A regular sustainability audit is essential as your company works toward its environmental goals. Analyzing all areas of your ecommerce business’s operations has a few benefits. It paints a picture for all stakeholders to see exactly where your company stands regarding environmental impact, highlights any risks or weaknesses, and illustrates opportunities for improvement.
Sustainability audits are not intuitive or easy. To be successful, they must cover a vast range of factors, from the impact of your supply chains to employee wellbeing.
Here’s our guide to sustainability audits, sustainability checklists, and why they are essential.
What Are Sustainability Audits?
A sustainability audit—also referred to as an ESG audit, Corporate Social Responsibility (CSR) audit, or triple bottom line assessment—evaluates the performance of an organization in terms of its sustainable business practices. It’s an essential exercise for any sustainable ecommerce company serious about hitting certain targets. A sustainability audit thoroughly analyzes internal and external factors, including a company’s carbon footprint, water usage, energy expenditure, social responsibility practices, waste generation, and more. Businesses can gather data for their audits using sustainability management software, like EcoCart.
Once the sustainability audit is complete, the organization can use that information to ascertain whether they are on track to completing their sustainability goals and make necessary adjustments to improve their overall sustainability. The results from the audit can, in turn, be made into a sustainability report, which is an external-facing document. Sustainability reporting assures stakeholders that sustainability goals are being achieved and any risks are being handled.
Read more: Sustainability vs CSR vs ESG
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Who Needs A Sustainability Audit?
Any company serious about its sustainable practices needs to complete regular sustainability audits. Sustainability auditing will certify that the company’s sustainability practices are effective, identify weaknesses, and prove to appropriate entities that the company is, in fact, as eco-friendly as it claims to be. Businesses seeking green business certifications complete a sustainability audit to inform the sustainability report that is required for the application process. Certifications that might require such an audit include B Corp Certification, LEED, Global Reporting Initiative, Green Business Bureau, and more.
What’s In A Sustainability Audit?
Sustainability audits consist of thoroughly analyzing your company’s internal and external sustainability, including environmental and social factors. Here are some areas that will be analyzed during a sustainability audit:
- Carbon footprint: This will include the carbon footprint of your supply chains, facilities, emissions associated with shipping, and more.
- Sustainability KPIs and goals: A sustainability audit covers the current state of your company’s sustainability and its goals and progress toward those goals.
- Diversity: The environment is only one of three areas of focus when it comes to sustainability. Social responsibility will also be analyzed, including the diversity of your company.
- Waste generation: This analyzes how much waste is produced within your company and along its supply chains.
- Spending: This examines where your company allocates its funds and whether it supports external sustainability projects.
Types Of Sustainability Audits
There are three different types of sustainability audits that your company can pursue. Your company’s type of sustainability audit will depend on its business sustainability goals, stakeholders’ expectations, and how the audit and subsequent sustainability report will be used.
The three different types of sustainability audits are:
- Environmental Compliance Audit: This analyzes the company’s legal compliance with environmental standards. These follow a compliance checklist and ensure that a project or operation acts in accordance with specific laws, licenses, or similar. This type of sustainability auditing will help investors see minimal risk in supporting your company and ensure that your company will not be financially penalized for failing to follow environmental legislation.
- Environmental Management System (EMS) Audit: This analyzes the company’s sustainability performance based on its own targets and sustainability strategies. It looks at aspects such as the sustainability strategy itself, whether targets have been completed in a verified manner, whether new targets and objectives can be achieved, and more.
- Functional Environmental Audit: This analyzes a specific function within a company’s organization related to its sustainability. For example, it might report on a company’s waste management system or its plan to reduce its carbon emissions. Functionally, it combines the above two audits, as it’s often meant to ensure compliance while analyzing the performance of a specific area within a company’s sustainability plan.
How To Conduct A Sustainability Audit
Sustainability audits can be conducted in one of three ways. An external sustainability audit is when a company hires a third-party entity to conduct the audit and analyze its sustainability strategy. This is the best way to ensure an expert and unbiased audit, and it’s often the required approach if the purpose of the audit is to gain green certifications. An internal audit is when employees of the business conduct the audit themselves. A self-evaluation is when employees self-evaluate their sustainability practices. This is done without using any internal resources.
Outsourcing your business sustainability audit to a trusted and verified third party is the recommended route, especially if you’re seeking green certification and are serious about your sustainability goals. Still, there are times when an internal audit is suitable. Internal audits can be made periodically to ensure you are on track with your sustainability strategy between third-party audits.
Here are the steps you must take to complete a sustainability audit.
- Create your audit team and plan the audit. This will include gathering the appropriate documentation, coming up with your sustainability audit checklist, planning any meetings or interviews that need to take place, and setting up everything that you’ll need.
