Prescription for a Better World 2014 Corporate Social Responsibility Report Table of Contents

Letters Prescription for a Better World 9 Larry Merlo, President and CEO 3 CSR Governance 11 Eileen Howard Boone, Senior Vice President, 5 CSR Strategy 13 Corporate Social Responsibility and Philanthropy Our Pillar Framework 15 CVS Health Corporate Profile 7 CSR Material Issues and 17 Materiality Assessment Process CSR Material Issues 19 Stakeholder Engagement 23

1 Health in Action 25 Leader in Growth 67 Accessible and Affordable Health Care 27 Safe, Rewarding and Inclusive Workplace 69 Support for Patients with Chronic Diseases 35 Workforce Diversity 81 Patient and Customer Well-Being and Safety 41 Regulatory Compliance and Voluntary 83 Standards are Met or Exceeded Planet in Balance 47 Supply Chain Responsibility 89 Sustainable Operations 49 About this Report 97 Greenhouse Gas Emissions, 53 Energy, and Water Data Analysis Global Reporting Initiative (GRI) Index 99 Sustainable Products and Packaging 59 Internal and External Engagement 63 Around Our Sustainability Vision

2 Dear Stakeholders

2014 was a big year for our company. Helping people on their path to better Protecting our planet is another In September, we changed our health was also the key driver behind pillar of our CSR strategy, based company’s name to CVS Health and our decision to stop selling tobacco on the strong connection between stopped selling tobacco products products. We fundamentally believe human and environmental health. in our retail pharmacy locations tobacco use is in direct conflict with The investments we are making to across the United States. These this purpose. Now that these products reduce our environmental impact and decisive actions reflect the company are no longer sold in our stores, we are improve our operational efficiency we are today and how we are focusing on awareness campaigns and range from new lighting fixtures and working to change the way health smoking cessation initiatives through more efficient HVAC systems, to a care is delivered. which we hope to help millions of growing list of chemicals we have people quit smoking for good. banned or are phasing out of our At our core, we are a pharmacy private label products. These and innovation company aligned around In last year’s report, we unveiled other initiatives are outlined in the a simple and clear purpose: Helping our corporate social responsibility Planet in Balance section of this people on their path to better health. (CSR) strategic framework, report. We also report on the good Our ultimate goal is to lower the cost, Prescription for a Better World. progress we have made toward our improve the quality of, and increase One of the key pillars of our strategy 15% reduction target of greenhouse access to, health care for our patients is focused on building healthier gas (GHG) emissions, which we and customers so they can live communities. In addition to the expect to achieve by 2018. healthier lives. This has led us to efforts I have described above, the expand our model beyond the corner Health in Action section of this Finally, creating economic opportunity drug store to a fully-integrated report describes some of the specific is the third pillar of our Prescription for pharmacy and health care provider, initiatives delivering on our purpose a Better World. Having opportunities which today includes 7,800 retail store and CSR strategy — from making to grow and thrive is not only essential locations, principally operating under health care more accessible through to our business, it is essential to our the CVS/pharmacy name; a pharmacy technology, like our Telehealth service colleagues, suppliers, communities, benefit management business called that is available at select MinuteClinic and investors. For example, we work CVS/caremark that covers about locations; to providing people in closely with our store brand supply 65 million Americans; 970 walk-in underserved communities free health chain partners on all quality and safety CVS/minuteclinic locations; and screenings so they can proactively requirements to help ensure they CVS/specialty, a growing pharmacy manage their health. At every turn, we continue to meet our social compliance service designed for patients with are challenging ourselves to innovate standards. We also have more than chronic diseases, cancer and other and invest in better solutions that will 50 development and training programs serious conditions. help improve health outcomes. tailored for our colleagues that focus

3 on career advancement as well as new technologies and business trends. We disclose more on this and other topics in the Leader in Growth section of this report.

Since 2007, our annual CSR Report has been an important vehicle for us to openly communicate our social responsibility commitments, plans and progress to our stakeholders. We believe transparency is about building trust while providing our stakeholders with a better sense of our values and the ways in which they guide how we conduct ourselves as corporate citizens. I hope you will take the time to review this report to see how we are bringing our purpose to life and advancing our Prescription for a Better World.

Sincerely,

Larry Merlo President and Chief Executive Officer

4 Our Journey

This past year has been a highly productive one in CVS Health’s CSR journey. Since we stopped the sale of tobacco products in our retail drugstores, we accelerated our work by clearly defining the strategy and goals of our Prescription for a Better World in order to better align with CVS Health’s purpose of helping people on their path to better health.

Working through our new Prescription for a Better World framework, we have built a powerful cross-functional team of senior leaders and subject matter experts to identify both the opportunities we have to advance our social and environmental commitments, as well as potential constraints and challenges. One thing we all agreed on is that the role of CSR is more than just “doing the right thing.” CSR must deliver value to the business and to society, while meeting the expectations stakeholders have of us.

To better understand the expectations of our stakeholders, we engaged with our colleagues, as well as with external parties: customers, clients, shareholders, advocacy groups and

5 nonprofit organizations. Their input and innovative spirit of our company helped us to prioritize our material and colleagues, and make sense for Working through our impacts and identify what else we our business and our stakeholders. can be doing as a large employer We present an overview of the new Prescription for a and health care provider to deliver priorities and goals that support Better World framework, value. For example, we met with our Prescription for a Better World we have built a powerful nonprofit organizations, regulators on page 15 in this report. cross-functional team and communities to help identify how CVS Health can support smoking As we look ahead to the next phase of senior leaders and cessation programs and efforts to of this journey, we will work through subject matter experts discourage youth from ever using targets and performance metrics to identify both the tobacco. We also met with and joined that will help measure and manage opportunities we have Ceres, a nonprofit organization that our progress over time. advocates for sustainability leadership, to advance our social to help us continue to advance our I invite you to read through this and environmental environmental stewardship. And we report — our eighth — to see where commitments, as well engaged with investors interested we are today and how we are already as potential constraints in social and environmental executing on the priorities and goals responsibility to get their feedback for our Prescription for a Better World. and challenges. on our CSR programs, progress I hope you will share your feedback and overall direction. with us at [email protected].

Our discussions with key stakeholders helped us focus our strategy on the Sincerely, most important priorities for our CSR efforts. Developing the right goals that support our strategic priorities involved many discussions to ensure we can both stretch our thinking and deliver on our promises. Personally, I’m pleased Eileen Howard Boone about where we landed. I believe our Senior Vice President, Corporate goals are ambitious, reflect the heart Social Responsibility and Philanthropy

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CVS Health Corporate Profile CVS Health (NYSE: CVS), formerly CVS Caremark, is a pharmacy innovation company helping people on their path to better health. We enable people, businesses and communities to manage health in more affordable and effective ways. We do this through our retail pharmacies (CVS/pharmacy®, Longs Drugs®, Navarro Discount Pharmacy® and Drogaria OnofreTM stores), walk-in medical clinics (CVS/minuteclinicTM), pharmacy benefits management (PBM) and mail service prescription operations (CVS/caremarkTM), specialty pharmacy services (CVS/specialtyTM, Navarro® Health Services and Coram®) and our online retail pharmacies (CVS.com®, Navarro.com® and Onofre.com.br). This unique integrated model helps to increase access to quality care, deliver better health outcomes and lower overall health care costs.

Our Operations a 33-store retail drugstore chain, and Supply Chain and Navarro Health Services, nearly CVS Health is headquartered in a specialty pharmacy serving patients Woonsocket, RI. We employ nearly with complex or chronic diseases. 215,000 colleagues in 47 U.S. states, In addition, we added Coram, one 215K the District of Columbia, Puerto Rico, of the nation’s largest providers of colleagues across Brazil and Northern Ireland. As of comprehensive infusion services. 47 U.S. states, the December 31, 2014, we operated: District of Columbia, 7,800 retail drugstores; 970 walk-in We work with vendors and medical clinics; 27 retail specialty manufacturing suppliers inside Puerto Rico, Brazil and pharmacy stores; 11 specialty mail and outside the United States to Northern Ireland are order pharmacies; four mail service supply our store and proprietary employed by CVS Health dispensing pharmacies; 17 onsite brands, which comprise pharmacy stores; 86 branches, approximately 19.5% of our including approximately 70 ambulatory front-of-store revenue. The operating profit was almost $9 billion, infusion suites and six centers remaining 80.5% of front-of-store and diluted earnings per share from of excellence for infusion and revenue is derived from the sale continuing operations were $3.96. enteral services; and our CVS.com, of national brands, which are Onofre.com.br, MinuteClinic.com, manufactured by third-party Our employees earned $8.3 billion in Caremark.com, Navarro.com, suppliers and sold at our retail wages and $1 billion in benefits; we Navarrohealthservices.com and drugstores and online. made payments to providers of capital Coramhc.com websites. During of $1.9 billion; and paid $4 billion in 2014, we increased the number of income, property and employer taxes CVS/pharmacy locations by a net Financial Results and in the United States. Our charitable 162 and added 175 new MinuteClinic Economic Impact contributions, employee giving, locations. We also acquired Miami- In 2014, CVS Health’s net revenues in-store fundraising and in-kind based Navarro Discount Pharmacy, were approximately $139 billion, donations totaled nearly $90 million.

7 Serving the Public

5M CVS/pharmacy visits per day

1.6B+ prescriptions filled annually

24M MinuteClinic visits since 2000

7.2M Pharmacy Advisor interventions in 2014

8 Prescription for a Better World

9 Our approach to CSR ties directly to our business purpose of helping people on their path to better health. As a pharmacy innovation company, we are working every day to provide people with high quality pharmacy and basic health care services, and to make these services accessible and affordable. Our Prescription for a Better World aligns with this purpose and extends to our sustainable business operations, workplace, supply chain and communities.

10 CSR Governance At CVS Health, our approach to CSR begins with our president and chief executive officer, Larry Merlo, who is responsible for delivering on our purpose and executing our business strategy across the enterprise. Our senior vice president of CSR and philanthropy, Eileen Howard Boone, is responsible for developing our Prescription for a Better World strategy and aligning it with our business objectives, as well as collaborating with others throughout the company on specific programs and initiatives. The Nominating and Corporate Governance Committee of our Board of Directors provides oversight of our CSR strategy and performance. The senior vice president of CSR and philanthropy reports to the Committee on an ongoing basis and seeks their counsel on our approach to key issues. The Nominating and Corporate Governance Committee also reviews the annual CSR Report before it is released for publication.

11 12 CSR Strategy Our approach to CSR ties directly to our business purpose of helping people on their path to better health. As a pharmacy innovation company, we are working every day to provide people with high quality pharmacy and basic health care services, and to make these services accessible and affordable. Our Prescription for a Better World aligns with this purpose and extends to our sustainable business operations, workplace, supply chain and communities.

Our Framework in 2013, a process that was informed Our Prescription for a Better World by internal and external stakeholders. framework is organized around Through ongoing engagement with our three key pillars: building healthy 3 Key Pillars stakeholders, it is possible their input communities, protecting the planet define our Prescription may lead us to reprioritize our CSR and creating economic opportunities. for a Better World material issues and evolve our priorities Each pillar is supported by strategic strategy and approach and goals in the future. We are currently priorities and goals, and aligned with in the process of identifying targets the CSR material issues we identified and/or key metrics to drive performance.

13 14 Our Pillar Framework

Pillar Strategic Priorities Goals

Reach more people with affordable health care options

Accessible and Affordable Health Care Expand network of integrated care

Provide educational resources to underserved patients

Expand chronic disease management services Support for Patients with Chronic Disease

Help improve health outcomes Health in Action Use best-in-class technology and processes in all prescription dispensing to help ensure the highest quality of care

Improve offerings of healthy products in-store

Patient and Customer Well-Being and Safety Help to prevent prescription drug abuse

Help people lead tobacco-free lives

Support communities in need during times of disaster

15 Pillar Strategic Priorities Goals

Sustainable Operations Reduce the environmental impact resulting from our operations

Improve the sustainability of CVS Brand and/or private label products Sustainable Products and Packaging Planet in Improve the sustainability of our Balance supply chain

Make sustainability a relevant part of every colleague’s role and responsibility Internal and External Engagement Around Our Sustainability Vision Engage consumers to encourage adoption of more environmentally responsible behavior

Create new jobs while providing best-in-class workplace and career development opportunities Safe, Rewarding and Inclusive Workplace Take steps to ensure that the diversity of our colleagues represents the diversity of our customers and local communities

Provide transparency around corporate policies and practices in ways that build trust with stakeholders Regulatory Compliance Leader in and Voluntary Standards are Met or Exceeded Growth Ensure policies and practices are best-in-class and processes are in place to execute

Engage store brand suppliers to ensure compliance with our social and environmental policies, and to help Supply Chain drive a best-in-class approach Responsibility

Encourage diversity within our supply chain

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CSR Material Issues and Materiality Assessment Process At the end of 2013, we conducted an assessment to determine our CSR material issues. We have used the findings from this assessment to define this report’s content and to develop our Prescription for a Better World strategy and roadmap. We did not update the assessment for this reporting year as we found the existing findings to remain appropriate.

The highest priority issues we Materiality • CEO communications, including identified were: patient and customer Assessment Process speeches safety; access and affordability of The Global Reporting Initiative‘s • The company’s social media health care; information security (GRI) Principles for Defining Report properties and customer privacy; managing Content served as the basis of our our carbon footprint; prescription materiality assessment process and • Employee surveys and internal drug abuse and disposal; and include: materiality, stakeholder communications tobacco cessation. We also identified inclusiveness, sustainability context, • Business plans 12 additional issues we believe and completeness. Our process should be priorities for our company. followed the guidance provided by • Position and policy statements In total, these issues form the focus the GRI and included four steps: • Carbon Disclosure Project — of this report. identify the material topics and their CVS Health’s questionnaire on boundaries; prioritize the topics and GHG emissions from 2013 align them with the material aspects; validate the material aspects; and External research was conducted to review our 2013 CSR Report with examine and assess the following:

A 4-step stakeholders. emerging issues specific to CVS Health process was followed and/or its industry; how significant issues are influencing the perception Step 1 or expectations of stakeholders; what competitors and corporate peers are Our main focus is on addressing Identify Material Topics doing to address similar issues and the priority issues over which we and Their Boundaries report on them; and what impact the have the greatest control, such as Input was gathered from a wide issues are having on society and/or the quality and safety of our services, range of internal stakeholders, on CVS Health. the products we sell and the and internal source documents and environmental impact of our stores. company communications were Some of the specific activities used to We do this by integrating responsible reviewed. These inputs covered capture external perspectives included: business practices into our daily a broad range of topics — from operations and continuously evaluating sustainable operations and supply • Reviewing the GRI material aspects opportunities for improvement. chain responsibility to access to health and performance indicators We then collaborate with others to care and patient and customer safety. • Benchmarking competitors and address the social and environmental Examples of source documents and corporate peers on their CSR impacts related to the issues that company communications included: priorities, strategies and transparency occur outside our direct control, such • The company’s Annual Report on as the disposal of prescription drugs • Auditing media coverage on Form 10-K and its proxy statement and the development and manufacturing relevant CSR topics, including of national brand products. • Company websites and press releases social media platforms

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• Studying white papers and/or and decisions of stakeholders were inclusive of stakeholders. The position statements on CSR also considered material. company’s senior vice president topics developed by non- of CSR and philanthropy reviewed governmental organizations The company’s value chain was used and approved these findings. (NGOs), the government, to determine where the significant Throughout the development of the consulting experts, academics impacts occur relative to each topic CSR Report, the disclosures around and other thought leaders or material aspect — whether the the performance indicators were • Examining the CSR-related boundary is inside or outside the continually reviewed to ensure the perspectives of and actions organization, and which stakeholders information was as complete as taken by our shareholders or entities contribute to the impacts possible, and timely. Content drafts or are affected by them. There have were reviewed by many of the • Reviewing the criteria of various been no significant changes to the company’s senior leaders and a indices, rankings and ratings scope and aspect boundaries since near final draft was reviewed by our last report. The aspect boundaries the Nominating and Corporate The external research also focused are disclosed in the chart on pages Governance Committee of the on establishing the broader 19 to 22. Board of Directors before publication. sustainability context as it pertains It should be noted that not all topics to CVS Health. Six mega-trends are easily quantified, nor do they were determined to be relevant: Step 2 all correspond exactly to specific evolving health care needs; resource material aspects and/or performance scarcity and climate change; material Prioritize the Issues; indicators. The reporting team use; economic opportunity; big data; Align with Material Aspects relied on the GRI Implementation and transparency. These mega-trends The material topics were Manual for guidance and applied helped to frame many of the issues discussed by CVS Health’s internal their best judgment when determining discussed in this report. CSR team and a team of external how to report on specific topics consultants. Careful consideration and meet the criteria for specific To ensure stakeholder inclusiveness, was given to each topic and its performance indicators. input was gathered by reviewing relative economic, social and direct correspondences or debriefing environmental impact, as well as on meetings that took place the impact it has on CVS Health’s Step 4 with stakeholders who shared their business and reputation. Each perspectives on specific issues. topic was also weighted based Review the 2013 CSR Report These stakeholder inputs covered on the influence it may have on CVS Health invited external a range of issues, such as: safe stakeholder perceptions and stakeholders to review the 2013 chemicals and product safety; tobacco decisions. The topics were CSR Report. Written feedback was cessation; prescription drug abuse; prioritized, revealing six high provided by multiple reviewers from prescription drug disposal; climate priority issues and 12 other issues. two socially responsible investing change; packaging and recycling; During this process, each topic (SRI) groups. The feedback was transparency on political contributions; was aligned with its corresponding mostly positive, but included a and patient privacy, among others. material aspect and performance number of recommendations for Customer surveys and feedback indicators were identified. The strengthening report content in a few were also reviewed. aspect boundaries are disclosed key areas, such as providing more in the chart on pages 19 to 22. information on employee safety, A list of material topics was developed better context on goals and progress and reviewed internally. Topics that made; and improved disclosure on reflected the company’s most significant Step 3 diversity, among others. Many of the economic, environmental and social suggestions these reviewers provided impacts — and may have an impact on Validate the Material Aspects are now under consideration and/or our business reputation and long term The validation process was done have been implemented this year success — were determined to be to ensure that the range of material to improve the report quality. material. In addition, topics that could aspects and their boundaries substantially influence the assessments accurately represented CVS Health’s This year’s report does not include sustainability impacts and were any restatements of information.

