Written by Marijn Overvest | Reviewed by Sjoerd Goedhart | Fact Checked by Ruud Emonds | Our editorial policy

The 7 Steps To Create a CSR Policy in Procurement?

The following steps show how a company can create a clear and practical CSR Policy in procurement that supports ethical sourcing, supplier responsibility, sustainability, and long-term business value.

1. Assess the current procurement situation

The first step is to review the current procurement process and understand how suppliers are selected, evaluated, and managed. This helps the company identify whether social, environmental, and ethical criteria are already included in purchasing decisions or whether procurement is still mainly focused on cost, quality, and delivery.

This assessment should include supplier questionnaires, existing audits, contract reviews, and analysis of high-risk categories or regions. CIPS recommends reviewing supply chains carefully because even non-strategic suppliers can create reputational and sustainability risks for an organization.

2. Define CSR objectives and policy scope

The company should clearly define what the CSR policy wants to achieve in procurement. These objectives may include responsible sourcing, fair labor practices, reduced environmental impact, anti-corruption, human rights protection, diversity, and supplier transparency.

The scope of the policy should explain which suppliers, product categories, services, regions, and procurement activities are covered. ISO 20400 highlights that sustainability should be integrated into procurement decisions and processes, regardless of organization size or sector.

3. Align the CSR policy with corporate strategy

A CSR policy in procurement should not be separate from the company’s wider business strategy. It should support corporate sustainability goals, ESG commitments, risk management priorities, and long-term value creation.

This alignment makes the policy easier to implement because procurement teams understand why CSR requirements matter for the organization. CIPS explains that procurement policies commit the organization and individuals to specific objectives, including legality, accountability, and responsible behavior.

4. Create supplier standards and a code of conduct

The next step is to translate CSR objectives into clear supplier requirements. These requirements should define expected behavior related to labor conditions, health and safety, environmental protection, business ethics, anti-bribery, human rights, and compliance with laws.

A supplier code of conduct is useful because it gives suppliers practical rules to follow. SAP defines a supplier code of conduct as a document that sets social, environmental, and ethical expectations for supplier behavior and helps improve traceability, risk control, and compliance.

5. Integrate CSR criteria into supplier selection and contracts

CSR requirements should be included directly in procurement procedures, not only written as general principles. This means adding CSR criteria to supplier pre-qualification, tenders, evaluation scorecards, contract clauses, and supplier onboarding processes.

For example, suppliers can be assessed according to environmental performance, labor practices, certifications, risk exposure, and willingness to follow the company’s code of conduct. ISO 20400 guidance supports the integration of sustainability into procurement stages such as planning, supplier selection, and contract management.

6. Monitor supplier compliance and manage risks

After the policy is created, the company must monitor whether suppliers actually follow CSR requirements. This can be done through audits, self-assessment questionnaires, supplier performance reviews, corrective action plans, and documentation checks.

Monitoring is important because a CSR policy without control mechanisms can remain only a formal document. Responsible sourcing policies often expect suppliers not only to comply with themselves, but also to manage their own supply chains according to similar standards.

7. Train employees and continuously improve the policy

Procurement employees, managers, and internal stakeholders should be trained to understand how to apply the CSR policy in daily purchasing activities. Training helps them recognize supplier risks, evaluate CSR criteria, and communicate expectations clearly to suppliers.

The policy should also be reviewed and improved regularly based on supplier performance, regulatory changes, stakeholder expectations, and sustainability goals. ISO 20400 guidance emphasizes that people involved in procurement need to understand the reasons for sustainable procurement and how they contribute to its implementation.

5 Real-Life Examples of CSR Policy in Procurement

1. IKEA – Responsible Sourcing Through IWAY

IKEA uses IWAY, its supplier code of conduct, as a structured procurement policy for responsible sourcing of products, services, materials, and components. The policy sets expectations related to environmental practices, social standards, working conditions, and animal welfare. It is mandatory for suppliers and service providers that work with IKEA, which means CSR requirements are directly connected to supplier qualification and cooperation.

This approach shows how CSR policy in procurement can move beyond simple supplier selection and become a continuous supplier management system. IKEA does not only ask suppliers to meet basic requirements, but also works with them to improve responsible business practices over time. In this way, procurement becomes a tool for improving human rights protection, environmental performance, and responsible supply chain behavior.

2. Nestlé – Responsible Sourcing Standard

Nestlé applies a Responsible Sourcing Standard to define how suppliers should manage social, environmental, and human rights risks in the supply chain. The standard includes requirements for traceability, risk assessment, supplier responsibility, and responsible production of materials and ingredients. This is important because Nestlé depends on complex global supply chains, especially for agricultural raw materials and food-related inputs.

The policy also shows how CSR in procurement can be used to control risks beyond direct suppliers. Nestlé expects suppliers to monitor their own supply chains and identify possible negative impacts connected with sourcing activities. When problems appear, procurement decisions can include corrective actions, supplier engagement, or changes in sourcing relationships to protect ethical and sustainability standards.

