SHARE issues new guidance on racial equity audit standards in Canada 

Today, SHARE published Racial Equity Audit Standards: Supplementary Guidance for Canadian Companies. This supplementary guidance builds on the U.S. Civil Rights Audit Standards hosted by PolicyLink, and offers practical considerations to align racial equity audits with Canada’s distinct historical, social, and legal context. 

This guidance marks a move from aspiration to accountability, anchoring racial equity audits in measurable outcomes, meaningful engagement and transparency. Boards, management teams, auditors and investors each have a critical role to play in ensuring that racial equity audits are not just a procedural checkbox, but rooted in genuine accountability, a comprehensive evaluation of structural barriers and a sustained commitment to systemic change. 

“Racial equity audits are a valuable tool for Canadian companies to identify and mitigate the risks associated with racial bias and discrimination,” said Shannon Rohan, Chief Strategy Officer, SHARE, “But how can companies ensure the audits they are conducting are credible and meaningful in the Canadian context? The supplementary guidance seeks to help companies answer that question with tangible advice for conducting audits that reflect Canadian legal and social standards including how to meaningfully engage with racialized communities and Indigenous groups.”  

Elizabeth Jordan, Senior Counsel at JFK Law, said the guidelines “offer Canadian companies a road map for engaging with Indigenous rightsholders and Indigenous groups in racial equity audits. Such engagement reflects a strong commitment to reconciliation and a recognition of rights enshrined in Section 35 of Canada’s Constitution.” 

Tana Turner, an anti-racism expert, auditor and principal at Turner Consulting Group, said, “These standards offer important guidance for auditors and companies on the process for conducting race equity audits. This helps to ensure that the results are relevant to the organizational context and reflect the experiences of Indigenous and racialized employees and customers.”

What is a Racial Equity Audit? 

Racial equity audits are independent assessments of a company’s corporate policies, practices, products and services aiming to identify and address potential biases and discriminatory effects on Indigenous Peoples and racialized communities. 

A racial equity audit enables a company to: 

• Identify risks related to discrimination and bias in its workforce, operations, products and services.  

• Ensure compliance with Indigenous rights standards and substantive equality laws, and embed equity, inclusion and equal opportunity throughout the company’s operations and decision-making.  

• Engage with and respond to the priorities of key stakeholders, including employees, customers, investors, impacted Indigenous and/or racialized communities, and regulatory bodies. 

U.S. Civil Rights Audit Standards 

Third-party racial equity audits gained significant prominence in corporate America in 2020, driven by the momentum of the Black Lives Matter movement and a surge in shareholder activism on racial justice. These audits sought to go beyond traditional diversity metrics and corporate social responsibility statements becoming a tool for companies to rigorously evaluate how their structures, decisions and business relationships might contribute to or mitigate discriminatory outcomes. 

The U.S. Civil Rights Audit Standards provide nine core standards for conducting racial equity audits:   

1. Comprehensive Scope  
2. Independent, Qualified Auditor  
3. Meaningful Engagement with Stakeholders  
4. Access to Critical Information  
5. Rigour and Objectivity  
6. Transparency  
7. Timeliness  
8. Regular Frequency  
9. Board Oversight and Accountability 

Emergence of Racial Equity Audits in Canada 

In 2021, the discovery of unmarked graves of children missing from Indian residential schools, along with growing support for the Black Lives Matter movement, catalyzed a national dialogue on racial equity and reconciliation in Canada. In response, investors began asking Canadian companies to demonstrate meaningful commitments to reconciliation and racial equity. This contributed to a surge in companies making public commitments to prioritize diversity, equity and inclusion. Against this backdrop, racial equity audits emerged as a critical mechanism for identifying and addressing discrimination risks across business operations, while facilitating compliance with Canada’s constitutional frameworks for substantive equality, and Indigenous rights.  

Evaluations of racial equity audits have highlighted the need for clear, consistent and credible standards. While Canadian efforts may draw from U.S. experiences, effective racial equity audits must be grounded in Canada’s legal, historical, social and governance context. The legal, historical and social landscape surrounding racial equity in Canada — particularly the centrality of Indigenous rights and reconciliation — differs from the U.S. context in important ways. Indigenous Peoples in Canada have distinct rights, as outlined in the Constitution Act, 1982, and further upheld in the United Nations Declaration on the Rights of Indigenous Peoples Act, 2021. 

To support companies and auditors in doing this work, this supplementary guidance offers practical considerations to align racial equity audits with Canadian social and legal standards. By embedding accountability, transparency and respectful community engagement into these processes, companies can reduce risk, build trust and help shape a more equitable, inclusive and resilient Canadian economy. The guidance offers a range of ways to strengthen the quality and credibility of a third-party racial equity audit by centering meaningful engagement and dialogue with racialized communities and Indigenous groups. The guidance is cross-sectoral and relevant to companies across all industries. We invite Canadian companies and auditors to use this guidance to demonstrate leadership by undertaking comprehensive and meaningful racial equity audits.

For more information, please reach out to Riya Sirkhell at rsirkhell@share.ca