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CSR Material Issues

CSR Material Topics Aspect Boundaries Material Aspects and Reported Indicators

Within CVS Health: EC1 Economic Performance all departments Direct economic value generated and distributed Access and Affordability of Care Outside CVS Health: patients, EC8 Indirect Economic Impact customers and plan members Significant indirect economic impacts, including the extent of impacts

Within CVS Health: all departments EC2 Economic Performance Climate Risks Financial implications and other risks and opportunities for the organization’s activities due to climate change Outside CVS Health: local communities, patients

Within CVS Health: all departments PR1 Customer Health and Safety Percentage of significant product and service Chronic Disease categories for which health and safety impacts Outside CVS Health: patients, are assessed for improvement customers and plan members

EN32 Supplier Environmental Assessment Within CVS Health: Percentage of new suppliers that were screened using all departments environmental criteria Deforestation (paper use) Outside CVS Health: EN2 Materials vendors, local ecosystems Percentage of materials used that are recycled input materials

LA12 Diversity and Equal Opportunity Within CVS Health: Composition of governance bodies and breakdown all departments of employees per employee category according to gender, age group, minority group membership, and Diversity and other indicators of diversity Inclusion

Outside CVS Health: patients, EC9 Procurement Practices customers and plan members Proportion of spending on local suppliers at significant locations of operation

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CSR Material Topics Aspect Boundaries Material Aspects and Reported Indicators

LA1 Employment Total number and rates of new employee hires and employee turnover by age group, gender, and region

Within CVS Health: all departments LA2 Employment Benefits provided to full-time employees that are not provided to temporary or part-time employees, by significant locations of operation

Economic Opportunity LA10 Training and Education Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings

Outside CVS Health: local communities EC5 Market Presence Ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation

EN15 Emissions Direct greenhouse gas (GHG) emissions (Scope 1)

Within CVS Health: EN16 Emissions all departments; Energy indirect GHG emissions (Scope 2) distribution and transportation

EN18 Emissions GHG emissions intensity Energy Use and Greenhouse Gas Emissions EN19 Emissions Reduction of GHG emissions

Outside CVS Health: EN30 Transport third-party transporters Significant environmental impacts of transporting products and other goods and materials for the organization’s operations, and transporting members of the workforce

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CSR Material Topics Aspect Boundaries Material Aspects and Reported Indicators

HR1 Investment Total number and percentage of significant investment agreements and contracts that include human rights clauses or that underwent human rights screening

Within CVS Health: N/A

HR5 Child Labor Operations and suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the effective abolition of child labor Human Rights

HR10 Supplier Human Rights Assessment Percentage of new suppliers that were screened using human rights criteria Outside CVS Health: store brand manufacturing suppliers HR11 Supplier Human Rights Assessment Significant actual and potential negative human rights impacts in the supply chain and actions taken

Within CVS Health: all departments PR8 Customer Privacy Information Security Total number of substantiated complaints and Customer Privacy regarding breaches of customer privacy and Outside CVS Health: patients, losses of customer data customers and plan members

Within CVS Health: CVS/pharmacy, CVS/caremark, PR3 Product and Service Labeling CVS/specialty Type of product and service information required Labeling and by the organization’s procedures for products and Transparency service information and labeling, and percentage Outside CVS Health: patients, of significant product and service categories subject customers and plan members to such information requirements

Within CVS Health: all departments EN2 Materials Packaging Percentage of materials used that are recycled Outside CVS Health: patients, input materials customers and plan members

Within CVS Health: CVS/pharmacy PR1 Customer Health and Safety Patient and Percentage of significant product and service Customer Safety categories for which health and safety impacts Outside CVS Health: are assessed for improvement manufacturing suppliers, vendors

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CSR Material Topics Aspect Boundaries Material Aspects and Reported Indicators

Within CVS Health: all departments Political S06 Public Policy Total value of political contributions by country Disclosure and recipient/beneficiary Outside CVS Health: N/A

Within CVS Health: all departments Prescription Drug EN28 Products and Services Percentage of products sold and their packaging Abuse and Disposal materials that are reclaimed by category Outside CVS Health: patients, local communities, government

Within CVS Health: CVS/pharmacy Product EN27 Products and Services Extent of impact mitigation of environmental Ingredients impacts of products and services Outside CVS Health: manufacturing suppliers, vendors

EC8 Indirect Economic Impacts Within CVS Health: Significant indirect economic impacts, CVS/pharmacy, CVS/minuteclinic including the extent of impacts Tobacco Cessation Outside CVS Health: patients and PR6 Marketing and Communications customers, local communities Sale of banned or disputed products

Within CVS Health: all departments, distribution centers EN23 Effluents and Waste Waste Total weight of waste by type and disposal method Outside CVS Health: patients and customers

Within CVS Health: CVS/pharmacy EN8 Water Water Total water withdrawal by source

Outside CVS Health: N/A

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Stakeholder Engagement We believe engaging stakeholders is key to the successful development, execution and evolution of our CSR strategy, and helps us identify emerging issues that may require us to respond. We seek to engage with stakeholders who are aligned with our goal of increasing access to health care, improving health outcomes and lowering overall health care costs. We also actively engage with those who are closest to us — our employees, customers and clients, suppliers and vendors, investors, and local communities. Most of our engagements are ongoing and occur through the natural course of conducting and growing our business.

our practices and will update the designated “Drug Take Back” days. The other type of engagement is information in our CSR Reports This ensures the safe disposal of typically issue-specific and more as our programs evolve. prescription drugs, which is one direct. Over the past two years, way to take drugs that could especially as we have been honing • As a new member of Ceres, potentially be abused out of the our CSR strategy, we engaged a a number of engagements took system. This led us to create a number of key stakeholders to place, including a dialogue community donation program that gain valuable external perspective. between CVS Health’s CEO and provides drug collection receptacles A few examples of engagements the CEO of Ceres. It was an to local police departments and from the past two years, and the opportunity to reaffirm our allows citizens to properly dispose related outcomes, include: commitment to sustainability and of their expired medications, environmental responsibility. • We conducted a multi-city listening including controlled substances. tour to gain insights from tobacco • Advocates for the development • An interfaith-based institutional control, smoking cessation, and and disposal of safe cosmetics investment group submitted a health organizations on best- expressed concerns about the use shareholder resolution for our 2014 practices in smoking cessation and of chemicals in the personal care annual meeting requesting that we prevention as well as market trends products we sell and encouraged provide further disclosure of our in the area of tobacco use. We us to consider adopting a restricted lobbying activities. After discussing used their feedback to inform the substances list. We disclose the the group’s concern, we realized we development and launch of our 2014 chemical substances that have were already sharing what they had smoking cessation programs. been, or are being, phased out of our requested, but the information was personal care products in this report. • A shareholder group raised questions difficult to find. We have updated about patient and customer privacy • We provided a location for local our website to make this information protections at CVS Health. We law enforcement to take back more accessible. The proposal was provided information to them on prescription drugs on DEA withdrawn prior to the annual meeting.

23 G4-24 G4-26 Types of Ongoing Engagement with Key Stakeholder Groups

Employees Annual employee engagement surveys, focus groups, newsletters, intranet, magazine, community projects

Non-Governmental Organizations Conferences, roundtables, strategic partnerships

Suppliers Procurement contracts, Supplier Compliance Program

Clients Dedicated client sales and account teams

Investors, Shareholders, Analysts Annual Report, Annual Analyst/Investor Day, Annual Stockholders Meeting, quarterly conference calls, meetings and conferences, investor website

Consumers Pharmacy and medical services and interactions, consumer surveys, customer relations hotlines, social media, websites

Local Communities and Civic Organizations Community engagement programs, volunteering, board memberships, event participation, speeches We engaged a number Trade and Industry Associations of key stakeholders Meetings, conferences, reports, to gain valuable collaboration on industry issues external perspective.

Government and Regulatory Authorities Briefings, meetings, regulatory filings

Media Press releases, social media, websites

24 Health in Action

25 The United States health care landscape is experiencing transformative change: an aging population, a rise in the prevalence of chronic disease, the increased prevalence and high cost of specialty medications and a surge in Americans gaining access to health care coverage — more than 30 million additional people expected by 2018. This confluence of factors, together with a shortage of primary care physicians, is testing our health care system and challenging it to improve health outcomes while also lowering costs.

We believe CVS Health can play a Our approach is described in our leadership role in addressing that Prescription for a Better World, challenge. We demonstrated this in a strategic framework that includes 2014 when we removed cigarettes a commitment to make community and tobacco products from our store health and wellness central to our shelves. As America’s largest integrated charge for a better world. pharmacy innovation company, we believe our leadership is also evident We have defined our strategic priorities in numerous, less public, ways. in the following areas: We conduct our business with a focus • Accessible and affordable on delivering high-quality care, health care proactively engaging patients to support their well-being, and providing • Support for patients with philanthropic support to partner chronic diseases organizations that share our interests • Patient and customer well-being and aspirations. and safety

26 Accessible and Affordable Health Care CVS Health understands that people who want to be well need straightforward solutions to help them on their path to better health. We are offering those solutions by changing the way health care is delivered to increase access, lower costs and improve quality for our patients and customers. Our pharmacists and nurse practitioners provide expert care through a variety of options that support affordable health care, medication advice and adherence, chronic condition monitoring and wellness support. This expert care is provided in our 7,800 retail pharmacies and 970 walk-in medical clinics located close to patients’ homes and linked to primary health care systems.

Goal: Reach more people with affordable health care options

CVS Health provides a number of programs and initiatives to help people access the affordable health care they need. In this section, we describe some of these, including how our pharmacists advocate on behalf of patients, our philanthropic initiatives that connect people with limited access to health care services, and the expansion of MinuteClinic and its Telehealth services.

Pharmacists as Advocates and championing adherence. More 17 additional markets. From January for Affordable Options detail on this program is here. through March and in November As part of our commitment to high and December 2014, we hosted 750 quality patient care, our pharmacists events in 591 CVS/pharmacy locations. counsel patients face-to-face on all Project Health Expands Health Project Health offered free health aspects of pharmacy health, including Screenings to 27 Cities services, including health screenings, how to take medications properly, CVS Health is committed to helping health insurance education, the importance of adhering to improve access to health care for all consultations with a CVS pharmacist prescribed dosages and schedules, Americans, including those who may and nurse practitioner and medical and effective drug alternatives that not have the resources to pay for referrals to nearby no-cost or low-cost can help reduce medication costs. medical care. Our Project Health medical facilities. In addition, 4,032 Through our Pharmacy Advisor® initiative has been successful in patients were provided free smoking program, they also work closely connecting people with limited access cessation support. In total, more with patients with certain chronic to preventive health care services. than 83,000 patients received free conditions, providing medication Originally launched in 10 U.S. cities, health services valued at $8.3 million information, identifying gaps in care in 2014 Project Health expanded into in 2014. Since 2006, Project Health

27 has delivered more than $81 million • Smoking cessation and anti-tobacco worth of free health care services programs to nearly 852,000 patients. • Enhanced coordinated care models 70 grants to help improve health outcomes were awarded by CVS Health Philanthropic Support to • Routine medical care, such as flu Improve Access to Health shots, eye exams, dental screenings Foundation, totaling Health in Action focuses on improving and mental health support patient outcomes and providing quality, affordable, and accessible • Community-based initiatives focused $5 million health care to the people and on the treatment and management communities we serve. We deliver of chronic illnesses on these priorities through our CVS Health Foundation provides support services and product offerings and In April 2014, the CVS Health Foundation, to survey grantees to identify challenges our integrated business model as a private foundation established by in patient care, monitors progress and well as our philanthropic support. CVS Health, announced 70 grants the impact of health care services, and In 2014, we delivered more than totaling $5 million to increase access uncovers best practices in smoking $90 million in charitable donations, to health care through free and cessation to discover key trends in volunteer hours, employee and charitable clinics, school-based health health care access, as well as developing in-store fundraising, gifts-in-kind centers and community health centers. an understanding of the evolving and community investments. Grant recipients will help increase health care needs in local communities. access to health care and coordinated Results of these affiliations to date We continue to advance our purpose care to improve health outcomes for have included helping patients at nearly of helping people on their path to people of all ages across the country 150 community health organizations better health through our philanthropic through a variety of measures. nationwide and increasing access to support and funded increased health care services for more than access to health care for underserved This was the third year we have been 23 million patients nationwide. populations, innovative approaches affiliated with the National Association to chronic disease management and of Community Health Centers and We also helped patients gain access to other initiatives focused on improving our second year with the National affordable health care services in 2014 overall health outcomes and reducing Association of Free & Charitable Clinics through a relationship with Direct Relief health care costs. We focus our and the School-Based Health Alliance. USA, by providing $1 million in flu shot giving in the areas of: Through these relationships, the vouchers to community health clinic

28 HEALTHY

patients in underserved communities To further extend this commitment, CVS Health signed on as the who lack health insurance. Nearly we also launched two new in-store title sponsor of the LUNG FORCE 100 participating clinics in Direct fundraising campaigns at initiative with a three-year, $6 million Relief’s network identified uninsured CVS/pharmacy. The spring campaign commitment to make lung cancer in individuals from their existing patient supported the American Lung women a public health priority, drive populations, and provided them with Association’s LUNG FORCE initiative policy change and increase research a flu shot voucher that was redeemable focused on raising awareness of lung funding. Through LUNG FORCE, at any CVS/pharmacy or MinuteClinic cancer as the leading cancer killer in CVS Health and the American Lung location in 14 metropolitan areas. women. According to the American Association are uniting women against Lung Association’s inaugural Women’s lung cancer and for lung health, In 2014, we aligned our support with Lung Health Barometer, a survey of and encouraging them to raise their our commitment to help people lead more than 1,000 American adult voices for change. CVS Health tobacco-free lives and provided more women that measures women’s colleagues and customers raised more than $2 million in grants through our knowledge and perceptions about than $3.6 million for LUNG FORCE company and our foundation for lung cancer, women’s awareness of through the 2014 campaign. tobacco cessation and prevention lung cancer’s impact is terribly low. programs. The grants were distributed Lung cancer is the leading cancer Also in 2014, CVS Health announced to leading health care and community killer of women, yet only 1% of women a three-year, $10 million commitment partners working to promote tobacco- cite it as a cancer that is top-of-mind. to support Stand Up To Cancer — free communities, programs that help Hundreds of thousands of women including a fall in-store fundraising people to quit smoking and encourage are affected by lung cancer every campaign which raised more than those who do not smoke to never start. year, and two-thirds of lung cancer $3.6 million. Stand Up To Cancer Among the awards were funds to cases are in those who have never (SU2C) raises funds to accelerate the support quit lines operated by National smoked or have successfully quit pace of research to get new therapies Jewish Health and the American Lung smoking. The Barometer also to patients quickly and save lives now. Association as well as a multi-year, revealed 78% of women are not SU2C funds collaborative research multi-million dollar relationship with aware that lung cancer has killed models called “Dream Teams” where the Campaign for Tobacco-Free Kids more women than breast cancer teams of investigators at different to reduce tobacco use among youth. since 1987. institutions and across multiple

29 disciplines work together to translate conduct rigorous, competitive their research from the laboratory to review processes to identify the patient to save lives now. There the best research proposals to are twelve Dream Teams and two recommend for funding, oversee Translational Research Teams made grants administration, and provide up of talented scientists from across expert review of research progress. disciplines, institutions, countries and CVS Health is a proud partner of specialties. These Dream Teams come SU2C in advancing innovative together in the spirit of collaboration, cancer research. innovation and acceleration to compete against cancer instead of each other, to move research from MinuteClinic Expands bench to bedside to benefit patients Health Care Accessibility A MinuteClinic Success Story more quickly. Each team in its own MinuteClinic, which provides high- This story comes from a way is changing the face of cancer quality, accessible medical care and letter received from a patient. research and pushing the dream of wellness support in CVS/pharmacy Names and identifying details ending cancer closer to reality. locations, is another core component have been changed to protect in our strategy to reach more people our patient’s privacy. As SU2C’s scientific partner, the with affordable health care options. American Association for Cancer A grateful mother shared Research (AACR) and a Scientific In 2014, we expanded our network her gratitude for a Advisory Committee led by Nobel to 970 MinuteClinic locations in 31 MinuteClinic Physician’s Laureate Phillip A. Sharp, Ph.D., states, adding 175 new locations — Assistant who helped her including new markets in St. Louis, daughter get treatment for Memphis and the state of Rhode a heart condition. The patient Island — with 2,700 nurse practitioners had come to MinuteClinic and physician assistants reaching for a routine strep test but close to half a million patient visits due to an elevated heart rate across these markets. MinuteClinic is the Physician’s Assistant on track to meet its goal of providing recommended the patient health care access through 1,500 go directly to the ER. Thanks clinics across 35 states by 2017. to this guidance, the patient 970 was able to get the special existing locations MinuteClinic addresses acute needs care she needed and ultimately related to common family illnesses, underwent a necessary as well as chronic conditions and corrective heart procedure. wellness needs such as vaccinations 31 and preventive screenings. In 2014, states in concert with our announcement to stop selling cigarettes, MinuteClinic expanded its existing smoking cessation programs, partnering with

175 many of our affiliates to implement new locations complementary initiatives. In addition, we added services to screen for

30 hypertension and for patients the U.S.’s pre-eminent evaluation experiencing dental pain. Our dental and certifying agency for nearly program includes clinical assessment 20,000 health care organizations and treatment and a connection to and programs nationwide. 24M professionals in the dental community MinuteClinic patient visits if needed. Telehealth Builds MinuteClinic accepts nearly every type Remote Access of insurance, locations are open seven Telehealth is experiencing high 94% days a week including evenings and growth, as consumers and providers customer satisfaction holidays, and patients are seen on a experience its value in helping ensure since MinuteClinic walk-in basis. Since it first opened in access to primary care, particularly 2000, MinuteClinic has provided care in rural areas. In 2014, MinuteClinic opened in 2000 through 24 million patient visits, expanded this service in two states. with a 94% customer satisfaction Through the program, a MinuteClinic rating. CVS/minuteclinic is the only licensed vocational nurse is able to loads. In 2014, the program managed retail health care provider to receive connect remotely to a nurse 7,300 visits, with 94% of patients three consecutive accreditations practitioner at another clinic within reporting a “very satisfied” rating from The Joint Commission, which is the state to better manage patient with their Telehealth experience.

31 Goal: Expand network of integrated care

We understand that patient care is most effective when done collaboratively with primary care providers in the communities where patients live and work. We continue to enhance patient care by expanding our affiliations with health systems across the country.

Enhancing Integrated our affiliations, eligible patients In 2014, we enhanced the continuity Care through Partnerships receive access to clinical support, of care within our network with our and Technology medication counseling, chronic transition to EpicCare, the most We believe that as MinuteClinic grows, disease monitoring and wellness widely used EMR system in the it offers an effective way to address programs at MinuteClinic locations. U.S. When fully implemented in 2015, the unmet needs of the millions of MinuteClinic also provides clinical EpicCare will support MinuteClinic’s patients in America who do not have prescription and visit information evidence-based model of care a primary caregiver. To support to a patient’s primary health system and connect with affiliated health continuity of patient care, we are through the integration of a secured systems, hospital networks and building affiliations — almost 50, electronic medical record (EMR) physician groups nationwide. As including 19 added in 2014 — with system that allow the secure MinuteClinic adds affiliated health medical care partners and health exchange of patient records among systems, it plans to integrate EMR systems around the country. Through medical providers. systems to streamline communications.

32 33 Goal: Provide educational resources to underserved patients

The health care system in the United States is complex and can be difficult to navigate. At CVS Health, we have expanded the educational resources available for customers, including information on health care insurance options as well as health care apps to help patients adhere to their treatment programs.

Medicare: Helping Seniors conduct their plan comparison online We also introduced Bill Pay, a Choose Affordable Coverage at www.cvs.com/medicare or by cash-based premium payment CVS Health is committed to helping calling CVS/pharmacy customer care. solution that serves as an alternative Americans understand and choose payment solution to Marketplace the health insurance coverage that We recognize that Medicare Part D customers who may not have access is best for them and their families. beneficiaries see great value in having to traditional banking services. Whether changing a Medicare Part D one-on-one consultations with health CVS/pharmacy is the first chain pharmacy prescription drug plan or choosing insurance experts to understand their to offer this barcode-based solution. one for the first time, it is important for options. In 2014, CVS Health provided patients to consider their annual costs, space for sponsors to conduct nearly including deductible, premium and 8,500 retail events that provided Health Care Apps co-payments, which plans cover the these customers access to Medicare In 2014, we continued to pilot prescriptions they are taking, any Part D experts. digital tools, including reminder out-of-pocket expenses, and if their devices and mobile apps, to help pharmacy is included in the plan. Among the Medicare Part D plans patients adhere to their medications. available to Medicare beneficiaries We unveiled some of these in In 2014, as part of our Annual include stand-alone Medicare early 2015, with the launch of our Enrollment Period information support, prescription drug plans offered by enhanced CVS/pharmacy mobile we provided our senior patients an SilverScript® Insurance Company. app. The app lets users perform easy way to compare Medicare Part D SilverScript has offered Part D plans key pharmacy and shopping tasks plans. Annual Enrollment is the one to Medicare beneficiaries since the from anywhere, including: time each year that most Medicare Part D program began in 2006 and beneficiaries can review their current serves more than 4 million members. • Refilling prescriptions prescription coverage and enroll in a • Finding a nearby MinuteClinic, new plan for the next year. Because Medicare Part D plans change every Health Insurance Marketplace including the services provided and year and people’s prescription needs To help customers understand insurance accepted at each location may also change, comparing Part D their health insurance options, we • Checking whether a prescription plans may save patients hundreds of provided space for more than 5,400 has potentially adverse reactions dollars. All CVS/pharmacy locations retail events that offered customers with other medications or over-the- nationwide were able to provide one-on-one consultations with experts counter products, foods, or lifestyle eligible patients a personalized on the health insurance Marketplace influences, such as sun exposure Medicare Part D plan comparison in (formerly known as “exchanges”), minutes based on the prescriptions and provided educational materials on • Distinguishing medications with a they filled at CVS/pharmacy. Medicare and the Marketplace both in pill identifier that uses information Patients also had the option to store and online at CVS.com/insurance. such as shape, color and imprint

34 Support for Patients with Chronic Diseases About half of all American adults suffer from one or more chronic conditions, such as heart disease, diabetes, asthma, arthritis and obesity. According to the Center for Disease Control, chronic conditions are the “most common, costly and preventable of all health problems” in the U.S. They are also the country’s leading cause of death and disability. With the aging boomer population upon us, the strain on health care from chronic conditions is expected to rise sharply.

