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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM SD

Specialized Disclosure Report

 

FLUENCE ENERGY, INC.

(Exact name of registrant as specified in its charter)

 

  Delaware   001-40978  
  (State or other jurisdiction of
incorporation)		   (Commission File Number)  

 

4601 Fairfax Drive, Suite 600

Arlington, Virginia 22203

(Address of principal executive offices) (Zip Code)

 

Ahmed Pasha

Senior Vice President and Chief Financial Officer

(833) 358-3623

(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

 

A copy of Fluence Energy, Inc.’s Conflict Minerals Report for the calendar year ended December 31, 2023 is provided as Exhibit 1.01 hereto and is publicly available online at https://ir.fluenceenergy.com. The content of Fluence Energy, Inc.’s website is included for general information only and does not constitute part of, and is not incorporated by reference into, this Form SD or the Conflict Minerals Report nor deemed filed with the U.S. Securities and Exchange Commission.

 

Item 1.02 Exhibit

 

The Conflict Minerals Report required by Item 1.01 is filed as Exhibit 1.01 to this Form SD.

 

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 Number   Description
1.01   Conflict Minerals Report for the reporting period January 1, 2023 to December 31, 2023.

 

 

 

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.

 

  FLUENCE ENERGY, INC.
   
Date: May 31, 2024 By: /s/ Ahmed Pasha
    Ahmed Pasha
    Senior Vice President and Chief Financial Officer

 

 

 

Exhibit 1.01

 

Fluence Energy, Inc.

Conflict Minerals Report

For the Calendar Year Ended December 31, 2023

 

This Conflict Minerals Report (the “Report”) for the reporting period from January 1, 2023 through December 31, 2023 (the “Reporting Period”) has been prepared pursuant to Rule 13p-1 under the Securities Exchange Act of 1934 and Form SD (the “Conflict Minerals Rule”). The Conflict Minerals Rule was adopted by the Securities and Exchange Commission (“SEC”) to implement reporting and disclosure requirements related to conflict minerals as directed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The Conflict Minerals Rule imposes certain reporting obligations on SEC registrants who have a reason to believe that the products they manufacture, or contract to manufacture, contain conflict minerals that are necessary to the functionality or production of those products. Under the Conflict Minerals Rule, "conflict minerals" are defined by the SEC to be cassiterite, columbite-tantalite (coltan), gold, and wolframite, including their derivatives, which are limited to tantalum, tin, and tungsten. Pursuant to the Conflict Minerals Rule, if an SEC registrant has reason to believe that any of those conflict minerals used in their products may have originated in the Democratic Republic of the Congo (“DRC”) or an adjoining country (together with the DRC, the “Covered Countries”), or the SEC registrant is unable to determine the country of origin of such conflict minerals, then the SEC registrant is required to submit a Conflict Minerals Report to the SEC that includes a description of the measures it took to exercise due diligence on the conflict minerals’ source and chain of custody.

 

This Report describes our inquiry and the results of the inquiry, along with our due diligence process for conflict minerals for the calendar year ended December 31, 2023. The information in this Report includes the activities of all majority-owned subsidiaries and entities that are required to be consolidated by Fluence Energy, Inc. under U.S. generally accepted accounting principles.

 

Cautionary Note on Forward-Looking Statements

 

This Report includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that statements in this Report that are not strictly historical statements, including without limitation, statements regarding our intentions to enhance future supplier engagement, risk mitigation efforts and strategy, and improve due diligence and other processes and our other efforts to promote and increase our supply chain transparency and our expectations regarding future smelters and refiners participation in RMAP (as defined herein) and other globally recognized auditing and reporting standards constitute forward-looking statements that involve risks and uncertainties. Actual results could differ materially from such forward-looking statements. Risks and uncertainties that could cause actual results to differ include, without limitation, the risks and uncertainties set forth in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 and filed with the SEC on November 29, 2023, as updated by any Quarterly Reports on Form 10-Q and other filings with the SEC from time to time. We are not under any obligation and do not intend to make publicly available any update or other revisions to any of the forward-looking statements contained in this Report to reflect circumstances existing after the date of this Report or to reflect the occurrence of future events even if experience or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized.

