UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

____________________

 

FORM SD

 

____________________

 

 

SPECIALIZED DISCLOSURE REPORT

 

 

AVNET, INC.

(Exact name of registrant as specified in its charter)

 

____________________

 

 

 

2211 South 47th Street,

Phoenix, Arizona 85034

(Address of principal executive offices)

 

Michael J. O’Neill

Senior Vice President, Chief Legal Officer

and General Counsel

(480) 643-2000

(Name and telephone number, including area code, of the

person 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 in this form applies:

 

 

 

 

 

 

 

Section 1 – CONFLICT MINERALS DISCLOSURE

 

Item 1.01       CONFLICT MINERALS DISCLOSURE AND REPORT

 

Conflict Minerals Disclosure    

 

This Form SD is filed by Avnet, Inc. (together with its consolidated subsidiaries, the “Company”) pursuant to Rule 13p-1 (the “Rule”) under the Securities Exchange Act of 1934, as amended, for the reporting period January 1, 2017, to December 31, 2017.

 

A copy of the Company’s Conflict Minerals Report is provided as Exhibit 1.01 to the Form SD and may be found publicly on the Company’s website at http://www.avnet.com/ under the “Human Rights” link.

 

Item 1.02       EXHIBIT

 

The Company has filed, as an exhibit to this Form SD, the Conflict Minerals Report.

 

 

Section 2 – EXHIBITS

 

Item 2.01       EXHIBITS

 

Exhibit 1.01 – Conflict Minerals Report as required by Items 1.01 and 1.02 of this Form SD.

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

 

 

Exhibit 1.01

 

Conflict Minerals Report 

 

Introduction

 

This is the Conflict Minerals Report of Avnet, Inc., together with its consolidated subsidiaries (herein referred to as “Avnet”  or the “Company”), for calendar year 2017 in accordance with Rule 13p-1 under the Securities Exchange Act of 1934 (the “Rule”). Conflict Minerals are defined as cassiterite,  columbite-tantalite, gold, wolframite, and their derivatives, which are limited to tin, tantalum, tungsten, and gold (collectively “3TG”).

 

Avnet is a global value-added distributor of electronic components and integrated products and solutions. The Company creates a vital link in the technology supply chain that connects the world’s leading electronic component manufacturers with a global customer base of original equipment manufacturers, electronic manufacturing services providers and original design manufacturers. The Company distributes electronic components, as received from its suppliers or through a customized solution, and offers assembly and other value-added products and services.    

 

Conflict Minerals Policy

 

The Company adopted a Conflict Minerals Policy, which provides, in part, that:

 

As a global value-added distributor of electronic components and embedded subsystems, Avnet promotes the traceability of these minerals and the transparency of the supply chain. Avnet firmly believes that its customers should be fully informed about the products they purchase. While Avnet, as a distributor, is not able to certify as to the country of origin of the minerals contained in the products manufactured by Avnet’s suppliers, Avnet is committed to working with its customers to supply products that meet the customer’s specifications.

 

With respect to those limited aspects of Avnet’s business that manufacture or contract to manufacture products that contain conflict minerals that are necessary to the functionality or production of the product, Avnet does not directly purchase any conflict minerals from any source and endeavors not to purchase products that contain conflict minerals that directly or indirectly finance or benefit armed groups in the [Democratic Republic of the Congo] or adjoining countries. Avnet expects its suppliers to these aspects of its business to only source minerals from responsible sources and provide Avnet with proper verification of the country of origin and source of the materials used in the products they supply to it. Avnet fully understands the importance of this issue to its customers and is committed to supply chain initiatives and overall corporate social responsibility and sustainability efforts that work towards a conflict free supply chain. Avnet is encouraging all of its suppliers to likewise support these efforts and make information on the origin of their product components easily accessible on their websites.

 

The Conflict Minerals Policy is available on the Company’s website at http://www.avnet.com/ under the “Human Rights” link.

 

Overview

 

The Rule requires that the Company disclose in an annual Form SD and associated Conflict Minerals Report information regarding any 3TG that is “necessary to the functionality or production” of any products that the Company manufactures or contracts to be manufactured. Further, the Rule requires that the Company conduct a reasonable country of origin investigation to determine whether any such 3TG originated in the Democratic Republic of the Congo or its adjoining countries (the “Covered Countries”) or is from recycled or scrap sources. If, based on the Company’s reasonable country of origin inquiry, the Company knows that any of the Company’s necessary 3TG originated in the Covered Countries and are not from recycled or scrap sources, or the Company has reason to believe that the Company’s necessary 3TG may have originated in the Covered Countries and the Company has reason to believe that such 3TG may not be from recycled or scrap sources, the Company is required to exercise due diligence on the source and chain of custody of such 3TG that conforms to a nationally or internationally recognized due diligence framework. 

