Harley-Davidson, Inc.
Conflict Minerals Report
for the Year Ended December 31, 2023
This conflict minerals report for the year ended December 31, 2023, is presented to comply with Rule 13p-1 under the Securities Exchange Act of 1934 (the
“Rule”).
This report has been prepared by the management of Harley-Davidson, Inc. (the “Company,” “we,” “us,” or “our”). The
information in this report includes the activities of all majority-owned subsidiaries and variable interest entities required to be consolidated.
The Company operates three segments: Harley-Davidson Motor Company (HDMC), LiveWire, and Harley-Davidson Financial
Services (HDFS). HDMC designs, manufactures and sells motorcycles. HDMC also sells motorcycle parts, accessories, and apparel as well as licenses its trademarks. HDMC’s products are sold to retail customers primarily through a network of independent
dealers. Dealers generally stock and sell Harley-Davidson motorcycles, parts and accessories, apparel, and licensed products and service motorcycles. A brief description of each of the product categories comprising the HDMC segment is as follows:
Motorcycles -
HDMC offers internal combustion engine motorcycles under the Harley-Davidson brand. HDMC’s internal combustion engines generally have displacements that are greater than 600 cubic centimeters (cc), up to a maximum displacement of approximately
1900cc. Additionally, during 2023, HDMC introduced a smaller-displacement motorcycle in certain markets.
We believe it is likely that tin, tantalum, tungsten, and gold (collectively, “3TG”) may be found in some form in all
HDMC motorcycles. However, we believe that the amount and value of 3TG that may be in any given motorcycle is generally de minimis compared to the size and value of the motorcycle as a whole.
Parts &
Accessories - Parts and accessories products are comprised of Genuine Motor Parts and Genuine Motor Accessories. Genuine Motor Parts include replacement parts and Genuine Motor Accessories include mechanical and cosmetic accessories.
Apparel &
Licensing – Apparel includes clothing and riding gear, including Genuine MotorClothes®. In addition, the Company creates reach and awareness of the Harley-Davidson brand among its customers and the non-riding public by licensing the name
“Harley-Davidson” and other trademarks owned by the Company for use on a range of products.
Other Services
- The Company also provides a variety of services to its independent dealers, including motorcycle service and business management training programs, and customized dealer software packages.
LiveWire is an all-electric motorcycle brand with a focus on pioneering the two-wheeled electric motorcycle space.
LiveWire sells electric motorcycles, electric balance bikes for kids, parts and accessories and apparel in the United States and certain international markets. Electric motorcycles, related parts and accessories and apparel are sold at wholesale to a
network of independent retail partners and direct to consumers through a company-owned dealer, through online sales and direct to customers through select international partners primarily in Europe. Electric balance bikes and related parts and
accessories are sold under the STACYC brand at wholesale to independent dealers and distributors and direct to consumers online.
We believe it is likely that 3TG may be found in some form in all LiveWire products. However, we believe that the
amount and value of 3TG that may be in any given motorcycle or electric balance bike is generally de minimis compared to the size and value of
the item as a whole.
HDFS is engaged in the business of financing and servicing wholesale inventory receivables and retail consumer loans,
primarily for the purchase of Harley-Davidson and LiveWire motorcycles. HDFS also works with certain unaffiliated insurance companies to provide motorcycle insurance and protection products to motorcycle owners. HDFS does not manufacture any products
that are subject to the Rule.
Supply Chain
We rely on our direct suppliers to provide information regarding the presence of 3TG in components and materials that
they supply to us and the origin of that 3TG - including sources of 3TG that lower-tier suppliers supply to them. Our supply chain during the reporting period included 382 different direct suppliers (excluding suppliers who only provide services to
us). We do not believe our relationships with our licensees constitute contracts to manufacture any of our products.
