Supply Chain Sustainability
Sustainability is integral to our procurement processes and supplier engagement. We have identified sustainability questions to be used in bids and performance indicators and will continue to enhance processes and engage our suppliers to identify and manage risks and increase productivity and efficiency within the supply chain. We are committed to supporting business opportunities and capacity building for local and diverse suppliers in our own operations and through our supply chain. Our Code of Business Ethics and Conduct: Expectations of Suppliers and Commitment to Supplier Inclusion communicate these positions to internal stakeholders and to suppliers.
Engaging with Suppliers
As we integrate sustainable development into our key business activities, suppliers play a significant role. From constructing our facilities to providing well services to supplying equipment, how they manage their impact on the environmental and community is important to us and can affect our performance.
We regularly engage our suppliers through Business Reviews, Supplier Relationship Management, Supplier Sustainability Forum and supplier audits to:
- Review the ConocoPhillips Sustainable Development strategy and goals and how we can work with suppliers.
- Identify Sustainable Development opportunities and risks in the extended supply chains of critical categories.
- Share best practices for building supplier capacity throughout the supply chain.
By collaborating with suppliers, we can identify activities in their operations and extended supply chains that have environmental and social impacts and guide how they manage those impacts.
In 2018, we focused on continued engagement with key suppliers. One key element of this effort was hosting a supplier sustainability forum bringing together over 80 suppliers from more than 20 different companies, as well as ConocoPhillips representatives from across the globe. The agenda included short presentations and panel discussions and was designed to facilitate sharing of sustainability best practices that are transferable throughout our diverse supply chains. Topics discussed included leak detection and repair (LDAR), sustainability governance, innovation and sustainability, and sustainability stewardship across the value chain. There was also a dedicated area for companies to share their emerging technologies. Collaborating with our suppliers to identify and manage risks, foster supplier inclusion, and increase productivity and efficiency allows us to mutually improve our sustainability performance.
We also engaged with major suppliers on standardized environmental key performance indicators (KPIs) to ensure alignment with our environmental, social and governance (ESG) performance objectives. Major suppliers reported annual performance in several categories, including GHG emissions and freshwater consumption. Annual review meetings also clarify performance expectations, track results and identify continuous improvement opportunities.
Advocating for supplier diversity in business opportunities allows us to build relationships with diverse suppliers. In the U.S., our 2018 supplier diversity program totaled $562 million with minority and women-owned businesses and $582 million in expenditures with small businesses.
Suppliers who positively impact our business are honored by our annual Supplier Recognition Awards. Sustainability is an integral consideration for these supplier awards. In 2018, awards ranged from produced water gathering and disposal to construction jobsite safety.
2018 Supplier Recognition Award Winners:
- Baker Hughes, A GE Company
- Clough Amec Pty Ltd.
- Noble Contracting II GMBH
- Schlumberger Australia Pty Ltd.
- Process Equipment & Service Company, Inc. (PESCO)
- Sperry Drilling Services – Halliburton
- Enventure Global Technology
- Northern Solutions LLC
- V.E. Brandl
Read how CAPL worked to maximize local content in Bayu-Undan.
Our commitment to our SPIRIT Values of Safety, People, Integrity, Responsibility, Innovation and Teamwork extends beyond our own activities. It is essential that our suppliers also remain aligned with those values to ensure operating excellence. Our contracts require that suppliers be guided in their performance for ConocoPhillips by the principles and standards set forth in the ConocoPhillips Code of Business Ethics and Conduct and their own ethics and conduct policies. We have developed our Supplier Expectations to provide additional clarity to our suppliers regarding our expectations in these areas: integrity; labor and human rights; health, safety, and environment; and supplier inclusion. Including these clear expectations and standards in our contracts means that sustainability considerations are included in total cost-of-ownership evaluations, quality audits and our ongoing discussions with suppliers on performance indicators and continuous improvement.
|Environmental Sustainability||Suppliers must comply with applicable environmental laws and regulations and conduct business with respect and care for both the local and global environment, including utilizing energy and natural resources efficiently and managing waste, emissions and discharges responsibly.|
|Labor and Human Rights||We conduct our business consistent with the human rights philosophy expressed in the Universal Declaration of Human Rights and the International Labour Organization Declaration on Fundamental Principles and Rights at work and expect suppliers and contractors working on our behalf to be guided by these principles.|
|Integrity||Contracts require that suppliers be guided in their performance for ConocoPhillips by the principles and standards set forth in the ConocoPhillips Code of Business Ethics and Conduct and their own ethics and conduct policies.|
|Supplier Engagement||We engage with suppliers and contractors on sustainable development issues through our Quarterly Business Reviews, Supplier Relationship Management, Supplier Sustainability Forum and supplier audits.|
We emphasize promoting local and diverse sourcing and supplier capacity building in our procurement and we expect our suppliers to do the same. We expect to do business with qualified suppliers that share our values, whether minority-owned, women-owned, small business enterprises, or global, local or indigenous suppliers around the world.
Local Content and Employment
We place a high priority on purchasing goods and services locally and are committed to giving local contractors and suppliers the opportunity to participate in projects and operating requirements, generally through a competitive bidding process. We also look for opportunities to develop local suppliers and promote local hiring as appropriate to meet business needs. Read more about how we are creating shared value in communities.
U.S. Supplier Diversity
In the U.S., we do business with diverse companies and continue to give them access to business opportunities through our Supplier Diversity Program. This approach attracts qualified suppliers, stimulates local economic development, and creates long-lasting social and economic benefits in our stakeholder communities. Through our Supplier Diversity program, we actively participate in certifying and developing diverse and small local businesses in the United States.
|Local Business Development||
Read more about supplier diversity efforts in our Lower 48 business unit.
The supply chain function contributes to the company’s sustainable development commitments by integrating sustainability issues into our processes and procedures. This incorporates sustainability thinking into sourcing, category management, our requisition-to-pay process, contracts, and material management programs.
Strategic Sourcing and Category Management
Integrating oversight on labor and human rights into our procurement processes and procedures includes recommended questions for supplier prequalification, bids and audits, as well as contract language. The questions and contracts directly address these issues and are based on our commitment to conduct our business consistent with the human rights philosophy expressed in the Universal Declaration of Human Rights and the International Labor Organization Declaration on Fundamental Principles and Rights at Work as described in our Code of Business Ethics and Conduct and our Supplier Expectations. We recognize slavery and human trafficking likely exist in every country. We are committed to the California Transparency in Supply Chains Act of 2010 and the United Kingdom Modern Slavery Act 2015.