Overview

Sustainable supply chains

Baker Hughes is part of a broad global supply chain, and we source materials from many countries around the world. In addition to managing our own corporate responsibility performance, we also have a desire  to ensure that the suppliers we work with adhere to high standards. As a major equipment manufacturer and service provider, we have some influence, along with our peer companies, to help raise the standards of our whole industry. Our Supplier Integrity Guide governs all aspects of our relationships with suppliers, contractors, consortium partners, and consultants. Our Supplier Social Responsibility Program is intended to set standards and monitor compliance with high standards of HSE performance, ethics, compliance, and respect for human rights.

Our sustainable supply-chain framework consists of four core programs. As a part of the Supplier Social Responsibility Program, all our suppliers are screened and assessed for social risks. We ensure that integrity and compliance are a foundational element of our culture. Our suppliers are required to hold their own suppliers to equivalent standards. Our enterprise-wide global ethics and compliance program is designed  to prevent, detect, and appropriately respond to any potential violations of the law or company policies, and this program applies to our suppliers. We will continue to enhance our supplier social responsibility frameworks in the coming year, through the addition of new programs addressing supply chain labor and emissions reporting. 

Supplier Integrity Management

Supplier integrity management

We review our direct material suppliers to determine our Supplier Social Responsibility Program (SSRP) applicability through our common supplier onboarding process. 

Assessment

We take a risk-based approach to our supply chain auditing program to identify suppliers based on country risks, the supplier's past performance, and other factors. We look to continuously improve our risk profiling by further identifying additional risk factors, such as process risks, to include in our reviews. Additionally, pre-engagements and on-site periodic assessments follow an "Eyes Always Open" policy for our teams to be alert to potential violations during any supplier visit. 

Verification

Suppliers identified as high-risk are subject to audit by our trained auditors. These auditors conduct on-site audits on a one- to five-year basis, using a global questionnaire and risk-weighting metrics. In 2020, due to the pandemic and restricted travel, we moved to desk-top audits with our suppliers to prevent disruption of the program. We intend to return to in-person audits when it is deemed safe to do so.

Requirements

Our Supplier Integrity Guide specifically prohibits activities associated with human trafficking, such as withholding passports, charging recruitment fees, and misleading recruitment. Our guide also imposes certain affirmative obligations on suppliers, such as a requirement to reimburse workers for transportation costs and to provide workers with written contracts in a language they understand. The guide encourages open and direct reporting. 

Accountability

All assessment findings from on-site audits are recorded in our automated assessment tracking tool. This tool monitors each assessment finding until it is closed, which occurs only after the supplier provides evidence that all noted findings have been corrected. Our target is close to 90% of audit findings within 90 days. New suppliers will not be issued purchase orders, and existing suppliers' purchase orders will be suspended, if findings remain open beyond this timeframe and no exception was provided. Business relationships will be suspended immediately in the case of serious labor-related findings. 

Training

We have 152 trained SSRP auditors with the opportunity for all employees to take SSRP Awareness training and Eyes Always Open training. Each one of our trained employees is empowered to raise concerns they may have on supplier expectations, human rights issues, and on-site due diligence requirements. 

We drive better outcomes through our collaboration and partnership with suppliers and other stakeholders. Working together with suppliers, customers, governments, industry partners, academic institutions, and non-governmental organizations, we can achieve holistic progress in human rights more than any one sector can accomplish alone. 

Supplier social responsibility

Supplier social responsibility

 

2019
2020
Number of certified SSRP auditors
145
152
Number of SSRP audits
590
434
Number of SSRP audit findings
3,301
965
% of assessments that were reassessments* (corrected)
64%
74%
% of audit findings closed within 90 days
96%
83%
Number of suppliers rejected due to SSRP audit
55
21