Apple Inc.

1y ago
22 Views
1 Downloads
349.72 KB
26 Pages
Last View : Today
Last Download : 16d ago
Upload by : Joanna Keil
Transcription

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM SDSpecialized Disclosure ReportApple Inc.(Exact name of registrant as specified in its charter)California001-3674394-2404110(State or other jurisdictionof incorporation or organization)(CommissionFile Number)(IRS EmployerIdentification No.)One Apple Park WayCupertino, California 95014(Address of principal executive offices) (Zip Code)Katherine AdamsSenior Vice President,General Counsel and Secretary(408) 996-1010(Name and telephone number, including area code, of theperson to contact in connection with this report.)Check the appropriate box to indicate the rule pursuant to which this form is being filed, and provide the period to which the information inthis form applies: Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2019.

Section 1 – Conflict Minerals DisclosureItems 1.01 and 1.02 Conflict Minerals Disclosure and Report, ExhibitConflict Minerals DisclosureA copy of Apple Inc.’s (“Apple’s”) Conflict Minerals Report for the reporting period January 1, 2019 to December 31, 2019 is provided asExhibit 1.01 hereto and is publicly available at default.aspx.*Section 2 – ExhibitsItem 2.01 ExhibitsExhibit 1.01 – Conflict Minerals Report for the reporting period January 1, 2019 to December 31, 2019.******The reference to Apple’s website is provided for convenience only, and its contents are not incorporated by reference into this Form SDand the Conflict Minerals Report nor deemed filed with the U.S. Securities and Exchange Commission.2

SIGNATUREPursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the duly authorized undersigned.Apple Inc.By:/s/ Katherine AdamsKatherine AdamsSenior Vice President,General Counsel and SecretaryDate: February 6, 20203

Exhibit 1.01CONFLICT MINERALS REPORTSummary of Apple’s Commitment to Responsible SourcingApple is deeply committed to upholding human rights across its global supply chain. Apple works to safeguard the well-beingof people touched by its supply chain, from the mine site level to the facilities where products are assembled. Apple’ssuppliers employ millions of people at their respective facilities, which range in size from a few employees to hundreds ofthousands.Apple is also committed to protecting the environment where minerals are sourced. In 2017, Apple announced its goal of, oneday, using only recycled and renewable minerals and materials in its products. Across Apple’s product line, an increasedamount of recycled materials is being utilized. As Apple makes progress toward this ambitious goal, it continues to strengthenits existing programs to source tin, tantalum, tungsten, and gold (“3TG”) and other minerals responsibly. Apple is committed tomeeting and exceeding legal requirements and internationally accepted due diligence standards, with the ultimate goal ofimproving conditions on the ground in the Democratic Republic of the Congo (“DRC”) and adjoining countries.Apple’s comprehensive approach to responsible minerals sourcing includes requirements and programs at many levels of thesupply chain. The Apple Supplier Code of Conduct (“Supplier Code”) and the Supplier Responsibility Standard on theResponsible Sourcing of Materials (“Responsible Sourcing Standard”) require suppliers to engage with smelters and refinersto assess and identify a broad range of risks beyond conflict, including social, environmental, and human rights risks.Suppliers are also required to review reported incidents and public allegations linked to their smelters and refiners and toengage with 3TG traceability and third party audit programs to address and mitigate risk.Beyond supplier requirements, Apple works with partners to better understand the human rights impact of due diligenceprograms on the lives of people working and living in mining communities. Apple also supports whistleblower initiatives toempower independent, local voices to raise issues and report incidents at the mine-site level.As of December 31, 2019—for the fifth straight year—100 percent of the 267 identified smelters and refiners in Apple’s supplychain for all applicable Apple products manufactured during calendar year 2019 participated in an independent third-partyconflict minerals audit (“Third Party Audit”) program for 3TG. These audits encompassed the identified smelters and refinersthat provide materials for Apple’s iPhone , iPad , Mac , iPod touch , Apple TV , Apple Watch , AirPods , HomePod , andBeats products; Apple Card ; and all Apple accessories.In 2019, Apple directed its suppliers to remove from its supply chain 18 smelters and refiners that were not willing toparticipate in, or complete, a Third Party Audit or that did not otherwise meet Apple’s requirements for the responsiblesourcing of minerals. Of the 267 smelters and refiners of 3TG determined to be in Apple’s supply chain as of December 31,2019, Apple found no reasonable basis for concluding that any such smelter or refiner sourced 3TG that directly or indirectlyfinanced or benefited armed groups from the DRC or an adjoining country.While the African Great Lakes region faces ongoing challenges to achieve lasting change, Apple remains committed tocontinue responsibly sourcing 3TG from the region. Apple believes that all stakeholders—governments, civil society, andindustry—should enhance their efforts to implement comprehensive due diligence programs, measure impact, and worktogether with local communities to improve conditions in the region.Apple Inc. 2019 Conflict Minerals Report 1