 

 

 

1. Introduction

 

Fluence Energy, Inc., a Delaware corporation (the "Company”), was formed on June 21, 2021 and completed an initial public offering on November 1, 2021. We conduct our business operations through Fluence Energy, LLC and its direct and indirect subsidiaries. Fluence Energy, LLC was formed on June 30, 2017, as a joint venture between Siemens Industry, Inc., an indirect subsidiary of Siemens AG, and AES Grid Stability, LLC, an indirect subsidiary of The AES Corporation and commenced operations on January 1, 2018. When used in this Report, the terms “we,” “us,” “our”, “Fluence”, and “Company” mean Fluence Energy, Inc. and its direct and indirect subsidiaries. The references herein to the Company’s website are provided for convenience only, and its contents are not incorporated by reference into this Form SD nor deemed filed with the SEC.

 

Fluence is a global market leader in energy storage products and services, and optimization software for renewables and storage. With a presence in 47 markets globally, Fluence provides an ecosystem of offerings to drive the clean energy transition, including modular, scalable energy storage products, comprehensive service offerings, and AI-enabled optimization software for managing and optimizing renewables and storage from any provider.

 

During the Reporting Period, we did not directly manufacture products that contained conflict minerals necessary to the functionality or production of those products. This Report relates solely to those products that we contracted to be manufactured that may contain conflict minerals necessary to their functionality or production (the “covered products”). The covered products during the Reporting Period include our energy storage products and solutions.

 

2. Fluence’s Responsible Supply Chain

 

We are committed to responsibly sourcing all materials and components that are used in the products contracted to be manufactured by the Company and products that may be manufactured by the Company in the future. Our suppliers are expected to comply with our Code of Conduct for Fluence and Third-Party Intermediaries (the “Supplier Code”). The Supplier Code outlines our expectations for our suppliers and includes both our commitment to conflict-free material sourcing as well as our expectations for suppliers regarding their own respective efforts regarding conflict-free material sourcing in their respective supply chains. We may ask our suppliers to periodically certify their compliance with the Supplier Code.

 

We have established an internal process known as our “Conflict Minerals Program” to identify, track, and trace any potential conflict minerals within our supply chain. This initiative is designed to assess the use, sourcing, and origin of conflict minerals. As part of this initiative, we have developed a Fluence Responsible Sourcing Policy and a Fluence Conflict Minerals Policy, both of which outline our expectations for suppliers regarding responsible sourcing practices and use of conflict minerals. These policies, along with our Supplier Code and other sustainability related initiatives, are intended to discourage and prevent the use of conflict minerals and other materials linked to armed conflict, human rights violations, or environmental harm, irrespective of sourcing location. Fluence expects our suppliers to implement policies, due diligence frameworks, and management systems to promote supply chain transparency for all materials and components used in our products. Our expectation is that these supplier-adopted due diligence policies, processes, and management systems should align with internationally recognized frameworks, such as the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, including the related supplements on tantalum, tin, tungsten, and gold (collectively, the “OECD Framework”).

 

Transparency of sourcing information from our supply chain is critical to our own efforts to source responsibly. Upon request, our suppliers are expected to provide us with information on their respective sourcing, due diligence efforts, and findings for all materials and components, including conflict minerals. For more information and details on our internal responsible sourcing policies, please see our Responsible Sourcing Policy, Conflict Minerals Policy and Supplier Code, all of which are available on our website at https://fluenceenergy.com/sustainability/.

 

 

 

3. Reasonable Country of Origin Inquiry

 

This Section describes the Company’s Reasonable Country of Origin Inquiry (“RCOI”) for Conflict Minerals as required by Item 1.01 of Form SD.

 

As part of the Company’s RCOI, the Company conducted an internal scoping assessment to identify materials and components that are used in our products that potentially contain conflict minerals and determine which of these materials and components are subject to the Conflict Minerals Rule (the “Scoping Assessment”). This Scoping Assessment helps us focus our RCOI efforts on relevant materials and components within the scope of the Conflict Minerals Rule. Our Responsible Sourcing Team collaborated with Fluence Supply Chain team members and Fluence Product Engineers to conduct the Scoping Assessment, in an effort to target the correct suppliers who may provide the Company with materials and components that contain conflict minerals. We then worked directly with these targeted suppliers (as defined below) to conduct the RCOI. Due to the complexity of our energy storage solutions, and the depth, breadth, and constant evolution of our supply chain, we do not believe it is practicable to survey all our suppliers.

