GLOBAL SOCIAL COMPLIANCE PROGRAM

We strongly value our vendor relationships as we believe they have been a key factor in our long-term success. On a worldwide basis, in Fiscal 2023, TJX had more than 1,200 Associates in its buying organization who source merchandise in a variety of ways from a universe of approximately 21,000 vendors and more than 100 countries around the world. Sometimes 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 may help design or develop merchandise to be manufactured just for us. We focus our auditing efforts on the factories that manufacture this merchandise because we believe this is where we are most likely to be able to have a meaningful impact.

Our philosophy towards social compliance mirrors our culture, and just as we are committed to honesty, integrity, and treating others with dignity and respect, we expect those that we do business with to do the same. Our approach to our Global Social Compliance Program includes:

Vendor Code of Conduct:

• Our Vendor Code of Conduct serves as the foundation for our Global Social Compliance Program, incorporating human rights, labor rights, and anti-corruption standards, among other expectations.
• TJX’s purchase order terms and conditions include a requirement for merchandise vendors to adhere to our Vendor Code of Conduct and require that any factories or subcontractors they use also comply with our Code.

• Factory Auditing

  We focus the auditing portion of our Global Social Compliance Program where we have more influence in bringing the products to market. This means our auditing program typically reaches factories that produce merchandise that we have helped design or develop just for 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. 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.

  Together with our representatives, UL Solutions LLC, Intertek Group PLC, and Omega Compliance Limited, we work closely with our buying agents and vendors so that they understand our Global Social Compliance Program, our Vendor Code of Conduct, and our factory auditing process. Our internal teams also play an important role in educating vendors on our Program requirements and encouraging vendors to make improvements at their facilities, when necessary. Additionally, we have Associates that support the program in various buying offices around the world.

  Our TJX Global Social Compliance Manual 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 agents, vendors, and factory management in our audit program 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 and have it posted to our vendor website, which is available to all vendors.

  Factories included in our Global Social Compliance Program are required to undergo periodic audits to confirm adherence to our Vendor Code of Conduct and local laws. In Fiscal 2023, we reviewed more than 2,900 audits, including:

  • Audits from recognized, third-party sources, including amfori’s Business Social Compliance Initiative (BSCI), Worldwide Responsible Accredited Production (WRAP), and Sedex Information Exchange Limited (SEDEX)
  • Audits conducted on behalf of TJX by third-party organizations, including UL Solutions (UL), Intertek, and Omega

  
  

  Association of Professional Social Compliance Auditors (APSCA)

  In Fiscal 2023, most of the audits we accepted were conducted by auditors rated at the Registered Auditor (RA) or Certified Social Compliance Auditor (CSCA) level by the Association of Professional Social Compliance Auditors (APSCA), a leading industry association for social compliance auditing. Through their APSCA membership, these auditors agree to adhere to all quality and ethical requirements outlined in APSCA’s Code and Standards of Professional Conduct.

  Audit Reports

  In recent years, industry collaboration has resulted in an increase in the number of factories that can provide us with a recent audit report from BSCI, WRAP, and SEDEX for our review. We believe this industry collaboration is beneficial as it helps reduce audit fatigue among factories, while helping companies obtain important information to evaluate their supply chain.

  We also continue to work with UL, Intertek, and Omega to conduct audits on behalf of TJX, especially when a BSCI, WRAP, or SEDEX report is unavailable. We have developed comprehensive compliance program guidelines for UL, Intertek, and Omega, and regularly review and modify these guidelines for consistency with evolving social compliance issues and trends. Factories are expected to cooperate fully with us and our auditors and to provide access to facilities and documents.

  Auditing Process

  When UL, Intertek, and Omega conduct audits on behalf of TJX, the audits generally include one to two full working days at each audited factory, whether in-person or remote, and cover the following components:

  • Interview with factory management
  • Policy, payroll, and documentation review, including confirmation that factory management has verified the ages of job applicants before hiring to protect against potential hiring of child labor
  • Factory walk-through
  • Health and safety inspection
  • Chemical and hazardous materials review, including usage information and verification of Material Safety Data Sheets, chemical safety, and hazardous waste programs
  • Confidential worker interviews
  • Debrief with factory management

  
  

  Our Assistant Vice President (AVP), Global Social Compliance, and certain Associates that support our program in buying offices around the world participate in shadow audits with auditors. Shadowing is practiced with an intent 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

  Audit reports are reviewed by TJX and assigned a rating of satisfactory, needs improvement, or unsatisfactory. For factories assessed as satisfactory, our goal is to conduct biennial audits. When a factory receives a needs improvement or unsatisfactory rating, a Corrective Action Plan (CAP) is created, and the auditors discuss concerns with factory management. A copy of the CAP is provided to factory management to assist them in resolving 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. Factory management is requested to sign the CAP to verify their understanding of the findings.

