Q&A: Exxon's DuCharme on how to get women involved in supply chains

A shop owner in Myanmar. Photo by: Richard Nyberg / USAID

WASHINGTON — Identifying and assisting women-owned businesses can be a challenge for multinational corporations that want to support women in communities where they work but don’t know how to go about identifying and vetting local enterprises.

When women are empowered economically in developing communities, they are more likely than men to invest income from their businesses back in their companies and into their families on children, education, and health care. This can create more stable environments in which corporations can work, increasing return on investment and long-term profits.

WEConnect International aims to bridge the gap between international companies and women-owned businesses that are ready and capable of providing necessary goods and services around the world. The corporate-led initiative helps multinational corporations such as ExxonMobil source their needs from women-owned enterprises up and down its supply chain, which helps the business do good while maximizing profits.

Each year, Exxon, which in 2017 had a total yearly operating cost of $75.783 billion, spends around $500 million with women-owned businesses around the world. It also funds initiatives designed to help women become more economically empowered in their communities. The company reported $15 billion in adjusted earnings in 2017 and this year plans to spend $7 million in grants for organizations that work both locally and globally to give women an economic boost.

“We don’t just do this because it feels like the right thing to do; we do it because it shows real value in the bottom line.”

— Linda DuCharme, president of Exxon’s Global Services Company

Linda DuCharme, president of Exxon’s Global Services Company, recently sat down with Devex to explain why working with women-owned businesses is not only a good thing to do, but also beneficial to the company’s bottom line. She explained how Exxon aims to ensure the integrity of all aspects of its enormous global supply chain, particularly in challenging environments and developing nations across the globe. DuCharme was in Washington to accept an award from WEConnect recognizing the oil and gas giant’s investment in incorporating women in all aspects of its business operations.

This interview has been edited for length and clarity.

Why is it important to actively involve women in supply chains?

It’s got two bases, one of which is just the pure fundamental business reasons. When we are looking at supply chains anywhere in the world, we have to make sure that our costs are as low as possible. We’re in a very competitive business and the best way to do that is to make sure that you open up the aperture. It helps drive cost down and improve competition.

We also fundamentally know that particularly in a lot of the developing world where a lot of our activities are in the oil and gas business, investing in women-owned businesses is shown to bring more value to the community. It makes the society more stable, it makes the community more stable, and everyone benefits. Women are known to take their money, when they make money owning a business, and invest it in education; they bring it home and they invest in their families, they invest in health care. All of that works to create more stable communities, and there’s a business purpose in that if we’re in a country long term.

Is there a particular sector in which you’ve had a lot of success in identifying women-owned businesses in your supply chain?

We try to identify them everywhere. In oil and gas development, you don’t pick where you do business. You go do business where there happens to be resource. So when we find resource in a new country, we try to identify the businesses in that country that we could add to our supply chain: What kind of services are already available in the community and then which of those are women-owned and which of those could we help support by having them in our bidding pool?

We try to go across our supply chain, so whether it’s providing materials, providing services, providing technology. We are generally most successful in the service industry because it’s lower capital, so a lower barrier to entry for women to get in that sort of a business.

What are some examples of services that businesses provide?

In the developing world, we’ll have catering services, and florists, and delivery services that will be owned by women. We have examples in Mexico, where we actually have consulting services. We have a transportation company for our fuels and lubes that is a women-owned business. We have examples that are also relate directly to what we do. For example, drilling tubulars, which are the pipes that you use to extract oil and gas from the ground once you’ve drilled a well, we have a women-owned business that we procure that from. We really try and do it across the supply chain to the extent we can.

What sort of example does Exxon hope to set for not only your competitors in your own industry as well as multinational corporations all over the world?

We’re a big company, but we’re able to be in this in a big way. We don’t do this just because it’s a token thing. We spend over a half a billion dollars a year with women-owned businesses and that’s because it’s smart for the bottom line. And I think we’d like to set the example that this is all around the right thing to do. It’s smart for the bottom line, it’s smart for the communities in which we operate.

How do you go about tracking that half a billion dollars and identifying women-owned businesses throughout your supply chain?

That’s where an organization like WEConnect comes in. They are a really important partner for us to help identify women-owned business to make sure we are exposed to the many women-owned businesses in the countries in which we want to operate. We do a lot of talking to the government to have them help us understand what women-owned businesses are available, what services they can provide for us. And then we try and hold ourselves accountable. If you actually focus on what you’re doing, you can monitor the results and monitor the success of the program. We don’t just do this because it feels like the right thing to do; we do it because it shows real value in the bottom line.

What is the biggest challenge in involving more women in your supply chain?

It’s the challenge of first of all getting more and more women to actually own businesses, particularly in some of the developing world where we work, and that’s again where WEConnect helps to come in and help people get the skills that they need to actually run businesses. There’s also a lot of partners within countries that help to provide the funding to start some of these seed businesses. It’s a supply issue for us. It’s not necessarily a demand issue.

Global Witness recently produced a report alleging Exxon had purchased a corrupt block of oil in Liberia. Given allegations like this, how can Exxon ensure integrity in its supply chain from top to bottom and make sure things like that are not happening?

That didn’t happen, and we have responded to [the accusations]. That was misinformation and misconstrued. To your broader question, we hold ourselves to the highest ethical standard. We understand that our reputation is extremely important to us. Even in what would be recognized as countries with high corruption perception index, we have no tolerance for any sort of bribery or anything in our supply chain. We have an absolute zero tolerance. We are very, very rigorous throughout our supply chain to make sure that we understand not just the cost of what people are providing us, but how they got it to us and that it’s all been done in a legal way.

What happens if a supplier is identified as operating outside the law?

We don’t want to have anything to do with it. We have a lot of vetting procedures before we go and do business with anybody. We have extensive vetting to make sure that we understand what the reputation of the company is, how it is that they produce the product they produce. We certainly follow all the laws of all the countries that we work in, starting with the U.S. and all of the issues and requirements that the U.S. has for how we vet companies we do business with around the world. We recognize that they’re an extension of us in many places.

In a lot of developing countries, Exxon is focused on strengthening those areas so they can be places where you can conduct business long term. Is there any effort to focus on climate change impacts of the businesses with which you incorporate into your supply chain?

We certainly look at the sustainability of our own business, the sustainability of those in the supply chain that are supplying us. It’s certainly a consideration and a growing one. All of us recognize that it’s an important consideration not just in the developed world but also in the developing world where you end up with more of the questions about how is something actually produced.

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About the author

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    Teresa Welsh

    Teresa Welsh is a reporter with Devex based in Washington, D.C. Prior to joining Devex, Teresa wrote about Latin America from McClatchy's Washington Bureau and covered foreign affairs for U.S. News and World Report. She worked as a reporter in Colombia, where she previously lived teaching English. Teresa earned bachelor of arts degrees in journalism and Latin American studies from the University of Wisconsin.