Walgreens CEO Once Again Questioned Over Company's Green Policies: Shareholder Activist Demands to Know If the Pharmaceutical and Retail Giant Places "Sustainability" Ahead of Investors and Customers
In Frozen Chicago, Walgreens CEO Gregory Wasson Meekly Defends Business Strategy Driven By Environmentalism Rather than Focusing on Free-Market Capitalism
Chicago, IL / Washington, D.C. - Today, at the annual meeting of Walgreens shareholders in Chicago, Illinois, a representative of the National Center for Public Policy Research questioned Walgreens CEO Gregory Wasson about the pharmaceutical and retail company's push for a radical green agenda that lacks consumer support.
"Walgreens executives spent a good portion of today's shareholder meeting touting a business philosophy based in large part on the amorphous concept of so-called 'sustainability.' However, when I confronted CEO Gregory Wasson about this issue, he was unable to say whether this environmental philosophy trumped common free-market business practices or if it benefited shareholders or customers," said National Center Free Enterprise Project Director Justin Danhof, Esq., who attended today's meeting.
Citing Walgreens' membership in the Retail Industry leaders Association, a massive trade lobby that advocates for sustainability standards that could raise prices and cause barriers to entry for small business, Danhof asked Wasson, in part:
[D]oes Walgreens currently pursue any initiative (outside of what is required by law) that artificially raises the price to its suppliers or its customers in the name of sustainability or environmentalism? If so, can you explain why you think this is important, rather than providing the best prices for the customers?
"Wasson had no real answer to my question," said Danhof. "He said he didn't think costs necessarily needed to rise in order to advance sustainability, but did not provide specifics or evidence to back his claim."
As a follow up question, Danhof noted: "We worked with General Electric on this issue, and they actually amended their corporate documents to say that they would not invest in any project that solely advances environmentalist or sustainability without a business metric. Would you be willing to do to the same?"
Wasson replied, "[w]ell, I think anything we look at has to have a strategic and a business perspective. But I think you can have both."
To see a video of Danhof and Wasson's exchange, go here.
"That doesn't answer the question," said Danhof. "If Wasson wants to prove to Walgreens investors, customers and suppliers that they aren't paying inflated prices or receiving diminished shareholder value due to the company's green endeavors, he should put it in writing. By failing to do so, he is inviting continued criticism and skepticism."
Through the shareholder resolution process, the National Center recently received just such a concession regarding corporate sustainability practices from the international conglomerate, General Electric (GE). In response to a shareholder proposal submitted by the National Center – and after years as the poster child for crony capitalism and green lobbying efforts – GE changed its corporate policies to ensure that none of its projects pursue environmentalism without a solid business / profit motive.
The National Center has repeatedly called on Wasson to come clean about Walgreens' affiliation with RILA and its support for top-down sustainability mandates.
At the Walgreens shareholder meeting last January, Danhof asked Wasson how much more he would be willing to pay for a hypothetical shopping cart containing $100 worth of commonly purchased items if all the products were labeled as "sustainable." Danhof also asked if it was fair to charge low and middle-income Americans more for basic retail goods so that large retailers such as Walgreens can "greenwash" their images.
Wasson stammered through an incoherent response that never answered the question. Wasson concluded his non-answer by saying: "Um... as... as far as... ah... as far as what the cost may be... certainly, we think there's opportunity to drive sustainability... corporate social responsibility without driving costs up. So... acknowledge your comments. Appreciate your comments. And thank you very much."
"A year later, and Wasson is still dodging the question," noted Danhof. "He is making our point for us – if RILA member companies are in fact pushing sustainability in a manner that benefits customers, suppliers and investors, Wasson would say as much. Since he is unable to do so, it is a tacit recognition that sustainability mandates may cause higher prices."
After last year's meeting, a contributor to the financial website the Motley Fool, Gene Koprowski, suggested that "investors refrain from buying shares of Walgreen until CEO Greg Wasson can provide a solid answer to the [National Center's] query."
"That advice still holds," said Danhof. "Wasson seems content to hide the effects of a major company initiative from Walgreens stakeholders. If the results were glowing, certainly the CEO would be the first one touting the financial successes of the drive for increased sustainability."
Also, in connection with last year's meeting, the National Center commissioned a poll to gage consumer sentiment for RILA's sustainability initiatives. More than half (52 percent) of consumers polled said they would not spend a single penny more for products in order to meet sustainability standards, and only three percent said they would be willing to spend ten percent or more.
Today marks the National Center's third attempt (not including media interviews and citations) to get Wasson to explain Walgreens' advancement of green policies. Last September, the National Center issued a press release in which Danhof noted, "Wasson said RILA presented an opportunity to push sustainability standards without dramatically increasing prices. Is that opportunity being realized, or are most Walgreens customers paying more then they should at the checkout line against their wishes? Our poll clearly shows that – if given a choice – most Americans would decline these 'green' goods."
National Center Senior Fellow Dr. Bonner Cohen further exposed RILA's sustainability agenda in his groundbreaking July 2013 paper titled, "The Retail Industry Leaders Association (RILA): A Cartel that Threatens Innovation and Competitiveness," in which he explained that:
The elevation of greenhouse-gas emissions to a place of prominence, for example, puts RILA squarely on the side of alarmists who, in the absence of any compelling data, blame human activities, i.e., the burning of fossil fuels, for climate change... While the standards and practices dictated by 'sustainable' trade associations do not have the force of law behind them, their effect on businesses and consumers can be as far-reaching as the most sweeping edicts from Washington regulators.
In 2013, National Center representatives attended 33 shareholder meetings advancing free-market ideals in the areas of health care, energy, taxes, subsidies, regulations, religious freedom, media bias, gun rights and many more important public policy issues. Today's Walgreens meeting was the National Center's first attendance at a shareholder meeting in 2014.
A copy of Justin Danhof's question at the shareholder meeting, as prepared for delivery, can be found here.
The National Center for Public Policy Research is a Walgreens shareholder.
The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, less than four percent from foundations, and less than two percent from corporations. It receives over 350,000 individual contributions a year from over 96,000 active recent contributors.
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