IT Cos. Pace Conflict Minerals Reporting While Other Sectors Lag, According to NGO

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By Yin Wilczek

May 19 — Information technology companies are leading the way in conflict minerals disclosures, according to a new report.

The Responsible Sourcing Network (RSN) and Sustainalytics's “Mining the Disclosures” report identified Intel Corp., Qualcomm Inc. and Apple Inc. as the strongest performers based on a sample group of 51 large-cap companies that filed conflict minerals disclosures with the Securities and Exchange Commission in 2014.

However, the average scores for all industries “fell short of the mark,” the report found. Even the IT sector had an average score of only 58 out of a possible 100.

The “lagging industries” that scored the most poorly include energy equipment and services, containers and packaging, and health-care equipment and supplies, the report added.

Checking the Box 

“While some companies took the initiative to provide robust conflict minerals reports, too many took the easy way out by fulfilling only the most minimal compliance requirements,” RSN founder and report co-author Patricia Jurewicz said in a release. “As companies see their peers adopting leading practices, we expect more transparency and greater depth in conflict minerals reporting.”

The report comes less than two weeks before the June 1 deadline for the 2015 filings.

It also is the second report to be released by nongovernmental organizations on the 2014 disclosures. In the earlier release, Global Witness and Amnesty International charged that more than three-quarters of U.S. companies failed to meet their conflict minerals reporting obligations.

Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and SEC requirements direct companies to publicly disclose their use of so-called “conflict minerals”—tantalum, tin, gold, or tungsten from the Democratic Republic of Congo and surrounding areas. The statute was aimed at stemming the funding of armed conflict in the region.

Of the 1,315 companies that submitted conflict minerals disclosures last year, RSN and Sustainalytics reviewed the filings of 51 companies that were the three largest in terms of market cap from 17 industries with the highest exposure to the minerals. The companies were scored using 18 performance indicators that were grouped into four measurement areas:

• assessing exposure and responding to risk;

• policies and management systems;

• transparency and reporting; and

• promoting a conflict-free minerals trade.


The report doesn't state the companies' individual scores, but ranks them in four groups—leading, strong, adequate and minimal—based on their overall performance.

Differing Methodologies 

In a same-day webcast to announce the report, Michael Littenberg, a New York-based partner at Schulte Roth & Zabel LLP, noted that although this is the second report to analyze the 2014 filings, there are significant differences in the NGOs' methodologies, and it will be important for companies and attorneys involved in conflict minerals disclosures to read both reports.

Schulte Roth & Zabel is a sponsor of the RSN/Sustainalytics report.

Jurewicz and RSN research analyst Andrew Arriaga, a co-author of the report, said during the webcast that the report will help companies understand how they can improve their disclosures by highlighting some best practices employed by the strongest reporting companies. They also said their study will make it easier for investors to compare the disclosures across companies and industries.

From the huge pool of information now publicly available through the Securities and Exchange Commission's disclosure requirements, RSN wanted some data that was “usable and useful for investors,” Arriaga said.

Socially responsible investors are expected to ramp up their campaigns and activities after the 2015 filings.

Beyond the SEC Rule 

Jurewicz acknowledged that the companies are measured beyond what is required under 1934 Securities Exchange Act Rule 13p-1, the SEC's conflict minerals rule. “We're not looking only at the filings but for companies to step up and contribute to a conflict–free trade in the region,” she said.

Although the report might come too late for the 2015 filings, the hope is that it will tilt companies toward becoming more transparent in their disclosures, Jurewicz said. She also urged companies to post to their websites any relevant information that they omit from their filings.

“We're even looking to make that somewhat of a mandate”—that companies include links in their disclosures to specific information on their websites, Jurewicz said.

Jurewicz added that in subsequent reports, RSN is looking to extend the study to mid-cap companies.

To contact the reporter on this story: Yin Wilczek in Washington at

To contact the editor responsible for this story: Ryan Tuck at

The report is available at


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