CIPS L5M5 MANAGING
ETHICAL PROCUREMENT
AND SUPPLY PRACTICE
TEST 46 QUESTIONS
Question 1: A procurement director wants an ESG approach rather than a purely
environmental sourcing policy. Which change best re�ects ESG?
Choices:
1) Add labour, environmental, and governance requirements to sourcing decisions 2) Replace supplier audits with annual price reviews 3) Add carbon-emission targets only 4) Limit sustainability checks to tier-one suppliers Correct Answer: Add labour, environmental, and governance requirements to sourcing decisions Explanation: ESG is a holistic framework covering environmental, social, and governance considerations. A sourcing approach that addresses all three dimensions is broader than an environmental-only policy.Page 1
Question 2: A buyer is comparing two packaging suppliers. Which factor is primarily an environmental consideration?
Choices:
1) Lifecycle material use, waste, and greenhouse-gas emissions 2) Representation of minority-owned suppliers 3) Board oversight of con�icts of interest 4) Whistleblowing protection for employees
Correct Answer: Lifecycle material use, waste, and greenhouse-gas emissions
Explanation: Environmental considerations focus on impacts such as resource use, waste, pollution, biodiversity, and emissions across the lifecycle of the product or service.
Question 3: Which procurement decision most directly creates social value?
Choices:
1) Extending payment terms to improve the buyer's cash �ow 2) Awarding only to the lowest unit-price bidder 3) Including measurable local employment and skills-development outcomes in the evaluation 4) Reducing the number of contract performance reviews Correct Answer: Including measurable local employment and skills-development outcomes in the evaluation Explanation: Social value concerns wider bene�ts to people and communities. Evaluating commitments such as local employment, training, inclusion, or community outcomes can create social value beyond the purchased output.Page 2
Question 4: A supplier o�ers a procurement manager an expensive weekend trip while a tender is being evaluated. What is the most appropriate governance response?
Choices:
1) Ask a colleague to accept it on the manager's behalf 2) Decline it and follow the organisation's gifts, hospitality, and con�ict-of-interest controls 3) Accept it but disclose it after the award 4) Accept it if the supplier o�ers the same trip to all bidders Correct Answer: Decline it and follow the organisation's gifts, hospitality, and con�ict-of- interest controls Explanation: Strong governance requires integrity, transparency, and controls over con�icts, gifts, and hospitality. The o�er should be declined and handled under the organisation's ethical procedures.Question 5: Which is the strongest strategic reward of embedding ESG criteria in supplier selection?
Choices:
1) It eliminates all regulatory exposure 2) It guarantees the lowest purchase price 3) It can reduce long-term risk while strengthening resilience and stakeholder trust 4) It removes the need for supplier performance management Correct Answer: It can reduce long-term risk while strengthening resilience and stakeholder trust Explanation: ESG criteria can improve resilience, reputation, risk management, and stakeholder con�dence. They do not guarantee the lowest price or eliminate the need for ongoing management.Page 3