IntroductionApple is committed to treating the people in its supply chain with dignity and respect and protecting the planet we all share.Conducting human rights due diligence is the foundation of Apple’s responsible sourcing of minerals program.Apple conducts robust due diligence on the source and chain of custody of 3TG in its global supply chain but does not directlypurchase or procure raw minerals from mine sites.In addition to the responsible sourcing of minerals, Apple works to reduce the amount of minerals mined from the Earth. In2017, Apple announced its goal of, one day, using only recycled and renewable minerals and materials in its products. In2019, Apple continued to make progress toward this goal by increasing the amount of recycled material used in its products.3TG are among the 14 materials prioritized in Apple’s initial efforts to transition to recycled and renewable materials, based onan evaluation of the environmental, social, and supply impacts of 45 mined elements and raw materials. The results of thisevaluation and the related methodology behind these Material Impact Profiles are available on Apple’s website for others toaccess and use at https://www.apple.com/environment/pdf/Apple Material Impact Profiles April2019.pdf. The informationcontained on this website is not a part of, or incorporated by reference into, this filing.Apple’s responsible minerals sourcing efforts are aligned with the Organisation for Economic Co-operation and Development(“OECD”) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas(2016) and related Supplements (the “OECD Due Diligence Guidance”).OECD Step 1: Strong Company Management SystemsAligned with Step 1 of the OECD Due Diligence Guidance, Apple has robust internal management systems overseeing itsresponsible sourcing of minerals efforts. Apple’s Board of Directors oversees its CEO and other senior management in thecompetent and ethical operation of Apple on a day-to-day basis. Apple’s Audit Committee, consisting entirely of independentdirectors, assists Apple’s Board of Directors in monitoring significant business risks, including operational and reputationalexposures. Apple also has a code of ethics, “Business Conduct: The way we do business worldwide,” that applies to allemployees, the Board of Directors, independent contractors, consultants, and others who do business with Apple. This codeof ethics, which mandates that Apple conduct business ethically, honestly, and in full compliance with applicable laws andregulations, applies to every business decision in every area of the company worldwide.Apple’s Supplier Responsibility (“SR”) team partners with its suppliers to drive its high standards for the protection of laborand human rights, health and safety, and the environment. The SR team within Apple’s Worldwide Operations groupcoordinates activities related to Apple’s Supplier Code and Responsible Sourcing Standard and works across a number ofApple business teams and functions, including, but not limited to, product design, manufacturing operations, environmentalinitiatives, procurement, legal, finance, and Apple retail. The SR team also regularly consults with Apple’s senior managementto review progress and set ongoing strategy for its responsible sourcing and human rights programs.Apple’s Supplier Code and Responsible Sourcing StandardApple’s Supplier Code and Responsible Sourcing Standard apply to all levels of Apple’s supply chain and are based onindustry and internationally accepted principles, such as the United Nations Guiding Principles on Business and HumanRights (“UN Guiding Principles”), the International Labour Organisation’s International Labour Standards, and the OECD DueDiligence Guidance. The Responsible Sourcing Standard outlines Apple’s extensive requirements on the responsiblesourcing of minerals and other materials, including expectations for suppliers concerning 3TG due diligence and relatedsourcing matters. The Supplier Code is available in 15 languages and the Responsible Sourcing Standard is available in fivelanguages.Apple Inc. 2019 Conflict Minerals Report 2

