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10/12/2022

Retailers ramp up initiatives to drive equity, diversity and sustainability

Drug store chains strengthen their program efforts and service activities to maximize community impact.

Drug store retailers have long had strong programs built around service to the community, from support for local charities to educational programs, health screenings and other initiatives.

Increasingly, those efforts have focused on diversity, equity and access to healthcare resources as retailers seek to play a role in improving health outcomes in disadvantaged communities. Sustainability also has become more and more important, as many consumers — especially millennials and Gen Zers — now expect companies to take aggressive steps to minimize their impact on the environment.

Battling on the front lines of the COVID-19 pandemic affected the approach that retailers have taken toward their community-focused initiatives. The pandemic forced retailers to rethink how they protected the health and safety of their workers while, at the same time, ensuring that they were providing the services that their communities needed, from testing and providing information to administering vaccines and boosters.

The pandemic brought to light some of the inequities in the healthcare system, said Lauren Stone, director of corporate social responsibility at Walgreens. “COVID amplified how systemic racism has led to health disparities in communities of color,” she said. “It’s not that people weren’t aware of that before, but COVID just made it so apparent. As a pharmacy retailer that’s in communities across the U.S., we saw what an incredible role we had to play.”

For example, Walgreens deployed a vaccine equity task force, which helped the company stage more than 1,200 vaccine events in medically underserved communities and locations, she said.

Similarly, Rite Aid identified the need to support underserved communities during the pandemic, said Jessica Kazmaier, chief human resources officer at the Camp Hill, Pa.-based chain. “We really rallied around the idea that this is why we’re here, and this is what we’re meant to do,” said Kazmaier, who also serves on the board of Rite Aid Healthy Futures. “We delivered over the course of the last couple of years 17 million COVID vaccines, a lot of those to communities that did not have easy access.”

[Read more: CVS Health study finds people embracing holistic outlook on health]

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Walgreens partnered with Greater Than Aids, a public information initiative of Kaiser Family Foundation, health departments and community organizations in more than 250 cities on June 27 to offer free HIV testing.

Walgreens focuses on access, equity

Walgreens’ environmental, social and governance, or ESG, initiatives revolve around four pillars, which the company describes as Healthy Communities, Healthy Planet, Healthy and Inclusive Workplace, and Sustainable Marketplace.

In recent years, Walgreens has refined its focus on supporting local communities, especially those that have been disadvantaged, Stone said. “We really have honed in on this idea of addressing access and equity around healthcare goods and services,” she said. 

Walgreen’s sharpened focus on equity and inclusion is helping shape many of its initiatives, Stone said. For example, the company has a goal of providing 100 million immunizations through its “Get a Shot. Give a Shot” initiative by 2024. That program, a partnership with the United Nations Foundation’s [email protected] campaign, is focused on getting vaccinations to people in developing countries who wouldn’t have access to them otherwise, with a focus on childhood vaccines.

Similarly, Walgreens’ partnership with the Vitamin Angels program provides vitamins and minerals to millions of expectant mothers and children both in the United States and abroad. The program seeks to address gaps in access to prenatal and postnatal nutrition.

The company is constantly looking at those and other charitable activities to maximize its impact in the local communities where it operates, Stone said. “We’ve seen a ton of progress in that space,” she said.

Diversity, equity and inclusion are of course closely intertwined with these efforts, and have been an area where Walgreens has shown strong progress, Stone said. The company has tied compensation to DEI initiatives, for example, in order to increase the representation of women and people of color in leadership roles.

Supplier diversity in particular has been a success, she said, citing purchases from diverse-owned suppliers that have exceeded the company’s goals. Walgreens has committed to increasing sourcing from suppliers that are at least 51% owned, operated and managed by individuals who are disadvantaged, disabled, military veterans, LGBTQ+, minorities and/or women. In fiscal year 2022, Walgreens has set a target to increase supplier diversity spending to $625 million, up from its 2021 spending of $521.5 million.

[Read more: Walgreens named as founding sponsor of Sustainable Medicines Partnership]

“Previously, we didn’t even have a goal around supplier diversity,” Stone said. “We’re seeing a lot of excitement and a lot of engagement in the supplier diversity space, and in the DEI space as a whole.”

