Supply Chain Management

Overview

We work with suppliers to advance our sustainability performance.

For Enbridge, our supply chain―those organizations that provide materials, goods or services to Enbridge, including contractors, subcontractors, vendors and consultants―plays a key role in our ability to live up to our social responsibility commitments and attain our sustainability objectives. To that end, we strive to work with suppliers who are leaders in their industries; are willing to uphold our core values of integrity, safety and respect; adhere to our fundamental policies and procedures and the Enbridge Statement on Business Conduct; and share our commitment to the highest standard.

Moreover, the creation of opportunities for Indigenous socio-economic participation continues to be integral to our Supply Chain Management (SCM) strategies and management systems.

4 performance objectives:

  • Procuring goods and services that meet our standards for environmental stewardship
  • Expanding opportunities for participation of local, small and minority-owned businesses in our supply chain
  • Expanding opportunities for Indigenous socio-economic participation in our supply chain
  • Procuring goods and services that meet our standards for safety and ethical practice

2017 Highlights

Acquired nearly $11.6 billion in goods and services company-wide from about 19,000 suppliers  Spent approximately 44% with Canadian suppliers, 56% with U.S. suppliers  Purchased about 133,000 tonnes of steel pipe, about 87% of which was made from recycled steel  Spent more than $216.8 million with Indigenous businesses, contractors and suppliers in Canada and the U.S
2017 Highlights

Acquired nearly $11.6 billion in goods and services company-wide from about 19,000 suppliers

Spent approximately 44% with Canadian suppliers, 56% with U.S. suppliers

Purchased about 133,000 tonnes of steel pipe, about 87% of which was made from recycled steel

Spent more than $216.8 million with Indigenous businesses, contractors and suppliers in Canada and the U.S

Management Approach

We work with thousands of suppliers across North America—from major international companies to small, local businesses. Our suppliers cover a wide range of disciplines, including manufacturing, construction, engineering, distribution and consulting, but the majority of our annual spend is in the areas of pipe manufacturing, constructing our pipelines and facilities, maintaining the fitness of our systems and monitoring to ensure the integrity of our systems.

Safety and opportunities for Indigenous involvement are two major considerations in our contract evaluation process, and we have a centralized SCM team and multi-year roadmap to help us further integrate Indigenous socio-economic participation and other environmental, social and governance (ESG) considerations and opportunities into our SCM strategies and programs. In 2017, we integrated key elements from Spectra Energy’s SCM CSR approach, providing a unified framework and roadmap going forward.

SCM Advancing CSR Performance

SCM Structure

We have one, centralized SCM function serving the entire enterprise. It is responsible for all aspects of SCM—from planning and governance, to tactical procurement and materials management, to contract management and strategic sourcing—with the goal of creating maximum value for Enbridge and our stakeholders. Our SCM function also has a centralized team to help us further integrate Indigenous participation and other environmental and social considerations and opportunities into our SCM strategies and programs.

SCM Governance

Enbridge’s core values of integrity, safety and respect, as well as a number of specific policies and protocols, govern all of our SCM function’s activities, and we continue to update and improve these policies as our business expands. Examples include these governing documents: Statement on Business Conduct, Corporate Social Responsibility Policy, Indigenous Peoples Policy, SCM Policy and Purchasing Controls Policy as well as a Supplier Code of Conduct, which we expect to publish the second half of 2018.

How SCM Integrates Environmental, Social and Governance Factors

Our SCM processes are designed to procure goods and services that meet our standards for environmental stewardship, social responsibility and ethical practice. We satisfy this objective by integrating ESG factors into our supplier selection and relationship management through a variety of means, including pre-qualification, requests for proposal (RFPs), proposal evaluations, contracts and supplier performance management.

Pre-qualification – In 2017, we implemented an updated pre-qualification process as part of the Supplier Lifecycle Management process. Roll-out and additional improvements to the process will continue through 2018 and 2019. In addition to ongoing core requirements related to safety and Indigenous participation, these enhancements will address other environmental and social considerations.

