CVS Sets a New Standard for Retailers on Reducing Plastic Waste

As a result of a Green Century Capital Management shareholder proposal, the nation’s largest pharmacy chain, CVS Health, has announced its goal to reduce virgin plastic in its store-brand packaging by 50 percent by the end of the decade. 
 
Leslie Samuelrich, president of Green Century, complimented CVS for taking its plastic use seriously. 

“Corporate goal-setting to stem production of new plastics is crucial for protecting wildlife in our oceans, reducing waste in our landfills and safeguarding human health,” Samuelrich said in a public statement.

Pushing CVS to become a sustainability leader

In addition to the virgin plastic reduction goal, the company says it plans to eliminate problematic and unnecessary plastics from its store brand packaging by 2030 and agreed to disclose plastic footprint metrics for most of its store-brand packaging. From the point of view of Green Century, these actions make CVS a leader on its plastic packaging efforts, surpassing such retailers as Walgreens, which as part of the Walgreens Boots Alliance has established a goal to reduce plastics in its private label packaging by 30 percent by 2030, and Target, which has gone on the record saying it plans to decrease the use of virgin plastic within its branded product lines at least 20 percent by mid-decade.

CVS has been moving towards reducing its plastic use since 2020, when the company engaged World Wildlife Fund to audit its Store Brand packaging portfolio and launch new sustainable packaging goals. 

“While we were encouraged to see CVS working with WWF on plastic packaging, we decided to engage to ensure that the company’s ambitions matched those of its peers when it comes to goal-setting on plastic packaging,” Annalisa Tarizzo, a shareholder advocate within Green Century, told TriplePundit.

On the same day CVS announced it was reducing use of virgin plastic in its packaging the company also announced a partnership with World Wildlife Fund and the organization’s activation hub, ReSource: Plastic, focused on reducing plastic waste and increasing the sustainability of materials within its packaging portfolio.

“This collaboration is a good signal that CVS is taking its approach to plastic packaging seriously and wants to be a leader in the space,” said Tarizzo.

A banner proxy season for Green Century

The CVS announcement caps what Tarrizo explained as a successful proxy season for Green Century, as it has engaged companies on various plastic-related risks through shareholder proposals. For example, a joint shareholder proposal from Green Century and As You Sow prompted Coca-Cola to announce its goal to have a quarter of its beverage portfolio globally distributed in refillable or reusable containers by 2030. ODP Corporation, the parent company of Office Depot, agreed to set an absolute plastic reduction goal for its owned brand packaging and ecommerce operations. Newell Brands has set a goal of at least 20 percent non-virgin plastic packaging for the manufactured goods portion of its portfolio.

In addition, 95 percent of the shareholders at the Jack in the Box annual meeting voted to support Green Century’s sustainable packaging proposal. Tarrizo noted that it was the highest-ever vote on an environmental or social shareholder proposal opposed by management. 

Green Century’s plastic packaging proposal received a 13 percent vote from shareholders at the Tyson Chicken annual meeting. Tyson has significant inside ownership, so when only accounting for independent shareholders, the proposal received a 59 percent vote, Tarizzo told 3p.

Shareholder activism shows no signs of slowing down

The number of shareholder proposals to address climate change has increased since the Security and Exchange Commission’s decision last November to widen the types of issues it allows shareholders to raise at annual meetings. The SEC wanted to make it more difficult for companies to block shareholder bids around climate targets, paid sick leave and other social issues. As of mid-March, a record-breaking 529 shareholder proposals had been filed on environmental and social issues, an increase of 20 percent from the same time last year, according to As You Sow and the Sustainable Investments Institute. More shareholder proposals are making it onto ballots as the SEC has only approved about 16 percent of companies’ bids to remove proposals, compared with about 50 percent last year.

Shareholder proposals are an effective means to advocate for environmental and social risk management within companies, Tarizzo told 3p. Large and small investors alike can raise their concerns with the companies they invest in, hold those companies accountable, and provide a way to push for action on issues such as climate change, plastic pollution, and others even when government action may be stalled or not possible, she added.

The urgency of reducing plastic use becomes more acute with each passing year, as plastic pollution is anticipated to grow from 11 million metric tons annually to 29 million by 2040, causing adverse impacts on wildlife and ocean health and risks to human health. According to As You Sow, in order to keep the plastic pollution crisis under control, companies must reduce their plastic demand by one-third by 2040.

Image credit: Miosotis jade via Wiki Commons