The failures of social auditing are widely documented. Yet over the past few decades, this form of private labor and human rights enforcement has become increasingly commonplace across industries from farms to factories to construction sites.  A growing body of evidence shows that social audits are inadequate to detect even the most extreme and systemic abuses of human and labor rights. Yet despite these audit failures, companies still universally rely on social audits to fulfill their human rights obligations. 

The report, Checking Boxes, Cheating Workers: How Social Audit Firms are Complicit in Labor Rights Abuses, examines the role of social auditing firms in supply chain regulation through three case studies. These case studies build on existing research to show how social audit firms are not just failing to discover abuses but actively undermining workers’ rights and co-signing corporations’ attempts to skirt responsibility. 

Social Auditing Part of the Trend of Privatization

Today, in 2025, the social auditing industry’s failures are at risk of being still further codified into labor and human rights enforcement. Decades of under-funding for labor rights enforcement in the US mean that in 2023 there were just 810 investigators to cover the 165 million workers in U.S. That was before the Trump administration took the ax to labor enforcement bodies in 2025, cutting staff and defunding already lean operations. Fewer than 1% of farm employers were investigated per year before these cuts and these cuts open the door for still more privatization of enforcement functions.

Elsewhere, there has been a rise in mandatory human rights due diligence regulation, including the European Union’s Corporate Sustainability Due Diligence Directive (CSDDD). Despite evidence that the social auditing model is not suited to the task, there is grave danger that it may become enshrined in emerging mandatory regulations.

Taken together, these trends paint a concerning picture in which human rights protections in workplaces and supply chains are further weakened and enforcement further privatized. The result: more corporate impunity and less money and power for working people.

Private Equity, Investors Poised to Cash In

Social auditing is big business too. By its own estimate, the social auditing industry is valued at over $300M and growing rapidly. Investors are taking note. Since the auditing firm ELEVATE was first involved in the Hong Seng Knitting case study included in this report, the firm has changed hands multiple times as private equity-backed LRQA has begun a string of acquisitions across the industry. Concerns have been raised regarding the impact of these sort of private equity-backed rollup acquisitions of auditing firms in the financial services industry, which is historically better regulated than the social compliance field. 

Taken together, these trends mean that it is more essential than ever to take a hard look at the social auditing industry and ensure that working peoples’ protections aren’t turned into just another line of profit.

Social Auditing Firms Fail to Protect Workers 

The case studies in this report all originate in the wage and severance theft crisis that ballooned in the global garment industry during the early period of the COVID-19 pandemic in 2020. Each case study includes a summary of some key cases of the audit company’s track record across years and industries, revealing themes that span multiple industries and geographies.

Despite these well-recognized risk factors, social audit firms ELEVATE (now LRQA), Impactt Limited, Intertek, and multi-stakeholder initiative Fair Labor Association (FLA) all performed audits or investigations of these factories using methodologies that neglected to address these risks–or in some cases exacerbated them. 

Each of these firms market themselves as experts at identifying and addressing human rights risks in corporate supply chains. Yet the case studies examined here demonstrate inadequate due diligence and poor risk assessment, at the very least. In the worst-case scenario, the audit firms appear to act negligently and even to be complicit in covering up abusive practices. 

Deny, Defend, Distract: Social Auditing Firms Delay Remedy for Workers

In particular, the Hong Seng and V.K. Garment cases show auditors who are ill-equipped to address factory management’s coercive practices and the consequences of retaliation threats and widespread intimidation. Instead, auditors or inspectors from ELEVATE, Intertek, and the FLA all propose convoluted explanations to selectively discredit worker testimony.

In both the Hong Seng and Hulu cases, ELEVATE, Impactt, and the FLA all take the position that low-wage workers living paycheck to paycheck would in fact freely renounce their pay, despite evidence–and common sense–to the contrary. 

The V.K.Garment case is currently being litigated in the UK. This case includes several particularly egregious and unprecedented elements:

• Intertek writing up an audit in three different ways, essentially using the “double-booking” tactics by which a supplier might conceal fraud from auditors to shape the narrative to their client’s advantage.
• Intertek violating workers’ confidentiality and appearing to actively attempt to discredit a worker’s testimony and undermine a judicial process in favor of its client.
• Because this case has gone through both Thai and (currently) UK courts, there is a significant amount of audit documentation available. This unusual transparency means that there is a stark contrast between what is documented by auditors and what appears in workers’ unconstrained testimony to investigative journalists. 

In each of the cases examined in this report, an independent investigation had already been completed by the time that any of the audit firms in question were commissioned. This report draws heavily on publicly available investigation reports by the Worker Rights Consortium as their investigations engage local worker organizations, conduct off-site interviews with workers, publish their findings online, and, critically, are not commissioned or paid for by either suppliers or brands. 

Social Auditing Firms Fail to Respect Human Rights, Provide Access to Remedy

The UN Guiding Principles on Business and Human Rights establish that businesses have a responsibility to respect human rights and to provide access to remedy when their business practices have caused harm, whether directly or indirectly. Yet despite explicit commitments to these principles, each of the audit firms named in this report currently appears to have done more to delay workers’ access to remedy than to facilitate it.

Each of the cases examined in this report reveals how the social auditing industry continues to use discredited methodology, ignores or fails to adequately assess risk, and undermines workers’ testimony. Taken together, the profusion of audits and audit reports points to another finding: These audits assist companies in risk management not through appropriate due diligence but rather through reputation management. 

Download the full report