 

Design of the Company’s Reasonable Country of Origin Inquiry and Due Diligence Process

 

The Company’s 3TG program was divided into the (i) program definition and scoping phase, (ii) country of origin inquiry and due diligence phase, and (iii) reporting phase. The Company’s program was designed to conform in all material respects to the framework in the Organisation for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: Second Edition (the “OECD Framework”). The Company’s reasonable country of origin inquiry was designed such that it functioned as the first step of the Company’s due diligence measures. Consequently, the Company does not separately discuss its reasonable country of origin inquiry in the following discussion.

 

Products

 

In response to the Rule, the Company reviewed its operations to determine which parts of its business, if any, may be subject to the disclosure requirements of the Rule. As provided by the Rule, this process did not include products that were not entered into the stream of commerce in the calendar year ended December 31, 2017, or products manufactured or contracted to be manufactured by entities acquired by the Company after April 2016.  As a result of the process discussed in greater detail below, the Company determined that the following products were subject to the disclosure requirements of the Rule for the calendar year 2017:

 

 

These products are hereinafter referred to as the “Covered Products.”

 

Due Diligence Framework

 

As noted in the Company’s Conflict Minerals Policy, the Company does not purchase 3TG directly from any mine, refiner or smelter. The Company’s supply chain with respect to the Covered Products is highly complex and there are many parties in the supply chain between the Company’s direct supplier and the mine from which the 3TG originated. Because of the Company’s “downstream” position in the supply chain, it followed the principles outlined in the OECD Framework for downstream companies with no direct relationships to smelters or refiners. In this context, “downstream” refers to the supply chain from smelters and refiners to retailers; it includes companies such as the Company, as well as product and component manufacturers. In this regard, the Company must rely on its suppliers to provide information regarding the country of origin and chain of custody of the 3TG included in the Covered Products. It is likely that years of engagement and propagation of expectations through many tiers of the supply chain will be necessary before information returned to downstream companies, such as the Company, may be considered accurate and complete. 

 

Due Diligence Efforts

 

The Company’s due diligence efforts since the adoption of the Rule include the following steps:

 

1.Establish company management systems

 

As part of the Company’s 3TG program, the Company created a governance team and a working team. The governance team is responsible for ensuring that the Company’s program meets regulatory requirements and enterprise goals, and provides direction to the working team. The working team is responsible for the day-to-day execution of the Company’s program, diligence efforts, and risk mitigation strategy. The Company also established a policy with respect to sourcing of minerals from the Covered Countries and published this statement on the Company’s website.

 

2.Identify and assess risks in the supply chain

 

The Company has performed the following steps to identify and assess risks in the supply chain:

 

 

 

 

 

 

3.Design and implement a strategy to respond to identified risks

 

The Company has designed and implemented a number of steps to respond to the identified risks in its supply chain:

 

 

4.Carry out independent third-party audit of smelter/refinery due diligence practices

 

The Company is a downstream consumer of 3TG and is generally many steps removed from smelters and refiners who provide minerals and ores.  The Company does not purchase 3TG from smelters or refiners, and does not, to the best of the Company’s knowledge, directly purchase from any of the Covered Countries. Therefore, as contemplated by the OECD Framework for downstream companies, the Company did not perform direct audits of smelters and refiners within the supply chain. Instead, as noted above, the Company’s due diligence efforts relied on cross-industry initiatives such as those led by the CFSI, such as the CFSP, to conduct smelter and refinery due diligence. 

 

5.Report annually on supply chain due diligence

 

This report and the associated Form SD are available online on the Company’s website at http://www.avnet.com/ under the “Human Rights” link.

 

Efforts to Determine the Mine or Location of Origin with the Greatest Possible Specificity

 

The Rule requires that the Company provide a description of the Covered Products, the facilities used to process the 3TG in those products, the country of origin of the 3TG in those products, and the efforts to determine the mine or location of origin with the greatest possible specificity. Based on the information that the Company has been able to collect through the Template and other information, it is unable to definitively determine the identity of the upstream smelters from which its suppliers source 3TG or the mine or location of origin of the 3TG included in the Covered Products. 

 

Steps to be taken in Calendar 2018

 

As the Company endeavors not to purchase products that contain 3TG that directly or indirectly finance or benefit armed groups in the Covered Countries, in order to mitigate the risk of purchasing such products, the Company has continued with its 3TG program discussed above during calendar year 2018. Specifically, the Company has pursued and will continue to pursue the following steps: