🎉 Announcement: Launching AuditSense - A Supplier Due Diligence Platform Powered by the Elm AI Engine (formerly Esger)

🎉 Announcement: Launching AuditSense - A Supplier Due Diligence Platform Powered by the Elm AI Engine (formerly Esger)

How are FLA Members Raising the Bar for Sustainability Due Diligence?

February 3rd, 2025 - 4 min read

By Nishtha Verma, ESG Lead at Elm AI

The Fair Labor Association (FLA) and its members are at the forefront of responsible business conduct, pioneering innovative due diligence practices that ensure fair labor standards, environmental responsibility, and corporate accountability. As new sustainability mandates emerge, such as the EU Corporate Sustainability Due Diligence Directive (CSDDD), FLA members are setting an example of how businesses can proactively integrate sustainability into their operations.

But what exactly does sustainability due diligence look like for FLA members? From leveraging assessment tools to implementing supply chain risk assessments and responsible recruitment practices, this organization is redefining what it means to operate ethically in a complex global economy.

Standardizing Due Diligence Processes

  • Many companies struggle with fragmented due diligence processes due to varying audit standards, regional regulations, and supplier inconsistencies, but FLA members are turning their attention towards tools that can help standardize these efforts, ensuring businesses have a unified, measurable approach to sustainability.

  • By integrating multiple audit reports and compliance data, the goal is to provide a maturity assessment that helps companies understand where they stand in terms of human rights and environmental compliance, and then identifying the areas that need improvement.

  • For FLA members, the current processes will lead to better risk identification, more effective supplier engagement, and a streamlined approach to meeting global sustainability expectations.

By standardizing their due diligence approach, FLA members are not just ticking compliance boxes—they are actively building resilient, transparent supply chains that prioritize ethical business practices.

Building Ethical and Sustainable Supply Chains

Beyond leveraging assessment tools, FLA members are implementing three key strategies to promote ethical practices and mitigate risks within global supply chains:

1. Supply Chain Mapping and Risk Assessment

Understanding where potential risks lie is the first step toward mitigation. FLA members conduct detailed supply chain mapping to gain visibility into their supplier networks, assessing factors like:
- Geographic risk (regions with weak labor laws or high environmental impact)
- Supplier performance history (past violations, audit results)
- Industry-specific risks (sectors prone to forced labor or environmental degradation)

By identifying high-risk areas, companies can prioritize due diligence efforts where they matter most.

2. Aligning with the UN Guiding Principles on Business and Human Rights

The United Nations Guiding Principles on Business and Human Rights (UNGPs) provide a global standard for ethical business conduct. FLA members have integrated these principles into their corporate frameworks, ensuring that:
- Suppliers are held accountable for labor rights, wages, and working conditions
- Environmental standards are met through responsible resource management
- Corporate policies align with globally recognized human rights benchmarks

By following UNGPs, companies ensure that their sustainability efforts are not just voluntary but deeply embedded in their business DNA.

3. Responsible Recruitment to Eliminate Forced Labor

Migrant workers often face exploitation due to unethical hiring practices. FLA members, in collaboration with the American Apparel & Footwear Association (AAFA), have committed to responsible recruitment principles that guarantee:
- No worker should pay recruitment fees to obtain a job
- Workers retain full control over travel documents and personal identification
- Employment terms are communicated clearly and transparently before hiring

This commitment significantly reduces the risk of forced labor and strengthens worker protections across supply chains.

Elm AI’s Regrading and Audit Equivalency Capability 

Elm AI’s AuditSense platform can be customized to each company’s internal supplier guidelines and frameworks to conduct a comparison and equivalency check for organizations that use multiple audit frameworks (including all major ones such as SMETA, WRAP, BSCI, etc). AuditSense will provide an output in the form of a score / severity comparison across the different report frameworks. 

A sample AuditSense AI generated equivalency report 

AI-generated explanations for the findings

A comparison of these findings can also give brands insights on where the gaps lie between assessment frameworks. 

The Future of Sustainability Due Diligence: A Data-Driven Approach

While FLA members have made remarkable progress in sustainability due diligence, technology can push these efforts even further. AI-powered solutions can revolutionize how organizations track compliance, manage supplier risk, and streamline corrective action plans.

- Insights: AI-driven analytics can extract data from audits, sustainability reports, and third-party assessments to uncover hidden risk trends and compliance gaps.
- Corrective Action Plans (CAPs): Automated action plans ensure that non-conformities are addressed with clear timelines and accountability measures.
- Due Action Tracking: A centralized platform to monitor issue resolutions, deadlines, and supplier improvements, ensuring that sustainability goals aren’t just set—they’re achieved.

As sustainability regulations tighten and supply chain expectations grow, data-driven compliance tools will be the key differentiator for businesses committed to ethical sourcing.

Is your organization ready to take sustainability due diligence to the next level? Let’s connect and explore how technology can empower your compliance programs. 

Schedule a call with the Elm AI team to learn more about how AI can be used to empower your organizations social compliance programs.  

The Operating System for Responsible, Sustainable Supply Chains

The Operating System for Responsible, Sustainable Supply Chains

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