What Is a SMETA Audit? Sedex Members Ethical Trade Audits Explained
In a world where ethical and sustainable practices are not only desired but expected, Sedex Members Ethical Trade Audits (SMETA) provide a clear path toward achieving these goals. SMETA is an ethical audit methodology that evaluates an organization's ethical, social, and environmental practices in its supply chain.
In this article, we will delve into the intricacies of SMETA audits, their purpose, and the key differences between 2-pillar and 4-pillar audits. We'll also explore the benefits of undergoing a SMETA audit and shed light on what auditors are looking for during the process.
What Is a SMETA Audit?
SMETA, which stands for Sedex Members Ethical Trade Audit, is a comprehensive and widely recognized audit methodology. It was developed by the Supplier Ethical Data Exchange (Sedex) to assess and monitor ethical and responsible business practices in global supply chains. SMETA audits evaluate various aspects of a company's operations, including labor, health and safety, environmental impact, and business ethics.
SMETA standards are firmly rooted in the Ethical Trading Initiative (ETI) Base Code, which, in turn, is founded on the conventions of the International Labor Organization (ILO). The ILO conventions provide internationally recognized guidelines for labor practices, ensuring fair and humane working conditions. Additionally, SMETA audits incorporate compliance with relevant local laws, thereby addressing specific regional requirements and regulations. This combination of global principles and local considerations makes SMETA audits a comprehensive and adaptable tool for assessing an organization's commitment to ethical and sustainable business practices.
2-Pillar vs. 4-Pillar SMETA Audits
SMETA audits can be conducted against two or four auditing “pillars.” For any SMETA audit, the two pillars of the 2-pillar audit, Labor and Health & Safety, are mandatory. The 4-pillar audit evaluates your supply chain against two additional pillars: Business Ethics and Environment.
2-Pillar SMETA Audit: This type of audit focuses on Labor and Health & Safety standards. It assesses a company's compliance with labor laws, working conditions, and occupational health and safety regulations. It is an excellent choice for organizations looking to start their ethical journey or those with a limited scope of interest.
4-Pillar SMETA Audit: In addition to Labor and Health & Safety standards, the 4-pillar audit also evaluates a company's Environmental Performance and Business Ethics. This comprehensive audit provides a holistic view of an organization's ethical and sustainable practices. It is ideal for companies committed to ensuring transparency and ethical conduct across all facets of their business.
Why Get a SMETA Audit?
The decision to undergo a SMETA audit is driven by several compelling reasons:
Enhancing Reputation: A SMETA audit demonstrates a company's commitment to ethical business practices and sustainability. This can significantly enhance its reputation and attractiveness to stakeholders, including customers, investors, and partners.
Reducing Audit Fatigue: Sedex and SMETA audits are internationally recognized markers of ethical conduct. Undergoing a SMETA audit reduces the need for multiple certifications and ethical audits. SMETA audits can also help improve supplier relations.
Improving Supply Chain Visibility and Efficiency: By identifying areas for improvement in labor conditions, safety measures, environmental impact, and ethical conduct, SMETA audits can lead to operational enhancements, cost savings, and a more efficient supply chain.
How Does a SMETA Audit Work?
During a SMETA audit, qualified auditors conduct a thorough assessment of the audited organization's facilities and operations. They focus on key areas, depending on whether it's a 2-pillar or 4-pillar audit. Here's a glimpse into what auditors look for:
Labor Standards: Auditors assess compliance with labor laws, including working hours, wages, child labor, and employee rights. They also evaluate the effectiveness of grievance mechanisms.
Health and Safety: Auditors examine safety protocols, emergency response plans, and the overall workplace environment to ensure the well-being of employees.
Environmental Impact: In 4-pillar audits, auditors investigate a company's environmental practices, including waste management, resource usage, and emissions. They assess adherence to environmental regulations and standards.
Business Ethics: For 4-pillar audits, auditors scrutinize an organization's business ethics, including anti-bribery and corruption measures, supply chain transparency, and adherence to codes of conduct.
There are additional SMETA tools (listed below), such as supplier self-assessments and Sedex Virtual Assessments, that can be used to support the ethical evaluation of your supply chain.
FAQ
How long is a SMETA audit valid for? After the SMETA audit report is issued, the report is valid for 12 months. In order to maintain continuity and reduce risk, it is recommended that you begin the audit booking and preparation process around 3-4 months before your audit is set to expire.
How frequent are SMETA audits? SMETA audits are typically conducted annually, but the exact frequency can vary depending on industry, risk level, and buyer requirements. Sedex doesn't mandate a specific audit schedule, so companies often follow their customers' guidelines.
What do SMETA audits cost? The cost of a SMETA audit is typically calculated based on a per man-day rate. This means that the total cost will depend on the number of days required to complete the audit. The average number of man-days needed for a SMETA audit ranges from two to five. This can vary depending on:
Number of workers: Larger companies will generally require more time to audit.
Number of buildings: Multiple buildings, including warehouses and storage facilities, can increase the audit time.
Total area of the site: Larger sites will require more time to cover.
Special requirements: Specific requirements from the site owners, such as complex production processes or language barriers, can also affect the audit duration.
Contact QIMA to get a specific quote for your situation.
Why QIMA for SMETA Audits?
By choosing QIMA as your audit partner, you're tapping into the expertise of one of the 51 SMETA-certified Affiliate Audit Companies. Our commitment to ethical practices and sustainability ensures that your organization receives the highest standard of auditing services, enhancing your reputation, compliance, and supply chain efficiency.
We offer several SMETA tools. These include:
Self-Assessment Questionnaire (SAQ) - You may have your supplier submit a self-assessment.
Sedex Virtual Assessment - A remote assessment of workplaces. QIMA is approved to conduct virtual assessments, which can reduce risk when physical access to a factory isn’t possible.
Third-Party SMETA Audit - An in-person examination as per Sedex protocol. QIMA is approved to conduct 2-pillar and 4-pillar in-person SMETA audits.
Corrective Action Plans - Provided as needed after an in-person audit.
We also offer a number of other ethical audits based on international standards, our own Best-in-Class protocols, and client-specific requirements.
Learn more about our SMETA services or contact us today.
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