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Costco Wholesale Canada Ltd.
Fighting Against Forced Labour and Child Labour in Supply
Chains Act (the “Act”)
Annual Report Fiscal Year 2023
Contents
1. Statement Coverage ....................................................................................p.2
2. Introduction……………………………………………………………… p.2
3. Costco’s Structure, Operations and Supply Chain…………………. p.2
4. Policies Related to Human Rights including Forced or Child Labour p.5
5. Risk-Identification of use of Forced or Child Labour………………… p.6
5.1 Stakeholder engagement
5.2 Human rights salient risk assessment
5.3 Grievance mechanisms
5.4 Monitoring of supplier performance through audits
5.5 Monitoring/tracking of human rights violations/incidents using a third-party platform.
6. Due Diligence and Remediation………………………………………. p.8
6.1 Employee Training & Engagement
6.2 Supplier Monitoring
6.2.1 Audit Outcomes
6.2.2 Priority Supply Chains
6.2.3 Grievance Mechanisms and Remediation
7. Assessing the Effectiveness of our Actions……………..………….. p.16
8. Process of Consultation in Developing this Statement…………….. p.17

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1. Statement Coverage
This Annual Report (“Statement”) is made by Costco Wholesale Canada Ltd. and CWC Pharmacies
Ltd. (collectively, “Costco Canada”) for the purposes of the Fighting Against Forced Labour andChild Labour in Supply Chains Act and covers its financial year (FY) ending on 3 September 2023.
Costco Canada is a subsidiary of Costco Wholesale Corporation (“Costco”), an international groupheadquartered in the United States.
Section 11(3) of the Act requires Costco Canada to report on specific information. All suchinformation is included as part of this Statement. The applicable section references from the Act for
the required information are included in the corresponding headers of this Statement for ease ofreference.

2. Introduction
As a retailer with more than 300,000 employees worldwide, and operations, logistics andmerchandise supply chains spanning the globe, Costco recognises our direct and indirect impacts
on human rights, and we are dedicated to continually improving our human rights practices andthose of our suppliers.1 Our Human Rights Statement outlines our commitment to respect humanrights, including in relationships with our employees, suppliers, workers in our supply chains and thecommunities in which we operate. We will take what we believe to be reasonable and appropriate
steps to support this commitment, which are informed by the following internationally recognised
human rights standards:● The International Bill of Human Rights, which includes the Universal Declaration of Human
Rights, the International Covenant on Civil and Political Rights, and the International
Covenant on Economic, Social, and Cultural Rights● Organisation for Economic Co-operation and Development Guidelines for Multinational
Enterprises● International Labour Organization Declaration on Fundamental Principles and Rights at
Work● United Nations Guiding Principles (UNGPs) on Business and Human Rights

3. Costco’s Structure, Operations and Supply Chain (s.11(3)(a))
Costco is principally engaged in the operation of membership warehouses (retail locations) in the
United States (U.S.) and Puerto Rico, Canada, Mexico, Japan, the United Kingdom (U.K.), Korea,
Australia, Taiwan, China, Spain, France, Iceland, New Zealand and Sweden. Costco also operates
e-commerce sites in the U.S., Canada, Mexico, the United Kingdom, Korea, Taiwan, Japan andAustralia.

1

For purposes of this Statement, “suppliers” may include contract labour and services providers who support our own operations
and supply chains, in addition to our suppliers of merchandise.

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Warehouse Locations

Warehouse Count

U.S. and Puerto Rico

591

Canada107

Mexico

40

Japan

33

United Kingdom

29

Korea

18

Taiwan14

Australia

15

Spain

4

France

2

China

5

Iceland1

New Zealand1

Sweden1

We offer merchandise and services in the following categories:
Core Merchandise Categories (or core business):● Foods and Sundries (including sundries, dry grocery, candy, cooler, freezer, deli,liquor, and tobacco)● Non-Foods (including major appliances, electronics, health and beauty aids, hardware,
garden and patio, sporting goods, tires, toys and seasonal, office supplies, automotive
care, postage, tickets, apparel, small appliances, furniture, domestics, housewares,
special order kiosk, and jewelry)● Fresh Foods (including meat, produce, service deli, and bakery)
Warehouse Ancillary:● Gasoline, pharmacy, optical, food court, hearing aids and tire installation

