We invested in ElmAI because it will make social audits more impactful.

Social audits are a persistent feature of the responsible supply chain landscape. Despite their well-documented limitations, there are thousands of social audits conducted every day in the supply chains of every large company in the world. Each audit report can run to dozens if not hundreds of pages long depending on the complexity of the audit process. Furthermore, supply chain due diligence requirements are growing (even in the face of scope reductions among EU laws), but responsible supply chain teams are not expanding. The task of managing these efforts is significant. The effort to turn them into meaningful change experienced by workers is yet a greater and more vital challenge.

ElmAI addresses this pain point head-on. The company deploys large language models (LLMs) to understand, refine, and strengthen social auditing, adding value and driving impact in several ways.

1.    The company treats social audits as a dataset, applying machine learning to extract, digitize and analyze unstructured data from audit reports. This enables users to use audits as a source of insight rather than merely a tool for compliance.

2.    ElmAI removes friction from the most important part of the audit cycle: turning findings into corrective actions. The company’s product reduces the amount of time spent per audit by an order of magnitude. In an era of increasing supply chain complexity and stronger regulatory requirements arrayed with continued tight budgets, efficiency gains enable internal teams to channel resources towards supplier improvement.

3.    Indeed, Corrective Action Plans can be generated automatically from an audit report by ElmAI’s approach. Supplier performance against that CAP can be monitored automatically as well. 

A social audit-focused investment might seem a strange fit for Working Capital Fund, due to our recognition that social audits are inherently limited, unscalable, and often flawed. Our investments are targeted to building a future where information about workplaces is worker-generated, real-time and accurate, rather than the result of the (often blurry) snapshot that is the social audit.

But social audits remain the most widespread responsible supply chain intervention, and an AI-driven approach to the data generated by the audit has an obvious path to value. ElmAI offers a path to take social audits to a place where they offer insight and deliver remedy.