CSR Procurement Initiative

TAIYO YUDEN Group conducts "Global Procurement" and "Fair Trade" in accordance with TAIYO YUDEN Group Basic Procurement Policy.
Local-content Ratio of each subsidiary in FY2023 is as follows.

TAIYO YUDEN Group shares "TAIYO YUDEN Group CSR Procurement Guidelines" specifying matters to be observed such as human rights, labor, environment, health and safety, fair trade, ethics, management systems, etc. when starting a transaction with new suppliers in order to have new suppliers understand the Group's CSR policies including environmental problems, and TAIYO YUDEN Group starts to deal with suppliers that submit agreement regarding matters to be observed.

TAIYO YUDEN Group does business with approximately 2,600 suppliers.
In order to identify high risk suppliers, TAIYO YUDEN Group defines significant suppliers as suppliers with large purchasing amount focusing on suppliers that supply materials and parts which are significant to our business, and conducts CSR assessment.
Significant suppliers are reviewed on an annual basis and approximately 500 suppliers have been identified as significant suppliers in 2023.

TAIYO YUDEN Group assesses human rights, labor, environment, health and safety, fair trade, ethics, management systems, etc. of new significant suppliers when TAIYO YUDEN Group starts transactions and deals with suppliers that meet the Group's criteria. In FY2023 also, TAIYO YUDEN Group has assessed CSR risks of all targeted new suppliers (8 out of 8 suppliers) by "CSR Self Check Sheet.^*"
TAIYO YUDEN Group regularly conducts assessments for existing significant suppliers by using CSR Self Check Sheet. TAIYO YUDEN Group requests corrective actions and supports improvement of suppliers failing to meet the Group's criteria of achievement level of 80% and identified as high risk as a result of assessment.
Also, as RBA Code of Conduct was revised in 2021, TAIYO YUDEN Group has revised "CSR Procurement Guidelines". TAIYO YUDEN Group has conducted self-assessments of 535 existing suppliers until FY2023 by "CSR Self Check Sheet" which incorporates the revised contents. According to the result of self-assessment, the score of management systems tends to be lower compared to the overall score, and there are especial problems on questions regarding Worker Feedback, Participation and Grievance and Supplier Responsibility. Based on the assessment results, no high risks including serious violations of employee's right etc. have been identified from any of TAIYO YUDEN Group's suppliers.

TAIYO YUDEN Group regularly conducts CSR audits that review human rights, labor, environment, health and safety, fair trade, ethics, management systems, etc. for suppliers whose assessment results of CSR Self Check Sheet are low and identified as high risk. If major non-conformances are found as a result of the audit, TAIYO YUDEN Group requests submission of corrective action plans and improvements completion reports. Based on the results of the audits conducted in FY2023, there were no major non-conformances, including serious violations of employee's rights. If there are no major non-conformances but there is room for improvement, TAIYO YUDEN Group requests improvement and provides support. TAIYO YUDEN Group found that suppliers have room for improvement mainly on health and safety and management systems. Specifically, TAIYO YUDEN Group requested suppliers to carry out evacuation drills, put first aid kits at resting rooms, and put SDS at the place of manufacturing processes.

TAIYO YUDEN Group regards suppliers as important partners in the business and holds "Suppliers Seminars" every year. At these "Suppliers Seminars", TAIYO YUDEN Group has suppliers understand an overview of the Group's business operations, communicates important policies in the business activities (quality policy, sustainability policy, procurement policy, etc.) and the Group's ESG initiatives, and shares the Group's requests to suppliers. TAIYO YUDEN Group also takes advantage of these opportunities to share best practices about social issues and environmental issues, the current situation and trends related to ESG and CSR with suppliers as part of supplier training. By doing so, TAIYO YUDEN Group supports suppliers to build capacity and respond to the changes. TAIYO YUDEN Group recognizes suppliers that have given us great assistance in our procurement activities from the perspective of procurement cooperation, quality management, response of CSR risks, green procurement, etc. In FY2023, 97 suppliers joined the seminars.

TAIYO YUDEN Group conducts buyer training in order to fulfill "Article 7 of TAIYO YUDEN Group CSR Code of Conduct: Responsible Procurement".
This buyer training includes not only legal compliance, but also education on fair trade, human rights and labor, business entertainment, gift, insider trading, information management, and other CSR-related issues.

To realize the overriding goal of TAIYO YUDEN Group's environmental preservation activities—supplying products with less environmental impact—TAIYO YUDEN Group has established "Green Purchase Standard" seeking customer understanding and, at the same time, giving priority to procuring materials and parts with lower environmental impacts.
TAIYO YUDEN Group assesses suppliers' "Green Procurement Activities" annually, promoting study of alternatives for suppliers that are high risk.

TAIYO YUDEN Group set a target to reduce GHG emission by 42% compared to 2020 by 2030. To reduce the absolute value of GHG emissions, TAIYO YUDEN Group sets target values in accordance with the SBTs (Science-Based Targets).
As a part of impact reduction for environment, TAIYO YUDEN Group conducts a survey to significant suppliers to ascertain the status of GHG emissions and the setting of reduction targets. In FY2023, TAIYO YUDEN Group provided explanatory material of the way to calculate Scope1 and Scope2, and calculation tool to suppliers who had not yet calculated their GHG emissions, and supported them to calculate GHG emissions. As a result, TAIYO YUDEN Group was able to have more suppliers calculate their GHG emissions than the previous year. TAIYO YUDEN Group will continue our efforts to reduce GHG emissions throughout the supply chain.

In order to reduce the risks regarding human rights and labor, TAIYO YUDEN Group shares "CSR Procurement Guidelines" and starts to deal with suppliers submit agreement regarding matters to be observed such as "maximum working hours", "legal minimum wage", "avoidance of child labor and forced labor", etc. Also, TAIYO YUDEN Group assesses suppliers by "CSR Self Check Sheet" and conduct CSR audits for critical suppliers and requests corrective actions from suppliers failing to meet the Group's criteria as a result of assessment.

TAIYO YUDEN endorses and participates in following organizations as a member in order to address environmental and social issues and legal compliance in collaboration with the industry.