Exhibit 1.01
ZIMMER BIOMET HOLDINGS, INC.
Conflict Minerals Report
For the Reporting Period from January 1, 2024 to December 31, 2024
This Conflict Minerals Report (this “Report”) of Zimmer Biomet Holdings, Inc. (“Zimmer Biomet,” the “Company,” “we,” “our” or “us”) has been prepared pursuant to Rule 13p-1 and Form SD (collectively, the “Rule”) promulgated under the Securities Exchange Act of 1934, as amended, for the reporting period from January 1, 2024 to December 31, 2024.
The Rule imposes certain reporting obligations on Securities and Exchange Commission (“SEC”) registrants whose products contain cassiterite, columbite-tantalite (coltan), gold, wolframite, or their derivatives, which are limited to tantalum, tin and tungsten (collectively, “conflict minerals”) that are necessary to the functionality or production of their products (such minerals are referred to as “necessary conflict minerals”). For products which contain necessary conflict minerals, the registrant must conduct in good faith a reasonable country of origin inquiry designed to determine whether any of the conflict minerals originated in the Democratic Republic of the Congo (“DRC”) or an adjoining country (collectively, the “covered countries”). If, based on such inquiry, the registrant knows or has reason to believe that any of the necessary conflict minerals contained in its products originated or may have originated in the DRC or an adjoining country and knows or has reason to believe that those necessary conflict minerals may not be solely from recycled or scrap sources, the registrant must conduct due diligence on the source and chain of custody of the necessary conflict minerals contained in those products.
Pursuant to SEC guidance issued April 29, 2014 and the SEC order issued May 2, 2014, we are not required to describe any of our products as “DRC conflict free” or “having not been found to be ‘DRC conflict free,’” and, therefore, we make no conclusion in this regard in this Report. Furthermore, given that we have not voluntarily elected to describe any of our products as “DRC conflict free,” an independent private sector audit of this Report has not been conducted.
Company and Products Overview
We are a global leader in musculoskeletal healthcare. We design, manufacture and market orthopedic reconstructive products; sports medicine, biologics, extremities and trauma products; craniomaxillofacial and thoracic products; surgical products; and a suite of integrated digital and robotic technologies that leverage data, data analytics and artificial intelligence. Our products and solutions help treat patients suffering from disorders of, or injuries to, bones, joints or supporting soft tissues. Our primary customers include orthopedic surgeons, neurosurgeons, and other specialists, hospitals, stocking distributors, healthcare dealers and, in their capacity as agents, healthcare purchasing organizations or buying groups, making Zimmer Biomet the final step in the supply chain prior to these products reaching the end customer.
Our orthopedic reconstructive devices include knee and hip implants that are used to replace joints that have deteriorated as a result of disease (principally osteoarthritis) or injury. Our sports medicine products are designed primarily for the repair of soft tissue injuries and are most commonly used in knee and shoulder procedures. Our biologics products are used as early intervention solutions for joint preservation or to support surgical procedures. Our foot and ankle and extremities products are designed to treat arthritic conditions and fractures in the foot, ankle, shoulder, elbow and wrist. Our craniomaxillofacial and thoracic products include face and skull reconstruction products as well as products that fixate and stabilize the bones of the chest in order to facilitate healing or reconstruction after open heart surgery, trauma or for deformities of the chest. Our trauma products are used to stabilize damaged or broken bones and their surrounding tissues to support the body’s natural healing process. Our surgical products are used to support various surgical procedures and include tourniquet systems, wound debridement devices, fluid waste management systems and surgical power systems.
Reasonable Country of Origin Inquiry
Our reasonable country of origin inquiry is discussed in the Specialized Disclosure Report on Form SD to which this Report is attached as an exhibit.
Due Diligence Framework
We designed our due diligence measures to be in conformity, in all material respects, with the internationally recognized due diligence framework as 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 and related supplements for gold and for tin, tantalum and tungsten.
Due Diligence Measures Undertaken
We are a downstream consumer of necessary conflict minerals. In most cases, there are several third parties in the supply chain between the original source of these minerals and us. We do not purchase necessary conflict minerals directly from mines, smelters or refiners; therefore, we rely on our suppliers to provide information regarding the origin of these minerals. We believe smelters and refiners are best situated to identify the sources of conflict minerals, and, therefore, we have taken steps to identify the smelters and refiners of necessary conflict minerals in our supply chain.
