Our program focuses on integrating sustainability into the procurement process, encompassing supplier selection, risk assessment, continuous improvement, and capacity building. We collaborate with businesses sharing our commitment to sustainability, strategically deploying procurement spend to meet operational requirements but also promoting fairness and competition.
We strive to seek opportunities enabling us to reduce our environmental impact while focusing on safety, positive social change, transparency, and active supplier engagement.
We hold our suppliers to the same high standards we uphold ourselves. Our Supplier Code of Conduct is an extension of our Code of Business Conduct and Human Rights Policy, which outlines our commitment to trust, integrity, labor and human rights, environment, and business ethics. These guidelines are referenced in all supplier contracts, and suppliers are regularly informed of any updates or changes.,
CN prioritizes supplier safety and security, which is why eRailSafe is mandated for contractors and sub-contractors working for CN. This program ensures that contractors possess the required credentials and adhere to CN's safety standards when working on our property. eRailSafe is a prerequisite for CN contractors and their sub-contractors who operate on company premises, access sensitive documents, and utilize CN's I&T infrastructure.
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We expanded our Request for Proposal (RFP) process to include a criteria on environment, social and governance (ESG), enabling us to identify suppliers with strong sustainability practices. We are assessing both our current and potential suppliers on various ESG elements, which include environmental management, health and safety, diversity, equity and inclusion, and their sustainable procurement practices within their own supply chains. Significant ESG topics material to our business, but also sector-specific and commodity-specific risk areas are considered. Screening our suppliers on ESG provides a means to determine areas where there may be actual or potential ESG risks and opportunities with our suppliers.
To assess ongoing sustainability performance of our suppliers, since 2021, we have partnered with EcoVadis, a cloud-based platform enabling us to help identify, manage, and monitor high ESG risk and opportunity suppliers. Currently, our scope is to onboard our critical and high spend suppliers to respond to the EcoVadis assessment. We use the EcoVadis scorecards, which consider country- and industry-specific risks, to monitor our suppliers’ sustainability performance and to use during performance reviews to discuss any improvement areas or corrective actions required based on the results of our risk framework.
As safety is our core value, we are extending this commitment to our contractors. Risk can be introduced by our contractors while working on-site at our yards and facilities. We have established a risk matrix to identify contractor requirements based on applicable safety standards. Since 2020, we have engaged ISNetworld to facilitate the mandatory reporting of safety statistics and submission of documentation from our in-scope contractors. Contractors must meet these requirements and have a passing score to perform work on-site for CN. Follow-ups are performed should a contractor receive a low safety score or fail to comply with this requirement.
The purpose of audits (on-site and desktop) is to examine the quality system of our suppliers and to ensure alignment with all applicable requirements and guidelines, including CN’s Supplier Code of Conduct. We have expanded our audit checklist to include ESG topics, which include review of policies in place and walkthrough of processes. All our critical suppliers undergo on-site audits within a three-year period. New suppliers may be subject to an audit as part of onboarding. On-site audits are also completed if a quality risk has been raised for any supplier. If deficiencies are found, we require our suppliers to build corrective action plans, and we review their progress until the issue is resolved.
Our Sustainable Procurement Program is a cross-functional initiative driven by our Procurement and Supply Management team and is overseen by CN’s Assistant Vice-President of Procurement and Supply Management with support from executive management. To effectively execute our program, we engage our internal teams across the Company through one-on-one meetings as well as providing training sessions on our various sustainable procurement initiatives, including general sustainable procurement onboarding, supplier sustainability performance discussions, and contractor safety. The goal of our internal engagement is to raise awareness, build knowledge, and enable the successful implementation of our program.
Supplier Updates Consistent communication with our suppliers by e-mail, supplier portal and meetings to provide updates on key initiatives and discuss sustainable procurement.
Supplier Diversity Promote an inclusive supply chain & procurement process by supporting traditionally underrepresented suppliers.
Indigenous Business Opportunities Building relationships and identifying opportunities with Indigenous-owned businesses in communities where we operate.
For more information about our Sustainable Procurement Program, please contact our Procurement team. For more information on our Indigenous partnership program please visit our Indigenous Relations page. CONTACT US INDIGENOUS RELATIONS
Critical Supplier is defined as a supplier with annual procurement spend greater than $25M and/or essential to CN operations.
Diverse Supplier is defined as a supplier who has identified as at least 51% owned, controlled and actively managed by Indigenous Peoples, visible minorities, women, individuals from the LGBTQ+ community, persons with disabilities, or veterans.
High Spend Supplier means a supplier not identified as a critical supplier, but for which annual procurement spend is at least $10M.
Indigenous Supplier is defined as a business that has identified as at least 51% owned, controlled and actively managed by First Nations, Inuit or Métis.
Tier 1 Supplier is defined as a direct supplier of CN and provides goods and services directly to CN. Annually, CN has approximately 7,800 Tier 1 suppliers.
Significant Tier 1 Supplier is a Tier 1 supplier that has been identified as a critical supplier, a high spend supplier, a supplier deemed to have substantial ESG impacts to our business, or a combination thereof.