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How Can You Practice More Ethical Procurement?

Here’s a look at what buyers can do to create a more ethical, responsible procurement strategy in today’s business environment.

As more and more consumers pay closer attention to how the products they buy are sourced, made, and delivered, the need for ethical procurement practices is expanding exponentially. And while the typical electronics buyer is likely operating in the most conscientious, ethical way that he or she knows how, there is always room for improvement. Procurement is not an exception to the rule.

The question is, what does ethical procurement really mean? And how does it apply in the real world? According to Procurement Academy, being ethical means being in accordance with the rules or standards for right conduct or practice. For example, procurement is involved in supplier selection, evaluation, negotiation, contracts sign-off, and awarding business to suppliers. When interacting with suppliers, the organization says, procurement should treat them in a fair and unbiased manner.

Avoid these Practices, and More

Digging down deeper, Procurement Academy says buyers should at minimum avoid these unethical practices:

  • Accepting supplier favors and gifts. Accepting gifts, favors, and freebies from suppliers is the most common unethical practice that may affect a buyer’s decision to evaluate and select a supplier.
  • Conflict of interest. These arise when buyers or their close family/friends have direct financial interest in a supplier’s organization. This is a major unethical practice and a serious breach of ethics.
  • Confidentiality of information. Confidential information should be shared only when needed and with the persons who are liable to get the same as part of their profession.   Some of the examples of confidential data include pricing, customer personnel information, and trade secrets.
  • Fair and unbiased treatment. Any biased treatment toward a specific vendor may be construed as unethical behavior.
  • Integrity. Integrity is the quality of being honest and having strong moral principles. “Any compromise on integrity has a negative impact on the overall procurement process,” the organization concludes.

The ethics of procurement don’t end there. They also expand across the supply chain and right out into the environment, where initiatives like sustainable sourcing also impact a buyers’ choices.

In a report that explores the “Future of Procurement,” for example, Raconteur points out that ethical procurement goes beyond just following policies, noting that the “recent history of procurement by global consumer brands is littered with the reputational detritus of bad ethics and selective legality.” The fast-fashion industry (i.e., Forever 21, H&M, etc.) has struggled to keep its name out of incriminating headlines, the publisher points out, and sourcing scandals continue to plague the food and agriculture sectors.

“Ethical procurement is essentially a people business, affecting lives and livelihoods, for good or ill,” Chartered Institute of Procurement & Supply’s Cath Hill told Raconteur. “Applying rigorous ethical standards to your supply chain is not just about compliance or completing necessary paperwork, but [also] implementing good governance and preventing exploitation of human beings across the globe for the sake of profit.” Procurement is in a good position to help drive these and other changes, all while creating more sustainable, ethical supply chains.

Procurement + Sustainability

In a world where global businesses are committing to key sustainability objectives (e.g., reducing greenhouse gas emissions, eliminating slave labor, avoiding plastics, conserving water used in production, tapping into renewable energy sources), procurement teams are at the forefront when it comes to driving such initiatives.

“Money saved on operations can be spent on achieving brand purpose, delivering better customer experiences, and implementing sustainable business practices such as resources circularity,” Judith Magyar writes in “How The Chief Procurement Officer Will Soon Become The Chief Purpose Officer.”

Pointing to Johnson & Johnson as one company that has successfully coupled its procurement and sustainability practices to create an environment where suppliers actively help the company achieve its mission, Magyar says the CPG manufacturer requires procurement partners to adhere to its code of conduct and follow responsibility standards. 

“Sustainable brands like Johnson & Johnson are shaping the future of commerce worldwide,” Magyar writes. “These companies are led by business leaders and practitioners who see social and environmental challenges as an essential driver of brand innovation, value creation, and positive impact.”

As more and more consumers pay closer attention to how the products they buy are sourced, made, and delivered, the need for ethical procurement practices is expanding exponentially. And while the typical electronics buyer is likely operating in the most conscientious, ethical way that he or she knows how, there is always room for improvement. Procurement is not an exception to the rule.

The question is, what does ethical procurement really mean? And how does it apply in the real world? According to Procurement Academy, being ethical means being in accordance with the rules or standards for right conduct or practice. For example, procurement is involved in supplier selection, evaluation, negotiation, contracts sign-off, and awarding business to suppliers. When interacting with suppliers, the organization says, procurement should treat them in a fair and unbiased manner.

Avoid these Practices, and More

Digging down deeper, Procurement Academy says buyers should at minimum avoid these unethical practices:

  • Accepting supplier favors and gifts. Accepting gifts, favors, and freebies from suppliers is the most common unethical practice that may affect a buyer’s decision to evaluate and select a supplier.
  • Conflict of interest. These arise when buyers or their close family/friends have direct financial interest in a supplier’s organization. This is a major unethical practice and a serious breach of ethics.
  • Confidentiality of information. Confidential information should be shared only when needed and with the persons who are liable to get the same as part of their profession.   Some of the examples of confidential data include pricing, customer personnel information, and trade secrets.
  • Fair and unbiased treatment. Any biased treatment toward a specific vendor may be construed as unethical behavior.
  • Integrity. Integrity is the quality of being honest and having strong moral principles. “Any compromise on integrity has a negative impact on the overall procurement process,” the organization concludes.

The ethics of procurement don’t end there. They also expand across the supply chain and right out into the environment, where initiatives like sustainable sourcing also impact a buyers’ choices.

In a report that explores the “Future of Procurement,” for example, Raconteur points out that ethical procurement goes beyond just following policies, noting that the “recent history of procurement by global consumer brands is littered with the reputational detritus of bad ethics and selective legality.” The fast-fashion industry (i.e., Forever 21, H&M, etc.) has struggled to keep its name out of incriminating headlines, the publisher points out, and sourcing scandals continue to plague the food and agriculture sectors.

“Ethical procurement is essentially a people business, affecting lives and livelihoods, for good or ill,” Chartered Institute of Procurement & Supply’s Cath Hill told Raconteur. “Applying rigorous ethical standards to your supply chain is not just about compliance or completing necessary paperwork, but [also] implementing good governance and preventing exploitation of human beings across the globe for the sake of profit.” Procurement is in a good position to help drive these and other changes, all while creating more sustainable, ethical supply chains.

Procurement + Sustainability

In a world where global businesses are committing to key sustainability objectives (e.g., reducing greenhouse gas emissions, eliminating slave labor, avoiding plastics, conserving water used in production, tapping into renewable energy sources), procurement teams are at the forefront when it comes to driving such initiatives.

“Money saved on operations can be spent on achieving brand purpose, delivering better customer experiences, and implementing sustainable business practices such as resources circularity,” Judith Magyar writes in “How The Chief Procurement Officer Will Soon Become The Chief Purpose Officer.”

Pointing to Johnson & Johnson as one company that has successfully coupled its procurement and sustainability practices to create an environment where suppliers actively help the company achieve its mission, Magyar says the CPG manufacturer requires procurement partners to adhere to its code of conduct and follow responsibility standards. 

“Sustainable brands like Johnson & Johnson are shaping the future of commerce worldwide,” Magyar writes. “These companies are led by business leaders and practitioners who see social and environmental challenges as an essential driver of brand innovation, value creation, and positive impact.”

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