3. Apple – Supplier Responsibility and Code of Conduct

Apple’s procurement approach includes a Supplier Code of Conduct that defines expectations for labor rights, human rights, health and safety, environmental protection, and ethical business conduct. Suppliers are expected to provide safe working conditions, treat workers with dignity and respect, act ethically, and use environmentally responsible practices. This connects procurement decisions with broader CSR goals because suppliers must follow social and environmental standards when producing goods or providing services for Apple.

Apple also uses supplier assessment and standards to make sure that CSR requirements are not only written in policy documents but also checked in practice. Supplier performance is assessed against Apple’s Code and Standards in areas such as labor and human rights, health and safety, environment, management systems, and ethics. This shows how procurement policy can combine supplier expectations, monitoring, and continuous improvement.

4. Microsoft – Supplier Code of Conduct and Training

Microsoft uses a Supplier Code of Conduct to guide supplier behavior in areas such as anti-corruption, conflicts of interest, human rights, accessibility, workplace concerns, climate commitments, and environmental responsibility. Suppliers are required to be aware of the code, confirm compliance, complete training, and follow the standards during their business relationship with Microsoft. This makes CSR part of procurement governance, not only a general corporate statement.

Microsoft’s approach is useful because it connects policy, supplier education, and risk management. By requiring training and supplier commitment, the company tries to reduce ethical, social, and environmental risks before they become serious supply chain problems. This example shows that CSR procurement policy should include clear rules, supplier communication, compliance expectations, and mechanisms for responsible sourcing.

5. Patagonia – Supplier Workplace Code of Conduct

Patagonia connects procurement and CSR through its Supplier Workplace Code of Conduct and related social and environmental responsibility programs. Its supplier code is based on the International Labour Organization’s core labor standards and requires factories to comply with laws in the countries where they operate. The company uses this framework to manage supplier relationships and address worker-related issues in its supply chain.

Patagonia also focuses on the environmental impact of supplier facilities through programs that measure and reduce manufacturing-related impacts. These areas include environmental management systems, chemicals, water use, emissions, energy use, greenhouse gases, air emissions, and waste. This shows that CSR policy in procurement can include both social responsibility and environmental performance, especially when suppliers are directly involved in production.

The 8 Important Elements in CSR Policy in Procurement

The following elements represent the key components that a company should include in a CSR Policy in procurement to ensure ethical sourcing, supplier responsibility, sustainability, risk control, and long-term value creation.

1. Ethical Sourcing Principles

Ethical sourcing is one of the central elements of a CSR policy in procurement because it defines how the company expects goods and services to be purchased. It means that procurement decisions should consider not only price and quality, but also fairness, legality, transparency, and responsible business conduct.

This element helps procurement teams avoid suppliers connected with corruption, unfair labor practices, unsafe working conditions, or irresponsible business behavior. CIPS explains that sustainable procurement should support organizational sustainability goals and optimize environmental, social, and economic impacts across the life cycle of products and services.

2. Supplier Code of Conduct

A supplier code of conduct is an important element because it translates CSR expectations into clear rules for suppliers. It usually includes requirements related to labor rights, health and safety, environmental responsibility, business ethics, anti-corruption, and legal compliance.

This document helps suppliers understand what behavior is expected if they want to cooperate with the company. SAP describes a supplier code of conduct as a document that defines social, environmental, and ethical expectations for supplier behavior and supports traceability, risk reduction, and regulatory compliance.

3. Human Rights and Labor Standards

A CSR policy in procurement should clearly protect human rights and labor standards across the supply chain. This includes fair wages, safe working conditions, freedom from forced labor, non-discrimination, and respect for workers’ dignity.

This element is especially important when companies buy from global supply chains where labor risks may be higher. Vendor codes of conduct in procurement commonly set standards for labor, safety, environment, and data protection across complex supplier networks.

4. Environmental Responsibility

Environmental responsibility is a key element because procurement decisions directly influence resource use, waste, emissions, packaging, and supplier production practices. A CSR procurement policy should encourage suppliers to reduce environmental impact through energy efficiency, waste reduction, responsible material use, and pollution prevention.

This element supports sustainable purchasing and helps the company reduce its environmental footprint through supplier management. ISO 20400 guides integrating sustainability into procurement for organizations of different sizes and sectors.

5. Supplier Risk Assessment and Due Diligence

Supplier risk assessment helps the company identify suppliers, categories, regions, or materials that may create social, environmental, ethical, or legal risks. This element is important because CSR policy should not treat all suppliers equally, but should focus more attention on high-risk areas.

Due diligence includes checking supplier practices, documentation, ownership, certifications, past performance, and possible compliance issues. ISO 20400 guidance emphasizes understanding sustainability impacts through due diligence, setting priorities, and avoiding complicity in negative impacts.

6. CSR Criteria in Supplier Selection and Contracts

CSR policy should be integrated into supplier selection, tender evaluation, onboarding, and contracting. This means that suppliers should be assessed not only on cost, delivery, and technical ability, but also on their environmental, social, and ethical performance.