So, too, are costs. Chronic conditions currently account for three of every four dollars spent on health care, a factor of their prevalence and the spiraling cost of specialty drugs to treat them. Specialty spending is expected to quadruple by 2020, reaching more than $400 billion per year. The rising costs are compounded by the significant number of patients who do not take their medications as prescribed and the nearly $300 billion each year in unnecessary and avoidable costs associated with medication non-adherence.

At CVS Health, we understand the challenges related to chronic disease prevention and management as well as medication adherence. We are committed to applying our health care expertise and medical affiliations to continue to develop ways to support patients with chronic disease, help them adhere to their medications and help achieve better health outcomes.

Goal: Expand chronic disease management services

At CVS Health, we know that patients suffering from chronic diseases tend to do better when they have support. We are providing patient support through our Pharmacy Advisor program, MinuteClinic resources and, with our 2014 acquisition of Coram, the specialty infusion business.

Pharmacy Advisor: better health outcomes. Through or by phone when they choose mail Helping Patients Manage the program, we connect eligible service pharmacy. Pharmacists are Chronic Disease patients with pharmacists, allowing able to counsel patients directly, Pharmacy Advisor is CVS Health’s them to communicate with their helping them stay on their prescribed integrated pharmacy-based physicians, either in face-to-face medications, identifying gaps in program to help people manage conversations, when patients fill care and intervening to help prevent their chronic conditions and achieve prescriptions in person or by phone, complications. In addition to improving

35 medication adherence, the program set realistic goals and stay on the path also directs members with certain to a healthier lifestyle. MinuteClinic chronic conditions to existing disease has partnered with DASH for Health™ management programs where they to create its program. can obtain additional support.

Launched by CVS Health in 2011 Improving Delivery of to support diabetes patients, the Specialty Medications program has expanded to cover four With the acquisition of Coram conditions of chronic cardiovascular specialty in 2014, CVS Health now care (high blood pressure, high has the resources to more effectively cholesterol, coronary artery disease manage the cost and application and congestive heart failure) as well of specialty drugs, including infused as asthma, breast cancer, chronic therapies. For patients this can obstructive pulmonary disease, often mean better clinical outcomes depression and osteoporosis. Our with lower total health care costs. Specialty drug spending is Pharmacy Advisor counselors delivered 7.2 million interventions in person and Coram infusion services provides expected to quadruple by by telephone last year, which made a comprehensive offering of infusion 2020, reaching more than demonstrable improvements in patient therapies, including anti-infective health and medication adherence. services, parenteral nutrition and enteral nutrition (tube feeding), $400 cardiac/inotropic therapies, Helping Patients with immunoglobulins (IVIg and SCIg), Weight Management and Alpha-1 therapies, pain and billion Chronic Disease Monitoring palliative care services, and MinuteClinic locations offer a variety hydration therapy. Fully accredited of monitoring programs for chronic by The Joint Commission, Coram per year diseases, including diabetes, high has more than 86 locations across cholesterol and high blood pressure. the country, including 70 infusion In addition, the MinuteClinic Weight suites, offering individual patient Loss Program offers patients a method counseling, education and skilled CVS/pharmacy locations in California to lose weight by making healthy nursing services for in-home and Texas. We plan to review the choices. A trained practitioner helps infusion care. In 2014, we piloted results of this pilot in 2015 and then individuals develop a personalized plan, in-store infusion suites at select will decide next steps.

36 Our goal is to increase medication adherence by 5–15% by 2017 by shifting in our approach to managing the pharmacy patient, not just in how we fill prescriptions.

37 Goal: Help improve health outcomes

At CVS Health, our aim is to improve the health outcomes of everyone we serve — either directly or indirectly.

Medical non-adherence statistics are startling: • One in four patients who receive Report on Adherence a prescription will never fill it For the past several years, CVS Health has been at • One in three who start a maintenance the forefront of efforts to improve adherence. Through prescription will discontinue treatment before their first refill research collaborations with respected academic organizations such as Harvard University, Brigham • Three of four people will stop taking their medications within and Women’s Hospital in Boston and the University of the first year of starting their Pennsylvania, CVS Health has published or presented treatment or will not take it more than 50 adherence-focused papers in peer- as prescribed reviewed journals and at clinical conferences. These

Non-adherence of essential research collaborations have yielded valuable insights medications costs the U.S. health into why people do not take their medication as care system about $300 billion prescribed, and set the stage for the development of annually. But more than that, innovative programs that target the adherence challenge. non-adherence is a frequent cause of preventable hospitalizations.

For the past several years, CVS Health has been at the forefront of efforts to address adherence. Our goal is Specialty ConnectTM and One-Time patients change their behavior. to increase medication adherence Medication Renewal. This program is complemented by by five to 15% by 2017 by shifting Maintenance Choice, a program that in our approach to managing gives eligible PBM members the option the pharmacy patient, not just in Helping to Improve of picking up their 90-day maintenance how we fill prescriptions. We are Medication Adherence prescriptions at a CVS/pharmacy doing this through a number of The Pharmacy Advisor program, location or receiving them through the programs that support medical described earlier, offers personalized mail. Maintenance Choice has helped adherence, including Pharmacy one-on-one counseling that has been drive significantly higher adherence Advisor®, Maintenance Choice®, highly effective in helping non-adherent rates among eligible members.

38 to support adherence to their • Digital reminders to help medication until they are able to follow patients track and adhere to their medication schedules 17M up with their primary care provider. CVS/caremark PBM We are also able to support patients members were enrolled through new technologies. For example, Supporting Employee Wellness in Maintenance Choice with 60% of prescriptions now In June 2014, CVS Health made a at the end of 2014 submitted electronically, CVS Health’s suite of MinuteClinic services available Electronic Medical Records (EMR) to employees, including smoking system creates a digital trail that helps cessation and a weight loss program. More than 17 million CVS/caremark us identify patient non-adherence By year-end, nearly 1,000 colleagues PBM members were enrolled in and gaps in their medication therapies had accessed the services. Maintenance Choice at the end of 2014. to follow-up with support adherence. Using this technology, we sent CVS Health believes that wellness Specialty Connect fills a similar unmet 14 million adherence text messages is as important for our colleagues need for greater convenience and to patients in 2014. as it is for patients and customers. access to specialty medications. That’s why we have invested in Patients can choose to pick up their In its Fall 2014 issue of Insights, resources that encourage our specialty medications at their local CVS Health featured some of the colleagues to embrace their health CVS/pharmacy or have them mailed key findings identified in its research and arm them with tools that to their homes from our specialty mail on adherence, why it is so hard help them get and stay healthy. order pharmacies. No matter which and what can potentially be done CVS Health’s comprehensive method they choose, patients receive to improve it. The publication also WellRewards program helps colleagues the same clinical, financial and highlights someof the adherence improve their well-being with a host logistical support from our therapy- solutions we are currently developing of programs, including preventive specific specialty care teams. and testing based on the company’s screenings, flu shots, smoking research findings. These include: cessation, weight management, health In addition, our One-Time Medication coaching, health management for Renewal program is designed to close • A prescription synchronization chronic and rare conditions, EAP life the gap for patients who do not have program that allows patients to services and maternity management. a physician or are unable to get a pick up all of their medications CVS Health offers team-based walking maintenance prescription renewed in one pharmacy visit programs and healthy dining options when they need it. We are able to do in campus cafeterias, which make it • Easier-to-understand drug information a low-cost, focused assessment at a easier for colleagues to make healthy and instructions through bigger labels MinuteClinic location and provide the choices. Additionally, all corporate and graphics patient with a 90-day prescription campuses are tobacco-free.

39

In 2014, CVS Health was honored for the sixth consecutive year with the Best Employers for Healthy

Lifestyles

Award from National Business Group on Health

CVS Health also received a Gold

Award for WellRewards, its employee wellness program

40 Patient and Customer Well-Being and Safety At CVS Health, the health and well-being of our patients and customers is our number one priority. We are focused on creating a place where patients receive expert care and counsel and on ensuring the quality and safety of our products and dispensed medications.

Goal: Use best-in-class technology and processes in all prescription dispensing to help ensure the highest quality of care

Ensuring patient safety is our highest priority. Over the past several years, we have made significant investments in our people, processes and technology to help ensure that the prescriptions we fill are dispensed safely and accurately. These include enhancements to our already robust quality assurance systems, improved access to drug information and the assurance of independent accreditation.

Enhancing Prescription high-quality care. In our retail Accuracy, Safety and pharmacies, well-defined processes Effectiveness are in place to help ensure accurate All of our pharmacy operations, dispensing. These include on-screen 2014 including the pharmacies in our computer messaging, bar-coded CVS/pharmacy received retail stores, our mail order services prescription labels, electronic a Community Pharmacy and our specialty pharmacies, follow prescribing, automated prescription accreditation from comprehensive quality assurance filling technology, electronic pill processes. Every prescription imaging and quality assurance URAC, the first retail we fill goes through a multi-step training for all pharmacy staff. pharmacy in the U.S. review by a pharmacist before it is to earn this distinction dispensed to a patient. Our mail order and specialty pharmacies also utilize extensive Our pharmacy teams are comprised quality control measures when compounded prescription items, of highly trained technicians led dispensing medications, including drug utilization reviews and final by pharmacists who are licensed enhanced quality control, electronic quality assurance checks. In addition, professionals dedicated to providing imaging, quality procedures for at our specialty pharmacies we

41 have a further comprehensive review process for medication appropriateness. We also conduct a complete patient assessment to help prevent safety, administration or efficacy issues with the prescribed medication.

Advancing Quality Assurance with WeCARE In 2014, we advanced quality assurance within WeCARE, CVS Health’s proprietary retail pharmacy workflow process, through the introduction of two new improvements. The first is a modification to our RxConnect Improving Access to With more than 30 accreditation dispensing system that provides Drug Information programs that it administers, enhanced functionality regarding Providing patients prescription label URAC, an independent, non-profit high dose drug alerts and other information through audio, large print organization, is the leading U.S. health critical clinical decision-making and Braille is an important tool to care accreditation organization for information for our pharmacists. enhance the safety and independence quality standards. The Community of customers who are blind or visually Pharmacy Accreditation Program We also augmented our WeCARE impaired. In 2014, CVS/pharmacy was developed to set consistent workflow process through the introduced a talking prescription benchmarks and standards for introduction of the Production label called ScripTalk. Early in 2015, pharmacy practice quality. The Safety Zone. We’ve re-engineered our CVS/caremark augmented its accreditation recognizes leadership process and procedures during the accessibility platforms with the in comprehensive patient care and prescription filling phase to ensure ScripAbility prescription system, medication management programs, the highest levels of quality assurance. providing Braille and large print label as well as quality and patient safety. formats to members through its mail To achieve Community Pharmacy service pharmacy. CVS Health accreditation, CVS/pharmacy Dedicated to Continuous developed the tools in collaboration underwent a rigorous evaluation Patient Safety Improvement with the American Council of the process to validate the quality of the Across our enterprise, our Patient Blind and CVS/caremark members. care and services it provides to its Safety team regularly analyzes our patients, including patient-centered systems and processes to identify medication management, wellness opportunities for continued refinement. Community Pharmacy services, and preventative and chronic The team is also responsible for testing Accreditation disease management. and monitoring the impact of any In 2014, CVS/pharmacy received changes in our processes to help Community Pharmacy accreditation CVS Health is now accredited in five ensure that patient safety is never from URAC, becoming the first of URAC’s programs for Pharmacy: compromised. Our objective is to pharmacy in the U.S. to earn this Community Pharmacy, Pharmacy provide our pharmacists with the tools distinction. The accreditation applies Benefit Management, Drug Therapy and training they need to help ensure to all CVS/pharmacy and Longs Management, Specialty Pharmacy prescription accuracy. Drug Store locations. and Mail Service Pharmacy.

42 Goal: Improve offerings of healthy products in-store

To ensure we are delivering on our purpose of helping people on their path to better health and to meet the changing needs of our customers, we are expanding our selection of “Better for You” choices in both CVS Brand lines and national brands. By offering healthy food and snack options as well as in-store signage at our 7,800 retail drugstores, we are supporting our customers in meeting their individual health goals.

Introducing Healthy signage program designed to Food and Snack Options help shoppers find food and snack Our new product line Gold Emblem items that suit their individual AboundTM, a brand extension of our dietary needs, including Healthy popular proprietary food product label, Heart, Sugar Free, Gluten Free represents one of the ways we are and Organic categories. addressing this goal. Gold Emblem Abound currently includes more than In 2015, in a complementary 40 wholesome snack choices, ranging program reflecting our commitment from snack bars to dried fruit to rice to a planet in balance, we are chips, each free of artificial flavors introducing the Seventh Generation and preservatives, and each having household product line in more other beneficial ingredients or than 450 select CVS/pharmacy 40+ characteristics. locations. Seventh Generation is wholesome a leader in household and family Fit ChoicesTM is another. Introduced products that are developed with snack choices in 2014, Fit Choices is an in-store sustainability in mind.

43 Goal: Help to prevent prescription drug abuse

Prescription drug abuse is a national issue that damages or destroys countless lives and requires millions of dollars of unnecessary health care costs every year. CVS Health believes that prescription drug abuse threatens the health and well-being of the communities where we and our customers live and work. We think we can have an impact by identifying and working with allies and partners to bring about lasting, systemic changes. We also believe this is the right thing to do for our customers and patients. Our 24,000 pharmacists have a professional duty to make sure medications are not being inappropriately prescribed or used improperly. We do this by partnering with organizations like The Partnership for Drug-Free Kids and supporting National Prescription Take Back Days at CVS/pharmacy locations.

Supporting Drug Drug Take Back Day, which has been Take Back Programs held twice yearly to provide a safe, CVS/pharmacy is a founding sponsor convenient and responsible means of The Partnership for Drug-Free Kids to dispose of expired or unwanted Medicine Abuse Project, a multi-year prescription drugs. It has also initiative to prevent a half-million been an opportunity to educate the teenagers from abusing prescription public about the potential for abuse medication by the year 2017. To of medications. In 2014, we hosted support this work, we launched the more than 400 drug take back events CVS/pharmacy Medication Disposal at CVS/pharmacy locations. This was for Safer Communities Program in part of a national effort in which law late 2013. The program is designed enforcement collected a total of to help police departments hold local 1.4 million pounds of medication from Prescription Drug Take Back events various sites across the country. and raise community awareness of local drug disposal programs managed CVS Health is committed to continuing by law enforcement. In 2014, as part to work to expand access to safe and 275 of this initiative and in collaboration responsible options for the disposal permanent drug with The Partnership for Drug-Free of unwanted prescription drugs in disposal sites were Kids, we created an innovative the communities that we serve. This established in 2014 community donation program that includes evaluating new solutions as awarded drug collection receptacles well as the recently enacted federal to local police departments to help regulations, which increase the options their communities safely dispose of people have to properly dispose of dispense naloxone without a unwanted medications, including controlled medical substances. prescription through a Collaborative controlled substances. In 2014, 275 Practice Agreement with physicians. permanent drug disposal sites across We are also supporting efforts to All CVS/pharmacy stores in the state the country were established through expand the availability and distribution of Rhode Island have an agreement this program. of naloxone, an important emergency in place, which we plan to implement medication used to reverse the effects in Massachusetts in 2015, and we CVS/pharmacy has also been a strong of an opioid overdose. State-specific expect that other state programs supporter of National Prescription programs allow pharmacists to will be added in the future.

44 Goal: Help people lead tobacco-free lives

In 2014, CVS Health stopped selling cigarettes and tobacco products at all of our CVS/pharmacy and Longs Drugs locations nationwide. Our reason was straightforward: The sale of tobacco is inconsistent with our corporate purpose of helping people on their path to better health.

Smoking remains a critical public As the first national pharmacy chain health issue: Some 16 million people to eliminate cigarettes and tobacco in the U.S. already have at least one from our stores, our decision was disease from smoking, and each year a declaration of support for the approximately 480,000 die from well-being of patients and customers. smoking or exposure to secondhand It is also consistent with positions smoke. The annual cost of smoking taken by the American Medical in the U.S. tops $300 billion. Association, American Heart Association, American Cancer 67,000 Society, American Lung Association patients filling a first and American Pharmacist Association — all of which have prescription for a 16M publicly opposed tobacco sales smoking cessation people in the U.S. already in retail outlets with pharmacies. drug or prescription have at least one disease NRT were counseled by We supported our decision with from smoking a number of programs, including CVS pharmacists between expanding our smoking cessation September and year-end programs, conducting a symposium of senior officials to advance research partnerships and providing 480K philanthropic support. critical components: an assessment of the smoker’s readiness to quit, people die from education to give smokers the smoking or exposure Helping Smokers Quit information and tools they need to to secondhand As part of our commitment to transition quit, medication support to help smoke each year out of tobacco and cigarette sales, curb the desire to use tobacco and we launched a very successful coaching to help individuals stay national smoking cessation program motivated to prevent relapses. in September 2014 to help the seven We partnered with the American in ten smokers who want to quit. Cancer Society to provide a quitline Our comprehensive and personalized supporting the campaign. $300B smoking cessation program is annual cost of a joint effort of CVS/pharmacy, Between the September launch and CVS/minuteclinic and CVS/caremark the end of 2014, CVS pharmacists smoking in the U.S. and was designed with input from counseled more than 67,000 patients national experts. It includes four filling a first prescription for a smoking

45 for smoking cessation counseling New Partnerships Symposium increased on a monthly basis from to End the Toll of Tobacco September through December, as In September 2014, CVS Health, 09/2014 compared to the prior eight months. with the American Public Health We launched a very Association, convened a national successful national The program is available at symposium to explore how traditional smoking cessation program CVS/pharmacy and MinuteClinic and nontraditional partners can unite locations, and we are partnering to reduce tobacco use, improve health to help the seven in ten with our affiliates to implement and curb health care costs. Speakers smokers who want to quit informational campaigns using a at the Washington event included variety of communications channels. senior public health leaders as well as To expand our reach, we have representatives from national business, cessation drug or prescription nicotine created innovative partnerships, pharmacy and anti-tobacco advocacy replacement therapy (NRT), and such as the one we have with the organizations. The symposium offered consulted with thousands of additional city of Philadelphia. It creates the practical advice, lessons learned, and smokers seeking advice about first tobacco-free pharmacy network stories of success and challenge. It over-the-counter NRT products. in the country, working together with also underscored the power of public Target, Wegmans and independent health-private sector partnerships in Prescriptions for smoking cessation pharmacies that have long been creating a healthier nation and attaining medications and visits to MinuteClinic tobacco-free. the vision of a tobacco-free generation.

46 Planet in Balance

47 The link between human health and the health of our planet is becoming increasingly apparent. According to the Fifth Assessment Report from the Intergovernmental Panel on Climate Change (IPCC), keeping global temperatures in check requires “an urgent and fundamental departure from business as usual.” At CVS Health, we acknowledge the need for action and as a retailer with a large facility footprint, we also recognize the opportunity. We believe, as the IPCC points out in its report, that economic growth and climate action can be mutually reinforcing.

As a company dedicated to improving and commitments are set out in our people’s lives through innovative environmental and climate change and high quality health and pharmacy policies and reinforced by our services, we are committed to Prescription for a Better World continually assessing the environmental framework, which establishes and climate-related impacts of our Planet in Balance as a core pillar. operations, implementing ways to reduce them, and contributing to the Our focus is centered on long-term sustainability of our business. three strategic priorities: • Sustainable operations We believe that ongoing measurement, assessment and transparency • Sustainable products and packaging of our environmental initiatives are • Internal and external essential and will lead to improved engagement around our performance over time. Our approach sustainability vision

48 Sustainable Operations With an enterprise that includes 7,800 stores, 20 distribution centers and field offices, and a significant transportation fleet, we understand the importance of embedding environmental sustainability in every facet of our operations with the goal of reducing our impacts.