Other Businesses:● Ecommerce, business centres, travel and other3DocuSign Envelope ID: 601528C0-3342-4649-BE30-2B78A036FD63

Below is Costco’s governance structure for managing Environmental, Social and Governanceissues:With regard to human rights, including risks of modern slavery, business leaders across ourenterprise within Global Sustainability & Compliance (including the Human Rights team), Human
Resources, Diversity & Inclusion, Merchandising, Legal and Operations promote policies and actions
supporting our Human Rights Statement. Our Human Rights and Human Resources teams workwith our business leaders to oversee our human rights strategy and action plans. Additionally, ourDiversity Advisory Committee and Inclusion Committee include executives from all areas of thecompany who meet regularly to discuss initiatives and activities that support our commitment todiversity and inclusion. The Nominating and Governance Committee of our Board of Directors is
responsible for sustainability oversight, including human rights. Regular reporting informs thisCommittee of progress, challenges and outcomes within our human rights activities.

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4. Policies Related to Human Rights, including Forced or Child Labour (s.
11(3)(b))
Our Employee Agreement includes policies on anti-harassment, equal opportunity, reporting
concerns and anti-retaliation. These policies govern our engagements with Costco employees.
With regard to our supply chains, Costco has established policies that reinforce our commitment torespecting human rights and reducing the risks of modern slavery:
Policy / Commitment

Objectives

Human Rights
Statement

Sets out our committed efforts to improve our own human rights practices andthose of our suppliers. It also sets out our salient human rights risks, which include
but are not limited to forced labour and the exploitation of migrant workers, andchild labour and young workers.

Code of Ethics

Since its inception in 1983, Costco has conducted business in accordance with our
Code of Ethics, which is to: obey the law; take care of our members; take care of
our employees; respect our suppliers; and reward our shareholders.

Supplier Code of
Conduct (“the Code”)

Derived from the International Labour Organization’s (ILO) Declaration on
Fundamental Principles and Rights at Work, as well as the United Nations
Universal Declaration of Human Rights, the Code prohibits child labour, forced
labour and human trafficking, and requires adherence to environmental, health andsafety standards. Suppliers must commit to voluntary employment, upholdtransparency during audits, and maintain compliance with the Code’s standards,
with violations potentially leading to business termination. The Code, among otherplaces, publicizes Costco’s confidential and anonymous ethics hotline for reporting
misconduct or policy breaches.

Conflict Minerals
PolicyMakes clear that we support the aims and objectives of the Dodd-Frank Act
regarding “Conflict Minerals” (i.e., tantalum, tin, tungsten and gold (3TG));
specifically, to not buy or sell consumer goods containing these minerals thatoriginate in the “Conflict Region” unless from a mine or smelter that is certified“conflict free”.

Palm Oil Policy

Aligns our palm oil sourcing for our private label products (Kirkland Signature™)with the Roundtable on Sustainable Palm Oil’s (RSPO) standards, which include
traceability to the mill level and adherence to a number of environmental andhuman rights guidelines.

5. Risk-Identification of use of Forced or Child Labour (s.11(3)(c))
Costco has considered the potential risks arising in relation to our operations. Costco directly
employs a very high proportion of its workforce and is committed to observing local employment
laws.

