Supply chain accountability

We have taken significant steps to improve transparency within our international supply chain, specifically as it relates to apparel manufacturing and materials procurement.

We work with leading international apparel brands, non-governmental agencies and labour groups to improve industry working conditions, benefitting millions of garment workers globally.

For more than a decade, we have maintained a factory audit compliance program comprised of a combination of Loblaw colleagues and third-party audit compliance managers and production auditors on the ground in China, Bangladesh, Thailand, Vietnam, Cambodia, and India. The core Supply Chain Compliance team located in Toronto, Canada work in conjunction with the on the ground team to oversee Loblaw’s Supply Chain Compliance programs ensuring that workplace condition assessments are conducted to our standards, and that our products are sourced from approved factories. Our audits and audit compliance program are designed to confirm that suppliers providing goods to Loblaw uphold our Supplier Code. 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. We will adjust the program as deemed necessary. Prior to sourcing goods from a supplier, Loblaw has the factories, processing facilities, plants, packing or other facilities, which are located outside of Canada and the USA, audited for (1) control brand products sourced by Loblaw; or (2) products for which Loblaw is the Importer of Record. Once sourcing has begun, Loblaw has processes in place to audit working conditions as well as fire, structural and safety assessments (if applicable). 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. Loblaw’s audit program reinforces the following factors by assessing and confirming that they are adhered to:

• worker rights and safety;

• voluntary labour;

• 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 2024, the facility compliance audits program applied to 550 suppliers operating more than 1,200 facilities. In 2024, we conducted more than 1,350 facility compliance audits and follow ups which resulted in Loblaw permanently de-listing seven facilities. All other infractions and temporary suspensions were resolved in the ordinary course and to our satisfaction.

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.