Labour-sponsored funds have introduced this principle to the venture capital market. This occurs largely by integration of social auditing with financial auditing in the due diligence process. In other words, while an investment project is being evaluated by fund officers according to its real and potential financial and economic performance, there is a concurrent assessment of its social performance. Data and outlooks relevant to fund criteria are gathered from owners, managers and workers, and submitted to boards of directors, along with financial reports, for final decision-making.

Like ethical and environmental funds, the social accounting procedures of some labour- sponsored funds act as a screen whereby undesirable investments may be consciously excluded. At the same time, audits can help detect certain qualities indicating a social performance record or capability that fund directors wish to see in all investee companies.

Sometimes, concerns raised through social auditing will inform negotiations between fund officers and firm owners/managers prior to completion of an investment agreement. Occasionally, the agreement itself will include terms and conditions of a social nature. At the very least, information gleaned through social auditing will be valuable to the representatives of shareholding labour-sponsored funds sitting on the boards of directors of investee firms.

The socially responsible investment programs of those funds which presently have them — the Fonds de solidarité, Working Opportunity, the Crocus Fund, the First Ontario Fund, and the Workers Investment Fund — differ only slightly with regard to generic criteria. CLMPC research has compiled the following list of areas under which standards most commonly exist (see also Figure 13):

1. participative decision-making structures: such as co-operative programs, employee participation in corporate governance and management, and internal systems that encourage open communications and sharing of information;
2. progressive policies in human resource management: including fair salaries, wages and benefits, job security, equal opportunity programs for women, visible minorities, the physically challenged, etc., and access to training;
3. local community involvement: such as contributing to economic and job opportunities, local business procurement, support for voluntary and charitable events, and promotion of cultural and recreational development;
4. environmental policies: including sustainable approaches to emissions and waste disposal, handling of toxic substances, packaging, energy use, compliance with government regulations, and health and safety standards;
5. concern for product quality: such as systems for ensuring product safety and excellence, appropriate labeling, fairness in advertising (e.g., no negative discrimination), and general responsiveness to customer complaints.