and corporate culture to further evolve ESG initiatives in all divisions, while

expected to deliver a promising future. As we move toward the 80th anniversary of our foundation, I want to take fullproperly conveying and sharing that information in an effort to spearhead the way to even higher corporate value.

TDK CSR REPORT 201514

State of Progress in Important Activity Areas
from a CSR Perspective
The TDK Group aims to realize a sustainable society and company by practicing our corporate motto of “Contribute to culture and industry
through creativity.” In addition, in consideration of their degree of impact on and importance to society and our company, we have selectedfour important activity areas and implemented PDCA cycles for them. The following is a report of achievements in fiscal 2014 and plans
for fiscal 2015 in these four areas.
Important Activity Area

1

Contribution to
the world bytechnology

2

Development of
human resources

3

FY 2014 Action PlanFY 2014 Results

FY 2015 Action Plan

Contributeto resolvingsocial problems
through businessactivities• Continue to promote the development of
products that contribute to the solution ofsocial issues in the priority strategic fields
of ICT, automotive, and industrial equipment
and energy• Promoted the development of Wireless
Charging (ICT), position sensors(automotive), NTC thermal sensor elements(industrial equipment and energy), etc.

• Will continue to promote the developmentof products that contribute to the solution ofsocial issues in the priority strategic fields
of ICT, automotive, and industrial equipment
and energy

Innovative
craftsmanshiptraining• Continue to hold TDK Monozukuri Tradition
Seminars• Continue to hold the seminars at overseas
sites depending on team composition• Held TDK Monozukuri Tradition Seminars(5 participants)• Will continue to hold TDK Monozukuri
Tradition Seminars• Will continue to hold the seminars
at overseas sites depending on teamcomposition

Development of
global humanresources• Improve global human resources function• Continue to implement cross-cultural communication training and IMD (International
Management Development) seminars• Continue to consolidate the Overseas Trainee
Program• Promoted the integration of sales activities
in Europe and the standardization of
educational tools, etc.
• Continued to implement cross-culturalcommunication training (106 participants)
and IMD seminars (19 participants)• Consolidated the Overseas Trainee Program(4 participants)• Will continue to improve the global humanresources function• Will continue to implement cross-culturalcommunication training and IMD seminars• Will continue to consolidate the Overseas
Trainee Program

CSR awarenesswithin thecompany• Continue to implement e-learning andexpand coverage (yearly implementation atcooperating sites and approach new groupcompanies)• Continue to implement corporate ethics andCSR education in training for new recruits
and assistant managers• Continue raising awareness for CSR in IMD
seminars• Continued to implement e-learning andexpanded coverage• Implemented corporate ethics and CSR
education in training for new recruits andassistant managers• Raised awareness for CSR in IMD seminars• Implemented worldwide complianceeducation• Will rearrange contents and continue to
implement e-learning• Will continue to implement corporate ethics
and CSR education in training for new
recruits and assistant managers• Will continue raising awareness for CSR in
IMD seminars• Will make separate plans for complianceeducation

Promote CSR
procurement• Continue to regularly revise CSR checksheets for suppliers and provide educationand guidance• Implement and improve quality of CSR auditsof suppliers• Implement CSR training at employment
agencies focusing on labor and human rights• Strengthened items in CSR check sheets
for suppliers and continued to provide
education and guidance (13 suppliers)• Implemented CSR audits of suppliers(13 suppliers)• Implemented CSR training at employment
agencies focusing on labor and humanrights• Will continue to regularly revise CSR checksheets for suppliers and provide educationand guidance• Will implement and expand CSR audits ofsuppliers• Will implement CSR training at employment
agencies focusing on labor and humanrights• Gather information and assess trends
regarding the interpretation of the SEC’s final
conflict mineral rules• Continue to respond properly to customers• Implement regular surveys for newly
purchased products and improve identification of smelters for existing purchased
products• Establish in-house arrangements in
response to the interpretation of the SEC’s
final conflict mineral rules• Gathered information and assessed
trends through participation in the JEITA
Responsible Minerals Trade Working Group• Responded properly to customers (2,489
cases)• Survey response rate from suppliers: 99%• Since there is no clear statement regarding
the due diligence of suppliers, used the2013 survey• Will continue to gather information andassess trends regarding the interpretation of
the SEC’s final conflict mineral rules• Will continue to respond properly tocustomers• Will continue to implement regular surveys
for newly purchased products and improve
identification of smelters for existingpurchased products• Will continue to establish in-house arrangements in response to the interpretation of
the SEC’s final conflict mineral rules• Implement regular TDK CSR self-checks
at manufacturing sites and promote theimprovement of risk management relating tolabor and corporate ethics• Continue to implement third-party audits
once every two years (including requests
from customers)• Respond to CSR survey and auditing
requests from customers in a timely manner• Implemented regular TDK CSR self-checks
at manufacturing sites and promoted risk
assessment relating to labor and corporate
ethics• Implemented autonomous third-party audits(5 sites in China)• Responded to CSR survey and auditing
requests from customers in a timely manner• Will implement regular TDK CSR selfchecks at manufacturing sites and promote
the improvement of risk management
relating to labor and corporate ethics• Will continue to implement third-party
audits once every two years (including
requests from customers)• Will respond to CSR survey and auditing
requests from customers in a timely manner• Promote environment-oriented activities
based on TDK Environmental Action 2020
• Continue toward achievement of carbon
neutrality• Reduce CO 2 emissions in manufacturing
operations (environmental load):
1.07 million tons or less
• Increase reduction of CO 2 emissions
through products (environmental
contribution): 700,000 tons or more

• Promoted environmental activities based on
TDK Environmental Action 2020
• Achieved carbon neutrality• Reduced CO 2 emissions in manufacturing
operations (environmental load):
1.068 million tons
• Increased reduction of CO 2 emissions
through products (environmental
contribution): 1.251 million tons

• Will promote environment-oriented
activities based on TDK Environmental
Action 2020
• Will achieve carbon neutrality• Will reduce CO 2 emissions in manufacturing operations (environmental load):
1.05 million tons or less
• Will increase reduction of CO 2 emissions
through products (environmental
contribution): 1.05 million tons or more

Society andenvironmental
considerations inthe supply chain
Handle conflictmineralsregulations

CSR-basedcustomer
relations4

Symbiosis
with the global
environment15

TDK CSR REPORT 2015

Promoteenvironmental
activities

Contribution to the World by Technology

1

TDK was established for the purpose of industrializing ferrite. Ever since then, we have createdproducts that contribute to the development of society through our unique technology development. For us, doing our part for the world with our technologies also means contributing to society
through our businesses. This philosophy is an integral, indelible part of TDK, and our mission will
always be to work for social development by way of our high-quality products and services.

