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Human Rights & Social Responsibility

Our Commitment

We are committed to upholding human rights and working conditions across our supply chain, and collaborating with industry leaders to ensure our global partners meet our rigorous standards.

The global economy brings together people from around the world who contribute to the creation of a product, from growing or extracting materials, to processing, production, packaging and final transportation to our customers.

As an enterprise with a global footprint, we hold a deep respect for other cultures and understand that different economies have their own dynamics. However, we only seek partnerships with those who share our Core Values and beliefs about the fair treatment of people. We know that our customers, shareholders and employees trust us to responsibly source the products that we sell, and to work with our vendors to continuously improve their social and environmental impacts. Our resolve on this remains the same regardless of where in the world we conduct business.

This is particularly relevant when we think about our owned brand products, which we design and develop specifically for life in Canada but that are sourced from countries around the world. Our global sourcing model allows us to provide products to our customers at the best possible price, but it also means we must responsibly manage all underlying supply chain, procurement and quality control processes. As a retailer, we do not own or operate the manufacturing facilities where the products we sell are produced; however, our suppliers are a critical part of our operations, and we are invested in advancing social and environmental standards throughout our supply chain.

Our customers appreciate the wide variety of quality goods they can find in our stores, which would not be possible without the many vendors we partner with. We consider our vendors to be a part of our team, and it is important to us that when their employees come to work – no matter where in the world they are – they are safe, paid fairly and treated with respect and dignity. All vendors that produce our owned brand products, as well as those that produce nationally branded products, are held to our responsible sourcing standards.

For example, all our vendors must commit to our Supplier Code of Business Conduct or an approved equivalent standard, and are subject to a risk assessment, which helps us determine the level of our oversight activities on their operations. We expect all our vendors to have responsible sourcing practices in place within their supply chains, and as we increase transparency in our value chain, we will be working with those vendors to protect workers’ rights.

We Are Here to Make Life in Canada Better by providing customers the products they want, in a way that respects human rights.

Our Approach

To ensure that our responsible sourcing standards are upheld with our global partners, all our owned brand vendors must go through a rigorous process both before we initiate work with them and throughout our relationship. We expect that the products we buy are made by vendors who treat their workers with respect, compensate them fairly and provide a safe work environment.

Our responsible sourcing process

Factory capability assessment:

All potential owned brand vendor factories are subject to a comprehensive audit that is used to measure quality compliance and fit with our company culture and standards, including working conditions for factory workers.

Supplier Code of Business Conduct:

Once we have agreed to work with a vendor, they are required to either sign and attest to our Supplier Code of Business Conduct, which outlines our standards and policies on labour, work conditions, wages, health and safety, and the environment, or provide their own standards that meet or exceed our own. The Supplier Code of Business Conduct is supported by an audit process that includes training and education to help our vendors understand and apply all policies.

Risk assessment:

We risk assess all our vendors to determine the level of monitoring we will employ. This risk-assessment process is ongoing, and we periodically review our risk assessments to ensure that they remain current and accurate.

Periodic factory audits:

Based on our risk assessment, our vendors are audited on a periodic basis for compliance against our Supplier Code of Business Conduct. We leverage the amfori Business Social Compliance Initiative (BSCI) standards for most of our audits. Factories may also submit a valid third-party audit report (referred to as a shared audit) produced against an approved social audit standard, such as Sedex Members Ethical Trade Audit (SMETA), Social Accountability International (SA8000), Worldwide Responsible Accredited Production (WRAP), Social & Labor Convergence Program (SLCP), Better Work, or International Council of Toy Industries (ICTI), and we leverage virtual audits for facilities under access restrictions or where local auditors are limited. Any non-conformance that is found is addressed collaboratively to remedy the situation.

Partnering with the amfori Business Social Compliance Initiative

Since 2003, the amfori BSCI has helped companies improve social performance in their supply chains, covering areas ranging from fair remuneration to ensuring no child labour. This global audit standard is used by over 2,400 retailers, importers, brands and associations from more than 40 countries, and it covers a network of 27,000 factories. Through our partnership with amfori BSCI and the support of certified auditors, we monitor and work with our suppliers to continuously improve working conditions around the world.

amfori Business Social Compliance Initiative

For more information visit www.amfori.org

To support this process, we have dedicated offices located in China (Hong Kong, Shanghai and Shenzhen) and Bangladesh (Dhaka and Chattogram), and remote staff in Vietnam, all of which enable us to understand the local cultures and the manufacturing sectors. These teams visit factories prior to vendor and product selection for our owned brand products to ensure CTC standards are met or surpassed. For example, we expect our vendors to be:

  • Fair, in that compensation is paid on time, excessive overtime is not allowed, and workers do not have to pay for their employment
  • Safe, meaning that the workplace – including dormitories and other worker spaces – is healthy and safe, that fire action plans exist and are practised, and that workers are free from harassment and abuse
  • Respectful of human rights, where absolutely no child labour, forced labour, or discrimination is allowed and where workers have freedom of association and can engage in collective bargaining

Over the decades, we have discovered that the most effective approach to raising standards is through due diligence, collaboration, open lines of communication and seeking to understand. It is through this style of partnership that we have been able to comprehend the unique pressures and social factors faced by global suppliers that have been tasked with meeting escalating production demands while protecting and building their quality workforces. Equipped with this greater awareness, we come together with facility owners and like-minded organizations to uphold human rights, improve working conditions, respect cultural values and create outcomes that benefit our stakeholders and the global communities in which we operate.

