Human Rights Due Diligence

Resolution Text

RESOLVED, that the shareholders of Walmart Inc. (“Walmart”) hereby request that the Walmart Board of Directors (the “Board”) prepare a report, at reasonable cost and omitting proprietary information, on Walmart’s human rights due diligence (“HRDD”) process to identify, assess, prevent and mitigate actual and potential adverse human rights impacts in its domestic and foreign operations and supply chains.

Supporting Statement:

As outlined by the UN Guiding Principles on Business and Human Rights, we recommend the report identify:

The human rights principles used to frame its risk assessments;

The human rights impacts of Walmart’s business activities, including domestic and foreign operations and supply chains;

The types and extent of stakeholder consultation; and

Walmart’s plans to track effectiveness of measures to assess, prevent, mitigate, and remedy adverse human rights impacts.

We strongly believe that HRDD reduces long-term risks for Walmart and its stakeholders. Companies that proactively identify and mitigate human rights abuses may avoid costly backlash from communities, customers, and government regulators. For leading retailers like Walmart, this creates an imperative not to cause or contribute to abuses within their operations or supply chains. As one of the largest employers in the United States, Walmart’s business practices and relationships with suppliers operating in high-risk sectors could expose Walmart and its investors to legal, reputational and financial risk.

Increased public scrutiny on employers whose employees rely heavily on public assistance, and on industries heavily affected by the coronavirus pandemic or reliant upon high-risk suppliers magnifies these risks. The New York Times reported on alarming working conditions for Walmart’s domestic workers during the pandemic1 and accusations that Walmart punished workers for using sick time.2 Walmart was sued for alleged failure to accommodate pregnant employees; while the lawsuit was dismissed, it seemingly pressured Congress to intervene.3 Recent scholarship found that in 2022, at least half of Walmart’s hourly workers earn under $29,000 annually,4 insufficient wages for a basic standard of living. Responsible companies must strive to identify, remedy and prevent poor labor practices to mitigate these reputational and legal risks.

Improving treatment of employees and foreign and domestic supply chain sourcing not only garners positive attention and customer loyalty, it can inoculate companies from anticipated regulatory changes, like the impending European Corporate Sustainability Due Diligence Directive and the Uyghur Forced Labor Prevention Act (which requires importers to implement certain due diligence processes). Competitors, including Kroger, Jumbo, Tesco and others, have conducted or committed to HRDD, including by conducting human rights impact assessments on high-risk commodities.

Given the low cost of conducting and reporting on HRDD relative to the significant potential costs tied to human rights violations, we urge the Board to adopt this proposal as a cost-effective means of reducing exposure to risk and protecting basic human rights.

1 https://www.nytimes.com/2021/09/27/business/walmart-coronavirus-workers-safety.html

2 https://www.nytimes.com/2017/06/01/business/walmart-workers-sick-days.html

3 https://news.bloomberglaw.com/daily-labor-report/walmart-pregnancy-accommodation-ruling-puts-pressure-on- congress

4 ttps://time.com/charter/6238245/still-broke-rick wartzman/#:~:text=Wartzman%20estimates%20that%20at%20least%20half%20of%20Walmart%E2%80%99 s,a%20 fair%20chance%20that%20you%E2%80%99ll%20still%20be%20poor