Determining Tier 1 or Tier 2 Status
BNY’s Supplier Diversity Program relies on a tiered approach to make sure diverse suppliers have the maximum amount of opportunities by participating in the program. The “Tier” is relative to the purchaser.
BNY views a Tier 1 Supplier as a supplier that invoices BNY for goods and services rendered directly. A Tier 2 supplier is a supplier that invoices the Tier 1 supplier for goods and services rendered.
BNY encourages its non-diverse Tier 1 suppliers to subcontract or work with diverse suppliers. The spend that the Tier 1 supplier has with diverse suppliers in that regard is considered as Tier 2 diverse spend.
BNYM’s Tier 2 Definition
The concepts of “Tier 1” and “Tier 2” are generally known in the supplier diversity field, and many companies track and report on Tier 2 diverse spend, including direct and indirect spend. However, each company might define direct and indirect Tier 2 diverse spend differently. At BNY, we consider direct spend and indirect spend as:
Direct Spend
This is the amount that BNY spends with a Tier 2 diverse supplier through BNY’s prime supplier for services/products that directly supports BNY’s business needs. These purchases must be able to be directly traced back to a specific agreement between BNY and a third party.
Indirect Spend
This is the amount that BNY’s prime suppliers spend with diverse suppliers in support of the prime supplier’s overall operations and business. This spend is not related to a specific BNY business need, but indirectly contributes to the business that the prime supplier has with BNY. A company can have both a direct and indirect diversity spend.
Related Resources
Supplier Ethics
At BNY, our reputation for integrity, honesty and accountability is essential to achieve our goal of becoming the best performing financial services company.
Supplier Code of Conduct
Supporting business opportunities for the supplier community.