What is a SMETA ethical audit?
A SMETA (Supplier Ethical Data Exchange) ethical audit, also known as a Sedex audit, is a comprehensive and standardized assessment process used to evaluate the ethical and social responsibility practices of suppliers and factories in global supply chains. SMETA audits are designed to ensure that organizations comply with ethical standards and promote responsible business practices throughout their supply chains.
The SMETA audit framework was developed by the Sedex (Supplier Ethical Data Exchange) organization, which is a membership-based platform for sharing ethical data and conducting responsible sourcing activities. Sedex works with companies to drive improvements in social and environmental practices across global supply chains.
The SMETA ethical audit covers a wide range of areas, including labour standards, health and safety, environmental impact, business ethics, and responsible sourcing. The audit typically includes an assessment of policies and procedures, on-site inspections, document reviews, interviews with workers, and engagement with management.
Some of the key areas that are typically examined during a SMETA audit include:
- Labour Standards: This includes evaluating compliance with local labour laws, assessing working hours, wages, and benefits, and ensuring the absence of forced labour, child labour, and discrimination.
- Health and Safety: This involves examining workplace conditions, safety procedures, and the provision of adequate health and safety measures to protect workers from hazards and accidents.
- Environmental Impact: The audit assesses environmental management practices, waste management, energy consumption, emissions, and the organization's commitment to sustainable practices.
- Business Ethics: This includes evaluating the organization's commitment to ethical business practices, anti-corruption policies, and adherence to relevant laws and regulations.
- Responsible Sourcing: The audit examines the traceability of products and materials, ensuring that suppliers are not engaged in illegal or unethical activities, such as sourcing conflict minerals
Upon completion of the audit, a report is generated detailing the findings, including any non- compliance issues and recommendations for improvement. SMETA audits help organizations identify areas for improvement in their supply chains, enhance transparency, and promote ethical and responsible practices throughout their operations.
It's important to note that while SMETA audits provide valuable insights and serve as a tool for organizations to monitor and improve their supply chain activities and demonstrate their commitment to responsible sourcing as well as evidence that can be used to demonstrate to customers and stakeholders that the organisation is run at the ethically, morally and with integrity.
What is the difference between a SMETA two-pillar and four-pillar audit
In SMETA (Supplier Ethical Data Exchange) audits, the number of pillars refers to the scope and depth of the assessment. The two-pillar and four-pillar audits differ in terms of the areas they cover and the level of detail they examine. Here's an overview of the differences:
SMETA Two-Pillar Audit: The two-pillar audit focuses on two main areas:
- Labour Standards: This includes evaluating compliance with labour laws, working hours, wages, child labour, forced labour, and worker welfare.
- Health and Safety: The assessment covers workplace conditions, safety procedures, and the provision of a safe and healthy working environment.
The two-pillar audit provides a basic evaluation of these key areas and is often used as a starting point for organizations to assess their suppliers' compliance with fundamental ethical standards.
SMETA Four-Pillar Audit: The four-pillar audit expands the scope to cover additional areas, in addition to labour standards and health and safety. The four pillars include:
- Labour Standards: Similar to the two-pillar audit, this pillar assesses compliance with labour laws, working conditions, wages, and worker welfare.
- Health and Safety: It examines workplace conditions, safety procedures, and the provision of a safe and healthy working environment.
- Environmental Impact: This pillar evaluates environmental management practices, waste management, energy consumption, emissions, and the organization's commitment to sustainable practices.
- Business Ethics: It focuses on the organization's commitment to ethical business practices, anti-corruption policies, and adherence to relevant laws and regulations.
The four-pillar audit provides a more comprehensive assessment of suppliers' ethical and social responsibility practices. It addresses not only labour and health and safety aspects but also environmental sustainability and business ethics, thereby reflecting a broader view of responsible sourcing and supply chain management.
The choice between a two-pillar or four-pillar audit depends on the specific requirements and goals of the auditing organization. Some organizations may opt for the more extensive four-pillar audit to gain a more comprehensive understanding of their suppliers' practices, while others may start with the two-pillar audit and gradually move towards the four-pillar audit as part of their continuous improvement process.