Ethics in Procurement: Why it matters more than ever

In today’s procurement and supply chain environments, ethics is a critical focus. As an experienced professional or an emerging leader in this sector, demonstrating your commitment to ethical practices is essential as businesses put an emphasis on corporate social responsibility (CSR) and sustainability.

So, how can procurement and supply chain professionals navigate the growing expectations around ethics, CSR, and sustainability?

Common ethical challenges in procurement

Procurement involves managing sensitive relationships and transactions. Some of the most common ethical pitfalls include:

• Conflicts of interest: Allowing personal factors to influence professional decisions.
• Supplier favouritism: Choosing suppliers without a fair, transparent process.
• Unfair practices: Pressuring suppliers into unfavourable  terms.
• Lack of transparency: Failing to communicate or document procurement decisions.

These practices damage internal trust and can severely impact a company’s reputation, especially when stakeholders are focused on ethics and sustainability.

Integrating CSR and sustainability into ethical procurement

Today, ethical procurement extends beyond fair business practices. It’s about integrating corporate social responsibility (CSR) and sustainability into procurement decisions. This means:

• Supporting ethical labour practices and fair working conditions.
• Prioritising environmentally sustainable suppliers.
• Emphasising diversity and inclusion in your supplier base.

Ethical procurement isn’t just about avoiding misconduct – it’s about making responsible decisions that contribute to the wellbeing of society and the planet.

Building an ethical procurement framework

To effectively manage ethical procurement, it’s essential to establish clear guidelines and processes that emphasise integrity. One idea is to create Procurement ‘Code of Conduct’ that outlines ethical standards and expectations, including CSR and sustainability principles.

Furthermore, procurement policies should ensure transparency in supplier selection and decision-making, making sure that processes like bidding or contract reviews are open and easily auditable. This framework will help ensure ethical practices are ingrained in every stage of the procurement process, from sourcing to supplier evaluation.

Cultivating a culture of ethics and integrity

Ethics is about building a culture of integrity within procurement and supply chain teams. Leaders must set the tone by modelling ethical behaviour and encouraging employees to make responsible decisions and raise concerns. By recognising and rewarding ethical choices, you are reinforcing integrity as a core value, while open communication and anonymous reporting mechanisms empower everyone to act ethically.

Using technology to enhance ethical procurement

Technology can significantly support ethical practices  by providing tools that enhance transparency and reduce the likelihood of unethical behaviour. For example, spend analysis tools help track financial patterns, enabling teams to spot discrepancies or signs of misuse early. Similarly, supplier management software allows for a more objective evaluation of suppliers based on sustainability practices, certifications, and performance, ensuring that ethical standards are met consistently. Contract management systems can automate contract reviews, reducing the risk of unfair terms or hidden clauses and ensuring that all agreements adhere to ethical guidelines.

In today’s market, companies are looking for more than just procurement expertise; they seek leaders who are committed to ethical, sustainable practices that positively impact the supply chain and society.

As hiring managers are paying more attention to how candidates approach ethical decision-making and responsible sourcing, whether you’re a seasoned professional or just beginning your career, enhancing your knowledge and showcasing your commitment to ethical practices is important when trying to stand out against the competition.

At Portfolio Procurement, we specialise in sourcing talented procurement and supply chain professionals who prioritise ethics, CSR, and sustainability. If you’re looking for your next procurement leader who can make a difference, let’s connect.

You can find out more about this topic in our blog post about Sustainability in Procurement here.

Darren Herd, Senior Recruitment Consultant

With over 14 years of experience in the recruitment of Procurement and Supply Chain professionals, Darren is a Senior Recruitment Consultant within our Procurement Division. Darren has a proven track record of delivering high-quality candidates and building long-term relationships with clients and candidates. Connect with him to discuss your hiring needs.