  For factories with a needs improvement rating, our buying agents or direct vendors are expected to provide evidence to us that remedial action has been carried out within six months of the audit. Where moderate to more serious violations of the Vendor Code of Conduct or local laws are detected, meaning the factory has received an unsatisfactory rating, we require that our third-party representatives re-audit the factory or require a follow-up audit from a recognized, third-party source within 6 months.

  We expect that improvement is verified during the re-audit. Our general goal is that each re-audit demonstrates measurable improvement from the prior audit. Factories are notified of any additional remedial action following a re-audit, as needed. We recognize that 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 those factories 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 is an ongoing effort. We believe this is preferable to ceasing use of these factories as it gives us the opportunity to encourage positive change. We believe that this continuous improvement model is in the interest of the workers in the facilities from which we source goods.

  There are several issues that we consider to be zero tolerance issues: for example, bribery/corruption; child labor and forced or slave labor; human trafficking; maintaining a facility with all doors and/or exits locked; use of chemicals banned in the region; and failure to pay wages. If a factory is found to be in violation of our requirements on these topics, we inform our vendor that it can no longer provide us with goods made by that factory.

  Encouraging Environmental Protection

  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 the factory’s compliance with applicable environmental laws and regulations.

  In addition, 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. Our social compliance training covers 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.

• Social Compliance Training

  We recognize that it is important to routinely train buying agents, vendors, and factory management, and we strongly encourage all new factories in our factory auditing program to participate in such training. Typically, we hold an average of 8-12 training sessions a year, focusing on various locations around the world that are regionally close to factories included in our factory auditing program. In Fiscal 2023, training sessions were held remotely.

  Our training sessions are conducted by representatives from UL Solutions, one of our third-party auditors, in partnership with our AVP, Global Social Compliance. We believe the presence of our management at these sessions demonstrates to factory management, buying agent management, and vendors that TJX is committed to our Global Social Compliance Program. Over time, our training sessions have been held in various locations and have included the following topics:

  • TJX’s Vendor Code of Conduct and the expectations contained in this Code
  • Local labor laws
  • Anti-bribery laws (including the Foreign Corrupt Practices Act and the U.K. Bribery Act)
  • Regulations on chemicals and hazardous materials, Material Data Safety Sheets, hazardous waste management, and required environmental permits
  • Business ethics
  • TJX’s policy against forced and involuntary labor, including slavery and human trafficking
  • Fire safety
  • Water conservation recommendations
  • TJX’s fur practices
  • Factory compliance best practices
  • Case studies to help demonstrate how to embed management remediation systems
  • Open discussions with vendors and factory management on compliance challenges

  
  

  In addition to the above, we often include targeted training based on geographic or other regional differences to ensure that we are covering the most pertinent topics for each training session, and we may break into focus groups to enhance training through shared learning.

  Designated Associates at various buying offices around the globe also provide instruction to vendors and factory management on our ethical sourcing expectations. We plan to continue to devote resources to these important training initiatives and to review and update these initiatives as appropriate.

  Associate Training

  TJX Associates involved in the development and buying of merchandise are expected to undergo formal social compliance training biennially. In addition, through informal meetings and discussions, our AVP, Global Social Compliance continues to share learnings, updating our product development and buying Associates on the requirements of TJX’s Global Social Compliance Program.

  In recent years, we have expanded our training offerings through our support of industry organizations and collaborations. For example, our sponsorship of the Responsible Sourcing Network’s Yarn Ethically and Sustainably Sourced (YESS) initiative allowed us to offer Associates that support our Global Social Compliance Program access to information sessions about YESS’s work. Additionally, through our participation in the Responsible Business Alliance’s Responsible Labor Initiative, Associates that support our Global Social Compliance Program have access to forced labor training modules. In Fiscal 2024, we plan to offer access to this training to our vendors.

• Vendor Code of Conduct

  We expect high ethical standards from anyone with whom we do business and are committed to respecting the rights of all workers involved in making products to be sold in our stores or on our e-commerce sites. Our Vendor Code of Conduct aims to reflect our belief that the interests of those workers be protected and serves as the foundation of our Global Social Compliance Program, setting forth our standards, including human rights, labor rights, and anti-corruption standards, among other expectations.

  TJX’s purchase order terms and conditions include a requirement for merchandise vendors to adhere to our Vendor Code of Conduct. While the specific requirements contained in the Code were developed with merchandise vendors in mind, we expect all of the companies and individuals with whom we do business to act with integrity and adhere to the basic principles that underlie each Code requirement. Those basic principles include a commitment to act in accordance with all applicable laws and regulations; respect the human rights and well-being of all people; and consider one’s impact on the environment.

