The Local Authority Pension Fund Forum (LAPFF) has called for an independent review of Sports Direct's human capital management strategy.
The group, which represents 71 local government pension schemes with combined assets of over £175bn, is backing a shareholder resolution brought forward by Unite.
The resolution, which will be put to shareholders at the company's annual general meeting (AGM) on 7 September, demands a report on the firm's labour practices to be produced within six months of the AGM.
It comes after criticisms of allegations of health and safety violations, sexual abuse, and the use of ‘zero hour' contracts.
The company was also recently in the spotlight for effectively failing to pay employees the minimum wage, by keeping back staff at the end of their shifts for security checks.
Sports Direct executive chairman Mike Ashley has already committed to conducting an internal review, but the LAPFF argued the review would not be independent.
It also said asking the company's lawyers RPC to produce a summary of the report would be a rubber-stamping exercise.
LAPFF chairman and councillor Kieran Quinn said: "LAPFF's view is that responsible business practices by companies lead to sustainable returns for investors over the long-term. We are worried that this view is not shared by Sports Direct.
"LAPFF's hope is that an independent human capital strategy review will rectify any workplace practices deemed inappropriate and will help Sports Direct to move forward from the reputational and financial damage it has suffered."
Sports Direct had not provided a comment at the time of publication.
Earlier this year, the LAPFF also backed resolutions calling for mining giants Anglo American, Glancore and Rio Tinto to be more transparent on climate change risks.
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