What is an ethical audit?

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Ethical audits are tools to ensure the workforce in your global supply chain operates in humane working conditions. This helps your company succeed ethically while building a reputation for social accountability. Customers care that their money is being spent in an ethical way, making these audits essential for cultivating loyalty, marketing to conscientious new customers, and ultimately improving your products by ensuring conditions meet agreed-upon standards.

Who performs ethical audits?

There are many different international social audit standards set forth by various organizations. These include Sedex Members Ethical Trade Audit (SMETA) and the Initiative for Compliance and Sustainability (ICS). Some of these standards are industry-specific, such as the Responsible Jewelry Council (RJC).

These standards are designed to ensure human rights conditions are present in your supply chain and identify any shortcomings in ethical practices. The audits focus on a range of categories, including:

  • Work hours
  • Fair wages
  • Safety standards in the work environment
  • Waste management
  • Use of underage labor
  • Disciplinary actions
  • Discrimination

In short, these audits help make sure your business participates in—and produces products from—an ethical process. Undergoing these audits has the added benefit of improving your image as a company and helps build stronger partnerships with suppliers. 

How does an ethical audit work?

Typically, ethical audits begin with an opening meeting where the pre-established standards for the audit will be reviewed, and the agenda will be laid out. There may be requests for specific records and documentation. While a specific set of standards for audits may be used, there is sometimes flexibility in tailoring programs to a company’s already-existing ethical practices.

Following this meeting is the factory tour, which may include inspecting the product development process, tools used, and safety conditions. There will also be a comprehensive review of documentation to determine whether standards are being followed regularly and recorded accurately. The next step is to conduct interviews with employees. These interviews help to establish a better look at the condition and day-to-day expectations put on workers. These may be conducted with individuals, in groups, or a combination of both. 

The combination and cross-checking of all these components help paint the overall picture and identify any issues that may not be immediately evident. Throughout the process, the trained auditor will create a Corrective Action Plan (CAP) based on their findings. This plan will highlight shortcomings in any standards as well as recommendations for getting back on track. This CAP will be discussed in a closing meeting so the team is informed and can be involved in the discussion for full investment moving forward.

Audits are conducted by professionally trained auditors who are taught industry standards in order to be able to properly identify shortcomings and solutions.

Why use Factored Quality?

Factored Quality is your one-stop shop for maintaining a fully functional and ethical global supply chain. We have the infrastructure and expertise to help you book quality control inspectors and auditors around the world. Factored Quality worries about quality control so you don’t have to. Schedule a demo to find out how you can start assessing your business’s ethical compliance.

Let’s connect today and we’ll be in touch very soon.

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