Mining Disclosures 2017: An Investor Guide to Conflict Minerals Reporting in Year Four
Publisher: Responsible Sourcing Network
Author(s): Raphaël Deberdt and Patricia Jurewicz
Date: 2017
Topics: Extractive Resources, Governance
Countries: Congo (DRC)
In the fourth consecutive year of analyzing companies’ conflict minerals compliance and reporting, Responsible Sourcing Network’s (RSN) research unveils a troubling trend widely spread among companies and industries. For the 2017 Mining the Disclosures report, RSN performed a year-on-year comparison between the scores achieved in 2016 and 2017. Regrettably, the disclosures and other publicly available information illustrate a decrease in companies’ efforts to provide strong supply chain due diligence regarding their use of conflict minerals. With the Trump administration questioning the value of Section 1502 of the Dodd-Frank Act, 1 and adding unhelpful uncertainty to its corresponding final rule developed by the Securities and Exchange Commission (SEC), the majority of companies appear to be losing momentum acquired in previous reporting years to improve the quality of their disclosures. Encouragingly, high performers keep pushing for more transparency to mitigate risks in global supply chains and have committed to pursue the application of the rule regardless of future political decisions.
This year again, the technology sector dominates the ranking with the majority of innovative leaders achieving scores above 70 points. Laggards are still to be found in a range of industry groups including those in Aerospace, Oil, and Building Materials. The low scores of these groups reflect a compliance-only focus instead of the proactive, due-diligence-based strategies implemented by the top five leading companies: Intel, Microsoft, Qualcomm, Apple, Royal Philips. A new industry group is introduced in 2017, the Solar industry, which scores fairly well. Three solar companies out of four achieve scores above 55 but the industry group’s average score is only considered “Minimal” due to Canadian Solar’s dismal conflict minerals program and disclosure.