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We perform regular employee engagement surveys to identify opportunities for improvement within
our operations, and continue to encourage and support both our ethics hotline and Open Door
Policy, which allow any employee to discuss any issue with any level of management. We
encourage anyone who is aware of violations of the law or our Code to notify their management, ourCode of Conduct Compliance team, or utilise Costco’s confidential reporting site:www.costco.ethicspoint.com.
In our supply chains, given the number of direct and indirect suppliers Costco has and theirgeographic dispersion, it is necessary to be selective with our efforts to mitigate human rights risks
while supporting those most vulnerable in our supply chains. We have carried out the following datadriven approach to identify the top risks, based on regions and commodities:
5.1 Stakeholder engagement. In FY23, we partnered with ELEVATE (now known as LRQA) to
conduct a five-month engagement with a range of external stakeholders, including human rights
experts representing high-risk commodities, on-the-ground worker organizations, industry
partnerships, and non-governmental organizations. Prior to stakeholder engagement, Costco
mapped 60-plus organizations to engage. Ultimately ten stakeholders were selected forinterviews, using a methodology based on a number of considerations, including proximity toworkers and geographic relevance. The input from this engagement informed the development of
our Human Rights Statement and our identification of salient human rights risks. We define“salient” as the risks that are the most severe and most likely to occur as a result of our direct
activities or business relationships.
5.2 Salient human rights risk assessment. Based on the findings from the stakeholder
engagement, audit reports, data from LRQA’s third-party political, human rights, economic, andenvironmental risk identification platform, and commodity risk assessments, Costco established alist of salient human rights risks. This list includes but is not limited to forced labour and the
exploitation of migrant workers, and child labour and young workers. Our human rights due
diligence work will be focused on these salient risks. While they may occur anywhere within ourbusiness, we recognise they may have the greatest likelihood of occurring in our supply chain.
5.3 Grievance mechanisms. Grievance mechanisms are critical to our identifying potential
forced labour violations. We support certain grievance reporting mechanisms in high risk supply
chains through various relationships, and require suppliers to provide an anonymous andconfidential method for their employees to raise concerns to senior level management at thefacility without fear of retaliation. Additionally, we have a global confidential ethics hotline tomonitor compliance with our Code of Ethics, our Supplier Code of Conduct, and other legal andethical policies: www.costco.ethicspoint.com. Employees and suppliers can access this hotline
from anywhere in the world, in multiple languages. Additional options for submitting reports canbe by mail or, in countries where we have Costco warehouses, by calling a local toll-free number.
Details can be found on our EthicsPoint website.

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5.4 Monitoring of supplier performance through audits. Costco’s Supplier Code of Conduct
explicitly prohibits human rights abuses in its supply chain, including but not limited to: illegal
child labour; forced, bonded, indentured, slave, prison or convict labour, and human trafficking.
The Code applies globally to all suppliers and their facilities throughout the supply chain, as wellas to Costco-owned manufacturing facilities. As described in more detail below, we carry out arisk-based approach to monitoring its suppliers against the Code.
5.5 Monitoring/tracking of human rights violations/incidents using a third-party platform.
Costco utilises LRQA’s Sentinel web crawler to discover supplier-specific news in key areas,
including forced labour, child labour, wages and working hours, and fire and health and safety.
Incidents identified are given risk ratings, the more severe of which are further reviewed andinvestigated, as appropriate.
From these efforts, we have identified the following region and product combinations in our supply
chains as prone to risks of Forced Labour and the Exploitation of Migrant Workers, and Child Labourand Young Workers. (See below under “Priority Supply Chains” for our evolving human rights due
diligence in addressing these areas):
RegionAsia

Americas

AfricaSalient Risk

Child labour, forced
labour, factory safety,
poor labour recruitment
practicesChild labour, forced
labour, poor labour
recruitment practices

Child labour, forced
labourCommodityor Product● Apparel● Cotton● Palm Oil● Shrimp● Tuna● Food processing● Fresh produce andmeat● Conflict minerals (i.e.,tantalum, tin, tungsten
and gold (3TG)● Cobalt● Cocoa

6. Due Diligence, Remediation and Training (s. 11(3) (b), (d), (e), (f))
When concerns regarding compliance with law or our Code of Conduct are reported through ourconfidential ethics hotline, our Legal Department directs the relevant areas within the company toinvestigate and follow-up on each report received, as appropriate. Responsibility for our Open Door
Policy is embedded among all managers and supervisors. Retaliation against those who reportgrievances is prohibited. Additionally, Costco-owned manufacturing facilities are periodically audited
for compliance with the Code standards, and any violations are required to be addressed throughCorrective Action Plans and re-audits, as appropriate.
With regard to our supply chain, a significant part of our merchandise, including many Kirkland
Signature products, is sourced by Costco. Costco Canada and all other Costco subsidiaries utilise
Costco’s centralised compliance function to handle supply chain human rights due diligence. Below

