Business – 6.1 External influences – Social and demographic | e-Consult
6.1 External influences – Social and demographic (1 questions)
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Social auditing is a systematic review of a company’s policies, practices and outcomes against recognised social standards (e.g., labour rights, health & safety, community impact). Its role includes:
- Verification: Provides independent evidence that CSR commitments are being met.
- Stakeholder assurance: Enhances credibility with investors, consumers and NGOs.
- Continuous improvement: Identifies gaps and informs corrective action plans.
- Risk management: Detects potential violations that could lead to legal or reputational damage.
Key challenges:
- Resource intensity: Conducting thorough audits requires skilled auditors, time and financial investment, which can be prohibitive for smaller firms.
- Standardisation issues: Multiple audit frameworks (e.g., SA8000, ISO 26000) lead to inconsistent criteria and difficulty comparing results across suppliers.
- Access and transparency: Auditors may face restricted access to factories or subcontractors, limiting the depth of assessment.
- Reliability of data: Self‑reported information can be biased; unannounced spot checks are needed but increase costs.
- Cultural and legal differences: Practices considered acceptable in one country may breach standards elsewhere, complicating global audits.
To overcome these challenges, companies often adopt a mixed‑method approach, combining third‑party certification with internal monitoring, and invest in capacity‑building for suppliers to meet social standards sustainably.