Our Approach to Supply Chain Management and Human Rights
Managing a responsible supply chain is critical to our business success. Our core values guide all that we do, from the way we treat our employees to how we interact with the broader community. We believe in being good stewards of the environment, promoting diversity and inclusion, and operating with integrity in everything we do. We expect the same from our supply chain partners.
When selecting providers, Equitrans involves organizations from the local operating area and seeks groups with diverse ownership backgrounds. We strive to give voice and value to minority and locally owned businesses. We select and manage third-party organizations that believe in and abide by Equitrans’ Core Values and demonstrate respect for human rights. We also prioritize suppliers that focus on safety performance and compliance, diversity and inclusion, and environmental stewardship. When we work with businesses that share our values, we are able to build trust and create lasting relationships, which contribute to our long-term success and sustainability goals. Additionally, a diverse supply chain helps to drive innovation, safety, and economic value for the minority and local communities in which we engage.
Supply Chain Integrity and Ethics
Contracts for new suppliers incorporate Equitrans’ Code of Business Conduct & Ethics (Code) to ensure our standards and expectations are clear. Our Code details Equitrans’ standards on ethical behavior and actions as well as resources to address any Code questions or concerns. Each year, Equitrans sends a compliance letter to refresh select suppliers on Code obligations. In 2021, Equitrans utilized a total of 963 suppliers and 499 of those suppliers received an annual compliance letter from our legal and compliance team. The list of supplier recipients is based on certain criteria, such as excluding suppliers with spend of less than $10,000 and/or law firms that must follow their own Code of Conduct as part of their licensing.
Should an instance of non-compliance with our Code occur, Equitrans’ Compliance Network undertakes an investigation to identify the root cause. Our Compliance Network responsibilities include ensuring conformity with laws, regulations, and our Code in all areas of our business. Suppliers that are non-compliant with Equitrans’ requirements are subject to immediate remedial action or contract termination. In 2021, Equitrans did not terminate any of its contracts with third parties as a result of non-compliance and, as is our practice, we will continue to have an open-dialogue with our suppliers should an issue arise.
In 2021, Equitrans developed and published more robust supplier-specific Code of Conduct. In addition to echoing the expectations in Equitrans’ Code, suppliers must now confirm their commitment to a broader set of social workforce policies specific to suppliers. Equitrans communicates policy updates to our suppliers and contractors through ISNetworld, as well as through several internal contractor liaisons. During 2021, Equitrans sent the Supplier Code of Conduct to active suppliers who provided $10,000 or more in services. A total of 423 suppliers (more than 90%) provided digital acknowledgement of receipt. The small number of suppliers who did not acknowledge Equitrans’ Supplier Code of Conduct are each already obligated to comply with similar internal policies, which have been reviewed and determined to meet Equitrans’ standards for suppliers.
Diversity in Our Supply Chain
Equitrans is committed to diversity and inclusiveness throughout our organization, including our supply chain. We recognize that management of a diverse range of suppliers benefits the local community, as well as the viability of the overall economy. As an element of our sourcing practices, Equitrans emphasizes the inclusion of local suppliers, which helps us reduce our environmental footprint and gain valuable insight into the culture of our operating areas. Equitrans defines a local supplier as any materials or service provider that receives payment in one of our primary operating states of Pennsylvania, West Virginia, or Ohio.
Local Suppliers: 59% of our total supply chain budget utilized on local suppliers.
We also include diverse-owned organizations, when feasible. Since 2018, Equitrans’ share of expenditures awarded to minority-, women-, and veteran-owned businesses has been steadily monitored and tracked, and we will continue to seek opportunities to build on our existing supplier base while establishing new relationships with diverse suppliers.
Equitrans Midstream has a zero-tolerance policy for any form of human rights abuse, including forced labor, child labor, and harassment or discrimination. We recognize that the nature of our business activities and existing operational footprint do not generally encounter a significant risk of negatively impacting the basic principles of human rights. Regardless, this does not diminish our commitment to respect human rights in all our actions with employees, local communities, customers, and other stakeholders. We work with our business partners to ensure they share our commitment and have similarly rigorous policies and protection measures in place. Equitrans promotes the preservation of human rights through:
- Promoting inclusion
- Having zero tolerance for discrimination
- Protecting employees’ rights to form unions and collectively bargain
- Prohibiting the use of modern slavery, human trafficking, forced labor, and child labor
- Guaranteeing fair work hours, compensation, and benefits
We will conduct appropriate due diligence to ensure we maintain that commitment and strive to create open channels of communication with anyone potentially impacted by our activities. For more details regarding our commitment to human rights, please see our Human Rights Policy.
Evaluating Our Supply Chain Management
Equitrans hires and manages suppliers based on their ability to adhere to Equitrans’ Code, Equitrans’ Supplier Code of Conduct, regulations, safety, and ESG standards. Suppliers must undergo an extensive onboarding process through an online supplier management database. Our supply chain and safety departments partner to determine Equitrans’ scorecard and grading requirements. Suppliers submit questionnaires, safety programs, and insurance documentation for review and are required to achieve a passing grade before we execute a master agreement or issue purchase orders.
We maintain a low-risk supplier base that is 99% domestic and, therefore, are required to comply with U.S. labor laws. During the onboarding process, new suppliers receive the master agreement and Supplier Code of Conduct, outlining Equitrans’ Human Rights Policy to reinforce our expectations for ethical, legal, and socially responsible business practices. Equitrans does not tolerate non-compliant suppliers. Should Equitrans find a compliance issue, we work diligently with the provider to resolve and re-establish compliance. If a resolution cannot be obtained, Equitrans will terminate the supplier contract. We take our Code, Supplier Code, and safety standards seriously and expect all contractors and suppliers to uphold our Core Values. Equitrans tracks, analyzes, and reviews supply chain data on a routine basis to identify gaps and areas of improvement, and we continue to identify ways to increase diversity in our sourcing activities.