  As with all of our corporate responsibility programs, we are committed to continuous improvement. As the Code has evolved over the years, we have reviewed and taken inspiration from the United Nations Guiding Principles on Business and Human Rights and the International Labour Organization Declaration on Fundamental Principles and Rights at Work, as well as the results of benchmarking our Code against those of industry peers, and feedback from other stakeholders. These efforts help us prioritize additional areas of focus and support enhancements made to our Vendor Code of Conduct. We most recently conducted these reviews and made updates to our Code in 2022. We plan to continue to evaluate further potential amendments we may want to make in the future.

  We encourage anyone with questions or concerns relating to our Vendor Code of Conduct to contact us at complianceofficer@tjx.com.

  The TJX Companies, Inc. Vendor Code of Conduct

  TJX requires that all products offered for sale in our stores be produced in facilities that meet specific criteria, as set forth below:

  
  

  Compliance with Applicable Laws and Regulations

  Our vendors and the factories in which the merchandise they sell us is manufactured must comply with all applicable laws and regulations, including, but not limited to, animal protection laws.

  
  

  Ethical Business Standards

  Our vendors must not engage in or attempt to engage in bribery, corruption, or similar unethical business practices in dealing with government officials or private individuals or entities. This includes, but is not limited to, avoiding all situations where they may have or appear to have a conflict of interest and prohibits offering gifts, entertainment, or anything else of value with the intent to gain a favorable business advantage.

  
  

  Health and Safety

  Our vendors must provide their workers with safe and healthy conditions, including in any living facilities that may be provided.

  
  

  Fire Safety

  Our vendors must abide by all applicable laws and regulations related to fire safety. All appropriate measures must be in place to safeguard the health and safety of workers in the event of a fire.

  
  

  Child Labor

  Our vendors must not use child labor. The term "child" is defined as anyone younger than 15 years of age (or younger than 14 years of age where the law of the country of manufacture allows 14-year-olds to work). At all times our vendors must respect compulsory education laws. Workers under the age of 18 must not perform hazardous work.

  
  

  Forced Labor

  Our vendors must not use voluntary or involuntary prison labor, indentured labor, bonded labor, labor acquired through slavery or human trafficking, or any forms of involuntary or forced labor. Our vendors must not require workers to surrender any identity papers as a condition of employment; such documents may only be temporarily held to verify a worker’s employment eligibility. Our vendors must reimburse their workers for any recruitment or hiring fees that are paid.

  
  

  Wages and Benefits

  Our vendors must abide by all applicable laws relating to wages and benefits, and must pay the legally prescribed minimum wage or higher. Workers must be provided with a written contract which clearly describes their employment and wage terms prior to acceptance of employment. Our vendors must not make any deductions from wages as a disciplinary measure.

  
  

  Working Hours

  Our vendors must not require their employees, on a regularly-scheduled basis, to work in excess of 60 hours per week (or fewer hours if prescribed by applicable laws and regulations). All overtime must be voluntary and must be fully compensated in accordance with the requirements of local law, and except in extraordinary circumstances, employees must be entitled to at least one day of rest in every seven-day period.

  
  

  Harassment or Abuse

  Our vendors must respect the rights and dignity of their employees. We will not tolerate human rights abuses, including physical, sexual, psychological or verbal harassment or abuse of workers.

  
  

  Discrimination

  Workers must be employed, retained, and compensated based on their ability to perform their jobs, and must not be discriminated against on the basis of gender, race, color, national origin, religious, ethnic or cultural beliefs, age, sexual orientation, or any other prohibited basis.

  
  

  Freedom of Association

  Our vendors must respect the rights of their workers to choose (or choose not) to freely associate and to bargain collectively where such rights are recognized by law. We prohibit harassment, retaliation, and violence against trade union members and representatives.

  
  

  Environment

  Our vendors must be in compliance with all applicable environmental laws and regulations, including maintaining current environmental permits. Our vendors must be in compliance with all laws related to the handling, storage, and disposal of chemicals and other hazardous materials. Our vendors must adopt reasonable practices, where possible, to conserve and protect resources, such as water and energy; and mitigate negative environmental impacts to local communities.

  
  

  Subcontractors

  Our vendors must ensure that all subcontractors and any other third parties they use in the production or distribution of goods offered for sale in our stores comply with the principles described in this Code of Conduct. Additionally, our private label vendors must disclose to TJX’s third-party auditors the names of all such subcontractors, and third parties before social compliance audits are scheduled.

  
  

  Monitoring and Compliance

  TJX or its designated third party auditor or agent shall have the right to monitor and assess compliance with these principles. Our vendors must be transparent and honest in all communications with TJX, our auditors and agents. A violation of this Code of Conduct may result in required corrective action, cancellation of purchase order(s), and/or termination of the business relationship.

  
  

  Reporting

  Violations of this Code of Conduct can be reported through the TJX Helpline at TJXethicsline.ethicspoint.com or by calling (US #) 800-TJX-6488 (800-859-6488).