In the mid 1970s in both the UK and Europe, the term Social Audit emerged to describe evaluations that focused on the likely impact on jobs, the community and the environment if a particular enterprise or industry were to close or relocate.  These evaluations used the term Social Audit to clearly make the point that they were concerned with the ‘social’ and not the ‘economic’ consequence of a particular action.  Trade Unions, Local Government Authorities, industry and private companies carried them out. 

These evaluations had no shared structure or method, no agreed criteria and little in common other than the term Social Audit and were used, in political ways, to counter commercial threats.  Over the past two decades evaluations on the impact of particular actions have become ever more sophisticated and at the same time have dropped the term Social Audit.

Social Audit as used by organisations to help them achieve improved performance is quite different in method and practice from the early evaluations.

The first recorded example of a methodology for a full organisational Social Audit was developed in 1978 at Beechwood College (an independent worker co-operative training centre in England).  The first presentations of the Social Audit were given in training courses and conferences run between 1978 and 1984 at Beechwood.  In 1981 a manual called Social Audit – A Management Tool for Co-operative Working by Freer Spreckley, was published.  This was the first time the present method of Social Audit was fully described; it contained an organisational method for democratic organisations to use in setting social objectives and measuring their performance.  It contained the four main elements Social Purpose, External View, Internal View and Social Accounting.   As part of this work Beechwood College also developed a set of Social Audit legal clauses for an organisation’s constitution, which were later used, in 1985, as the basis for the Industrial Common Ownership Movement’s (ICOM) model constitutions.

The Social Audit model has since, the first edition, been updated, enlarged and re-published twice, the third edition published in April 2000 and titled Social Audit Toolkit.

One of the first recorded social reports was in Switzerland where the Migros Co-operative (a large multi-functional organisation) first published a social report in 1978, which focused on one of its departments.  The Migros Co-operative reports biannually on one part of its organisation and uses quite detailed information running into reports of 100 pages.

Early on in the history of Social Audit a number of community arts organisations started to undertake audits of their community that included physical and social assets, natural resources and stakeholder needs.  Most notable of these was the Dunston Social Audit in 1982, which was published and widely distributed.  Many of these organisations did not continue using the method and saw the Social Audit as a one-off evaluation.

It was when in 1984 the Co-operative Retail Society started to look at the idea of Social Audit that larger organisations became interested in voluntarily undertaking a Social Audit.  The CRS and the Co-op Bank still carry out social reporting.

During the late 1980s there was an explosion of interest in the ideas of Social Audit.  This was mainly in a number of business schools looking at social responsibility in industry.  SANE was a newsletter published by the Policy Research Unit, Leeds Polytechnic and ran for three issues.  In 1993 Social & Environmental Accounting newsletter was published by The Centre for Social and Environmental Accounting Research based at the University of Dundee.

It wasn’t until the New Economic Foundation (NEF) in London, established in 1984, started to work on Social Audit in conjunction with the Strathclyde Community Business Ltd. (SCB) in the early 1990s that any alternative method to the Social Audit Toolkit was developed.  They worked with Traidcraft plc (a fair trade NGO) issuing the first set of accounts in 1993.  There followed a number of private companies that wished to measure their performance using Social Audit.  These included the Body Shop 1993, Shared Earth 1993 and Ben & Jerry’s 1995.

NEF published a number of booklets on Social Audit during the early 1990s which explored different users for Social Audit.  One of these is the Social Audit workbook published in 1997 that closely follows the original Methodology developed in the late 1970s by Freer Spreckley at Beechwood College.  In 1996 NEF established the Institute of Social and Ethical Accountability that drafted a set of standards for monitoring the application of Social Audit.  Large corporations such as Shell, BT, Barclays Bank, etc has used this set of standards to present social reports to the public.

NICDA, in Northern Ireland, (a Social Economy promotion agency) started running accredited training courses in Social Audit in 1998 and have since complete three programmes.  This programme used the Social Audit Toolkit. During the late 1990s many of the above organisations continued to develop and practice Social Audit. 

In 1997 Social Enterprise Partnership developed the first European Social Audit programme involving groups from Ireland, Spain, Finland, Sweden, Denmark and England.  This programmed used the Social Audit Toolkit model and it has now been translated in a number of European languages.  More recently Social Enterprise Partnership has run and been involved with three transnational Social Audit programmes that also included France, Belgium and Italy.  NICDA also ran a transnational Social Audit programme during 1998/9.  

The Social Audit Toolkit has been translated into Swedish, Finnish and Spanish and the NEF Social Audit Workbook has been translated into Flemish.

More recently the Social Audit Toolkit has been integrated into the model rules for a Community Enterprise that are being used by the Neighbourhood Regeneration programme organisations.    Freer Spreckley is now preparing a fourth edition of the Social Audit Toolkit that is accompanied by a software based data collection and analysis system.

Recently a move away from Social Audit to Social Accounting has taken place that involves detail preparation and accounting of targets and milestones.  In relation to this shift the original Social Audit is now being seen more as a way of social enterprises applying good governance.