Why audits are still necessary for a responsible supply chain

Audits are always considered to be an integral part of the responsible sourcing program of any customer’s business. But still, in recent times the role of audits is being asked like audit still a necessary part of the sustainability portfolio? Or have audits become outdated with other tools becoming more favorable?

Here is one of the most widely used social and ethical audit methodologies worldwide that are Sedex Members Ethical Trade Audit (SMETA). It has been viewed that on Sedex platform, near about 20,000 SMETA audits are uploaded every year and an estimated 60,000 audits are conducted for Sedex members and non-members for offline use.

Audits are a catalyst for positive change

According to a recent analysis of audit methodologies, there is evidence that a positive kind of change in the workplace is brought by audits by improving working conditions, health and safety, environmental sustainability and anti-corruption and bribery.

According to Sedex research, companies that undergo regular audits could be seen decreasing their incidents of non-compliance and thus focus on making positive improvements in their working conditions.

Let’s take an example, talking about the 20 years back, childlabor in China was found in 2 – 5% of audits of companies who regularly undertook audits. Nowadays child labor in those companies could be found in less than half a percent of those companies.

Talking about the ELEVATE, in if the child labor violations have been found the businesses, only 2.5% of these organizations re-offended the following year. A positive change could be made by the audits prompt companies as this is suggested by it because the suppliers would be encouraged by it in order to improve their business operations and management systems.

“A detailed and comprehensive report of the company is given The SMETA like where it is as well as highlights the areas we are doing well and where improvements need to be made so we can improve as a business and further benefit the conditions and lives of the people who work for us.”

Jonathan Mason, Group Ethical Trade Manager, AG Thames Ltd

Regular audits can help decrease non-compliances over time

Crucial information for reporting on health and safety could be provided by the Audits. Insights on health and safety are very beneficial for Sedex members so that the informed and effective decisions throughout their supply chains could be made.

It has been indicated by Sedex research that the increased amount of audit data regarding health and safety will result in the reduction in incidents of non-compliances with health and safety legislation.

It should be taken into consideration that audits are only a snapshot in time and it is mandatory to determine that this snapshot is a step that is leading towards progress. A thorough indication is provided by the company regarding how a company can improve business practices.

There is one important step that is to evaluate a workplace toward reaching a cycle of continuous improvement. There are various chances when the reporting consistency could be compromised and the reason behind this is that audits take place all over the world, and across thousands of companies. Poorer quality audits do not mean that audits, as a general tool, are not helpful. Rather, it is a case of fixing the quality of those audits so that the data is more reliable. A part of this development includes the use of professional and well-trained auditors, who are independently monitored to ensure their knowledge is continually maintained.

Audits increase a company’s credibility and reliability

Diverse culture denotes that business that is prevailing in different countries can have the norms and expectations regarding how to operate. In many areas, businessmen think that they are amazing employees and the reason behind this is that they are in their local context. But still, audits may cooperate with them in order to discover if they are actually meeting national or international laws.

So, the increased training of an auditor is very crucial not only in general areas they operate. Upskilling auditors to ensure they don’t overlook processes which have simply become the ‘industry norm’, will help these businesses reach requirements from an international perspective.

Consumers, buyers, and supplier audit can be demonstrated by an factory audit that a company is aiming to be compliant as well as trustworthy business. It also shows the business commitment to having a clear and responsible supply chain.  will ultimately strengthen the relationship between buyers and suppliers – enabling collaboration and making it easier to address risk. This helps improve a company’s brand reputation and drive revenue in the long-term.

Audits improve business relationships

And finally, audits are a catalyst to drive positive and sustainable change in the global supply chain. Audits do not fix all the issues, but they are a way to objectively measure risks, foster dialogue between buyers and suppliers, and start a positive conversation.