Sustainability is integral to our procurement process. Through supplier engagement, supplier recognition and sustainable procurement, we continue to improve our business practices and operations to manage risk while increasing total value within the supply chain. We are committed to upholding our business ethics by supporting business opportunities and capacity building for local and diverse suppliers through our supply chain. 

As we integrate sustainable development into our key business activities, suppliers play a significant role. From constructing our facilities to managing our work camps, providing well services and supplying equipment, how they manage their impact on the environment and community is important to us and affects our overall sustainability performance. 

We regularly engage our suppliers through business reviews and supplier audits to: 

• Identify sustainable development opportunities and risks in the supply chains of critical categories. 
• Standardize Key Performance Indicators (KPIs) to ensure alignment with our environmental, social and governance (ESG) objectives. 
• Track metrics, review performance and identify continuous improvement opportunities. 
• Share best practices for building supplier capacity throughout the supply chain. 

An important element of our ongoing engagement with key suppliers is our annual Supplier Sustainability Forum. In 2022, we hosted a hybrid virtual and in-person forum to accommodate a diverse cross section of our key suppliers. With over 150 participants, including suppliers from more than 40 companies and ConocoPhillips representatives from across the globe, the agenda was designed to communicate our strategic sustainability objectives and collaborate with suppliers to manage and mitigate the environmental and social impacts from activities and operations throughout the supply chain. Through this forum, along with ongoing engagement, we are seeking to discuss how our suppliers can help us reduce our emissions while working to understand the approach they are taking to address their own emissions. Topics discussed included our:

• Net-zero operational GHG emissions ambition and our Triple Mandate.
• Climate risk strategy and targets.
• Low Carbon Technologies focus.
• Scope 3 Supplier Emissions Strategy.

The forum also included a panel discussion with ConocoPhillips leaders and industry association representatives from the National Association of Manufacturers and the Energy Workforce & Technology Council. Participants examined meaningful measures to show alignment in a world aiming for net-zero, opportunities and challenges on the road to net-zero, and opportunities for collaboration to benefit nature and communities.

Mitigating supplier risk is critical to support our operations through sustainable procurement. Driven by supplier stability concerns, we regularly monitor the financial health of suppliers. Additionally, supply chain leaders meet quarterly to proactively assess risk for over 150 business-critical suppliers and review status changes from the previous quarter. This process helps deliver on an important goal – continuity of global operations through avoidance of supply or service interruptions. In 2022, we interacted with suppliers regularly to avert bottlenecks, strengthen ties, seek out emissions reduction opportunities, and address risk mitigations due to global supply chain disruptions and the lingering effects of the COVID-19 pandemic. During sourcing events, we also conducted comprehensive contract risk classification assessments to quantify inherent risks and establish mitigation strategies prior to contract award. This process has been used across our Supply Chain organization globally for over 15 years. Engaging our suppliers to identify and manage risks allows us to mutually improve our sustainability performance. 

Our Norway business unit established supply chain systems and processes to account for matters related to human rights and working conditions, as addressed in the Norway Transparency Act and the United Kingdom Modern Slavery Act. As an example, we added contractual language requiring that suppliers comply with the Transparency Act. In addition, we actively participate in an industry association network to ensure consistency in how we approach our supplier community regarding the topic as well as having such network verify whether/how our suppliers address sustainability performance internally and with their supply chain.

ConocoPhillips Australia is committed to ensuring that opportunities created through our business and supply chain are equitably accessible by Aboriginal and Torres Strait Islander Peoples, businesses and organizations. We hosted a workshop in October 2022 where we aligned with 13 of our tier one suppliers to support an APLNG Indigenous Participation Working Group. Read more about our commitment and the development of our Reflect Reconciliation Action Plan.

