Which audit do you have to make when a buyer wants a “SMETA audit”: 2-pillar or 4-pillar? In general, when it comes to SMETA 2-pillar vs 4-pillar, the answer is up to the buyer. A 2-pillar audit includes labor and health & safety at a reduced price, while a 4-pillar audit includes additional areas such as environment and business ethics.

SMETA (Sedex Members Ethical Trade Audit) is an audit system, developed by Sedex (Supplier Ethical Data Exchange) to evaluate ethical trade practices of suppliers. This guide gives an insight into each audit scope, their differences, and tells which audit scope fits better for food manufacturers/exporters and how not to make a mistake.

This guide is informative and comparative and contains essential information on which audit scope to choose for your company.

What Is the SMETA Audit, Exactly?

SMETA stands for Sedex Members Ethical Trade Audit; it is an internationally recognised audit process designed by Sedex for suppliers required to prove to their customers how they handle labour, health and safety, environment and ethical practices. SMETA consists of 2 audit types: 2-pillar audit and 4-pillar audit.

To put it simply, the 2-pillar audit is focused on treatment of people and working conditions. The 4-pillar audit covers all the same aspects and, besides, takes into consideration how the facility affects the environment and operates.

Short Answer: SMETA is a Sedex audit process focusing on labour conditions, health and safety and, in 4-pillar form, also environmental impact and business ethics.

A few things worth knowing upfront:

• Run by whom: Sedex is a non-profit organization based on collaboration among members and aims to assist the firms in the management and exchange of ethical information.
• Impact on Indian Companies: The audit result for the supplier will be entered into the Sedex database where the supplier would be able to present it without getting re-audited.
• Area of usage: SMETA has been implemented in food processing, retail, garments, electronics and agriculture sectors.
• Not what it is: SMETA is an audit process rather than a certificate, therefore, the right question would be which scope to choose and not which certificate to obtain.

Why Global Buyers Prefer Suppliers With the Right Audit Scope

Buyers care less about which audit you hold and more about whether it matches what they asked for.

1. It Meets the Requirement of the Buyer

If the buyer wants a 4-pillar audit, no amount of recency of a 2-pillar audit will help. This prevents a need for a second audit from the buyer’s side by supplying the required scope at once.

2. It Demonstrates Your Commitment

The commitment of the supplier is demonstrated by completing the 4-pillar audit. Buyers who expect more from their suppliers need this aspect most.

3. It Meets the Needs of the Buyer with ESG Policy

If a company takes ESG policy seriously, then they require proof on the grounds of environmental management and ethical business dealings. The 4-pillar scope of audit includes both.

4. It Saves the Hassle of Repeat Audits

Since results are stored in the Sedex database, buyers do not have to request another audit from your side in order to view the results.

The Core Benefits of Choosing the Right SMETA Scope

Here’s where the benefits actually show up, in practical terms.

More Efficient & Simplified Audits Using 2-Pillar

2-piller audits are faster and simpler, hence fit smaller suppliers and those new to the ethical trade. The basic requirements of ethical compliance are set by the audit without any additional paperwork of a bigger program.

One Audit & Multiple Buyers

A 2-pillar audit means that there is no need to have an additional audit for each buyer. Results sharing using Sedex is the most practical benefit of such approach.

Better Versatility with 4-Pillar

While a 4-pillar audit will normally meet the requirements of all buyers asking for a 2-piller audit, vice versa cannot happen. Thus, when choosing a 4-pillar audit you will gain some flexibility in case something happens with the buyer’s list.

Premium & Export Oriented

Manufacturers of foods exporting their products or supplying premium international retailers have to undergo a 4-pillar audit. As environmental and business ethics audits are part of due diligence in such marketplaces, food manufacturing belongs to one of the most audited industries where major supermarket chains and food brands require a strict supplier auditing from their side.

Increased Buyer Confidence

Choosing the 4-pillar audit indicates to the buyer that the supplier takes its responsibilities seriously. The 2-pillar audit does provide increased confidence with regard to labour and safety where buyers request no more.

Cost Control

The 2-pillar audit tends to be less costly, and the 4-pillar audit tends to cost more. Choosing the type of audit needed prevents you from spending money unnecessarily or having to pay twice later.

Advantage Over Other Suppliers in Bidding

When the 4-pillar audit format is specified, a supplier that holds only the 2-pillar audit is disadvantaged in bidding against other suppliers. Knowing this ahead of time allows you to prepare accordingly.

