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Question 1 of 30
EcoSolutions Inc., a company committed to sustainable practices, is evaluating potential suppliers for a new line of eco-friendly packaging materials. The procurement team conducts an initial risk assessment focusing primarily on financial risks such as supplier solvency, potential for cost overruns, and supply chain disruptions. After selecting a seemingly viable supplier based on competitive pricing and production capacity, a whistleblower report reveals potentially unethical labor practices at the supplier\'s factory, including allegations of forced overtime and unsafe working conditions. According to ISO 20400:2017, which of the following best describes the most significant deficiency in EcoSolutions Inc.\'s initial risk assessment process?
The initial risk assessment was insufficient because it did not adequately address social risks associated with labor practices, a critical aspect of sustainable procurement as outlined in ISO 20400.
The initial risk assessment was adequate, as financial risks are the primary concern in procurement, and social risks are secondary considerations that can be addressed later in the supplier relationship management process.
The initial risk assessment was flawed because it relied solely on internal data and did not incorporate external sources of information, such as industry reports and non-governmental organization (NGO) assessments.
The initial risk assessment was incomplete because it did not include a detailed analysis of the supplier's environmental impact, such as carbon footprint and waste management practices, which are the most important factors in sustainable procurement.

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