Sedex: Supporting More Transparent Supply Chains
Service-based supply chains often go unexamined, with companies generally focusing due diligence efforts on manufacturing, agriculture and other physical elements.
However, operations involving distributed workforces, such as cleaning, logistics, catering and security, also carry serious labour-related risks. Despite this, they are less frequently assessed and still widely perceived as lower-risk.
Supply chain sustainability platform Sedex is piloting a version of the SMETA audit methodology that’s adapted specifically for service providers. SMETA stands for Sedex Members Ethical Trade Audit and is one of the most commonly used audit tools for evaluating working conditions across supply chains.
The adjusted version is designed to help companies extend their due diligence activities to these often-overlooked areas.
"As supply chain expectations evolve, so must the tools we use to meet them," says Jon Hancock, CEO at Sedex.
"Sedex has long supported companies to manage risks and drive responsible practices in manufacturing and product supply chains. However, one area is frequently overlooked: service providers.
"That’s why we’re piloting a new version of our SMETA audit, specifically designed for service activities. It’s a strategic step towards broader, more inclusive oversight, helping businesses strengthen practices across their full value chain, not just in component supply."
Service suppliers escape scrutiny
Most supply chain programmes continue to focus on product-based industries, with manufacturing and agricultural supply chains receiving more attention from companies and stakeholders alike. In contrast, service providers tend to sit outside of the usual spotlight, leaving a substantial gap in risk management.
Sedex data shows that 15.5% of service suppliers could pose high risk when it comes to sustainability. They tend to operate in sectors like logistics and security, where services take place across mobile or distributed sites, often beyond regular business hours.
Many rely on subcontracting, which can obscure visibility and increase the difficulty of monitoring labour conditions.
Labour rights risks in these environments are more complex. Workers in such roles – especially migrant workers – can face insecure employment terms, low pay and minimal protections.
Subcontracting only amplifies the problem, but 15% of Sedex-registered supplier sites say they have no measures in place to ensure subcontractors meet basic labour standards.
When service operations rely on a mobile workforce or multiple locations, applying traditional audit tools becomes less effective. This creates operational blind spots that can undermine resilience and damage reputation.
Failures in service supply chains can disrupt operations just as much as issues in physical product supply chains, and consumers, investors and regulators increasingly expect businesses to address violations wherever they occur.
Targeting overlooked sectors
In response to these gaps, Sedex's new version of SMETA is tailored for the realities of service providers, and follows the introduction of its Service Provider Self-Assessment Questionnaire (SAQ) last year. Together, these tools aim to create a clearer, more complete view of labour conditions within service-based supply chains.
The new SMETA approach addresses the logistical and structural differences that make standard assessments challenging in services. For example, it covers both headquarters and the customer locations where services are delivered.
It also introduces extra requirements where subcontracting is present, reflecting the added complexity and risk involved.
Ross Heritage, Chief Technology Officer at Sedex, says: "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."
The adapted methodology includes sector-specific checks and evaluates working conditions that are often difficult to assess using standard tools. It aims to create better transparency and accountability for businesses that rely heavily on service providers, without adding unrealistic burdens to already-complex operations.
Meeting stakeholder and operational expectations
Labour risks in service supply chains are not only ethical concerns – they also present real operational challenges.
A workforce facing exploitation, poor working conditions or insecure contracts is less stable and less productive. That instability, spread across cleaning, logistics or security operations, has the potential to disrupt the entire supply chain.
Moreover, regulators and investors continue to raise expectations around ethical sourcing and responsible business conduct. Companies that ignore their service supply chains leave themselves exposed to reputational and legal risks.
By extending SMETA’s rigour to the service sector, Sedex helps businesses address this weak point. It also allows for improved monitoring of subcontracted operations and supports a more resilient and transparent supply chain framework.
