Ethical & ESG Audit for an Outdoor Apparel Manufacturer in Kathmandu
Overview
An international outdoor apparel and gear brand was evaluating a long-term manufacturing partnership with a factory based in the Kathmandu Valley. Before deepening the relationship, the buyer wanted independent, verifiable assurance that the factory’s labor practices, health and safety systems, environmental management, and business ethics met international standards.
To provide this assurance, Sourcing Nepal coordinated a full-scope Ethical & ESG Assessment, carried out by an accredited third-party audit firm, benchmarked against SA8000, the Responsible Business Alliance (RBA) Code of Conduct, and SMETA.
Our objective was to give the buyer a clear, evidence-based picture of the factory’s compliance standing, so they could move forward with confidence — and give the factory a concrete roadmap for improvement.
The Challenge
Buyers sourcing from overseas factories face real exposure if labor and compliance risks go undetected, including:
- Reputational damage from labor or safety violations discovered after the fact
- Regulatory and import risk tied to forced labor and supply chain due diligence laws
- Uncertainty around whether policies on paper are actually followed on the factory floor
- Limited visibility into wage practices, working hours, and worker treatment
- Difficulty verifying environmental and business ethics compliance without an independent audit
Without a rigorous, independent assessment, the buyer had no reliable way to confirm the factory’s actual practices matched its claims.
How Sourcing Nepal Helped
Sourcing Nepal arranged and managed a comprehensive ESG audit at the factory, covering nine core compliance areas:
- Management Responsibility
- Child Labour
- Working Hours
- Wages and Benefits
- Health and Safety
- Non-Discrimination
- Coercion and Harassment
- Environment
- Business Ethics (Conflict of Interest & Materials)
The audit team reviewed factory documentation, conducted an on-site walkthrough, and interviewed a representative sample of workers across departments — with additional scrutiny applied to checkpoints classified as critical risk.
The Outcome
The audit confirmed a number of meaningful strengths:
✓ Zero tolerance for child labor, with documented age-verification controls and no underage workers identified
✓ Strong protections against discrimination, harassment, and coercion, backed by written policies, an active worker grievance committee, and a confidential complaint mechanism
✓ Sound environmental management, including licensed waste disposal and compliant wastewater handling
✓ Robust health and safety infrastructure, from marked emergency exits to trained first-aid personnel
✓ Timely, transparent wage payments and a defined employee benefits package
✓ An established business ethics framework, with confirmed absence of conflict minerals or high-risk regional sourcing anywhere in the supply chain
The audit also surfaced clear opportunities for improvement, most notably around working hours management — isolated cases of employees exceeding legal daily and monthly limits, and inconsistent enforcement of weekly rest days. Additional recommendations covered strengthening internal KPIs for policy effectiveness, reconciling social security contributions, and formalizing supplier code-of-conduct requirements.
Overall, the factory received a Medium Risk rating, reflecting strong fundamentals with defined, actionable areas for continued improvement.
Why Global Buyers Work with Sourcing Nepal
Responsible sourcing from Nepal requires more than finding a factory — it requires transparency, accountability, and independently verified compliance at every stage.
Sourcing Nepal helps international buyers reduce sourcing risk through:
- Ethical and ESG factory audits
- Supplier verification
- Quality control and product inspections
- Production monitoring
- Export coordination
Whether sourcing apparel, handicrafts, herbs and spices, wellness products, or private-label goods, our team acts as your trusted partner on the ground in Nepal — helping you source with confidence, backed by independent evidence.
Client details in this case study have been anonymized to protect confidentiality. Full audit findings are available to prospective buyers under NDA upon request.
Sourcing Nepal (Himalayan Trade Ventures Pvt. Ltd.) is an ISO 9001:2015 certified sourcing and quality assurance company based in Lalitpur, Nepal. We specialize in product sourcing, private labelling, factory audits, quality inspection, and export logistics for international buyers.
Email: sourcing@sourcingnepal.com Website: www.sourcingnepal.com
