Our global supply chain

Approach to sustainable procurement

ExxonMobil is committed to promoting inclusive sourcing, respecting human rights and working to minimize impacts to the environment in our supply chain. We seek to work with suppliers that share our commitment.

Our Supplier, Vendor and Contractor Expectations call for the operations and business practices of our suppliers be conducted in a manner consistent with the  International Labor Organization 1998 Declaration on Fundamental Principles and Rights at Work (ILO Declaration) and  the goals of the United Nations Guiding Principles on Business and Human Rights (UNGPs). They also communicate our expectation that they comply with all local laws and regulations. Our suppliers, vendors and contractors are held to stringent compliance, anti-corruption, conflict of interest, safety and other guidelines in order to remain in good standing.

Managing our supply chain

To integrate sustainability into our practices, ExxonMobil leverages existing stewardship and purchasing processes and systems. Plans and initiatives are reviewed to identify opportunities related to inclusive sourcing and environmental performance as well as to identify potential human rights impacts within category families. Objectives are established annually.

ExxonMobil utilizes a source-to-contract platform that facilitates consideration of sustainability in the acquisition process.  Steps have been included to assist in identifying diverse suppliers and incorporate sustainability elements into commercial activities. 

Not only do we review a potential supplier’s operational, technical and financial performance, but we also perform compliance due diligence.  We screen potential suppliers across compliance areas such as sanctions, anti-corruption and human trafficking using third-party information.

Our due diligence process for identifying and assessing human rights risks focuses on three factors: supplier, commodity and location.

Additional due diligence is applied when procuring goods and services that utilize a significant amount of low-skilled, physical labor in a country ranked in the lower tiers (i.e., 2 Watch, 3 or Special Case) of the Trafficking in Persons (TIP) Report published by the U.S. Department of State. If a potential higher risk is identified, then the potential suppliers complete a questionnaire prior to contract award to assess whether they have the policies or practices in place to address such risks and we review and assess the responses prior to continuing with the contracting process. Our procurement professionals have received training on human rights risks in the supply chain and how to effectively review questionnaires. In addition, standard requests for quotations highlight ExxonMobil’s expectation that the supplier shall: 

• Comply with all applicable laws prohibiting the utilization of forced or compulsory labor.
• Provide its employees with working conditions, including payment of wages and benefits, which comply with all applicable laws.
• Hire only employees who meet the legal employment age requirements in the country of employment.

The standard terms and conditions used by the Procurement function oblige suppliers to:

• Adhere to all applicable laws and regulations, including those related to employment, safety, security, health and the environment.
• Impose similar terms and conditions on their subcontractors. 
• Permit audits and allow access to office and work locations, documentation and personnel.

We annually reiterate our expectations of suppliers, including on human rights, through a Year End Supplier Letter. This letter highlights that suppliers are expected to conduct business in compliance with standards similar to the Standards of Business Conduct and that compliance with all applicable laws is a fundamental expectation. 

ExxonMobil audits a select number of suppliers each year for contract compliance, such as related to pricing, safety, drug and alcohol policy compliance, invoicing and travel expenses. A supplier’s contract may be subject to termination if the supplier is not meeting our expectations.

Supplier diversity and inclusive sourcing

We promote inclusive sourcing by championing local, small and diverse suppliers in order to increase competition and innovation while striving to make positive impacts on communities. Where there is a lack of diverse, small or local suppliers, ExxonMobil aims to contribute to building capacity within our supply chain. 

We purchase goods and services from local suppliers and build their capabilities through training programs. This approach creates competitive advantage for ExxonMobil through access to qualified and reliable local suppliers. It also helps in building long-term, local economic capacity, strengthening our relationships as a valued community member and supporting the objectives of the related U.N. SDGs.

More information on our approach to local economic development, including local content, can be found here.

Working with diverse suppliers creates new perspectives, ideas and practices that help grow our business. We strive to cultivate mutually beneficial relationships with a diverse supplier base that contributes to their growth via outreach, business development and training programs.

We are committed to economic empowerment and aim to increase the number of women-owned and historically disadvantaged-owned businesses in our global supply chain.