In the new process, we continue to use ISNetworld (ISN), a global resource for connecting corporations with reliable contractors and suppliers and pre-qualifying them on the basis of safety. We also continue to engage subject-matter experts from all relevant areas of Enbridge―including technical, legal, finance, etc.―to provide input into supplier pre-qualification and the monitoring phases of the supplier lifecycle, as well as to provide guidance on emerging issues. They also ensure that our standards regarding safety, quality, labor and environmental practices are upheld throughout our supply chain.

Also in 2017, we updated the Supplier Information Form on our website to gather basic ESG information from potential future suppliers.

RFPs, Proposal Evaluations, Contracts and Supplier Performance Management – Our SCM function has developed content to address safety, sustainability and Indigenous participation factors that it includes in its RFPs, proposal evaluations and contracts. In 2017, our SCM function began including sustainability factors in its supplier performance management processes. These efforts will continue to expand in 2018 and 2019.

Risk Management Considerations – To manage the sustainability risks among our suppliers, our SCM function considers multiple business factors that relate to sustainability, including:

  • environmental standards associated with our suppliers’ processes, products or services;
  • fundamental human rights (e.g. freedom of association and promoting an inclusive and respectful workplace);
  • occupational health and safety;
  • business ethics (e.g. corruption and anti-competitive practices);
  • quality of management systems; and
  • sub-contractor guidance (i.e. whether suppliers require their sub-contractors to adhere to supplier standards).
Engaging Suppliers in Our Sustainability Journey

2017 Performance

2017 Company-wide Procurement

In 2017, we purchased about $11.6 billion of goods and services from about 19,000 suppliers. Of this total, we spent about 44 percent with Canadian suppliers, 56 percent with U.S. suppliers and less than one percent with European, Asian, Australian and South American suppliers.

Supply Chain Management - Areas of Spend
2017 Company-wide Procurement

In 2017, we purchased about $11.6 billion of goods and services from about 19,000 suppliers. Of this total, we spent about 44 percent with Canadian suppliers, 56 percent with U.S. suppliers and less than one percent with European, Asian, Australian and South American suppliers.

Procuring goods and services that meet our standards for environmental stewardship

Strong supplier relationships are important to our business success. We believe in doing business with suppliers who demonstrate high standards of ethical business conduct and who share our commitment to safety, reliability and quality.

Recycled Steel Pipe
Our SCM function’s most significant materials purchase is steel pipe. In 2017, we purchased about 133,000 tonnes of steel pipe, about 87 percent of which was made from recycled steel.

Amount of Steel Pipe Purchased (tonnes) / Percentage of which Was Made from Recycled Steel
2015 2016 20171
Major Projects1 220,508 / 96% 324,000 / 96% 119,200 / 94.9%
Enbridge Gas Distribution 1,243 / 63.8% 793 / 60.7% 1,624 / 88.8%
Union Gas N/A N/A 12,130 / 11.9%
Total 132,954 / 87.3%

12017 reflects Spectra Energy and Enbridge assets as a combined company

Natural Gas Vehicle Fleet

Enbridge Gas Distribution (EGD) and Union Gas in Ontario have the largest natural gas vehicle (NGV) fleet in Canada, and we have converted most of the vehicles to run on natural gas. This has resulted in lowering the carbon footprint for this fleet, reducing fuel costs and promoting the use of natural gas in the transportation sector.

Every RFP that our SCM function issues to vehicle manufacturers on behalf of EGD requires that the supplier provide vehicles that are either NGV ready or that have a component for conversion to NGV. For more information, please see the Climate Change section of our Sustainability Report.

Procuring goods and services that meet our standards for safety and ethical practice

We are committed to buying from companies that uphold the Enbridge’s Statement on Business Conduct and will not compromise on our core values of safety, integrity and respect. Our SCM processes—from pre-qualification to contracting—hold our suppliers accountable to our standards and requirements for safety and ethics. Additionally, in 2017 building upon the Supplier Code of Conduct that Spectra Energy previously implemented, we began to develop a new Supplier Code of Conduct that outlines the company’s expectations regarding the ethical standards and business conduct of our suppliers within these areas: health and safety; the environment; labor and human rights; and responsible business behavior. We expect to implement it by the end of 2018.

