At Loblaw, our purpose is to help Canadians Live Life Well. We recognize our responsibility to respect and protect the human rights of all people who support and intersect with our business, and we do not tolerate abuse, discrimination or harassment in any form.
Through our formal policies, codes of conduct for our colleagues and suppliers, comprehensive compliance standards and a robust governance framework, we strive to uphold the rights of our customers, colleagues and employees, as well as the many workers across our supply chain.
Our commitment to protecting human rights is founded on our strong belief in doing what is right, and we pledge to create a safe and inclusive experience across our value chain for the many customers who choose our products and services.
We uphold high standards and expectations for respecting human rights in our own operations and throughout our domestic and international supply chain, which are detailed in our Supply Chain Compliance Program.
In November 2020, Loblaw issued a statement outlining our position on human rights in relation to the United Nations Guiding Principles (UNGPs) on Business Human Rights. Since then, we have built on feedback and key learnings from our colleagues, customers, internal and external stakeholders, and investors and we are accelerating the review and improvement of our approach to human rights.
In 2022 we engaged ELEVATE, a third-party expert and leader in sustainability and supply chain services, on several workstreams related to human rights and responsible sourcing. As part of this engagement, we asked ELEVATE to conduct Human Rights Due Diligence (HRDD) to assess our procedures and policies, across the company’s enterprise.
In partnership with ELEVATE, we are following a multi-step process to identify opportunities to further strengthen policies and processes across the enterprise, including our international supply chain.
While this work is ongoing, we are pleased to share here the steps completed so far:
Current State Assessment & Gap analysis: Conducted an evaluation of how our current policies on human rights align with expectations outlined in the UNGP and with best international and industry practices. The process included a review of existing policies, commitments, processes, and governance related to human rights and responsible sourcing in Loblaw’s own operations and in our international supply chain.
Global benchmarking: Analyzed policies and human rights disclosures from recognized leaders and industry peers.
Supply chain risk assessment: Utilizing proprietary assessment tools, conducted a risk assessment of human rights impacts of product categories using sourcing data, geographies and commodities. This assessment will assist us in prioritizing future deep dives into select key areas.
Stakeholder engagement: Conducted interviews with internal stakeholders and external stakeholders. The Loblaw team did not participate in calls with external key stakeholders to enable candid, confidential feedback on human rights risks.
Identification of Salient Risks: Identified and prioritized Loblaw’s salient human rights risks to inform next steps. We engaged internal cross-functional leaders and subject matter experts to review the third-party supply chain risk assessment and discuss geographic and commodity-based areas of risk, to align on a list of the Company’s most salient human rights risks.
Statement of Salient Human Rights Risks
Salient Risks are defined as those risks having the highest potential impact to people’s human rights as a result of the company’s activities or business relationships. As per UNGP guidance, Salient Risks do not factor in mitigating steps that we as a company may be taking on specific issues; instead, they focus on issues likely to be encountered due to the nature of our business.
As a step in identifying our Salient Risks, we engaged in detailed discussions about our business practices with internal and external stakeholders. Through this process, management has aligned to the following five (5) Salient Risks, which will inform the ongoing work we do on human rights and responsible sourcing:
Forced labour: Forced labour refers to situations in which persons are coerced to work using violence or intimidation, or by more subtle means such as accumulated debt, retention of identity papers, or threats of denunciation to immigration authorities.
Child labour: Child labour refers to work that is mentally, physically, socially, or morally dangerous and harmful to children; and/or interferes with their schooling by: depriving them of the opportunity to attend school; obliging them to leave school prematurely or requiring them to attempt to combine school attendance with excessively long and difficult work. The International Labour Organization Convention establishes minimum age requirements for many jurisdictions, which can be varied by local regulations.
Discrimination, Harassment, and Abuse: Unequal treatment, directly or indirectly, on various grounds including race, ethnicity, sex, language, religion, political or other opinion, national or social origin, property, and birth or other status (such as sexual orientation or health status, for example having HIV/AIDS). Harassment and abuse include but are not limited to violence; corporal punishment; harsh or degrading treatment; sexual or physical harassment; mental, physical, verbal, or sexual abuse.
