UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SD
SPECIALIZED DISCLOSURE REPORT
Alcon Inc.
(Exact name of the registrant as specified in its charter)
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| Switzerland | | 001-31269 |
(State or other jurisdiction of incorporation or organization) | | (Commission File Number) |
Rue Louis-d'Affry 6, 1701 Fribourg, Switzerland
(Address of principal executive offices)
Royce Bedward
Senior Vice President, General Counsel & Corporate Secretary
Chemin de Blandonnet 8, 1214 Vernier, Geneva, Switzerland
Tel: +41 58 911 20 00
(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:
_X_ Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2023.
___ Rule 13q-1 under the Securities Exchange Act (17 CFR 240.13q-1) for the fiscal year ended ______.
Section 1. Conflict Minerals Disclosure
Item 1.01 Conflict Minerals Disclosure and Report
In accordance with Rule 13p-1 under the Securities Exchange Act of 1934, Alcon Inc. has filed this Specialized Disclosure Form (Form SD) and the associated Conflict Minerals Report. Both reports are posted and publicly available at the Alcon corporate website: https://www.alcon.com/about-us/responsible-business-practice.
Item 1.02 Exhibit
The Conflict Minerals Report is attached as Exhibit 1.01.
Section 2. Resource Extraction Issuer Disclosure
Item 2.01 Resource Extraction Issuer Disclosure and Report
Not applicable.
Section 3. Exhibits
Item 3.01 Exhibits
Exhibit No. Description
SIGNATURES
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 duly authorized undersigned.
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| | | ALCON INC. |
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| Date: | May 29, 2024 | | By: | /s/ Royce Bedward |
| | | Name: Royce Bedward |
| | | Title: Authorized Representative |
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| Date: | May 29, 2024 | | By: | /s/ Ed McGough |
| | | Name: Ed McGough |
| | | Title: Authorized Representative |
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Exhibit 1.01
Conflict Minerals Report of Alcon Inc.
For the Calendar Year Ended December 31, 2023
Overview
This Conflict Minerals Report for Alcon Inc. and its consolidated subsidiaries covers calendar year 2023 and was prepared in accordance with Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Rule 13p-1 under the Securities Exchange Act of 1934 (collectively, the “Rule”). Unless the context requires otherwise, the words “we,” “our,” “us,” “Alcon,” “Company,” and similar words or phrases in this report refer to Alcon Inc. and its consolidated subsidiaries. Our report describes the due diligence undertaken to determine the source and chain of custody, including a Reasonable Country of Origin Inquiry (“RCOI”), of the conflict minerals that were contained in, and necessary to the functionality or production of, the products in our supply chain between January 1 and December 31, 2023. An RCOI is designed to help us determine whether these conflict minerals were sourced from the Democratic Republic of Congo or its nine adjoining countries (the “Covered Countries”) or came from recycled or scrap sources. The conflict minerals covered by the Rule are columbite-tantalite (coltan), cassiterite, wolframite, including their derivatives, which are limited to tin, tantalum, and tungsten, and gold (collectively the “Conflict Minerals”).
Company Background
Alcon is the global leader in eye care with $9.4 billion in net sales during the year ended December 31, 2023. We research, develop, manufacture, distribute and sell a full suite of eye care products within two key businesses: Surgical and Vision Care. We employ over 25,000 associates operating in 56 countries and serving consumers and patients in over 140 countries. We believe our market leading position and global footprint allow us to benefit from economies of scale, maximize the potential of our commercialized products and pipeline and effectively grow the market and expand into new product categories.
Our Surgical business is focused on ophthalmic products for cataract surgery, vitreoretinal surgery, refractive laser surgery and glaucoma surgery. Our broad surgical portfolio includes implantables, consumables and surgical equipment required for these procedures and supports the end-to-end needs of the ophthalmic surgeon. Our Vision Care business comprises daily disposable, reusable and color-enhancing contact lenses and a comprehensive portfolio of ocular health products, including products for dry eye, ocular allergies, glaucoma, and contact lens care, as well as ocular vitamins and redness relievers. Alongside our world-class products, Alcon provides best-in-class service, training, education and technical support for our customers.
We are dedicated to providing innovative products that enhance quality of life by helping people see brilliantly. Our strong foundation is based on our longstanding success as a trusted brand, our legacy of industry firsts and advancements, our leading positions in the markets in which we compete and our continued commitment to substantial investment in innovation. With more than 75 years of history in the ophthalmic industry, we believe the Alcon brand name is synonymous with innovation, quality, service and leadership among eye care professionals worldwide.
Product Review
We conducted a review of all direct materials either necessary to the production of our products or necessary to the products’ functionality to determine the risk that Conflict Minerals were present. In accordance with Securities and Exchange Commission Staff Guidance with respect to the Rule, we excluded packaging materials from this review. Based on the review, the categories of our products that were determined to include or be at risk for containing Conflict Minerals or to include metals of undeterminable content were components associated with Alcon’s equipment product lines within our Surgical and Vision Care franchises.