Goal: Reduce the environmental impact resulting from our operations

To advance our goal, we developed a roadmap and are in the process of identifying specific internal and external targets aimed at driving operational efficiency and reducing our environmental footprint. We currently have a reduction target for GHG emissions, and will review our ability to add energy, water and waste targets in the future. Other focus areas include green building initiatives, purchasing environmentally preferred paper for our business operations, and ensuring we are meeting or exceeding environmental compliance regulations.

Climate Change working to reduce the impact Measuring and Reducing and GHG Emissions of our distribution centers and Our Greenhouse Gas Emissions CVS Health recognizes that human transportation network. We have been measuring and reporting activity has an impact on the world’s our GHG emissions since 2008. climate system and that our business As described in our Climate We monitor them in accordance activities, in particular the operation Change Policy, our approach to with the Greenhouse Gas Protocol of about 77 million square feet of retail reducing emissions includes risk published by the World Resources space in our 7,800 retail drugstores, and opportunity monitoring, energy Institute and the World Business contribute to this impact. We are and GHG efficiency programs, Council for Sustainable Development. intent on reducing the GHG emissions and ongoing communication This standard also informs the created in those facilities, and do on our climate-related progress boundaries of our carbon footprint, so by continuously measuring and with our stakeholders through which encompasses all U.S. retail trying to reduce our energy use, the CDP (formerly Carbon stores, MinuteClinic locations, water use and waste. We are also Disclosure Project) and this report. distribution centers, and corporate

49 facilities, as well as emissions from By of the end of 2014, we had business travel, product delivery achieved an 11% reduction toward and refrigerants. Our small pharmacy our carbon intensity goal. This chain in Brazil is included in these result was primarily due to ongoing 77M+ boundaries, but our recently acquired lighting efficiency upgrades and sq ft space

Coram and Navarro businesses have fleet efficiency initiatives. not yet been included. While we have been successfully reducing our carbon intensity, 7, 8 0 0 absolute emissions have risen slightly. In 2014, the small increase CVS/pharmacy stores

11% in absolute emissions was due to reduction achieved the opening of new stores and toward our carbon intensity higher demand for heating because of colder weather. goal of 15% by 2018 970 CVS/minuteclinic stores

2014 Climate Performance Leadership Index Our goal is to reduce our carbon In 2014, CVS Health was identified 20 intensity by 15% per square foot as a leader in climate change action, of retail space by 2018, compared achieving a position on the CDP distribution centers to a 2010 baseline. While we also S&P 500 Climate Performance measure and report absolute Leadership Index (CPLI) and profiled emissions, we believe tracking in CDP’s Climate Performance carbon intensity by square foot of Leaders Report. Performance retail space allows us to determine is assessed on the level of action, the success of the various efficiency as reported by the company, measures we implement, especially on climate change mitigation, as our business continues to grow. adaptation and transparency.

50 Climate Change Risks on a regional level. Their focus is on Energy and Fuel and Opportunities ensuring we are operational during At CVS Health, the energy used Climate change poses risks to times of severe weather events or to operate and distribute product many communities around the world, directing customers to other nearby to our 7,800 retail stores — totaling including the communities CVS Health CVS/pharmacy locations in the event approximately 2.9 million megawatt serves. To prepare for potential that a particular store must close. hours of electricity and 9.5 million impacts, we evaluate our risks and gallons of fuel in 2014 — represents opportunities on an annual basis. In evaluating and preparing for our most significant environmental We know that the occurrence of these risks, we believe that the impact and the largest input to our “superstorms” is increasing, which unexpected closure of our data carbon footprint. It also represents is why we identified the potential centers and corporate offices the biggest opportunity we have for for extreme weather-related events would pose the greatest threat to energy and cost savings. We focus or patterns as a major climate risk our business because it would our energy strategy on the operational for our company. impede our ability to operate the areas where we can have the greatest systems that support our stores. impact by improving efficiency in our As a provider of prescription Our Business Continuity Plan lighting, heating and air conditioning medication and retail health services, addresses the loss of facilities, (HVAC) systems, cooler and freezer we understand that a major IT infrastructure and human use, as well as in the transportation disruption in our business can resources as well as losses in of our goods. have serious implications for patients our supply chain in the case of who rely on us for health care floods, hurricanes and similar Electricity use in 2014 was flat despite needs. We have responded to events. Financially, we are at risk a 2% increase in overall square disasters in the past and learned of physical damage to our facilities, footage, which is partly attributable valuable lessons that help our lost inventory from power outages and to the use of our Energy Management business continuity team enhance lost business from being closed System (EMS), lighting retrofits and our emergency response action plans in the wake of a natural disaster. other new store efficiency measures.

51 Use of natural gas increased in and HVAC and other system Transportation 2014, primarily due to colder weather. upgrades. In 2014, we continued In 2014, CVS Health operated a fleet In particular, CVS/pharmacy stores to invest in high-efficiency HVAC of 299 company-owned tractors and experienced the largest increase in upgrades, and used our EMS to 808 trailers, and 426 third-party usage during January, February and maximize efficiency from these tractors and 1,027 trailers. Together March of 2014. new systems. these consumed a total of 7.1 million gallons of fuel for distribution and As we seek opportunities to drive We are also exploring new EMS covered 47.2 million miles. This efficiencies, we will focus on software for our distribution centers contributes to our carbon footprint, technologies that offer a reasonable to monitor and manage our energy and we are continuously looking for return on investment and are scalable consumption, and in 2015 will innovations and technologies to help across our retail facilities. evaluate the performance of a pilot us reduce or mitigate the impact of system installed in our Woonsocket these activities. distribution center in 2014.

90% Lighting Retrofits of stores and A significant amount of energy is used to light our facilities. With new lighting technologies emerging and 50% improving at a rapid pace, there of distribution centers is the potential for energy and cost linked to our EMS savings. Our strategy, given the scale of our footprint, is to build long-term success through sustained year-over-year investments in Energy Management proven lighting technologies. System (EMS) An EMS helps us drive energy In 2014, our new store construction efficiency consistently across our included LED lighting for exterior stores and distribution centers by lighting and signage, and we allowing us to manage, monitor continued our multi-year lighting 861 and adjust lighting, HVAC, and other retrofit program, once again achieving LED retrofits of freezers systems from a central location. measurable progress. This included As of 2014, more than 90% of our LED retrofits of coolers and freezers stores and 50% of our distribution at 841 of our existing stores and 82 centers operate with an EMS, and 20 distribution centers. We expanded LED retrofits of we continue to implement it as we the use of LED technology to retrofit store interiors acquire or build new facilities. interior lighting at 82 stores and exterior lighting for 10 stores in Since its launch in 2012, we have Massachusetts and Rhode Island. 10 continuously fine-tuned the EMS In 2015, we will measure the LED retrofits of operations to achieve peak energy investment return and environmental efficiency, taking into account factors benefits of these pilots to determine store exteriors such as our stores’ seasonal cycles our next steps.

52 Greenhouse Gas Emissions, Energy, and Water Data Analysis

Total Energy Usage, by Type, for 2010-2014*

ELECTRICITY NATURAL GAS PROPANE & OIL FUEL CONSUMPTION**

2.9 Million 10.2 Million 764,500 9.8 Million

2010 MWh Therms Therms Gallons

2.9 Million 10.4 Million 584,000 10.1 Million

2011 MWh Therms Therms Gallons

3.0 Million 8.3 Million 519,500 9.7 Million

2012 MWh Therms Therms Gallons

2.9 Million 12.3 Million 583,500 9.3 Millon

2013 MWh Therms Therms Gallons

2.9 Million 14.0 Million 458,500 9.5 Million

2014 MWh Therms Therms Gallons

* Data represents all CVS distribution centers, stores and administrative locations, landlord paid facilities and Caremark locations. Energy data for recently acquired Coram and Navarro businesses are not included. 2010-2013 data was updated to include landlord paid and Caremark facilities. **Excludes employee commercial air travel. Emissions from commercial air travel in the GHG inventory is estimated based upon miles and aircraft type.

Greenhouse Gas Emissions by Scope*

2014 2013 2012

Tonnes Tonnes Tonnes % % % of CO2e of CO2e of CO2e

Natural Gas, Other Fuels, Corporate Jet, Corporate Car Fleet, Private Delivery 188,500 11% 193,000 11% 201,000 12% Fleet, Refrigerants

Electricity, Steam, Chilled Water 1,468,000 84% 1,466,000 85% 1,495,000 87% Scope 2Scope 1 Scope

Dedicated Delivery Fleet, Employee Air Travel, 80,000 5% 74,000 4% 15,500 1% Employee Personal Car

Travel, Rental Cars 3 Scope

* In 2012, emissions from Private and Dedicated Delivery Fleets were both reported under Scope one as part of Private Delivery Fleet. In 2013, emissions from Dedicated Delivery Fleet were moved to Scope 3. 53 Total Carbon Footprint and Carbon Intensity Measurement*

CO2 EQUIVALENTS Cumulative Progress CO2 EQUIVALENTS intensity per sq. foot SQ. FEET Toward Carbon Intensity (metric tons CO2e) of retail space of retail space Reduction Goal

0.0255 1,777,500 69.7 Million * 2010 Metric Tons

0.0252 1,800,500 71.5 Million 1% 2011 Metric Tons

0.0234 1,711,500 73.1 Million 8% 2012 Metric Tons

0.0231 1,733,000* 75.0 Million 9%

2013 Metric Tons

0.0226 1,737,000 76.7 Million 11%

2014 Metric Tons

* Adjusted from figure reported in the company’s 2013 CSR Report due to minor (~5%) updates as a result of CVS Health’s third-party verification process. Carbon Intensity Goal: Reduce carbon intensity by 15 percent by 2018, based on 2010 figures.

Water Use Intensity Measurement for 2010-2014* Environmental Management NORMALIZED WATER TOTAL WATER USAGE (PER SQ. FT. Program USAGE (ML) SQ. FT. OF RETAIL SPACE OF RETAIL SPACE)

Since 2011, our Environmental 7,350 69.7 Million 0.000105 ML

2010 Management Program (EMP) has helped us track and responsibly manage our environmental 7,200 71.5 Million 0.000101 ML compliance obligations 2011 within our operations. We have implemented the program in all retail 7,550 73.1 Million 0.000103 ML pharmacies, corporate 2012 offices and distribution centers. In 2015, we will integrate the EMP within 6,800 75.0 Million 0.000091 ML our Navarro and Coram 2013 acquisitions, and plan to introduce an online tracking system to help 6,200 76.7 Million .000078 ML us monitor our compliance

2014 obligations and the programs we have in place to meet them. *Intensity measurement based on per square foot of retail space. Water data for recently acquired Coram and Navarro businesses are not included. 54 Level 1 highest rating EPA SmartWay for emissions control on our private fleet in 2014

Throughout the year, we continued Water water use, results from the water to implement fleet efficiency initiatives, Water scarcity is one of the most we use for irrigation systems to including route optimization and significant challenges facing the global maintain landscaping. We conducted reduction in idling times, as well as economy and is becoming a crisis in a zero-irrigation pilot project at tire-monitoring inflation systems and some parts of the world. While we are our West Haven, CT retail store weekly tire checks, such as tread not a large user of water, we recognize and learned that we can reduce depth and air pressure checks at we must take steps to monitor and water use significantly. We have every private fleet facility. However, reduce our water consumption. since begun to assess irrigation fuel consumption increased in 2014 requirements for our new locations. due to the expansion of route territory CVS Health’s water management for our distribution fleet. strategy provides guidance for how Our water usage decreased in 2014 we drive water efficiencies and reduce due to our efforts to reduce use for Our private fleet continues to be an usage. We continuously measure our landscaping purposes and because Environmental Protection Agency water use and savings, and establish of the transition we are making from SmartWay Carrier Partner for the guidelines around the development of wet photo processing to dry photo fifth year in a row, receiving the new properties. We also report our processing in retail stores. highest carrier rating of Level 1 water use data annually through the for emissions control. CVS Health CDP. In 2014, we participated in the has been a SmartWay Shipping CDP’s water scoring project, which Waste Management Partner since 2012. found an increasing awareness of and Recycling water issues and the need for water Our retail pharmacies and clinics, In 2015, we plan to implement stewardship among the 174 Global distribution centers and corporate new routing software that will 500 companies that responded. offices produce a variety of waste allow us to track and optimize and recyclable materials. We have miles driven, fuel efficiency, average The vast majority of the water we implemented reduction and recycling cost per load and on-time service use comes from United States systems to help us minimize our delivery, and establish Routing municipal water systems. Our biggest environmental footprint by diverting as Centers of Excellence. impact, accounting for 45% of our much as possible from the waste stream.

55 Assessing our Waste Impact While we are striving to improve In 2014, we initiated steps to establish recycling rates for various materials, a profile of the types of waste our largest recycling stream remains generated by our operations. Our cardboard at more than 100,000 tons goal was to identify what percentage recovered in 2014. of our waste stream is being diverted from landfills. While this proved to be more complex than anticipated, due Sustainability in Action in part to differing jurisdictional We identified a unique opportunity to recycling mandates and the number reduce waste, serve our community of independent waste and recycling and lower overall disposal expense for haulers we employ, we were able to our Hawaii stores. Cross-functional establish a general waste profile. This partners from Community Relations, effort showed a landfill diversion rate Store Operations, Loss Prevention of approximately 45% that is largely and Inventory Management worked driven by recycling of cardboard, 35K lbs with our Environmental Team to paper, plastics, bottles/cans and develop a pilot test to evaluate the plastic bags. We will continue to look of plastic bags were donations of usable but non-saleable for opportunities that impact our diverted from landfills products. Working together with diversion rate by better understanding through our retail location Child & Family Service, a nonprofit waste reduction options. recycling program organization serving the local community, we established a process and donated more than $84,000 of Reducing Waste at consumer products to the community. CVS/pharmacy enhance programs for certain The pilot proved to be good for the Minimizing the amount of solid waste materials, such as plastic bags or environment by reducing waste generated by our stores is a focus plastic film wrap, throughout the volume, good for the community by of ours. As a retailer, there are times enterprise. By increasing awareness providing products to those in need, when items we sell need to be of recycling at store-level, we and good for our business by showing removed from our store for a variety have seen improvement in results. promising disposal cost savings. of reasons. We use technology to Our plastic bag recycling program, help ensure we are maximizing the available at some of our retail value of the items through the reverse locations, encourages customers to Recycling at Distribution Centers distribution process where we are bring in their used plastic bags and Corporate Offices able to take advantage of liquidation instead of throwing them in the trash. In our distribution centers and or donation options. The reverse In 2014, we diverted more than 35,000 corporate offices, our waste diversion distribution process helped our stores pounds of plastic bags from landfills, programs resulted in the recycling across the country support local a 6% improvement over 2013, and of 235 tons of plastic stretch film, organizations with donations of more than 9,900 pounds of plastic compared to 199 tons in 2013, and products valued at more than $65 bottles and aluminum cans, more 49,218 tons of cardboard, compared million, based on the cost of goods. than double the amount diverted in to 50,307 tons in 2013. We also 2013. We saw improvement in our recycled 673 tons of the totes we In an effort to further improve our single-stream recycling in stores in use to carry and ship many of our waste reduction and recycling Connecticut and New Jersey, where products, 531 tons of metal and 106 initiatives, we worked to analyze our we recovered more than 1.1 million tons of other miscellaneous waste, current system of recycling programs pounds of recyclable material — which includes office paper and to assess where we can expand or double the amount collected in 2013. commingled recyclables.

56 Cell Phone Recycling toxins such as lead, zinc, mercury through increased monitoring CVS Health partnered with e-Cycle and flame retardants. Between and measuring of key program to implement a reuse and recycling June 1, 2013 and June 30, 2014, elements consistent with the program for cell phones. By recycling we collected 1,053 devices for reuse continuous improvement goal under wireless devices, we are helping to save and recycling. our Environment Management energy and GHG emissions, essentially Program (EMP). These efforts have by avoiding the energy used to mine reinforced our culture of environmental and process new materials, and Waste Water compliance, making our hazardous avoiding the use and disposal of A continuing focus area for our waste management program one that stores is managing the waste is often benchmarked by others. produced from our photo-processing services. We are in the process of converting all stores with chemical- Incorporating Green based photo-development processors Building Practices to dry digital processors. The ink We recognize the long-term cartridges from dry digital processors economic and environmental value do not require special handling of incorporating sustainable building or contain materials considered design into our new store and facility hazardous, and this change will specifications. We also monitor best ultimately eliminate our use of practices in green design through our photo-development chemicals and participation in Leadership in Energy the need to dispose of used silver- and Environment Design (LEED) containing solutions. Since we training programs developed by the began this process, we have United States Green Building Council converted nearly 3,200 stores, (USGBC), as well as by our home state including 838 stores in 2014, to of Rhode Island’s USGBC chapter. digital photo processing. We plan to convert another 757 stores in 2015, Our energy-efficient pilot store in 1,053 which will complete our nationwide West Haven, CT, which opened transition to digital photo processing. in 2013 and was designed to the devices collected USGBC’s LEED Platinum standards, with e-Cycle received its LEED certification in 2014. Hazardous Waste The store showcases environmental Responsible management of design features that include an electric

38 lbs unsalable consumer products is car-charging station and zero irrigation always a priority for us. Whether landscaping, as well as rooftop solar of copper, silver these products are sent through panels, solar tubes and natural lighting and gold saved reverse distribution for liquidation, solutions to reduce electricity use.

donated, returned to the vendor, or The West Haven store serves as a determined to be waste and disposed model of energy efficiency and other at store level, we want to ensure green design features. We continue 21M these products are handled in a to monitor these and plan to integrate gallons of water manner that minimizes the generation successful elements into future new of waste. We have integrated our store builds. not contaminated hazardous waste management program into technology used by In 2014, we also piloted a dozen store colleagues to ensure proper smaller footprint stores that range 71 product disposition and financial from 6,000 square feet to 9,500 square reconciliation. It is this seamless feet. These smaller stores naturally households could integration with the inventory require less land and are made with be powered by management business process that more environmentally preferred the energy saved aligns compliance with everyday materials. In 2015, we will continue operational practices. In 2014, we to evaluate the viability of adopting continued to refine the program these prototypes on a wider scale.

57 LEED-Certified Buildings

2014 Retail Store West Haven, CT 2014 Distribution Center La Habra, CA 2013 Finance Center Cumberland, RI 2013 Retail Store Los Angeles, CA 2011 Retail Store Burtonsville, MD 2011 Distribution Center Chemung, NY 100% 2011 Customer Care Center of paper used for Cumberland, RI store operations (approximately one 2011 Marketing Support Center billion sheets annually) Woonsocket, RI was sourced from 2010 Retail Store FSC-certified La Quinta, CA eucalyptus plantations

Restoring Brownfields • 86% of the paper used for external When it comes to building new marketing materials, excluding stores, our first priority is locating circulars, was sourced from FSC- 94 certified mills, up from 54% in 2013. ideal sites. Some of the sites we brownfield sites select are classified as brownfields, • 100% of paper used for retail land that may be contaminated remediated circular program was sourced from by concentrations of hazardous SFI-certified mills. This program waste or pollution as a result of currently utilizes 55,000 tons of its former industrial or commercial paper annually. use. When we acquire a brownfield pharmaceutical purchases, PBM • 60% of the paper used for our site for a CVS/pharmacy location member mailers, weekly flyers direct mail program contained we are required to remediate it and other marketing materials, as 10% or more post-consumer before construction, making it a well as corporate document printing. recycled content, up from a mere safe and viable property for our Over the past two years, we have 5.8% in 2013. Our goal is to retail store and for the community. introduced a chain-of-custody incorporate post-consumer recycled In 2014, we remediated 94 sites certification approach for paper content in 100% of the paper for CVS/pharmacy stores. use within our business operations. used for this purpose in 2015. We are seeing significant results, including the consolidation and • 100% of paper used for store Sustainable Forestry conversion of all of our paper operations (approximately one billion Certified Paper and Printing sourcing and printing to companies sheets annually) was sourced from CVS Health uses a large amount certified by the Forest Stewardship FSC-certified eucalyptus plantations. of paper in its business operations — Council (FSC) or the Sustainable The paper also includes up to 30% more than 65,000 tons each year — Forestry Initiative (SFI). Our efforts recycled content, and is lighter for in-store receipts and bags for in 2014 resulted in the following: weight than the paper previously used.

