Social sustainability in fashion: limits and benefits of social audits

The sustainability of a company develops mainly along two main pillars: the environmental and the social. While from an environmental point of view there are reliable certifications and objective studies to monitor sustainability, in the area of social sustainability brands, companies and operators in the supply chain can face major challenges in conducting effective assessments and monitoring and developing their own performance and that of their value chain.

From a social perspective, it is more difficult to find audit schemes, reports and benchmarks to refer to, due to the lack of sufficient quantifiable data and internationally recognized standards on which to base their research. 

The characteristics of the business model of fashion brands and companies make it even more complex to assess their social performance and improve it over time. Indeed, having global supply chains reduces the control brands can exercise over the supply chain and this includes social risks. However, the use of virtuous sustainability programs can positively transform the economic and social situation of entire communities.

The use of social audits, i.e. on-site assessments of a company's corporate social responsibility procedures and efforts, is a popular tool, but one with certain limitations. Ineffective social audits pose a cascading risk to companies and their brands, which can suffer reputational damage and incur 'social washing', i.e. the dissemination of false or misleading information regarding working conditions and social initiatives undertaken by the company.

However, besides social audits, there are other tools to verify social conditions along the supply chain of fashion companies, such as certifications and social standards.

Social audits for fashion companies

Companies use social audits as a tool to assess the starting point and current level of social sustainability of their partners, prevent human rights violations and ensure decent working conditions for workers employed within complex supply chains. Thanks to them, brands have the opportunity to assess on-site the performance of their suppliers with respect to corporate social responsibility objectives.

There are different types of audits, each of which can take different forms depending on the purpose of the audit and the sector in which it is carried out. For example, an audit may take the form of a direct audit, where an auditor visits an organization or facility to gather first-hand information and verify compliance with on-site procedures and regulations. Alternatively, it may take more complex forms, such as participation in verification structures such as consortia or sector organizations, which collaborate to carry out a systematic assessment of compliance with regulations and standards, and use more comprehensive evaluation systems and indicators.

Generally, social audits are carried out by third parties and the main ones are:

• Amfori BSCI: Amfori BSCI is the leading supply chain management system that aims to promote social compliance in factories and farms around the world. Participants in the BSCI audit of Amfori must undertake to respect the points of the Code of Conduct, which include fair remuneration of employees, the elimination of child labor, the guarantee of decent working hours and the guarantee of the setting of safety standards for the creation of a healthy working environment.
• SMETA: acronym of "Sedex Members Ethical Trade Audit", has been developed by the Sedex Associate Auditor Group and describes a methodology to conduct audits through a collection of best practices in the field of ethical control. Beneficiaries include all stakeholders involved in the process, including retailers, manufacturers and suppliers. It covers the principles of the ETI Base Code and verifies performance on human rights, territorial rights, responsible recruitment practices, fair treatment and non-discrimination of immigrant workers, implementation of management systems, subcontracting and remote work. After the audit, the companies involved must draw up a Corrective Action Plan (PAC) and undergo a second audit by the company to verify its completion.
• ICS: The Initiative for Compliance and Sustainability was launched by the French Association of Distributors (FCD) to encourage suppliers to respect universal human rights, together with local labor regulations. Again, suppliers must comply with an Environmental and Social Code of Conduct, and after the audit is completed, the factories of ICS members must also draw up the Corrective Action Plan (CAP) to make the improvements recommended by the auditor.
• SLCP: The Social and Labor Convergence Program is a non-profit multi-stakeholder initiative that, through the Converged Assessment Framework, allows manufacturers to take ownership of their social and work data through a three-step evaluation process: self-assessment by companies through the collection of social and work data, the on-site verification by a social auditor to ensure the truthfulness of the information and, finally, the sharing of the data on different platforms called Accredited Host, linked together by the SLCP Gateway. Importantly, this framework does not provide any value judgment or score on the social practices implemented by companies, but only focuses on data transparency.

Critical social audits and prospects for improvement

Although social audit is a useful tool for companies to evaluate their suppliers, some doubts have arisen about its effectiveness.

In particular, in November 2022 Humans Rights Watch published a report entitled Obsessed with Audit Tool, based on the experiences of 20 expert auditors who conducted social audits on suppliers in different countries and industries, interviews with workers and other academic analyses of social audit reports.

According to the report, one of the main problems concerns the time taken to conduct an audit, as this has a strong impact on the quality of the evaluation. Pressure to lower costs by limiting the time available for audits reduces the ability of auditors to carry out in-depth audits and interview workers. 

In addition, in the case of pre-announced inspections, companies could mislead auditing companies by previously training workers to answer auditor questions in order to hide inadequate working conditions.

