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Global Social Compliance Program


Our Social Compliance Program is worldwide and attention to ethical sourcing spans across many departments. The Program is guided by a global, executive level committee. Our Vendor Code of Conduct serves as the foundation for our program, setting forth our expectations that all merchandise vendors and factories will act ethically and responsibly and respect the rights of workers.

We take a comprehensive approach to social compliance, and our Program includes training as well as factory auditing. We also recognize that some of the issues facing retailers are challenging. The auditing portion of our Program is focused on vendors, agents, and factories involved in producing merchandise designed by us. We focus our auditing efforts on these factories because we believe this is where we are most likely to be able to have a meaningful impact. We aim for continuous improvement, as we believe this is in the best interest of the workers in these facilities.


PROGRAM OVERSIGHT


Our Social Compliance Program is included as part of our ongoing enterprise risk assessment, and, as such, our Senior Vice President (SVP), Chief Risk and Compliance Officer, has responsibility for global social compliance. The SVP periodically reports to our Board of Directors on aspects of our Social Compliance Program, which may include training efforts, and audit results, as well as other compliance-related topics. Program management is overseen by the Assistant Vice President (AVP), Global Social Compliance, who works closely with representatives of our merchandise and purchasing functions across all of TJX’s businesses and with the Global Social Compliance Committee.

This Committee is comprised of senior leadership from the U.S., Canada, and Europe and from relevant disciplines within TJX, including Merchandising, Sourcing, Imports, Compliance, Enterprise Risk Management, Legal, and Global Communications. The Committee meets on a regular basis, oversees compliance of TJX’s ethical sourcing initiatives, and serves in an advisory capacity, helping to guide the strategy and execution of the program. Our international buying offices and merchants also play key roles in achieving our goals.



For us, value is a combination of Brand, Fashion, Price, and Quality.
  • EXTERNAL STAKEHOLDER ENGAGEMENT

    As we continue to develop and evolve our Social Compliance Program, we engage with various audiences and consider their guidance. We have reviewed and incorporated many of the international human rights standards enunciated by international bodies, such as the United Nations and the International Labour Organization, and have received and at times, incorporated insights and suggestions from socially responsible investors. To conduct our audits, we have retained and engage with several organizations that have extensive experience and expertise in the field of ethical sourcing – UL LLC (UL), Intertek Group PLC (Intertek), and Omega Compliance Ltd. (Omega). Additionally, these groups assist us with program development, supplier education and training, and compliance monitoring. We are members of the National Retail Federation, the Retail Industry Leaders Association, Ethisphere’s Business Ethics Leadership Alliance, Boston College Center for Corporate Citizenship, and the Ethics & Compliance Officer Association. We also participate in industry conferences and stay current on the latest developments in social compliance and ethical sourcing. Finally, we benchmark ourselves against the programs of companies whose business models more closely relate to our own, as well as vertically-integrated retailers whose business models differ significantly.

  • Factory Monitoring Program

    Some of our merchandise is manufactured for us and some we design, particularly when what we are seeing in the marketplace is not the right value for our customers, meaning the right combination of brand, fashion, price, and quality. We believe our factory monitoring efforts are best devoted to products we design and have manufactured for us, because this is where we are most likely to be able to have a meaningful impact. When we source these products we require the buying agents and vendors that are involved to identify any active factories that they use, or intend to use, to produce such merchandise and request that we have an audit prior to starting to produce our goods.

    Together with our representatives, UL, Intertek, and Omega, we work closely with our agents and vendors so that they understand our Social Compliance Program, our Vendor Code of Conduct, and our factory auditing process. Our merchants also play an important role in educating suppliers on our Social Compliance Program requirements and encouraging them to make improvements at their facilities, when necessary. Additionally, our buying offices have one or more Associates assigned to support our local social compliance efforts and assist in driving positive change at the factories.

    We created the TJX Global Social Compliance Manual, which contains, among other important guidance, an audit procedure outline and factory evaluation checklist to help prepare the factory for the audit process. This tool is available in seven languages and offers detailed information designed to help our agents, vendors, and factory management better understand the expectations of our Vendor Code of Conduct, as well as our monitoring and corrective action processes. We require our buying agents to disseminate this manual to their entire TJX vendor base.