58 Sustainable Products and Packaging CVS Health manufactures, distributes and sells CVS Brand and private label products across multiple product categories, including cosmetics, personal care, over-the-counter medications, and food, among other categories. We recognize that we have a role in ensuring that product design, manufacturing and disposal are undertaken in an environmentally sustainable manner, and as a demonstration of our commitment, we have prioritized our programs and initiatives in this area within our Prescription for a Better World strategy.

Goal: Improve the sustainability of CVS Brand and/or private label products

Improving our products and reducing their impact is an ongoing process. We focus our efforts in two primary areas: ingredients and packaging.

Choosing the We apply heightened rigor to the We prioritize certain chemical Right Ingredients chemical ingredients that we use ingredients and evaluate whether At CVS Health, we apply robust in formulating our products and they should be removed, reduced standards in the creation and adhere to our high internal standards or replaced in certain CVS Brand production of each of our CVS Brand for quality and safety. Through categories, including beauty, and private label products to help our active participation in industry baby and food products. As ensure the highest level of quality groups focused on ingredient new, conclusive research is and environmental safety. and chemical safety we have published on how certain chemical strengthened our understanding of ingredients are linked to health At a minimum, our ingredient strategy appropriate alternatives, identified and environmental risks, and safer is informed by all U.S. Food and emerging opportunities to enhance alternatives are made available, Drug Administration (FDA), federal the safety of our products, and we apply our Cosmetic Safety and state requirements in which learned from and contributed to Policy. This policy outlines our our aim is to be an early adopter of the growing green chemistry commitments to customer safety, proposed or impending regulations. field. We are partnering with other scientific research, collaborating Product formulations are also leading retailers, product and with suppliers and continuous designed to meet evolving and chemical manufacturers to develop improvement, and to evaluate and increasing consumer demands for common goals in sustainable inform the replacement of priority environmentally preferable products. chemical management. ingredients in CVS Brand products.

59 In evaluating supplier compliance with our Cosmetic Safety Policy, products must be tested to ensure they meet FDA requirements and CVS/pharmacy specifications.

In 2014, we addressed certain priority ingredients to go beyond existing or pending regulations: • Triclosan, an ingredient added to certain soaps, cosmetics, toys and other products to reduce or prevent bacterial contamination, is being removed from all CVS Brand products as well as most name- brand products we stock in 2015. • Microbeads, small plastic spheres that are widely used in cosmetics, skin care and personal care products usually as exfoliating agents, will be reformulated or removed from CVS Brand products in 2015, Partnering for Sustainable ahead of regulatory requirements. Packaging Opportunities We work with CVS Brand As a company that relies largely on • Formaldehyde, used in certain suppliers to resolve issues the sale of products, the packaging baby products, will be removed we use for our products — which helps in CVS Brand products by August to ensure customer safety, manage In November 2014, we took part 2015 in all stores, to comply with efficient distribution and provide in a collaborative summit between new regulations banning the effective display on the shelves of suppliers and retail pharmacies to substance in child products in our retail stores — has an environmental identify the opportunities to reduce the State of Minnesota. In addition, impact. We work with our suppliers carbon footprints, material use ahead of regulations, we are to influence packaging design for and costs by eliminating inner working with suppliers to also most of our CVS Brand products and packaging. The summit was initiated remove the chemical from select we partner with our national brand by the National Association of non-medicated adult cleansing vendors on their packaging efforts. Chain Drug Stores (NACDS), wipe products in 2015. facilitated by the Retail Industry We work directly with CVS Brand Leaders Association, and included suppliers to resolve issues Walgreens and Rite Aid, as well as Formaldehyde will be related to labeling, primary and packaging engineers representing removed in CVS Brand secondary packaging and approximately 20 suppliers. Through baby products by hazardous material packaging. this effort, we are hoping to establish We actively encourage them to a Supplier Council for Packaging to August 2015 minimize or eliminate inner packaging continue to move efforts to reduce and use recycled materials. packaging forward.

60 Goal: Improve the sustainability of our supply chain

At CVS Health, our suppliers play an integral part in our success as a health care leader, and we often engage with them down to the factory level to better understand the source of our products’ raw materials, how and where the products were manufactured and under what conditions. Our supplier engagement strategy is underpinned by our Supplier Ethics Policy, and ingredient compliance is monitored through our WERCSmart supply chain reporting tool. We provide details and results of our supplier audit program in the Leader in Growth section of this report.

Monitoring Suppliers requirements that state that animal addition, we require all new for Sustainability Compliance testing is strictly prohibited. products or products that have All CVS Health suppliers must changed formulations, ingredients comply with state and federal or UPCs (Universal Product environmental laws and regulations Monitoring Compliance Codes or “bar codes”) and that as well as with our Supplier Ethics with WERCSmart meet our registration criteria to Policy, which establishes the In 2013, we introduced a new disclose their ingredients in environmental and social criteria supply-chain reporting tool WERCSmart. Using this data, required of all suppliers. For example, called WERCSmart, which we are able to identify which we want to know if a factory has enhances our ability to monitor products have certain chemical a written environment policy, if they product ingredients (see table ingredients and determine the have implemented an environmental on page 65). As part of the best methods for meeting federal management system, and if they have WERCSmart rollout, we required and state regulations for safe obtained environmental certifications. our suppliers to register ingredient handling, transport and disposal. These criteria are evaluated as part information for all the chemical- We are also able to identify any of our factory audit process. based, over-the-counter health, suspect and/or non-compliant pesticides, aerosols, battery products that contain restricted We also care about the ethical and other hazardous-material ingredients or ingredients treatment of animals and have products sold in our stores. In of concern.

61 We also care about the ethical treatment of animals and have product test requirements that state that animal testing is strictly prohibited.

62 Internal and External Engagement Around Our Sustainability Vision As one of the largest pharmacy chains in the United States, we rely on collaboration with a variety of stakeholders — investors, suppliers, clients, employees, communities and customers — to be successful, and the same is true for our approach to sustainability.

Goal: Make sustainability a relevant part of every colleague’s role and responsibility

Throughout our company, we recognize that our sustainability initiatives will have the biggest impact when our colleagues are informed and engaged in them.

Program and advise our CEO Employee Engagement Administration and Energy Management on the program’s performance Some ways in which we engage our and comprised of subcommittee heads. colleagues are through sustainability- The Advisory Team reviews product • Sustainability Committee, a part related councils and committees. results and identifies opportunities to of ETAC and a cross-functional scale solutions. team that drives sustainability initiatives across our enterprise Energy Technology Other councils and committees and focuses on initiatives such Assessment Committee focused on sustainability at as lighting efficiency and evaluating We receive advice on strategic priorities CVS Health include: performance metric indicators from our internal Energy Technology and metrics Assessment Committee (ETAC). ETAC • Sustainability Leadership Council, is comprised of five subcommittees: a team of leaders who meet In 2014, we also introduced our Energy Star Standards and LEED periodically to discuss our colleague sustainability platform, Certifications, Alternative Energy sustainability strategy and set an online tool to engage and educate Sources, Energy Efficiency Projects, our carbon reduction goal colleagues in the area of sustainable Waste Stream Management, and • Executive Management Council, behaviors. The program encourages Sustainability. These groups monitor a group of senior-level corporate and rewards employees to track and pilot sustainability initiatives across executives representing all business their personal sustainability actions, the company and present proposals units at CVS Health, who direct such as bicycling to work, carpooling, that are reviewed by the ETAC Advisory the overarching strategy, policy printing on both sides of the page, Team, a cross-functional team led and implementation of our turning lights off and using a reusable by our Vice President of Property Environmental Management water bottle.

63 In 2014, our Energy Technology Assessment Committee led a wide variety of projects that helped integrate sustainability across our business. Types of projects included the installation of LED fixtures in coolers in 655 stores; replacing illuminated messaging in drive-thru canopies; and using continuous coolers rather than walk-in coolers in 315 stores.

64 Goal: Engage consumers Registration of Ingredient Information to encourage adoption of more environmentally responsible behavior Product Criterion Chemicals Any product that is advertised or labeled to kill, Customer Engagement repel, or prevent the growth of any living organism We look for opportunities to engage (e.g. anti-microbial products and pesticides) our customers in sustainable living in a variety of ways, including Any product that contains a powder, gel, introducing more healthful snacks paste, liquid, or gas, and is not intended for and environmentally preferred human consumption household products in our retail In addition, the following products also must be drugstores, offering plastic bag submitted, even though they are intended for recycling in select locations, or human inhalation, consumption or absorption: partnering on drug and sharps (needles, syringes and lancets) • Liquids, lozenges, pills or capsules (e.g. pain take back programs at many of relievers, vitamins, water pills) our locations. • Any other over-the-counter medication or supplement of any kind (e.g. nicotine replacement As part of our commitment to therapies, antihistamines) engage our customers in sustainable • Medicated swabs, wipes and bandages living, in 2015 we are introducing • Patches (heated and/or medicated) 18 products from Seventh Generation and Mrs. Meyers in more than • Liquids (e.g. soap, shampoo, cough medicine, 450 select CVS/pharmacy locations. eye drops, ear drops, nasal spray and inhalers) These household product lines are • Medicated shampoos, gums, ointments and developed with sustainability in mind. creams (e.g. suntan lotion, antibiotic cream) • Lip balm, lip creams and petroleum jelly Transparency • Skin lotions, creams and ointments and Engagement • Contraceptive foams, films and spermicides We believe that transparency and • Equipment sold with chemicals (e.g. vaporizer sold engagement in industry organizations with medication, air fresheners, gel shoe inserts) that focus on moving the sustainability agenda forward helps us understand • Cleaning products the broader environmental issues • Cosmetics impacting society, establish the • Perfumes right strategies and goals, and improve our performance. In 2014, in addition to reporting our progress Aerosols Any product that contains a compressed gas in this report, we continued to or propellant; includes bag on valve (e.g. spray participate in the CDP reporting cheese, continuous-spray sunscreen) programs that track corporate Batteries All batteries, any product that contains greenhouse emissions and water use. a battery of any kind

We are members of a number of Electronics Any product that contains a circuit board industry committees, and in 2014, we (e.g. blinking lights or making sounds) became a company network member of Ceres, a non-profit organization Food Cooking oil, energy bars, dietary supplements that advocates for sustainability and vitamin drinks leadership and supports the work Light Bulbs Any fluorescent, incandescent, LED, halogen, neon, of companies to expand the adoption mercury vapor, or high-pressure sodium bulbs of sustainable business practices.

65 CVS Health Charity Classic Goes Green

$ 1.4 M raised for charities across Southern New England

$18M+ donated to local charities since its inception in 1999

100% compostable service ware was supplied

36% of waste was diverted through new recycling and composting programs throughout the grounds

66 Leader in Growth

67 The risks and opportunities that businesses face in the 21st century are complex. Increasingly, stakeholders are interested in how companies are embedding economic, social and environmental issues in their practices and processes to create long-term value. Our annual CSR Report provides transparency on our strategy and approach to sustainability and social responsibility, including our commitment to create economic opportunities and value for employees, customers, suppliers and investors.

In fact, this is a core pillar of our • Safe, rewarding and Prescription for a Better World, inclusive workplace which we refer to as Leader in • Regulatory compliance Growth and is centered on three and voluntary standards strategic priorities: are met or exceeded • Supply chain responsibility

68 Safe, Rewarding and Inclusive Workplace

The backbone of CVS Health is our nearly 215,000 colleagues who contribute to our purpose of helping people on their path to better health. Many of them also contribute to their local communities outside of work by giving of their time and talents to causes they are passionate about. We are dedicated to our colleagues and strive to create the kind of workplace environment where they feel safe, included and can thrive.

Goal: Create new jobs while providing best-in-class workplace and career development opportunities

As a growing business, we focus on creating new jobs and retaining our employees as well as making investments that help to ensure we will have the future workforce needed to run our business. We invest in programs that open doors to future recruits, help employees develop their careers at CVS Health, provide comprehensive benefits and compensation, recognize their efforts, ensure a safe working environment, and uphold our workplace practices and policies.

Creating Jobs managers; we hire, on average, retention rates that are approximately We are continually creating jobs — 20,000 youth each summer for two times the national industry average. we hired more than 14,000 new full and part-time positions, and employees at our corporate facilities provide job shadowing and internship and nearly 90,000 at our stores in opportunities; and, cumulatively, Investing in a Future Workforce 2014. We also introduced thousands we have helped more than 95,000 While many of the jobs we fill are of new positions across our individuals transition from public positions at retail drugstores, we also operations. In addition, we have had assistance to meaningful jobs hire a large number of skilled health more than 1,500 trainees in registered and career paths. Investments in care workers, including pharmacists apprenticeships as pharmacy colleagues participating in programs and pharmacy technicians, nurse technicians and assistant store like these have helped us achieve practitioners, and physician assistants.

69 These skilled workers are in high the Hispanic Heritage Foundation with others, will help us prepare demand today and will continue to and Job Corps. the workforce we need for our be as the health care sector grows. CVS/pharmacy stores, corporate It is projected that, by 2020, 5.6 million Early in 2015, we announced our plan facilities and our ongoing expansion of new health care jobs will be created, to double the size of our pharmacy MinuteClinic locations across the U.S. which may lead to a sizeable shortage technician apprenticeship program in skilled professionals. to reach a goal of 3,000 Registered We also advance the business of Apprenticeship participants by pharmacy through the CVS Health 2020, as part of President Obama’s Foundation Pharmacy Scholarship Cultivating New initiative to overall double the program, which supports the Pharmacy Professionals number of apprenticeships most promising pharmacists of One way we are addressing this nationwide. This program, along tomorrow as they complete their challenge is by investing in education. The Foundation has partnerships and initiatives that provided scholarships to a number promote careers in science, of pharmacy schools across the technology, engineering and math country and provided nearly $400,000 (STEM). Since 2000, when we in scholarship funding in 2014. launched our Pathways to Pharmacy program, we have introduced more than one million young people to Opening Doors to Retail pharmacy as a career option. In We also continue to build on our addition, we have connected young Regional Learning Center (RLC) people to job opportunities at 5.6M model to provide instructor-led CVS/pharmacy locations through new health care jobs training for new and current partnerships with hundreds of will be created by 2020 colleagues, including fully operational nonprofits, faith-based organizations mock-ups of CVS/pharmacy stores and government agencies, including at several RLC sites.

70 Operating in collaboration with are chosen by senior leaders and which is why we have a best-in-class community colleges and other provided with a series of mentoring benefits program that makes employee community service partners, our six and coaching sessions. engagement a top priority and rewards centers supported the training and achievement and talent in a variety development of more than 11,000 Leadership Forum: This program of ways. CVS Health retail colleagues in 2014 helps our company cultivate future and, through our partnerships, provided leaders by providing them with a fully Full-time colleagues earn a full valuable pre-employment skills and integrated view of health care. Each benefits package, which includes: continuing education to an additional individual is placed in a 24-month comprehensive medical and 1,200 job seekers. We have training program, which helps further prescription coverage with a company committed to adding two new RLCs develop their abilities to champion our contribution to a Health Savings in 2015 and 2016 to help thousands culture, employ strategic thinking and Account (HSA); vision and dental of additional employees build customer- develop and grow connections across coverage with contributions payable on service and health care-related jobs the company. In 2014, 25 colleagues a pretax basis; a 401(k); an employee skills, including one specifically to participated in the program. stock purchase plan; fertility and support our commitment to hiring adoption benefits; life, accident and veterans, current uniformed service disability insurance; flexible spending members and military spouses. accounts; paid time off; tuition reimbursement; and an employee In addition, our RLCs support our 229 discount at our stores, as well as continued investments in programs high-performing access to many other employee that facilitate hiring new colleagues colleagues joined discounts. Part-time colleagues who were previously on public the Emerging qualify for a different benefits package, assistance prior to joining our which includes hospital indemnity, workforce. In 2014, we hired more than Leaders Program dental, vision, accident and life 1,800 people through these programs, insurance that are paid by the and measured a 65% retention rate colleague on a pre-tax basis. of these colleagues, compared to Foundations for Leading and 37% of average new retail colleagues. Learning: Implemented in 2014, Our company is also committed to this initiative replaced the previous providing fair compensation to all of Pre-Emerging Leaders Program our colleagues. We meet all state and Creating Opportunities and was expanded to serve store federal minimum wage requirements. for Career Growth and pharmacy managers interested Our company has more than in building their leadership capabilities. 50 development and training It also serves those interested in Health Plans and programs tailored for our colleagues. pursuing opportunities as field Wellness Programs These programs focus on career managers through the Emerging During the past three years, we advancement and help ensure that Leaders Program. Participants have been evolving our health plan our colleagues are staying up to attend classroom sessions that coverage. This process has been date with everything from new build leadership capabilities, driven by a variety of factors, technologies to business trends. including field leader competencies, including market trends, costs, Some examples include: individual development planning, the implementation of the Affordable coaching, problem solving, Care Act (ACA), and a company Emerging Leaders Program: inspirational leadership and perspective that health coverage This long-standing program provides accountability. More than 750 and wellness programs should be development opportunities for store and pharmacy managers integrated and interdependent. Our select managers and directors participated in this new program perspective is that wellness should across our enterprise. Participants during 2014. not be optional, and we have put more are chosen by senior leaders and resources in place to encourage provided with a series of mentoring colleagues to achieve their best health. and coaching sessions. Comprehensive Benefits and Compensation at CVS Health Plan for Health, our preventative health Leaders of Tomorrow Program: We are committed to providing our and wellness program for colleagues Launched in 2011, this program colleagues with a benefits package that we introduced in 2012, offers provides development opportunities that is comprehensive, competitive incentives, including a $600 reduction for select managers and directors and customizable. We also realize in paycheck contributions, for across our enterprise. Participants compensation comes in many forms, colleagues who undergo a free health

71 non-tobacco users after 12 months Colleagues who enroll in this program must make a will be rewarded with an additional $50 deposit of their own money. After six months, if $500 from CVS Health and will receive their $50 deposit back. they are non-tobacco users, they will receive $200 from CVS Health. Those who are non-tobacco users We continue to offer other incentives after 12 months will be rewarded with an additional $500 for colleagues who aim for better health from CVS Health and will receive their $50 deposit back. through WellRewards, our employee wellness program. The program, which is facilitated through WebMD, offers colleagues access to an online, screening and complete an online into their Health Savings Account. confidential health assessment, health assessment, each year. In 2015, If their spouse does the same, personalized health programs, and we are extending a further reduction in they will receive a total of $100. health challenges and trackers. paycheck contributions for colleagues Beginning on June 1, 2015, all whose spouses also participate. colleagues who use tobacco, not WellRewards is linked to our employee just those participating in our health recognition program, Values in Action, Also in 2015, we are providing an plan, will be eligible for an incentive which provides colleagues with the incentive for colleagues enrolled program designed to encourage opportunity to earn up to 10,000 in our health plan who do not use the individual to take on the challenge Values in Action points by completing tobacco or who pledge to quit using of quitting tobacco. a variety of wellness activities or tobacco through enrollment in a challenges. The points can then be cessation program. If while completing Colleagues who enroll in this program redeemed for up to $100 to spend their online health assessment, must make a $50 deposit of their own on merchandise or gift cards, many colleagues who do not use tobacco money. After six months, if they are wellness-related, on the Values in pledge to live tobacco-free, they will non-tobacco users, they will receive Action website. In 2014, sample receive an additional $50 deposited $200 from CVS Health. Those who are wellness activities included:

72 • Participating in the Stepping It Up For Summer walking challenge and measures will help colleagues pursue granted through the ERF, supporting completing at least 7,500 steps each health care when they need it, rather more than 300 colleagues during day over a six-week period through than waiting until their HSA has their time of need. the summer months. More than sufficient funds. We continue to 7,000 colleagues met the target. encourage colleagues to contribute Recognizing our Colleagues their own money to their HSA, which Recognition is an important element • Taking part in our 12-week Weight offers several tax advantages, the of the workplace experience at Loss Challenge in fall 2014. ability to invest to earn additional CVS Health, and we believe hard More than 3,000 colleagues took savings, and allows 100% of funds work and a commitment to our part, losing a total of almost to be rolled over year after year. purpose should be rewarded and 29,000 pounds. celebrated. Some examples of our recognition programs include: In 2014, we also continued to fine-tune Employee Relief Fund our health benefits, moving the In 2011, we established a company- Paragon Awards: Recognizing majority of our colleagues into high- wide Employee Relief Fund (ERF) colleagues who have had an deductible health plans. Preliminary to provide short-term, immediate extraordinary impact on their work results of this switch suggest that financial relief to colleagues who or in their community. colleagues are beginning to apply have suffered significant hardship a more judicious use in health care as a result of a natural disaster, loss CEO Awards: Geared for colleagues spending. In response to feedback of a loved one, medical emergency, who work in a corporate setting, from colleagues, in 2015 we will military deployment or other and is presented to those who have deposit money into colleagues Health unforeseen events. Our company led major initiatives, championed Savings Accounts twice yearly, with and colleagues contribute to this teamwork, generated innovative the first contribution at the beginning fund and, in 2014, more than ideas, increased revenue or shown of a program year, and will introduce $235,000 was provided in grants leadership around our core values. the option for colleagues to borrow to approximately 88 colleagues. against the second contribution if Since the program was conceived, Values in Action: An online rewards they have a health expense. These more than $875,000 has been system in which all colleagues and

