A Comprehensive Guide on Social Audit

The emergence of social enterprises and the establishment of social stock exchanges have highlighted the importance of addressing social and environmental challenges while ensuring financial viability. As organizations increasingly seek to balance their profit-driven objectives with a commitment to social responsibility, the concept of social audit has gained significant prominence.

I. What is Social Audit?

A social audit –

a) Assesses whether the project/program/project-based activity is operating in accordance with the stated strategic intent and planning.

b) Assesses the stated performance in terms of impacts/`outcomes.

c) Suggests ways to improve the impact measurement and/ or performance by way of a management letter.

II. Is Social Audit a novice concept like Social stock exchange?

No, Social Audit is not a novice concept in India. The concept of social audit was first introduced in the 1990s as a means of evaluating the performance of rural development programs. Since then, it has been expanded to cover various sectors, including education, health, and public works. With the introduction of the Social Stock exchange (SSE), the importance of social audit has increased. SSE can be used to raise capital for social welfare and sustainable development initiatives, which can be evaluated through the social audit process. The social enterprises listed on the SSE use the capital raised to generate social impact which will be evaluated through the social audit.

III. Objectives of Social Audit

The main object of a Social Audit is to ascertain the impact made by the Social Enterprise through its activities, intervention, programs or projects implemented during the reporting period. The main objectives of Social Audit are as follows:

• Assessing the impact made by the Social Enterprise through the implementation of activities, interventions, programs or projects
• Verifying the authenticity and validity of the implementation of activities, interventions, programs or projects
• To identify and report the gap between desired object and the actual impact made by the Social Enterprise
• Assessing the nature, intensity and duration of the impact of the project

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