  • Factory Auditing Process

    Factories manufacturing merchandise that we designed are required to undergo periodic audits to ensure adherence to our Vendor Code of Conduct, which includes adherence to local laws. In conjunction with our third-party auditors, we conducted approximately 750 audits in 2018, and we accepted an additional 1,300+ audits from accredited, third-party sources, like Amfori’s Business Social Compliance Initiative (BSCI), Worldwide Responsible Accredited Production (WRAP), and Sedex Information Exchange Limited (SEDEX). We believe this industry trend of collaboration and accepting audits from accredited sources is beneficial in that it helps reduce audit fatigue among suppliers, while helping companies obtain important information to evaluate their supply chain. Factories are expected to cooperate fully with us and our auditors and to provide access to facilities and documents. We have developed comprehensive compliance program guidelines for our third-party factory auditors. We regularly review and modify these guidelines for consistency with evolving social compliance issues and trends.

    On-site audits generally include one to two full working days at each audited factory, and include the following components:


    Our AVP, Global Social Compliance, and International Buying Office Associates participate in shadow audits with auditors. Shadowing is practiced to gain a better understanding of the compliance audit process and challenges, and to better aid TJX in our review of both our audit results and, more broadly, our program’s effectiveness.

  • Corrective Action and Remediation

    For factories in good standing, our goal is to conduct biennial audits. At the conclusion of an audit where it has been determined that corrective action is required, a Corrective Action Plan (CAP) is created and concerns are discussed by the auditors with factory management. A copy of the CAP is provided to factory management to assist them in resolving any violations or deficiencies detected during the audit. To encourage collaboration between our buying agents and vendors, a copy of the CAP is also forwarded to both parties’ attention shortly following the audit. TJX receives a copy as well. Factory management is requested to sign the CAP to verify their understanding of the findings.

    For lower-risk deficiencies, our buying agents or direct vendors are expected to provide evidence to us demonstrating that remedial action has been carried out. However, where moderate to more serious violations of the Vendor Code of Conduct or the local laws are detected, we require that our third-party representatives re-audit the factory. Problems are tracked and factories are notified of the expectation of remedial action. Our goal is to have re-audits complete within six months of the prior audit.

    We expect that continuous improvement is verified during the re-audit. Our general goal is that each re-audit demonstrates measurable improvement from the prior audit. If a factory receives several consecutive noncompliant grades, this pattern may suggest that required remedial action is not being undertaken.

    Though we strive to work with vendors to address and resolve shortcomings in their operations, under extreme circumstances, we may conclude that our merchandise can no longer be produced in certain factories, or that they will be precluded from producing goods for us until they demonstrate that they have addressed the situation and have put management systems in place to prevent a recurrence. Our preferred approach, however, is to work with vendors whenever possible to address and resolve issues identified during audits because improving working conditions in factories in underdeveloped countries is an ongoing effort and TJX, like other retailers, continues to face this challenge. We believe this is preferable to ceasing use of these factories as it gives us the ability to influence positive change. We believe that this “continuous improvement” model is in the best interest of the workers in the facilities from which we source goods.

    Integral to the success of our compliance program is ongoing involvement and partnerships between TJX, our ethical sourcing experts – UL, Intertek, and Omega, our buying agents, and vendors to address shortcomings identified in audits and to work toward improvement.

    There are several issues that we consider to be “zero tolerance” issues. That is, we would immediately terminate use of a factory found to be in violation of certain aspects of our program, including for example, our prohibition of bribery/corruption; child, prison, slave, or forced labor; human trafficking; maintaining a facility with all doors and/or exits locked; use of chemicals banned in that region; and failure to pay any wages.

  • Encouraging Environmental Responsibility

    In keeping with our commitment to protect the environment, audits conducted on behalf of TJX include a review of factory policies, practices, and procedures concerning the handling of chemicals and other hazardous waste, and a review of whether the factory is in compliance with applicable environmental laws and regulations. Our Vendor Code of Conduct strongly encourages our vendors to share our commitment to protecting the environment by operating in a sustainable manner where possible, for example by conserving and protecting resources, such as water and energy, and taking into consideration environmental issues that may impact local communities. Furthermore, our Supplier Training Program has been expanded to include coverage of the protection and conservation of water, as well as an overview of the legal requirements on the use of chemicals and hazardous materials in the regions where products are both manufactured and sold. Training includes case studies to assist vendors and factory management in better understanding our expectations and our Vendor Code of Conduct requirements in this area.

  • Continuous Improvement

    The driving tenet of TJX’s Vendor Code of Conduct and our Social Compliance Program is continuous improvement. While we expect each of our vendors and agents to adhere to the expectations set forth in our Vendor Code of Conduct, we also encourage them to make improvements throughout their operations. To advance these objectives, we do more than simply audit suppliers to test compliance; we also provide education and training to our agents, vendors, and factory management, so that they understand our expectations and can develop meaningful processes to meet and exceed these expectations.