There’s More to Social Audits than Ticking Boxes!
January 11, 2017
Following our involvement at the 2016 China and Asia Footwear Summit “The Changing role of social audits” was presented by Stuart Cranfield, Head of Vendor Audit at C&J Clarke International Ltd. Stuart held a standpoint that these audits should be about improving working conditions which reflectsAdjuno’sexperience of working with leading retailers but also got us thinking…
…Regardless of the industry in which your business operates, your supply chain process needs close management and regular auditing. However, we are not only referring to your supplier’s processes either, but also those of your internal, direct business operations which can often get overlooked.
The organisations that don’t fully appreciate the benefits of social audits often report that the efforts required to meet compliance standards and targets can often feel like an endless bureaucratic process. It might be easy to dismiss a social audit as yet another painful box-ticking exercise – especially if you don’t fully understand the goals and the implications of not doing them effectively.Therefore, we’ve summarised the positive reasons to carry out social audits, how to do them, and what could happen to your business without them.
Why carry out social audits in the first place?
Corporate Social Responsibility (CSR) is a topic that’s getting increasing attention on executive board agendas and if it’s not, that may be some cause for concern. A social audit should evaluate factors such as a company’s record of charitable giving, energy use, transparency, work environment, and worker pay and benefits to measure what kind of social and environmental impact your company is having on the locations and resources it uses. You should know how your business is performing against your CSR targets and how you shape up against your competitors.
In a global environment of continuous transformation, increasing complexity and an ever evolving risk landscape, you need confidence that your entire supply chain is operating responsibly. A social audit shouldn’t just be an obligatory tick box exercise, but an opportunity for your business to protect the longevity of your brand and prove to your stakeholders and customers that it’s worthy of their trust.
What measures are available?
There are many different standards that already exist for different social audits such as; SA8000, WRAP, ETI, BSCI, FLA and FLO to name just a few in which your business can adopt as the basis in which to measure your CSR credentials. It should be about choosing which ones are most appropriate for your industry and the line of work being assessed throughout your supply chain activities, including any third party suppliers and partners that are involved. The goal of meeting the independently selected, or compulsory standards for your business and industry is to verify that your business is compliant, as well as to gain insights into parts of your business that need closer attention or strategic improvement programs in place that could also bring about competitive advantages. The audit parameters in place also need to be aligned to CSR targets set out by senior management so that it’s easy to extract information to report against the progress towards the targets set out, which should be re-evaluated on a regular basis.
Social audits should improve productivity
The social audit should play a vital role in improving working conditions inside your organisation, but should go beyond your immediate supply chain, or direct suppliers and consider your entire supply chain ecosystem which is likely made up of multiple suppliers and partners.Keeping all of these workers safe is crucial to maintaining loyalty and boosting productivity, as well as safeguarding business continuity.
It is also vital to ensure that your suppliers support freedom of association. This is not only a fundamental human right, but it will also allow employees to better represent themselves when trying to improve workplace health and safety.
Ethical and social concerns are an increasingly important part of the buyer decision-making process. After the 2013 Savar building collapse (Rana Plaza incident) which was considered the deadliest garment factory accident in history, access to information and social awareness among consumers has increased. Consumers are demanding greater transparency of the supply chain process from organisations in which they buy from.
The Fair Trade movement is just one example of organisations actively choosing suppliers based on how workers are treated and the company’s social stance. Suppliers are also waking up to the benefits of more stringent auditing and seeing this as an opportunity to strengthen business partnerships.
In order to meet growing consumer social expectations, organisations are expected to provide proof of their efforts to enhance local communities, reduce their environmental impact and to uphold legal and moral standards. The social audit process provides the necessary proof, allowing your business to gain access to these customer groups.
The future of social audits
Balance sheets and raw financials no longer provide the depth of detail that investors demand. Instead they are actively seeking new datasets that can be used to assess the overall health of a business such as the Triple Bottom Line (TBL) accounting framework
A social audit reveals a lot about the attitudes of senior management towards their workers, their communities and their customers. Businesses who fail to uphold workplace health and safety standards across their entire supply chain may be a higher risk investment.
The additional information generated by an audit provides context for raw financial data.Using it allows potential investors to make an informed decision about your business before committing any cash.
Social Audits are here to stay and will increasingly delve deeper into the supply chain looking for real-time tracing of raw materials, components and production processes. The level of information made available to the public is already increasing with projects like “Project Just Wiki” – where you can get all information about your favourite brands (how, where and by whom your clothes are made). This is just the beginning and it should be embraced as an opportunity to do business better.
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We have found them to be an excellent business partner. Through the implementation of both their supply chain and sourcing software they have more than proven themselves in giving us a product that functions the way we need it to. LIMA has been a fantastic supply chain visibility tool, calculating real accurate landed cost position throughout the order lifecycle. The LIBERTY software matches our product sourcing business needs perfectly. PLM systems I’ve previously used, often bring lots of issues through implementation, but these guys managed this and I’ve got highly satisfied users.John Amm - GM Global Sourcing, Myer
The solution has realised more benefits than we initially thought possible. Claims notifications are being handled in a fraction of the time. Suppliers are making fewer calls into the office and quality scores have increased dramatically. All of this can only have had a positive impact on the customer experienceMartin Ashfield, head of commercial property claims, AXA
The system alerts us to exceptions against our plan, allowing us to focus our attentions on solving the real issues in the supply chain. Having a comprehensive audit trail of events for everyone to see has resulted in significantly improved service levels from our suppliers and agents.Darren Walker, head of generics buying and UK trading, Alliance Healthcare
Now our buyers can exchange photographs with suppliers and have a real-time dialogue as they develop styles, while buyers out in the Far East can send detailed and accurate information back to their teams in the UK. It has certainly cut lead times and reduced errors.Maxine Walter, supply chain co-ordination manager, New Look
The time it takes to compile reports has been significantly reduced; a report which used to take five whole days to complete is now accomplished within a single day!Sam Brown, Responsible Sourcing Co-ordinator - John Lewis.