GreenBiz Forum 2015 Workshop Slides: "Conflict Minerals: Creating Industry-wide Solutions"
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San Diego, CA Conflict Minerals Creating Industry Solutions to a Company Problem GreenBiz Forum - February 18, 2015
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Transcript of GreenBiz Forum 2015 Workshop Slides: "Conflict Minerals: Creating Industry-wide Solutions"
San Diego, CA
Conflict MineralsCreating Industry Solutions to a Company Problem
GreenBiz Forum - February 18, 2015
About UsAmon Rappaport, VP Brand Purpose, i.d.e.a.
Tanya Bolden, Corporate Responsibility Program Development Manager, AIAG
Michael Oleksa, Senior Director of Regulatory Affairs and Quality Compliance, STERIS
Jared Connors, Technical Sales Manager, iPoint
We move people, products and culture.
PERSPECTIVEIndividual, Organizational, Industry
Globally recognized trade association founded in 1982 § Unique open/neutral forum to collaborate on industry issues
§ OEM’s, Suppliers of all sizes, Service Providers, Government & Academia
§ 1,000+ Member companies & growing
§ 35+ full-time staff
§ Sr. Purchasing Executives ‘on loan’ from Chrysler, Ford and GM § Over 900 Industry ‘volunteers’ providing subject matter expertise at
any point in time
§ Over 60 active projects and committees
AIAG: at-a-glance
3
Aluminum -‐ Primary
Simulator exposure -‐approx 204M pounds-‐ wheels , cooling modules
Forecast $ 1.10
Brake pads Tin addi'ves
Electronics Solders Fuses Contacts
Glass Conduc've 'n coa'ngs
Radiator Brass alloys Solders
Wiring Tinned copper
Seat cushions Tin catalyst
BaHery Tin alloy addi'on
Fuel tank Tin-‐zinc coa'ng
Sealants Tin catalyst
Bearings Tin alloy addi'on Coa'ngs
PlasIcs PVC stabilisers
Examples of Tin Applications
Automotive Industry
“It is our intention to do what we can to ensure that the parts and assemblies in our vehicles and products, regardless of where they are
assembled or sold, do not contain Conflict Minerals which have contributed to the armed conflict in the DRC.”
These companies are leading change throughout the supply chain.
Healthcare 73%
Life Sciences
15%
Isomedix 12%
STERIS Corporation Overview
• $1.9 billion in revenue • 8,000 employees worldwide
– Direct sales and service force of over 2,500
• A Global Leader in infection prevention, decontamination, gastrointestinal and surgical products and services
• 77% of revenue in United States
• 9 acquisitions in the last 3 years
• Infection Prevention
• Surgical Solutions • GI/Endoscopy • Services
• Pharmaceutical Manufacturing
• Research Labs
• Contract Sterilization
2
Infection Prevention (45% of revenue)
Surgical Solutions (20% of revenue)
Service (35% of revenue)
Healthcare Segment Overview
Washers Steam and
Gas Sterilizers Cleaning
Chemistries
Service
Skin Care
GI/Endoscopy Solutions
Specialty Services/Instrument Repair
Surgical Tables Integrated Operating Rooms
EBIT
60%
Revenue
73%
Lights
3
Risk of not being Socially Responsible ?
4
Stock Price: Risk: STERIS inventor base is largely institutional. Divestment of shares for nonfinancial reasons would increase stock volatility. Constraints: • Depth of supply chain • Multiple ERP systems • Little influence with suppliers • Regulated devices, changing suppliers has regulatory implications.
Depth of Supply Chain Example
STERIS
Supplier Supplier
Supplier
Supplier Supplier
Supplier Supplier Supplier
Supplier Supplier
Supplier Supplier Supplier Supplier Supplier
Trader Trader Trader
Supplier Supplier
Supplier Supplier Supplier
Smelters
Information Needed
STERIS level of direct influence
STERIS has no visibility
Level of the supply chain providing smelter names
Level of the supply chain providing RCOI information
© iPoint-systems gmbh
© iPoint-systems gmbh
Who is iPoint?
2/12/15 1
So#ware and services company focused on environmental compliance and sustainability
Est. 2001 with 100 employees worldwide.
Privately held, averaging 20% annual growth
Headquarters in Germany with offices in: • U.S. – iPoint US Subsidiary and Support Center • China • Japan • U.K. • France
Key ApplicaNons: • Conflict Minerals (iPCMP) • Material Compliance (iPCA) • Recyclability (RRR) • LCA • Value Chain Agent
© iPoint-systems gmbh
© iPoint-systems gmbh
Impact
2
• Requirements – Repor&ng Period is the calendar year Jan.1 – Dec. 31 – Report to SEC due on May 31st (June 1st) – Customer expecta&ons…
• Identification of Sources – “Covered Countries” [DRC, Angola, Burundi, C.A.R., Congo Republic, Rwanda, South Sudan, Tanzania, Uganda and Zambia]
– Valida&on of all sources…
We move people, products and culture.