She said Walgreens has committed to being transparent around its diversity efforts, pledging to report both its successes and its shortcomings.

With all of its ESG efforts, driving employee engagement is one of the most important keys to success, Stone said. The most successful initiatives tend to be those that have buy-in from workers, she said. “I think that’s what we all want,” Stone said. “We all want to work for a company that we feel shares our values.”

Rite Aid focuses on community, diversity

Similarly, Rite Aid also has refined its efforts around support for the community in the wake of the pandemic, Kazmaier said.

Its four ESG pillars include Thriving Planet, Thriving Business, Thriving Workplace and Thriving Community. It meshes the broad sets of goals in those areas with its RxEvolution strategy, unveiled in 2020, that seeks to remake the company as a “whole health” destination for the communities where it operates.

Rite Aid also has revamped its diversity, equity and inclusion road map, Kazmaier said. Overall, the company has become more intentional and focused on its community efforts.

For example, in its 2021 ESG report, Rite Aid said it had improved access to COVID-19 vaccines in neighborhoods across the country, partnering with such organizations as the Newark Equitable Vaccine Initiative, the NAACP and the Philadelphia Council AFL-CIO to set up clinics for vulnerable or underserved populations.

While the company had previously focused broadly on children’s charities, it has since refocused Rite Aid Healthy Futures — the nonprofit it established in 2001 — “around the intersection of racial injustice and health disparities,” Kazmaier explained.

[Read more: Rite Aid, WellSpan Health partner to improve health outcomes in Central Pennsylvania]

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CVS Health recently expanded its free, community-based health screening services to two new markets — Las Vegas and Richmond, Va.

Despite coping with the challenges of COVID-19, Rite Aid has doubled down on its diversity and inclusion initiatives under the leadership of CEO Heyward Donigan. In December 2020, the company named its first vice president of diversity, equity and inclusion, Texanna Reeves, who has helped the retailer create a three-year road map for its DEI program, Kazmaier said.

She also touted the diversity of Rite Aid’s board, which includes 50% representation from women, including two female board chairs. In addition, 88% of board members are gender or ethnically diverse. “We did that with great intentionality,” Kazmaier said. “We’ve seen the benefits of that. It’s helped our board to thrive, and we see that as the road map of what can be done.”

Rite Aid has been highly focused on attracting diverse leadership, Kazmaier said, and has been working with consulting firms, including McKinsey & Co., to help it achieve those goals. In fact, it currently has several leaders in McKinsey’s leadership development program for executives to prepare them for C-level management opportunities.

The fact that the company has embraced a remote-work environment, which had been in the works before the pandemic began, has created a deeper talent pool, Kazmaier said. It has allowed the company to expand its search throughout the entire country for leaders, including more diverse candidates, she said.

“We’ve got a lot of great, talented people from central Pennsylvania, which is where our old headquarters was, but we didn’t need to limit ourselves to people who were either from there or who were willing to move there,” Kazmaier explained. “That strategy has worked for us.”

In addition, Rite Aid has more than 30 employees who are in a management accelerator program, specifically designed to develop racially diverse leaders.

The company also has formed a new talent network, which Kazmaier described as a modern version of an employee resource group, or ERG.

“It is about promoting professional development, but we actually tap it to help inform us on business decisions, on community activities and opportunities,” Kazmaier said. “So the people who are in that talent network are really helping to inform our company direction.”

Another key initiative at Rite Aid involves its expansion of new stores into underserved communities. It is currently testing a small-format model that would focus on prescriptions and health care, without much of the typical front-end merchandise. “It really is pharmacy-focused to give these communities access to a healthcare professional that they need,” Kazmaier said.

She said the company sees the test as an opportunity to learn more about the people in those communities and how Rite Aid can better meet their unique needs.

CVS addresses health disparities

Like Walgreens and Rite Aid, Woonsocket, R.I.-based CVS Health also has a comprehensive ESG strategy that rests on four pillars: Healthy People, Healthy Business, Healthy Community and Healthy Planet.