Suppliers who have questions or concerns about compliance and ethics issues are encouraged to use the Enbridge Ethics and Conduct Hotline, and all calls to the Hotline are treated in strict confidence according to Enbridge’s Whistleblower Policy which also prohibits retaliation against any person making a complaint in good faith.

Addressing Human Trafficking

Expanding opportunities for Indigenous socio-economic participation in our supply chain

Enbridge’s SCM function has a team within it that is specialized and dedicated to proactively facilitating opportunities for Indigenous communities within our supply chain. In 2017, we continued to build on our prior work in this area, increasing our resources and results in both Canada and the U.S.

Because a significant opportunity within our supply chain is sub-contracting, we created and implemented tools for our prime contractors to seek and incorporate Indigenous participation in their work with Enbridge. These tools include the Socio-Economic Requirements of Contractors (SERC) and access to our database of quality Indigenous businesses.

In 2017, our Indigenous business database for Major Projects and Liquids Pipelines increased about 40 percent with significant effort to develop a database for the U.S., and our Union Gas Indigenous business listing was overhauled and enhanced. Additionally, we expanded the SERC from Major Projects work to incorporating it in some of our existing Liquids Pipelines preferred supplier agreements. We also began incorporating Indigenous inclusion in the supplier relationship management process and supplier performance indicators with preferred suppliers.

For more information, please see the Indigenous Engagement section of our Sustainability Report.

Delivering Home Weatherization Services in Indigenous Communities
Working with Our Suppliers to Support Indigenous Economic Development
Dollars Spent on Materials and Services Sourced from Indigenous Businesses in Canada and the U.S. (Canadian dollars)
2015 2016 20171
Major Projects and Liquids Pipelines >$63 million $79 million $136.2 million
Union Gas $6 million $13 million $10.5 million
Gas Transportation & Midstream2 $70.1 million
Number of Qualified Indigenous Businesses Identified and Documented in Our Databases / Business Listings
MP/LP Canada 600 760
MP/LP U.S. 100
Union Gas 74

1 2017 reflects Spectra Energy and Enbridge assets as a combined company
2 in British Columbia only- Capital and Operations

Expanding Opportunities for Participation of Local, Small and Minority-owned Businesses in Our Supply Chain

Enbridge recognizes the value and innovation that results from having a diverse group of suppliers, including woman-owned, minority-owned, small and local businesses; and we promote equal opportunity for all qualified suppliers.

Building on efforts initiated by Spectra Energy, we plan to enhance our approach to supplier diversity. We started tracking diverse supplier data in our Gas Transmission and Midstream business segment in 2017, and we will make similar efforts in our other business segments as part of our three-year roadmap.

Dollars Spent on Materials and Services Sourced from Diverse and Small Businesses in Canada and the U.S. – Gas Transmission and Midstream (Canadian dollars)
20151 20161 20172
Small Businesses (U.S.) $72.5 million $67.6 million $99.6 million
Woman-owned Businesses (U.S.) $5.2 million $4.8 million $6.2 million
Minority-owned Businesses (U.S.) $3.5 million $0.4 million

1 Data from legacy Spectra businesses.
2 2017 reflects Spectra Energy and Enbridge assets as a combined company

Supply Chain Management Data Summary
2015 2016 20171
Amount of Steel Pipe Purchased (tonnes) / Percentage of which Was Made from Recycled Steel
Major Projects 220,508 / 96% 324,000 / 96% 119,200 / 94.9%
Enbridge Gas Distribution 1,243 / 63.8% 793 / 60.7% 1,624 / 88.8%
Union Gas  
12,130 / 11.9%
Dollars Spent on Materials and Services Sourced from Indigenous Businesses in Canada and the U.S.
Major Projects and Liquids Pipelines >$63 million $79 million $136.2 million
Union Gas $6 million $13 million $10.5 million
Gas Transportation & Midstream2

$70.1 million
Number of Quality Indigenous Businesses Identified and Documented in Our Databases / Business Listings
MP/LP Canada
600 760
MP/LP U.S.

