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Social Audits


A Social Audit is a formal review of a company’s endeavors, procedures, and code of conduct regarding social responsibility and the impact on the community. It primarily focuses on assessing how a business affects its society and environment. The audit also measures a company’s ethical and philanthropic efforts.


The phonetic spelling for the word “Social Audits” is /ˈsōSHəl ˈôdəts/.

Key Takeaways

  1. Transparency and Accountability: Social audits are a tool used to promote transparency and accountability within an organization. They involve a thorough review and assessment of an organization’s social performance in relation to its goals, policies, and stakeholder expectations.
  2. Focus on Social Performance: Unlike financial audits, social audits center on measuring a company’s social impact and performance. This includes its corporate social responsibility (CSR) initiatives, environmental contributions, labor practices, and community involvement.
  3. Stakeholder Engagement: A key aspect of social audits is stakeholder engagement. Social audits involve collecting information directly from stakeholders that include employees, customers, suppliers, community members, and others. Their views, opinions, and concerns are taken into account and contribute towards the final audit result.


Social audits are essential in the business/finance sector as they provide a systematic evaluation of a company’s adherence to social responsibility principles. These audits help in assessing the company’s effects on its surrounding society, encompassing the social, environmental, and economic impacts. They ensure businesses maintain ethical standards in their operations, which enhances their credibility and reputation. Also, it promotes transparency, as it informs stakeholders about how the company is addressing social concerns. Furthermore, they assist businesses in identifying areas for improvement, ensuring they meet their social objectives alongside their economic goals. This balance aids in fostering value creation, sustainable growth, and socioeconomic development.


Social audits are used within a business to assess the company’s social responsibility performance and impact on society – both within the business and externally. They evaluate the effectiveness, strategic alignment and efficacy of a company’s social interactions and responsibilities. The main purpose of a social audit is to gauge an organization’s degree of social responsibility and responsiveness to societal needs. This could include the effects of their decisions on society and the environment, or their commitment to ethical standards, human rights, corporate governance, health and safety, and sustainability.A social audit provides an in-depth analysis of the company’s non-financial operations and paints a picture of the company’s social and environmental responsibility. It focuses on revealing, tracking, and improving the social and ethical effects of a company’s operations. This helps organizations identify gaps in their social performance, which they can use to make improvements and increase transparency and accountability in their dealings with stakeholders. In the broader view, social audits also align with the goal of sustainable development, enhancing a business’s reputability and integrity, and fostering stronger relationships with stakeholders and the community.


1. The Body Shop:The beauty retailer The Body Shop has long been recognized for its commitment to social and environmental causes. To monitor its performance in these areas and ensure transparency, the company conducts social audits. These audits focus on examining the company’s adherence to its community fair trade program, cruelty-free production process, and environmental sustainability efforts. Such auditing helps the company to maintain a socially responsible image to its consumers and stakeholders. 2. Starbucks:Starbucks uses social audits to ensure their coffee is sustainably sourced and their business practices are ethical. They have established their own standards called C.A.F.E. (Coffee and Farmer Equity) Practices, which include guidelines on product quality, pricing transparency, safe and humane working conditions, and environmental leadership. Independent organizations conduct the audits to ensure the coffee they purchase meets these guidelines.3. Nike:After facing widespread criticism in the 1990s for poor working conditions in its supplier factories, Nike began conducting social audits to assess and improve its social impact. These audits focus on labor conditions, employee health and safety, and environmental practices in their supply chain. As a result, Nike has invested heavily in improving working conditions and has become more transparent about its social and environmental practices.

Frequently Asked Questions(FAQ)

What is a Social Audit?

A Social Audit is a systematic evaluation of an organization’s social, ethical, and environmental performance. It’s a way to measure the impact of an organization’s non-financial objectives and ensure they are being met.

Why are Social Audits necessary?

Social Audits help organizations demonstrate their commitment to corporate social responsibility (CSR). They provide a framework to assess and manage non-financial performance, promote transparency, and help to enhance the organization’s reputation.

Who conducts a Social Audit?

A Social Audit can be conducted either internally by the organization’s staff or externally by an independent third-party auditor.

How frequently are Social Audits conducted?

The frequency of a Social Audit can vary widely depending on the organization’s specific needs and objectives. Some companies may choose to conduct them annually, while others may do them semi-annually or even quarterly.

What areas do Social Audits typically cover?

Social Audits usually evaluate several areas, such as labor conditions, human rights, environmental impact, supply chain management, community engagement, and stakeholder relations.

What is the outcome of a Social Audit?

The outcome is typically a detailed report which outlines the organization’s performance in key social and environmental areas. This can help the organization identify areas for improvement and develop strategies for meeting its social, ethical, and environmental goals.

Are Social Audits mandatory?

While social audits aren’t typically legally required, they have become a standard best practice in many industries and are often expected by stakeholders, including customers, employees, and investors.

What is the difference between a Social Audit and a financial audit?

While both are assessment tools, a financial audit focuses on evaluating the accuracy of a company’s financial records, while a Social Audit assesses the social, ethical and environmental impact of a company.

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