Tier

A level within a supply chain that indicates the position of a supplier or subcontractor in relation to the buying company. A Tier 1 supplier has a direct contractual relationship with the buyer, while lower-tier suppliers (such as Tier 2 or Tier 3 suppliers) supply goods or services indirectly through other suppliers. Sustainability-related requirements often fail to extend beyond Tier 1, the first contractual tier, if cascading mechanisms are unclear or missing.