EX-1.01 2 d187538dex101.htm EX-1.01 EX-1.01

Exhibit 1.01

The Sherwin-Williams Company

Conflict Minerals Report

In Accordance with the Rule 13p-1 under the Securities Exchange Act of 1934

For Reporting Period from January 1, 2020 to December 31, 2020

This is the Conflict Minerals Report (this “Report”) of The Sherwin-Williams Company (“Sherwin-Williams”, “we”, “our”, “us”, or the “Company”) for the reporting period from January 1, 2020 to December 31, 2020 that is being filed as an exhibit to the Company’s Form SD in accordance with Rule 13p-1 under the Securities Exchange Act of 1934, as amended (“Rule 13p-1”). Please refer to Rule 13p-1, Form SD and the 1934 Act Release No. 34-67716 for definitions to the terms used in this Report, unless otherwise defined herein.

Based on the existing guidance from the Securities and Exchange Commission (the “SEC”), this Report has not been audited, nor is an independent private sector audit required for this Report.

Executive Summary

Sherwin-Williams is dedicated to ethical sourcing and takes very seriously the humanitarian concerns that led to the enactment of Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act pursuant to which the SEC adopted Rule 13p-1. During calendar year 2020, we continued to investigate the sourcing of any conflict minerals necessary to the functionality or production of our products (the “subject minerals”).

As a global manufacturer and seller of a large variety of paint, specialty coatings and related products for a broad range of customers, we analyzed our products for their potential of containing even small quantities of conflict minerals that are necessary to the functionality or production of our products. Based on our analysis, we determined that paint cans, paint brushes and other associated application tools that we manufacture or contract to manufacture are in the scope of Rule 13p-1. Upon such determination, we investigated suppliers of the metal components necessary to the functionality or production of such paint cans, paint brushes and application tools. This Report focuses on the processes and the results of the investigation.

Sherwin-Williams does not directly source from mines the subject minerals that may be contained in our products, and such materials often pass through several commercial intermediaries before being purchased by Sherwin-Williams.

More specifically, the subject minerals in their raw material form are processed by smelters or refiners (“SORs”) independent of Sherwin-Williams. After the subject minerals are processed or refined, they are sent to different types of facilities where they are processed and/or manufactured into components or sub-components. Following this multi-step process, Sherwin-Williams purchases components from suppliers. As a result, we rely on the responses of our suppliers for information about the subject minerals in their products, and they, in turn, rely on their own suppliers for information.

Conflict Minerals Disclosure

Reasonable Country of Origin Inquiry (RCOI)

We conducted a reasonable country of origin inquiry (“RCOI”), in good faith, relating to the subject minerals in accordance with Rule 13p-1. After identifying the suppliers as described above, we sent each of these suppliers a data inquiry in the form of an e-mail via a third-party software system. The data inquiry requested that the suppliers complete a Conflict Minerals Reporting Template (“CMRT”) revision 6.01 or higher, developed by the Responsible Minerals Initiative (“RMI”). Suppliers were provided with multiple options for providing the data, namely via the MS Excel-based document (the CMRT itself) and completing a response through our third-party software provider’s online platform. The CMRT included an inquiry regarding the country of origin for any subject minerals that were contained in the products we purchased from such supplier. In addition to the initial data inquiry, we followed up with e-mails and telephone calls, where needed, to obtain the necessary information from our suppliers, and in those follow up communications we further educated suppliers on Rule 13p-1 and how to accurately complete the CMRT. We received responses from 100% of the suppliers from which we requested a response.


Based on our RCOI, we have determined that our paint cans, paint brush products and other application tool products may contain subject minerals that may have originated in the Democratic Republic of the Congo or the adjoining countries (collectively, the “Covered Countries”). Accordingly, we performed due diligence on the source and chain of custody of the subject minerals in those products.

Due Diligence

Design of Due Diligence

Sherwin-Williams’ due diligence measures, processes, and related documentation were designed to conform, in all material respects, with the due diligence framework set forth 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, Third Edition, 2016 (“OECD Guidance”) and the related supplements for tin, tantalum and tungsten and for gold.

Due Diligence Measures Performed

The following is a description of the due diligence measures we performed for the Reporting Period.

OECD Step 1: Establish and maintain strong company management systems

Individuals from various groups within the Company including Sourcing, Legal, and Regulatory collaborated to implement our supply chain due diligence. The Sourcing team led our conflict minerals compliance efforts and program with guidance from Legal Vice President Deputy General Counsel and Senior Vice President of Global Sourcing.

The Sourcing team is responsible for maintaining our Conflict Minerals Policy, which is available on the Company’s website at https://suppliers.sherwin-williams.com/cs/suppliers/conflict-minerals.

The content of any website referred to in this Report is not incorporated by reference in this Report.

Our record retention policy requires us to retain relevant supplier response documentation for no less than five (5) years in accordance with the OECD Guidance.

Our grievance mechanism is our ethics hotline at www.sherwin.ethicspoint.com.