Conflict Minerals Statement:
We adopted and disclosed the following Statement on Conflict Minerals:
Harley-Davidson Statement on Conflict Minerals
Harley-Davidson is committed to supporting responsible sourcing of its materials from suppliers that share our values
around human rights and environmental responsibility. To further this objective, we are committed to complying with the requirements set forth in the final rule regarding the use of “Conflict Minerals” under Section 1502 of the Dodd-Frank Wall Street
Reform and Consumer Protection Act, and the related rules and regulations issued by the U.S. Securities and Exchange Commission (“SEC”).
The rules and regulations require certain public companies to perform supply chain due diligence to identify the extent
to which their products contain Conflict Minerals originating from the Democratic Republic of the Congo and certain adjoining countries (“Covered Countries”). “Conflict Minerals” is currently defined as tin (cassiterite), tungsten (wolframite),
tantalum (columbite-tantalite or coltan), and gold.
In order to support a conflict-free supply chain and comply with the applicable rules and regulations, Harley-Davidson
commits to:
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Support the objectives of the legislation on Conflict Minerals.
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Identify the presence of Conflict Minerals in our supply chain that are or may be necessary to the
functionality of our product.
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Develop repeatable processes to determine whether Conflict Minerals in our supply chain, if any, originate
from Covered Countries or are derived from recycled or scrap sources.
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Perform a series of supplier inquiries to help ensure the responsible sourcing of minerals within our supply
chain.
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Educate our suppliers with respect to our reporting requirements related to Conflict Minerals.
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Require all suppliers to adhere to the H-D Supplier Code of Conduct, which includes the responsible sourcing
of materials.
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Prepare an appropriate disclosure for Harley-Davidson’s required SEC filings on the due diligence performed.
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In addition to the foregoing commitments, we expect our suppliers to perform similar due diligence on the
sources of Conflict Minerals in their respective supply chains and make their findings available to us.
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This statement is publicly available on our website at https://investor.harley-davidson.com/governance/corporate-governance/default.aspx
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Conflict Minerals Compliance Process
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Compliance Framework
We have designed our Conflict Minerals Compliance Program (“Compliance Program”) in a manner that we intend to conform
in all material respects with 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, Third Edition (“OECD Guidance”),
and the related Supplements for 3TG.
Statement on Conflict Minerals
As described above, we adopted a Statement on Conflict Minerals, which is posted on our website at: https://investor.harley-davidson.com/governance/corporate-governance/default.aspx
Internal Team and Training
The Company has established an internal reporting structure for conflict minerals which includes receiving regular
updates on the project's progress during the reporting period. A team of subject matter experts is responsible for implementing our conflict minerals compliance strategy. Senior management is briefed about the results of our compliance efforts
regularly. Harley-Davidson provides its internal and external stakeholders with training and assistance on related matters as needed.
Control Systems
Our controls aimed at ensuring the completeness and accuracy of our compliance efforts include: (i) the integration of
our product data repositories with our internal conflict minerals survey tool, (ii) mechanisms to identify additional suppliers in our supply base, and (iii) the implementation of a standardized follow-up cadence with suppliers based on their survey
responses. Additional controls include our Code of Business Conduct, which outlines expected behaviors for all our employees, and our Supplier Code of Conduct that requires our suppliers to cooperate with our conflict minerals and other compliance
efforts.
As we do not have direct relationships with 3TG smelters and refiners in the ordinary course of business, we utilize a
reputable third-party conflict minerals service firm (“Service Firm”) to assist with our compliance efforts. We use this firm to organize and analyze data received internally and externally and to gain insight into how to improve our reporting
process further. We also have access to a list of global smelters and can determine which are certified as “conflict-free” and those that are not.
Grievance Mechanism
We have longstanding grievance mechanisms that allow employees and suppliers to report violations of the Company’s
policies, including our Supplier Code of Conduct.
Records Maintenance
We have retained all relevant documentation from our country-of-origin inquiry and due diligence measures.
