Supply chain sustainability
Sustainability is integral to our procurement process. By actively engaging with suppliers to learn and share sustainable practices, we seek to enhance our business methods and operational efficiency. This proactive approach allows us to effectively manage risks, minimize impacts, and enhance overall value across our supply chain. We work to foster business opportunities and promote the growth of local and diverse suppliers within our supplier network.
Supplier engagement
As an organization committed to sustainable development (SD), we recognize the critical role that suppliers play. Engagement with suppliers is a fundamental aspect of our sustainability strategy. We collaborate with our suppliers to assess their sustainability practices and look for alignment with our values and objectives. Through dialogue, we foster a shared commitment to environmental stewardship and community well-being.
We regularly engage our suppliers through business reviews and supplier audits to:
- Identify SD opportunities and risks in the supply chains.
- Maintain alignment with our Climate Risk Strategy for supply chain engagement.
- Track metrics, review performance and identify continuous improvement opportunities.
An important element of our ongoing engagement with key suppliers is our Supplier Sustainability Forum where we engage about our strategic sustainability objectives. ConocoPhillips held our annual forum in October 2023, inviting representatives from four supplier companies to our headquarters. Suppliers were selected given the relative impact on emissions associated with the contracted goods and services they provide — chemicals, pumping equipment, oil country tubular goods and engineering, procurement and construction (EPC). ConocoPhillips Supply Chain, Sustainable Development, Low Carbon, and Commercial teams hosted the event. Key objectives were as follows:
- Establish a common understanding of external drivers and evolving sustainability landscape as it relates to climate risk, and specifically Scope 1, Scope 2 and Scope 3 emissions.
- Discuss how to identify and leverage the most impactful opportunities to reduce ConocoPhillips Scope 1 and Scope 2 emissions through our suppliers.
- Discuss how to effectively collaborate to meet evolving climate-related expectations and reporting requirements within our value chains.
The forum included a plenary session, where ConocoPhillips and each invited company presented an overview of their climate strategy (focused on emissions), including opportunities, challenges and barriers they see in meeting regulatory and/or stakeholder requirements/expectations. Following the plenary discussions, a workshop took place to deliver the remaining forum objectives. Key forum learnings and next steps were shared with all attendees.
Supplier recognition
Through our annual Supplier Recognition Awards, we honor suppliers who uniquely contribute to our business in a positive manner. Read more about our 2023 winners.
Sustainable procurement and business ethics
The supply chain function contributes to the company’s SD commitments by integrating sustainability into our processes and procedures. We engage with suppliers and contractors on SD issues through our Quarterly Business Reviews, Supplier Relationship Management, Supplier Sustainability Forum, sourcing events and supplier audits, leveraging insights from these engagements to continuously enhance internal processes for managing suppliers.
We endeavor to conduct all contracting and procurement activities in a responsible 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 is reviewed annually and updated as applicable. The document provides added clarity to our suppliers regarding our expectations in the areas of: Integrity, Labor and Human Rights, Health, Safety and Environment, and Sustainable Development.
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 capability and 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 providing local contractors and suppliers with 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.
Supplier diversity
We believe that long-term success and diverse supplier inclusion go hand-in-hand. Through our Supplier Diversity Program we strive for inclusion of diverse suppliers throughout our areas of operation.
We do business with qualified minority, woman, disabled, LGBTQ+ or veteran-owned, small business enterprises, as well as global, local and Indigenous suppliers around the world. 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 2023 Supplier Diversity spend totaled $803 million with Indigenous businesses, businesses owned by veterans, minorities, women, members of the LGBTQ+ community, service-disabled people and historically underutilized businesses (HUBs). An additional $787 million was spent with small business enterprises.
In 2023, ConocoPhillips was an active corporate member of 11 national and local supplier diversity non-governmental organizations (NGOs) in the U.S. These organizations promote and support development, mentorship, and scholarship programs that contribute to building capabilities and supporting growth of minority business enterprises.
ConocoPhillips also continued as an active corporate member of the American Petroleum Institute (API) Supplier Diversity Task Force, with the primary focus of supporting the Houston Minority Supplier Development Council (HMSDC), API and Blue Wave business training program. The objective of this program is to upskill minority-owned businesses to better position them to compete in the oil and gas industry. In 2023, ConocoPhillips conducted in-depth interviews with all 20 companies that successfully graduated from the program, to align capacity with opportunity.
Additionally, while continuing to hold a position on the HMSDC Board of Directors, our Chief Procurement Officer (CPO) served as a co-convener of the council’s 2023 Chief Procurement Summit. This event brought together CPOs from over 20 corporate members to discuss the future of supplier diversity and continuous improvement opportunities.