Auditing Supply Chains

🌱 What role do audits play?

Overall, “evaluating the environmental and social costs of th[e] supply chain requires extensive information about every step in its production [such as if] mines exploited child labor, or how much fossil fuel was used to ship each part around the world”.[i] The collection and verification of this information is not an easy task to do in practice. Therefore, auditing also plays a key role in managing supply chains.

🌱 What challenges are there with social audits?

Over the past two decades, audits have been used by companies as evidence “that they have eliminated abuses in their supply chains”. Yet, there are currently still a lot of shortcomings in the quality of the work being done. An analysis of 40 000 audits by the Cornell professor, Sarosh Kuruvilla, in 2021 “found that nearly half had relied on forged or dubious documents”. Moreover, a New York Times “review of confidential audits conducted by several large firms shows that they have consistently missed child labor”.[ii]

This post has been adapted from a newsletter written by Saskia Tykkyläinen and Christine Nikander for a collaboration between Palsa & Pulk and The E-Waste Column. The newsletter titled “How can digital product passports create more transparency in supply chains?” was originally published in both “The Just Transition Newsletter” and “The E-Waste Newsletter”.

[i] https://www.theewastecolumn.com/database/due-diligence-obligations/the-role-of-human-rights-auditing-in-a-just-transition; https://qz.com/battery-passport-sustainable-climate-tech-1851095928; https://www.business-humanrights.org/en/from-us/briefings/silicon-shadows-venture-capital-human-rights-and-the-lack-of-due-diligence/; https://www.nytimes.com/2023/12/28/us/migrant-child-labor-audits.html

[ii] https://www.theewastecolumn.com/database/due-diligence-obligations/the-role-of-human-rights-auditing-in-a-just-transition; https://qz.com/battery-passport-sustainable-climate-tech-1851095928; https://www.business-humanrights.org/en/from-us/briefings/silicon-shadows-venture-capital-human-rights-and-the-lack-of-due-diligence/; https://www.nytimes.com/2023/12/28/us/migrant-child-labor-audits.html