Choice to Place Public Health above Corporate Profits Heralded as Watershed Moment for Retail Pharmacy Sector by Long-Term Shareholders
NEW YORK, NEW YORK, Wednesday, February 5, 2014 – In a move investors hope represents a “tipping point” for the retail pharmacy sector, CVS Caremark announced today that it would end tobacco sales in its chain of 7600 stores. Conceding that the loss of cigarette sales would cost the retail division an estimated $2 billion in sales, company representatives said the decision was made for “ethical” reasons and because it was “the right thing for us”.
As part of their broader, long-term campaign to reduce the sales of tobacco products, members of the Interfaith Center on Corporate Responsibility began engaging companies in the retail pharmacy sector citing the considerable reputational risk given their health positioning.
"Recognizing the conflict of interest in selling a cancer-causing agent in a self-described health care facility, we began filing shareholder proposals on this over 20 years ago,” said Rev. Michael Crosby of WIMCRI, ICCR’s coordinator of shareholder tobacco initiatives. “Our 1992 resolution with Rite Aid stated that we believed profiting from cigarettes while positioning the company as caring about its customers’ health constituted a “serious contradiction.”
ICCR members have used a variety of strategies to reduce cigarette sales, particularly to minors and the economically vulnerable, including working with film studios to eliminate smoking in youth-rated movies, and pressing for curbs on marketing to minorities and the poor and calling for disclosure of lobbying and political spending by tobacco companies to influence regulation.
“When we met in 2003 at the headquarters of Walgreens, the company chose to frame its choice to continue cigarette sales as a matter of competition with the grocery store chains. We are indeed quite gratified to see CVS has acknowledged this contradiction and, in spite of the business impact, is putting its customers’ health first,” continued Crosby.
Said Cathy Rowan, Director of Socially Responsible Investments for CHE Trinity Health, “We congratulate CVS Caremark for putting words of concern into action and doing the right thing by eliminating the sale of tobacco products from its stores. Given that research has shown a correlation between the unavailability of tobacco products and their reduced use, CVS has taken a huge step towards protecting public health. We will continue to engage the other drug stores and retailers with pharmacies we own in the hopes that they will see the wisdom in following CVS’s lead.”
Said Tom McCaney of the Sisters of St. Francis of Philadelphia, who leads the current engagement with CVS Caremark and Walgreens, "The shareholder members of the Interfaith Center on Corporate Responsibility are thrilled that CVS Caremark has committed to honor its stated purpose to 'improve health outcomes and lower health care costs by taking cigarettes out of its stores. We hope that this decision will be the tipping point in our long-term efforts to convince the major retail pharmacy chains to abandon the tobacco business. In our ongoing engagements with Walgreens, Walmart and Rite Aid, we now have CVS as a model of corporate responsibility that we can point to.”
Director of Communications, ICCR
About the Interfaith Center on Corporate Responsibility (ICCR):
Currently celebrating its 43rdyear, ICCR is the pioneer coalition of active shareholders who view the management of their investments as a catalyst for change. Its 300 member organizations with over $100 billion in AUM have an enduring record of corporate engagement that has demonstrated influence on policies promoting justice and sustainability in the world.