Case study: How INPEX promotes sustainability among its suppliers
INPEX is Japan’s largest oil and gas development company, engaged in exploration, development and production projects in approximately 20 countries around the globe. INPEX is committed to promoting sustainability across its supply chain Tweet This! and requires its suppliers to comply with labour and environmental laws and regulations, prevent corruption, and respect the INPEX Group Human Rights Policy.
This case study is based on the 2020 Sustainability Report by INPEX published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Abstract
As a company that manages projects in almost 20 countries worldwide, INPEX recognises its important role for fair and impartial procurement and responsible supply chain management. In order to promote sustainability among its suppliers INPEX took action to:
- implement risk assessments
- engage suppliers
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With this case study you will see:
- Which are the most important impacts (material issues) INPEX has identified;
- How INPEX proceeded with stakeholder engagement, and
- What actions were taken by INPEX to promote sustainability among its suppliers
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What are the material issues the company has identified?
In its 2020 Sustainability Report INPEX identified a range of material issues, such as complying with laws, preventing bribery and corruption, respecting human rights, contributing to local economies, promoting diversity, securing occupational health and safety. Among these, promoting sustainability among its suppliers stands out as a key material issue for INPEX.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups INPEX engages with:
To identify and prioritise material topics INPEX engaged with its stakeholders through the following channels:
| Stakeholder Group | Method of engagement |
| Project Partners
| · Regular meetings · Regular communication |
| Contractors | · Indication of qualifications to prospective suppliers · Briefings on qualifications · Regular meetings · HSE Audits |
| Customers
| · Designated contact · Provision of product information · Identification of customer needs at service · stations |
| Shareholders and Investors
| · The General Meeting of Shareholders, briefings and exhibitions, IR meetings · Issuance of reports (securities report, annual report, presentation slides, etc.) |
| Local Communities | · Environmental and social impact assessment · Community briefings · Various pamphlets · Social contribution activities |
| NGOs | · Information gathering to solve global social issues · Round-table discussions |
| Employees
| · Face-to-face meetings with managers · Consultation between labour and management · Various training and study abroad programmes · Internal magazines |
| Oil and Gas Producing Countries | · Communication at each project phase (tender, approval process of development plan; development and production; decommissioning) |
What actions were taken by INPEX to promote sustainability among its suppliers?
In its 2020 Sustainability Report INPEX reports that it took the following actions for promoting sustainability among its suppliers:
- Implementing risk assessments
- From FY 2018, INPEX has been implementing supply chain risk assessments through a series of self-assessments for major suppliers. Survey questionnaires include whether they have established human rights policies and grievance mechanisms for human rights violations, the status of their regulations on preventing bribery and corruption, and the status of employee education and training in relation to human rights, and bribery and corruption. This assessment enables INPEX to monitor the compliance systems of its suppliers and identify risks. When bidding at overseas operator projects, INPEX conducts comprehensive assessments of suppliers’ compliance with local laws and regulations, the INPEX ABC (Anti-Bribery and Corruption) policy, and the INPEX Group Human Rights Policy. INPEX has also established prequalification criteria regarding HSE (health, safety and environmental) requirements and its relevant matters. For domestic projects, when bidding large-scale construction, INPEX also conducts a comprehensive assessment according to the INPEX ABC policy and HSE requirements, to ensure fair and impartial procurement.
- Engaging suppliers
- INPEX’s Domestic Exploration & Production Division is working to improve HSE through meetings of the HSE Committee, which is part of the INPEX-Supplier engineering forum, comprising INPEX and 16 of its major suppliers. Discussions include explanations and announcements, such as the INPEX HSE priority targets and activity programmes, information about incidents and near misses, and HSE information from Engineering Council member companies. In Australia, INPEX also provides fair opportunities to any suppliers, which includes regular meetings with major suppliers to review their performance on HSE, quality and service. INPEX also discusses related risks and their mitigation at the meetings.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standards addressed in this case are:
1) Disclosure 308-1 New suppliers that were screened using environmental criteria
2) Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken
3) Disclosure 414-1 New suppliers that were screened using social criteria
4) Disclosure 414-2 Negative social impacts in the supply chain and actions taken
Disclosure 308-1 New suppliers that were screened using environmental criteria does not correspond to any SDG.
Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken does not correspond to any SDG.
Disclosure 414-1 New suppliers that were screened using social criteria corresponds to:
- Sustainable Development Goal (SDG) 5: Gender Equality
- Targets: 5.2
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.8
- Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
- Targets: 16.1
Disclosure 414-2 Negative social impacts in the supply chain and actions taken corresponds to:
- Sustainable Development Goal (SDG) 5: Gender Equality
- Targets: 5.2
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.8
- Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
- Targets: 16.1
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References:
1) This case study is based on published information by INPEX, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:
http://database.globalreporting.org/
2) https://www.globalreporting.org/standards/gri-standards-download-center/
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