CMI Level 5 Managing Ethical Procurement and Supply (L5M5)
Understanding of sustainable supply chain strategies, the influence of globalization, and the challenges associated with balancing profitability and ethical responsibilities. This knowledge is essential for procurement professionals seeking to implement responsible sourcing strategies while mitigating risks related to environmental and social governance.
Unit Objectives
The primary objectives of this unit include:
- Developing an in-depth understanding of ESG factors and their role in ethical procurement and supply.
- Enabling learners to analyze the application of ESG principles to secure sustainable procurement practices.
- Identifying cultural, social, and governance considerations in procurement and supply chain decisions.
- Understanding stakeholder conflicts in implementing ethical supply chain strategies.
- Ensuring compliance with ESG regulations to enhance organizational reputation and brand value..
Learning Outcomes
The significant learning outcomes of the unit CIPS Level 5 Managing Ethical Procurement and Supply (L5M5) are demonstrated below:
LO1: Understand the impact of ESG (Environmental, Social, and Governance) considerations on ethical and sustainable supply chains
This learning outcome focuses on the application of ESG principles in procurement and supply chain management to promote ethical and sustainable operations. Learners will analyze how environmental, social, and governance factors influence procurement policies, contract management, and supplier relationships. Additionally, they will explore risks such as modern slavery, bribery, corruption, fraud, and human rights violations, as well as the impact of ESG breaches on brand reputation. By mastering this outcome, learners will develop a strategic approach to integrating sustainability, ethical sourcing, and compliance into procurement and supply chain decision-making.
LO2: Understand the importance of compliance with ESG factors to achieve ethical and sustainable procurement and supply arrangements
This learning outcome highlights the significance of ESG compliance in securing ethical supply chains. Learners will assess methods such as supply chain mapping, stakeholder engagement, and risk mitigation strategies to achieve transparency and ethical procurement. Additionally, they will evaluate how contractual agreements and third-party audits help maintain ESG standards. By achieving this outcome, learners will be able to monitor supplier performance, implement corrective action plans, and develop supplier relationship management strategies to address ESG failures and enhance compliance.
LO3: Understand initiatives and standards related to ESG that support ethical and sustainable procurement and supply
This learning outcome explores international ESG standards, frameworks, and certifications that promote ethical and sustainable procurement. Learners will assess the role of United Nations (UN) and International Labour Organization (ILO) standards, fair trade principles, and independent accreditations in achieving ESG objectives. Additionally, they will analyze how external frameworks such as the Ethical Trading Initiative (ETI) and Social Accountability International (SA8000) influence procurement strategies. By attaining this outcome, learners will develop expertise in adopting ESG-aligned policies and ensuring compliance with global ethical standards in procurement and supply chain management.
Assessment Criteria
1.0 Understand the impact of ESG (Environmental, Social, and Governance) considerations on ethical and sustainable supply chains
1.1 Analyse the application of ethical and ESG (Environmental, Social, and Governance) factors in supply chains
- Principles and application of ESG (Environment, Social, and Governance) considerations to secure ethical and sustainable procurement and supply arrangements
- The role of environmental considerations in securing ethical and sustainable procurement and supply arrangements
- The role of social value considerations in securing ethical and sustainable procurement and supply arrangements
- The role of governance considerations in securing ethical and sustainable procurement and supply arrangements
- The risks and rewards of adopting ESG (Environmental, Social, and Governance) considerations in securing ethical and sustainable procurement and supply arrangements
- The development of ESG (Environmental, Social, and Governance) focused procurement and supply policies in securing ethical and sustainable procurement and supply arrangements
- Role of equality, diversity, and inclusion (ED&I) in securing ethical and sustainable procurement and supply arrangements
- Issues impacting ethical and sustainable procurement and supply: modern slavery, bribery, corruption, fraud, and human rights infringements
- Impact of breaches of ethical codes or ESG standards on reputation and brand