Step 1: Establish robust company management systems
We undertook the following measures to establish management systems to address compliance with the Rule:
•Established a cross-functional conflict minerals project team to direct the overall efforts of our conflict minerals compliance program.
•Adopted a policy statement on conflict minerals, communicated it to suppliers and published it on our Company’s website at www.zimmerbiomet.com/corporate/suppliers.html. Our policy statement provides, among other things, that we expect our suppliers to source conflict minerals from socially responsible sub-tier suppliers and manufacturers and to undertake reasonable due diligence within their supply chains to determine the origin of the conflict minerals contained in materials and products supplied to us.
•Reinforced our expectations of our suppliers via our Zimmer Biomet Code of Supplier Conduct, available at www.zimmerbiomet.com/corporate/suppliers.html; then under Global & North America Supplier Information, then under Global Guidelines, Supplier Code of Conduct, which sets forth important legal, ethical, behavioral and other requirements for our suppliers, including our policy statement on conflict minerals.
•Maintained a grievance mechanism to allow parties to contact us with conflict minerals-related questions or concerns via our Corporate Compliance Hotline website, www.zimmerbiomet.com/en/compliance.html#compliance-hotline.
•Engaged with suppliers, including notifying them in writing that we are subject to disclosure obligations under the Rule relating to the sources of necessary conflict minerals used in our products, that we must collect important supply chain data from them and that we expect their cooperation in providing such information in a timely manner.
•Leveraged materials, including a Conflict Minerals Reporting Template (“CMRT”), created and made available by the Responsible Minerals Initiative, which supports the responsible sourcing of minerals through the Responsible Minerals Assurance Process (“RMAP”).
•Included provisions in our policy statement on conflict minerals and our Zimmer Biomet Code of Supplier Conflict that address suppliers’ obligations to provide us with information pertaining to the origin of any necessary conflict minerals in materials or components supplied to us.
•Provided suppliers with opportunities for training and links to educational websites related to conflict minerals.
Step 2: Identify and assess risks in the supply chain
We took the following measures to identify risks in our supply chain:
•Zimmer Biomet identified a sourcing point-of-contact at each Zimmer Biomet site to specifically identify Suppliers and Supplier points-of-contact for Conflict Minerals Training and data gathering.
•Surveyed suppliers, identified by each site, were contacted for providing information concerning materials or components necessary to the production and/or functionality of our products. Suppliers were asked to provide information based on the CMRT through the use of iPoint’s Conflict Minerals Platform. Our cross-functional team identified 292 suppliers globally to be surveyed due to potential necessary raw materials in the products we purchased.
•Provided, via iPoint, training materials to suppliers on the use of iPoint’s Conflict Minerals Platform portal and the CMRT.
•Reviewed and assessed survey responses. Zimmer Biomet and/or iPoint followed up with suppliers multiple times when responses were not received in a timely manner, incomplete or appeared to report inconsistent information.
•When a supplier response stated that conflict minerals were sourced from the DRC or an adjoining country and identified the smelter or refiner involved, Zimmer Biomet had iPoint compare the identified smelter or refiner (even though the supplier had not confirmed that the necessary conflict minerals were used in the materials supplied to us) against the RMAP Conformant Smelters and Refiners Lists to confirm whether the smelter or refiner in question was identified as having undergone an assessment through the RMAP or industry equivalent program and was validated to be conformant with the protocols.
Step 3: Design and implement a strategy to respond to identified risks
We designed and implemented strategies to respond to identified risks, including the following:
•Where applicable, both Zimmer Biomet and iPoint sent follow-up communications to suppliers that provided incomplete or inconsistent survey responses.
•We requested suppliers submitting survey responses of conflict “status” to complete additional survey tasks to collect additional relevant information.
•Suppliers who received a follow-up communication were directed to our policy statement on conflict minerals and were provided the opportunity for conflict minerals training and education materials. Suppliers were asked to review the materials and provide updated survey information in a timely manner.
•Suppliers who did not respond to our initial survey were sent escalation communications from iPoint and/or the Zimmer Biomet Compliance Team requesting that they respond to the survey and provide the requested information.
•Some unresponsive suppliers were also advised to complete our requested survey to the best of their ability and then directed to iPoint for assistance with form information.
