Case study: How MPC promotes sustainability among its suppliers
Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio and operating the United States’ largest refining system. MPC’s supply chain organisation provides essential support to its business operations and extends its commitment to sustainability beyond its doorstep Tweet This!, making sure suppliers achieve high safety and ethical standards, offer innovative, value-added capabilities, understand MPC’s business, and embrace quality procedures and processes.
This case study is based on the 2019 Sustainability Report by MPC 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
MPC’s robust procurement process evaluates its suppliers against key safety metrics and programmes and its strategic procurement decisions inherently reduce supply chain risks to human rights, environmental and worker safety. In order to promote sustainability among its suppliers MPC took action to:
- promote supplier diversity
- implement a Supplier Code of Conduct
- incentivise outstanding supplier performance
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With this case study you will see:
- Which are the most important impacts (material issues) MPC has identified;
- How MPC proceeded with stakeholder engagement, and
- What actions were taken by MPC to promote sustainability among its suppliers
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What are the material issues the company has identified?
In its 2019 Sustainability Report MPC identified a range of material issues, such as business ethics and accountability, water use and conservation, cybersecurity, spill prevention, workforce safety, air quality and emissions, process safety. Among these, promoting sustainability among its suppliers stands out as a key material issue for MPC.
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 MPC engages with:
To identify and prioritise material topics MPC engaged with its stakeholders through the following channels:
| Stakeholder Group | Method of engagement |
| Employees | · Code of Business Conduct · Integrity Helpline · Employee satisfaction survey · Performance management · Safety meetings · CEO communications · Employee Network Groups · Wellness programmes |
| Business Partners | · Procurement process · Stakeholder interviews · Contract negotiations · Core contractor programme · Project management |
| Customers
| · Global, regional and local industry events, forums and conferences · Proprietary company events and meetings · Partnerships and working groups to advance best practices |
| Communities
| · Websites, news media and social media · Community investment programmes · Community engagement · Employment · Landowner events · Focus groups · Community surveys · Tours · Community hotlines · Community Advisory Panels · Facilitation of community events · Sponsorship of charity fundraising events |
| Governments | · Advocacy · Policy development · Industry and trade association representation · Regulatory compliance · Permit reviews · Regulatory audits · Leadership and collaboration on community investment projects · Legislator engagement days · Tours · Marathon Petroleum Corporation Employees Political Action Committee |
| Shareholders | · Investor presentations and conferences · Analyst calls · Annual Shareholder Meeting · SEC filings |
What actions were taken by MPC to promote sustainability among its suppliers?
In its 2019 Sustainability Report MPC reports that it took the following actions for promoting sustainability among its suppliers:
- Promoting supplier diversity
- MPC is committed to promoting diversity within its supply chain, values and respects the unique character and contribution of each of its employees, and seeks out suppliers that have the same commitment. Doing so is not only the right thing to do, but it allows MPC to capitalise on the business and competitive advantages that stem from diversity of people and ideas. MPC supports economic inclusion and strives to source from suppliers that are local to its refineries and facilities and encourages diverse suppliers, including local suppliers and businesses owned and operated by people who are minorities, women, veterans, physically challenged and/or disadvantaged, to participate in its Supplier Diversity programme.
- Implementing a Supplier Code of Conduct
- While MPC expects all suppliers to comply with its Code of Business Conduct, it implemented a stand-alone, tailored Supplier Code of Conduct in 2020. The Supplier Code of Conduct further emphasises MPC’s expectations of suppliers in the areas of: legal and ethical compliance; environmental, health, safety and security; conflict minerals; conflicts of interest; human rights; diversity; compliance assurance; and reporting. MPC encourages all suppliers to utilise its Integrity Helpline to anonymously report unethical or illegal acts, or suspicions of unethical or illegal acts. Additionally, MPC’s supply chain employees receive annual training on sustainable procurement topics, including compliance and ethics, human rights, diversity and environmental topics. This enables MPC to be educated, aware and proactive to minimise risks through supplier selection, contracting and compliance assurance.
- Incentivising outstanding supplier performance
- Suppliers that positively impact MPC’ business are honoured at its annual Supplier Recognition Awards. In 2019, MPC recognised suppliers in the following categories: Safety, Environmental Stewardship, Corporate Citizenship, Innovative Partnership, Diverse Business of the Year and Supplier of the Year.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standards addressed in this case are:
1) Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken
2) Disclosure 414-2 Negative social impacts in the supply chain and actions taken
Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken does not correspond to any SDG.
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 MPC, 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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