During the due diligence process, we advised suppliers who supplied us products that contained, or had the potential to contain, the subject minerals that they were covered by our conflict minerals policy. Moreover, we’ve continued our practice of strengthening supplier engagement by sending them an email after our data collection ended to thank them for their continued collaboration and provided a link to our conflict minerals policy.

OECD Step 2: Identify and Assess Risks in the Supply Chain

We reviewed and analyzed the responses from suppliers and determined which suppliers required further discussion to address inconsistent or incomplete responses. We compared the SORs identified by our suppliers in their completed templates against the list of facilities on the RMI website. We utilized the RMI website as a reference to determine whether the SORs received a “conformant” or “active” designation from the Responsible Minerals Assurance Process (“RMAP”). For entities declared by our suppliers that were not recognized by the RMI, we conducted additional due diligence to determine if in fact said entities were smelters or refiners.

OECD Step 3: Design and implement a strategy to respond to identified risks

The Company determined in good faith that some risks in our supply chain can reasonably be identified when suppliers who responded in a manner that did not meet our expectations or responses indicated potential risk with their CMRT declaration. In order to respond to any risks revealed in our supplier responses, we utilized a third-party system for surveys and data collection, as well as engaging our direct suppliers.


The Sourcing team responsible for conflict minerals compiled responses from our suppliers and analyzed the due diligence results to identify further risk, and they documented this information. When it was determined that further follow up was warranted, it was accomplished through various means of communication.

OECD Step 4: Carry Out Independent Third-Party Audit of Smelters/Refiners’ Due Diligence Practices

We do not have direct relationships with SORs of the subject conflict minerals in our products, and we did not carry out audits of these facilities. However, as a member of the RMI, Member ID# SHWI, we do support the independent third-party audits conducted for the RMAP. Moreover, we understand that RMI also actively engages alleged SORs to encourage them to participate in audits.

OECD Step 5: Report Annually on Supply Chain Due Diligence

This Conflict Minerals Report is available on our Company website at

https://suppliers.sherwin-williams.com/cs/suppliers/conflict-minerals and is filed with the SEC.

Results of Review

We obtained information from our suppliers about the facilities that may have processed the conflict minerals in our products.

Facilities used to process the subject minerals

The information that we obtained from our suppliers provided valuable insight and transparency into the SORs that process the subject minerals in our supply chain. Moreover, our data inquiry resulted in our suppliers providing a list of processing facilities that may have processed the subject minerals in our supply chain. The facilities listed in Annex I were declared by suppliers that responded to our inquiries at a product level and have been independently verified by a third-party as a smelter facility that is RMAP-conformant.

Tin Smelters:

Our suppliers have indicated that the tin in our products was processed by fifty-two (52) tin smelters, as listed on Annex I, that also have a “Conformant” status designated by the RMI, and therefore have been independently audited and confirmed to be conformant with the RMAP assessment protocols.

A listing of these tin smelters is available in Annex I.

Tungsten Smelters:

Our suppliers have indicated that the tungsten in our products was processed by only one (1) independently verified tungsten smelter. That smelter has a “Conformant” status designated by the RMI, and therefore has been independently audited and confirmed to be conformant with the RMAP assessment protocols.

The name of the identified tungsten smelter is available in Annex I.

Country of origin of the subject minerals

Based solely on the responses provided by our suppliers, and the data available to us as a RMI member, potential countries of origin that the subject minerals may have originated from are listed in Table 1.

Of the potential twenty-four (24) countries of origin in Table 1, tin contained in our products may have originated from some or all of them. There are only six (6) potential countries of origin for tungsten, all of which are identified with an asterisk (*) in Table 1.


Table 1

 

Australia    Colombia    Mongolia    Rwanda*
Austria    Dem. Republic of Congo*    Myanmar    Taiwan
Bolivia    Guinea    Nigeria    Thailand
Brazil    Indonesia    Peru    Uganda*
Burundi*    Laos    Portugal    United Kingdom
China*    Malaysia    Russian Federation*    Venezuela

Efforts to determine the mine or location of origin

We have determined that the most reasonable effort we can make to determine the mines or locations of origin of the subject minerals to the greatest possible specificity is to seek information from our direct suppliers about the SORs and the countries of origin of the subject minerals in our products and urge that our suppliers do the same with their direct suppliers. We must rely on our suppliers to provide information about the mine or location of origin of the subject minerals. Moreover, we remained a member of the RMI, a cross-industry organization that coordinates independent third-party audits of smelters and refiners on behalf of its members. We utilized the RCOI information provided to us by the RMI in order to determine the possible country of origin of the subject minerals.

Steps Taken and Being Taken to Mitigate Risk and to Improve our Due Diligence

The Sherwin-Williams Company has not been immune to the effects of the Covid-19 global pandemic. Like other companies, our business and supply chains have been significantly impacted by the pandemic. As such, our ability to invest additional resources into the improvement of our due diligence has been limited. Nonetheless, we remain committed to ethical and responsible souring of minerals and continue our collaboration with cross-industry groups, such as the RMI.

