Business Context and Reporting Period
Company: Canadian National Railway Company (CN) and Autoport Limited (collectively, the "CN Group").
Filing Type: Form 6-K (Report of Foreign Issuer).
Reporting Period: Financial year ended December 31, 2024.
Subject: Annual Report pursuant to Canada's Fighting Against Forced Labour and Child Labour in Supply Chains Act (the "Act").
Business Overview: CN operates a rail and related transportation network spanning Canada and the U.S., transporting over 300 million tons of cargo annually. The company employs approximately 24,671 people (18,590 unionized) and manages over 7,500 active suppliers.
Key Financial and Operational Metrics
Note: This filing is a compliance report regarding human rights and supply chain due diligence. It does not contain audited financial statements, revenue figures, profit margins, cash flow, or debt levels.
- Revenue Composition (2024):
- Intermodal: 22%
- Petroleum and chemicals: 20%
- Grain and fertilizers: 20%
- Metals and minerals: 12%
- Forest products: 11%
- Coal: 6%
- Automotive: 5%
- Other: 4%
- Geographic Flow (2024): Overseas (35%), Transborder (32%), Canadian domestic (17%), U.S. domestic (16%).
- Supply Chain Spend: Approximately 99% of spending is with suppliers in Canada and the U.S.
- Supplier Monitoring: ~40% of CN's addressable supplier spend is monitored via third-party ESG platforms; 98% of critical suppliers were assessed on ESG issues in 2024.
Material Changes and Actions
The filing details specific governance and operational updates implemented during the 2024 reporting period to comply with the Act:
- Governance Updates: The Corporate Governance Manual was updated to expand the mandate of the Governance and Sustainability Committee to explicitly review and monitor human rights matters, including forced and child labour risks.
- Policy Revisions: The Human Rights Policy, Code of Business Conduct, and Procurement Policy were amended to explicitly incorporate commitments to human rights protection and the mitigation of adverse impacts in supply chains.
- Due Diligence Expansion: CN engaged a third-party provider to assess forced labour and child labour risks for its top 100 tier 1 suppliers (representing ~70% of addressable spend). Additionally, an in-house questionnaire was developed to survey suppliers identified as having moderate risk.
- Training: Approximately 4,400 management employees received enhanced training on human rights, forced labour, and child labour issues.
Outlook, Risks, and Management Commentary
Risk Assessment Results:
- CN Top 100 Suppliers: 72% classified as low risk; 28% as moderate risk; 0% as high risk.
- Autoport Top 22 Suppliers: 77% classified as low risk; 23% as moderate risk; 0% as high risk.
Management Commentary:
- CN considers the risk of forced or child labour in its direct operations to be low, as the workforce is largely unionized and employed directly in Canada or the U.S.
- The company acknowledges a risk in its extended supply chain and is utilizing a multi-pronged approach involving screening, audits, and contractual warranties.
- Remediation: No instances of suspected or actual forced labour or child labour were identified in 2024; therefore, no remediation measures were required.
- Effectiveness: The filing explicitly states that, to date, no actions have been taken to assess the effectiveness of the implemented measures.
Investor Verification Checklist
- Verify the company's 2024 Annual Report (Form 20-F) for actual financial performance metrics (revenue, net income, cash flow) as they are not included in this 6-K filing.
- Confirm the timeline for the analysis of the in-house questionnaire results for moderate-risk suppliers, which is expected to be completed in the next reporting period.
- Review the upcoming 2025 report to see if the company has established a methodology to assess the effectiveness of its human rights due diligence measures.
- Monitor for any future disclosures regarding remediation actions if moderate-risk suppliers fail to address identified concerns.