Research and development costs

70.6

Sales ratio for our three key sectors: ICT,
automotive, and industrial equipment &energy*93.4

billion yen

TDK has focused on stepping up new product development for the ever-diversifying electronics sector, in advanced memory products and microelectronics modules
for cellular communications in particular. Based on ourmaterials and design technology, we have also concentrated our energies on devices for saving energy andenvironmentally friendly automotive applications, as well
as next-generation infrastructure device research anddevelopment.

TDK selected as one ofThomson Reuters’
Top 100 Global Innovators

3

for therdconsecutive year (2014)
Corporations and research organizations selected for this award
are judged not only on patent filingvolume, but also on an assessment of whether or not they havecommercialized notable inventions on a global scale. Criteria for
selection includes: number of patents, success rate, global reach ofpatent portfolio, and influence ofpatents in citations. TDK received
especially high ratings for numberof patents, success rate, and influence of patents in citations.

%

To help us overcome the challenges of the current competitive environment, we at TDK have conducted reviews
and revisions of our entire business portfolio over the past
few years, implementing structural reforms including the
optimization of our manufacturing sites. Because we havemade a certain level of progress on these initiatives, wehave now concluded large-scale structural reforms. By
focusing our business resources on our three priority markets of ICT, automotive, and industrial equipment & energy,
as well as our five priority segments as of FY 2014 (mentioned below), we have secured growth and made the shift
to a balanced profit structure where we can boost profits
in each segment.
*Includes HDD heads and suspensions

Three priority markets and five priority segments

Automotive

Five priority
segments

ICT• Inductive devices• High frequency components• Piezoelectric material
products• HDD heads• Rechargeable batteries

Industrial
equipment &energyTDK CSR REPORT 201516

1

Automotive

ICT

TDK is making significant contributions to improving
performance and fuel efficiency in the next generation of environmentally friendly cars, such as hybrid
electric vehicles (HEV) and electric vehicles (EV), as
well as self-driving vehicles currently under development.

TDK is developing wireless charging systems for mobile devices. These not only make charging more convenient, they also help to protect the products against
damage from water or sweat.

Magnetics
Technology fromTDK Leads into
the Future
Our mission is contributing to culture and industry
through creativity. Ever since our founding days,
the TDK Group has been advancing state-of-the-art
magnetics technology, with the aim of helping tobuild a sustainable society. This section highlights anumber of products used in areas to which TDK isdevoting special attention.

ICT
In an increasingly networked world, the power ofcraftsmanship which is a core strength of TDK also
provides advantages when it comes to realizing othergoals, such as making mobile devices more compact
and versatile or enabling data centers to store moredata while consuming less energy.

17

TDK CSR REPORT 2015

Contribution to the World by Technology

Industrial Equipment& Energy
The use of renewable energy sources is expanding
worldwide. The lineup of innovative TDK products inthis area is instrumental in efforts to resolve serious
issues such as global warming and the depletion of
resources.

n Wireless charging for mobile devices
Beyond incorporating wireless communication
capabilities such as Wi-Fi and Bluetooth, mobile
devices and wearable devices these days arestarting to go wireless in the charging process
as well. TDK has harnessed its advanced knowhow in magnetics technology to create a highly
efficient, ultra low-profile wireless charging
system. This approach also makes it possible

The wireless charging systems that we are developing are employed in wireless charging systems
for cellular phones, tablets, and various otherelectronic devices. The convenience of charging by
simply placing a device on the charger is of course
a huge advantage, but the approach also brings
various other benefits. Reliability problems causedby conventional cables and connectors can beeliminated, and resistance against water damage
and corrosion can be improved. And since there areno batteries that need to be replaced, the environmental load caused by discarded batteries can also
be reduced.
During development, a major focus was on
how to downsize the coil while keeping the rise intemperature as low as possible. To find the optimal
specifications, various combinations of coil shapeand magnetic sheet material and thickness had tobe evaluated under real world conditions with actual prototypes. It was a long and difficult process.
By utilizing magnetics technology which is one of
TDK’s strong points, we succeeded in realizing an
industry-leading low-profile, light-weight productwith high efficiency.
Wireless charging systems require no exposedcontacts and therefore are extremely safe, whichmakes applications for wearables such as hearing
aids and other healthcare products highly promising. With the aim of having sophisticated technology
enhance the convenience of the end product, we
will continue to develop, design, and manufacture
products that help in dealing with environmental issues and the rapid aging of society.

to eliminate the need for cumbersome battery
replacement in very small electronic devices
such as hearing aids.
The system is suitable mainly for hearing aids
and other wearable devices such as smart
watches, as well as for mobile devices. It enables charging without physical contact.

We want to help create anenvironmentally and peoplefriendly society using TDK’stech power
Feng Lung Chien [right]
Department Manager, Power GroupTDK Taiwan Corporation

Amos Chen [left]
Power GroupTDK Taiwan Corporation

TDK CSR REPORT 201518

1

Automotive

Industrial Equipment& Energy

High-accuracy position sensors made possible
by TDK’s magnetics technology contribute toimproved fuel economy and enjoyable and comfortable driving.

n Position sensors
Used in the DCT* of automotive, this position sensor, which
incorporates a magnet and magnetic sensor chip, performs
position detection without physical contact. As the output of
the sensor changes according to the orientation of the magnetic field of the magnet, the distance to the target object canbe measured with high accuracy. The sensor can be usedalso when immersed in water, oil, or other fluids, and stable
operation is maintained even in environments with high levelsof noise.

Working together as a team torealize quality that merits thetrust of customers
Seiji Fukuoka [left]
Manager
Automotive Group, Applied Products Section,
Sensor Department, Sensor Business Group,
TDK Corporation
Toshihiko Oyama [right]
Assistant Manager
Automotive Group, Applied Products Section,
Sensor Department, Sensor Business Group,
TDK Corporation

19

TDK CSR REPORT 2015

Contribution to the World by Technology

Smaller and more robust temperature sensors enable higher functionality
and greater energy savings.

* DCT (Dual Clutch Transmission) is a type of transmission used in motor vehicles. It comprises two separate
clutch and gear systems whose engagement with eachother is altered in order to change gears. Compared toconventional automatic or manual transmissions, theenergy loss when switching gears is significantly lower.
In recent years, this system has become increasingly
popular, as it helps to improve fuel economy and resultsin smoother gear changes, which makes for more enjoyable and comfortable driving.