1.2 Contrast the factors influencing globalisation in supply chains
- Use of STEEPLED analysis to explain the factors driving globalisation
- Competitive advantage through global sourcing
- Low-cost country sourcing
- ESG (Environmental, Social, and Governance) considerations in global sourcing
1.3 Assess the cultural and social factors in securing ethical and sustainable procurement and supply
- Language and culture
- Labour standards and working practices
- Wages and social security arrangements
- Workers` rights
- Health and safety standards
1.4 Contrast the potential conflicts between stakeholders that may arise from using ESG (Environmental, Social, and Governance) considerations in developing ethical and sustainable procurement and supply arrangements
- Profit maximisation and low-cost sourcing
- Demand management and the need for urgent orders
- Short-term commercial gains and long-term availability
- Specifications
- Responsible use of power relationships
- Comprehensive stakeholder consultations and engagement
2.0 Understand the importance of compliance with ESG (Environmental, Social, and Governance) factors to achieve ethical and sustainable procurement and supply arrangements
2.1 Assess methods to achieve ESG (Environmental, Social, and Governance) standards to secure ethical and sustainable supply chains
- Mapping supply chains to achieve supply chain transparency
- Analysis of ESG (Environmental, Social, and Governance) and ethical considerations to secure ethical and sustainable procurement and supply arrangements
- Use of risk mitigation strategies to achieve ESG (Environmental, Social, and Governance) objectives to secure ethical and sustainable procurement and supply arrangements
- Mapping, consulting, and managing all stakeholder requirements to secure ESG (Environmental, Social, and Governance) considerations in ethical and sustainable procurement and supply arrangements
2.2 Evaluate how contractual terms can support the achievement of ESG (Environmental, Social, and Governance) objectives for ethical and sustainable procurement and supply
- Monitoring contract performance
- The importance of data and feedback from stakeholders to achieve compliance
- Methods to correct non-compliance and create and monitor action plans
2.3 Evaluate the use of third parties to promote compliance with ESG (Environmental, Social, and Governance) considerations in supply chains
- Sourcing third parties for auditing services
- Assessing the competencies of third parties for the provision of ethical and ESG (Environmental, Social, and Governance) audit services
- Challenges with third-party auditors
2.4 Assess how supplier relationships should be managed in the event of failures in ESG (Environmental, Social, and Governance) considerations in ethical and sustainable procurement and supply arrangements
- Creating awareness of standards and updates to standards with suppliers
- Worker representation, processes, and audit trails
- Creating corrective action plans and supplier development programmes
- Escalating non-compliance and making exit arrangements
3.0 Understand initiatives and standards related to ESG (Environmental, Social, and Governance) that support ethical and sustainable procurement and supply
3.1 Assess the role of international labour standards and independent external accreditations in achieving ESG (Environmental, Social, and Governance) considerations for procurement and supply
- Standards set by the United Nations (UN) and the International Labour Organization (ILO)
- The role of the UN and ILO in pursuing improved ESG (Environmental, Social, and Governance) and ethical standards
- Labour codes of conduct: Ethical Trading Initiative (ETI) and Social Accountability International’s standard SA8000
3.2 Analyse how external environmental standards frameworks and external accreditations can help to achieve ESG (Environmental, Social, and Governance) objectives in ethical and sustainable procurement and supply arrangements
- The benefits and challenges of independent standards in securing ESG (Environmental, Social, and Governance) objectives for ethical and sustainable procurement and supply arrangements
- Role of industry standards and frameworks used by organisations in securing ESG (Environmental, Social, and Governance) considerations and ethical standards
3.3 Analyse how standards can help to achieve fair trade in ethical and sustainable procurement and supply arrangements
- Principles of fair trade in procurement and supply
- The World Fair Trade Organisation (WFTO) and its principles and charter of fair trade and implications for procurement and supply
- Fairtrade International (FI), global fair trade organisations and their implications for procurement and supply
- Fairtrade standards that affect the workplace and producers and their implications for procurement and supply
- Importance of updating internal governance standards
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