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The Oxford College of Procurement and Supply defines ethical procurement as a code of conduct and a commitment to environmental, social, and economic issues. It’s the set of principles that guides an approach to procurement and eliminates unethical practices throughout the supply chain.
Increasingly, colleges and universities recognize the importance of ethical considerations in their procurement practices. This goes well beyond compliance with laws and regulations, it impacts overall business practices. As institutions that shape future leaders and contribute to societal progress, colleges and universities have a unique responsibility to lead by example in how they conduct business.
Ethical procurement is the right thing to do, but it’s not without challenges. Balancing ethical considerations with increasing demands for cost efficiency amid budget constraints and rising prices is difficult. Finance and procurement teams have to meet an ever-growing list of priorities.
The Chartered Institute of Procurement & Supply (CIPS) has a good framework for how organizations should handle procurement in an ethical manner. You should review the CIPS code of ethics to see how your procurement strategies line up.
Educational ethics in procurement is crucial for several reasons:
Universities serve as critical role models in their communities. Their procurement practices reflect their values and priorities, influencing students, staff, and local businesses. By adopting ethical procurement policies, universities demonstrate the importance of integrity, fairness, and social responsibility. This behavior encourages students to uphold similar values in their future careers and instills a sense of accountability.
When educational institutions prioritize ethical suppliers and practices, they set a standard that can inspire others.
The integrity of academic research is paramount, and ethical procurement plays a significant role in this. By ensuring that research materials and equipment are sourced from reputable and responsible suppliers, universities safeguard the validity and reliability of their findings.
This commitment can also enhance collaboration with researchers and institutions that value ethical standards, leading to better academic partnerships.
Your business practices impact your reputation. By showcasing your commitment to social responsibility and integrity, a strong ethical stance can attract prospective students who prioritize ethical values, as well as potential donors and partners who want to align themselves with institutions that reflect their own values.
Supporting ethical suppliers has a broader societal impact extending beyond the university’s immediate operations. By choosing suppliers that prioritize ethical labor practices, environmental sustainability, and diversity, colleges and universities can contribute to positive change in their supply chains and the communities they serve.
This commitment helps improve conditions for workers and the environment and encourages suppliers to adopt similar practices. Over time, these choices can lead to significant improvements in social equity, environmental stewardship, and overall community well-being, reinforcing the role of universities as catalysts for societal progress.
Creating a comprehensive ethical sourcing roadmap is essential for colleges and universities committed to sustainable and responsible procurement practices. Your roadmap provides a structured approach to integrating ethics into every stage of the sourcing process, ensuring that your institution’s values are reflected in its purchasing decisions.
Here are eight steps and best practices that can help:
Start by evaluating your existing procurement processes.
Identify areas where ethical considerations are currently being met and where improvements are needed. This assessment will help you understand the gaps in your current practices and inform your roadmap’s development.
Establish specific, measurable ethical goals that align with your institution’s mission and values. Clear goals will provide a framework for decision-making and help you measure progress.
Define criteria for evaluating potential suppliers. This should include standards for ethical labor practices, environmental sustainability, and social responsibility. Ensure you communicate these criteria to potential suppliers during the sourcing process, making it clear that ethical alignment is a key factor in your selection.
Build strong, collaborative relationships with suppliers sharing your ethical values. A cooperative relationship enhances compliance and helps drive innovative procurement solutions.
Invest in training programs for procurement staff and stakeholders to raise awareness of ethical sourcing practices. Continuous education will keep the focus on ethics and help your team make decisions that align with your ethical roadmap.
Establish a system for regularly monitoring and evaluating your ethical sourcing initiatives. Set key performance indicators (KPIs) that track progress toward your goals and facilitate continuous improvement.
Transparency is vital in building trust and credibility. Regularly communicate the progress of your ethical sourcing initiatives to your campus community, including successes, challenges, and lessons learned.
Ethical sourcing is an ongoing journey. Stay informed about emerging trends, regulations, and best practices in ethical procurement. Be prepared to revise your roadmap as needed to reflect changing circumstances and evolving ethical standards in the procurement landscape.