Wireless position sensors that can detect distanceand rotation angle of target objects are essential components of DCTs, because they can provide accurate
data about gear movement. Our newly developed
sensor uses three magnets mounted to a moveable
element. This allows highly accurate detection overa range of several tens of millimeters, based on thechanges in the magnetic field that occur when theelement moves. The use of magnets with outstanding
environmental resistance ensures stable measurement even when facing the harsh environmental elements to which motor vehicles are exposed, including
high temperatures, dust, water, oil, etc. The expertisein magnetics technology gathered by TDK since its
founding has led to the realization of compact magnets in a layout that enables reliable detection overa wide area. The smaller size also contributes to a
reduction in the use of resources.
During the development process for this product,
numerous difficult challenges had to be overcome before the intended functionality and quality could be realized. Many customer consultations and a multitudeof specification matching were required, and we also
worked across several departments internally andrepeatedly came together for discussion sessions.
In this way, the problems were eventually solved one
by one. As this is a product that helps to improve theenergy efficiency of cars, we intend to continue working together as a team towards further improvements
in functionality, in order to meet the expectations that
customers and society at large are placing on us.

n NTC (Negative Temperature Coefficient) temperature sensors
These compact sensors use a wafer base and have exposed electrical contacts on the top andbottom, allowing them to be directly incorporated in IGBT (Insulated Gate Bipolor Transistor) power
modules. These modules are a type of semiconductor device that plays a vital role in implementing power control for frequency converters in industrial equipment. NTC temperature sensors
integrated in power-saving-type IGBT power modules for industrial and automotive drive systems
enable accurate temperature monitoring and control.

Developing products that
support high efficiency inindustrial equipment
Dr. Lutz Kirsten

Head of Product Marketing for NTC Sensor
Elements, Sensor Business Group

Precise temperature monitoring is a prerequisite for the most efficient operation possible of
IGBT modules in the frequency converters ofindustrial drive systems. Working in cooperation with leading semiconductor manufacturers, we were aiming for a compact yet robust
and accurate wafer-based temperature sensor.
The main challenges for my team were to develop a metallization for optimal bonding andto create a component able to fully withstandthe high temperatures and pressure occurring
during the semiconductor assembly process.
These challenges were met and overcome
through persistent repeated attempts. The
result is the S860 series of NTC temperature
sensors which can measure very delicate
resistance value changes at temperatures ashigh as 125 ºC. This makes it possible to operate the IGBT power module at its limit temperature where efficiency is highest, which in turncontributes to making industrial drive systems
more energy efficient.
Our next goal, a new product currently under development, is a sensor that will sustain
operation at up to 200 ºC. It is destined for use
in the next generation of power modules. By
expanding our lineup of embedded-type NTC
sensors, we aim to contribute to further energy
savings.

TDK CSR REPORT 201520

1

Contribution to the World by Technology

Development of Human Resources

TDK’s Vision for Future Society

2

We regard our employees as one of our most vital assets. They allow TDK to contribute to culture
and industry through creativity—as our corporate motto states. The development of human resources, we believe, is the source of true and lasting prosperity for the company. Toward this end,
we promote a variety of measures that build upon respect for individuality to give our employees
the chance to extend their abilities and reach their full potential.

At TDK, we consider it our mission to utilize our unique products and technologies for the greater good. Based on this vision,
we seek to maximize the possibilities of the world of electronics.
Here we outline our proposed contributions to the future.

Building a lively, upbeat
society where people canlive in accordance with
who they really are
Applications in medical and healthcare fields

We offer new value via
a fusion of regional
resources and elemental
technologies
Doing our part in the energy field

21

TDK CSR REPORT 2015

95

426

TDK Monozukuri Tradition Seminar
participants:

Cross-cultural communication training
participants:

The percentage of elderly people is on the rise around the world, particularly in developed countries. At TDK, we are forging ahead withtechnical innovation with the goal of enabling people to live as they
desire—and in good health—as they age, a wish common to everyone
on the planet.
As more and more medical and healthcare equipment and devices
enabling people to maintain optimal health and a comfortable living
environment become available, TDK makes recharging these devices
ever-more convenient with our wireless charging technologies. Our
simple wireless system, an example of people-friendly equipment that
does not require setup, eliminates risks such as electric shock and shortcircuits.
In addition, TDK’s magnetic sensor technology plays an importantrole in preventive medicine, a field critical to the treatment of illness.
Our high-performance sensors, which are being built into a variety of
medical and healthcare devices, are now expected to come into a wide
range of uses. They can help, for instance, to prevent serious diseases
by accurately assessing blood flow and detecting irregularities such as
blocked blood vessels at an early stage. In addition, our sensing technologies can assist people with disabilities in moving better by detecting
neural signals, which in turn lessens the burden of physical labor put on
nursing care personnel. In this way, we do our part for society throughproduct development.

(Total to date)(Total to date)

In Japan, for instance, TDK works to fuse regional resources and elemental technologies to resolve the two key social issues of national
low energy self-sufficiency rates and the withdrawal of industry from theregions, while at the same time offering new value.
By utilizing TDK’s sensing technologies, we will accelerate the introduction of IT in the various businesses which have previously been
relying on experience and intuition.
In doing so, we will nurture regional businesses to become profitable. Meanwhile, we also maximum natural energy use with a view tomeeting local electric power needs. TDK’s power electronics products
and anti-noise parts—which serve to cut costs associated with energy
conversion and conveyance—facilitate the efficient use of energy. In
addition, our research and development is also progressing in the areaof harnessing miniscule amounts of energy, including heat, vibration,pressure, and temperature variation in the surrounding environment.
As the task of securing stable energy sources becomes increasingly
difficult in tandem with climate change and world population growth, weseek to build systems where energy is generated and consumed in thesame place, thereby fostering a more dynamic community.

TDK conducts international management development(IMD) training to help our internal leaders acquire truly
global skills and develop stronger borderless solidarity
within the Group. This training is for candidates for managerial positions at the TDK Group’s overseas affiliates. The
training seminars have been held since 1997. They takethe form of a week-long residential training course withlectures and workshops. The participants gain a deeper
understanding of TDK’s corporate philosophy, acquirea broader, more managerial perspective, and establish
bonds that help build personal international networks.
Some participants who have completed the IMD training
have gone on to become presidents of overseas affiliates,
playing a vital role in human resources development within
the TDK Group.

Since 2010, TDK has been holding TDK Monozukuri Tradition Seminars, a training program for up-and-coming
personnel who have a future as plant managers andupper-level managers. This training develops leadershipability and the vision to see the entire process of monozukuri (craftsmanship-based manufacturing), along with theability to visualize how to optimize the process overall. The
aim of the program is to pass on TDK’s spirit of monozukuri
to the next generation. The diverse program encouragesa basic spirit of self-training and self-development, andpushes participants to think for themselves, put ideas into
practice, and study further.

IMD seminar
participants:(Total to date)285

As the scale of our business has grown truly global, there isan increased need for all of our employees, not to mention
overseas nationals, to improve their cross-cultural communication skills. With this in mind, TDK has strengthened its
support for language learning, primarily through e-learning. TDK also conducts cross-cultural communication
training sessions at various regional locations ultimately toenhance our ability to function as a global business.

19

Overseas Trainee Program
participants:(Total to date)

As our global business is expected to expand further in the
future, the Overseas Trainee Program was established in2010. Aimed at younger employees, this program involves
year-long placements at overseas subsidiaries. Participants gain a better understanding of different cultures andhow to make use of this knowledge. They acquire the ability to engage in global business and establish a personal
international network. Besides sending trainees overseas
from Japan, TDK also sends people from other countries
to Japan.