73 leaders can recognize each other powered industrial trucks. Our goal and grant points redeemable for is to both ensure compliance with merchandise, travel vouchers, gift legal requirements and to ensure that cards or charitable donations. documented policies and procedures are consistent with actual practices Values in Action Breakthrough at CVS Health facilities. Awards: Celebrating colleagues whose ideas, actions and behaviors Another focus in 2014 for the have led to a breakthrough that Safety Team involved working exemplifies our company values closely with Store Operations to of innovation, collaboration, caring, enhance our “compliance scorecard” integrity and accountability. process, whereby the store manager of any store that has failed an internal monthly audit is required to develop Prioritizing Health and Safety and implement an action plan Measuring Safety At CVS Health, we create and reinforce that addresses the issues identified. a culture of safety through programs The district managers and pharmacy Performance that focus on personal responsibility supervisors are responsible for and continuous improvement. following up on each action plan We measure the success to ensure they have been of our safety programs and Our safety program is supported appropriately completed. initiatives using a variety of by our Environmental, Health and tools. These include: Safety group through a dedicated Finally, the Safety Team Safety Team. Team members enhanced its own internal Toluna Scorecard: A monthly regularly visit our workplaces and processes by engaging an Environmental Health & Safety work with colleagues to identify outside vendor to conduct assessment score for our facilities and address potential hazards, and “follow-along” assessments at that allows timely follow-up and assess opportunities for process stores after the Team’s assessment corrective actions as required improvements. The program itself was completed. This was done is continually evolving to respond to to improve consistency in the way Workers’ Compensation Claims: emerging concerns and to make sure our Safety Team conducts store Reports are produced by store, we have the best practices and training assessments and to ensure that district and region and show the in place to keep our colleagues and any new issues facing our stores type and number of claims. customers safe. Ensuring that our are identified and funneled into The information is used to target Safety Team has the skills to create the safety assessment process. areas of concerns with new training a culture of safety is also imperative. and/or policies Over the past two years, we developed The Safety Team also developed a and conducted formalized skills comprehensive safety-based training Third Party Assessments: assessment and trainings for our for all new colleagues at distribution Enhances our internal inspections safety professionals, assuring they centers. That training will be rolled to better target areas of concern have the necessary tools to address out to all distribution centers in the which might require additional the needs of our work environments first half of 2015. training and/or a new policy today and in the future. and procedure Peer Assessments: By monitoring Other Updates on retailers and health care providers, New Safety Initiatives in 2014 Safety Initiatives we identify opportunities to In 2014, the Safety Team finalized To advance our Stockroom Standards enhance CVS Health’s policies and and implemented new training for Program, the Safety Team targeted procedures all store and distribution center select markets and conducted visits colleagues on how to recognize to all stores within these markets to Industry Engagement: Through and prevent workplace violence. provide specific counseling and participation in peer roundtables The Safety Team also worked with coaching on the program, with a focus and safety associations, we can all appropriate business units to on enhancing inventory management. share our approach and learn from review and update core safety-related This program helps stores maintain our peers, with the ultimate goal of protocols — from bloodborne Occupational Safety and Health maintaining best practices pathogen exposure control Administration (OSHA) compliance procedures to working around in the stockroom areas. Since

74 such as a natural disaster, interruption safe and empowered to contribute In our PBM business, of business operations, facility at their highest levels. These a Strategic Diversity evacuations, and shelter-in-place principles are outlined in our Code operations, and ensures the availability of Conduct, which states that Management Oversight of medical care in the workplace. our workplace should be free from Committee oversees a Incidents that required emergency discrimination and harassment, detailed Strategic Diversity action in 2014 were minor medical threats or acts of violence or Management Integration situations and building evacuations intimidation, and it should provide due to false fire alarms. all employees an equal opportunity Plan that is being to grow and develop their careers incorporated into the Following a successful pilot in 2013, and be appropriately compensated various PBM business CVS Health’s Food Protection Program for their contributions to the units and facilities. was completely rolled out across company’s success. All colleagues the enterprise in 2014, providing for receive and acknowledge our the safety and well-being of both Code when joining the company and implementation started, we have had our colleagues and customers. revisit it annually through training. an overall decline in citations related to The program gives our colleagues this type of work — and in 2014, we had the tools and knowledge to operate CVS Health’s Compliance team, in zero “high gravity” OSHA citations — safely in their buildings, prevents conjunction with support from the showing us that the program is working the spread of foodborne illness, and Legal Department, plays a role in to help keep our employees safe. ensures compliance with regulatory assessing any potential code violations requirements. We are currently and corrective action, as needed. We continued our focus on ergonomics working with multiple state food by creating two new training modules safety departments to obtain their We have professional and productive that provide guidance on improving approval to utilize our specific training relationships with our union workstations and avoiding potential program in lieu of the individual colleagues and their representatives, injury, and geared especially for our jurisdiction programs, which we and recognize the rights of our CVS/caremark colleagues. believe will provide a more consistent employees to decide whether or not training platform for our colleagues. to join a union — which is included Following the roll-out of our in our company policies. Emergency Action Plan to all stores during 2013 we plan to implement Workplace Practices We also comply with local labor it in our corporate facilities and and Policies laws regarding employment of distribution centers. Our Emergency We are committed to creating youth. The minimum age of Response Team prepares for and a welcoming, inclusive and productive employment at CVS Health is responds to any emergency incident, workplace where all colleagues feel 16, or older in some instances.

75 Goal: Take steps to ensure that the diversity of our colleagues represents the diversity of our customers and local communities

Every day, CVS Health serves millions of customers of all ages and from countless walks of life. In order for our businesses to thrive, it is vital to have a diverse workforce that reflects our customers, as well as the communities in which they live. It is also important that our workplace environment empowers all of our colleagues to succeed, regardless of their differences.

Our approach to diversity management Our Diversity Management Leadership executing the enterprise diversity includes four primary objectives Council provides oversight and management strategy at a department direction for the execution of and business unit level. In our • Reflecting the marketplaces we enterprise-level strategic diversity PBM business, a Strategic Diversity serve and the demographics of our management and focuses on Management Oversight Committee communities through our workforce reviewing progress and goals for oversees a detailed Strategic Diversity workforce representation, colleague Management Integration Plan that is • Engaging our colleagues by engagement, talent development and being incorporated into the various leveraging workplace relationships marketplace diversity. In addition, it is PBM business units and facilities. to create and sustain a culture responsible for: of inclusion • Putting policies, practices, programs • Incorporating and leveraging Colleague Resource and procedures in place that enable strategic diversity management in Groups (CRGs) us to develop and retain the best each of their respective business Our Colleague Resource Groups diverse talent units and corporate functions to (CRGs) are one of the many ways deliver on business objectives CVS Health supports and celebrates • Ensuring alignment with and diversity among our colleagues. engagement of external partners, • Serving as visible and verbal The CRGs are networks that offer customers, clients and communities champions of the company’s diversity management strategy colleagues the opportunity to share or support a particular ethnicity, Diversity Leadership • Providing advice and counsel on culture or perspective. They include Oversight of diversity management short- and long-term corporate Asian, Black/African American, African at CVS Health is the purview of the driven initiatives that reach across American-Hispanic, Portuguese-Latino, full Board of Directors. Our CEO and the enterprise women, military, family-focused/ his executive leadership team serve caregivers, LGBT, health and wellness, as our Diversity Management Steering Area Diversity Leadership Teams, those with differing abilities, and Committee and report to the full which are established in all of our leadership. We introduced three new Board. In their role, each of these retail markets, as well as in the regional CRG chapters in 2014. senior leaders serves as an executive logistics, information systems and sponsor for one of our 11 Colleague retail pharmacy departments, are Also in 2014, a tobacco-free Resource Groups. responsible for translating and component was added into the health

76 and wellness CRG to support Mature Workers U.S. Chamber of Commerce colleagues on their path to better CVS Health’s mature workers program, Foundation’s nationwide initiative health. In addition, two of our CRGs Talent is Ageless, is an initiative to help veterans and military merged to leverage synergies, forming designed to recruit and retain spouses find employment. In 2014, the Portuguese-Latino Empowerment colleagues who are age 50 or older. we piloted an internship initiative Group. Interest grew in 2014 to form In 2014, we employed 45,582 mature exclusively for veterans at a new CRG focused on analytics, and colleagues, many of whom came Richland College in Texas. plans are underway to launch it in 2015. through partnerships we have with such organizations as the American We also announced an initiative to Colleagues are provided detailed Society on Aging, AARP (Senior double the number of Registered guidance on how to form CRGs Community Service Employment Apprenticeships we will offer to and, if approved, they are sponsored Program), National Caucus and Center 3,000, which will include targeted by the company and encouraged on Black Aged, and National Able roles for military hires. In 2015, we to represent CVS Health within the Network, among others. Mature workers are establishing a Regional Learning community as part of their overall represent about 22% of our workforce, Center, which will support the hiring business plan. At the end of 2014, up from less than 10% in the late 1990s. and training of new veteran and there were 11 national CRGs and military family recruits. We launched 40 regional chapters of these 14 new partnerships with military CRGs, comprising more than Veterans, Current Service organizations, including: 5,000 colleagues in 26 states. Members and Military Families CRG members also contributed In 2014, we continued supporting The Value of a Veteran: Conducted approximately 2,200 volunteer enterprise-wide military alliance recruiting, interviewing and military hours to community initiatives as programs, including the Hiring management skills training for company part of their 2014 efforts. Our Heroes program — the recruiters and hiring managers.

77 20pt

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79 Community Partners students at historically black colleges In 2014, CVS Health collaborated and universities graduate. with hundreds of partners across LGBT the country that work with and National Urban League (NUL): support individuals and families We supported the NUL, a civil rights in multicultural communities. organization dedicated to economic Equality empowerment, by collaborating on a wide array of programs across Best Place to Work National Partners the country. Hispanic Heritage Foundation (HHF): As the health care category sponsor in 2014, we provided Diversity Recognition educational grants to high school In 2014, our company was named one In addition, CVS Health scored seniors for their academic of DiversityInc’s 25 Noteworthy 100% on the 2015 Corporate Equality achievement, leadership and interest Companies, one of the Top 10 Index, up from 85% the prior year. in pursuing a career in health care. Companies for Veterans and one of The improved score reflects our newly Additionally, CVS Health executives the Top 10 Companies for Employee introduced transgender-inclusive took part in panels across the country Resource Groups. We were also benefits policies, which took effect in providing insight to young Hispanic recognized by Professional Woman’s June 2014. These benefits now include leaders about health care careers Magazine, Careers & the DisABLED coverage for medically necessary as part of the LOFT (Latinos on the Magazine, LatinosForHire.com, health care services that transgender Fast Track) program. Latina Style and the U.S. Chamber people need, including transition- of Commerce for our approach to related treatment. With the 100% United Negro College Fund (UNCF): diversity management and as an score, CVS Health is designated as a We provided financial support to employer of choice. Best Place to Work for LGBT Equality. UNCF initiatives, to help college

80 CVS Health Workforce Diversity Total Employee Count 210,770

Employment Type + Gender

11% Part-Time Male

22% Full-Time Male

26% 100% Part-Time Female 63% 33% Total Full-Time Total Male 41% Full-Time Female 37% 67% Total Part-Time Total Female

Full-Time + Ethnicity Part-Time + Ethnicity

White 18% White 14% African American African American Hispanic/Latino Hispanic/Latino Asian Other 12% Other Asian 12% Not Specified Not Specified

60% 52% 10% 9% 1% 4% 1% 7%

Employee Composition + Gender Employment Age 42% 43% Up to 29 Male Manager 51% 57% 30 to 59 Female Manager 7% 60+

81 MinuteClinic Workforce Diversity Total Employee Count 2,582

Ethnicity Employment Type 12% 14% 65% White Full-Time 10% African American Part-Time 9% Asian Casual Part-Time Hispanic/Latino 4% 2 or more 4% Not Specific 4% Hawaiin/Pacific 78% -% American Indian -%

Employment Type + Gender Employment Type + Gender Full-Time Part-Time Casual PT

10% Male 10% Female 12% 12%

74% 4% 9% 1% 11% 1% 78% 78%

78% 10% 12% Male Female Full-Time Part-Time Casual Part-Time Age

12%

100% 7% 30 to 59 Up to 29 60+

81%

82 Regulatory Compliance and Voluntary Standards are Met or Exceeded Stakeholders, including stockholders, are increasingly demanding that companies have sound governance practices in place, are operating with integrity and are providing transparency on their business practices. Some of the specific areas of interest among stakeholders include: board independence and diversity; corporate public policy positions and political activities; and data security and customer privacy issues.

Goal: Provide transparency around corporate policies and practices in ways that build trust with stakeholders

Board Independence Shared Responsibility oversight of risk management According to our Corporate Governance via Board Committees practices for the categories relevant Guidelines, a substantial majority of The Board considers its role in to the functions. directors must meet the New York risk oversight when evaluating the Stock Exchange (NYSE) requirements company’s Corporate Governance for independence. The Board Guidelines and its leadership structure. Board Diversity determines the independence of each In 2014, the Board transferred The Nominating and Corporate director annually and reevaluates its governance responsibility of two Governance Committee of the determinations during the year as areas — succession planning and Board focuses on the following needed. In 2015, we have 11 members diversity — from Committee qualities in identifying and evaluating on our Board — all of whom are responsibility to full board candidates for Board membership: independent, except for our president responsibility. The Chairman and background, experience and skills; and chief executive officer, Larry Merlo. the CEO are each focused on the character, reputation and personal Only Directors determined by the company’s risk management integrity; judgment; independence; Board to meet independence efforts and ensure relevant matters diversity; commitment to the company standards serve on our Board’s are appropriately brought to and service on the Board; and any Audit, Nominating and Corporate the Board and its Committees for other factors that the Committee Governance, and Management Planning their review. The other Board may determine to be relevant and Development Committees. Committees are responsible for and appropriate.

83 While we do not currently have any Participating in the health care and long-term business specific minimum qualifications for Political Process interests, and we communicate with candidates or a specific policy CVS Health participates in the political policymakers and stakeholders on regarding diversity, the Committee process to help shape public policy issues that impact our business, believes that the Board’s composition, and address legislation that has a health plan clients and customers. which represents diverse backgrounds direct impact on the company and the and experiences, provides significant industry as a whole. Our engagement Lobbying is highly regulated in the benefits to the company. The Board ensures that the interests of our United States, and we comply with membership in 2015 includes eight business, customers, shareholders applicable U.S. federal and state laws, men and three women. and employees are fairly represented including the Lobbying Disclosure at all levels of government. It is CVS Act and Honest Leadership and Open Health’s policy that the CEO and the Government Act that require reporting Contacting the Board are responsible for determining on lobbying activities and certification Board of Directors the company’s policy and political of compliance with Congressional gift Stockholders and other parties, interests in a manner consistent with rules. Starting in 2015, we posted including employees, interested in applicable laws. The Nominating and copies of our federal lobby reports on communicating directly with the Corporate Governance Committee our website to make the information Board of Directors may do so by reviews and considers the company’s more accessible to our stakeholders. sending correspondence to their policies and practices, including attention, care of CVS Health expenditures, regarding political Corporation, One CVS Drive, contributions and direct and indirect Woonsocket, RI 02895. The Corporate lobbying. It will also review and CVS Health participates Secretary of the company reviews all consider the company’s policies and in the political process to such correspondence and, as she practices regarding other significant deems necessary or advisable, public policy issues. In this section, we help shape public policy supplies to the Board with a summary describe our Public Policy Principles, and address legislation of all correspondence that deals lobbying activities, political donations, that has a direct impact with the functions of the Board or Employees Political Action Committee on the company and the its Committees. and our trade association participation. industry as a whole.

Stockholder Proposals Public Policy Principles CVS Health views the stockholder Our Public Policy Principles outline our proposal process as an important priorities for participating in the public avenue for stockholders to raise policy sphere. We are committed to Political Donations material concerns relating to addressing health costs, quality and As a corporation, CVS Health is environmental, social and governance access because they are essential prohibited by federal law from making issues. When a stockholder proposal factors in helping people on the path to contributions directly to candidates or is submitted, we typically engage better health. We work with federal and political parties in federal elections. proactively with the filing parties to state policymakers, others in our We make contributions at the state better understand and address their industry, the broader business level, as allowed by state laws. All of concerns. Through this type of community and nonprofit and civic the company’s contributions promote engagement, we are often able to partners to advance policies that will the interests of the company and are resolve the concerns and the proposal improve health outcomes. made without regard for the private will subsequently be withdrawn. In political preferences of company cases where matters are not resolved, officers and executives. A listing of we comply with the Securities and Lobbying Activity our 2014 political donations at the Exchange Commission (SEC) rules and Our Government Affairs team state and local level, including reprint properly submitted stockholder represents the company’s point of view candidates, political parties and proposals and supporting statements, in Washington, D.C., in state capitals ballot initiatives, is available in the as they were submitted to us, in and with regulatory agencies around Political Activities and Contributions our annual proxy statement. There the country. We focus on legislative report on our website. All past reports were no stockholder proposals in the and public policy issues that impact published by CVS Health are also 2014 CVS Health Proxy Statement. the company’s delivery of pharmacy maintained on our website.

84 CVS Health was ranked among first tier companies in the 2014 CPA-Zicklin Index of Corporate Political Disclosure and Accountability, with a score of 80% — an improvement over a second tier ranking in 2013.

85 CVS Health Employees are disclosures of the contributions authority for potential political Political Action the CVS Health EPAC also makes at contributions. As with many corporations, we the state level. We also operate offer certain eligible employees employee-funded state Political an opportunity to participate in Action Committees (PACs) in Rhode Trade Association Participation the political process by voluntarily Island, Massachusetts and New York. CVS Health participates in various contributing to the CVS Health CVS Health has a policy governing federal and state trade associations Employees Political Action Committee political contributions made from or organizations that operate in support (EPAC). Political contributions to corporate and EPAC funds to ensure of specific industries. Trade associations federal candidates, certain state that all potential political contributions participate in activities such as candidates, political party committees made by or on behalf of CVS Health education, advertising and lobbying and political action committees are or a CVS Health EPAC are reviewed to influence public policy. Many made by our EPAC. Consistent with and approved internally for associations offer other services, such federal law, CVS Health pays the compliance with all federal, state and as producing conferences, networking administrative, solicitation and local laws, and that all of the or charitable events or offering classes compliance costs of the committee. company’s political activities are or educational materials. Some The activities of the CVS Health conducted in accordance with high associations also make political EPAC are subject to comprehensive ethical standards. This policy applies contributions or operate a PAC. regulation by the federal government, to all employees of CVS Health, and including detailed disclosure each of its subsidiaries and affiliates. In 2014, CVS Health paid nearly requirements. CVS Health does not make any $4.3 million in dues to trade and independent expenditures in federal, industry associations for advocacy Under the Lobbying Disclosure state or local elections. CVS Health and/or political activities. Details Act of 1995, CVS Health submits to requires certifications of compliance regarding 2014 membership dues Congress semi-annual reports, which with this policy, generally through the can be found in our annual Trade also include a listing of CVS Health company’s annual compliance Association Dues Report, along with EPAC’s contributions to federal training. Certifications must be past reports. These reports include candidates. We report these submitted following such training by the amount paid for advocacy and/or contributions in the Political Activities all CVS Health representatives and political purposes for any trade or and Contributions report on our employees at the director-level and industry association with annual website. Included on our website above who maintain budgetary total dues of $25,000 or more.

