Every year, NS purchases goods and services with a value totalling more than a billion euros. In 2019 we had ties with approximately 4,300 active suppliers in 23 countries. Of our total purchasing volume, we obtain 80% from 140 suppliers; the largest share of that volume (92%) originates from the Netherlands and other countries in Western Europe. These goods and services include staff, financial and facility services, IT, construction, communication, energy, trains and transport.
Through a targeted supplier policy, NS uses its position as a purchaser to encourage suppliers to make their products and services more sustainable. As such, our suppliers contribute to our sustainability objectives. Our CSR requirements are stated in the procurement governance rules and are also embedded in our General Terms and Conditions of Purchase (www.nsprocurement.nl/en/). We have also incorporated them into our Sustainable Third-Party Policy. We work closely with our suppliers and challenge them and other market players to submit innovative and sustainable bids. We used the following initiatives to steer procurement:
Sustainable Third-Party Policy
Through our Sustainable Third-Party Policy, we focus on encouraging our suppliers to make their products and services more sustainable, inviting them to explore the following four themes with us:
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Climate-neutral and efficient energy consumption: we strive to purchase climate-neutral products and services through maximum energy efficiency and the use of renewable energy, preferably generated by ourselves.
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Sustainable mobility: we strive to achieve sustainable mobility and maximum mobility efficiency (zero emissions and use of energy generated from sustainable sources) for the transport of goods and passengers.
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Circular use of materials: we strive to achieve maximum circularity in the use of materials in the sector by reducing material consumption, using recycled materials and materials that can easily be recycled, prolonging the useful life of materials through optimised maintenance, renewed production and a second lease of life. In addition, we make sure that discarded materials are reused or recycled, preferably in our own processes. We also aim to keep the ownership of materials as close to the producer as possible.
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Corporate social responsibility: we strive to create trainee posts for people who have limited opportunities on the labour market (target: 5% of the total hours to be spent on the assignment) and to promote responsible market conduct, diversity and inclusion.
Embedding sustainability in procurement through tendering plans
NS designs its new invitations to tender in such a way that sustainability is safeguarded. One example is the inclusion of sustainability as a criterion in the tendering plan for a European call for tenders. In the tendering plan, which describes the process steps required when preparing a call for tenders, the principles of Socially Responsible Procurement (SRP) are applied in the formulation of selection and award criteria. These criteria have been embedded in the plan since 2015. The plan also identifies opportunities for contracts that are due to expire. Once prepared, the tendering plan is discussed in the various tender boards.
Supplier assessments and Code of Conduct
We subject our major suppliers to a Corporate Social Responsibility (CSR) assessment. This involves an assessment of their environmental impact, labour and human rights record, integrity and sustainable procurement. We have imposed the CSR assessment as a requirement since 2015 on all parties that have won an NS contract. The minimum standards that we require these suppliers to meet have steadily increased. Together with around ten major European carriers and rail suppliers, NS is working on the 'Railsponsible' method with the aim of having it accepted as the standard in the rail industry. Through our Code of Conduct, moreover, we expressly communicate to our suppliers the CSR standards and values that we apply to doing business with them.
Supplier Code of Conduct
The Supplier Code of Conduct explicitly states the conditions we impose on suppliers who want to do business with us. One general requirement, for instance, is that the suppliers must shoulder their share of responsibility in socially aware business practices and subscribe to the principles enshrined in relevant standards, as laid down in such documents as the Universal Declaration of Human Rights and by organisations such as the ILO, OECD and ICC. NS arranges for an independent party to check whether suppliers are complying with the Code of Conduct. If the Code is not observed or if there are infringements, we first assess the risk. Then we start discussions with the supplier and ask for an improvement plan. In cases of serious violations, such as corruption, we may decide to terminate the relationship. Exclusion criteria also apply to the subcontractors engaged by our suppliers.
NS has a policy in place to prevent bribery and corruption. As part of its implementation, all purchasers within NS take an e-learning module on Ethics & Compliance, and we highlight the importance of proper observance of the policy.
Risk management
NS recognises that the procurement of goods and services entails risks in the areas of railway safety, safety at work, information security, competition rules, continuity and supplies, liability for hired workers and vicarious liability, and sustainability. NS minimises these risks by setting specific contractual requirements and – depending on the magnitude of the risk – performing assessments to check whether the contractual agreements are being complied with. Contracts provide for the possibility of penalties or termination if the requirements are not satisfied.