TDK CSR REPORT 201522

2 Development of Human Resources

Global HR Department

Development of Human Resources

Making Maximum Use of
TDK’s Human Resources Assetas a Driving Force to Further
Promote Globalization

Overseas Trainee Program
TDK operates the Overseas Trainee Program with a view to the TDK Group’s global development in the future. The aims of the
program are to enable trainees to understand different cultures, acquire global business skills, and build personal networks.
TDK conducts the planned dispatch of trainees to sites around the world so that they can learn about the business culture of
their destination countries and explore the potential of TDK products.

Andreas Keller
General Manager, Global HR Department,
Human Resources Group,
TDK Corporation

Matthew Cotton

Chiaki Yoshikawa(Place of work before overseas appointment)
East Japan Home and Healthcare Department,
Japan Sales & Marketing Management Division,
Electronic Components Sales & Marketing Group,
TDK Corporation(Place of work for overseas appointment)
TDK UK Limited

Looking back on activities in fiscal 2014 and outlining his future ambitions, General Manager Andreas Keller of the Global HR Department
talks about the training and utilization of human resources in order topromote the TDK Group’s goal of true globalization.

(The Accepting Side)Managing Director,
TDK UK Limited

Polishing My Global Communication Skills

23

Optimizing HR Utilization throughout
the Group

Aiming to Become a Truly Excellent
Global Company— Summary of FY 2014

— Ambitions for FY 2015

Since the TDK Group launched the Global HR Department
in September 2013, the scope of our activities has expanded
to cover Japan, Europe, China, ASEAN countries, Korea, andthe U.S.
It has also been decided to integrate the European sales
activities of EPCOS into TDK in 14 European countries in order
to appear as a uniform TDK Group.
From the perspective of human resources development,
we made efforts to unify educational tools and programs infiscal year 2014. Many sites and subsidiaries in Europe, theU.S., and ASEAN countries have already introduced this infrastructure, and we are now studying its introduction in China
and Japan as well. The globalization of employee education
will allow us to maximize Group synergy and share best practices throughout the Group. In addition, the Overseas Trainee
Program, which is a scheme for personnel dispatched to andtraining at overseas sites, has been achieving results in accordance with the desired objectives as well.
Meanwhile, we have also been putting a lot of effort into
building a Group-wide Talent Management system, the ultimate goal of which is to increase transparency in the TDKGroup’s assignment of human resources and to make surethat the right people are placed in the right positions.
Furthermore, we are promoting various measures aimed
at optimizing the use of human resources throughout the TDKGroup, such as a sales incentive scheme designed to increase
further the engagement of employees and more important toalign selling efforts across various brands in the TDK Group.

Strengthening our recognition that human resources are the
TDK Group’s biggest asset, we will continue our efforts toutilize human resources with the aim of achieving sustainablegrowth in fiscal 2015. In order for TDK to continue creating
innovations, it is important to build an environment that draws
out the potential of every individual employee and unifies
employees with different cultures and diverse skills as “OneTDK.”
Human resources exchange through the Overseas Trainee
Program, job exchanges, and international training programs
will be extremely important for enhancing Group synergy andconsolidating and sharing the TDK spirit. By strengthening
Group-wide collaboration around the world, we can fully utilize
our human resources and turn them into a driving force for thepromotion of true globalization.

TDK CSR REPORT 2015

Looking for Creative Human Resources and Aiming to Grow Together

General Manager, Human Resources Group
GeneralManager, Global
HR Department

Planning officeJapan

Department Head, Department Head, Department Head,
Human Resources
Personnel Affairs
Education andDevelopment
Department
Training Center
Department

Europe

China

ASEAN

As the company accepting human resources, we have to constantly think of appropriate work assignments for individual
trainees. It is by immersing themselves in the business cultureof their destination countries and engaging in meaningful jobs
that trainees can gain valuable experience that will be usefulfor them in their subsequent careers. By actually working on
the front lines and taking part in communication with customers, they can substantially improve their language proficiency
as well.
The Overseas Trainee System is very meaningful for theaccepting side too, because it gives us an opportunity tounderstand the TDK Group’s wide scope of activities. Even
if they are initially a little perplexed by the arrival of a newmember from a different cultural region, our employees soon
develop a sense of togetherness with someone who belongs
to the same TDK Group and is working toward shared goals. I
believe that this system, which aims to train human resources
who can challenge the global market in the future, brings
enormous benefits to the TDK Group as a whole.

Efforts in Recruitment Activitiesn Organization of the Global HR Department

Department
Head, Labor
Administration
Department

I wanted to make use of the Overseas Trainee Program because I realized that the difficulty of engaging in complex
communication with people in other countries was an issue forme. At the moment, I am working in the sales and marketing
division of TDK UK Limited.
Every day, I visit customers together with the local staff
and engage in marketing activities. I try hard to gauge theinterests, questions, and concerns of customers from theirlanguage and expressions. But even if I can understand theconversation itself, I still sometimes cannot understand thenuances contained therein. So I have to make modest efforts
myself, like checking with my colleagues after the meeting.
It’s been a valuable experience for me to accept andrespect diversity and build relations from scratch with peopleof different backgrounds. After this assignment, I want to takeadvantage of what I have learned in my work and put it touse in realizing deeper communication with customers andcolleagues in other countries.

Training Human Resources to Challenge
the Global Market

Korea

Americas

As of April 1, 2015

The type of person that TDK is seeking to recruit
conforms with the four qualities cited in the new
TDK Value issued in 2015, which are “customer
focus,” “challenge,” “HR development,” and “diversity.”
At a time of volatile change in the businessenvironment, the human resources needed tosupport TDK in the future are people who have a“customer focus” enabling them to identify what
is really necessary, the courage to “challenge”
difficulties and never give up, and the desire to
thereby achieve “HR development” themselves.
Furthermore, at a time when our overseas operations account for more than 90% of both sales

and number of employees, “diversity” is essential
if TDK is to continue developing as a truly global
enterprise. We want to recruit talented people
regardless of things like gender, nationality, andreligion, and we want to turn those differences into
our strength.
Both new young employees and midcareer
recruits comment that if you speak out sincerely,
TDK is a company that lets you do the job you
want. That has been TDK’s DNA since its founding, and it is deeply rooted in our corporate
culture. We will continue our efforts to introduce
various schemes and reform training in order tosupport employees who embody creativity.

