Oil and gas companies pursue supplier diversity and sustainability goals

Supplier diversity and sustainability are critical components of responsible sourcing in most any industry, but particularly the oil and gas industry. Below, three supplier diversity executives discuss the approaches their companies have taken to achieve sustainable outcomes for the industry, its suppliers and the communities it serves.

Ana Moreno Kopf
Manager, Supplier Diversity and
Diversity Outreach
Shell Oil Co.

How can suppliers help your company meet its sustainability goals?
For Shell, supplier diversity means working to make the profile of our supply chain reflect the profile of the communities in which we live and work and encouraging these businesses to grow into the kind of suppliers Shell will need to meet the energy needs of the future. Our energy goals for the future require the best resources we can gather from a broad spectrum of innovative, service-oriented businesses. We encourage diverse suppliers to find their fit either through showcasing existing technologies or new technologies within our various business lines — upstream, midstream and downstream.

In your opinion, how has supplier diversity changed the oil and gas industry?
• Supplier diversity:
• Provides the oil & gas industry with increased access to innovation and technology.
• Provides economic development opportunities in the local communities in which we operate.
• Builds a positive brand image for Shell.

There are a limited number of minority/women’s business enterprises in highly technical categories, which has posed a barrier to expanding supplier diversity across all parts of our business. We will continue to educate suppliers and partners on the critical areas of doing business with Shell and the oil & gas industry, with the aim of growing both Tier I and Tier II eligible providers.

How do you keep supplier diversity at the forefront throughout your global organization to ensure that spend goals
are met?
Shell supplier diversity continues to encourage business leadership teams to have ongoing exploratory discussions with diverse business owners who can help improve our efficiency and create value in the marketplace. We have put in extra effort to ensure supplier inclusion is a customary part of our day-to-day business culture. We share quarterly results of our spend with diverse suppliers and small businesses with our leadership teams. We look for opportunities to set up purposeful conversations during national, regional and local events with contract holders who have upcoming opportunities.

Debra Jennings-Johnson
Senior Director, Supplier Diversity
BP America Inc.

What do you see as the biggest challenge to supplier diversity in your industry?
Despite the robust advocacy for supplier diversity and the many examples where embracing alternate and capable diverse suppliers has resulted in safe, reliable and efficient successes in operations, there is still a big challenge in the oil and gas industry to build confidence in our buyers to consider suppliers who do not have experience in our industry.
How do you keep supplier diversity at the forefront throughout your global organization to ensure that spend goals are met?
At BP, it starts at the top with our president and CEO who embraces supplier diversity to meet our corporate strategies in performance, innovation and reliability. In addition, our supplier diversity team collaborates with many advocates within procurement and business operations who have influence. We also have an established diversity and inclusion council and supplier diversity advisory council leaders with global responsibilities who understand the dynamics of local content. They know diversity matters within our workforce and among our business partners.

Which commodity categories have a shortage of diverse suppliers? How can diverse suppliers take advantage of this shortage?
Some of the commodity categories which have a shortage of diverse suppliers are drilling and completion wells, environmental products and services, facilities engineering & construction, manufacturing operations, production operations, retail assets and seismic.
The greatest advantage for striving suppliers is to understand these gaps and come up with solutions to fill them. At BP, our fit-for-the-future strategy involves:
1. Growing advantaged oil in the upstream.
2. Market-led growth in the downstream.
3. Modernizing the group.
4. Venturing in low-carbon across all fronts.
Any way a diverse enterprise can bring innovation, cost-efficiency and reliability into these strategies will help build a better, stronger and more competitive BP.

Dave Feldman
Manager, Supplier Diversity/Local Content
Chevron Corp.

What do you see as the biggest challenge to supplier diversity in your industry?
The biggest challenge is the current trend toward fewer, larger and more sweeping contracts. Our current instincts are leading us to create efficiencies by using larger, global providers — managing fewer contracts and generally disadvantaging small suppliers who may not have sufficient capability to compete on such an enormous scale.

How do you keep supplier diversity at the forefront throughout your global organization to ensure that spend goals
are met?
In order to be an effective, value-adding initiative, supplier diversity must be fully integrated into everyday business and procurement processes. It cannot be an add-on or extra item that we encourage individuals to consider. It must be an intentional element to the procurement process and be seen as a means to ensure that all companies with the capability to compete are given the opportunity to do so. Such thinking is built on a foundation of improved business outcomes.

Are there commodity categories which have a shortage of diverse suppliers? If so, what are these categories and how can diverse suppliers take advantage of this shortage?
Historically, we have a shortage of suppliers in our core businesses — those “closest to the wellhead” — and where much of Chevron’s spend is focused. There are many great opportunities in oil and gas exploration, production and refining.