The illusion of assurance: How certification and auditing mask corporate abuse

As global supply chains face increasing scrutiny for human rights abuses and environmental harm, companies have leaned heavily on third-party audits and certifications to assess impacts and present themselves as compliant with social, environmental and climate standards. Industry actors seeking to avoid regulatory oversight have pushed for self-regulation and touted voluntary standards and certifications as the solution. However, such audits and certificates often fail to live up to their claims of assuring responsible and sustainable supply chains. Instead, they provide both a shield and a smokescreen that allow companies to give the illusion that they are acting responsibly while continuing business as usual. 

Problems with audits and certifications

Certifications and audits are plagued with problems, ranging from conflicts of interest and methodological flaws to weak standards and lack of transparency. 

Auditing firms, mostly for-profit entities, are usually paid by the companies they assess. This incentivises auditors to overlook problems and produce favourable reports to secure repeat business. A case in point is the collapse(opens in new window) of a dam in Brazil in 2019, which killed over 270 people. When two certifiers refused to certify the dam due to safety concerns, the dam owner dismissed the firms and instead hired another firm, which certified the dam using lower safety criteria.

Pre-announced audits, superficial checklists, time constraints, and lack of meaningful stakeholder engagement lead to biased and substandard audits. As a result, certifications issued based on audits are frequently inaccurate or incomplete. A 2024 report by SOMO and NGO Conectas found indicators of forced labour on several Brazilian coffee plantations, despite being certified by schemes used by major coffee multinationals to avoid forced labour. This raises serious questions as to the effectiveness of these schemes’ monitoring efforts.

Despite overwhelming evidence over the decades of the inadequacy of audits across industries such as garment(opens in new window) and mining(opens in new window) , auditors seldom face legal consequences for inaccurate reports. This is largely due to the lack of independent regulation or accountability mechanisms. Audit reports are also typically confidential, preventing third parties from verifying whether companies are rightfully certified.

Whether intentional or not, auditors and certifiers often end up serving as rubber stamps for companies to justify exploitative practices, perpetuating a global economic model that is unjust and inequitable. This can also be seen in the carbon offset industry, which establishes projects primarily in the Global South to generate carbon credits for supposedly “cancelling out” pollution elsewhere. Reports from media, academia, and civil society have uncovered that even the most renowned projects have led to negative impacts, including land grabbing and human rights abuses. Yet these projects are certified as meeting climate and often also social standards. Parallels can be seen in the biodiversity offset industry(opens in new window) , where inadequate biodiversity assessments by environmental auditors give destructive projects a veneer of legitimacy.

Over-reliance on audits and certifications without acknowledging their drawbacks has resulted in human rights and environmental impacts remaining unaddressed while misleading consumers regarding the conditions in which products are manufactured.

Regulatory overreliance

Despite these limitations, audits and certifications have been integrated into EU regulations.

• The Corporate Sustainability Due Diligence Directive (CSDDD), which is now being amended under the Omnibus proposal, allows companies to refer to independent third-party verification to support the implementation of due diligence obligations.
• The EU Batteries Regulation provides for third-party verification of due diligence policies. 
• The EU Critical Raw Materials Act stipulates that a raw materials project can use certification by a corporate-led scheme to prove compliance with social and environmental sustainability requirements. 
• The EU Carbon Removals and Carbon Farming Certification Regulation allows for carbon credits to be certified by third-party auditors.

These problematic provisions heighten the risk that authorities will rely heavily on flawed audits and certifications as evidence of compliance with due diligence obligations.

Beyond audits and certification

While social audits and certifications can sometimes play a role in identifying risks and adverse impacts, they are no substitute for due diligence. Governments must not allow audits and certifications to be used as a proxy for compliance with human rights and environmental standards. Instead, governments should equip public authorities with sufficient resources to verify compliance independently. Rather than rely solely on audits and certifications, companies should engage with stakeholders meaningfully, respect the fundamental rights to collective bargaining and freedom of association, support worker organisations, and employ worker- and community-driven monitoring tools. Where companies do cause harmful human rights and environmental impacts, they must be held directly accountable regardless of any audits or certifications they might have used.