Managing a global supplychain has never been more complex. Brands and retailers today face growingpressure from regulators, consumers, and business partners to prove theirproducts are sourced responsibly and ethically. Labor violations, unsafeworkplaces, and environmental risks are no longer hidden operational issues butquickly escalate into shipment delays, financial penalties, and lastingreputational damage.
With hundreds of suppliersacross multiple countries, maintaining consistent oversight can be challenging.But with the right structure and tools, it’s achievable.
That’s where Sedex Members Ethical Trade Audit (SMETA) comes in. As one of the world’s most widely adopted ethical audit methodologies, SMETA provides a structured, standardized way toevaluate supplier practices, identify risks early, and drive continuousimprovement across your supply chain.
In this article, we’llexplain what SMETA is, why it matters, the most common non-compliances ituncovers, and how your organization can prepare for success.
What Is SMETA?
SMETA stands for SedexMembers Ethical Trade Audit. Developed by Sedex, a global organization dedicated to responsiblesourcing, SMETA is a standardized social and ethical audit methodology used bybrands, retailers, and suppliers worldwide.
Rather than acting as asimple pass-or-fail inspection, SMETA focuses on transparency, accountability,and continuous improvement. It helps businesses assess working conditions andoperational practices at manufacturing sites and identify areas that requirecorrective action.
SMETA audits typicallycover two main formats:
2-Pillar audit
- Labor standards
- Health and safety
4-Pillar audit
- Labor standards
- Health and safety
- Environment
- Business ethics
This flexible structureallows organizations to select the scope that best fits their compliance goalsand customer requirements.
Globally recognized andwidely accepted, SMETA enables companies to apply consistent expectationsacross all suppliers, regions, and industries — reducing duplication whileimproving visibility.
From Regulation toPractice: How SMETA SupportsSupply Chain Due Diligence
Around the world, companies are facingstricter human rights and environmental due diligence requirements. Brands andretailers must show they have practical systems in place to identify risks,prevent issues, and improve conditions across their supply chains. Given these,SMETA is commonly used as a voluntary due diligence tool to support supplierrisk identification and monitoring.
- EU CorporateSustainability Due Diligence Directive (CSDDD) –Requires large companies to identify and address human rights and environmentalimpacts across their value chains
- UK Modern Slavery Act2015 – Requires transparency on actions taken to preventforced labour and human trafficking
- German Supply ChainDue Diligence Act (LkSG) – Requiresstructured human rights and environmental risk management systems
- France’s Duty ofVigilance Law – Requires companies to implement vigilanceplans covering human rights and environmental risks
- California GarmentWorker Protection Act (SB-62) – Strengthensaccountability for labour practices and enforcement of supplier codes ofconduct
As a widely recognized auditframework, SMETA gives organizations a structured way to assess suppliers,uncover risks, and monitor performance — turning compliance expectations intoclear, actionable steps.
Key Compliance Gaps SMETA Frequently Reveals
Basedon audit data and industry reports, a number of recurring non-compliances arefrequently identified during SMETA audits. Understanding these common pitfallsis the first step toward proactive compliance.
|
Non-Compliance Category |
Common Issues |
|
Working Hours & Rest Days |
Excessive overtime, failure to provide mandated rest days, exceeding legal weekly hour limits (48 hrs/week standard, 60 hrs/week maximum). |
|
Wages & Benefits |
Incorrect calculation of overtime pay, unauthorized deductions, failure to pay minimum wage. |
|
Time Records |
Incomplete, inaccurate, or falsified time records. |
|
Health & Safety |
Missing risk assessments, inadequate PPE, insufficient training. Chemical safety issues are the second most common non-compliance type. |
|
Fire Safety |
Blocked exits, faulty alarms, inadequate drills, expired extinguishers. |
|
Chemical Management |
Improper storage, missing or outdated Safety Data Sheets (SDS), lack of worker training. |
|
Grievance & Disciplinary Procedures |
Weak documentation, lack of formal processes, fear of retaliation. |
|
Contractor & Subcontractor Control |
Failure to ensure contractors meet ethical standards. |
Take A Proactive Approach to Compliance
Suppliers can stay compliant by takinga proactive, structured approach rather than waiting for audits to uncoverissues. Key steps include:
- Understandrequirements.Learn applicable regulations and SMETA standards so teams know what is expected.
- Conductself-assessments.Regularly review operations against SMETA criteria to spot gaps early.
- Scheduleofficial SMETA audit.Work with approved partners to conduct an SMETA audit for a thorough review.
- Acton findings.Implement corrective actions and strengthen processes based on audit results.
- Monitorcontinuously.Track performance, train workers, and maintain documentation year-round.
By embedding compliance into dailyoperations, suppliers can reduce risks and stay audit-ready at all times.
Make Compliance a Competitive Edge
Assupply chains expand and expectations around ethical sourcing rise, compliancecan no longer be treated as a box-ticking exercise. It must be proactive,systematic, and data-driven.
TurnSMETA from just an audit requirement to a strategic advantage for enhancedcompliance and strengthened resilience. Work with an approved SMETA audit bodytoday for a more ethical future.
How SMETA Is Delivered
AQF supports brands and suppliers in strengthening their ethicalcompliance systems. SMETA audits are conducted by API Limited, oursubsidiary and an approved audit body, ensuring independence, technicalintegrity, and full alignment with Sedex requirements. A SMETA audit should beviewed as a constructive process. This allows suppliers to systematicallyaddress gaps, improve management systems, and demonstrate measurable progressover time. Contact us today.