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are a number of efforts Costco has in place to prevent, identify and remediate human rights
concerns:
6.1 Employee Training & Engagement. We focus on educating our employees with buying
responsibilities on the importance of the Code and their role in supporting it, through updated
virtual training and in-person presentations. In FY23, an eLearning course was deployed to allmembers of our Costco U.S. and Costco Canada merchandising teams to provide further
education on the definition and common indicators of forced labour and modern slavery;
remaining members of Costco’s merchandising teams around the world will be assigned shortly.
The course also covered the topic of responsible purchasing practices; more specifically, howsuch practices of accurate forecasting, providing sufficient lead times for production and shipping
deadlines (particularly when changes are made to item specifications or order quantities) can
help prevent forced labour risks and provide support for supplier facilities to meet compliancewith the Code.
In FY23, Costco employees responsible for the day-to-day management of the Code’s facility
audit program underwent a two-day training conducted by staff from the Worldwide Responsible
Accredited Production (WRAP). The training offered examples of practical challenges faced byauditors, as well as raised employees’ awareness of the following: ILO Forced Labour indicators;
the UNGPs on Business and Human Rights; the 17 UN’s Sustainable Development Goals; andvarious due-diligence laws and regulations from around the world.
6.2 Supplier Monitoring. Costco Canada facilitates the independent auditing of domestic
agricultural suppliers of fresh meat and produce for labour and health & safety performance. For
other suppliers, Costco Canada utilizes Costco’s centralized compliance function for supplieraudits as described below.
Costco’s ongoing risk assessment process informs our approach to targeting audits of supplierfacilities against the Code standards. We prioritize suppliers of Kirkland Signature merchandiseand suppliers whose product or country of origin poses an increased risk.
In our FY23, 5,589 independent third-party audits against the Code standards were conducted in
88 countries, primarily at the final manufacturer or processor level of the supply chain. For
facilities at this level considered intermediate to high risk, audits are initially required at least
annually and more frequently if actions to correct Code violations require onsite verification. For
suppliers that are in full compliance, subsequent audits may be less frequent.
Of the 5,589 independent third-party audits conducted, 4,085 were conducted against the Code’s
standards. For facilities considered intermediate to high risk, these audits are carried out on apartially announced basis, providing the facility with a two-week window of when the audit may
take place. This limited notice is to take the facility’s security measures into consideration and toallow the supplier to collect records that are reviewed during the audit. Fully unannounced audits8DocuSign Envelope ID: 601528C0-3342-4649-BE30-2B78A036FD63

are carried out on occasion, typically in response to tips received through our confidential ethics
hotline. Audits include the workplace where production takes place and onsite worker housing.
Many of our suppliers have programs to verify compliance with their own codes of conduct orwith independent compliance audit standards. Upon review of the program and standards
applied, Costco may accept these reports in lieu of audits against our Code. These audits makeup the remaining 1,504 reports accepted in FY23. Acceptance depends on a variety of factors,
such as industry and geographic risks for human rights violations and prior audit history.
With very few exceptions (which require Costco’s approval), all audits are required to be
conducted by a member of the Association of Professional Social Compliance Auditors (APSCA).
As an industry association whose members represent a substantial majority of the social
compliance audit industry, APSCA seeks to enhance the professionalism, consistency andcredibility of independent social compliance auditors.
6.2.1 Audit Outcomes
For FY23, below are the results of the audits conducted against the Code’s standards.

All audit grades are based on qualitative and quantitative assessments. High Performance
grades range from no violations to only minor violations. These generally are facilities withvery strong management systems in place to meet the high standards of the Code.
Additionally, the audit reports capture and emphasize all instances of facilities going aboveand beyond the standards and expectations of local laws and the Code. These include avariety of benefits and/or services provided to the workforce, and/or actions to mitigate thefacility’s environmental impacts.
The other end of the spectrum of audit performance involves Critical audit grades, which are
the result of at least one Critical Violation, defined by the Code as follows: “A practiceincluding any of the following: Illegal child labour; Forced, bonded, indentured, slave, prison orconvict labour, and human trafficking; Physical, sexual, verbal or mental abuse or
harassment; Bribery or attempted bribery; Health and safety conditions posing immediate risk
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to life and limb; Corruption, deception or falsification of records; Auditors denied timely entry
by Facility.”
Suppliers’ Key Performance Indicators (KPIs)●

4,085 third-party audits conducted against the Code’s standards, of which there were 393
Critical audit grades involving a total of 464 Critical Violations.

●

The majority (287) of Critical Violations cited were health and safety related, such as
instances where there was no legally-required fire alarm or an emergency exit was locked.

