As shareholders, we look to the companies to manage their human rights risks and address their human rights impacts as a demonstration of strong risk oversight and sound corporate governance. Loblaw has disclosed that its policies and practices are informed by, among other things, the UN Guiding Principles on Business and Human Rights (UNGPs). The UNGPs state that companies have a responsibility to respect human rights within their operations and throughout their value chains. This responsibility requires that companies (i) be aware of their human rights risks and impacts, (ii) take concrete steps to prevent, mitigate, and remediate adverse impacts when they occur, and (iii) publicly communicate how they are addressing their most salient human rights issues.

Aware of its responsibility to respect human rights through its value chain, and in response to concerns about forced and child labour in cotton harvests, Loblaw has pledged to not source cotton produced in Uzbekistan and Turkmenistan, and in early 2021 it expanded the scope of this pledge to include Xinjiang Uyghur Autonomous Region (XUAR) of China. In July 2021 Loblaw signed on to the world’s leading sustainability initiative for cotton, known as the Better Cotton Initiative. However, according to shipment data compiled by Dr. Laura Murphy, Professor of Human Rights and Contemporary Slavery at the Helena Kennedy Centre for International Justice at Sheffield Hallam University (UK), Loblaw imported textiles from XUAR as recently as August 2021.

Despite its efforts, Loblaw is not without controversy. A 2021 CBC Marketplace investigation also found that Loblaw was selling tomatoes produced with forced labour from both other brands and through Loblaw’s private brand, President’s Choice.

The Corporate Human Rights Benchmark (CHRB) scored Loblaw poorly on human rights due diligence. Know the Chain has scored Loblaw poorly on traceability and supply chain transparency, supplier selection and monitoring disclosure.

As part of their supply chain due diligence procedures, retailers across the globe (including Loblaw) conduct audits of suppliers. While Loblaw has begun disclosing the number of audits it conducts, its disclosure falls short of other large retailers. Both Walmart and Tesco disclose the number of audits conducted, as well as certain details on the results of those audits.

Enhanced information on these audits would give investors key information to ensure that Loblaw’s enterprise risks are being managed and mitigated.