Each year, Apple evaluates and strengthens its Supplier Code and Responsible Sourcing Standard. In 2019, Applestrengthened its Responsible Sourcing Standard by more clearly describing how its requirements apply to all levels of thesupply chain, including traders, sub-suppliers, mines, and collection points for recycled minerals used in its products.As part of its commitment to industry-wide progress, Apple benchmarks the scope and requirements of dozens of third-partysustainability standards, including upstream protocols for mineral processors and mining companies, and publishes thisinformation in its Responsible Sourcing Standard. In 2019, Apple again analyzed third-party sustainability standards andmapped those against risk criteria such as labor and human rights, health and safety, and the environment. Thisbenchmarking helps to illustrate which standards satisfy Apple’s requirements.Supplier EngagementApple requires its suppliers to adhere to the Supplier Code and Responsible Sourcing Standard, including any subsequentamendments or updates. Suppliers are required to apply Apple’s requirements to their suppliers through all levels of thesupply chain. In this way and through direct outreach by Apple to smelters and refiners, Apple implements its requirement thatsmelters and refiners in its supply chain comply with Apple’s strict standards, including that smelters and refiners participate inThird Party Audit programs.To ensure that Apple’s suppliers understand Apple’s 3TG sourcing policy, Apple communicates its requirements to its directsuppliers annually and regularly engages with suppliers using tailored communication and guidance throughout the year. Inaddition, Apple’s SupplierCare portal provides suppliers with access to online training materials in English and MandarinChinese that focus on Apple’s due diligence expectations and requirements for 3TG reporting. If Apple discovers thatstandards are not being met, Apple works side by side with suppliers to help them improve. In 2019, certain suppliers alsoparticipated in a live online training webinar that provided additional guidance on Apple’s requirements and best practices forthe responsible sourcing of minerals.Throughout the year, suppliers can reach out to Apple with questions about 3TG sourcing through the SupplierCare portal orthrough a dedicated Apple email. Apple also maintains a separate dedicated 3TG email address that allows suppliers toreport concerns or grievances related to 3TG mining, processing, and trading. The concerns or grievances submitted to Appleare reviewed with relevant Apple business teams, and follow-up activities are conducted as appropriate.In 2019, Apple took steps to further strengthen the implementation of the Supplier Code and Responsible Sourcing Standardby expanding the integration of its responsible sourcing requirements into its Apple-managed supplier assessments, whichare distinct from third party smelter and refiner audits. These assessments evaluate suppliers’ performance against all areasof Apple’s Supplier Code. In addition, Apple continued to engage an independent audit firm to conduct specializedresponsible sourcing audits of certain suppliers in order to have a deeper review of their internal management systems andimplementation of Apple’s requirements related to 3TG and other minerals. At the end of an Apple-managed assessment orspecialized audit, the supplier is given a list of areas to strengthen against Apple’s Supplier Code and Responsible SourcingStandard, and the supplier is required to correct any identified nonconformances in a timely manner. Apple provides supportto help suppliers complete a corrective action plan to meet and exceed its requirements. If a supplier is unwilling or unable tomeet Apple’s requirements, Apple will indefinitely end its business relationship with that supplier.Apple’s efforts to responsibly source 3TG and cobalt were recognized as number one in its industry group by the ResponsibleSourcing Network, a project of the non-profit organization As You Sow, in their 2019 publication “Mining the Disclosures 2019:An Investor Guide to Conflict Minerals and Cobalt Reporting in Year Six.”Apple Inc. 2019 Conflict Minerals Report 3