86 Goal: Ensure policies and practices are best-in-class and processes are in place to execute

In recent years, as personal information is shared through ubiquitous technology, reports of privacy and data breaches have increased. At CVS Health, our role in the health care industry requires us to collect and maintain personal information, and we are acutely aware of our responsibility to protect the information in our charge. In this section we describe the ways in which we manage our information security functions, and the programs we have in place to ensure ongoing compliance by colleagues across the organization.

Managing Information also conducted within 30 days Privacy Program Security and Governance after the date of hire for contractors, Protecting private information and Maintaining the confidentiality, integrity within 21 days for retail colleagues, the confidentiality of those we serve and accountability of CVS Health data and within 12 days for PBM colleagues. are conditions of employment with is not only a legal responsibility, it is Compliance is tracked to ensure CVS Health and are described in essential to the company’s values and trainings are completed. detail in our Code of Conduct. All of an integral part of the trust placed in our colleagues receive privacy and us by our customers. The measures In 2014, we added more staff and security training, the frequency of taken to protect and secure personal expanded the coverage and visibility which depends on a number of factors, information across the enterprise is of the Security Operations Center including where an employee works implemented through our Information across affiliate companies. We also within the company and how likely that Governance Framework. commissioned a security assessment of position is to encounter privacy risks. our retail stores in October 2014. The Generally, this equates to an annual results of the assessment led training for corporate employees, Information Security Program to enhancements of training and semi-annual training for in-store and CVS Health employs industry standard educational offerings for colleagues. pharmacy employees, and as-needed technology safeguards, including In early 2015, we launched a new retraining for employees following their network firewalls, intrusion prevention, mandatory Information Security involvement in a potential incident. and malware detection systems to Awareness curriculum for all identify and prevent potential cyber colleagues and Social Engineering We also maintain a privacy program attacks. We maintain rigorous policies Detection training for those colleagues aimed at improving and enhancing our and procedures for authentication and who work in our store operations. privacy practices. Internal privacy authorization to systems that restrict Also in 2014, as per the Payment activities include an investigation and access to and define appropriate use Card Industry Data Security Standard, response team that manages the review of client and plan member data. we completed an annual external and response to any potential privacy Through our audit compliance plan, assessment by a qualified security incident. When potential privacy we continuously monitor and assess assessor of our policies and incidents are discovered, the team uses our systems and networks so safeguards in connection with a protocol that involves an assessment appropriate safeguards can be cardholder data. The assessment of the incident and, when necessary, implemented to mitigate the risk of found no major security risks or faults tracking and resolving the incident security violations and intrusions. for cardholders or our company. so that we mitigate any privacy risks. We also conduct regular assessments When appropriate, we retrain our against our security and privacy Today, security threats are very colleagues or develop a corrective controls, and address any issues that real and cyber criminals are proving action plan. In addition, we conduct a may have been identified during the to be relentless. We must and periodic risk assessment of our privacy assessment period in a timely manner. will continue to invest in security practices. For example, we periodically measures and maintain our focus review our retail facilities by using an Security awareness is promoted on protecting the information independent assessor to review a throughout the organization and our entrusted to us, while also ensuring statistically significant sample of stores colleagues are required to complete information is available for all to ensure implementation of our privacy security training annually. Training is authorized business purposes. protections and safeguards.

87 In 2014, we posted CVS Health’s fostering a culture of compliance We provide this training to all new Privacy Commitments, along with throughout the company. Key full-time or part-time employees and our privacy policy, on our website. components include: our Code of also require that they have read and Conduct; policies and procedures; understand our Code of Conduct. education and training; reporting Ongoing compliance training Vendor Assessment Program mechanisms for unethical behavior requirements are based on employee CVS Health maintains a Vendor or non-compliance; remedial job function and responsibilities, Assessment Program. Through it, measures and discipline procedures; and existing government mandates. each vendor who collects, uses, periodic assessments; fraud, stores, shares, processes, transmits waste and abuse, and compliance or destroys confidential information on programs applicable to our Ethics Line our behalf must undergo initial and Medicare Part D business. CVS Health maintains a toll-free, recurring assessments to ensure 24-hour Ethics Line to receive they are operating in accordance Our Chief Compliance Officer (CCO) communications from employees, with our privacy and information is responsible for overseeing and vendors and other third parties in security policies and procedures. implementing our Compliance and connection with alleged unethical Integrity Program. Our CCO reports to or illegal behavior. Parties also may the Audit Committee of the Board of contact the Ethics Line via mail, Governance Oversight Directors and to the company’s Chief email or fax. In addition, any employee We operate oversight committees Executive Officer. As part of the has the ability to raise a compliance to enhance our privacy and administration of the program, the issue and seek guidance directly information security programs. CCO chairs the Corporate Compliance with the CCO and members of The committees meet periodically Committee, a cross-functional group management, Human Resources to make recommendations aimed comprised of company legal and and the Legal Department. CVS Health at enhancing our practices, which business leaders who provide has a strict non-retaliation policy are then implemented at the company. expertise, coordination and oversight. that protects our employees who We also engage senior leaders in use these resources in good faith. decision-making processes related to new digital interfaces and analytical Code of Conduct Our Compliance Office oversees the technologies to help ensure appropriate The CVS Health Code of Conduct Ethics Line as well as other alleged protections and safeguards are t sets forth the company’s expectation violations and is responsible for aken into consideration when we of legal and ethical behavior of all logging, triaging, following up and implement these tools. employees. The CCO leads the tracking reported potential compliance development of and periodic updates violations to conclusion. This includes to the Code, which is reviewed by directing a thorough investigation Remaining Compliant the Board of Directors. and, upon completion, determining We work to ensure that the right whether credible evidence of a business practices, policies and violation exists. When it is confirmed processes, as well as compliance Compliance that misconduct has occurred, mechanisms, are in place. CVS Health Education and Training corrective action — which may include is committed to following ethical The CVS Health Integrity Training remedial action to address the specific standards and complying with all Program underscores the issue or help prevent similar issues in applicable laws and regulations in company’s commitment to high the future, discipline and/or additional the conduct of our business. This ethical standards and practices training — is initiated promptly. commitment extends to everyone that comply with applicable laws, within the organization and to all regulations and company policies. As appropriate, certain confirmed interactions with customers, plan Training content is reviewed and violations may be reported to outside members, clients, physicians, vendors approved by the Compliance agencies or authorities. In addition, and all other business associates. Office, and aims to raise employee the CCO provides the Audit Committee awareness of policies through of the Board of Directors with the presentation of real-life work information concerning significant Programs and Oversight situations that pose ethical dilemmas violations or alleged significant CVS Health’s Compliance and Integrity or may violate aspects of our violations of the Code of Conduct and Program provides a framework for Code of Conduct. applicable policies and procedures.

88 Supply Chain Responsibility Doing business with a broad range of suppliers spreads economic opportunities around, from diverse suppliers in the United States to vendors around the world. Companies are also expected to help mitigate potentially negative impacts by ensuring that their suppliers are upholding applicable laws and operating in accordance with their social and environmental compliance standards.

Goal: Engage store brand suppliers to ensure compliance with our social and environmental policies, and to help drive a best-in-class approach

Much like CVS Health’s internal Code of Conduct, the expectations we have for our suppliers are communicated through our Supplier Ethics Policy and further enhanced through our Global Supplier Audit Program, which plays an important role in preventing, detecting and resolving instances of potential unethical behavior and noncompliance. We describe these and the related initiatives that we have in place in the sections that follow.

Ensuring Human the use of child, forced or imprisoned Ethics Policy are also upheld Rights Considerations labor; requires that working conditions in our workplace policies and Respect for human rights is expressed are safe and fair; forbids any form practices, and in the CVS Health in CVS Health’s Supplier Ethics Policy, of discrimination with regard to age, Code of Conduct. We believe which all new and existing vendors gender, minority status and/or other every employee is entitled to a must adhere to as a condition of protected classes; and upholds safe and healthy work environment doing business with the company. the right to freedom of organization, that is free from discrimination This includes suppliers producing among other essential human rights. and harassment, threats or acts direct import and CVS Brand items We monitor compliance with the of violence or intimidation and manufactured in high-risk countries Supplier Ethics Policy through risk- where all employees have an but sourced domestically. based audits conducted by external equal opportunity to grow and third parties. For more information develop their careers and be The policy is aligned with the principles about audits, please see the Global appropriately compensated for outlined by the International Labour Supplier Audit Programs section. their contributions to the company’s Organization and the United Nation’s success. For more information on Universal Declaration of Human Rights, The same international principles our workplace practices, please which prohibits human trafficking and that are applied to our Supplier see page 69.

89 Supplier Ethics Policy • Strictly adhere to applicable CVS Health requires all suppliers to child labor and workplace safety Forbid any form of laws and regulations and respect conduct business in accordance with discrimination with regard the Policy and other applicable legal and apply international treaties, and ethical standards. We seek compacts and regulations addressing to age, gender, minority suppliers that share our values as the use of child labor and workplace status and/or other well as our promise to deliver safety in the absence of applicable protected classes; and local law setting minimum standards outstanding service. CVS Health uphold the right to freedom suppliers are required to adhere to our for the protection of workers company’s ethical standards, supplier of organization • Pay workers a fair and legal requirements, and business processes, wage under applicable laws and which are published on our supplier regulations and not withhold website and communicated in our of any money or thing of value to wages for coercive purposes CVS Health Supplier Ethics Policy. As any government official, including any defined by this policy, suppliers must: • Adhere to and be familiar with employee or agent of a government- import requirements of the owned or government-controlled • Prohibit human trafficking and the United States Customs and business, for the purpose of: influencing use of child, forced or imprisoned Border Protection, a component any act or decision of such government labor and provide working conditions of the Department of Homeland official, in his/her official capacity; that are safe and fair Security, and other United States inducing such government official to governmental and/or regulatory do or omit doing any act in violation • Forbid any form of discrimination agencies, including Customs-Trade of the lawful duty of such official; with regard to age, gender, minority Partnership Against Terrorism securing any improper advantage; or status and/or other protected inducing such government official to classes; and uphold the right to • Not appear on the United States use his/her influence in order to assist freedom of organization Department of Health and Human in obtaining or retaining business. Services or the General Services • Conduct business in accordance Administration’s Lists of Parties with established legal and ethical Our internal Code of Conduct also Excluded from Federal Programs standards addresses the company’s standard CVS Health also requires full of ethics when interacting with • Not require workers to surrender compliance with all applicable suppliers. Employees with direct identity papers, other critical anti-corruption laws, including the responsibility for import supply chain personal documents, or a “deposit” United States Foreign Corrupt management have been trained on as a condition of employment Practices Act. Vendors and suppliers mitigating risks within the supply chain • Not subject workers to physical or may not, directly or indirectly, offer, of products, including risks associated mental coercion pay, promise or authorize the payment with human trafficking and slavery.

90 2014 Audits Performed by Country CVS Health requires all suppliers to conduct Total Number Percentage Country business in accordance with the CVS Health of Audits of Audits Supplier Ethics Policy and other applicable China 741 83.2584% legal and ethical standards. We seek Mexico 19 2.1348% suppliers that share our values as well as our promise to deliver outstanding service. India 18 2.0225%

Taiwan 17 1.9101% Global Supplier Audit Programs Vietnam 16 1.7978% We monitor compliance with the Supplier Ethics Policy through risk-based audits conducted by our partner, Israel 9 1.0112% Intertek, and other external third parties. The CVS Health Factory Social Audit Program helps us assess our South Korea 9 1.0112% performance and allows us to compare the results against industry standards. This ensures that our direct Japan 7 0.7865% import suppliers and other store brand suppliers are in 7 compliance with social, legal and trade security standards in Thailand 0.7865% accordance with local laws in which they operate. Germany 6 0.6742%

Our factory audit program focuses on auditing new and Italy 6 0.6742% existing foreign factories that manufacture both direct import and CVS Brand items. In 2014, we expanded our Turkey 4 0.4494% factory audit program to include factories in Japan and the United European Union. Beginning in 2015, we will assess certain 4 0.4494% Kingdom subcontractors based on their risk profile. This follows the 3 implementation of our policy in late 2013 requiring factories Netherlands 0.3371% to disclose a list of their subcontracts to us. Spain 3 0.3371%

CVS Health partners with Intertek by utilizing its Workplace Denmark 2 0.2247% Conditions Assessment (WCA) and the Global Security Verification (GSV) audit programs. The WCA program is France 2 0.2247% based on industry best practices and assigns scores based on observation for the following five criteria: Indonesia 2 0.2247%

• Labor, including child labor, forced labor, discrimination, Malaysia 2 0.2247% discipline, harassment or abuse, freedom of association, and employment contracts Philippines 2 0.2247%

• Wages and Hours, including hours worked, wages Portugal 2 0.2247% and benefits Switzerland 2 0.2247% • Health and Safety, including facility safety, emergency preparedness, occupational injury, machine safety, Argentina 1 0.1124% safety hazards, chemical and hazardous materials, and within dormitories and canteens Belgium 1 0.1124% • Management System, including having established Colombia 1 0.1124% policies and procedures to ensure compliance with applicable laws El Salvador 1 0.1124% • Environment, including compliance with all required Finland 1 0.1124% environmental permits, licenses and registrations, being aware of the potential environmental impacts of Hungary 1 0.1124% a site and having an effective environmental management system to better understand and comply with all Sri Lanka 1 0.1124% environmental laws, regulations, and permits as they relate to hazardous waste and emissions TOTAL 890 100.00%

91 In 2014, 100% of the factories producing in-person training, we communicate certification status with the U.S. Total Number Percentage CVS Brand and direct import products supplier requirements, including our Customs and Border Protection. Country of Audits of Audits in countries outside of the U.S. and zero-tolerance policy, through our We perform GSV audits on 100% China 741 83.2584% Canada, including all new supplier cvssuppliers.com website. In 2015, of foreign factories that produce factories, underwent a human rights we plan to introduce additional direct import products and are located Mexico 19 2.1348% screening via the CVS Health Factory process improvements and training outside of China, and 20% of foreign Social Audit Program. opportunities. In lieu of the WCA factories located within China. India 18 2.0225% audits, CVS Health accepts other A primary focus in 2014 was engaging globally recognized third-party CVS Health takes its Global Supplier 17 Taiwan 1.9101% lower-performing suppliers and social audit reports, including: Audit Program very seriously, factories scoring between 51 and 74 including setting policies around Vietnam 16 1.7978% (out of 100) during an audit. Our goal is • ICTI — International Council of Toy zero-tolerance and non-passing audits. Israel 9 1.0112% to work with them directly in order to Industries If a factory does have a zero-tolerance remediate their factory performance on failure, such as child labor, forced • WRAP — Worldwide Responsible South Korea 9 1.0112% social compliance, rather than to or prison labor, abuse, harassment or Accredited Production exclude them immediately from our attempted bribery, the company will Japan 7 0.7865% supply chain. In 2015, we plan to further • BSCI — Business Social Compliance take appropriate action up to and enhance our supply chain’s remediation Initiative including canceling all orders and 7 Thailand 0.7865% and corrective action activities. placing the factory on probation for • SA8000 — Social Accountability one year. In 2014, we performed initial Germany 6 0.6742% International (SAI) We also conducted our semi-annual and follow-up assessments on a total Italy 6 0.6742% supplier and factory training on social CVS Health also participates in of 890 factories and discovered compliance and new subcontracting Intertek’s GSV security audit program 33 zero-tolerance failures. The details Turkey 4 0.4494% requirements in Shenzhen and to maintain our Customs-Trade of the zero-tolerance incidences are Shanghai, China. In addition to our Partnership Against Terrorism (C-TPAT) listed in the table below. United 4 0.4494% Kingdom 2014 Zero-Tolerance Incidence Netherlands 3 0.3371% 2014 Zero-Tolerance Number of Factories Follow-up/Remediation Spain 3 0.3371% Issues/Low Scoring found to have a Action Taken Process Factories Zero-Tolerance Issue Denmark 2 0.2247% Forced/Prison Labor 0 N/A N/A France 2 0.2247% Abuse & Harassment 0 N/A N/A Indonesia 2 0.2247% For blocked exits, immediate 2 Malaysia 0.2247% corrective action was taken Orders for 22 factories and proof of correction was Philippines 2 0.2247% with locked/blocked exits submitted through a corrective Portugal 2 0.2247% Life-Threatening Conditions 7 Locked/16 Blocked were placed on hold until action plan for approval. — Locked/Blocked Exits 23 (2.6% of total audits) corrective action was For locked exits, either Switzerland 2 0.2247% taken. Orders for 1 factory corrective action was taken were cancelled. or the orders were moved to Argentina 1 0.1124% approved factories. One order was cancelled. Belgium 1 0.1124% Orders for all 9 factories Colombia 1 0.1124% Attempted Bribery were canceled and all (Factory Management 9 factories were placed 1 Production for approved orders El Salvador 0.1124% Bribing the Auditor to 9 (1.0% of total audits) on a one-year probation. were moved to approved facility. receive a passing Score All factories must pass Finland 1 0.1124% on the audit) a social audit prior to Hungary 1 0.1124% receiving new orders.

1 Orders were canceled. Sri Lanka 0.1124% Production for approved orders Child Labor 1 (0.1% of total audits) Facility was placed on were moved to approved facility. TOTAL 890 100.00% probation.

92 Goal: Encourage diversity within our supply chain

Supplier diversity provides CVS Health a competitive advantage, contributing to our supply- chain excellence and enhancing our brand among our customers. By strengthening the inclusion of diverse supplier and diverse-owned pharmacies, we are not only creating economic opportunities, but also helping to foster strong relationships with our customers and suppliers who live in the communities we serve and shop in our stores.

Supplier Diversity Program potential business opportunities. Business Opportunity Fairs, Our Supplier Diversity Program aims In 2014, CVS Health anticipated including three where we offered to ensure all types of businesses are 70 store remodels and 10 new free health screenings to diverse given the opportunity to do business store openings in the Missouri, suppliers. The events included: Southern Indiana and Southern with CVS Health. This expands our • Puerto Rico Minority Supplier Illinois markets, with a need for supplier pool, increasing competition Development Council and potentially reducing cost, a broad range of supplier skills and contributes to a more resilient over a period of approximately • Women Business Enterprise supply chain. 18 months. National Council Summit and Salute • Maintained our memberships Our Supplier Diversity Program with the National Minority Supplier • South Florida Minority Supplier consists of two tiers: Tier I focuses Diversity Council (NMSDC), Development Council on monitoring our purchases to NMSDC Health Care Industry • United States Hispanic ensure we have diverse suppliers Group, NMSDC Retail Industry Chamber of Commerce providing quality goods and services. Group, Women’s Business Legislative Summit Tier II monitors the diversity of the Enterprise National Council, suppliers employed by our large- Association for Disabled Veterans • Chicago Minority Supplier valued Tier 1 suppliers. Our two- Business Enterprises, United Development Council tiered program further demonstrates States Hispanic Chamber of • Keeping the Promise- Disabled our commitment to both the use of Commerce, the National Gay and Veterans Business Alliance diverse direct suppliers and to doing Lesbian Chamber of Commerce, business with suppliers who are Keeping the Promise, the U.S. Pan • Women’s Business Enterprises embedding diversity in their own Asian American Chamber of National Council supply chains. In 2014, we continued Commerce and U.S. Business • Celebrasian — USPAACC to build our efforts for this program Leadership Network (Disability at Conference in the following ways: Work). In 2014, we added two new organizations to our list of • National Gay Lesbian Chamber • Held a series of Construction membership partners: United States of Commerce Business Building Events in Dallas, Business Leadership Network • The Elite Network National Fort Lauderdale, FL, La Habra, CA, (USBLN)-Disability Supplier Diversity Conference Charlotte, NC, and St. Louis, MO. Program and the Elite Network of More than 100 suppliers participated Service Disabled Veteran-Owned • United States Business in the St. Louis event, which Business (SDVOB). Leadership Network Conference offered them the chance to meet and make valuable connections • Sponsored, attended and/or • National Minority Supplier with CVS Health purchasing exhibited at several Supplier Diversity Development Council representatives and learn about Development Council events and Business Fair

93 Our Supplier Diversity Program consists of two tiers: Tier I focuses on monitoring our purchases to ensure we have diverse suppliers providing quality goods and services. Tier II monitors the diversity of the suppliers employed by our large-valued Tier 1 suppliers.

