Pass the CIPS CIPS Level 5 Advanced Diploma in Procurement and Supply L5M5 Questions and answers with CertsForce

When cost is the overriding priority, suppliers may compromise on sustainability. The L5M5 study guide explains that cheap materials may be unsustainably sourced (e.g., timber from non-certified forests). This is particularly highlighted in the old syllabus under LO 3.4, which noted risks when cost or speed is prioritised over ESG. Procurement professionals must balance cost, quality, speed, and sustainability to avoid reputational damage and unethical practices. Focusing solely on cost undermines long-term ESG commitments.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, section on sustainability vs cost priorities

The L5M5 study guide (p.190) explains that a warranty is a contractual term where breach allows the injured party to claim damages, but the contract continues. By contrast, conditions are fundamental terms—breach may allow termination and damages. Representations are statements made in negotiation, not binding terms, and innominate terms may be treated as conditions or warranties depending on the breach. Understanding the difference is crucial for procurement professionals when drafting and managing contracts, as it affects remedies and supplier relationships.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.190

The L5M5 study guide (p.182) states that sustainability reporting and the adoption of ESG (Environmental, Social, Governance) principles can stimulate organisational change and innovation. By measuring and reporting on sustainability, companies often seek new technologies, processes, and supply models to improve performance and meet ESG commitments. Reporting is not mandatory in all cases, so option B is incorrect. While sustainability may improve reputation and sometimes costs, these are not the key focus of this question. CIPS guidance stresses that sustainability reporting can drive innovation—procurement can encourage suppliers to develop new sustainable practices, products, and approaches.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.182

ISO14001 is an international standard for environmental management systems. According to the L5M5 study guide (p.277), one disadvantage is that ISO does not set environmental performance targets itself; instead, it requires organisations to define their own targets. This means some organisations may set very easy or minimal goals, limiting actual environmental improvement. Option A is incorrect as ISO14001 applies consistently across industries. Option C is a requirement, not a disadvantage. Option D is an overgeneralisation—while some firms misuse it for "greenwashing," many genuinely use it to improve sustainability.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.277

The Equalities Act 2010 provides legal protection against discrimination in the UK. The L5M5 study guide (p.35) lists the protected characteristics, which include disability, pregnancy and maternity, age, race, sex, sexual orientation, gender reassignment, marriage/civil partnership, and religion/belief. Weight is not included as a protected characteristic. For procurement, understanding equality legislation is vital to ensuring suppliers uphold fair treatment of employees and do not discriminate unlawfully. Organisations must embed these protections into contracts and supplier codes of conduct.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.35

When a supplier’s conduct breaches expected standards, the appropriate tools are Root Cause Analysis (to identify why the issue occurred) and a Corrective Action Plan (to detail how the supplier will fix and prevent recurrence). The L5M5 study guide (p.228) emphasises that KPIs should already be established at the start of the contract, and a single conduct issue may not mean performance indicators are being missed. SWOT analysis is not suitable in this scenario, as it is a strategic tool rather than a compliance or corrective measure. Corrective actions ensure continuous improvement and supplier accountability, which are essential for ethical supply chain management.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.228

A competitive advantage is something that makes one organisation more attractive than its competitors. The L5M5 study guide (p.62) highlights reduced lead times as a clear competitive advantage because customers value speed, reliability, and efficiency in delivery. While high profit margins (B) and ROI (C) are outcomes of strong performance, they do not necessarily attract customers. Brand reputation (D) is important but is considered a broader intangible asset rather than a direct competitive advantage in procurement. Reduced lead times demonstrate operational excellence, helping procurement gain a strategic edge in the marketplace.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.62

The L5M5 study guide (p.210) specifies that independent auditors must be approved by a certified body (B) and have sector-specific knowledge (C) to assess compliance effectively. While qualifications (D) may be desirable, there is no universal "auditor qualification," and experience (A) varies by sector. CIPS also stresses the importance of auditor qualities such as independence, objectivity, and integrity. For procurement, selecting the right auditor ensures credible, reliable assurance of supplier compliance with ethical and sustainability requirements.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.210

Employee resistance to ESG policies typically arises because they may require changes to existing practices and operations. The L5M5 study guide (p.6) notes that employees often resist change, particularly if it disrupts established ways of working. While reduced profits (A) or stakeholder returns (C) may concern senior executives, they are less relevant to employee resistance. ESG policies usually enhance reputation, not create negative publicity (D). Procurement professionals must manage change carefully by engaging employees and suppliers, ensuring they understand the long-term benefits of ESG practices.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.6

Adjudication is a formal ADR method, widely used in construction and supply disputes. The L5M5 study guide (p.237) outlines its key features: it is designed to be faster than court proceedings and legally requires that a decision is reached within 28 days of referral. Decisions made can also be legally binding. Contrary to option A, adjudication is not informal; it follows structured legal processes. Option D is also incorrect, as adjudicator decisions may carry binding authority unless overturned later in arbitration or litigation. The process ensures disputes are resolved promptly, preventing long project delays.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.237