Case study: How Southwestern Energy promotes sustainability among its contractors
Founded almost a century ago, Southwestern Energy is a leading U.S. producer of natural gas and associated liquids, focused on responsibly developing core positions in the nation’s two premier natural gas basins: the Appalachia and Haynesville basins. Southwestern Energy seeks to work with contractors that strive to be the Right People doing the Right Things Tweet This!, and who will meet the same high standards and expectations Southwestern Energy has for its employees.
This case study is based on the 2021 Corporate Responsibility Report by Southwestern Energy, prepared in accordance with the GRI Standards, 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 part of its HSE (health, safety and environmental) assurance process Southwestern Energy performs its own contractor assessments, to hold contractors accountable for following the same HSE expectations and standards to which Southwestern Energy holds its own employees. In order to promote sustainability among its contractors Southwestern Energy took action to:
- train and evaluate contractors
- assess contractors
- implement a new HSE data management system
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With this case study you will see:
- Which are the most important impacts (material issues) Southwestern Energy has identified;
- How Southwestern Energy proceeded with stakeholder engagement, and
- What actions were taken by Southwestern Energy to promote sustainability among its contractors
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What are the material issues the company has identified?
In its 2021 Corporate Responsibility Report Southwestern Energy identified a range of material issues, such as company financial health, environmental monitoring, economic impact in local communities, talent attraction, retention, development and career transitions. Among these, promoting sustainability among its contractors stands out as a key material issue for Southwestern Energy.
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 Southwestern Energy engages with:
To identify and prioritise material topics Southwestern Energy engaged with its stakeholders through the following channels:
| Stakeholder Group | Method of engagement |
| Investors
| · Annual report, quarterly reports and earnings calls · In-person meetings with institutional investors, including analyst conferences · Meetings with investors who are specifically interested in environmental, social or governance issues · Additional regular investor contact through the Investor Relations function, including active engagement and soliciting feedback · Continuous monitoring of relevant and emerging ESG issues important to investors |
| Employees
| · SWNet (intranet) · Town hall meetings · Support and networking groups, including diversity groups · Safety training · Performance management · “Career Matters” conversations · Wellness programmes · Leadership and professional development programmes · Ethics hotline · Day-to-day interactions · Employee engagement surveys |
| Contractors
| · ONE Team events and communications · Safety Stand Down days and safety training · Monthly safety meetings at SWN sites · Special project meetings at SWN sites to address specific health, safety and environment issues and corrective · actions · Operational reviews by division management · Vendor forums and audits · SWNlink communications, including operational announcements and quarterly newsletters · ISNetworld, a third-party service for hiring, communicating with and managing contractors |
| Customers | · Regular contact through the Marketing group |
| Landowners and Holders of Mineral Rights
| · Access via SWN.com website · Direct conversations and negotiations – individually and in small groups · Monthly payment statements to royalty owners · Semiannual newsletters · Landowner hotline |
| Local Communities | · Regular contact via SWN community liaisons · “Everyday Heroes” events for first responders (annually in operating areas) · Employee volunteerism · Feedback hotlines |
| State- and Federal-Level Government Officials | · Participation in select SWN health, safety and environment meetings · Legislative and regulatory engagement |
| Environmental Organisations and Universities | · Participation in and funding of specific partnership projects · Joint research projects · Resources for technical assistance · Direct communication with relevant SWN employees |
What actions were taken by Southwestern Energy to promote sustainability among its contractors?
In its 2021 Corporate Responsibility Report Southwestern Energy reports that it took the following actions for promoting sustainability among its contractors:
- Training and evaluating contractors
- Southwestern Energy maintains stringent requirements and processes for selecting, training and evaluating contractors, following a five-step process:
- Prequalification assessment of all contractors
- Project preparation
- Pre-job activity, including the Training Assurance programme
- Job oversight, including daily safety meetings
- Performance assessments
- Southwestern Energy uses a third-party analysis and management system to coordinate the evaluation of contractors on health, safety and environmental (HSE) issues and other issues.
- Assessing contractors
- In 2020, Southwestern Energy continued assurance assessments and leveraged its existing software systems to perform an additional Review and Verification audit on 38 key contractors and perform 168 prequalification reviews. Any concerns or deficiencies identified in a contractor’s assessment must be addressed within 30 to 90 days, depending on the circumstances. Southwestern Energy provides oversight and support as needed during this period and makes sure that any required corrective actions are completed.
- Implementing a new HSE data management system
- In 2020, Southwestern Energy finalised the implementation of a new HSE data management system to support its commitment to continuous improvement. One enhancement of this system is facilitating better accountability and tracking of corrective actions arising from both contractor and Southwestern Energy operational assessments. Another improvement made to the system in 2020 was the initiation of a tracker for subcontractors, allowing Southwestern Energy to review their safety numbers and understand the full scope of the workforce on its locations.
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 414-1 New suppliers that were screened using social criteria
Disclosure 308-1 New suppliers that were screened using environmental criteria 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
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References:
This case study is based on published information by Southwestern Energy, 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 following link:
https://www.swn.com/wp-content/uploads/2021/11/2021_11-2020-CR-Report-Complete.pdf
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