Investors to get Bangladesh supply chain briefing from retail giant Wal-Mart

Meeting follows shareholder concerns about oversight at company

Wal-Mart Stores, the US retail giant that is one of the companies most excluded by investors over supply chain and human rights issues, is to brief its shareholders about its practices in Bangladesh in a sign that it is responding to concerns about the Rana Plaza and other disasters in the country’s garment industry.

Earlier this month, Responsible Investor reported that the California Public Employees Retirement System (CalPERS), the largest US pension fund at $266.3bn (€200bn), was considering working with other investors in the company to address the giant retailer’s “human capital issues”. The fund voted against six of the company’s directors at its annual meeting in June due to its concerns about the board’s oversight of operational and reputational risk. The fund said it has conveyed its concerns directly to Chief Executive Michael Duke.

Moreover, a series of investors have recently exited the stock citing social factors. German foundation EVZ divested over the company’s reported use of child labour in China. In July a group of Dutch pension fund investors including PGGM, engineering sector funds PMT, and administrator MN Services excluded Wal-Mart over labour relations.

PGGM, the Dutch pension investor, had earlier voted against Duke and other directors over the board’s “failure to reassure shareholders that the alleged FCPA [Foreign Corrupt Practices Act] violations will have a limited impact on shareholder value, and that any responsible executives will be appropriately held accountable”.The New York City Pension Funds voted against nine of the 14-director slate at the AGM over their “persistent concerns” about the board’s poor oversight of compliance — with laws and regulations as well as its own policies. “Wal-Mart has continually rejected stronger, more independent oversight — from its board room all the way down to its supply chain — to the detriment of shareowners,” New York City Comptroller Liu said.

At the AGM, CEO Michael Duke was voted against by 12.11% of shareholders. A shareholder proposal for an independent chairman gained 14.4% support.

Investors have also been critical of Wal-Mart and other North America retailers’ initiative on Bangladesh supply chain standards, saying the firms’ North American Bangladesh Worker Safety Initiative lacks sufficient worker protections and accountability. Investors under the Interfaith Center on Corporate Responsibility (ICCR) banner say it is a “weaker alternative” to the existing, legally binding, Bangladesh Accord on Fire and Building Safety that is backed by 80 companies, NGOs and unions. The earlier accord has the backing of some 200 global investors with $3trn in assets.

The briefing is planned for today (August 29), according to a report in the Wall Street Journal citing an email to investors from Wal-Mart’s Vice President of Global Investor Relations Carol Schumacher. The briefing would feature executives Rajan Kamalanathan, vice president of ethical sourcing, and Wesley Wilson, senior director of ethical sourcing.