Takashi Otake

Department Head,
Human Resources Development
Department,
Human Resources GroupTDK CSR REPORT 201524

2 Development of Human Resources

Society and Environmental Considerationsin the Supply Chain
Respect for Diversity

3

Study Meeting HeldThinking about Diversity
as a Growth Strategy
As a global corporation of which about 90% of our employees
are non-Japanese nationals, the question of how to transformthe diversity of our human resources into a strength is anurgent issue for TDK. As the newly compiled TDK Value
places emphasis on diversity, TDK invited an expert andheld a study meeting in Japan in April 2015 aiming to deepen
understanding of the essence of diversity.
In the study meeting, after a talk by Ms. Joanna Sook
Ja Park, the representative of Appassionata, Inc., which
provides consulting support for the utilization of diverse human resources and other matters, a discussion took place

Date of implementation: April 17, 2015

with the six TDK participants. Various comments were madeduring the discussion, such as “TDK should clarify how it
defines diversity and where it will place emphasis” and“Through practice it is important to keep thinking and making
necessary revisions.” In particular, a lively discussion took
place on the issue of not simply gathering diverse humanresources together but clarifying scales of evaluation for theutilization of different opinions and values to achieve results.
Ms. Park also stressed the precondition that “organizations
place importance on respect for diversity precisely because
it improves their performance.”n Ms. Park’s Main Opinions and Proposals
Joanna Sook Ja Park
Representative, Appassionata, Inc.

Utilizing Differences to Strengthen Competitiveness in the Market
Generally speaking, when we talk about “diversity,” we tend to focus only on the utilizationof women and overseas human resources.
But actually no two people are exactly thesame. If you have two or more people, youhave diversity. So it is extremely important tounderstand the matter as something that concerns you yourself. TDK must not only build apersonnel system for the promotion of diversity
but also foster a corporate culture in which
all employees, under the leadership of seniorand mid-level management, think and act withrespect for diversity. In addition, it is essential
to have a perspective of “diversity and inclusion” enabling all diverse human resources toparticipate fairly in the organization’s activities
and fully display their abilities.
At present, against the background of
globalization and changes in the demography,

the types of people working in companies arediversifying, and customer needs are continuing to spread in many directions as well. That is
to say, the need for diversity is arising from both
employment and the market. In the workplace,
if diversity is being properly respected, theclash of different opinions will lead to innovation and creativity, which in turn will speed up
the company’s response to the ever-changing
business environment and lay the foundations
for enhancing market competitiveness. In theprocess of promoting diversity, various discord
and friction can be expected to arise. But evenwith that cost, the benefits that the company
gains from diversity are immeasurable. The
important thing is to move forward step by stepwith a medium- to long-term perspective.

TDK CSR REPORT 201572

As a buyer

13

No. of CSR audit requests received

CSR check sheets for suppliers(FY 2013–14
cumulative total)(No. of companies
given improvement
guidance)

auditscompanies

We see CSR audit requests as an opportunity to upgrade
our CSR activities. At the same time, amid moves tostrengthen CSR activities in the supply chain as a whole,
we are concerned that CSR audit redundancies among
the companies will lead to a confused response and fatigue. Therefore, we see the number of CSR audit requests
received as an important barometer. We will continue togauge the number of audit requests and search for effective methods of implementing CSR audits in the value
chain as a whole.

In order to realize CSR procurement that enhances corporate value for both ourselves and our suppliers, we believe
it is important for suppliers themselves to notice thingsand make their own improvements. That is why we see thenumber of companies given improvement guidance as aresult of CSR check sheets for suppliers as an importantbarometer.

No. of employees receiving CSRinternal auditor training

Response to conflict minerals(FY 2014
cumulative total)

121

employees

We believe that giving employees a systemic understanding of requirements in CSR audits and having them masterthe basic skills for evaluating TDK’s CSR activities will be
important in upgrading our CSR activities in the future.
That is why we see the number of employees receiving
CSR internal auditor training as an important barometer.

(Questionnaire retrieval rate)

99%

The distribution and retrieval of conflict mineral questionnaires for suppliers is an essential activity in response tothis serious social issue. We see the questionnaire retrieval
rate as an important barometer for gauging awarenessamong suppliers of the problem of conflict minerals.

2,489(No. of responses)

Aiming to Transform the Diversity of Human Resources into
Strength to Enhance Corporate Value25

As a supplier

Response to conflict minerals

n Reflecting on the Study Meeting

Respect for the diversity of its human resources is essential for TDK to realize its corporate
principles and vision, in other words, its DNA.
I realized once again that two elements arenecessary: the building of a corporate culture in which the diversity of the more than80,000 TDK Group employees around theworld is respected and mutually recognized
and strong management that points all of

As a midstream company at a time when CSR is demanded throughout the entire supply chain,
the TDK Group is surrounded by a business environment that is heavily influenced by legislative
systems, international industrial standards, and other factors in the supply chain. That is why wesee society and environmental considerations in the supply chain as an important aspect of ouractivities.

these employees in the same direction. Thiscannot be achieved overnight, but in order to
respond to the continually diversifying needsof the market, we need to make steady efforts to build an organization that continues
to generate innovative creativity by displaying
the abilities of its diverse human resources tothe fullest.

Noboru Saito
Senior Vice President and General Manager,
Corporate Strategy, TDK Corporation

responses

We are aware that TDK’s response to conflict mineralsurveys from customers reflects our sincerity in tackling
this serious social issue. At the same time, we believe thatgauging the number of responses to surveys is an important barometer for determining our response burden.

TDK CSR REPORT 201526

3 Society and Environmental Considerations in the Supply Chain

Upstream company
Supplier

Midstream company
TDK

Supplier

Buyer

Procurement

Supplier

Downstream company
Customer

Procurement

Upstream company
Supplier

Midstream company
TDK

Supplier

Buyer

Procurement

Buyer

Supplier

Downstream company
Customer

Procurement

Buyer

Efforts as a Supplier

Efforts as a Buyer

TDK, which is a supplier of products to customers, endeavors to incorporate society and environmental considerations at all of its
sites. Through self-checks, audits, and other measures, we promote CSR which leads to enhanced corporate value.

As a buyer procuring materials, TDK engages in CSR procurement emphasizing communication and builds solid relationshipsof trust. We believe that these efforts enhance the corporate value of both suppliers and TDK.

Efforts at TDK’s Production Sites

Promotion of CSR Procurement

TDK has compiled the TDK CSR Self-Check Sheet, based on theElectronic Industry Citizenship Coalition’s Code of Conduct, with theaims of understanding issues in CSR activities and replying speedily
to customers. This self-diagnosis is implemented at main production sites every year. Furthermore, TDK responds to requests from
customers for CSR audits, which have been increasing in recent
years, seeing them as a good opportunity to further raise the levelof CSR activities. Regarding high-risk regions and production sites,
as well as customer CSR audits, we conduct internal audits by thirdparty organizations once every two years. Since 2013, TDK has also
implemented CSR internal auditor training every year with the aimsof conveying a systemic understanding of the requirements of these
CSR audits and upgrading CSR activities at production sites.