Supplier Recognition  

The company’s annual Supplier Recognition Awards honor suppliers who positively impact our business, including a category focused on sustainability-related activities. In 2022, we raised the profile for minority, Indigenous and local suppliers by adding a diversity indicator to award submissions. Final awards ranged from delivery of safe and reliable shutdown logistics to support of a winterization/flare reduction project. 2022 Supplier Recognition Award Winners are: 

• Atlas Energy Solutions, Inc.
• Bay Ltd
• Boon Energy Services, Inc.
• ChampionX Norge AS
• COSL
• Compass Well Services LLC
• Crossfire LLC
• Halliburton AS
• Hevilift (M) Sdn. Bhd.
• Honeywell Limited
• iO Data AS
• Leo and Sons LP
• LV Energy Services LTD
• Mistras Group INC
• NeoInsulation, LLC
• TAMS Group Queensland Pty Ltd
• Tenaris Global Services USA Corporation

Sustainable Procurement and Business Ethics 

The supply chain function contributes to the company’s sustainable development commitments by integrating sustainability into our processes and procedures. For example, in 2022 we added a global supplier due diligence minimum vetting protocol for supplier onboarding, which includes supplier capability, ownership, financial health, integrity, labor and human rights assessments, where appropriate. We engage with suppliers and contractors on sustainable development issues through our Quarterly Business Reviews, Supplier Relationship Management, Supplier Sustainability Forum and supplier audits.

Further integrating engagement on labor and human rights into our procurement processes and procedures includes recommended questions and contract language for supplier prequalification, bids and audits. 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 our Code of Business Ethics and Conduct and our Supplier Expectations. We are committed to the California Transparency in Supply Chains Act of 2010, the United Kingdom Modern Slavery Act 2015, the Australia Modern Slavery Act 2018 and the Norway Transparency Act. 

We endeavor to conduct all contracting and procurement activities in an ethical manner in accordance with our Supply Chain Standard and applicable laws. We require suppliers to comply with certain requirements as a condition of business and to be guided by the principles and standards set forth in the ConocoPhillips Code of Business Ethics and Conduct (COBE) and their own ethics and conduct policies. Our Code of Business Ethics and Conduct: Expectations of Suppliers was updated in 2022 to align with updates to our COBE, specific to prevention of money laundering, complying with international trade laws, preserving data privacy and advancing respect for human rights. The document provides additional clarity to our suppliers regarding our expectations. 

Our contract templates incorporate requirements for export compliance and the U.S. Foreign Corrupt Practices Act (FCPA) among other requirements. ConocoPhillips prohibits any form of money laundering and follows all domestic and international laws governing money laundering. ConocoPhillips strives to prevent money laundering through procurement policies, vetting, due diligence and payment processes. 

Local Content and Employment 

We emphasize promoting supplier capacity building in our procurement and we expect our suppliers to do the same. 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 seek 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 on our website. 

Supplier Diversity 

We expect to do business with qualified suppliers that share our values, whether minority, woman, disabled, LGBTQ+ or veteran-owned, small business enterprises, or global, local and Indigenous suppliers around the world. In the U.S., we do business with diverse companies and continue to provide 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. In the U.S., our 2022 Supplier Diversity Program totaled $621 million spent with Indigenous businesses, businesses owned by veterans, minorities, women, members of the LGBTQ+ community, service-disabled people and historically underutilized businesses (HUBs). Through our Supplier Diversity program, we actively participate in certifying and developing diverse, small and local businesses in the United States. 

In 2022, we elevated our U.S. Supplier Diversity program by assembling an advisory council comprised of seven senior company leaders who are actively engaged in building and enhancing our strategy in this space.

Additionally in 2022, our Chief Procurement Officer joined the Houston Minority Supplier Development Council’s (HMSDC) Board of Directors. ConocoPhillips also supported the HMSDC, American Petroleum Institute and Blue Wave launch of a business training program for minority-owned businesses to better position them to compete in our industry. The program was a 6-month course which included health and safety, cybersecurity, quality, corporate policies, technical capabilities, finance and sustainability. Twenty companies successfully graduated from the program in October 2022.