BSCI audits are a framework for evaluating and fixing the ethical aspects of suppliers within your supply chain.
They’re designed to ensure the safety of employees throughout your supply chain and thereby making your business more socially responsible. As a result of audits and improvements, most businesses see their supply chains become more sustainable and reliable. Of course, this also helps with your brand image (CSR + ESG).
Business owners new to ethical improvements in their supply chain usually ask:
- What does this audit entail?
- How much does it cost?
- How long does it take?
- Most importantly – what benefits can it offer our business?
We’ll walk through each of these questions here.
BSCI Audits: What are They?
The “BSCI” acronym stands for “Business Social Compliance Initiative.”
This initiative is not a business or organization, but rather a system designed to promote transparency up and down your supply chain.
The Auditors
Auditors are an accredited third party you hire to evaluate your supply chain.
Auditors must be certified within the BSCI system. Once certified, you can work with an auditor to have your supply chain evaluated. Here is a list of all certified auditors.
The Inspection
Once the auditors have completed their inspection of your supply chain, you’re provided with guidelines to implement before the next audit takes place.
BSCI audits are designed to encourage improvement throughout your supply chain, rather than immediately punishing you for failing to meet industry standards.
Why Do You Need a BSCI Audit?
BSCI audits are designed to help your supply chain operate more fluidly.
Your suppliers will each be audited. In turn, they will receive a PASS or FAIL grade, based on the legislative standards they’re expected to meet. Standards can be based on their local laws and/or BSCI international standards (specification is set by what you and the auditor determine is necessary).
- A passing grade suggests that the audited supplier is among the better organized parties in your supply chain. Their safety standards are in line with the latest regulations and standards.
- A failing grade indicates that a member of your supply chain fails to meet legislative safety standards. These partners will need to amend their grade by instituting concrete changes throughout their operations. They can continue to operate in your supply chain while implementing these changes.
BSCI audit grades are classified as follows:
- A/B: The subject has received a passing grade and only needs to make minor changes to how its plant or offices operate.
- C/D: The subject has received a failing grade and needs to make immediate changes (but not entire overhauls) to its office or plant’s operating standards.
- E: The subject has received a failing grade and needs to make immediate, substantial changes to how it treats staff and business operations.
When to Request an Audit
Overall, it’s wise to request a BSCI audit of your supply chain if:
- You have an initiative to improve your CSR
- You believe having ethical suppliers will make your supply chain more sustainable
- You need to meet requirements for your industry or market
However, you may not always be the party to call in an audit. Outside sources, buyers, or suppliers can request a BSCI audit of their supply chain at any point.
What to Expect During a BSCI Audit
As mentioned, BSCI audits balance the social legislation (which your business must abide by) with recommendations for overall supply chain improvement.
As such, you can expect on-site BSCI auditors to look for the following as they audit your supply chain:
- The background of your partners
- Management practices on display in the applicable plant
- Management practices on display in the applicable offices
- Health and social facilities
- Occupational Safety and Health Administration (OSHA) compliance
- Working hours
- Compensation
- Child labor and young workers rights
- Disciplinary measures
- Freedom of association and collective bargaining
- Discrimination or harassment in the workplace
- Working conditions in general
As you can see, auditors want to guarantee that everyone working in your supply chain is treated fairly and is well-compensated for the time they spend on-site.
Beyond that, auditors want to ensure that employees are as safe as possible while on-site.
What Does a BSCI Audit Cost?
If you want your BSCI audit to be considered valid, you need to reach out to an appropriately-accredited organization. Private ventures can offer feedback that you can use to prepare for an audit, but the final audit must be performed by accredited professionals.
The current price of an audit from an accredited service provider is around $500 and $650 per factory (as of 2020). The audit size and depth are two main variables that will influence price.
How Long is a BSCI Audit Valid For?
The amount of time between BSCI audits will vary. This is based on the grades received by different members of your supply chain.
- Members of your supply chain who receive an A or B grade can wait up to two years before undergoing another BSCI audit.
- Members of your supply chain who receive a C, D, or E grade will need another audit within a year of the first’s completion.