CMC 2023 Sustainability Report

Governance

Strengthening Our Supply Chain

  1. Governance
  2. Strengthening Our Supply Chain

Our Supply Chain

  • 2-6 Activities, value chain and other business relationships

At CMC, we strive to work with partners who share our commitment o sustainability, ethical business practices, quality and reliability. We continually evaluate our suppliers to make sure their goals align with ours while maintaining quality and reliability.

Our chief supply chain officer oversees vendors, and our operations and procurement teams meet regularly to discuss supplier strategy and risks.

Since 2022, CMC has focused on incorporating our Supplier Code of Conduct into all new vendor contracts. All new vendors must agree to the terms of the Supplier Code of Conduct to become CMC partners.

We offer training to all employees in our purchasing and procurement department and require teams within the Western hemisphere to enroll in our supply chain courses within six months of joining CMC. Upon completion, they’re certified as either an advanced procurement professional or a procurement professional.

We also do not purchase, use or process any conflict minerals, and we have created a conflict minerals statement outlining our position in our Supplier Code of Conduct.

We continually evaluate our supplier practices to set goals and benchmark performance.

Improving Resilience

  • 2-23 Policy commitments
  • 2-24 Embedding policy commitments
  • 2-25 Processes to remediate negative impacts
  • 2-30 Collective bargaining agreements

Our vast global supplier base sometimes faces inherent risks of disruption, such as economic downturns or geopolitical crises. Several years ago, to help mitigate these risks, we began moving the supply chain closer to our local operations when possible.

With a focus on buying locally, we improve the resilience of our supply chain, reduce risks and minimize our environmental impact from factors such as transport-related GHG emissions.

Throughout these efforts, we’ve continued to increase our sustainability focus. This allows us to work with our suppliers to help improve human rights, worker conditions, ethical behavior and environmental compliance and performance.

At the same time, we acknowledge that supply chain risks persist from COVID-19, while the Ukraine war has added to supply chain insecurity in Europe . To that end, we performed a supplier risk assessment in 2023 to better understand the environmental, geopolitical and regulatory impacts across our operations.

governance and risk monitoring approach

Assessing Suppliers via Strategy and Risk Books in the U.S.

In 2023, CMC formalized our strategy and risk books program. The program used a combination of on-site visits and virtual data gathering to assess the supply chain risks of our commodity suppliers.

Teams review the suppliers’ sustainability programs and global and local risks they may face, as well as current or upcoming regulations, and share that information with senior leadership. We then recommend 5- and 10-year strategies for procurement of the commodity to strengthen the supply chain and mitigate risks.

Increasing Engagement

In 2023, CMC expanded upon previous supplier engagement efforts by formally surveying 35 mills operations and services suppliers—over 90% of spend—for two major steelmaking categories:

  • Materials and services for mill operations
  • Industrial gases and mill services

The goal: to gain a better understanding of our suppliers’ engagement and commitment toward sustainability related topics such as diversity, human rights and environmental performance.

Our survey was completed at the end of 2023. Survey responses will provide a baseline for further sustainability discussions with suppliers in 2024.

Expanded Supplier Engagement Survey in the U.S.

In 2023, CMC expanded upon previous supplier engagement efforts by formally surveying 35 mills operations and services suppliers.

Those surveyed accounted for over 90% of spend. They were surveyed for two major steelmaking categories:

  • Materials and services for mill operations
  • Industrial gases and mill services

The goal: to gain a better understanding of our suppliers’ engagement and commitment toward sustainability related topics such as diversity, human rights and environmental performance.

Our survey was completed at the end of 2023. Survey responses will provide a baseline for further sustainability discussions with suppliers in 2024.

Coupa Platform Focuses on Local Suppliers

CMC integrated a new purchasing platform called Coupa in 2023, which is available for all U.S.-based suppliers.

This more advanced, streamlined platform makes it easier for local and regional suppliers to do business with us.

Coupa provides over 600 catalogs of supplier goods and services available to CMC, with at least 50% from local or regional suppliers. The portal allows CMC to receive and acknowledge purchase orders and invoices within the same platform, which minimizes back-office functions for smaller suppliers. Coupa is part of our commitment to a localized supply chain as a way to offset global supply chain risks from disruptions such as the war in Ukraine, COVID-19 and other geopolitical, regulatory and financial risks.