CIPS CERTIFICATION L5M5 EXAM TRAINING MATERIALS

CIPS certification L5M5 exam training materials

CIPS certification L5M5 exam training materials

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CIPS Managing Ethical Procurement and Supply (L5M5) Sample Questions (Q100-Q105):

NEW QUESTION # 100
Rashed's company is exploring the adoption of the EU's EMAS (Eco-Management and Audit Scheme). What are the key benefits of implementing EMAS?
1. It helps the organization improve its environmental performance and achieve sustainability goals.
2. It guarantees an immediate increase in sales and revenue.
3. It demonstrates compliance with environmental laws and regulations.
4. It offers no costs or resources required for implementation

  • A. 2 and 4 only
  • B. 1 and 2 only
  • C. 1 and 3 only
  • D. 3 and 4 only

Answer: C

Explanation:
Option 1- This is correct. EMAS encourages continuous improvement in environmental performance, which is central to the scheme's purpose.
Option 3- This is correct. One of the key benefits of EMAS is helping organizations demonstrate that they comply with environmental legislation, making it easier to meet legal requirements.
Incorrect answer:
Option 2- This is not correct. While EMAS can enhance reputation, it doesn't guarantee immediate sales or revenue growth.
Option 4- This is incorrect. There are costs involved in setting up and maintaining EMAS, such as for auditing and reporting.
Therefore, the answer is Choice B.
Reference:
LO-3.2; Page 279-280; The benefits and challenges of independent standards in securing ESG objectives in ethical and sustainable procurement and supply arrangements


NEW QUESTION # 101
Which of the following statements best describes the potential risks associated with adopting ESG considerations?

  • A. ESG initiatives are primarily concerned with social factors and do not impact environmental or governance aspects
  • B. Adopting ESG practices eliminates all regulatory scrutiny and compliance requirements
  • C. Greenwashing can lead to a loss of consumer trust and brand reputation when companies falsely claim to be environmentally friendly
  • D. Implementing ESG considerations guarantees immediate financial returns and market leadership

Answer: C

Explanation:
Choice D- Greenwashing involves misleading claims about a company's environmental practices, which can result in significant backlash from consumers and stakeholders. If consumers discover that a company is not genuinely committed to sustainability, it can lead to a loss of trust, negative publicity, and a damaged brand reputation. Thus is the correct answer.
Incorrect answer:
Choice A- ESG initiatives encompass environmental, social, and governance factors, and all three components are interconnected. Ignoring any of these aspects can undermine the overall effectiveness of ESG strategies and fail to address comprehensive sustainability goals.
Choice B- While adopting ESG practices can lead to long-term benefits, such as improved brand loyalty and risk mitigation, it does not guarantee immediate financial returns or market leadership. The transition to sustainable practices often requires time and investment before yielding significant financial benefits.
Choice C- This option is incorrect. Implementing ESG practices does not eliminate regulatory scrutiny; in fact, it may increase it, as regulators are becoming more focused on corporate sustainability and accountability. Companies still need to comply with existing regulations and may face additional reporting requirements related to their ESG efforts.
Reference:
LO-1.1; Page 27; The risks and rewards of adopting ESG considerations in securing ethical and sustainable procurement and supply arrangements


NEW QUESTION # 102
A manufacturing company experienced frequent breakdowns of a critical machine due to improper maintenance. To resolve this, management is investigating the root cause and implementing measures to prevent future occurrences. What type of plan is the management prioritizing?

  • A. Risk mitigation plan
  • B. Root Cause
  • C. Corrective Action Plan
  • D. Preventative Action Plan

Answer: D

Explanation:
Choice B- This is the correct answer because the focus is on implementing measures to prevent future breakdowns and ensure the issue does not recur.
Incorrect answer:
Choice A- This would apply if the management's focus was on fixing the immediate issue (e.g., repairing the broken machine). Since the emphasis is on prevention, this is incorrect.
Choice C- While identifying the root cause is a part of the process, the plan described involves taking preventive action beyond just identifying the cause.
Choice D- This is incorrect because risk mitigation focuses on reducing potential risks, often before they occur. In this case, the issue has already occurred, and the goal is prevention, not general risk management.
Reference:
LO-2.4; Page 229-230; Creating corrective action plans and supplier development programmes


NEW QUESTION # 103
The unethical practice of using information that is not publicly available to trade on the stock market is commonly known as what?

  • A. insider trading
  • B. bribery
  • C. greasing the wheels
  • D. kickback

Answer: A

Explanation:
This is Insider Trading- the definition is on p.2


NEW QUESTION # 104
Abed, the CEO of a manufacturing firm, plans to introduce an ESG policy. During a board meeting, concerns were raised about potential employee resistance to the initiative. What could be the most likely cause of this resistance?

  • A. Negative publicity
  • B. ESG policies require extra resources in both time and money
  • C. ESG policies require change which the employees are afraid of
  • D. A good ESG strategy promotes innovation

Answer: C

Explanation:
Choice D- ESG policies require change and many employees are worried by change. Thus D is the correct answer!
Incorrect answer:
Choice A- ESG agendas increases business reputation and does not negatively publicize.
Choice B- Requiring extra resources is a matter of the management and does not concern the employees.
Choice C- Promoting innovation is a positive effect of ESG policies and leads to more engaged employees.
Reference:
LO-1.1; Page 7; Analyze the application of ethical and ESG (Environmental, Social and Governance) factors in supple chains


NEW QUESTION # 105
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