Social and Environmental Auditing Should Be Compulsory for All Businesses
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Social and environmental auditing should be compulsory for all businesses.
Currently, it is revealed that auditing in social and environmental spheres or corporate social responsibility needs to be obligatory for every company. The social auditing refers to one of many approaches of the estimation and analysis of responsibility towards the society and the company impact on people in general and the ethnicity while the environmental auditing means the measuring the influence of the business on the environmental (Visser, 2007). The majority of changes have happened in technologies, science, lifestyles and education because of impacts of business industry progression worldwide, which have disharmonized the stability in the society and in the natural environment. Every company and corporation needs to have opportunities in using raw materials, however the natural resources are already under pressure. For example, it is counted that present intensive use of nature will lead to the deficiency of fresh water by 2025 (Fitzgerald & Cormack 2006). In spite of the fact, it is presumed that the corporate social responsibility is not important, some people believe that it is crucial. The issue is whether the social and environmental auditing should be obligatory for all businesses or not. This essay will argue that it should be compulsory, because it can increase the value of stock, improve the reputation of companies and attract the customers.
It is considered that businesses which are eminently rated in environmental and social auditing meaningfully outperform businesses who have lower level of social responsibility. These audits are used to gauge and convey the influence of corporations management systems, performance or marketing policy on the society and environment. To begin with, management control, which auditing is monitoring, will facilitate the success of the companys purposes. This control would consist of cooperating with stakeholders, possible risk, which the company can be faced with, social and environmental responsibility and productivity of the whole business (Gray, 2000). To sum up, this monitoring could positively improve the profitability and expand the market share. According to a research study of costs of businesses stock, certificates rose globally between 1995 and 2003, and it was discovered that the measures of responsibility towards the environment and society in the company are capable of impacting the stocks values of a company (Smith, 2007). In addition to this, firms with the heavy prices of stocks, which were highly rated in the social responsibility are more attractive for investors in ploughing their money into the company finances (Smith, 2007). As a result, social and environmental auditing is able to improve the companys economic conditions, its position in general and maintain the stability through the investments.
Other people believe that social and environmental auditing are necessary for companies not only due to the interaction of investors, but also because they can predict weakness and turn them into strengths in majority of business areas and attract the customers. The materials and derivations which can be generated from types of audit are capable to implement an informative knowledge and evidence about the “ethnical performance”, effects on environment and the supplies provided by the government. This knowledge might be important for both company and its customers, because today the efficiency of a firm can be investigated through citizens charters which were created to explore whether the services standards were breached, humans rights violated and legitimacy maintaining (Worthington, 2015). For instance, a big scandal has run high around the company Converse, the offspring of the world sport corporation Nike, where its workers were made to sit in the hot sun, as a punishment, when they were not capable of meeting the target of 720 pairs of sneakers (Braddock 2011). This situation practically depicts a breach of the responsibility towards ethnics and society in which the social auditing monitored. As a result, it could disenchant the Nikes customers from purchase and sales transactions and take the profit away, because majority of people will be against cooperating with businesses which have negative effects on employees. Another example is a Volkswagen corporation, which showed a great failure in terms of environment auditing. Their environmentally friendly cars turned out to be poisoning for nature, because they rejected all basic rules in engineering. As a result, the company suffered the resignation of the Chief Executive Officer and the engine chief (Dans, 2015). To sum up, the social and environmental auditing are responsible for provision and providing actual and honest positions of a company in relation to the society and environment to avoid problems, such as poisoning the environment the suffering of workers.
Despite the advantages that auditing can bring for the society or business, there are people, who assume that social and environmental audit activities should not be necessary for companies, because they can deter the customers rather than interacting with them. In other words, the companies can have negative responses from consumers, who can identify that their potential purpose is only to create a positive image to market more products instead of meeting the clients demands. For instance, John Morris Tobacco corporation, maintains an active corporate social responsibility position, by advertising and promoting the National Cancer Association (Yeosun, 2003). However, this position also establishes negative