●

Critical Violations involving forced labour indicators or child labour:○

56 Critical Violations included a forced labour indicator, such as the retention of
employees’ original documentation, fees charged to foreign/recruited workers,
mandatory overtime hours, etc.

○

4 Critical Violations included an employee(s) under the legal working age.

All Critical Violations must cease immediately, and a detailed and proactive corrective action planaddressing all Critical Violations shall be submitted to Costco. Additionally, depending on theseverity or lack of remediation of any Critical Violations or any other Code violations, we reserve
the right to terminate our relationship or purchase orders with a supplier and/or its facility. Costco
is committed to and prefers working with suppliers and their facilities that remediate Codeviolations, rather than applying sanctions that may cause further hardship to workers and theirfamilies. Some violations, however have led to termination sanctions.
To raise awareness of these efforts, we shared aggregate audit results and other updates related
to the Code at our annual Supplier Day event in the fall of 2023.
6.2.2 Priority Supply Chains
Costco addresses a number of its salient human rights risks through selective partnerships
and initiatives. These can promote systemic improvements. Some examples include:● Apparel. We continue to require third-party social audits of the fabric mills for our Kirkland
Signature apparel and domestics items, which are often the second tier of the
manufacturing supply chain. This is in addition to auditing the final cut and sew factories.
We support industry-led initiatives like Nirapon to enhance worker safety and create aculture of minimizing occupational hazards and risks in our supply chains. We require
suppliers who source from Bangladesh to either be active members of Nirapon or to
support comparable efforts in place at the factory.

10DocuSign Envelope ID: 601528C0-3342-4649-BE30-2B78A036FD63● Cocoa. Most of Kirkland Signature chocolate products derive from cocoa sourced
sustainably, including some from Costco’s Sassandra Cocoa Program in Côte d’Ivoire.
Child labour, unfortunately, remains a persistent challenge in the cocoa industry. To
combat this, Costco has implemented monitoring and remediation programs that spanseveral years. When child labour instances arise, immediate remediation plans are set inmotion for the affected families. These interventions encompass actions like buildingclassrooms to boost educational access, issuing birth certificates to enable school
attendance, supplying necessary school kits, raising community awareness about childrelated dangers, and empowering women with resources and skills to uplift their families'
well-being and education.
● Conflict Minerals. In response to human rights abuses associated with mining, Costco
takes measures to exercise due diligence on the sourcing and chain of custody of tin,tantalum, tungsten and gold (“3TG”), and cobalt in products where we influence the
manufacturing. Additionally, beginning in FY22, our compliance program broadened theconflict areas of concern beyond the Democratic Republic of Congo and adjoining
countries to include all Conflict Affected and High-Risk Areas as defined by theOrganisation for Economic Co-operation and Development. To support this work, Costco
joined the Responsible Minerals Initiative (RMI), which helps companies address
responsible sourcing of minerals used in many consumer products. We use the RMI’s
Conflict Minerals Reporting Template and Extended Minerals Reporting Template to trace
the supply chain, and the RMI’s Responsible Minerals Assurance Process and database
to monitor smelters and refiners in our supply chain that are likely to supply 3TG andcobalt. Costco also leverages its membership in RMI to learn about emerging issues andbest practices on responsible mineral sourcing, and to work on addressing sharedchallenges. More information can be found in our Form SD and Conflict Minerals Report.
● Cotton. The sourcing of cotton presents particular challenges with respect to forced
labour around the world. We utilize a cotton supply-chain mapping program, which
requires document verification, to further understand where the cotton in our apparelproducts originates (see our Cotton Policy for more details). The program covers Kirkland
Signature apparel and home textile products. Restricted party screening is applied to the
manufacturing entities involved in these supply chains to promote compliance with tradesanction laws. As of FY22, the due diligence steps above have been supplemented by thebroad application of product testing by Oritain, which uses forensic testing to verify theorigin of the cotton. Additionally, we continue to engage with the joint association(AAFA/NRF/RILA/USFIA) Forced Labor Working Group, which consists of brands andtrade associations, to share best practices and innovative approaches to mitigate forced
labour risks, with a primary focus on apparel and home textile supply chains.
● Fresh Meat. In light of widely reported incidents of child labour in U.S. facilities, primarily
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contracted by the facility and often working overnight shifts, Costco began in FY23 torequire an increased audit scope of select facilities in the U.S.; specifically, by including
employees of service providers and observation of working conditions during overnight
shifts. We plan to expand these efforts in FY24 in the U.S., with an emphasis on suppliersof Kirkland Signature products.
● Fresh Produce. Costco supports the Equitable Food Initiative (EFI), which is a fresh
produce multi-stakeholder effort that includes farmers, suppliers, buyers and NGOs to
improve labour practices, environmental stewardship and food safety for the benefit ofworkers, agricultural communities, businesses and consumers. Costco has been thelargest single investor/donor to EFI’s development, with over $2.5 million contributed since
2018. Costco and several of its produce suppliers support a program with Fair Trade USA,
which directly engages with farmworkers to promote sustainable incomes, safe working
conditions, responsible labour recruitment, environmental stewardship and transparent
supply chains. For every Fair Trade Certified™ product sold, farmers and workers earn an
additional amount of money, empowering them to improve their lives and fight poverty.
Since 2014, the total amount raised from Costco’s Fair Trade Certified produce purchases
is $25.8 million. Costco and some of its fresh produce suppliers partner with CIERTO, an
independent third-party nonprofit that provides transparent, no worker-fee recruitment forfarm workers in order to ethically and legally recruit farm labour for U.S. agricultural
products. As a signatory of the International Fresh Produce Association’s Ethical Charter
on Responsible Labor Practices, Costco joined a group of produce buyers and suppliers tolaunch the Ethical Charter Implementation Program (ECIP). Through an assessment tooland capacity building resources for growers, ECIP helps to measure and strengthen theiralignment with the principles of the Ethical Charter. This program was launched on
November 1, 2023.
● Logistics. We work with Truckers Against Trafficking to educate our fleet drivers, as wellas other trucking service suppliers. We also understand that sex trafficking (including thecommercial exploitation of children) occurs in the hospitality industry. We work with Costco
Travel suppliers to bring awareness to this issue.
● Palm Oil. Costco is committed to ensuring that the palm oil contained in our Kirkland
Signature products and component ingredients is responsibly sourced by requiring
Roundtable on Sustainable Palm Oil (RSPO) certification. Among the many standards of
RSPO is the respect for human rights, including the rights of indigenous people and local
communities and their right to free, prior and informed consent, for community
stakeholders impacted by expansion.