Design of Due Diligence Program
We designed our due diligence measures to conform in all material respects with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High Risk Areas Third Edition (OECD 2016) (the “OECD Framework”) and related Supplements.
As a purchaser of components, we are many steps removed from the mining of Conflict Minerals and we do not purchase raw ore or unrefined Conflict Minerals. We must rely on our immediate suppliers to provide information regarding the sourcing of Conflict Minerals. These immediate suppliers are also often many steps removed from the mining of Conflict Minerals.
Our annual due diligence activities, which are in line with the OECD Framework, are summarized below.
Step 1: Establish strong company management systems
▪We maintain a Code of Business Conduct, which calls for all third parties with whom we work to comply with the law, to adhere to ethical business practices, and to observe our standard requirements concerning labor, health, safety, environmental protection and management systems. We maintain a Third Party Code of Conduct that establishes a standard for suppliers’ support with respect to Conflict Minerals tracking. Specifically, the Third Party Code of Conduct requires that suppliers help to: identify the source of Conflict Minerals in the products that they sell to Alcon and, as possible through reasonable means, the names of smelters and refiners that process Conflict Minerals and the country of origin of these Conflict Minerals; cooperate with Alcon in our due diligence process and in responding to requests relating to Conflict Minerals in our products; provide reasonable evidence of suppliers’ performance of similar due diligence with respect to any of their suppliers or sub-contractors involved in the production of materials or products supplied to Alcon or any components of those materials or products; and work with Alcon to assess opportunities for alternative sources where non-conflict free Conflict Minerals are identified.
▪Our Conflict Minerals Core Team (“Core Team”) is responsible for the implementation and ongoing management of Conflict Minerals reporting activities, and the documentation and reporting of the results of the Conflict Minerals due diligence activities.
▪Annually, we establish and document our process to evaluate our products, in order to identify and assess the presence and sources of Conflict Minerals in the supply chain.
▪The Core Team uses standardized documentation to capture key decisions, processes and procedures used in gathering information related to the use of Conflict Minerals in our products, and to the sources of any such Conflict Minerals. We retain such documentation in accordance with our corporate document retention policy.
▪In recognition of the OECD Framework requirement, Alcon maintains feedback mechanisms available to all interested parties to provide information or voice their concerns regarding our compliance with laws and regulations.
Step 2: Identify and assess risks in the supply chain
▪On an annual basis, we review the suppliers that provide materials used in our manufacturing to identify potential sources of Conflict Minerals in our supply chain. The Core Team is responsible for determining the suppliers of materials that are necessary to the production or functionality of products that may contain one or more Conflict Minerals or contain metal of undeterminable content.
▪Suppliers of the items identified as potentially containing Conflict Minerals or metals of undeterminable content are designated as “In Scope” for the RCOI.
▪As part of this annual process, we, through a third party vendor, offer Conflict Minerals training for In Scope suppliers and require our suppliers to complete a web-based survey using the most recent Conflict Minerals Reporting Template (“CMRT”) from the Responsible Minerals Initiative (“RMI”). This survey seeks information regarding the country of origin of Conflict Minerals supplied to us and the smelters or refiners in the supply chain.
▪To help encourage the highest level of compliance, our third party vendor makes multiple attempts (email and phone calls) to obtain responses from all In Scope suppliers.
▪We review the information provided by each supplier to determine the completeness of each supplier’s responses, and note certain points of information, including whether the supplier has a policy regarding conflict minerals and whether they source any Conflict Minerals from the Covered Countries.
▪We review aggregate supplier CMRT responses as well as statements made by suppliers regarding the status of Conflict Minerals in their supply chain in order to summarize key findings regarding risks in the supply chain. The Core Team meets regularly to review progress.
▪We conduct a review of smelter/refinery information provided in the supplier surveys to determine the actual number of unique smelters/refiners identified by our suppliers and whether each has been audited by a third party or presents a "red flag" as defined by the OECD Framework. To make the determination of each smelter/refiner’s conflict status, we rely solely upon information provided by RMI. RMI states that it established and maintains a Responsible Minerals Assurance Process (“RMAP”), in which it uses an independent third-party assessment of smelter/refiner management systems and sourcing practices with RMAP standards. It uses a risk-based approach to validate company-level management processes for responsible mineral procurement.
▪RMI makes available to the public the list of smelters/refiners that it has listed as “Conformant”, which identifies smelters/refiners that have successfully completed an assessment against the applicable RMAP standard or equivalent cross-recognized assessment.
▪According to RMI, smelters and refiners that carry the RMI “Active” designation have committed to undergo an RMAP assessment, completed the relevant documents, and scheduled an on-site assessment.
▪A smelter or refiner is deemed by RMI as “Eligible” if it was not Conformant or Active but is able to undergo an RMI assessment based on the criteria in the applicable RMI standard. Eligible facilities are listed on the RMI's Eligible Facility list. Inclusion on this list does not mean that the facility has successfully completed an RMI assessment.