Also, like its rival retail drug chains, CVS is focusing many of its ESG efforts around goals that expand access to affordable care and address racial inequities, along with taking steps to minimize its impact on the environment. The company said it has a goal to commit more than $1.5 billion to social impact investments to build healthier communities, as a part of its broad set of Healthy 2030 ESG goals.

The company unveiled its new Health Zones initiative earlier this year, in which it is testing a program in five cities, partnering with local organizations to address a range of factors that the company said contribute to health disparities. These factors include housing, access to food, transportation, education, labor and workforce training, and healthcare access.

[Read more: Albertsons, WinnCompanies bring essential services to affordable housing communities]

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Albertsons’ entire private truck fleet is certified by the Environmental Protection Agency’s SmartWay program, and in 2021, the retailer completed the nation’s first commercial 100% zero-emission refrigerated grocery delivery.

For example, CVS is partnering with Uber Health to find transportation to medical appointments for patients with the greatest need.

“This has been a real wonderful opportunity to really bring an integrated approach to underserved communities,” said Eileen Howard Boone, senior vice president of corporate social responsibility and philanthropy and chief sustainability officer at CVS Health, in a video announcing the program.

The Health Zone initiative launched in Atlanta; Fresno, Calif.; Columbus, Ohio; Hartford, Conn., and Phoenix. The company said it would monitor the results from those markets before deciding whether to expand the program to additional locations.

Joneigh Khaldun, vice president and chief health equity officer at CVS Health, said the pandemic, in which minorities were disproportionately impacted, was a wake-up call about the severity of the health disparities that exist in the country. “The disparities that we’ve seen with COVID-19 weren’t a surprise, but they’ve certainly alarmed all of us, and there are specific actions we can take to be able to address it,” she said.

Albertsons unveils new ESG framework

Supermarket operators also have long been at the forefront when it comes to community support. While their initiatives often revolve around hunger relief and food insecurity, they have increasingly expanded their efforts in other areas, including diversity and sustainability.

This past April, Albertsons unveiled a new ESG framework, called Recipe for Change. The framework lays out new long-term strategies and goals focused on substantially reducing carbon emissions, eliminating food waste going to landfills, reducing the use of plastic, accelerating the transition to a more circular economy, reducing food insecurity and cultivating a diverse and inclusive workforce.

“As a long-standing neighborhood grocer, it’s important to us that we use our national presence and resources to drive meaningful change for our communities and our planet,” said Suzanne Long, chief sustainability and transformation officer at Albertsons.

Albertsons has been making what Long described as “substantial progress” across all four pillars of its Recipe for Change framework: planet, people, product and community. For example, the company implemented 850-plus energy efficiency projects in 2021, such as LED lighting and doors on refrigerated cases, that are helping the company achieve its goals around carbon reduction. The company is also continuing to expand its use of renewable energy, such as on-site solar capabilities.

Albertsons’ entire private truck fleet is certified by the Environmental Protection Agency’s SmartWay program, and in 2021, the company completed the nation’s first commercial 100% zero-emission refrigerated grocery delivery with a class 8 truck, which delivered groceries to a Leadership in Environmental and Energy Design (LEED)-certified Albertsons store in Irvine, Calif.

At the same time, Albertsons is also working to reduce food waste, an effort that includes an artificial intelligence-powered platform to better manage inventory and fresh product supply. “This helps reduce the amount of food going to landfill and also ensures our customers have access to fresher products,” Long said.

Albertsons has also formed innovative partnerships to help the company repurpose food waste as animal feed, or to send the surplus to a biodigester that creates biogas and soil nutrients for organic farming.

“We have also been making significant progress toward our commitment to reduce food insecurity,” Long said, noting that in 2021, the company, along with the Albertsons Cos. Foundation, contributed nearly $200 million in food and financial support, including approximately $40 million through its Nourishing Neighbors Program to ensure those living in its communities have enough to eat.

The keys to Albertsons’ success with its ESG efforts, she said, have been setting clear goals, having strong executive support and engagement, and embedding its ESG efforts directly into its operations. For example, the entire leadership was involved in setting Albertsons’ company-wide goal to reduce its carbon footprint by 47% by 2030, Long said.

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