2-18. EHS Checklists for Supplier Audits and How to Provide Improvement Guidance

Supplier EHS (Environment, Health, and Safety) audits are essential for enhancing the sustainability of the entire supply chain. Companies are responsible not only for their own compliance but also for verifying their suppliers' EHS management standards and providing guidance for improvement when necessary. Especially from the perspective of CSR (Corporate Social Responsibility) procurement and ESG (Environmental, Social, and Governance) investment, supplier audits are gaining international importance. Here, we will explain the key items on an EHS checklist used in supplier audits and methods for providing effective guidance for improvement.

1. Purpose and Importance of Supplier Audits

Supplier audits are conducted to verify that business partners are complying with laws, maintaining appropriate working conditions and safety and health management, and working to reduce their environmental impact. An industrial accident or environmental incident at a supplier can lead to a loss of credibility for your own company's brand, making prevention through audits crucial. Audits also confirm conformity to international standards like ISO 14001 and ISO 45001, as well as the RBA (Responsible Business Alliance) Code of Conduct.

2. Key EHS Audit Checklist Items

Here are the typical items that should be checked during an audit:

• Environmental Management: Waste sorting and disposal methods, wastewater and exhaust gas measurements and records, and chemical substance management (e.g., maintaining Safety Data Sheets [SDS] and complying with Pollutant Release and Transfer Register [PRTR] regulations).

• Safety and Health Management: Establishment of an occupational safety and health committee, implementation of risk assessments, and the existence of work procedures and emergency response manuals.

• Working Environment: Management of working hours, prohibition of child and forced labor, and appropriate employment contracts.

• Equipment Safety: Protective covers and emergency stop devices on machinery, and records of periodic inspections.

• Education and Training: The status of safety and chemical handling training for employees.

It is effective to provide these items in a checklist format beforehand so suppliers can conduct a self-assessment.

3. Audit Implementation Process

• Preparation: Formulate an audit plan and inform the supplier of the audit criteria and scope.

• On-site Verification: Combine document review with on-site inspection to confirm there are no discrepancies between records and actual conditions.

• Employee Interviews: Assess the level of awareness of safety and health training and working conditions among employees.

• Reporting Results: Clearly identify non-conformities and specify a deadline for improvement.

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4. How to Guide Improvements

When non-conformities are found, it is important to not just point them out but also to provide guidance for improvement.

• Issue Corrective Action Requests: Clearly state the non-conformity, the deadline for improvement, and the person responsible.

• Prioritize Improvements: Encourage the supplier to address the most significant risks first.

• Share Best Practices: Provide examples from other companies or your own successful cases to demonstrate feasible improvement measures.

• Follow-up Audits: Re-verify the improvement status after the deadline. If issues remain unresolved, consider revising the business terms.

5. Building a Continuous Partnership

An audit should be a "partnership" where you work with the supplier to make improvements, not just a one-sided evaluation. By offering training and support for improvement activities, you can raise the EHS level of the entire supply chain.

By systematically using an EHS checklist and providing improvement guidance during supplier audits, companies can mitigate risk and build a reliable supply chain that promotes sustainable procurement.