What is a Social Audit?

A social audit is an examination of the activities of a business that support the public interest. For example, a firm may support a foundation, make donations to non-profit entities, or allocate some staff time to pro bono work. A social audit can also include the environmental impact of a business, such as any negative effects on groundwater pollution or air pollution, or the level of energy use. It may also address such matters as worker compensation and benefits, discriminatory practices, and diversity in the company’s hiring practices. It is initially sent to the firm’s board of directors and senior management team.

Advantages of a Social Audit

There are several advantages to conducting a social audit. They are as follows:

Image improvement. A social audit is usually initiated by a business that wants to improve its image with the general public or the local community.
Enhanced customer loyalty. A favorable outcome to a social audit might convince more customers to make repeat purchases from the company, on the grounds that it is engaged in activities of which they approve.
Opportunities for improvement. The resulting report is used to identify opportunities for improvement within the company.
Public relations tool. A favorable social audit report might be released to the public to enhance the entity's public relations.