Every Code of Conduct – whether set by a buyer, a lender, or a development finance institution – defines the terms of the relationship: what a supply chain commits to on labor, safety, and environmental practice. SMETA, BSCI, and the audit frameworks built around them are how that commitment gets verified – in the workshop, the field, the warehouse. Verification generally covers two areas.
Social provisions typically address the following:
Environmental provisions typically address:
Typically address child labor and young worker protections, prohibition of forced and bonded labor, freedom of association and the right to collective bargaining, working hours and overtime limits, wages and benefits, workplace health and safety, non-discrimination and freedom from harassment, disciplinary practices, and regular employment terms, including limits on informal or excessive subcontracting.
Typically address environmental management systems and permitting, wastewater and air emissions, hazardous substance and chemical management, waste management and reduction, energy use and resource efficiency, pollution prevention, and compliance with local environmental regulations. Increasingly, they extend to biodiversity and ecosystem impact, now formally required under the April 2026 revision to ISO 14001.
Codes of Conduct increasingly exist alongside binding regulation, not instead of it. Frameworks like the EU’s CSRD and CSDDD, the UK Modern Slavery Act, California’s Transparency in Supply Chains Act, Germany’s Supply Chain Due Diligence Act (LkSG), and the US Uyghur Forced Labor Prevention Act are turning voluntary Code commitments into legal reporting and due diligence obligations. The OECD Due Diligence Guidance and the UN Guiding Principles on Business and Human Rights (UNGPs) underpin most of these frameworks and most Codes of Conduct alike, which is why the same evidence base tends to satisfy both.
See how these map onto development finance safeguards