12DocuSign Envelope ID: 601528C0-3342-4649-BE30-2B78A036FD63● Paper Products. A key principle of Forest Stewardship Council® (FSC) certification is to
identify and uphold indigenous peoples’ rights of ownership, use and management of land,
territories and resources. Delegation by indigenous peoples of control over management
activities to third parties, as well as protecting and utilizing traditional knowledge andintellectual property, require a binding agreement between the certificate holder andindigenous peoples concluded through free, prior and informed consent. Costco accepts
forest management certifications from three leading organizations: FSC, Sustainable
Forestry Initiative (SFI) and Programme for the Endorsement of Forest Certification(PEFC). Many of our Kirkland Signature paper products have FSC certification, including
nearly 100% of our bath tissue. Additionally, all of the register tape used in our U.S. andCanadian warehouses is FSC certified.
● Seafood. Costco helped establish and is an active member of the Seafood Task Force(STF), a collaboration tackling human rights and environmental issues in global shrimp
and tuna supply chains. We support the Responsible Recruitment subgroup of the STF toadvance the industry’s efforts for responsible labour recruitment. The primary goal is toleverage the power of the STF’s membership to build demand for responsible recruitment
practices throughout member supply chains. Learn more about the STF’s work on
Responsible Recruitment on their website, including its Guidance on Responsibility for
Recruitment Related Costs, which is intended to guide the implementation of the STF
Code of Conduct standard on recruitment and hiring-related costs. Additionally, to drive
worker welfare across the tuna supply chain, see the STF’s recently published Grievance
Mechanism Procedure for vessel owners and fleets.
6.2.3 Grievance Mechanisms and Remediation
Below are a variety of ways we support suppliers, facilities and workers in our supply chain to
help prevent, identify and/or remediate human rights concerns raised through audits or othermeans:●

