Resolution askConduct due diligence, audit or risk/impact assessment
ESG sub-theme- Modern slavery inc. forced labour
Type of voteShareholder proposal
Company sectorConsumer Discretionary
Company HQ countryUnited States
Resolved clauseRESOLVED: Shareholders of TJX Companies urge the Board of Directors to oversee a third-party assessment and report to shareholders, at reasonable cost and omitting proprietary information, assessing the effectiveness of current company due diligence in preventing forced, child, and prison labor in TJX’s supply chain.
Whereas clauseWHEREAS:
TJX Companies sources from approximately 21,000 vendors in over 100 countries. While TJX’s Vendor Code of Conduct prohibits forced, child, and prison labor, TJX does not conduct or require routine audits of factories to confirm compliance, beyond the producers of private label merchandise (reportedly a very small portion of merchandise);
TJX's failure to disclose adequate due diligence mechanisms has caused a low score on
human rights benchmarking. The preeminent UN Guiding Principles on Business and Human Rights (UNGP) specify due diligence principles for human rights commitments, including assessing actual and potential human rights impacts, integrating and acting upon findings, tracking responses, and communicating remedies;
The World Benchmarking Alliance’s 2020 Corporate Human Rights Benchmark evaluated companies against the UNGP. TJX was one of the poorest scoring apparel companies evaluated – of 26 possible points, TJX scored 4, including zero on each Human Rights Due Diligence indicator;
Ample evidence of severe human rights violation risk exists in TJX supply chains:
• In numerous countries from which TJX sources, the Department of Labor has found evidence of forced or child labor in manufacture of footwear, garments, textiles, toys, jewelry, and leather;
• The Coalition to End Forced Labour in the Uyghur Region reports that “virtually the entire apparel and footwear industry is tainted by forced Uyghur and Turkic Muslim Labour” and that TJX has not yet taken “all credible steps” to prevent forced labor of Uyghurs in its supply chain;
• U.S. garment manufacturers employ millions of undocumented workers which are “unquestionably more vulnerable to labor exploitation.” The industry’s “multiple levels of contracting, intense industry competition, and dysfunctional immigration policies impede efforts to establish and sustain a legal, safe, and fair working environment” ;
Also in the U.S., half the incarcerated population works in some way. Research indicates that over 60,000 incarcerated people work in correctional industries annually – an industry worth $1 billion. Most are paid subminimum wages; some are coerced or forced to work in inhumane conditions. Some incarcerated workers are also known to produce merchandise sold at U.S. retailers.
Supporting statementSUPPORTING STATEMENT: Shareholders recommend that the report, at Board and management's discretion:
• Assess risks that TJX’s existing approach, lacking systematic verification of compliance with the Vendor Code of Conduct, could lead to occurrences of forced, child, or prison labor in the supply chain;
• Evaluate related risks to company finances, operations, and reputation;
• Examine whether requiring third-party environmental and social audits of vendors would reduce such risks, and any rationale for not requiring such audits;
• Draw upon guidance of international standards such as the UNGP and the ILO Indicators of Forced Labor.