Human rights in our supply chain

We respect human rights and expect the same of our suppliers. We leverage current processes and systems to assess our direct suppliers for potential human rights risks in the supply chain. These risks focus on workers’ rights, including safe and healthy working conditions as well as the elimination of forced labor, child labor and discrimination.

For more information on our approach to Human Rights click here.

Supply chain human rights  

Our Statement on Labor and the Workplace articulates our support of the principles of the International Labor Organization (ILO) 1998 Declaration on Fundamental Principles on Rights at Work, namely the elimination of child labor, forced labor and workplace discrimination, the recognition of the right to freedom of association and collective bargaining and a safe and healthy workplace.

Through our regimented procurement process, we seek to do business with suppliers who observe similar standards. Purchases arranged by our global procurement organization include contract language that requires adherence to all applicable laws and regulations. Furthermore, requests for quotations issued by our procurement staff typically include clauses relating to the prohibition of forced or child labor and the payment of wages in accordance with local laws. Participants in such tenders are required to adhere to those requirements.

Another means of managing supply chain transparency involves auditing. Our contracts typically require suppliers and all their subcontractors to allow ExxonMobil to access all offices and work locations, to interview supplier and subcontractor personnel. We select a certain percentage of suppliers annually for such audits, which include a compliance review on contract provisions.

Human trafficking issues have received considerable attention in recent years. ExxonMobil proactively manages supply chain risks, including those associated with human trafficking, through our Standards of Business Conduct, our Statement on Labor and the Workplace and our due diligence processes. We also seek to reduce the underlying conditions that lead to human trafficking by working to engender economic growth and personal prosperity.

Environmental performance in our supply chain

We seek and aspire to work with innovative suppliers to minimize environmental impacts in our supply chain. We incorporate environmental considerations when developing cost models and sourcing strategies. Examples include reducing energy use and incorporating recycled content into packaging materials. We also assess and engage with suppliers through relationship management.

Environmental performance is an important consideration in our commercial decisions. Since 2021, sustainability questions have been embedded in our sourcing platform and considered in bid evaluation and supplier selection. 

Whether through collaboration with our transportation and logistics suppliers or the focus on efficiently running our warehousing operations, these actions have resulted in innovative ways to tackle everyday challenges in a cost-effective way.

For example, in Singapore, working with our suppliers has resulted in increased savings through products using less natural resources without compromising product performance. In addition, innovative solutions include the reduction of top board thickness of pallets and the thickness of Form Fill Seal bags.

Performance and initiatives¹

In 2021, we surpassed $5.5 billion in annual spending with local suppliers in select countries, and with diverse suppliers and small businesses globally. We spent $2.4 billion of the $5.5 billion in the U.S. with businesses owned by minorities, women, lesbian-, gay-, bisexual- and transgender individuals, veterans, service-disabled veterans, people with disabilities and small businesses. Our supplier diversity program continues to expand internationally; we spent $421 million with women-owned and Indigenous-owned businesses around the world.    

During the year, new training was introduced to ExxonMobil employees to build skills in the areas of inclusive sourcing, human rights and environmental performance in the supply chain. More than 2,100 employees completed this training.

In Guyana, through the Centre for Local Business Development, we launched a women entrepreneurship program called “Accelerate-Her.” It offers Guyanese women the opportunity to enable the growth of small businesses through tailored workshops, access to one-on-one business advisory services, mentoring, pitch development and a strong and supportive peer-learning environment for professional women. This innovative program works in concert with ExxonMobil Foundation’s Women Economic Opportunity Initiative and its partnerships with the Cherie Blair Foundation for Women’s Road to Growth program and Counterpart International’s Global Women in Management training course. 

FOOTNOTE

¹ _{Includes direct ExxonMobil spending on Tier 1 suppliers and a select group of Tier 2 suppliers. Total spending includes suppliers classified as minority-owned businesses; women-owned businesses; small businesses; lesbian-, gay-, bisexual- and transgender-owned businesses; veteran-owned businesses; service-disabled veteran-owned businesses; and businesses owned by people with disabilities.}