Over 70% of Independent Loblaw Shareholders Demand Supplier Audit Transparency
Union-filed shareholder motion earns significant support
Burnaby — Today, at the Loblaw (TSX: L) annual general meeting of shareholders, independent shareholders voted 72% in favour of a shareholder proposal asking for the company to release more information on supplier audits (34% overall). The shareholder proposal was submitted by the B.C. General Employees’ Union (BCGEU), an institutional investor in Loblaw.
Currently, Loblaw only discloses the number of audits it conducts with no additional information. Investors believe that enhanced information is required to ensure supply chain risks are being managed. The two largest proxy advisory firms in the world, Institutional Shareholder Services (ISS) and Glass Lewis, both recommended that shareholders vote in favour of BCGEU’s proposal.
BCGEU filed the proposal following concerning supply chain controversies at Loblaw related to forced labour in the Uyghur region of China. In early 2021, Loblaw committed to not source cotton produced the Uyghur Region of China. 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 the Uyghur region of China as recently as August 2021. In addition, a CBC investigation found Loblaw has sold tomatoes produced with forced labour.
In response to the AGM results, BCGEU President Stephanie Smith released the following statement:
“Right now, investors are in the dark about what is going in Loblaw’s supply chain. Our proposal asked a simple question: should Loblaw disclose more information on the results of its audits in line with its peers? Today’s significant vote indicates Loblaw shareholders agree it must. We intend to keep pushing Loblaw to manage risk and protect shareholder value.”
Both Walmart and Tesco disclose more details on the results of those audits than Loblaw. Gildan reports results of supply chain audits and classification criteria for the results of supply chain data.
Loblaw is majority owned by George Weston Limited and the Weston family.
View the BCGEU shareholder proposal here (page B-2 or 87): https://dis-prod.assetful.loblaw.ca/content/dam/loblaw-companies-limited/creative-assets/loblaw-ca/investor-relations-reports/annual/2022/2022_Loblaw_Circular_SEDAR_EN.pdf
View BCGEU's investor letter brief: https://assets.nationbuilder.com/bcgeu/pages/896/attachments/original/1650903276/2022-037%20INVESTOR%20BRIEF%20LOBLAWS8.pdf?1650903276
About BCGEU: BCGEU is one of the largest unions in British Columbia, with over 85,000 members in almost every community and economic sector in the province. Under BCGEU's capital stewardship strategy, the union has submitted shareholder proposals at some of Canada’s largest companies on topics such as human rights, racial equity, and executive compensation. The union's strategy has succeeded in achieving strong commitments on ESG issues.
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