CVS Health Corporation – Sustainable Plastic Packaging (2020)
Outcome: Successfully withdrawn as CVS is taking positive and constructive action to identify the amount and types of plastic used in its packaging, as well as their recyclability. It is also collaborating with industry partners to address various aspects of the plastic pollution problem.
Whereas: Plastic pollution has become a critical and urgent global problem. Experts estimate 300,000 metric tonnes of plastic are polluted to the ocean from U.S. land sources every year. The global figure is eight to twelve million tonnes and is projected to increase rapidly. The environmental impacts of plastic pollution are vast, including significant harm to marine and terrestrial ecosystems and wildlife. Plastic waste breaks down and persists in the environment, eventually accumulating in agricultural soils, water supplies, food supplies, and the human body – with as yet unknown health repercussions.
EPA data shows only 8.4 percent of plastic waste generated in the U.S. was recycled in 2017; 76 percent was sent to landfill. Single-use plastic packaging is the largest source of this plastic waste.
139 companies, including Nestle, PepsiCo, Unilever, Coca-Cola, WalMart, Target, and Colgate-Palmolive have committed to eliminate unnecessary plastic packaging and ensure the remainder is reusable, recyclable, or compostable in practice by 2025. In addition, Unilever and Procter & Gamble have committed to cut their use of virgin plastic in half by 2025 and 2030, respectively.
CVS Health (CVS) has identified packaging as a material issue and “Sustainable Products and Packaging” is a key component of CVS’s CSR strategy. However, CVS has not disclosed the amount or types of plastic used in its packaging; whether its packaging is recyclable, reusable, or compostable in practice; or if it intends to incorporate recycled content into its plastic packaging. Such information is important as CVS Health offers more than 2,500 private label products (according to its website), ranging from medicines to beauty products to snacks and beverages. Many have a high reliance on plastic packaging, likely contributing to plastic pollution problems.
In its 2018 CSR report, CVS states it will be “developing our criteria for CVS Pharmacy brand printed packaging to create more sustainable packaging for our products.” This sounds like a promising first step, but given CVS’s mission to “leverage our scale, expertise and innovative spirit in ways that positively impact all of our stakeholders,” proponents believe CVS should ramp up its efforts to reduce the harmful environmental impacts of its plastic packaging and help improve plastic recycling rates above 8.4 percent.
Resolved: Shareholders request CVS Health Corporation issue a report, at reasonable cost and omitting proprietary information, discussing if, and how, it can further reduce its environmental impacts by increasing the scale and pace of its sustainable plastic packaging initiatives.
Supporting Statement: In the report, shareholders seek information on (among other issues at board and management discretion):
• Current plastic usage levels by type, the percentage of plastic packaging that is recyclable in practice, and the percentage that contains post-consumer recycled content;
• Any initiatives CVS has implemented or explored to increase the use of post-consumer recycled content or pursue alternative packaging materials;
• How CVS works with policymakers to support recycling infrastructure and legislation, both directly and via trade associations.