The new environment of “responsible consumption” demands that companies and organizations adhere to very strict principles of sustainability. A scenario where SMETA audits are essential to avoid losing competitiveness in an increasingly demanding market.
The competitiveness and efficiency of companies and organizations is not only measured from economic or productivity indices. It is also very important that their work respect ethical principles and values that are essential today for society to move towards a sustainable development scenario and aligned with professional “good practices”.
To guarantee that this productive organizational development adheres to these objectives, in recent years various measurement systems and indicators have been created. Among all of these methods, the “SEDEX Affiliates Ethical Trade Audit”, also known as SMETA, stands out as one of the most popular and efficient.
This methodology not only allows to measure risk control in the supply chain, but also to assess compliance with the principles of social responsibility in all processes of an organization. Such characteristics allow it to become one of the most widely used ethical audit formats in the world.
Its general objectives are the following:
- Attend the needs of consumer goods organizations.
- Promote responsible purchasing in the supply chain, and improve the effectiveness and efficiency of the ethical audit.
General principles
Although the SMETA method was originally developed as a standard for members of the ethical trade organization SEDEX (among which are large multinationals such as Nestlé, PepsiCo, Kellogg Company and Sodexo, among others), its creators emphasize that “any company can use it, regardless of its size or prestige”.
The objective of this joint effort is to promote greater transparency in audit methodologies. This allows that today it is possible to share freely the knowledge about the auditors’ qualifications, as well as the theoretical contents and the practices that support the reports made using the SMETA technique.
However, any company that intends to certify the use of this methodology in its internal processes must schedule first a third-party ethical audit that certifies adherence to good work practices.
This process must be carried out by validly recognized auditing bodies (such as Deloitte or Bureau Veritas, among others), which deliver a certificate whose validity lasts for 3 years. Once this period has expired, the company must repeat this procedure if it aspires to maintain internationally recognized ethical standards.
Implementation and features
In order to implement correctly the SMETA methodology, we must work in accordance with the following principles:
- Analyze the reality of the organization in accordance with the requirements established by certain strategic pillars, or, based on requested items in the Supplier Codes of the requesting companies themselves.
- Design Policies and Procedures that cover all relevant items in the production chain.
- Implement the respective documentation.
- Be audited by a duly certified external auditing body.
- Propose the respective improvement actions.
THE IMPACT OF ETHICS AND SUSTAINABILITY
Until very recently, the traditional production model worked on a circuit of “apparent” efficiency: extract, make and dispose of. Nevertheless, over the years this system has shown itself to be very harmful for the very survival of the environment.
A true vicious circle where organizations were not aware of the negative impact of their activities, and the cumulative effects that these had not only for human communities, but also for the entire environment. Worse still, the possibility of compensating for this damage was not even considered as an “eventuality”, within the items of productive costs and benefits.
However, the emergence of a greater and stronger collective ethical conscience, which in turn reflects itself in the consumer trends themselves, has motivated a radical redesign of this model.
Today it is the client and end consumer whose demand that organizations build and consolidate a more sustainable supply chain. That is precisely one of the main reasons why hundreds of companies choose to implement the SMETA audit.
According to its own creators, this type of methodology offers organizations the opportunity to demonstrate in a reliably way that they have a sustainable supply chain.
This objective is achieved, thanks to the fact that its base focuses on four fundamental areas, which are labor standards, health and safety, environment and business ethics.
2 or 4 Pillars?
Depending on the needs of the supply chain of each company, or the demands of their respective clients, we can opt for a SMETA audit with 2 or 4 pillars. These are as follows.
2-pillar SMETA Audit
It works from two pillars governed, in turn, by the labor practice standards contained in the ETI Base Code (Ethical Trading Initiative). This is based on the conventions established by the International Labor Organization (ILO).
The two base pillars are as follows:
- Labor standards
- Health & safety
From this basic dual structure, other additional elements evaluated are:
- Human rights
- Management systems
- Responsible recruitment practices
- Right to work
- Outsourcing
- I work from home.
This methodology also considers a brief evaluation of the environment.
4-pillar SMETA Audit
Although this methodology also works from the same framework established by the labor practice standards contained in the ETI Base Code, it differs from the previous one in that we apply four basic pillars instead of just two. In addition, it develops deeper and more detailed studies regarding the environmental impacts of the respective tasks.
The four pillars are as follows:
- Labor standards
- Health & Safety
- Environment (in a more exhaustive and extended way)
- Business ethics
Once this framework for action has been established, the respective additional evaluated elements are:
- Human rights
- Management systems
- Responsible recruitment practices
- Right to work
- Outsourcing
- Work from home
However, in this case the additional pillars of Environment (in extended version) and Business Ethics are also governed by standards agreed upon through a process of affiliation and multisector consultation.
As these are audits that require different requirements, and pose demands with different degrees of difficulty, it is important that companies define in advance what type of procedure they wish to carry out. In this way, it is ensured that the resources available for this purpose are used efficiently, without wasting person-hours or incurring unnecessary expenses.
For example, it is not the same to audit a small field dairy enterprise than a mining tire factory, since they are activities with different orientations and specific activities. In addition, each one of them generates a very different impact on the environment, especially in the “carbon footprint”.
Therefore, before opting for 2 or 4 pillars, it is important to consider, in advance, the characteristics of the company, its target market and its real impact on the environment.
In this way, the selected external auditor will be able to prepare properly its evaluation, and the days for auditing that are considered necessary to carry out a truly efficient work will be jointly determined.