•Further, some unresponsive suppliers were informed that Zimmer Biomet would place a negative note in the Supplier’s file because of this failure to respond to our survey. Delinquent Suppliers were informed that this escalation may result in impact to future purchasing decisions.
Step 4: Carry out independent third-party audit of smelter/refiner due diligence practices
As previously noted, we are a downstream consumer of the necessary conflict minerals in our products and are many steps removed from smelters and refiners who provide minerals and ores. As such, we do not perform or have direct audits of smelters and refiners within the supply chain. Our due diligence efforts rely on cross-industry initiatives to conduct smelter and refiner due diligence and independent third-party audits, such as those led by the Responsible Minerals Initiative, including the RMAP.
Step 5: Report annually on supply chain due diligence
A copy of our Specialized Disclosure Report on Form SD, along with a copy of this Conflict Minerals Report, which is attached to the Form SD as Exhibit 1.01, is available on our website at www.zimmerbiomet.com (in the “Investors” section under the “Financial Information” caption and “SEC Filings” sub-caption).
Due Diligence Results
We initially identified 304 suppliers globally that may contribute necessary conflict minerals to our products, but 12 of those suppliers were not surveyed due to various factors, including the supplier no longer doing business with Zimmer Biomet, being out of business, being a distributor or because Zimmer Biomet did not purchase from the supplier during 2024. As a result, 292 suppliers remained in survey scope, a lower quantity of suppliers than in previous years primarily due to our efforts to consolidate our supply base to fewer suppliers and to reduce inventory on hand. The survey response rate was approximately 86% (250 out of 292) from 2024 in-scope suppliers, which was lower than the prior year's return rate of 91% in 2023 yet still improved compared to our return rates of 77% in 2022 and 73% in 2021. Most of the suppliers who responded provided data at a company, division or product category level and/or were unable to specify the smelters or refiners that processed conflict minerals in materials or components supplied to us.
Of the 250 suppliers that responded to our survey:
•151 (approximately 60%) reported that no conflict minerals are intentionally added or used in the products or the production process that they manufacture or contract to manufacture for Zimmer Biomet; and
•99 (approximately 40%) reported that conflict minerals were intentionally added or used in the products or the production process that they manufacture or contract to manufacture for Zimmer Biomet; of these suppliers, 35 (representing approximately 14% of the responding survey population) reported that their supply chain sources the conflict minerals from the covered countries.
Appendix A lists the smelters and refiners that the suppliers who responded to our survey reported as being in their supply chains. Only known smelters or refiners (those listed in the CMRT) with an RMAP audit status of Conformant or Active are included in Appendix A. Not all of these smelters and refiners may have processed necessary conflict minerals contained in our products, since suppliers may have reported to us smelters and refiners that were not in our supply chain due to the decision of such suppliers to provide data at a company, division or product category level, over-inclusiveness in the information received from their respective suppliers, or for other reasons.
Efforts to Determine the Mine or Location of Origin
As described above, we are a downstream consumer of necessary conflict minerals. In most cases, there are several third parties in the supply chain between the original source of these minerals and us. Further, the large majority of suppliers who responded to our survey provided data at a company, division or product category level. Our due diligence process, described above, reflects our efforts to determine with the greatest specificity the mines or location of origin of the conflict minerals necessary to the functionality or production of products we manufacture or contract to manufacture.
Continuous Improvement Efforts to Mitigate Risk
Due to the complexity of our global supply chain, we engaged iPoint in 2024 as we did in several prior calendar years to assist us in collecting, managing, and aggregating conflict minerals information. Going forward, because we have seen a reduction in the portion of our suppliers using conflict minerals from the covered countries, we expect to continue to take the following additional steps, among others, to improve our due diligence measures and to further mitigate the risk that necessary conflict minerals contained in our products may finance or benefit armed groups in the DRC or adjoining countries:
•Continue to educate our direct suppliers about our SEC reporting obligations related to conflict minerals.
•Continue to offer conflict mineral training, educational materials and website links to our direct suppliers, which they may provide to their own suppliers.
•Continue to include our policy statement on conflict minerals as part of sourcing training curriculum.
•Continue to include our policy statement on conflict minerals in our new supplier onboarding process.
•Continue to encourage our direct suppliers to implement responsible sourcing and ask them to encourage smelters and refiners to become conformant with the RMAP assessment protocols.
