What is a social audit?

A social audit is a formal review of a company’s endeavors, procedures, and code of conduct regarding social responsibility and the company’s impact on society. A social audit assesses how well the company achieves its goals or social responsibility benchmarks.

Understanding

Companies should ideally strive to achieve a balance between social responsibility and profits. An internal analysis of the social impact of a particular firm is called a social audit. Companies may use the audit to assess if they are fulfilling their goals, including benchmarks and quantifiable targets. A social audit helps a firm determine if its activities receive favorable or unfavorable feedback and connects that data to the company’s public perception.

In the age of corporate social responsibility, businesses are often required to satisfy social and environmental requirements and provide value to shareholders and customers. Using social audits, companies may establish, enhance, and preserve a favorable public relations image. Many businesses find that favorable public perception contributes to building a positive corporate image, lessening negative news’s detrimental effects on revenues.

Things were looked at during a social audit.

A social audit’s scope might be broad and variable. In addition to employee treatment, social and public responsibilities may be evaluated. The following are some of the rules and subjects covered in a social audit:

• Effect of the company’s activities on the environment
• openness in disclosing any problems about the environment or the general public.
• Transparency in accounting and finances
• Development of the community and monetary donations
• Giving to charities
• Employee volunteerism
• Energy consumption or footprint effect
• Workplace conditions that include equality of opportunity, safety, and freedom from harassment
• Benefits and compensation for employees
• Nondiscriminatory methods
• Variety

The things that are part of a social audit need to be standardized. Social audits are optional, so businesses can decide whether to share the findings with the public or use them only for internal purposes.

Because social audits are flexible, businesses may adjust their scope to suit their objectives better. While some businesses may want to know how their actions affect a particular town or city, others may decide to have the audit cover their whole state, nation, or even the entire world.

An illustration

As one of the biggest corporate software firms in the United States, Salesforce.com (CRM) is a Fortune 500 corporation. The firm has tried to employ 100% renewable energy internationally as part of its social audit and evaluation. The business publishes its results on its website, including an annual stakeholder impact report. A section of the 2017 report is shown below.

Corporations may enhance their public image over time by consistently aiming to meet and surpass their social responsibility standards; social audits assist corporations in striking a balance between profitability and ethics.

According to the company’s website, Salesforce was among the first cloud providers to pledge to run all data center operations entirely on renewable energy. A company’s stakeholder report graph illustrates its progress toward using only renewable energy sources.

Application of Social Audit Results

Public dissemination of the results is also a choice, as social audits are voluntary. Positive outcomes may be shared, while bad outcomes may be kept confidential and utilized to highlight development areas that enhance the subsequent social audit outcomes.

Through its review, a corporation may discover, for instance, that it needs to be more actively involved in community philanthropic initiatives. Consequently, business leaders might implement programs with quantifiable objectives to boost community engagement. The following social audit might track and examine the actions.

The business may gradually enhance its public image through persistent efforts to achieve and surpass its social responsibility standards. To put it simply, social audits assist businesses in striking a balance between ethics and profitability.

Conclusion

• An official assessment of a business’s efforts, practices, and code of conduct concerning social responsibility and the business’s influence on society is known as a social audit.
• A social audit evaluates the company’s performance and whether it meets its social responsibility criteria or objectives.
• Companies should ideally strive to achieve a balance between social responsibility and profits.