Identify and Assess Risk in Our Supply Chain
Because of the size of our Company, the complexity of our products, and the depth, breadth, and constant evolution of
our supply chain, it is difficult for us to identify actors upstream from our direct suppliers.
As described above, our efforts relating to the reporting period encompassed 382 direct suppliers (excluding suppliers
who only provide services to us), which constituted substantially our entire direct supply chain. We rely on suppliers whose materials or components contain 3TG to provide us with information about the source of 3TG contained in those materials or
components. Our direct suppliers similarly rely upon information that their suppliers provide to them. We believe many of the largest suppliers either are SEC registrants and subject to the Rule or are suppliers to other SEC registrants that are
subject to the Rule.
Design and Implement a Strategy to Respond to Risks
The Company has a process through which the conflict minerals program is implemented, managed, and monitored. We update
senior management regarding changes to the conflict minerals program or risk assessments.
Report on Supply Chain Due Diligence
This conflict minerals report is being filed with the SEC as an exhibit to our specialized disclosure report on Form SD
and is available on our website at https://investor.harley-davidson.com/governance/corporate-governance/default.aspx.
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Reasonable Country of Origin Inquiry and Results
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Supplier Surveys
Consistent with our Statement on Conflict Minerals, we designed a country-of-origin inquiry to provide a reasonable
basis for us to determine whether we source 3TG from the Democratic Republic of the Congo and certain adjoining countries (the “Covered Countries”). To determine whether the necessary 3TG in our products originated in Covered Countries, the Company
has retained Service Firm to assist in reviewing our supply chain and identifying risks. The Company utilized the Conflict Minerals Reporting Template (“CMRT”) version 6.0 or higher to survey our direct suppliers.
During the supplier survey, the Company contacted suppliers via a software-as-a-service (SaaS) platform that the
Service Firm uses that enables users to complete and track supplier communications and allows suppliers to upload completed CMRTs directly to the platform for validation, assessment, and management. The survey is intended to facilitate the
disclosure and communication of information regarding smelters that provide material to a company’s supply chain. It includes questions regarding a direct supplier’s conflict minerals policy, engagement with its direct suppliers, and a listing of the
smelters the direct supplier and its suppliers use. In addition, the CMRT contains questions about the origin of 3TG included in the direct supplier’s products, as well as supplier due diligence. The platform also provides functionality that meets
the OECD Guidance process expectations by evaluating the quality of each supplier response and assigning a health score based on the direct supplier’s declaration of process engagement. Additionally, the data we provide in this report, as well as the
step-by-step process for supplier engagement and upstream due diligence investigations performed, are managed through this platform.
The Company requested that all direct suppliers complete a CMRT. To ensure that direct suppliers understood our
expectations, we obtained a conflict mineral contact for each direct supplier and contacted each direct supplier that we surveyed by phone or email. We make our employees available to answer direct suppliers’ questions on an as-needed basis. We
continued to maintain a centralized mailbox for routing conflict minerals-related inquiries. We answered all questions from direct suppliers that requested further clarification from us. We then provided each direct supplier with a copy of the CMRT
to complete for conflict minerals tracking. Furthermore, we reviewed responses to the CMRT with certain direct suppliers where we believed additional clarification was necessary. Training and education to guide suppliers on best practices and the use
of this template was included. The Company monitored and tracked all communications in the platform for future reporting and transparency.
The Compliance Program includes automated data validation on all submitted CMRTs. The goal of data validation is to
increase the accuracy of submissions and identify any contradictory answers in the CMRT. The results of this data validation contribute to the Compliance Program’s health assessment and are shared with the suppliers to ensure they understand areas
that require clarification or improvement.
All submitted forms that suppliers have submitted are accepted and classified as valid or invalid so that data is
retained. Direct Suppliers are contacted by Service Firm regarding invalid forms and are encouraged to submit a valid form. Service Firm also provided direct suppliers with guidance on how to correct these validation errors in the form of feedback on
their CMRT submission. Some direct suppliers may remain unresponsive to feedback, and the Company tracks program gaps to account for opportunities to improve in the future.
