While audits continue to be a major part of the CSR initiative of almost all brands, often in recent times it has come under lot of scrutiny. So what has changes in the minds of brands that they suddenly want to do away with a component of their programs that have served them for last 20 years or so? Has the quality of audits gone down or have we entered a different phase of supply chain CSR where audits have lost relevance?
Let’s first see where audits belong in the current trend of CSR programs. Many agree that audits can no longer be a means to an end. Brands that want to tick the box of developing their suppliers, would want to do a bit more than just auditing them. Stopping at just identifying non-conformities would only take them so far if they really want to call themselves ‘responsible buyers’. We have crossed a lot of miles since the days when brands used to send a letter to their suppliers and ask them to sign and send back saying ‘we are compliant with your standards’. This is the age of sustainability. An age when buyers are not just held accountable for sourcing from compliant factories but also for the role they play in standing by them as they achieve compliance. Unlike past, brands are now expected to be a partner in solution, too.
Now to the service providers. Independent audit firms are conducting a major portion of all audits in the global supply chain. Being nominated by buyer and paid by supplier, they are carrying out almost 90% of all audits being conducted worldwide. Focus of their work-model remains at checking if the supplier meets buyer’s standards. It is only recently that some suppliers have started asking the question of return on investment from these audits. What are there in these audits for the suppliers to gain from? Are these mere checks to see if they are compliant or responsible buyers are really interested in impacting development? Well, it is probably muddled somewhere in between. But in a sustainability framework, there is more and more need to bring audits closer to the factories. Call it audit or assessments, these one or two day visits must give back something to the factories that they can use to develop.
Often times, these audits, termed as ‘social’ audits, are conducted in a rather ‘scientific’ method. A checklist, set sample size, set number of workers to interview, set questionnaire during interview, these broadly describes what happens during an audit day. So there is an in-built filtering in this method that cannot bring us too much systemic description. As a result what we get are mere glimpses of individual diffractions. We need more than that if factories are to benefit from audits. We need more focus on broader aspects than individual incidents which generally encourage quick-fix only. And then there are the administrative parts during audits. Either intentionally or otherwise, some brands maintain gigantic audit tools which they expect to be filled in during an audit day. Which in turn means auditors are not left with quality time to dig deep into systems? Focus shifts too much into filling out the academic information. What brands get as a result, is a snapshot of event on the audit day; a blurry one at that.
So can audits encourage sustainable solutions? Well, only if it identifies systemic issues. How best to do it? Definitely not by with a bigger checklist or following a static scientific model. More trust needs to be bestowed on the auditor’s capabilities to identify areas for improvement. Checklist will only take us so far.
Can brands really do away with audits? Well, not industry wide. Brands would still want some sort of mechanism that they can use for selecting suppliers. Audits or the term ‘audit’ gives them that leverage. If we are to discontinue audits we need a suitable replacement. A replacement that can allow brands to select factories as well as deliver sustainability.