Consumer Behavior Change

Why CVS' 'No Smokes' Decision Is Big News for Forward-Thinking Brands

On Feb. 5, drugstore chain CVS Caremark announced that it will stop selling tobacco products.It’s a big deal. Here’s why.It signals a step towards more businesses saying, “It’s wrong. So we’re stopping.” Even when the financials — what the sustainability world calls “the business case” — don’t support it in the short term.I’d like to suggest that CVS’ announcement moves the ball downfield for more business decisions based on social and environmental impacts. It creates new, safe middle ground to operate more openly from the “morals” argument as a valued partner to the “money” business case argument.

By Claire Sommer | Published 10 years ago | About a 4 minute read

On Feb. 5, drugstore chain CVS Caremark announced that it will stop selling tobacco products.

It’s a big deal. Here’s why.

It signals a step towards more businesses saying, “It’s wrong. So we’re stopping.” Even when the financials — what the sustainability world calls “the business case” — don’t support it in the short term.

I’d like to suggest that CVS’ announcement moves the ball downfield for more business decisions based on social and environmental impacts. It creates new, safe middle ground to operate more openly from the “morals” argument as a valued partner to the “money” business case argument.

OK, Now What?: Navigating Corporate Sustainability After the US Presidential Election

Join us for a free webinar on Monday, December 9, at 1pm ET as Andrew Winston and leaders from the American Sustainable Business Council, Democracy Forward, ECOS and Guardian US share insights into how the shifting political and cultural environment may redefine the responsibilities and opportunities for companies committed to sustainability.

Tell me more!

To back up, let’s remember that Target made a similar decision to stop selling tobacco — in 1996. (Thanks to Kathrin Winkler for the tip.)

At the time, Target’s up-front reason was cost savings. The company said that selling tobacco products was too expensive to continue in the short term because of 1) shoplifting and 2) overhead costs for (inadequate) anti-theft measures.

Today, CVS leadership says it’s taking tobacco off the shelves as a long-term strategy to pivot from being a seller of goods to a provider of health services. Over time, the estimated $2 billion annual sales hit won’t matter.

In 1996, Target said, “It’s a money decision,” because adding, “And also, it’s wrong for kids to smoke and we care about our customers’ health,” probably wouldn’t have flown.

Today, I feel, CVS has more room to say, “It’s wrong. So we’re stopping” for a few reasons:

First, it’s happening when more Americans can access and afford more healthcare services.
Second, CVS’ allies can quickly broadcast and broaden support for the move through social media. Twitter’s megaphone didn’t exist in 1996 for Target, and wouldn’t for another 10 years.
And third and most importantly, I think the CVS leadership team decided that it’s the right thing to do and assessed the wind blowing in their direction.

On this last point, I believe that sustainability’s greatest strength has always been that it’s the right thing to do. I’m inspired by Lincoln’s appeal to our fellow humans’ better angels, rather than just their bank balance.

BT’s Kevin Moss has written about this dilemma, and suggests that the sustainable business world might go about fixing it with “case studies for successful resolution that give the practitioner confidence and tools to use, based on examples where these dilemmas have been successfully addressed."

So to that end, here are some resources to support “morals and money” decision making:

1. See the third point in Andrew Winston’s Feb. 5 HBR blog post

2. The Guardian’s Jan. 2013 coverage of a Nature climate change piece showing that “engaging the public in the moral rather than economic case for sustainability might be more effective, with lessons to be learned at policy level.”

3. Disney’s June 2012 move to stop taking junk food advertising, countered by rival Nickelodeon’s July 2013 statement that it wouldn’t follow suit.

4. The key finding from Fairleigh Dickinson University’s 2013 research survey of sustainability motivations: New Jersey business owners are incorporating sustainability practices into their businesses “because it’s the right thing to do.”

5. And finally, WWF’s 2010 Common Cause initiative exploring how values can bring people together.

We’re all too familiar with the fact that, sometimes, the right thing to do doesn’t add up to be best thing to do money-wise in the short term. But when leaders decide to value long-term sustainability over short-term financial results, amazing things are possible. It’s not just the Ray Andersons and Paul Polmans of the world anymore. CVS’ leaders decided to say, “It’s wrong. So we’re stopping.”

More will follow.