Survey Responses and Follow-up Engagement
The following summarizes matters relating to our survey responses:
In response to our inquiry, we received substantive responses from 318 suppliers that we surveyed. We made follow-up inquiries to each direct supplier that did not respond to our initial survey, by phone or email, until we obtained a response. We reviewed the responses against
criteria developed to determine whether the responses required further engagement with our direct suppliers. These criteria included unclear or incomplete responses and inconsistencies within the data reported in the CMRT. We worked directly with
those suppliers to obtain supplemental responses or clarification, as applicable.
The large majority of the responses that we received provided data at the supplier company level or a division/segment
level relative to the supplier, rather than at a level directly relating to a part number that the supplier supplies to us or were otherwise unable to specify the smelters or refiners used for components or materials supplied to us. We were therefore
unable to determine whether any of the 3TG that these suppliers reported was contained in components or materials that the suppliers supplied to us or to validate that any of the smelters or refiners that the suppliers identified are in our supply
chain. As a result, we have elected not to present smelter and refiner names in this report.
Approximately 74% of the substantive supplier responses indicated that the supplier does not utilize 3TG or that there
was no risk of the supplier using 3TG from Covered Countries.
In approximately 5% of the substantive supplier responses, the supplier indicated that it used 3TG but that there was
no reason to believe that the 3TG it provided may have been sourced from Covered Countries, and no further follow-up was required.
Approximately 21% of the substantive supplier responses contained information suggesting that 3TG used by the supplier
could be sourced from Covered Countries. These suppliers were asked to provide further explanations of their responses and give insight into their due diligence process.
Approximately 1% of the 382 suppliers that we surveyed were eventually classified as not being within the scope of this
initiative, as these suppliers were previously thought to have spend with Harley-Davidson in 2023, but in fact did not.
Approximately 15% of the 382 suppliers that we surveyed did not respond.
Conclusion
We conducted our country-of-origin inquiry in good faith, and we believe that such inquiry was reasonable to allow us to make our
determination. After reviewing the results of our country-of-origin inquiry, we determined that we had reason to believe that 3TG necessary for the functionality or production of our products from 67 suppliers may have originated in a Covered Country
during 2023, all within the meaning of the Rule. Therefore, we determined that the Rule required us to conduct due diligence regarding the source of such 3TG.
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Due Diligence and Results
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Due Diligence
In light of the responses to our inquiries from 67 direct suppliers that contained information suggesting that 3TG may
be sourced from Covered Countries, we completed specific due diligence measures to obtain additional information. In particular, we communicated further with the relevant suppliers seeking additional information as to whether any of the 3TG that
these suppliers reported were actually contained in components or materials that the suppliers supplied to us, whether any of the 3TG that these suppliers reported, in fact, originated in a Covered Country, and whether any of the 3TG that these
suppliers reported benefit armed groups in Covered Countries. We did not receive any reliable information indicating that these remaining 67 suppliers sourced 3TG from Covered Countries in a manner that benefited armed groups in Covered Countries.
Conclusion
We conducted our due diligence in good faith. After reviewing the results of our due diligence, we did not find any
evidence to suggest that any of the 3TG in our supply chain that may have originated in a Covered Country: (1) finances any armed groups in the Covered Countries or (2) is actually contained in our products.
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Future Actions to Improve Our Process
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In addition to the commitments set forth in our Statement on Conflict Minerals, we also take the following steps to
ensure the effectiveness of our conflict minerals program:
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Continue to provide training to Company staff on conflict mineral compliance, as necessary.
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Continue to engage with suppliers to assist them in their efforts to improve the quality of information that they obtain from
their supply chains.
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Continue to engage any of our suppliers at risk of supplying us with 3TG from sources in the Covered Countries that they cannot
demonstrate are “conflict-free”.
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