Response to CSR Audits
In fiscal 2013-14, TDK implemented CSR internal audits at five sites.
Including responses to customer audit requests, we undertook CSR
audits at an aggregate total of 72 sites. Audits were conducted at allsites in China, where there is a high risk of labor issues. Each sitemade improvements regarding highlighted matters, and the CSRGroup shared information with related head office functions, called
for attention to be paid to these problems, and reflected them in countermeasures.
Furthermore, continuing from fiscal 2013, CSR internal auditor
training was implemented in fiscal 2014 in Japan and China. In particular, in China, where many audits are carried out, the emphasis wasplaced on case studies, and quality training was provided at an evenhigher level than the previous year.

Responding to Customer
Voice Expectations with a HighLevel of CSR
I am currently assigned to CSR promotion at
TDK Xiamen Co., Ltd. In order to promote CSR
throughout the entire supply chain, I believe that
it is our responsibility as a supplier to respondto the CSR standards required by customers. At
TDK Xiamen, we have received CSR audits onfive occasions since our CSR Promotion Office
was launched in 2013. The standards requiredby customers get higher each time, and theaudits have become increasingly rigorous. So
each audit poses a challenge for us, but wehave been able to pass all of these audits dueto thorough preparations, which include people
in charge sharing audit aims, communicatingclosely with one another, and getting an understanding of the situation.
As a trend in CSR auditing recently, thematurity of our CSR management system has
increasingly come into question, including
topics such as the tasks of people in charge,
assessment methods, and the sharing of audit
results, so we must respond appropriately,
including in the revision of our conduct guidelines. We will continue to make relentless efforts
toward improvement and build a more systemicand effective mechanism.

CSR procurement, which is included in TDK’s purchasing policy, isan important issue for our company. Because we are a components
manufacturer, we promote CSR from our position as a supplier. But it
is also necessary for us to demand CSR among our own suppliers.
Therefore, we require our suppliers to reply to a CSR check sheet
every year, and if there are any issues with their answers, we request
them to make improvements individually.
In addition, we have been implementing CSR audits with the aimof acquiring an objective understanding of the situation since fiscal
2012. We select suppliers for these audits in consideration of suchfactors as degree of importance and level of dependence in relation
to products delivered to customers.

Summary of CSR Audit Results (TDK Xiamen)
TDK Xiamen implemented CSR audits at 9 companies in 2014 andmade a total of 118 findings. Of them, findings relating to healthand safety accounted for 49% of the total. These included multiple
instances of inadequate protection for workers engaged in jobs handling hazardous substances (specific medical examinations, protective gear, etc.), failure to secure evacuation routes, and inappropriate
storage management of dangerous chemicals.

Breakdown of CSR Audit Findings

Addressing Management

Voice Issues together with
Suppliers

I am currently assigned to CSR audits of suppliers. The content of CSR audits covers a wide
range of fields, and legal and professional
knowledge is required. In actual audits, it canoften be difficult to spot risks and determine
problems, so it is necessary for auditors like
us to make efforts to upgrade our own skills by
regularly participating in training, taking legal
courses, and receiving guidance from experts.
Furthermore, when we conduct audits, I
think it is important for us, in consideration of
the scale of the risk detected in the audit andthe management conditions of the supplier, topoint out problems and measures for improvement. By doing so, we can answer questions
from suppliers accurately and with sincerity,
which leads to suppliers understanding the importance of CSR and builds relationships oftrust which ultimately enhances the corporate
value of both parties.
I intend to continue making efforts to promote CSR by steadily mastering CSR knowledge and accumulating experience.

CSR in general

5%

Ethics3％

Management
systems

14%

Labor

17%

Environment

12%

Yafei Yan
Shelly ChenCSR Promotion Office,
TDK Xiamen Co., Ltd.

27

TDK CSR REPORT 2015

Health and safety49%

Procurement Division,
Management Planning HQ,
TDK Xiamen Co., Ltd.

TDK CSR REPORT 201528

3 Society and Environmental Considerations in the Supply Chain

Symbiosis with the Global Environment
CSR Promotion in the Supply Chain

4

What are the expectations of TDK and on what
points can TDK be praised in terms of promoting CSR in the supply chain as a whole? We
invited Mr. Masaki Wada of Energetic Green foran exchange of opinions.

TDK has formulated the TDK Environmental Charter as the environmental policy of the TDKGroup as a whole. TDK recognizes that symbiosis with the global environment is an importantmanagement issue and aims to contribute to sustainable development. To realize this goal,
TDK has formulated an environmental vision called TDK Environmental Action 2020 and is conducting activities with the target of becoming the first company in the electronic components
industry to achieve carbon neutrality.

TDK’s Aim of Achieving Carbon Neutrality

Masaki Wada
CEO, Energetic Green

CO2 emissions from production activities (environmental load) – Reduction of CO 2 emissions through products(environmental contribution) ≤ Zero

From 2001, Mr. Wada worked for companies related to sporting goods and apparel, and was active
mainly in relation to the problem of human rights
in the supply chain. From June 2013, he became
involved in a foreign national training program ata public-interest foundation, and in August 2014,
was appointed as co-representative of Energetic
Green, where he conducts CSR-related researchand consulting.

CO2 emissions fromproduction activities(environmental load)

reduction
efforts

Reduction of CO2 emissions
through products (environmental contribution)

Date of implementation: May 11, 2015

n Mr. Wada’s Main Opinions and Proposals

Efforts of TDK as a Supplier
As audit requests from customers continue to increase, theburden on TDK sites of responding to those requests can be expected to increase in the future, too. Regarding human rights andlabor in the workplace, regardless of industry it is certain specificissues that are likely to be questioned, such as forced labor, childlabor, and long working hours. Therefore, it is important to gather
your own survey results prior to requests and be ready at all times
to submit material if an inquiry is received.
At present, I hear that TDK is making attempts to standardize
records at its sites, such as the contents and results of external
and internal audits conducted so far and countermeasures, andplans to disclose this information. That is a wonderful effort. It isan effective means of avoiding future risks and also has muchsignificance in terms of continuing to respond to customer requests. I definitely hope that you will actively promote this measure.
Furthermore, when preparing to establish an overseas
site, TDK makes a checklist of items that should definitely be
implemented and conducts a feasibility study including not only
quality, equipment, cost, and so on but also the CSR perspective. This is an excellent approach as well. I hope that TDK wellunderstands the importance of conducting operations on thebasis of the 4Gs and acts accordingly. (Known as the “four gen
principles” in Japanese, the 4Gs are go to the source, go down to
the factory floor, grasp the actual situation, and get together withlocal employees.)

Efforts of TDK as a Buyer
When you have so many suppliers, it is difficult to conduct selfassessment questionnaires, audits, and improvement guidance
in a uniform manner. So priority is important. It is essential for
TDK to clarify its guidelines taking into account such factors as
dependence on suppliers.
TDK currently conducts CSR audits on suppliers and is putting a lot of effort into audit training, so now you have reached
the stage where you must ask yourselves what should be the aim

beyond that. The concept of capacity building is going to become increasingly important. This means including the perspective of growing together in improvement guidance for suppliers
and supporting the strengthening of the supplier’s organization
through guidance. As one aspect of information disclosure, it
might be a good idea to include the guidance provided on eachmatter in future reports.