 

For 2023, the Company surveyed those suppliers reasonably believed or known to have provided materials, components, or products included in our covered products that may contain conflict minerals (the “targeted suppliers”), which is approximately 82% of all of our direct suppliers. Approximately 91% of such targeted suppliers either submitted a response to the Conflict Minerals Reporting Template (“CMRT”), made available through the Responsible Minerals Initiative (“RMI”), or responded that the products they supplied to the Company contained no conflict minerals. We continued to seek responses from our remaining targeted suppliers through April 30, 2024 in preparation of this Report. If a targeted supplier did not provide a response or provided a response we believed to be incomplete or inaccurate, the Company sent follow-up requests to individual targeted suppliers pursuant to an escalation process. We reviewed completed targeted supplier responses for completeness and internal consistency. We believe that surveying targeted suppliers using their responses to the CMRT is a reasonable means of determining whether conflict minerals originated from a conflict region or helped finance armed conflict. However, there are inherent limitations in the information provided by third parties, including, but not limited to, potential inaccuracies, incompleteness or falsified information despite our efforts to review the information. By using our supply chain due diligence processes effectively, working to drive accountability within our supply chain, and continuing our engagement and outreach efforts, we hope to continue to develop transparency into our supply chain.

 

4. Due Diligence Performed

 

We designed our due diligence measures with an aim to conform, in all material respects, to the OECD Framework. These due diligence measures take into account the OECD’s recommendations for companies in downstream segments of the supply chain, which typically are several tiers removed from, and have no direct relationship with, smelters or refiners ("SoRs"). We are many steps removed from the mining processes, we do not purchase raw ore or unrefined conflict minerals, we do not purchase minerals directly from SoRs, and we do not conduct purchasing activities directly in any of the Covered Countries.

 

 

 

Step 1: Company Management Systems

 

A.Internal Team: The Company has an internal Responsible Sourcing team within its Environmental, Social, and Governance ("ESG") department to lead the supplier due diligence efforts, which includes sending CMRTs to our suppliers, collecting, and evaluating their responses, following up with suppliers who we believe have provided inadequate or incorrect information, sending reminders to suppliers who have not responded, monitoring, and tracking the status of responses, and then rolling up the reports to the Company’s customers. This Responsible Sourcing team reports directly to the Director, ESG & Sustainability and work hand-in-hand with other members of the Supply Chain, Legal, and Compliance teams in implementing the Company’s strategy and objectives with respect to responsible sourcing, ethical business practices, and social responsibility and sustainability.

 

B.Company Policies: The Company has adopted the following policies that demonstrate and promote our commitment to responsible sourcing, ethical business practices, and social responsibility and sustainability:

 

·Our Supplier Code (described in greater detail above) lays out our expectation that our suppliers globally undertake reasonable due diligence within their supply chains regarding conflict minerals.

 

·Our Code of Business Conduct reinforces our commitment to ethical business practices and our expectations that all directors, officers, and employees will adhere to the expected behaviors and will continue to comply with the Code of Business Conduct, as well as Company policies, laws, and regulations that apply to their jobs. The Code of Business Conduct is available on our website at https://ir.fluenceenergy.com/corporate-governance/governance-overview.

 

·Our Human Rights Policy reinforces our commitment to ethical business practices. This policy sets forth our commitment to promote our global operations being conducted in a manner that maintains an inclusive workplace where people are voluntarily employed, any unlawful employment or exploitation of children is prohibited, and employee rights and freedoms are respected.

 

·Our Responsible Sourcing Policy and Conflict Minerals Policy also set forth our expectations for our suppliers on responsible sourcing and conflict minerals, both of which are described above and are available on our website at https://fluenceenergy.com/sustainability/.

 

C.Ethics Hotline: We also maintain an ethics hotline (described in the Company’s Code of Business Conduct) which can be used to report concerns relating to the Company’s responsible sourcing and conflict minerals activities.