•Continued escalations to Zimmer Biomet’s Sourcing functions regarding suppliers that failed to provide a response, failed to meet our
internal timeline for reporting, or failed to provide data specific to materials or components supplied to us.
•Retain copies of escalation communications in delinquent Supplier files for consideration evaluating the Supplier for future business.
Independent Private Sector Audit
Not applicable.
Appendix A
The following smelters and refiners were reported by our suppliers as being in their supply chains.
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Metal |
Smelter/Refiner Name |
Smelter/Refiner Country |
Smelter ID |
Smelter Status |
Gold |
Abington Reldan Metals, LLC |
UNITED STATES OF AMERICA |
CID002708 |
Conformant |
Gold |
Advanced Chemical Company |
UNITED STATES OF AMERICA |
CID000015 |
Conformant |
Gold |
Agosi AG |
GERMANY |
CID000035 |
Conformant |
Gold |
Aida Chemical Industries Co., Ltd. |
JAPAN |
CID000019 |
Conformant |
Gold |
Almalyk Mining and Metallurgical Complex (AMMC) |
UZBEKISTAN |
CID000041 |
Conformant |
Gold |
AngloGold Ashanti Corrego do Sitio Mineracao |
BRAZIL |
CID000058 |
Conformant |
Gold |
Argor-Heraeus S.A. |
SWITZERLAND |
CID000077 |
Conformant |
Gold |
ASAHI METALFINE, Inc. |
JAPAN |
CID000082 |
Conformant |
Gold |
Asahi Refining Canada Ltd. |
CANADA |
CID000924 |
Conformant |
Gold |
Asahi Refining USA Inc. |
UNITED STATES OF AMERICA |
CID000920 |
Conformant |
Gold |
Asaka Riken Co., Ltd. |
JAPAN |
CID000090 |
Conformant |
Gold |
Aurubis AG |
GERMANY |
CID000113 |
Conformant |
Gold |
Bangalore Refinery |
INDIA |
CID002863 |
Active |
Gold |
Bangko Sentral ng Pilipinas (Central Bank of the Philippines) |
PHILIPPINES |
CID000128 |
Conformant |
Gold |
Boliden Ronnskar |
SWEDEN |
CID000157 |
Conformant |
Gold |
C. Hafner GmbH + Co. KG |
GERMANY |
CID000176 |
Conformant |
Gold |
CCR Refinery - Glencore Canada Corporation |
CANADA |
CID000185 |
Conformant |
Gold |
Chimet S.p.A. |
ITALY |
CID000233 |
Conformant |
Gold |
Chugai Mining |
JAPAN |
CID000264 |
Conformant |
Gold |
Coimpa Industrial LTDA |
BRAZIL |
CID004010 |
Conformant |
Gold |
Dowa |
JAPAN |
CID000401 |
Conformant |
Gold |
DSC (Do Sung Corporation) |
KOREA, REPUBLIC OF |
CID000359 |
Conformant |
Gold |
Eco-System Recycling Co., Ltd. East Plant |
JAPAN |
CID000425 |
Conformant |
Gold |
Eco-System Recycling Co., Ltd. North Plant |
JAPAN |
CID003424 |
Conformant |
Gold |
Eco-System Recycling Co., Ltd. West Plant |
JAPAN |
CID003425 |
Conformant |
Gold |
Elite Industech Co., Ltd. |
TAIWAN, PROVINCE OF CHINA |
CID004755 |
Conformant |
Gold |
Gold by Gold Colombia |
COLOMBIA |
CID003641 |
Conformant |
Gold |
Heimerle + Meule GmbH |
GERMANY |
CID000694 |
Conformant |
Gold |
Heraeus Germany GmbH Co. KG |
GERMANY |
CID000711 |
Conformant |
Gold |
Heraeus Metals Hong Kong Ltd. |
CHINA |
CID000707 |
Conformant |
Gold |
Impala Platinum - Platinum Metals Refinery (PMR) |
SOUTH AFRICA |
CID004714 |
Active |
Gold |
Impala Refineries – Base Metals Refinery (BMR) |
SOUTH AFRICA |
CID004604 |
Conformant |
Gold |
Impala Rustenburg |
SOUTH AFRICA |
CID004610 |
Conformant |
Gold |
Inner Mongolia Qiankun Gold and Silver Refinery Share Co., Ltd. |
CHINA |
CID000801 |
Conformant |