SMETA 2-Pillar vs 4-Pillar Benefits: Quick Comparison

Feature	2-Pillar SMETA Audit	4-Pillar SMETA Audit
Pillars covered	Labour Standards and Health and Safety	Labour, Health and Safety, Environment and Business Ethics
Audit scope	Basic ethical compliance	Comprehensive ethical and environmental compliance
Duration	Shorter and less complex	Longer and more detailed
Cost	Generally lower	Generally higher
Buyer fit	Suits many standard buyers	Often required by premium and global buyers
Environment and business ethics	Not assessed	Fully assessed

 

The table shows why the question isn’t which audit is better. It’s which audit fits your buyers, your market and your resources today.

What Does It Take to Meet SMETA Audit Requirements?

Whichever scope you choose, auditors review documents, interview employees and inspect the facility against the ETI Base Code and relevant national legislation. These are the main requirement areas:

• Audits recorded in the Sedex database – audit results are captured by the Sedex database and can be viewed by the buyer.
• Labour practices and conditions – wage practices, working hours, child labour, forced labour, freedom of association and discrimination.
• Health and safety – fire safety, machine safety, emergency planning, hygiene and safety training.
• Environment (only 4-pillar audits) – waste management, energy use, carbon dioxide emission, water use and environmental compliance.
• Business ethics (only 4-pillar audits) – anti-corruption and anti-bribery efforts, transparency and actions against unethical behavior.
• Documentation supporting – written policies and procedures, especially on environment and business ethics (4-pillar audits).

Validity period and audit frequency are not defined. An SMETA audit is normally considered valid for up to 1-2 years. The frequency of your audit depends on how risky the particular facility is considering its geographical location, industrial sector and performance of audit.

Common Mistakes Suppliers Make When Pursuing a SMETA Audit

• Selecting the scope before contacting the buyer. Contact your buyers first since it is the buyer’s requirement that determines what type of audit you should conduct.
• Relying on a new 2-pillar audit for all buyers. Since the buyer may require a 4-pillar, it will not matter how new your 2-pillar audit is.
• Scheduling a 4-pillar audit without the proper documentation. You should have documentation for your environmental and business ethics policies and practices before conducting the audit.
• Ignoring future considerations. Sustainability standards are increasing and 4-pillar audits are becoming common in many industries so plan for future orders.
• Viewing validity as a set value. It varies according to buyer’s requirements and the risks at your facility.

When Each SMETA Scope Makes the Most Sense

• Select 2-pillar if your buyers simply need compliance ethics on labour and safety.
• Select 2-pillar if you are a small supplier or manufacturer in the food industry.
• Select 4-pillar if you export to or supply high-end international buyers and international food brands.
• Select 4-pillar if buyers have strong ESG or sustainability policies.
• Select 4-pillar if your company is becoming more mature and desires one audit to meet most of the buyer needs.
• Consult your buyer first before conducting any audit, regardless of which one you want.

There are five main criteria which usually determine which one to select: buyer requirements, industry/market, your company’s size and maturity, ESG/sustainability strategy, and your budget. Consider these together and don’t focus just on costs.

If you supply to buyers that have not yet required either of the scopes, the decision becomes less important these days but preparation of your documentation still has value.

Key Takeaways

• SMETA is an auditing framework by Sedex, and Sedex will store the audit findings so that they can be viewed by the buyer.
• A 2-Pillar audit includes both Labour Standards and Health and Safety; whereas a 4-Pillar audit includes Environment and Business Ethics, apart from these two pillars.
• A 4-Pillar audit is expected to meet 2-Pillar requirements, but not vice versa.
• The 4-Pillar audit is not legally required, but many global buyers and ESG-conscious brands demand it.
• In terms of time, effort, and cost, 2-Pillar audit is faster and more affordable; while 4-Pillar audit is more thorough and costly.
• The scope depends on your buyers and sustainability strategy.

Conclusion

The choice between the 2-pillar and 4-pillar SMETA audit scopes is ultimately based on the requirements of your buyers and your sustainability strategy. While 2-Pillar audit scope is a cost-effective choice, 4-Pillar audit scope can help open more doors for your business and gain premium buyers and ESG buyers. With growing expectations, the 4-Pillar scope goes beyond luxury to become common practice. For more information, contact us at Legal4Sure.