 

D.Contracts: In addition, the Fluence Supply Chain team and Legal team work to incorporate required compliance with our Supplier Code, Conflict Minerals Policy, and Responsible Sourcing Policy into our purchase orders and supply agreements.

 

Step 2: Risk Identification and Assessment

 

Our Supply Chain team and Responsible Sourcing team work together to analyze the products and components purchased by the Company to determine whether those products and their components contain conflict minerals. The Company surveys targeted suppliers annually about the potential use and origin of conflict minerals in their respective supply chains during the RCOI, including reviewing SoR information and chain of custody information, as appropriate. The Company assesses survey responses to identify sourcing and supplier risks, and follow-up, due diligence, and risk mitigation are completed as necessary. During this assessment, the Company conducts SoR due diligence, including comparing supplier-disclosed SoRs against the RMI's list of facilities identified as conformant under the RMI Responsible Mineral Assurance Process ("RMAP").

 

 

 

Step 3: Risk Response Strategy

 

The Company conducts RCOI and due diligence on targeted suppliers using the CMRT and assesses supplier responses by analyzing each answer for completeness or inconsistencies within the data reported in the template. We follow up directly with those targeted suppliers who cannot definitively answer these questions, whose answers are ambiguous and require clarification, who fail to identify SoRs, or who fail to respond at all.

 

As we continue to develop and build our responsible sourcing program, we intend to enhance supplier communication and put processes in place intended to improve due diligence data accuracy, response rate, and data completion.

 

Step 4: Carry out an Independent Third-Party Audit of the Supply Chain Due Diligence at Identified Points in the Supply Chain.

 

We use and rely on audits of SoRs conducted by third parties through RMI and supplier self-disclosures.

 

Step 5: Report on Supply Chain Due Diligence.

 

The Company’s Form SD and this Report shall be publicly available on the Company’s website at https://ir.fluenceenergy.com/.

 

5. Results of Due Diligence Process

 

For the Reporting Period, the Company surveyed those suppliers reasonably believed or known to have provided materials, components, or products that may contain conflict minerals, which is approximately 82% of all of our direct suppliers. Approximately 91% of such targeted suppliers submitted a response. Following review of the list of SoRs maintained by the RMI and the RCOI responses received from its targeted suppliers, the Company identified a total of 603 SoRs that may be in our supply chain. These SoRs were compared to the RMI’s RMAP list of audited SoRs. Of the 603 SoRs identified, 58% are RMAP conformant. We recognize the importance of greater supply chain transparency and are working to foster improvements of responsible sourcing best practices by ourselves and our suppliers. We aim to consistently engage with our suppliers to increase awareness, accountability, and transparency and are actively working to increase SoR participation in RMAP and other globally recognized auditing and reporting standards.

 

Based on our due diligence efforts described herein, we are unable to conclusively determine the country of origin and the chain of custody of all the necessary conflict minerals in our covered products. Some of the respondents in our RCOI and due diligence processes did not provide SoR information or only provided their responses at a company-wide level, rendering the Company unable to conclude whether conflict minerals from SoRs that may have been identified were actually used in Company's covered products. Other targeted suppliers did not respond to the CMRT or our due diligence inquiries at all. We have therefore determined that a portion of the conflict minerals contained in our covered products may have originated from Covered Countries or may have been from recycled or scrap sources. We are, and plan to continue, working with our targeted suppliers to provide full and complete responses to our due diligence inquiries and the CMRT, as part of our efforts to promote and increase our supply chain transparency.

 

 

 

Because we have not described any of our covered products as “DRC conflict free”, based on guidance from the SEC's staff, we have not undertaken an independent private sector audit.

 

6. Due Diligence Process Improvements

 

As Fluence continues to conduct the due diligence on its products, as discussed above, we expect to continue to refine our procedures to meet our responsible sourcing goals as follows:

 

a.The Conflict Minerals program will continue to be managed by the Fluence Environmental, Social, and Governance team, with assistance from the Supply Chain, Product Engineering, Legal, and Compliance teams.

b.Fluence intends to improve its RCOI and due diligence processes.

c.Fluence intends to continue to engage with suppliers to obtain current, accurate and complete information about their respective supply chains, chain of custody, and the SoRs.

d.Fluence intends to continue to support supply chain transparency efforts.