- Conduct the audit. Once your audit is planned, it’s time to implement it. Follow your checklist closely, have meetings as needed to ensure everyone is on track, conduct site visits, compile appropriate data, and gather all the information outlined in the audit plan.
- Write your sustainability report. This should include areas of concern, targets that have been reached, targets that are behind schedule, the current state of your sustainability, etc.
Sustainability audits aren’t simple. Even if you decide to conduct your audit internally, you may consider hiring a sustainability consultant to lead the project. There are a ton of details that need to be analyzed for a thorough audit, and a sustainability auditing expert will ensure that you have all of your bases covered.
Sustainability Audit Checklist
When conducting an audit, a sustainability audit checklist is helpful to keep track of which areas to work on and which actionable items your business can take. This will guide the entire process and help ensure you’ve covered everything. While you can create your own sustainability audit checklist, it should be guided by established sustainability frameworks so that you can feel confident that you’ve covered everything.
A sustainability audit usually focuses on three key areas:
- Investment practices: whether it’s investing in environmental responsibility, if its investors are unsustainable, or if any company or investment firm boycotts them for unsustainable practices
- Operations: waste generation, energy consumption, water usage, and more related to the environmental impact of business operations
- Customer relations: whether it’s taking the proper steps to educate customers about sustainability
Companies serious about gleaning important information from their audits should use a sustainability checklist that’s as detailed as possible. It’s not uncommon to see hundreds of items on a sustainability audit checklist.
Let’s review some items that may appear on a sustainability audit checklist.
- Have you analyzed your current investments for their environmental impact?
- Are you investing in green projects, such as renewable energy or sustainable agriculture?
- Do you have a policy to screen new investments for their environmental policies and practices?
- Have you divested from industries that are harmful to the environment, like fossil fuels or mining?
- Are you engaging with investors or funds that prioritize environmental sustainability?
- Do you publish an annual report detailing how your investments align with environmental goals?
- Are you a member of any networks or forums focused on sustainable investing?
- Do you have a comprehensive recycling program in place, and are employees educated on proper recycling practices?
- Have you switched to or considered using renewable energy sources, such as solar panels?
- Have you upgraded to energy-efficient equipment, like LED lighting and Energy Star appliances?
- Do you conduct regular energy audits to assess and improve your energy usage?
- Have you implemented measures to reduce water usage, such as installing low-flow fixtures?
- Is your supply chain optimized for sustainability, including choosing suppliers with sustainable practices? Learn how to evaluate your supply chain with a life cycle analysis.
- Have you implemented a paperless office policy to reduce paper use?
- Are you using eco-friendly packaging materials for your products?
- Do you provide customers with information about the sustainability of your products?
- Do you offer incentives for customers who make eco-friendly purchases? Learn more about how to launch a green loyalty program.
- Have you considered hosting workshops or webinars to educate customers about sustainability?
- Do you have a system for gathering customer feedback on your sustainability practices?
- Are you actively promoting eco-friendly products in your marketing campaigns?
- Do you collaborate with environmental charities or contribute to environmental causes?
- Do you regularly publish content related to sustainability, such as a blog or newsletter?
- Do you offer a product take-back program for recycling or refurbishing used products?
Gathering the information needed for a sustainability audit isn’t easy. Investing in tools like EcoCart’s sustainability insights dashboard can organize data surrounding your company’s environmental footprint, making it easy to gather the data needed for an audit.
Want to know where your business stands? Get your sustainability scorecard with our quiz:
How To Implement A Sustainability Program
Your sustainability audit will inform your sustainability program. Whether you already have one or are just beginning to build one, the information from the sustainability audit will highlight areas that need work and the places where you’re already doing well.
Here are some example strategies to help you rectify key areas of improvement highlighted in your sustainability audit:
- Invest in eco-friendly packaging to eliminate plastic waste internally and along your supply chains.
- Encourage sustainable shipping practices by offering carbon-neutral shipping at checkout and investing in fully electric or hybrid vehicles.
- Switch to 100% renewable energy sources.
- Partner with an eco-friendly web host.
- Encourage waste reduction by making recycling receptacles readily available at all your facilities.
- Use third-party warehouses to place your products and reduce shipping distances strategically.
- Donate a portion of sales to a sustainability charity.
- Reduce energy usage by switching to energy-efficient lightbulbs, putting a timer on your lights, and encouraging your employees to turn off electric items when not in use.
Modern business requires regular sustainability auditing to build trust with stakeholders, remain compliant, and reach sustainability goals. Any ecommerce company that’s serious about sustainability and that’s seeking business sustainability certifications must commit to regular sustainability audits that prove progress toward their sustainability goals and highlight areas where their sustainability strategy can be improved.
Becoming sustainable isn’t an easy task. You’ll need all the help you can get. EcoCart can help make your journey toward carbon neutrality a little bit easier. Interested in learning more? Reach out to our team for a demo today.