CO2 emissions fromproduction activities

Reduction of CO2 emissions
through products(environmental load)(environmental contribution)

1,068

thousand t-CO2

Environmental load involves many factors, such as resource and water use, but we realize that the biggest factor
at TDK is CO2 emissions from production activities. That is
why we are making efforts to reduce these emissions.

1,251

thousand t-CO2

Environmental contribution involves many factors, suchas the use of renewable energy, but we realize that thebiggest factor at TDK is the reduction of CO2 emissions
through products. That is why we are making efforts to
expand the scope of emission-cutting products.

Required Role in the Industry as a Midstream Company
Since TDK is a midstream company, you are able to view the supply chain from the perspectives of both supplier and buyer. It isessential at all times to have an understanding of what is trending
in the supply chain. It might also be a good idea to team up withNPOs and NGOs and seek their guidance on the latest humanrights issues and CSR audits.

29

TDK CSR REPORT 2015

It is unfortunate that so far midstream companies have notshown a strong presence in compiling self-assessment questionnaires and so on. As globalization proceeds, it will be unavoidable for midstream companies to firmly express their thoughts. I
hope that TDK will strengthen collaboration in the industry andacross other industries and formulate standards so that you cantake the initiative in international society.

TDK CSR REPORT 201530

4 Symbiosis with the Global Environment

Reduction of CO2 Emissions from Production Activities(Environmental Load)

Increasing the Reduction of CO2 Emissions
through Products (Environmental Contribution)

The TDK Group engages in capital investment and energy-saving activities at each site in order to reduce CO2 emissions fromproduction activities.

In order to increase its environmental contribution, the TDK Group is promoting visualization as a contribution of its technologicalachievements in product development and manufacturing.

Achievements in FY 2014

Achievements in FY 2014

TDK Environmental Action 2020 sets the target of reducing the TDKGroup’s global CO2 emissions to less than one million tons by March
2021.* As a result of the continued promotion of energy-saving activities
at production sites around the world, CO2 emissions amounted to 1.068
million tons in fiscal 2014, which was under the fiscal year target of 1.07
million tons.

Voice

Promoting Energy Saving
through Cross-Sectional
Communication

TDK Environmental Action 2020 sets the target of increasing the reduction of CO2 emissions through products to more than 1.0 million tons byfiscal 2020. In fiscal 2014, this environmental contribution amounted to1.251 million tons through the expansion of applicable power supply
products and efforts to establish calculation criteria for flash memories,
aluminum electrolytic capacitors, and lithium ion polymer batteries.

*Applicable to sites at the time of compilation of TDK Environmental Action 2020 that commenced
activities in fiscal 2011.

Trends in the Reduction of CO2 Emissions through ProductsTrends in CO2 Emissions from Production Activities (Global)
72
kt-CO2 1,095

1,110

1,103

1,190
127

1,251

1,269

(kt-CO2)

201

236

1,000

886

1,000

1,031

1,063

1,068

0

2011

2012

2013

2014

(FY)

Note: The light green parts of the graph indicate emissions at plants that were newly added after
compilation of TDK Environmental Action 2020.

Example from the Kofu Plant in JapanAs a replacement for outdated turbo refrigerating machines which
produce chilled water for use in production and clean room air conditioning, TDK’s Kofu Plant introduced highly efficient machines andalso reviewed the system for transporting chilled water, boosting heat
quantity visualization, increasing the variability of chilled water flow, andintroducing free cooling* in the winter. The resulting reduction of CO2
emissions amounted to 999 tons per year.
*Free cooling is a system for producing chilled water for air conditioning and production equipmentthat uses a chilling tower to make use of the low external air temperature in the winter.

More than 30 years have passed since theKofu Plant was built, and on the occasion of
the replacement of outdated equipment, it
was decided to promote energy-saving activities. In the promotion of these activities,emphasis was placed on communication.
The Kofu Plant consists of many divisions, socross-sectional communication among themwas essential. When repairing buildings andproduction equipment, repeated discussions
were held with the users, who asked whether
the energy saving would have any adverse
impact on manufacturing conditions and also
voiced their requests and opinions, such as“Wouldn’t it be better like this?” and “Costs
would be lowered even more if we did it likethis.” These discussions clarified the merits
for both sides and improved the process.
Through these activities, the participants became aware once again of the importance of
creating an atmosphere in which related parties can communicate and air their opinionsfrom their respective standpoints. In termsof contributing to the environment as well,the Kofu Plant intends to continue its role asa company that “contributes to culture andindustry through creativity.”

1,015

321

The energy-saving subcommittee at TDK’s Kofu Plant

2010

498

500

500

0

2011

2012

2013

2014

(FY)

*The light green parts of the graph indicate new efforts made possible by the completion of criteria for
calculating environmental contributions.

Example from TDK-Lambda UK Ltd.
TDK-Lambda UK Ltd. calculated the environmental contribution of its
products on the basis of the method for calculating the environmental
contribution of power supply products implemented at TDK-Lambda
Corporation. The company’s power supply products are used in not
only industrial equipment but also medical devices, such as CT scanners. The resulting reduction of CO2 emissions amounted to 83,000
tons per year.

Voice

Visualization ofEnvironmental Contribution
Leads to Further Design
Innovation

A major feature of the power supply products of
TDK Lambda UK Ltd., which are used in medical applications and measurement equipment,is that the settings and composition can beeasily changed to match the varied input-output
conditions of the application. Selecting the best
power supply product for the application has
an impact on energy efficiency throughout theentire lifespan of the product, 10–15 years, andleads to improvements in the final product’senergy consumption.
What I noticed in our efforts to calculate
the environmental contribution is that even areally small improvement in product design canhave a colossal impact on the environmental
contribution of the final product. Our company
receives much praise from customers for supplying the most appropriate power supply
products, and from now on, we will also search
for ways to further improve energy efficiency inproduct design, manufacturing, and operation.
We want to continue taking on challenges sothat we can always surpass the expectations of
our customers.

Tim Puttick
Production Manager,
TDK-Lambda UK Ltd.

Products of TDK-Lambda UK Ltd.

For medical
purposes

Industrial
equipment

Data centers

31

TDK CSR REPORT 2015

TDK CSR REPORT 201532

4 Symbiosis with the Global Environment

Dialogue with an Expert

Third-Party Opinion

Toward Compilation of the
Next Environmental Vision
TDK Environmental Action 2020 set fiscal 2020 as the target year
for achieving carbon neutrality, but the goal was reached aheadof schedule in fiscal 2014. So we have reached the stage where
we should stipulate the next target of our activities. TDK invited
Mr. Keisuke Takegahara, director of the Environmental Initiative& Corporate Social Responsibility Support Department at theDevelopment Bank of Japan, Inc. and a leading figure in the fieldof environmental finance in Japan, for a talk with Mr. Tetsuya Kuwashima and Mr. Ryo Yokoyama of the Safety and Environment
Group of Manufacturing HQ.

