Sedex Piloting SMETA Audit for Service Providers to Address Major Due Diligence Blind Spot

Operations with distributed workforces – such as cleaning, logistics, catering and security – are often perceived as lower-risk than physical product supply chains, and are less frequently assessed. But these activities can carry significant labour rights risks. We’re piloting an adapted version of the SMETA methodology to help companies extend site-level due diligence activities to service providers.

Service businesses are a critical blind spot in supply chain due diligence efforts. While companies’ programmes and stakeholder scrutiny often focus on physical supply chain components like manufacturing, agriculture and product origins, service providers are often overlooked.

But Sedex’s data indicates 15.5% of services suppliers could be high risk for sustainability concerns.

Labour risks in service supply chains

Severe labour rights risks are a particular concern – including low pay, insecure employment, and sizeable populations of workers more vulnerable to exploitation (e.g. migrant workers).*

Subcontracting, distributed workforces and mobile operations increase both the labour-related risks and the difficulty of applying standard assessment tools. And yet, 15% of Sedex-registered supplier sites acknowledge they don’t have any measures in place to ensure subcontractors meet required labour standards.

Managing these risks is both a stakeholder requirement and an operational necessity for reliable, resilient activities. Investors, legislators and consumers hold companies accountable for supply chain violations, while unstable workforces in any industry can disrupt operations.

Services like cleaning, logistics and security take place across mobile locations or multiple worksites, often outside core business hours and sometimes through hidden subcontracting. This means companies have reduced oversight of these operations and the associated risks.

These factors also make it difficult to apply standard on-site assessment methods.

Read more about managing risks in service supply chains.

Introducing SMETA for Service Providers

We’re addressing this challenge through an adapted version of the on-site SMETA audit. This follows the introduction of our tailored Service Provider SAQ, launched last year. Both tools are designed to power more effective, in-depth and comprehensive supply chain due diligence.

“Service providers are an essential part of supply chains – yet they often fall outside of traditional risk assessments. Less than 3% of Sedex-registered sites fall within these industries.

“We’re bringing the robustness of the SMETA methodology to provide a practical due diligence solution for these activities – enabling better risk management, more responsible practices and more resilient supply chain operations.”

Ross Heritage, Chief Technology Officer, Sedex

SMETA for Service Providers is specifically tailored to the unique nature of service activities, offering a workable assessment of practices, working conditions and labour risks.

This includes:

• Sector-specific assessment points
• Comprehensive evaluation across service provider headquarters and customer sites
• Enhanced requirements where subcontracting is in use
  

The 2025 pilot phase

We’re piloting SMETA for Service Providers over the next few months with a small group of customers. The pilot findings will help us to refine the methodology further, before we roll out this assessment more widely later in 2025.

Want to strengthen due diligence in your services supply chains – or facing customer requirements on this? Discover our tips to prepare for an audit.

Reach out to our team, or your usual Sedex contact, to learn more about the new SMETA methodology and other service provider risk tools.

*For example, see the International Transport Workers’ Federation’s insights on exploitation in the European trucking industry.