▪Additionally, RMI classifies smelters and refiners as:
•"unknown" - not participating in an RMAP verification and have no smelter CID number assigned or whose CID number (as provided by a supplier) does not appear on RMAP Conformant or Active lists
•"name correction" - not designated as "Active" or "Conformant", but may be in a transition to such status
•"removed" - no longer Conformant, Active, currently Eligible, or operational
▪The status information reflected in this report is current as of May 7, 2024.
Step 3: Design and implement a strategy to respond to identified risks
▪We expect supplier conformance with the Conflict Minerals section of the Alcon Third Party Code of Conduct.
▪We regularly assess identified risks based on suppliers’ completed surveys. If a high risk is identified, we will determine how to implement necessary risk mitigation efforts, including temporarily suspending trade or disengaging with a supplier.
▪As part of our review of compliance activities, we assess our processes in order to determine whether additional actions are required in the future.
Step 4: Carry out independent third-party audit of smelter/refiner's due diligence practices
▪In accordance with the OECD Framework, we monitor industry actions and the results of independent third-party audits of the due diligence performed by smelters and refiners. Given the nature of our business, the associated costs, and the current lack of transparency in our global supply chain, we are not in a position to conduct our own audits of smelters and refiners; however, we appreciate the efforts of internationally-recognized assessment programs such as RMAP and strongly encourage that each smelter and refinery seek certification from an internationally-recognized assessment program.
Step 5: Report annually on supply chain due diligence
▪In accordance with the Rule, we annually summarize the activities and results of our due diligence with regard to Conflict Minerals in this Conflict Minerals Report, which is filed with our Form SD.
Determination
Consistent with the OECD Framework, after our initial determination that Conflict Minerals were necessary to the functionality of some of our products, we conducted an RCOI to determine whether we had reason to believe that any Conflict Minerals were contained in, and necessary to the functionality or production of, our products may have originated in the Covered Countries.
In accordance with the Rule, we performed an RCOI based on the procedures set forth above. Based on this process, the results of our RCOI for 2023 were as follows:
▪In Scope Suppliers (all were surveyed): 518
▪Responses received: 331
In undertaking the RCOI for 2023, we took additional measures to increase the responses from our suppliers. As a result of those increased efforts, we experienced an increase in the number of responses from 285 last year to 331 this year.
As a result of the RCOI process, we concluded in good faith that during 2023 we had reason to believe that certain of the products that we manufactured or contracted to manufacture contained Conflict Minerals that may have originated from Covered Countries. Consequently, we exercised due diligence on the source and chain of custody of the Conflict Minerals following the OECD Framework.
In response to our due diligence activities, certain In Scope suppliers provided us with no information about their smelters and refiners, certain other In Scope suppliers provided only a partial list of their smelters and refiners, certain other In Scope Suppliers provided outdated or inaccurate information about their smelters and refiners, and certain other In Scope suppliers provided us with a complete list of their smelters and refiners. As a downstream purchaser of components that contain Conflict Minerals, our due diligence is highly reliant on our suppliers providing accurate information to us. Based on the limited information from our In Scope suppliers that provided us with names of smelters and refiners in their supply chain, we have determined the following information with respect to the facilities used to process Conflict Minerals:
▪Unique Smelters/Refiners Identified: 603
▪Conformant Smelters/Refiners Identified: 238
▪Active Smelters/Refiners Identified: 9
▪Eligible Smelters/Refiners Identified: 121
▪Name Corrections Identified: 4
▪Removed Smelters/ Refiners Identified: 95
▪Unknown Smelters/Refiners Identified: 136
We further note that not all of the included smelters and refiners may have processed the necessary Conflict Minerals contained in our products. In some cases, suppliers may have reported to us smelters and refiners that were not in our supply chain due to over-inclusiveness in the information received from their respective suppliers, the decision of such suppliers to provide information on a company-wide level rather than a product-based level, or for other reasons.
Because the information that we obtained from In Scope suppliers was incomplete or over broad, we were unable to determine the countries of origin of the Conflict Minerals or the facilities used to process them.
Risk Mitigation and Future Due Diligence Measures
We will look to improve our due diligence process by considering measures aimed at increasing Supplier responses to our RCOI in terms of accuracy, timeliness and completeness.
Cautionary Note Regarding Forward-Looking Statements
This report may contain certain “forward-looking statements” within the meaning of the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “commitment,” “look forward,” “maintain,” “plan,” “goal,” “seek,” “target,” “assume,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on Alcon’s current beliefs, expectations and assumptions regarding the future of its business, future plans and strategies, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties and risks that are difficult to predict, such as the factors discussed in Alcon’s flings with the United States Securities and Exchange Commission,
including its Form 20-F. Should one or more of such uncertainties or risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated. Therefore, you should not rely on any of these forward-looking statements. Forward-looking statements in this report speak only as of the date of its fling, and Alcon assumes no obligation to update forward- looking statements as a result of new information, future events or otherwise.
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