Date of implementation: May 8, 2015

Industry-Wide Efforts to Establish International Standards
The first point to be confirmed in the discussion was that in-house
understanding and cooperation are essential to promote the two
objectives of reducing CO 2 emissions and increasing TDK’s environmental contribution. Mr. Kuwashima explained confidently that“our activities are steadily spreading, and we are shifting fromthe stage of calculating reductions and contributions in eachbusiness division to positively calling on sites to put them into
practice.” In order to make employees understand the value ofthese environmental contributions and to feel the significance of
their own efforts, he said, it is important to have an external assessment of TDK’s contributions and to feed that back to sites.
In addition, the participants agreed that in order for TDK toreceive an appropriate assessment, it is essential for the industry to have rational standards that can serve as a foundation.

Mr. Yokoyama resolutely remarked, “If companies in the industry
all have their own standards, even if we shout about consideration
for the environment, there will just be confusion. Standardization
is essential. International standards formulated under the leadership of the Japanese electric and electronic industries have been
issued, and guidance for electronic component manufacturers
compiled on the basis of these standards in collaboration withJEITA [Japan Electronics and Information Technology Industries
Association] has taken shape at last. Now we must publicize thisguidance globally.” Mr. Takegahara highly praised the fact that
TDK is calculating and disclosing its environmental load andenvironmental contribution according to globally acceptable
criteria.

Going beyond Carbon Neutrality to Create Even Higher Value
Mr. Takegahara commented, “TDK’s environmental activities are
extremely advanced and unparalleled by other companies. Now
that you have realized carbon neutrality, the next point is how tocreate value not only environmentally but socially as well.” Citing
the example of wearable devices, Mr. Kuwashima spoke of thepotential, saying, “Electronic components account for most of thetotal weight, so if they can be made lighter and smaller, that partcan be allotted to other useful functions, which will increase the

Keisuke Takegahara
General Manager,
Environmental Initiative &Corporate Social Responsibility Support Department,
Development Bank of Japan,
Inc.

Mr. Takegahara joined the Japan Development Bank (now the Development Bank ofJapan, Inc.) in 1989. He was stationed for a
total of six years in Frankfurt, Germany anddeveloped the DBJ’s environmental rating
loan scheme and is a leading figure in thefield of environmental finance in Japan.

33

TDK CSR REPORT 2015

convenience of the final product. In that sense, I think there isroom for quantification of our social contribution.”
As for the future, Mr. Kuwashima said enthusiastically, “Thetarget set in TDK Environmental Action 2020 was so ambitiousthat people in the company asked whether it could really beachieved at first. The next environmental vision must set targets
with the same impact, and we must display the hallmark of TDK
in executing it.”n Mr. Takegahara’s Main Opinions and Proposals
Carbon neutrality is generally discussed
in terms of individual products and individual efforts, but TDK has achieved realcarbon neutrality after building an internationally acceptable framework. This istruly outstanding. To put it another way,
TDK’s positive impact on society in environmental terms grows in proportion to
the spread of its products in society andthe increase in its sales. This is a powerful

message to both investors and society.
In addition, TDK is conducting
M&As. If a company comes under the
TDK Group umbrella, that company also
adopts TDK’s standard environmental
countermeasures, which in turn leads toa curbing of the environmental load in theworld. I think TDK should be more awareof this form of contribution and broadcast
it to society.

This year’s TDK CSR Report clearly reflects the efforts by
TDK to evolve its CSR initiatives from a medium- to longterm perspective to the next stage in the process.
As a case in point, take diversity. It can naturally besaid that TDK has stressed the importance of diversity
over the years. With the fact that further clarification ofthis stance is underscored in the company’s newly formulated TDK Value. Also contributing on that front, thisyear’s report is truly outstanding in content. I particularly
encourage readers to closely examine the section entitled“Thinking about Diversity as a Growth Strategy.” It is pointed out that simply bringing together people of all different
genders, nationalities, and other external traits does notamount to real diversity. Since people are all unique, “Ifyou have two or more people, you have diversity.”
An absolute precedent for diversity to contribute to
growth is said to be “a corporate culture in which all employees think and act with a respect for diversity.” Global
HR Department General Manager Andreas Keller correctly states “consolidating and sharing the ‘One TDK’ spirit.”
Proceeding in that context, I also encourage reading of
the “TDK Progress on the Threshold of Its 80th Anniversary” and the statement of the company’s vision in Vision
2035. That information definitely provides a more accurate grasp of the significance in this vein. The effective
sharing of vision is the underlying premise for diversity tofunction correctly. It is likewise imperative that such vision
be coordinated to stay in close step with the changes of
the company. Such initiatives are precisely what TDK has
implemented this year.
Yet another commendable point of this year’s report
are the efforts to incorporate outside opinions from a wide
range of perspectives, effectively addressing diversity,
nonfinancial information disclosure, the supply chain, andother important topics. With regard to the supply chain,progress can be seen in the issuance of improvement
guidance to 13 suppliers and in other forms. With oneof the next steps in the process consisting of capacity

building, as Mr. Masaki Wada points out, I look forward to
the inclusion of such efforts in upcoming reports.
For the environment, I first want to give high marks tothe achievement of carbon neutrality. The report touches
upon the endeavors undertaken at the Kofu Plant (whichhave proven to be extremely important in supporting
the push to arrive at such neutrality) in its introductionof that unit’s activities: “The Kofu Plant consists of many
divisions, so cross-sectional communication among themwas essential.” The essence of this suggestion is not
limited to the environment, but can definitely be applied
to the full scope of CSR. Such cross-sectional dialogue,
which by its very nature expands beyond divisional lines,
is certainly one of the most vital keys in carrying CSR at
TDK to the next stage in its development.
Next, regarding contributions to the world by technology, it was with great interest that I read the article“TDK’s Vision for Future Society”—and especially thecommentary on technology being applied in the medical and healthcare fields. It is described how sensing
technology can support the mobility of people with disabilities, thereby helping to ease the weight of burdens
involved in nursing care. I was pleasantly surprised by thegreat potential impact of such technology on society. In
that regard, it is obvious that demands will continue to beleveled for unrelenting technical development. Looking
ahead, in the event of the need for institutional improvements when such technology is actually deployed in ourdaily lives, I certainly hope that TDK will play an active rolein the ensuing rule-making process. I say that because
the creation of rules are necessary for linking social technical innovation to the social demands for such advances.
To TDK, I look forward to clear recognition of where
the inadequacies in the company’s in-house CSR initiatives lie. That awareness should then be strategicallychanneled into the mission of fulfilling the social responsibilities consigned to TDK on the road to making Vision2035 a working reality.

Toshihiko Fujii
Consulting Fellow,
Research Institute of Economy, Trade and Industry

TDK CSR REPORT 201534

TDK CSR REPORT 2015
English version

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