Going Beyond: Working Together with Stakeholders for ProgressApple believes that continuous improvement and refinement of industry standards are critical to driving industry-wide progresson the responsible sourcing of minerals. Apple is committed to systemic engagement and working in collaboration withstakeholders beyond its own supply chain. As part of this commitment, Apple engaged with a broad range of civil society,industry, academic, and government experts in 2019 to gather feedback on its own program. Apple also convened an expertgroup to discuss opportunities to work collectively on the measurement of human rights impacts and other innovativeapproaches to the responsible sourcing of minerals in the supply chain.In 2018, Apple worked with the International Organization for Migration (“IOM”)—the leading global expert on migration—todevelop and publish the Remediation Guidelines for Victims of Exploitation in Extended Mineral Supply Chains, a set ofguidelines for industry actors on how to address confirmed allegations in the upstream supply chain in accordance with theUN Guiding Principles. In 2019, IOM continued to share these guidelines with government and industry stakeholders, and theguidelines were featured in several publications, including a United Nations Report of the Special Rapporteur on trafficking inpersons, especially women and children.In 2019, Apple also supported the development of certain responsible sourcing-related industry-wide standards, including theCode of Risk mitigation for Artisanal and Small-scale Mining (“ASSM”) engaging in Formal Trade (“CRAFT Code”) developedby the Alliance for Responsible Mining and RESOLVE, a sustainability nonprofit organization; and the Blockchain Guidelinesof the Responsible Business Alliance’s Responsible Minerals Initiative (“RMI”). Apple continued to participate in RMI’sBlockchain working group, helping to standardize data interoperability across minerals blockchain solutions and ensure dataprivacy. Apple believes that minerals blockchain solutions should be used as a tool to support—but not to replace—supplychain due diligence, and that the interests of people working at mine sites and in surrounding communities should be takeninto consideration.Apple also continued to support the development of standards for large-scale mining by conducting outreach to industrystandard-setting bodies to encourage the alignment of industry standards and the adoption of tools such as the RiskReadiness Assessment tool (“RRA”). The RRA was designed by Apple to help assess risks in supply chains beyond thoseassociated with conflict, such as social, environmental, and human rights risks. In addition, Apple continued to integrate theprinciples of the Extractive Industries Transparency Initiative (“EITI”) as part of its risk mapping and due diligencerequirements.In 2019, Apple chaired the board of the Responsible Business Alliance (“RBA”), served on the Steering Committee of theRMI, continued to participate in the European Partnership for Responsible Minerals, and participated in the ResponsibleArtisanal Gold Solutions Forum. Apple also served on the Governance Committee of the Public Private Alliance forResponsible Minerals Trade (“PPA”), a multi-sector initiative supporting the ethical production, trade, and sourcing of mineralsfrom the Great Lakes region of Central Africa.In 2019, Apple participated in a PPA delegation to the DRC and Rwanda to visit mine sites and engage with miningcommunity advocates, labor and human rights experts, and government leaders on the importance of credible due diligenceand traceability systems as a means of ensuring that the minerals trade does not finance armed conflict or contribute tohuman rights abuses, including child labor or sexual and gender-based violence against women.Apple Inc. 2019 Conflict Minerals Report 4

OECD Step 2: Identification and Assessment of Risk in the Supply ChainConsistent with Step 2 of the OECD Due Diligence Guidance, Apple reviews public allegations from civil society and otherindependent voices related to risks outlined in Annex II of the OECD Due Diligence Guidance that are potentially linked to itssupply chain. Apple also works with Third Party Audit programs—in particular, RMI and the London Bullion MarketAssociation (“LBMA”)—to address identified risks at the smelter, refiner, and mine-site levels. In 2019, Apple reviewedpublicly available information on certain risks, including investigative reports by international organizations, including the UNGroup of Experts on the DRC, and non-governmental organizations (“NGOs”). Apple also worked with Third Party Auditprograms to seek verification of allegations to the extent possible; to advance appropriate corrective action, where necessary;and to improve due diligence processes.Apple works at multiple levels in its supply chain to identify and assess risk. Apple requires its suppliers that utilize 3TG tosubmit an industry-wide standard Conflict Minerals Reporting Template (“CMRT”). Apple collects and processes dataprovided by suppliers through their completion of the CMRT to map Apple’s supply chain to the smelter and refiner level andto the mine-site level, to the extent available. Suppliers are also required to inform Apple immediately, in accordance with itsResponsible Sourcing Standard, if they identify certain high risks such as conflict risks, risks included in Annex II of the OECDDue Diligence Guidance, or human rights risks associated with 3TG.To help assess risks in its supply chain beyond those associated with conflict, such as social, environmental, and humanrights risks, Apple developed the RRA in 2016. In 2018, Apple completed the transition of the RRA to RMI to make the toolbroadly available to the industry. The RRA, which is available in English, Mandarin Ch

Section 1 – Conflict Minerals Disclosure Items 1.01 and 1.02 Conflict Minerals Disclosure and Report, Exhibit Conflict Minerals Disclosure A copy of Apple Inc.’s (“Apple’s”) Conflict Minerals Report for the reporting period January 1, 2019 to December 31, 2019 is provided as