THE HOME DEPOT, INC. | Report on Prison Labor in the Supply Chain at THE HOME DEPOT, INC.

Status
13.33% votes in favour
AGM date
Previous AGM date
Proposal number
6
Resolution details
Company ticker
HD
Lead filer
NorthStar Asset Management, Inc.
Resolution ask
Strengthen board oversight of issue
ESG theme
  • Social
ESG sub-theme
  • Modern slavery inc. forced labour
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
United States
Resolved clause
Shareholders urge the Board of Directors to issue a report evaluating opportunities to address the company's role in systemic racism by enhancing its policies applicable to any suppliers utilizing incarcerated workers.
Whereas clause
Prison labor - voluntary and forced - is allowed in the United States due to an exception in the 13th amendment to the Constitution: "Neither slavery nor involuntary servitude, except as a punishment for crime...";

Modern prison labor is an outgrowth of slavery in the U.S. The Brennan Center for Justice explains that after slavery was abolished, "Southern states codified punitive laws, known as the Black Codes, to arbitrarily criminalize the activity of their former slaves." Soon after, formerly enslaved African Americans comprised 70% of the prison population. Then, "desperate for cheap labor and revenue," Southern states began to lease convicts out to private parties for physical labor. To the present day, prison labor remains inextricably linked to systemic racism;

The Proponent recognizes that the Company's 2020 Responsible Sourcing Report states that it prohibits forced labor as well as "involuntary or exploitative prison labor" and that it appears that the Company has revised its policies to include requiring responsible sourcing audits of at least some manufacturers in the United States;

Because the company prohibits "involuntary or exploitative prison labor," the Proponent presumes that prison labor deemed "voluntary and non-exploitative" will be permitted in the Company's supply chain. The Company's Responsible Product Standards states that the use of prison labor "must be consistent with the laws where the products are manufactured";

In the U.S., despite its legality, sometimes incarcerated individuals work in unsafe or unhealthy conditions. Reports indicate that some may be coerced into working by threat of punishment for declining work. Correctional industries workers may be paid as little as USD0.33-USD1.41 per hour. In some states, incarcerated people are forced to work for no pay;

Regardless of the legal nature of prison labor in the U.S., companies have experienced public backlash, boycotts, and long-term brand name and reputation harm from a connection to prison labor. This can pose financial and operational risks for companies including supply chain disruption, litigation, and reputational damage;

The Proponent believes that the Company would benefit from strengthening of policies related to prison labor identified in the supply chain.
Supporting statement
Shareholders recommend that the report examine, at the board and management's discretion, the benefits and drawbacks of enhancing supplier policies such as requiring:
- Payment to workers of local prevailing wage and transparency of wage payments for incarcerated workers;
- Additional company or independent mechanisms for verification of voluntariness of labor;
- Programs to support prisoner transitions to the workforce following incarceration, such as counseling on careers, job applications, and interview preparation.

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Kutxabank Gestion SGIIC SAU. For
KBI Global Investors For
Dana Investment Advisors (Delisted) For
Universities Superannuation Scheme - USS Against After careful consideration, we do not believe the proponent's resolution is in the best interests of shareholders.

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