Contract clauses are important because they make CSR expectations formal and enforceable. Sustainable procurement guidance highlights the need to embed sustainability criteria into specifications, supplier selection, contract management, performance monitoring, and continual improvement.

7. Monitoring, Audits, and Corrective Actions

Monitoring is necessary because a CSR policy has little value if supplier behavior is not checked in practice. Companies can use supplier questionnaires, audits, performance scorecards, certifications, site visits, and third-party assessments to verify compliance.

Corrective actions are also important because they give suppliers a structured way to fix problems instead of being immediately excluded. For example, CSR procurement audits often review areas such as human rights, labor, environment, health and safety, fair trade, ethics, and management systems, while non-conformances can require corrective action plans.

8. Training, Communication, and Continuous Improvement

A CSR procurement policy should include training for buyers, managers, and suppliers so that everyone understands how to apply the policy. Training helps procurement teams recognize risks, ask the right questions, evaluate CSR criteria, and communicate expectations clearly.

Continuous improvement is also essential because CSR requirements change with regulations, stakeholder expectations, market conditions, and sustainability goals. Some procurement policies include buyer CSR training, supplier due diligence, monitoring according to identified risk, CSR criteria in sourcing, and supplier CSR performance evaluation.

7 Best Practices To Create CSR Policy in Procurement

The following best practices show how a company can create a clear, practical, and effective CSR Policy in procurement that supports responsible sourcing, supplier accountability, sustainability, and continuous improvement.

1. Align the CSR policy with business and sustainability goals

A CSR policy in procurement should be connected with the company’s wider business strategy, ESG goals, and sustainability commitments. This helps procurement teams understand that responsible sourcing is not separate from business performance, but part of long-term value creation. ISO 20400 highlights that sustainability should be integrated into procurement processes and aligned with organizational objectives.

2. Define clear supplier expectations

The policy should clearly explain what the company expects from suppliers in areas such as labor rights, health and safety, environmental protection, ethics, and legal compliance. Clear expectations reduce confusion and make it easier for suppliers to understand the standards they must follow. A supplier code of conduct is useful because it translates CSR principles into practical rules for supplier behavior.

3. Include CSR criteria in supplier selection

CSR requirements should be included in supplier evaluation, tendering, onboarding, and contract renewal. This means suppliers should not be selected only based on price, quality, and delivery, but also on their environmental, social, and ethical performance. Some procurement policies include sustainability considerations such as supplier commitments, codes of conduct, and greenhouse gas reporting in supplier selection and contract renewal processes.

4. Use supplier risk assessment and due diligence

A strong CSR procurement policy should identify which suppliers, regions, categories, or materials create higher social, environmental, ethical, or compliance risks. Due diligence helps the company check supplier practices before and during cooperation. This approach supports better risk control and helps procurement teams focus more attention on suppliers that may have a higher impact on human rights, labor conditions, environmental performance, or business ethics.

5. Monitor supplier performance regularly

CSR policy should include mechanisms for monitoring supplier compliance through audits, questionnaires, performance reviews, certifications, and corrective action plans. Regular monitoring ensures that CSR requirements are actually applied in practice, not only written in policy documents. It also helps the company identify problems early and work with suppliers to improve their performance.

6. Train procurement employees and communicate with suppliers

Procurement employees need training so they can understand CSR requirements, recognize supplier risks, and apply the policy correctly in daily purchasing decisions. Suppliers also need clear communication about expectations, documentation, reporting, and possible corrective actions. Training and communication make the CSR policy easier to implement and help create a shared understanding between the company and its supply base.

7. Review and improve the policy continuously

A CSR policy in procurement should be reviewed regularly because regulations, stakeholder expectations, market conditions, and sustainability risks can change over time. Continuous improvement allows the company to update supplier criteria, strengthen monitoring, improve reporting, and adapt the policy to new ESG priorities. Sustainable procurement best practices focus on long-term value creation rather than only short-term cost optimization.

Why is CSR Policy in Procurement Important?

CSR Policy in procurement is important because it helps companies buy goods and services in an ethical, responsible, and sustainable way. It ensures that supplier decisions are not based only on price, quality, and delivery, but also on human rights, labor standards, environmental protection, and business ethics.

It also helps companies reduce reputational, legal, environmental, and supply chain risks. By applying CSR principles in procurement, organizations can build stronger supplier relationships, improve transparency, and create long-term social, environmental, and business value.

Conclusion

CSR Policy in procurement helps companies make purchasing decisions that are ethical, responsible, and sustainable. It ensures that suppliers are evaluated not only by price, quality, and delivery, but also by human rights, labor standards, environmental responsibility, and business ethics. In this way, procurement becomes an important tool for reducing risks and creating positive social and environmental impact.

A strong CSR procurement policy should include clear supplier expectations, risk assessment, monitoring, audits, corrective actions, employee training, and continuous improvement. By applying these elements, companies can improve supplier accountability, strengthen transparency, and build more responsible supply chains. Therefore, CSR Policy in Procurement is not only a compliance requirement, but also a strategic approach for long-term business value and sustainability.