Livelihoods: This includes conditions related to maximum working hours, days off, fair wages, job security, social security, and benefits. The right to an adequate standard of living requires, at a minimum, that everyone shall enjoy the right to necessary subsistence: adequate food and nutrition, clothing, housing, and necessary conditions of care when required.
Occupational Health and Safety (OHS): Refers to the protection of workers from exposure to short- and long-term risks at work to reduce workplace injuries and illness and promote worker wellbeing.
For each of the identified Salient Risks, Loblaw recognizes that there are inherently different risk profiles for domestic, migrant, and international workers. In keeping with the prescribed UNDG process, Loblaw assessed each identified risk on its face value, for instance without the distinction of the very different rules, regulations and working conditions of a retail store in our home market Canada compared to a factory or operation on a different continent. The mitigation strategies we will develop and deploy against the Salient Risks will draw appropriate distinctions between individuals working in our own operations and those within our global supply chain.
Our Next Steps
We intend to conclude our assessment with ELEVATE at the end of 2022. We will provide updates on our process to design and embed salient risk mitigation strategies, and on our plans to track and disclose future progress.
Supply Chain Compliance Program
Supplier Code of Conduct
Loblaw’s supplier relationships are guided by the Loblaw Supplier Code of Conduct. This Supplier Code sets minimum expectations and guidelines with respect to responsible sourcing including our commitments to human rights, the environment, health and safety, regulatory compliance, business ethics and the development of a diverse and sustainable supply chain. We expect our Suppliers to communicate these expectations to their contractors, agents, sub-contractors and sub-agents, including any labour agencies, who are engaged to assist with providing goods or performing services for Loblaw.
Facility Compliance Audits
Loblaw conducts audits on facilities we source through that are designed to confirm that suppliers uphold our Supplier Code of Conduct. Below we provide details with respect to our audit compliance program.
Prior to commencing sourcing activities, Loblaw must audit factories, processing facilities, plants, farms, packing or other facilities outside of Canada and the U.S. that are going to produce, process, manufacture, grow, raise, package or pack (i) control brand products sourced by Loblaw, or (ii) products for which Loblaw is the Importer of Record (IOR). Once sourcing has begun, an audit of the working conditions of the facility must be conducted annually, and a fire, structural and safety assessment (if applicable) must be conducted every three years. In addition, facilities located in designated high-risk locations such as Southeast Asia, require a fire, structural and safety assessment to be conducted prior to Loblaw beginning to source from the facility.
These audits reinforce worker rights and safety by conducting reviews and assessments to ensure that, among other things:
labour is voluntary;
workers are properly compensated;
workers are not exploited;
facilities comply with employment standards (including minimum age);
working hours are consistent with local laws and standards; and
facilities meet health and safety laws and regulations.
Our facility audit compliance team is comprised of a core team in Toronto, supplemented by in-market teams in China, Bangladesh, Thailand, Vietnam, Cambodia, and India.Facility compliance audits are conducted by third-party experts using a best-practice audit framework. Where suppliers provide us with facility compliance audits using an acceptable global framework, we conduct an equivalency review to ensure the audit scope meets our standard.
If a facility audit identifies a compliance issue such as child labour, forced or bonded labour, or life-threatening health and safety situations, we suspend our relationship with that facility (and/or supplier). Less severe infractions can also result in suspension. In both cases, we will work with suppliers to determine whether satisfactory remediation of the compliance issue is possible. We will terminate relationships with suppliers who are unable or unwilling to remediate non-compliance to our satisfaction within a reasonable timeframe.
As of 2022, the facility compliance audits program applied to nearly 700 suppliers operating more than 1,400 facilities. In 2022, we conducted more than 1,200 facility compliance audits and follow ups which resulted in Loblaw permanently de-listing ten facilities due to one or more of the following infractions: suspected child labour, attempted bribery and building structural/fire safety concerns.
We continuously review the supplier monitoring program to determine if an expanded scope of the program is necessary and as we are made aware of new considerations as they relate to our supply chain.