In 2009, our sourcing team, part of the supply chain team, undertook a formalized effort to include proactive and consistent environmental, social, and financial sustainability qualifiers into the strategic sourcing methodology for supplier assessment and qualification in our North American operations. This initiative developed the foundation upon which we can build, and it provided enhanced visibility into the sustainability efforts and performance of our suppliers.

Cliffs developed 38 sustainability-focused questions that have been implemented into standard sourcing templates, including supplier Requests for Information (RFI) and Requests for Proposals (RFP).

Considering Social Value

As a next step, we will focus on incorporating and weighting sustainability related supplier responses as part of bid evaluations, scoring and award considerations using Cliffs’ eSourcing project management system.

The new sourcing decisions take into consideration:

• Environmental and financial sustainability
• Human rights
• Health and safety
• Supplier diversity
• Ethics and business conduct

Sourcing decisions at Cliffs’ Asia Pacific iron ore operations are based upon supplier safety and environmental performance, as well as employment practices, including indigenous employment commitments. Locality of the supplier is also taken into consideration as part of the sourcing strategy.

You can read more about our philosophy of economic shared value in the Economic Impact section of our 2009 Sustainability Report, Committed to the Global Community.