INFORMATIONWhat to Gather, and How to Identify Sourcing
Due Diligence Framework Prescribes Role of Filing Companies
Organization for Economic Cooperation and Development (OECD) Due Diligence Guidance for Responsible Supply Chains of Minerals
From Conflict-Affected High-Risk Areas
Establish
Strong Company
Management Systems
Identify And
Assess Risk In The Supply
Chain
Design And Implement A Strategy To Respond To
Identified Risks
Carry Out
Independent Third-party
Audit Of Smelter or
Refiner Due Diligence
Report Out On Supply Chain Due Diligence
1 2 3 4 5
SEC Final Rule for Conflict Minerals 3TG (Tin, Tungsten, Tantalum, Gold)
© iPoint-systems gmbh
© iPoint-systems gmbh
Detailed Request Management Data Organiza&on & Storage
Due Diligence Repor&ng, KPIs
Data Exchange Process
3
My company
Supplier Supplier
Supplier Supplier
Customer
SEC
Roll-‐Up
Report
Sub-‐Supplier Smelter Identity
Roll-‐Up
Smelter Lib cer&fied
Smelter consolidatio
n
Consistency check Report
validation
© iPoint-systems gmbh
© iPoint-systems gmbh
4
Smelters Are Key
US Filers Suppliers Traders
Mines
Smelters
Survey process RCOI data provided by the smelters
Recycled Materials
Names the smelters
We move people, products and culture.
COLLABORATION Value and Practice
Actions and Multi Stakeholder Involvement
• AcIvely generaIng resources to communicate industry perspecIves iniIaIve(s)
• ex. FAQs, Case Studies, PresentaIons, Events and Documents Awareness and EducaIon
• Commentary and collaboraIon regarding global guidelines. OECD
• Distributed VP leHers to AutomoIve Supply Chain AutomoIve LeHer
• CollaboraIon with EICC/GeSI and the Conflict Free Sourcing IniIaIve (CFSI) EICC/GeSI and CFSI
• Alignment with commiHee for standards progress IPC 1755
• Supplier level data collecIon • Trainings, Regional MeeIngs iPoint
• CoordinaIon across industries and supply chains for common best pracIces Next Steps
© iPoint-systems gmbh
© iPoint-systems gmbh
iPCMP
Smelter Valida&on
iPCMP Global Smelter Library
5
Smelter Library
List of 180 smelters (does not represent the CFS list or all smelter worldwide)
Conflict-Free Smelter (CFS) Program:
Compliant Smelter and Refiner Lists
www.conflictfreesmelter.org
Import Import
We move people, products and culture.
COMMUNICATION With Supply Chain
Supplier Outreach
© iPoint-systems gmbh
© iPoint-systems gmbh
2/11/15 6
Value of Collaboration
Exchange Pla:orm
US Filer
Tier-‐1 Supplier
Tier-‐2 Supplier
Tier-‐4 Supplier
Tier-‐3 Supplier Tier-‐5
Supplier
Tier-‐6 Supplier
Typical flow of information is tier to tier making it easy for the message to get lost
Exchange Platform
Tier-‐7 Supplier
An exchange platform means everyone has a seat at the table
Consistent messaging is key!
• We are not a manufacturer of electronics parts and thus not in a position to provide accurate information relating to conflict Minerals….
• We distribute more than 555,000 products, it is our policy to not distribute products from the DRC and under the terms and conditions or our contracts our suppliers warrant they are in compliance with this policy…
• We assume that our sub-suppliers purchase raw materials from legal sources according to EU or national law. It is not our part to investigate this fact….
• Dodd Frank is a US law, we have no plans nor obligations to comply with this non EU law. We are in full compliance with all EU laws…
Common Supplier Responses
Helpful Resources• The CMRT (Conflict Minerals Reporting Template) 3.0x is the standard reporting format used
by the automotive and other industries. http://www.conflictfreesourcing.org/conflict-minerals-reporting-template/
• The iPCMP (iPoint Conflict Minerals Platform) is a useful software reporting tool used by the automotive and other industries. http://conflict-minerals.com/
• For an overview of conflict minerals and the automotive industry, and to take action on the issue, visit: http://conflictminerals.aiag.org
• In March 2014, the EU published a draft proposal outlining their potential requirements for Conflict Minerals regulations: http://trade.ec.europa.eu/doclib/docs/2014/march/tradoc_152227.pdf
Contact UsAmon Rappaport - (510) [email protected]
Tanya [email protected]
Michael Oleksa - (216) 272-6250 [email protected]
Jared Connors - (503) [email protected]
GreenBiz February 2015
