Report Oct. 24, 2018
Supply chain management
ExxonMobil’s performance is influenced by every individual who contributes to our daily operations.
Report Oct. 24, 2018
Supply chain management
Procurement process and supplier qualification
We work to source goods from local suppliers. In 2017, ExxonMobil made payments to more than 100,000 suppliers of goods and services worldwide.
We have developed a set of best practices to help ensure our company consistently engages with local and diverse suppliers. These practices include supplier forums, local supplier databases and local enterprise centers for business development and training. For example, we have established a Centre for Local Business Development and supplier registration portal to support identification and training of Guyanese suppliers for our new development in Guyana. A similar example, in Papua New Guinea, has supported nearly 19,000 local entrepreneurs.
We strive to promote a sustainable supply chain that meets ExxonMobil’s expectations, including complying with local laws, respecting human rights and the environment, and creating opportunities for historically underrepresented groups. Learn more about how ExxonMobil respects human rights in the supply chain.
Our approach to supply chain management begins when any ExxonMobil business line identifies project or operational needs requiring the procurement of third-party goods, services or materials. We have a company-wide procurement approach that allows for the application of the same rigorous standards, accountability and practices worldwide.
Our procurement staff is trained to conduct prequalification assessments. Supplier qualification is the process for determining a supplier’s capability to provide the required materials or services. Supplier qualification includes operational, technical and financial qualification. In addition, the procurement staff must conduct mandatory anti-corruption due diligence for suppliers in relevant countries. This process also involves identifying higher-risk parties, gathering additional information on those parties and consulting with the Law Department if further due diligence is warranted.
For existing agreements, a select number of suppliers are audited each year for contract compliance. Some components of those audits include pricing, safety, drug and alcohol policy compliance, invoicing, and travel and entertainment expenses. Potential follow-up from these audits could be in the form of additional payments or refunds if incorrect billing is found. A contractor who does not meet our expectations may be subject to supplemental training and contractual remedies, including termination.
Performance and initiatives
Promoting sustainability throughout our supply chain
We work with suppliers to identify opportunities for improving our environmental performance. In 2017, ExxonMobil started working with Sierra Chemicals L.C. (Sierra) and Sumter Transport Company (STC) to introduce more sustainable cleaning services and reduce waste at our refineries in Beaumont and Baytown, Texas.
Sierra offers a Green Seal™ approved cleaning chemical, which improves biodegradability and leaves no chemical residue. Sierra’s product E6 meets the Green Seal GS-37, one of Green Seal’s testing protocols for biodegradability, and can be considered as indicative of rapid and ultimate degradation in the environment. This partnership with Sierra provides environmental benefits from the new product, economic benefits for the refinery and social benefits in the form of more sustainability-focused suppliers entering into the supply chain.
Also in 2017, ExxonMobil signed an agreement with STC for the removal and reuse of waste from the Baytown refinery. This agreement enables ExxonMobil to take advantage of STC’s unique technology to remove 28,000 tons of waste generated during the refining process. STC safely moves waste residuals from slurry oil tanks to cement kilns for firing cement fabrications. Traditional disposal methods would generate approximately 10,000 cubic yards of residual ash that would have been disposed of in landfills. STC's process results in zero residual ash and zero deposits into landfills.
Promoting supplier diversity
ExxonMobil values a diverse and inclusive workforce. Expanding opportunities for diverse suppliers brings a variety of perspectives, ideas and practices that we believe will positively grow our business. We cultivate long-lasting, mutually beneficial relationships with diverse suppliers to contribute to the economic development of historically underrepresented groups. In the United States, we have fostered diversity across our supply chain for more than 40 years.
Our U.S. supplier diversity database enables businesses from traditionally underrepresented groups in the United States to register an interest in being an ExxonMobil supplier. On an international scale, ExxonMobil uses a database through a nonprofit, WEConnect International, to identify women-owned businesses outside of the United States.
We consider the full reach of our supply chain, not just our direct spending, by tracking the progress of our primary suppliers in the use of diverse suppliers in their businesses. We work closely with the National Minority Supplier Development Council and the Women’s Business Enterprise National Council to help identify and develop relationships with certified diverse suppliers in the United States. These organizations have robust supplier databases that ExxonMobil accesses as part of standard work practice. Women’s economic development is a strategic global priority for ExxonMobil, and our international supplier diversity program currently focuses on supporting women-owned businesses in a number of countries where we operate. In 2017, ExxonMobil was recognized by the Women’s Business Enterprise National Council for the twelfth consecutive year as a top corporation in support of women-owned businesses.
We continue to work with WEConnect International to increase the participation of women-owned businesses in our supply chain. In addition to compiling an international database of women-owned businesses used by ExxonMobil, WEConnect identifies, educates, registers and certifies women’s business enterprises based outside of the United States that are at least 51 percent owned, managed and controlled by one or more women. In 2017, WEConnect International named ExxonMobil its Corporation of the Year in recognition of the company’s diverse supplier program. Additionally, ExxonMobil participated in WEConnect panel discussions in Vietnam, Mexico and Canada to educate women-owned businesses on becoming more competitive in the oil and gas market and to better prepare them to participate in ExxonMobil commercial activities.
Performance and initiatives
ExxonMobil has had a U.S. supplier diversity program for more than 40 years focused on inclusion of minority- and women-owned businesses. Since 2011, our spending with minority- and women-owned business enterprises has reached $1 billion in the United States. In 2017, we exceeded our target with a total of $1.9 billion in spending with designated diverse suppliers in the United States. This represents the highest annual spending with diverse suppliers in our program’s history.
In 2015, we formally expanded the diversity categories in our program to include lesbian-, gay-, bisexual- and transgender-owned businesses, small businesses, veteran-owned businesses, service-disabled businesses and businesses owned by people with disabilities. This broader scope will bring even more diversity of thought and experience into ExxonMobil’s global supply chain.
Our supplier diversity program continues to expand into the international arena. In 2017, we spent $186 million with women-owned and indigenous-owned businesses outside the United States.
Sustainability Report • Oct. 24, 2018