Setting the standards for fair trading practices

Paul Gosling looks at the new world of social auditing

A single pan-European institution to represent, govern and accredit social auditors is to be established. Businesses that place social concerns at the heart of their operations, including the Body Shop, Traidcraft and the Co-operative Bank, have backed the proposal.

The creation of an Association of Social and Ethical Accounting arose from discussions at a meeting in Tuscany last month of the Social Venture Network, a body that brings together a variety of social enterprises from across the European Union. The network is based on a similar, successful organisation in the US.

There has been a rapid growth in the number of companies that engage social auditors to produce annual social reports, to be placed alongside annual accounts. The process provides external verification for companies that claim they trade fairly, and can assist businesses in countering accusations of poor trading practices.

The Body Shop is this year joining the likes of Traidcraft in undergoing a social audit, after three years of environmental audits. David Wheeler, the company's head of ethical auditing, says: "Our environmental audits have pointed out weaknesses, and this year's social audit will be verified by the New Economics Foundation, which will set up an independent panel of experts to ask the right questions.

"I don't think anyone, other than a few neanderthals, would argue that business today is only run for one stakeholder - there are several, including the shareholders, the customers, the staff and the suppliers."

Where environmental audits examine such matters as pollution control, use of raw materials, energy consumption and waste disposal, a social audit will examine these plus a range of other factors, including wage rates and the effect of a company's operations on trading partners, particularly in the Third World.

Mexx International, a retailer based in the Netherlands but with stores in Birmingham and elsewhere in Britain, is enthusiastic about the principle of social auditing. The company buys clothing from 32 countries, and is keen that suppliers are good employers.

"We work with producer companies, which we call co-makers, and examine their working relations," says Sonia Sin, licensing manager for Mexx. "We look seriously at child labour - and I don't think any of them use child labour - hazardous materials and the disposal of hazardous wastes."

Ms Sin says it is important that there is a single, verifiable standard for social auditing for Europe as a whole. "We can't have different countries using different standards when we are measuring the same things," she says. Future meetings of the Social Venture Network over the next few months will agree details on the standards and accreditation to be adopted. Academics from Germany and the Netherlands, where social auditing is well established, are to make detailed proposals on how individuals and firms will become qualified and licensed.

Simon Zadek of the New Economics Foundation is recognised as a leading practitioner of social auditing, and he has just returned from a conference in South Africa, sponsored by KPMG, where there was a high level of interest in the subject. "There are a whole lot of consultancies moving into the field, and the next stage is to pull together non-governmental organisations and academics to set the standards and accreditation," he says.

There is a determination to avoid the fragmentation that has not only affected the accountancy profession in England, but has already damaged the still young specialism of environmental auditing, which has three representative bodies in Britain alone.

Unfortunately, social auditing is also establishing a new language which has to be learnt. Social auditors are now talking of "footprints", "shadows" and "rucksacks". Which is a very complicated way of saying that companies will be expected to pay a fair price for what they buy, and that their impact on Third World trading partners needs to be inspected if they are to be given a clean social audit.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

Life and Style
love + sex
Arts and Entertainment
Victoria Wood, Kayvan Novak, Alexa Chung, Chris Moyles
tvReview: No soggy bottoms, but plenty of other baking disasters on The Great Comic Relief Bake Off
Ashley Young celebrates the winner for Manchester United against Newcastle
footballNewcastle 0 Man United 1: Last minute strike seals precious victory
Life and Style
Tikka Masala has been overtaken by Jalfrezi as the nation's most popular curry
food + drink
Arts and Entertainment
Seth Rogan is one of America’s most famous pot smokers
filmAmy Pascal resigned after her personal emails were leaked following a cyber-attack sparked by the actor's film The Interview
Benjamin Netanyahu and his cartoon bomb – the Israeli PM shows his ‘evidence’
Arts and Entertainment
80s trailblazer: comedian Tracey Ullman
Life and Style
A statue of the Flemish geographer Gerard Kremer, Geradus Mercator (1512 - 1594) which was unveiled at the Geographical Congree at Anvers. He was the first person to use the word atlas to describe a book of maps.
techThe 16th century cartographer created the atlas
Arts and Entertainment
Stephen Tompkinson is back as DCI Banks
tvReview: Episode one of the new series played it safe, but at least this drama has a winning formula
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Graduate Application Support Analyst

    £25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

    Reach Volunteering: External Finance Trustee Needed!

    Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

    Christine McCleave: FP&A Analyst

    £36,000 - £40,000: Christine McCleave: Are you looking for a new opportunity a...

    Recruitment Genius: Sales Executive - OTE £40,000

    £15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

    Day In a Page

    War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

    Baghdad fights to win back Tikrit from Isis – but then what?

    Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
    Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

    What is it like to live with Alzheimer's?

    Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis
    The Internet of Things: Meet the British salesman who gave real-world items a virtual life

    Setting in motion the Internet of Things

    British salesman Kevin Ashton gave real-world items a virtual life
    Election 2015: Latest polling reveals Tories and Labour on course to win the same number of seats - with the SNP holding the balance of power

    Election 2015: A dead heat between Mr Bean and Dick Dastardly!

    Lord Ashcroft reveals latest polling – and which character voters associate with each leader
    Audiences queue up for 'true stories told live' as cult competition The Moth goes global

    Cult competition The Moth goes global

    The non-profit 'slam storytelling' competition was founded in 1997 by the novelist George Dawes Green and has seen Malcolm Gladwell, Salman Rushdie and Molly Ringwald all take their turn at the mic
    Pakistani women come out fighting: A hard-hitting play focuses on female Muslim boxers

    Pakistani women come out fighting

    Hard-hitting new play 'No Guts, No Heart, No Glory' focuses on female Muslim boxers
    Leonora Carrington transcended her stolid background to become an avant garde star

    Surreal deal: Leonora Carrington

    The artist transcended her stolid background to become an avant garde star
    LGBT History Month: Pupils discuss topics from Sappho to same-sex marriage

    Education: LGBT History Month

    Pupils have been discussing topics from Sappho to same-sex marriage
    11 best gel eyeliners

    Go bold this season: 11 best gel eyeliners

    Use an ink pot eyeliner to go bold on the eyes with this season's feline flicked winged liner
    Cricket World Cup 2015: Tournament runs riot to make the event more hit than miss...

    Cricket World Cup runs riot to make the event more hit than miss...

    The tournament has reached its halfway mark and scores of 300 and amazing catches abound. One thing never changes, though – everyone loves beating England
    Katarina Johnson-Thompson: Heptathlete ready to jump at first major title

    Katarina Johnson-Thompson: Ready to jump at first major title

    After her 2014 was ruined by injury, 21-year-old Briton is leading pentathlete going into this week’s European Indoors. Now she intends to turn form into gold
    Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

    Climate change key in Syrian conflict

    And it will trigger more war in future
    How I outwitted the Gestapo

    How I outwitted the Gestapo

    My life as a Jew in wartime Berlin
    The nation's favourite animal revealed

    The nation's favourite animal revealed

    Women like cuddly creatures whilst men like creepy-crawlies
    Is this the way to get young people to vote?

    Getting young people to vote

    From #VOTESELFISH to Bite the Ballot