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What is a Social Audit and Why Are They Important?

Social audits, also called social compliance audits, are an assessment of an organisation’s social and ethical practices and performance. This includes areas such as employment practices, workers’ conditions and a company’s impact on the communities where they operate.<br

This involves evaluating how well a business or individual facility adheres to ethical standards – such as those outlined in

  • Relevant labour and ethical laws 
  • Related international standards and best practice, such as those from the International Labour Organization 
  • A business’s own stated sustainability goals 

Social audits aim to identify inconsistencies between these standards and a business’s actual practices. 

Companies use social audits to look at both their operations and their supply chains. They use social audits to understand, manage, track and report to their stakeholders on the social risks and conditions in their supply chains. This is an increasingly important requirement in many laws, investors’ ESG asks and demands for more responsible business.  

Social audits are also a way of validating self-reported information and desktop (or remote) ESG risk assessments, so businesses can take action to make improvements and address any actual issues or negative impacts.