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Arjuna Capital: CVS Commits to Strengthen Customer Privacy Protections Amidst Reproductive Health Restrictions
[March 28, 2023]

Arjuna Capital: CVS Commits to Strengthen Customer Privacy Protections Amidst Reproductive Health Restrictions

CVS has committed to enhance its data privacy disclosures and transparency reporting in response to a shareholder proposal filed by investment management firm Arjuna Capital, co-filer Presbyterian Church U.S.A. and partner Rhia Ventures. The shareholder proposal, filed in November 2022, asked CVS to address threats to privacy of customers' reproductive health data collected and maintained by the company. Following a productive dialog with investors, CVS committed to further protect reproductive health data by enhancing its privacy statement regarding how it responds to law enforcement data requests, publishing semiannual transparency reports on the number of legal information requests received, improving internal legal request tracking processes, and continuing conversations with Arjuna Capital around protecting consumers' reproductive health data. As a result, Arjuna withdrew the proposal from going to a vote at CVS's annual meeting this spring.

Arjuna filed the proposal following last June's US Supreme Court decision which ended the constitutional right to abortion protections (Dobbs v. Jackson Women's Health Organization). Investors are increasingly concerned about how companies are using the personal digital data they collect for the enforcement of state laws that ban or restrict abortion access, noting companies' business interests are at risk. Fears heightened following news in 2022 that Meta satisfieda Nebraska police warrant by turning over private Facebook messages that were used as evidence to charge a mother and daughter with felony crimes related to the alleged illegal termination of the daughter's pregnancy. Meta received significant negative press in response.

"CVS is taking the steps necessary to protect its customers' privacy and data in a post-Dobbs world," said Natasha Lamb, managing partner at Arjuna Capital. "It's clear that threats to women's privacy are also a threat to CVS's business, brand, and investors."

Rhia Ventures' Director of Corporate Engagement, Shelley Alpern, who has supported numerous investor proposals regarding reproductive rights said, "The Dobbs decision has created enormous uncertainty for companies who are in possession of personal health information. Law enforcement agencies are not required to be specific or transparent regarding their information demands. Companies will have to go the extra mile to protect their customers. The outcome of Arjuna's proposal and engagement with CVS on these challenges has been very rewarding."

As CVS collects sensitive commercial data through its pharmacy and sales of over-the-counter medications like Plan B, it is important the company retains customers' trust by safeguarding personal data whenever possible. Companies in possession of sensitive customer data can best protect it by scrutinizing law enforcement data requests to ensure their legality and by responding narrowly by providing only the data requested. CVS has committed to enhance its privacy statement so that it protects clients' data whenever possible. By providing transparency reporting, investors will be able to review CVS's law enforcement request trends year-over-year to better understand how customers' data might be at risk.

Arjuna Capital filed seven shareholder proposals, and other investors filed an additional 24 proposals this proxy season, addressing the business risks associated with reproductive health restrictions. These proposals focus on reproductive health data privacy, political spending, risk assessments of how state anti-abortion policies will impact companies' workforces, hospital policies, maternal health care, and health insurance companies' plan offerings regarding abortion and contraception. Arjuna's proposal at United Parcel Service (UPS) requesting a risk assessment of how state anti-abortion policies will impact the company, including employee recruitment and retention challenges, will go to a vote on May 4, 2023.

Arjuna Capital is a sustainable investment firm that works with accredited investors and institutions to invest their assets integrating Environmental, Social, and Governance (ESG) risks and opportunities. Arjuna Capital has been recognized for using shareholder resolutions to promote racial and gender pay equity in the tech, banking, and consumer sectors.

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