Finally, auditor evaluations are often not published but remain private documents of suppliers, often shared only with brand customers.

According to the report, therefore, the social audits would serve only to report any problems present in a company but not to improve them by making an effective contribution.

Furthermore, in order to improve the effectiveness of social auditing, Human Rights Watch believes that competent authorities, political figures and regulators should ensure that social audits are not considered as a substitute for legislation. Instead, regulations should require companies and brands to perform real due diligence on their operations and along global value chains. Therefore, companies should engage with concrete programs and practices to ensure integration between social audits and existing human rights laws and supply chain management.

Social certifications: what they are and what differentiates them from audits

An alternative to the use of social audits to verify respect for the fundamental rights of workers in their supply chain is the adoption of certifications related to social standards.

Like social audits, certifications also include a third-party body, in this case, a certification body, which performs an on-site audit and validates the documents and activities carried out by the company. However, unlike social audits, certification is the conclusion of a path defined by precise rules dictated by the certifying body and that provides for the measurement and validation of the requirements to be met.

The certifications that require the verification of standards and social performance for fashion companies are divided into two categories:

• Product certifications: they concern the production process of textile products and the traceability of raw materials, but also cover environmental and social standards. The main textile product certifications that also require compliance with social standards are: GOTS, GRS, Fairtrade Certification, Better Cotton Initiative. 
• System certifications: they concern the organization as a whole and are useful tools to measure and manage the impacts of companies' social policies. Among the existing social system certifications, the most important is the SA8000 and is applicable to companies of any industry. While, a specific social certification for the fashion industry is represented by Get it Fair.

To ensure respect for workers' rights, fashion companies can choose to adopt one or more of these certifications as a verification tool for their operations and for the supply chain.

While the product certifications have been deepened in some previous articles, in this article the system certifications will be deepened, which allows monitoring of the entire organization.

The social certification SA8000

In the field of system certifications, the SA8000 is one of the most important and internationally recognized certifications. It was created by Social Accountability International (SAI) and concerns the management of working conditions within companies. 

The Standard reflects the labor provisions of the Universal Declaration of Human Rights and the International Labour Organisation (ILO) conventions. Some of the main areas covered by the rule concern child labor, forced labor, working hours, pay and health and safety at work.

To obtain certification, the company must establish a Social Responsibility Management System, which allows the organization to plan, manage, review and improve the categories of performance defined within the standard. The Management System must involve all stakeholders, both internal and external.

However, this standard remains within company limits: every company involved in the supply chain must adopt certification independently.

Get it Fair: social certification for fashion businesses.

Get it Fair is an independent third-party certification scheme developed in collaboration with leading Italian fashion stakeholders, in order to support the development of Responsible Sourcing strategies.

The goal of Get it Fair is to assess the actual risks along the supply chain that could pose hazards to workers, the environment and local communities, especially in developing countries where there are no regulations to ensure compliance with minimum standards. 

The certification is based on the principles and guidelines of the "OECD Due Diligence Guidance for responsible supply chain in the garment and footwear sector" and the international standard ISO 26000 "Guidance for Social Responsibility".

Compared to other certifications and social audits, Get It Fair stands out for some features:

• Focus on all aspects of social responsibility (society, security, environment and ethics)
• Emphasis on quantitative assessment of actual risks along the supply chain
• Score orientation to support benchmarking

Like audits, the Get it Fair certification is audited by third parties and subject to regular audits, specifically twice a year, including an unannounced annual audit.

Social standards: ISO 2600

In addition to certification, there are social standards, which do not impose requirements to be met but provide guidelines, as in the case of ISO 2600.

ISO 26000:2010 is an international standard that provides guidelines on Corporate Social Responsibility, therefore, unlike other ISO standards, it is not possible to obtain a certification of conformity to the standard.

ISO 26000 adopts an active approach that leads companies to self-diagnosis and awareness of their social sustainability performance. This implies that companies must independently identify the categories of internal and external stakeholders that are influenced by their choices and activities.

This social standard, unlike certifications and audits, is a tool exclusively to support organizations, in order to guide them in the adoption of a responsible approach and the involvement of relevant stakeholders.

Conclusion 

The critical issues and risks related to social sustainability and human rights along the supply chain of the fashion industry are numerous and complex to address. The use of social audits can be an effective tool to monitor company policies regarding workers' rights and environmental safety, provided that it is integrated with the main national and international regulations.

However, there are also certifications and social standards that companies can adopt as alternatives or in addition to social audits to improve the performance of their supply chain, based on their priorities and objectives.

Tracing its production chain and ensuring respect for the human rights of the workers who work there allows companies to demonstrate a real and long-term commitment, improving their reputation towards consumers and all stakeholders.