Nearly every college and university has ethical procurement initiatives in place. Some notable ones include:
As you can see, ethical procurement takes multiple approaches, from overriding principles to breaking down ethical initiatives into specific purchase categories.
An educational cooperative procurement can help schools meet their ethical goals in several ways:
Cooperative purchasing organizations have established relationships with suppliers that adhere to ethical standards. By leveraging these connections, schools can access products and services from suppliers committed to ethical labor practices, sustainability, and community engagement. Educational cooperative procurement helps you source and align your procurement with your values.
Cooperative purchasing organizations excel at cost reduction. By leveraging the volume purchasing power of their members, they typically achieve volume pricing discounts that individual schools cannot secure on their own.
This allows academic institutions to choose ethical options without straining their budgets. By making ethical products more affordable, educational cooperative procurement enables schools to prioritize ethics and maintain financial responsibility.
You can simplify procurement by accessing pre-negotiated contracts with suppliers that meet ethical standards. This can significantly reduce the administrative burden and ensure that purchasing decisions align with your ethical goals.
Schools can benefit from collective and best practices to implement ethical standards in their own purchasing decisions. For example, E&I Cooperative Services focuses solely on the education sector. Members are active in guiding sourcing decisions and you can benefit from the insight of 6,000+ academic institutions.
Educational cooperative procurement can spur action, advocating efforts for ethical and responsible business practices. Facing a large voice, suppliers are more likely to adopt sustainable and ethical practices, creating a broader impact beyond just the educational sector.
Cooperative purchasing organizations, on behalf of their members, often work with companies that prioritize sustainability and diversity. Colleges and universities can benefit from access to a broader range of environmentally friendly goods and services and more diverse suppliers.
You can also connect with more certified diverse and minority-owned suppliers, promoting equity and social responsibility. In many cases, contracts allow suppliers to direct a portion of their spending to diverse subcontracts or local suppliers.
With a cooperative purchasing organization, you get transparency in its operations and supplier relationships, backed by documentation. This enables you to monitor compliance with ethical standards and hold suppliers accountable.
The short answer is an unqualified yes. Cooperative purchasing organizations can help reduce the cost of purchasing goods and services and the administrative overhead that goes with it—while still helping meet your ethical and social goals.
The financial situation at colleges and universities has been well-documented. Changing enrollment patterns, tighter-than-ever budgets, funding cuts, and rising operational costs are taking their toll. A Forbes analysis of about 900 private colleges showed that half of them had finances that rated a “C” or worse, compared to just 20% in 2021.
Public institutions are seeing similar challenges. Inside Higher Education headlined it like this: Colleges on the Brink. For some schools, wrote authors Michael Nietzel and Charles Ambrose, “…financial problems are so severe that overall academic integrity is fundamentally compromised.”
Such financial struggles require a different and strategic approach to procurement. Educational cooperative procurement is a way to maintain ethical integrity while directly addressing these financial constraints through:
Cooperative purchasing organizations can also be a source of revenue generation. Many cooperative contracts include additional incentives or rebates to participating schools. E&I Cooperative Service, as a member-owned and non-profit cooperative, returns a percentage of net income to its members annually in the form of patronage rebates based on purchasing volume. Based on 2023 financial results and member purchases of $3 billion, E&I distributed $3.35 million to its members in cash rebates.
What are the ethics in procurement for higher education?
Ethics in procurement for higher education encompass transparency, fairness, sustainability, and social responsibility. This includes considering the environmental impact of purchases, ensuring fair labor practices in the supply chain, promoting supplier diversity, and maintaining integrity in all procurement processes.
What is the difference between sourcing and procurement?
While often used interchangeably, sourcing and procurement are distinct aspects of the supply chain process. Sourcing focuses on identifying, evaluating, and engaging suppliers who can provide the required goods or services. It involves market research, supplier assessment, and negotiation of terms.
Procurement, on the other hand, encompasses the entire process from identifying needs to the final acquisition and payment for goods or services. In essence, sourcing is a subset of the broader procurement process.
What are the key ethical considerations in higher education procurement?
Four key ethical considerations should guide your procurement activities:
Learn more about how E&I Cooperative Services can help you maintain the highest level of ethics in procurement while saving you time and money. Contact our team of procurement professionals today.