100
Union Gas

74
Dollars Spent on Materials and Services Sourced from Diverse and Small Businesses in Canada and the U.S. – Gas Transmission & Midstream (Canadian dollars)
Small Businesses (U.S.) $72.5 million $67.6 million $99.6 million
Woman-owned Businesses (U.S.) $5.2 million $4.8 million $6.2 million
Minority-owned Businesses (U.S.) $3.5 million $0.4 million

1 2017 reflects Spectra Energy and Enbridge assets as a combined company
2 in British Columbia

Conversations

A Conversation with Kevin Hill, Vice President Commercial – Canadian Operations, Acuren

1) Please tell us about your organization, as well the benefits of the relationship between Acuren and Enbridge?

Acuren provides state-of-the-art nondestructive testing, inspection, engineering and rope-access-enabled industrial services delivered through over 80 locations and over 4,000 employees throughout North America and the United Kingdom.

Acuren has a longstanding relationship as a service provider to Enbridge that spans decades across a wide variety of projects. Among other services, Acuren’s core service to Enbridge has been a wide array of Non-Destructive Examination services. Our knowledge and experience in providing services to Enbridge on hundreds of scopes of work have allowed our technicians and leadership to form trusted relationships. The depth and length of this longstanding relationship allows us to utilize our experience to drive value for Enbridge. Further, the Enbridge path to zero aligns with Acuren’s safety culture, and Acuren’s exemplary safety record affords Enbridge a level of comfort in knowing that they’ve selected a service provider that ensures safety considerations are the number one priority.

Acuren feels that through developed communication channels we are better suited to understand and meet Enbridge’s requirements, of which we feel have been appreciated through our internal pool and depth of industry experts and technicians, the breadth of our organizational footprint, open access to the regional leadership teams, and commitment to investment in emerging technologies. We look to work together for continued success.

2) How has Acuren worked with Enbridge to advance our commitment to environmental stewardship?

Our shared environmental target is always zero—zero incidents and zero spills. Acuren’s management recognizes an obligation to protect the human, physical and financial resources of our organization and every client site we work on.

We also recognize our responsibility to ensure environmental protection. For each project, we develop an environmental plan and program. These cover each individual and their responsibilities associated with their work for Enbridge. At the heart of the environmental plan is the Environmental Program Coordinator, who is responsible for developing and setting the groundwork for the program to assure compliance with Acuren’s and Enbridge’s policies and procedures, as well as state/provincial and federal regulations. The site lead is responsible for communicating expectations at the site and assuring on a day-to-day basis that the program requirements are being followed. The employees are required to understand the program, as well as identify and understand disposal of various waste products. Employees are also trained and engaged to recognize environmental incidents, immediately implementing appropriate actions and reporting of these events.

3) Over the last three years, Acuren has been methodically replacing film-based radiography with computed or digital methods. What are the environmental benefits of that?

We carry out radiographic testing for a variety purposes, including weld examination, fabrication and repair of tanks, and crack detection. This type of testing detects both surface and subsurface defects, requires minimal surface preparation and provides a permanent record of an inspection.

These newer technologies eliminate the need for chemicals to develop the exposures, which in turn leads to fewer chemical and heavy-metal disposal and recycling programs. In addition, our carbon footprint is cut in half because we can eliminate the need for darkrooms and move to driving smaller trucks, which are more fuel efficient.

4) In what other ways are Acuren and Enbridge working together to contribute to a more sustainable world?

We work together in areas that have a direct impact on sustainability outcomes, including quality initiatives, HSE programs, environmental protection plans, and material management and selection programs. In addition, sustainability is engrained as a part of Acuren’s culture, and that translates into the decisions we make each and every day on any customer site, including Enbridge’s.

Moreover, when companies have a shared philosophy of sustainable, responsible operations like the one Acuren and Enbridge have, it becomes a partnership type of approach. This sort of partnership has the greatest potential to yield the most impactful benefits.