1

Upholding and continuing to support workers’ rights and working conditions across our supply chain

We apply a risk-based approach to identify the risks in our supply chain and deploy compliance mechanisms where the risks are the highest. As a retailer that sells both owned brand products (products sold under private label brands that are designed internally and manufactured through supply chains under our direct control or influence) and national brand products (third-party products that are designed and manufactured outside of our control and sold at multiple retail stores), we believe our responsibility is greatest with our owned brand production, and accordingly focus most of our auditing and compliance efforts with these factories. We also consider the country where the factory is located and the stringency of their local laws when assessing where to direct these efforts.

Our auditing and compliance efforts include monitoring for adherence to international labour standards on workers’ health, safety and human rights. This is primarily accomplished through our partnership with the amfori BSCI, a globally recognized audit and continuous improvement program. The amfori BSCI platform brings together over 2,400 retailers, importers, brands and national associations to collaborate to improve the ethical behaviour towards workers and the political and legal framework for international trade in a sustainable manner. As part of our partnership with amfori BSCI, we work with certified global audit firms to conduct ongoing factory inspections against the amfori BSCI standards. We encourage all suppliers in our supply chain to engage in ongoing audits and to work to continuously improve their management systems.

We employ various mechanisms to ensure compliance with our labour standards and applicable laws, including a robust audit strategy. First, we aim for 100% of our Tier 11 owned brand supplier facilities to have been audited to a satisfactory labour code of conduct within the last two years. By the end of 2022, 93% of our Tier 1 owned brand supplier facilities were audited, with the gap primarily due to certain regions being placed on hold for audits (such as high COVID-19 regions and Ukraine), or timing delays with audits that have been scheduled in early 2023. We also conduct ad-hoc audits in alignment with our risk assessments or where previously obtained audits have expired. In 2022, we assessed 1,261 audits of factories manufacturing our owned brand products, either through globally recognized third-party audit firms, virtual audits or shared audits that meet our standards.

To further enhance our responsible sourcing practices, we are looking to invest in an enhanced Enterprise Sourcing Management System and a Vendor Master Data Management System. Improved systems will enable us to capture more detailed vendor and factory data to increase transparency across banners and product categories and identify new risks and opportunities to improve environmental and social outcomes. Our initial focus with these systems would be to map the suppliers that work with our owned brand apparel and footwear vendors, as that industry has been identified as having a higher rate of environmental and social risks in its supply chain.

Enhancing transparency with our owned brands

We sell products under more than 100 owned brands, and we are proud of our partnerships with our owned brand vendors across the globe. In addition to meeting our strict sourcing standards, our vendors work with us to continually innovate and improve their social and environmental impacts. Please see a list of our Tier 1 owned brand apparel and footwear vendor factories.

Tracking our cotton: Working towards raw materials traceability

We are enhancing the traceability of the cotton in our apparel and home décor products by collaborating with farmers, leveraging innovation in chemical traceability and partnering with organizations like CottonConnect in an effort to achieve full visibility.

CottonConnect Logo

CottonConnect is an industry-leading not-for-profit organization that works with farmers in countries like India and China to improve sustainability practices in the cotton supply chain. Our long-standing partnership with CottonConnect enables us to source cotton fairly and sustainably by creating more robust, resilient, and successful raw material supply chains. Learnings from the traceability of cotton will be used to expand our traceability strategy to other raw materials that have social or environmental risks.

2

Addressing non-conformances with our owned brand vendors

We have adopted a risk-based approach to auditing factories that celebrates strong performance, encourages improvements and remedies any non-conformance against our standards. When we identify areas that can be improved, our Responsible Sourcing team works with the vendors and factory management to develop a continuous improvement plan.

Our 2022 factory audit results:

1,261

Number of audits assessed (amfori BSCI audits, shared audits and virtual audits)

24

Number of countries in which audit assessments were completed

6

Number of priority non-conformance incidents reported

0.5%

Percentage of audits with priority non-conformances

100%

Corrective action rate

In 2022, our audit program uncovered six priority non-conformance incidents related to our Supplier Code of Business Conduct: five related to bribery and one related to physical abuse. In each instance, we worked with the vendor to understand the situation and develop a corrective action plan, and our Responsible Sourcing team verified that the plans were implemented to address the issue.

Woman smiling with others in a sewing factory

Increasing worker safety in Bangladesh

In 2019, we partnered with 25 brands and retailers to establish Nirapon, a members-led organization that uses education and capability-building to change the behaviours and perspectives of brand representatives, factory owners, managers, and workers so safety becomes an inherent part of daily operations. Nirapon provides a Safety Management Program which includes helpline services through the Amader Kotha Helpline, worker training with BRAC, and a factory maintenance and safety support program with ELEVATE. In 2022, we leveraged the Nirapon Safety Management Program with the 51 factories that manufacture our owned brand products in Bangladesh, helping to uphold the health and safety of the workers in those factories.

1 Our Tier 1 owned brand suppliers are the factories that supply the finished owned brand goods directly to CTC. For more information on how suppliers are categorized across our supply chain, please see the Sustainable Supply Chain Management section.

Unless otherwise indicated, information in this ESG Report is provided for the 2022 fiscal year. For further information on our approach to ESG reporting, including our Glossary, which sets out definitions of capitalized terms and acronyms that are not otherwise defined on this page, and our forward-looking information disclaimer, please click here.