10 May 2012 CVS Caremark Mum on Harm to Consumers, Small Businesses of RILA Sustainability Program

National Center for Public Policy Research Questions CVS Caremark Executives Over “Sustainability” Push at Company’s Annual Shareholder Meeting

Declines to Answer Shareholder Question About Company Policies Hurting Consumers and Small Businesses

Woonsocket, RI / Washington, D.C. – Today, at the CVS Caremark annual shareholder meeting in Woonsocket, Rhode Island, the National Center for Public Policy Research questioned company executives about their aggressive push for radical environmental standards on consumer products and company practices – standards expected to raise consumer prices and harm suppliers, especially small businesses.

CVS Caremark is a member of the Retail Industry Leaders Association (RILA) – one of the country’s largest trade organizations, representing more than 200 companies and many of the largest American retail chains. Recently, RILA issued the first ever industry-wide sustainability report in which it pressured its member organizations to reduce their environmental impact by reducing greenhouse gas usage.

“RILA and its member companies are trying to advance a European-style green program into every aspect of the retail industry,” said National Center General Counsel Justin Danhof. “These sustainability standards will increase production costs as suppliers and manufacturers are forced to reduce energy usage, switch to recyclable materials, increase compliance staffs and reconfigure packaging. This will lead to sticker-shock in many retail stores as these new costs are borne by consumers in the form of increased prices.”

Danhof asked CVS Caremark’s Chief Executive Officer Larry Merlo if he was concerned that these increased costs would be passed onto consumers and may drive some smaller suppliers out of business.

“Merlo said that sustainability is very important to CVS Caremark. Regarding his company’s membership in RILA, he said that he hoped to work with suppliers on sustainability issues and that the company continually assesses its memberships in associations, and will only work with those groups that promote the values of CVS Caremark,” said Danhof.

“Merlo did not address my concern that RILA’s advocacy may increase the price of CVS Caremark’s consumer products. While unemployment remains stubbornly high and many macro-economic indicators are trending downwards, it is disappointing to see CVS sticking with an extreme environmental policy that will increase the costs for consumer goods at the checkout counter and may cause small employers to go out of business,” said Danhof.

According to Adam Siegel, RILA vice president of sustainability and retail operations, “retailers are working to incorporate sustainability into their strategy, operations, workforce engagement, and connection to consumers and communities.”

“Nice-sounding words,” added Danhof, “but higher prices, shuttered small businesses and decreased competitiveness are what those words lead to, and they don’t sound nice at all.”

A copy of Justin Danhof’s question, as prepared for delivery, can be found here.

The National Center for Public Policy Research is a CVS Caremark shareholder.

The National Center for Public Policy Research is a conservative, free-market, non-profit think-tank established in 1982. It is supported by the voluntary gifts of over 100,000 individual recent supporters. In 2011 it received over 350,000 individual donations. Two percent of its revenue comes from corporate sources. Contributions to it are tax-deductible and greatly appreciated.

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