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[General] 100% Pass 2026 CIPS L5M5: Latest Managing Ethical Procurement and Supply (L5M5)

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【General】 100% Pass 2026 CIPS L5M5: Latest Managing Ethical Procurement and Supply (L5M5)

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CIPS L5M5 Exam Syllabus Topics:
TopicDetails
Topic 1
  • Understand the importance of compliance with ESG (Environmental, Social, and Governance) factors to achieve ethical and sustainable procurement and supply arrangements: This section of the exam measures skills of Supply Chain Specialists and covers methods to ensure compliance with ESG standards in procurement. It includes the use of supply chain mapping, risk management, stakeholder engagement, and contractual terms to secure sustainable practices. Candidates also learn how to monitor supplier performance, handle non-compliance, and utilize third-party auditors to maintain ethical standards. Relationship management strategies, corrective actions, and escalation processes are emphasized as part of ensuring suppliers meet ESG expectations.
Topic 2
  • Understand initiatives and standards related to ESG (Environmental, Social, and Governance) that support ethical and sustainable procurement and supply: This section of the exam measures the skills of Procurement Leaders and covers the global frameworks and standards that shape ethical supply practices. It explores international labour standards set by organizations such as the UN and ILO, and labour codes like the Ethical Trading Initiative and SA800. Candidates also examine external environmental frameworks, industry accreditations, and their role in meeting ESG goals. Finally, this section addresses fair trade principles, organizations such as WFTO and Fairtrade International, and the need to align internal governance with global standards.
Topic 3
  • Understand the impact of ESG (Environmental, Social, and Governance) considerations on ethical and sustainable supply chains: This section of the exam measures the skills of Procurement Managers and covers how ESG principles are applied to secure ethical and sustainable supply chains. It looks at the role of environmental, social, and governance factors in procurement decisions, alongside risks and benefits of ESG adoption. Learners also explore issues such as modern slavery, bribery, and human rights, as well as the importance of diversity, inclusion, and stakeholder management. The section highlights how globalization, culture, and labour practices shape supply strategies and examines potential conflicts that may arise when balancing ESG priorities with business demands.

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CIPS Managing Ethical Procurement and Supply (L5M5) Sample Questions (Q86-Q91):NEW QUESTION # 86
CSR (Corporate Social Responsibility) is a key factor in many business decisions. Which of the following are benefits of having a CSR Policy? Select THREE
  • A. Positive impact on wider society
  • B. Enhance competitiveness
  • C. Protection from all legal issues
  • D. Improved reputation
Answer: A,B,D
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
CSR policies allow businesses to integrate ethical, social, and environmental concerns into their operations. The L5M5 study guide (p.28) highlights several benefits: an improved reputation (A), enhanced competitiveness (B) by differentiating the company, and a positive impact on wider society (D). However, CSR policies do not provide protection from all legal issues (C)-illegal activities can still occur despite having a policy. CSR (sometimes referred to as ESG in modern usage) builds stakeholder trust, supports compliance with global sustainability frameworks, and enhances long-term resilience. Procurement teams are particularly important in embedding CSR into supply chains by ensuring supplier compliance and accountability.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.28

NEW QUESTION # 87
A large electronics company uses third-party audits to ensure supplier compliance with labor standards. However, one supplier has raised concerns about undergoing multiple audits from different buyers, each with varying requirements. The supplier argues that this is diverting resources from making meaningful labor condition improvements.
Which issue is most relevant to the electronics company?
  • A. Risk of audit fraud
  • B. Audit fatigue
  • C. Hidden issues
  • D. Box ticking
Answer: B
Explanation:
Option A- The supplier's complaint about being overwhelmed by repeated audits from multiple buyers aligns with the concept of audit fatigue. This issue arises when frequent and overlapping audits burden suppliers, making it harder for them to implement sustainable improvements.
Incorrect answer:
Option B- This refers to a superficial approach to compliance, where suppliers focus on meeting the minimum requirements on paper rather than making meaningful, lasting improvements in working conditions. The scenario focuses on the supplier being overwhelmed by frequent audits, not on them meeting requirements superficially.
Option C- Risk of Audit Fraud arises when suppliers deliberately falsify records, misrepresent practices, or hide non-compliance to pass audits. There's no indication in the scenario that the supplier is misrepresenting their compliance or engaging in fraudulent activities.
Option D- This refers to problems that remain undetected during audits due to ineffective audit processes or deliberate concealment by suppliers. The scenario does not mention undetected issues or gaps in identifying non-compliance; the focus is on the supplier's challenges with repeated audits.
Reference:
LO-3.1; Page 273; Labor codes of conduct: Ethical Trading Initiative (ETI) and Social Accountability International's standard SA8000

NEW QUESTION # 88
Which tier of a supply chain would the original equipment manufacturer have the closest relationship with?
  • A. Tier 2
  • B. Tier 3
  • C. No tier
  • D. Tier 1
Answer: D
Explanation:

As shown in the figure, Tier 1 suppliers directly provide systems or services to the OEM. According to the study guide, the correct answer is Choice B. Reference: LO-2.1; Page 146; Mapping supply chains to achieve supply chain transparency

NEW QUESTION # 89
Which of the following are tools that can be used by procurement professionals to evaluate the sustainability risk of contracts, their relative linkages, complexity and also help to identify potential improvements?
1. Macro environmental audit
2. Supplier preferencing
3. Portfolio analysis
4. Supply chain mapping
  • A. 1 and 3 only
  • B. 3 and 4 only
  • C. 1 and 2 only
  • D. 2 and 4 only
Answer: B
Explanation:
Option 3- Portfolio analysis (e.g., Kraljic Matrix) categorizes purchases based on risk and value. It highlights complexity and prioritizes contracts needing attention but is less focused on sustainability unless explicitly incorporated into criteria.
Option 4- Supply chain mapping provides a visual representation of the supply chain, identifying sources of risk, including sustainability challenges. This is a direct and practical tool for assessing the complexity of contracts, linkages, and areas for improvement.
The most relevant tools for assessing sustainability risks and complexities in contracts are portfolio analysis and supply chain mapping. Therefore, the correct answer is Choice C.
Incorrect answer:
Option 1- This tool involves assessing external factors such as political, economic, social, technological, legal, and environmental (PESTLE) influences on procurement activities. It helps identify sustainability risks associated with external conditions, but it is not contract-specific.
Option 2- Supplier preferencing evaluates how suppliers perceive a buyer's business, determining whether the buyer is a core, strategic, nuisance, or exploitable customer. While useful for relationship management, it does not directly assess sustainability risks or contract linkages.
Reference:
LO-2.1; Page 155-163; Assess methods to achieve ESG standards to secure ethical and sustainable supply chains

NEW QUESTION # 90
Social security is recognized internationally as a fundamental human right. When sourcing from developing countries, procurement professionals must be mindful of the limited social support available to low-income workers, as neglecting this issue could harm their organization's reputation. Which of the following is NOT a step toward expanding social security coverage for more people in developing countries?
  • A. Separate social security benefits from a person's employment status
  • B. Improve tax collection to finance the extension
  • C. Increase costs of informal economy benefits
  • D. Increase costs of formal sector benefits
Answer: D
Explanation:

Therefore Choice D is a not a way in which social security can be extended as we need to reduce costs of formal sector benefits. Reference: LO-1.3; Page 94; Wages and social security arrangements

NEW QUESTION # 91
......
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