Since the start of the reporting period, the steps that we have taken, or are taking, to mitigate the risk that subject minerals benefit armed groups and to improve our due diligence include, but are not limited to:

 

   

Continued membership and funding of the RMI and the corresponding assessment protocols

 

   

Sustained iterative inquiry among the supply chain for determining country of origin

Cautionary Statement Regarding Forward-Looking Information

Certain statements contained in this Report, including those made under the “Steps Taken and Being Taken to Mitigate Risk and to Improve our Due Diligence” section, may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based upon management’s current expectations, estimates, assumptions and beliefs concerning future events and conditions. Any statement that is not historical in nature is a forward-looking statement and may be identified by the use of words and phrases such as “believe,” “expect,” “may,” “will,” “should,” “project,” “could,” “plan,” “goal,” “potential,” “seek,” “intend” or “anticipate” or the negative thereof or comparable terminology.

Readers are cautioned not to place undue reliance on any forward-looking statements. Forward-looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of the Company and such risks, uncertainties and other factors could cause actual results to differ materially from such statements and from the Company’s historical results and experience. These risks, uncertainties and other factors include such things as (a) the responsible sourcing of conflict minerals in our supply chain by our direct and indirect suppliers, (b) the effectiveness of traceability systems used by our direct and indirect suppliers to determine the source and chain of custody of conflict minerals contained in our supply chain, and (c) other risks, uncertainties and factors described from time to time in the Company’s reports filed with the Securities and Exchange Commission.

Readers are cautioned that it is not possible to predict or identify all of the risks, uncertainties and other factors that may affect future results and that the above list should not be considered to be a complete list. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as otherwise required by law.


Annex I:

 

Smelter ID

  

Alias

  

Metal

CID000228    Chenzhou Yunxiang Mining and Metallurgy Co., Ltd.    Tin
CID000292    Alpha    Tin
CID000402    Dowa    Tin
CID000438    EM Vinto    Tin
CID000468    Fenix Metals    Tin
CID000538    Gejiu Non-Ferrous Metal Processing Co., Ltd.    Tin
CID000555    Gejiu Zili Mining And Metallurgy Co., Ltd.    Tin
CID000760    Huichang Jinshunda Tin Co., Ltd.    Tin
CID000942    Gejiu Kai Meng Industry and Trade LLC    Tin
CID001070    China Tin Group Co., Ltd.    Tin
CID001105    Malaysia Smelting Corporation (MSC)    Tin
CID001142    Metallic Resources, Inc.    Tin
CID001173    Mineracao Taboca S.A.    Tin
CID001182    Minsur    Tin
CID001191    Mitsubishi Materials Corporation    Tin
CID001231    Jiangxi New Nanshan Technology Ltd.    Tin
CID001314    O.M. Manufacturing (Thailand) Co., Ltd.    Tin
CID001337    Operaciones Metalurgicas S.A.    Tin
CID001399    PT Artha Cipta Langgeng    Tin
CID001402    PT Babel Inti Perkasa    Tin
CID001406    PT Babel Surya Alam Lestari    Tin
CID001453    PT Mitra Stania Prima    Tin
CID001458    PT Prima Timah Utama    Tin
CID001460    PT Refined Bangka Tin    Tin
CID001468    PT Stanindo Inti Perkasa    Tin
CID001477    PT Timah Tbk Kundur    Tin
CID001482    PT Timah Tbk Mentok    Tin
CID001539    Rui Da Hung    Tin
CID001758    Soft Metais Ltda.    Tin
CID001898    Thaisarco    Tin
CID001908    Gejiu Yunxin Nonferrous Electrolysis Co., Ltd.    Tin
CID002036    White Solder Metalurgia e Mineracao Ltda.    Tin
CID002158    Yunnan Chengfeng Non-ferrous Metals Co., Ltd.    Tin
CID002468    Magnu’s Minerais Metais e Ligas Ltda.    Tin
CID002500    Melt Metais e Ligas S.A.    Tin
CID002503    PT ATD Makmur Mandiri Jaya    Tin
CID002517    O.M. Manufacturing Philippines, Inc.    Tin
CID002593    PT Rajehan Ariq    Tin
CID002706    Resind Industria e Comercio Ltda.    Tin
CID002773    Metallo Belgium N.V.    Tin
CID002774    Metallo Spain S.L.U.    Tin


CID002834    Thai Nguyen Mining and Metallurgy Co., Ltd.    Tin
CID002835    PT Menara Cipta Mulia    Tin
CID002844    HuiChang Hill Tin Industry Co., Ltd.    Tin
CID002849    Guanyang Guida Nonferrous Metal Smelting Plant    Tin
CID003116    Guangdong Hanhe Non-Ferrous Metal Co., Ltd.    Tin
CID003190    Chifeng Dajingzi Tin Industry Co., Ltd.    Tin
CID003205    PT Bangka Serumpun    Tin
CID003325    Tin Technology & Refining    Tin
CID003379    Ma’anshan Weitai Tin Co., Ltd.    Tin
CID003381    PT Rajawali Rimba Perkasa    Tin
CID003397    Yunnan Yunfan Non-ferrous Metals Co., Ltd.    Tin
CID002320    Xiamen Tungsten (H.C.) Co., Ltd.    Tungsten