Grievance Mechanisms. As noted above, we support the operation of certain grievancereporting mechanisms in high risk supply chains, and have our own ethics hotline topromote and monitor compliance. When we receive inquiries, we investigate appropriately.
Depending upon the issue, we may work with suppliers directly or conduct independent
third-party audits, and we may terminate our relationship with suppliers if appropriate
remedial action is not taken. In FY23, grievances received included potential violations of
our Supplier Code of Conduct, employee health and safety, wage and hour, working
conditions, the alleged hiring of undocumented workers, and poor treatment of workers bymanagement. The majority of these concerns were reported through our own Ethicspoint
tool, with additional concerns reported via emails sent directly to employees of theCompany. Where the allegations were substantiated, appropriate action was taken to
remedy the situation. Remedies for reported concerns included back pay for workers who
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facilities in order to improve working conditions, and additional training for facility
management on specific areas related to the concerns reported to Costco.
Ethics hotline KPIs in FY23●

13 total human-rights related grievances were received regarding the treatment ofworkers across our supply chain. Each was addressed as noted above.

● eLearning Lessons. We continue to partner with LRQA to offer eLearning lessons (often
in the local language). These web-based lessons educate suppliers and their facilities onhuman rights risks, including modern slavery. They also provide guidance to facilities oncorrecting specific audit violations. The most frequently used lessons cover Fire Safety,
Working Hours and Health & Safety.

eLearning KPIs in FY23

● 1,882 Costco employees completed eLearning on the Code, and on defining,
identifying and preventing forced labour and modern slavery (95% completion rate).

● 9,046 lessons were completed by suppliers and/or their facilities.
○ 470 lessons completed by Costco suppliers and/or their facilities on forcedlabor-specific topics, such as: Recognizing Forced Labor, Forced Labor
Prevention for Factories, Forced Labor Due Diligence, Preventing Forced Labor
during Recruitment, Working with Labor Brokers, Forced Labor Prevention for
Farms, and Hiring and Working with Migrant Workers.

● Corrective Action Plans (CAP). We recognise that some suppliers will need assistancewith compliance. For any supplier with an audit that reveals the need for improvement,
Costco requires a CAP that includes a time frame for correcting each violation and often
on-site re-audits to verify progress. Costco also offers access to capacity-building services
that improve management systems to address the causes of violations and support the
supplier’s CAP completion.

7. Assessing the Effectiveness of our Actions (s. 11(3) (g))
In our operations, as a measurement of engagement, Costco conducts a global employee
engagement survey to obtain feedback concerning ethics, compliance and engagement. Survey
results have indicated a high level of satisfaction by employees with their work environment. In
FY23, the company moved from an annual survey to a biennial one, with the next one slated for

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2024. Where there are opportunities for improved engagement, Costco leadership is committed totaking action in those areas.
Additionally, we have consistently found that a vast majority of employees know how to access thevarious Open Door channels available if they have a workplace concern and feel equally comfortable
doing so.
In our supply chains, Costco has joined multiple efforts to help improve the working conditions ofpeople within our supply chains, including the numerous stakeholder engagements and industry
initiatives described above. A key aspect of these engagements is the opportunity to periodicallyassess the effectiveness of our overall human rights due diligence approach, including mitigation offorced labour and modern slavery.
In addition, we have a number of KPIs to measure our progress on assessing and addressing risks
of forced labour and modern slavery as described above under Due Diligence and Remediation. We
plan to track progress with these KPIs going forward, year over year.

8. Process of Consultation in Developing this Statement
This Statement was developed by the Human Rights team within Costco’s Global Sustainability andCompliance Department, with input from Legal and Human Resources Departments, as well as
Costco Canada.
This Statement was approved by the Boards of Directors of Costco Wholesale Canada Ltd. and
CWC Pharmacies Ltd. as of 24 April, 2024.
COSTCO WHOLESALE CANADA LTD.
CWC PHARMACIES LTD.

By:
Gino Dorico, SVP & Country Manager

Statements contained in this document are aspirational and relate to the manner in which the Company currently
intends to conduct certain of its activities, based on management's current plans and expectations. Thesestatements are not promises, guarantees, or statements on which you should rely with respect to the Company's
conduct or policies, and are subject to a variety of risks and uncertainties, some of which may be material and/or
beyond the Company's control. Forward-looking statements speak only as of the date they are made, and theCompany does not undertake to update these statements, except as required by law.

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