94 Supplier Diversity Recognition we need, while providing a broader In 2014, CVS Health was recognized forum for suppliers to list their Construction as the Best Diversity Company by services and build their businesses. Business Events readers of Diversity Careers Magazine Diverse suppliers can also register and the Top Supplier of Diversity through our online portal, which Programs for Women, African allows us to consider diverse Americans and Veterans. We also suppliers in all not-for-resale 300+ ranked as one of America’s Most sourcing and procurement suppliers trained Admired Corporations for Supplier opportunities and helps facilitate on how to build a Diversity by Minority Network USA the tracking of Tier I and Tier II capabilities statement Magazine and were among the WE spending, supplier certification Top 100 corporations in Supplier and capabilities. In 2014, more Diversity. For the second year, than 800 certified diverse suppliers Diversity Plus Magazine recognized registered within the online portal. 500 + Monette Knapik, CVS Health’s Director In addition, we awarded, and are new diverse suppliers of Strategic Procurement, as one of currently doing business with, added to our database the Top 25 Women Impacting Diversity. more than 1,500 certified diverse In 2014, we spent more than $700 million with diverse 40+ vendors in our Supplier Diversity Program. Our goal is suppliers provided to reach $1 billion by 2017. Diverse suppliers are defined as tender opportunities Minority Owned, Woman Owned, Veteran or Disabled Veteran Owned, Disability Owned, Disadvantaged

Owned, LGBT Owned, HU-Zone Owned, 8(a) Owned 15 suppliers awarded business Business Enterprise or a Small Business Enterprise. We also recognize certifying organizations such as the National Minority Supplier Development Council, pharmacy benefit management (PBM) Women’s Business Enterprise National Council, business. Our Diverse Retail Pharmacy National Gay and Lesbian Chamber of Commerce, Program encourages diverse-owned United States Hispanic Chamber of Commerce, retail pharmacies, many of which are U.S. Pan Asian American Chamber of Commerce, independently owned, to become certified with CVS Health. The U.S. Business Leadership Network, Small Business certification allows them to expand Association or a recognized government agency. and establish potential business opportunities with our company, as well as become qualified for targeted government programs. In order to CVS Health also strives to include local suppliers across our not-for-resale encourage growth and participation, diverse suppliers that conduct repair business activities. CVS Health provides guidance and and maintenance services at company assistance to potential partners about facilities. In 2014, we continued the certification process. to encourage our local suppliers Diverse Retail to register with Service Channel Pharmacy Program At the end of 2014, we had more than (Fixxbook), a third-party online Diversity is also an important 130 retail pharmacy partners in the platform that helps us find diverse component of the pharmacy partners program. We spent more than $225 suppliers to provide the services we work with on behalf of our million with these pharmacies in 2014.

95 Building Capacity of Diverse Suppliers

In 2014, CVS Health collaborated with National Grid and Roger Williams University in Rhode Island to train diverse suppliers in the skills needed to secure contracts with large businesses.

This included co-developing a customized CEO Master Series focused on critical management skills and industry knowledge. CVS Health and National Grid each sponsored three diverse businesses to participate in the program. CVS Health- sponsored participants included: Capital City Construction, a commercial general contractor; Peachtree Supplies, an office and business product dealer; and Heroica’s Painting, a professional painting company.

Over two semesters, beginning in April 2014, the CEOs from those businesses focused on learning skills to maximize employee performance, develop successful business proposals, and critical areas for competitive advantage, including sustainability training, safety plans, HIPAA requirements.

The collaboration proved a successful professional training model, with graduation celebrated in November. CVS Health plans to launch the program more broadly to its diverse supplier community in 2015.

96 G4-17 G4-23

About This Report CVS Health’s 2014 Corporate Social Responsibility (CSR) Report provides an overview of our company’s social and environmental commitments and progress against our CSR-related initiatives and goals.

Boundary and Scope During 2014, we acquired Coram, on our process, please see CSR Consistent with previous reports, one of the nation’s largest suppliers Material Issues. the boundaries for this report of infusion and enteral nutrition extend to all United States company- services, and Navarro Discount Our report was submitted and finalized owned and/or operated facilities, Pharmacy, the largest Hispanic- by the GRI Materiality Disclosures administrative offices and retail owned drugstore chain in the U.S. Service, verifying that at the time pharmacies for the corporate These new entities were not included of publication General Standard enterprise, including: CVS/pharmacy, in the boundaries of our most recent Disclosures G4-17 to G4-27 were CVS/minuteclinic, CVS/caremark CSR materiality assessment, which correctly located in both the Content and CVS/specialty. Company was undertaken in 2013 and informs Index and the text of the final report. operations outside the United States the issues covered in this report. represent less than one percent of the total enterprise and are not Our 2014 CSR Report is our eighth Disclosure and Assurance covered in this report. Topics related annual publication of this type; our CVS Health management is to the company’s supply chain include last report was published in May 2014. responsible for the preparation and our Supplier Ethics Policy, supplier We plan to continue reporting on an integrity of the information in this diversity strategy, and product quality annual basis. report. The enterprise metrics and and safety procedures, but do not goals in this report are established extend to environmental impacts. through a rigorous review process Content and CSR Materiality involving internal subject matter Data contained in this report covers In 2013, we conducted a CSR experts, and we believe this report activities that occurred in fiscal materiality assessment to identify accurately and fairly represents our year 2014 (January 1 – December 31), issues most relevant to CVS Health, CSR activities, programs and unless otherwise noted. There may our industry and our stakeholders. results for the fiscal year ended also be certain events or activities The process involved gathering input December 31, 2014. The report was referenced in this report that from external and internal sources as submitted to the Nominating and were initiated in 2014, but came well as reviewing prior feedback from Corporate Governance Committee of to fruition in 2015. Our process stakeholders. We continued to focus the Board of Directors for review, and focused exclusively on CVS Health’s the content for this report on the was reviewed and approved by operations, communities and material aspects identified through members of CVS Health senior stakeholders in the United States. that process. For additional detail management, including our internal

97 Disclosure Committee, which is and progress. Your feedback is Quarterly Report on Form 10-Q. We comprised of management from important to us as we continue to refer readers of this Report to all of each functional area within the look for ways to improve our reporting our SEC filings, including our Annual company and serves as a separate and provide you with the information Report to Stockholders, our Form 10-K, review of our disclosure controls you need. Please submit your Forms 10-Q and any Forms 8-K, and procedures. This report has not feedback to [email protected]. which provide important information been externally assured or verified about our business, operations and by an independent third-party, financial performance. Before making except for our carbon footprint data, Preparation of this Report any investment or other decision which is assured by an independent CVS Health Corporation relating to the company, all such public third party. The company may 1 CVS Drive, Woonsocket, RI 02895 filings should be considered in detail. consider having additional content 401-765-1500, [email protected] and data in its future CSR Reports References in this document to externally assured. This report contains certain forward- CVS Health products, programs looking statements that are subject to or service do not imply that This report was produced based on risks and uncertainties. Actual results CVS Health intends to provide all the Global Reporting Initiative (GRI) may differ materially from those products, programs or services G4 Sustainability Report Guidelines contemplated by the forward-looking across all of its businesses. ‘in accordance’ option core. The GRI information for a number of reasons Statements regarding CVS Health’s Index can be found at the end of this as described in our Securities and future direction and intent are subject report. More information on GRI is Exchange Commission (SEC) filings, to change or withdrawal without available at www.globalreporting.org. including those set forth in the risk notice and represent goals and factors section and under the section objectives only. entitled “Cautionary Statement Your Feedback Concerning Forward-Looking This report is an important tool for Statements” in our most recently filed communicating our CSR performance Annual Report on Form 10-K and

98 Global Reporting Initiative (GRI) Index

External G4 General Standard Disclosures Response/Page/Link Assurance

STRATEGY AND ANALYSIS

G4-1 CEO statement Letter from Larry Merlo, p. 3

ORGANIZATIONAL PROFILE

G4-3 Name of reporting organization CVS Health

G4-4 Products Company Profile, p. 7

G4-5 HQ location Company Profile, p. 7

G4-6 Countries of operation Company Profile, p. 7

G4-7 Nature of ownership and legal form Company Profile, p. 7

G4-8 Markets served Company Profile, p. 7

99 External G4 General Standard Disclosures Response/Page/Link Assurance

ORGANIZATIONAL PROFILE

G4-9 Report the scale of the organization, Company Profile, p. 7 including: Total number of employees; Total Quantity of products or services provided: During number of operations; Net sales (for private 2014, CVS Health filled 756 million retail prescriptions sector organizations) or net revenues (for (counting 90-day prescriptions as one prescription), or public sector organizations); Total capitalization approximately 21% of the U.S. retail pharmacy market broken down in terms of debt and equity (for private sector organization); Quantity of products or services provided

G4-10 a. Report the total number of employees All work is performed by the company’s employees, by employment contract and gender. with a large majority of them performing retail-related b. Report the total number of permanent duties in the company’s 7,800 retail pharmacies employees by employment type and gender. located primarily in the U.S. c. Report the total workforce by employees and CVS Health Workforce Diversity, p. 81 supervised workers and by gender d. Report the total workforce by region and gender. e. Report whether a substantial portion of the organization’s work is performed by workers who are legally recognized as self-employed, or by individuals other than employees or supervised workers, including employees and supervised employees of contractors. f. Report any significant variations in employment numbers

G4-11 Report the percentage of employees covered As of December 31, 2014, approximately 5.6% were by collective bargaining agreements covered by collective bargaining agreements.

G4-12 Describe the organization’s supply chain Company Profile, p. 7

G4-13 Report any significant changes during the Company Profile, p. 7 reporting period regarding the organization’s During 2014, we increased the number of size, structure, ownership, or its supply chain CVS/pharmacy locations by a net 162 and added 175 new MinuteClinic locations. We also acquired Miami-based Navarro, a 33-store retail drugstore chain, and Navarro Health Services, a specialty pharmacy serving patients with complex or chronic diseases. In addition, we added Coram LLC, one of the nation’s largest providers of comprehensive infusion services.

G4-14 Report whether and how the precautionary CVS Health does not have a formal policy approach or principle is addressed by the regarding the precautionary principle. organization. All CVS brand products must comply with FDA and government requirements and adhere to the company’s Cosmetic Safety Policy. The Policy outlines the company’s approach should an ingredient be suspected of causing harm.

The company also takes a proactive approach to risk management, including climate change, and performs regular reviews of risks in our operations and supply chain.

100 External G4 General Standard Disclosures Response/Page/Link Assurance ORGANIZATIONAL PROFILE

G4-15 List externally developed economic, CVS Health’s Supplier Ethics Policy, which all environmental and social charters, principles, vendors around the world must adhere to as a or other initiatives to which the organization condition of doing business with the company. subscribes or which it endorses. The policy is aligned with the principles outlined by the International Labour Organization (ILO) and the United Nation’s Universal Declaration of Human Rights

G4-16 List memberships of associations (such Participating in the Political Process, p. 84 as industry associations) and national or 2014 Trade Association and Coalition international advocacy organizations in Participation report which the organization: Holds a position on the governance body; Participates in projects or committees; Provides substantive funding beyond routine membership dues; Views membership as strategic. This refers primarily to memberships maintained at the organizational level.

IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES

G4-17 a. List all entities included in the organization’s Please see company Form 10-K, page 27, No consolidated financial statements or filed 2/10/15 for the Period Ending equivalent documents. December 31, 2014. Data in this CSR report b. Report whether any entity included in covers our U.S. and Brazil operations; it does the organization’s consolidated financial not cover data from our 2014 acquisitions statements or equivalent documents is not of Navarro, a 33-store retail drugstore chain, covered by the report. Navarro Health Services, a specialty pharmacy nor Coram LLC infusion services, p. 7, 97

G4-18 a. Explain the process for defining the Our CSR Strategy: Prescription for a Better No report content and the Aspect Boundaries. World: CSR Material Issues, p. 17-18 b. Explain how the organization has implemented the Reporting Principles for Defining Report Content.

G4-19 List all the material Aspects identified in the Our CSR Strategy: Prescription for a Better No process for defining report content. World: CSR Material Issues, p. 19-22

G4-20 a. For each material Aspect, report the Aspect All material aspects selected in this report apply No Boundary within the organization, as follows: to CVS Health’s operations in the United States. Report whether the Aspect is material within Our CSR Strategy: Prescription for a Better the organization. If the Aspect is not material World: CSR Material Issues, p. 19-22 for all entities within the organization (as described in G4-17), select one of the following two approaches and report either: The list of entities or groups of entities included in G4-17 for which the Aspect is not material or The list of entities or groups of entities included in G4-17 for which the Aspects is material: Report any specific limitation regarding the Aspect Boundary within the organization

101 External G4 General Standard Disclosures Response/Page/Link Assurance IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES

G4-21 a. For each material Aspect, report the We source from and manufacture in various No Aspect Boundary outside the organization, parts of the world. The majority of our direct as follows: Report whether the Aspect is import products come from factories in China. material outside of the organization. If the Our retail pharmacy, PBM and MinuteClinic Aspect is material outside of the organization, businesses are almost exclusively conducted identify the entities, groups of entities or in the U.S., in areas where our customers and elements for which the Aspect is material. In employees live. addition, describe the geographical location Our CSR Strategy: Prescription for a Better where the Aspect is material for the entities World: CSR Material Issues, p. 19-22 identified. Report any specific limitation regarding the Aspect Boundary outside the organization

G4-22 Report the effect of any restatements of There are no significant restatements that have No information provided in previous reports, and any material effect. Any minor restatements are the reasons for such restatements. noted in the report, p. 18

G4-23 Report significant changes from previous There are no significant changes from previous No reporting periods in the Scope and reporting in the Scope and Aspect Boundaries of Aspect Boundaries. this report, p. 97

STAKEHOLDER ENGAGEMENT

G4-24 Provide a list of stakeholder groups engaged Our CSR Strategy: Prescription for a No by the organization. Better World: Stakeholder Engagement, p. 23-24

G4-25 Report the basis for identification and selection Our CSR Strategy: Prescription for a No of stakeholders with whom to engage. Better World: Stakeholder Engagement, p. 23

G4-26 Report the organization’s approach to Our CSR Strategy: Prescription for a No stakeholder engagement, including frequency Better World: Stakeholder Engagement, p. 23-24 of engagement by type and by stakeholder group, and an indication of whether any of the engagement was undertaken specifically as part of the report preparation process.

G4-27 Report key topics and concerns that have been Our CSR Strategy: Prescription for a Better No raised through stakeholder engagement, and World: Stakeholder Engagement, p. 23 how the organization has responded to those key topics and concerns, including through its reporting. Report the stakeholder groups that raised each of the key topics and concerns.

REPORT PROFILE

G4-28 Reporting period (such as fiscal or calendar January 1-December 31, 2014. year) for information provided.

G4-29 Date of most recent previous report (if any). May 2014

G4-30 Reporting cycle (such as annual, biennial). Annual

G4-31 Provide the contact point for questions Please submit questions or feedback regarding the report or its contents. regarding this report and our CSR strategy to [email protected].

102 External G4 General Standard Disclosures Response/Page/Link Assurance REPORT PROFILE

G4-32 a. Report the ‘in accordance’ option the About This Report, Disclosure and Assurance, organization has chosen. p. 98 b. Report the GRI Content Index for the chosen The GRI content index is included on these option (see tables below). pages. c. Report the reference to the External Assurance Report, if the report has been externally assured.

G4-33 a. Report the organization’s policy and CVS Health does not have a formal policy for current practice with regard to seeking external assurance at this time. However, the external assurance for the report. company does use an external third party to b. If not included in the assurance report verify its greenhouse gas emissions inventory. accompanying the sustainability report, report the scope and basis of any external assurance provided. c. Report the relationship between the organization and the assurance providers. d. Report whether the highest governance body or senior executives are involved in seeking assurance for the organization’s sustainability report.

GOVERNANCE

G4-34 Report the governance structure of the There are three committees of the Board: Audit, organization, including committees of Nominating and Management Planning and the highest governance body. Identify Development any committees responsible for decision- Shared Responsibility via Board Committees, making on economic, environmental p. 83 and social impacts. Our CSR Strategy: Prescription for a Better World: CSR Governance, p. 11

ETHICS AND INTEGRITY

G4-56 Describe the organization’s values, principles, Company Profile, p. 7 standards and norms of behavior such as Remaining Compliant, p. 88 codes of conduct and codes of ethics.

103 Material Material Response/Page/Link External Indicator Indicator Omissions Issue Aspect for DMA and Indicators Assurance Access and Economic EC1 Direct economic CVS Health’s business Affordability Performance value generated and model is focused on of Care distributed increasing access to high-quality, affordable pharmaceutical and health care products and services. Revenue from these efforts contributes economic value to our stockholders, employees and operating communities. Company Profile, p. 7

Indirect Economic EC8 Significant indirect Project Health Expands Impact economic impacts, Health Screenings to 27 including the extent of Cities, p. 27 impacts

Climate Risk Economic EC2 Financial implications Climate Change Risks and Performance and other risks and Opportunities, p. 51 opportunities for the organization’s activities due to climate change

Chronic Customer Health and PR1 Percentage of The prevention and Disease Safety significant product management of chronic and service categories disease is a strategic focus for which health area for CVS Health. While and safety impacts we are unable to measure are assessed for our efforts as a percentage, improvement we continuously monitor and evaluate existing services and develop new services to support patients on their path to better health. Support for Patients With Chronic Diseases, p. 35

Deforestation Supplier EN32 Percentage of new Sustainable Forestry (Paper Use) Environmental suppliers that were Certified Paper & Printing, Assessment screened using p. 58 environmental criteria

Materials EN2 Percentage of Sustainable Forestry materials used that Certified Paper & Printing, are recycled input p. 58 materials

104 Material Material Response/Page/Link External Indicator Indicator Omissions Issue Aspect for DMA and Indicators Assurance Diversity and Diversity and Equal LA12 Composition of The Board membership in Inclusion Opportunity governance bodies 2015 includes eight men and breakdown and three women. of employees per Workplace Diversity p. 81 employee category according to gender, age group, minority group membership, and other indicators of diversity

Procurement EC9 Proportion of spending Supplier Diversity Program, Practices on local suppliers at p. 93 significant locations of operation

105 Material Material Response/Page/Link External Indicator Indicator Omissions Issue Aspect for DMA and Indicators Assurance Economic Employment LA1 Total number and Nearly all employee hires Opportunity rates of new employee in 2014 were in the U.S., hires and employee and the gender and age turnover by age group, breakdown were consistent gender, and region with our current workforce composition. More on new hires in Creating Jobs p. 69

Retention rates, p. 71

Employment LA2 Benefits provided to Health Plans and Wellness full-time employees Programs, p. 71 that are not provided to temporary or part-time employees, by significant locations of operation

Training and LA10 Programs for skills Investing in a Future Education management and Workforce, p. 69 lifelong learning that Diversity Leadership, support the continued p. 76 employability of employees and assist them in managing career endings.

Market Presence EC5 Ratios of standard Creating Jobs, p. 69 The entry level wage by company gender compared to does not local minimum wage disclose at significant locations this of operation information

106 Material Material Response/Page/Link External Indicator Indicator Omissions Issue Aspect for DMA and Indicators Assurance Energy Emissions EN15 Direct greenhouse Measuring and Reducing CVS Health Use and gas (GHG) emissions Our Greenhouse Gas carbon footprint Greenhouse (Scope 1) Emissions p. 49 data has been Gas Emissions audited by Ernst and Young

CVS Health Emissions EN16 Energy indirect Measuring and Reducing carbon footprint greenhouse gas (GHG) Our Greenhouse Gas data has been emissions (Scope 2) Emissions, p. 49 audited by Ernst and Young

CVS Health carbon footprint Emissions EN18 Greenhouse gas Measuring and Reducing data has been (GHG) emissions Our Greenhouse Gas audited by intensity Emissions Ernst and p. 49 Young

CVS Health carbon footprint data has been Emissions EN19 Reduction of Measuring and Reducing audited by greenhouse gas (GHG) Our Greenhouse Gas Ernst and emissions Emissions Young p. 49

Transport EN30 Significant Transportation, p. 52 environmental impacts of transporting products and other goods and materials for the organization’s operations, and transporting members of the workforce

107 Material Material Response/Page/Link External Indicator Indicator Omissions Issue Aspect for DMA and Indicators Assurance Human Rights Investment HR1 Total number and All of the company’s percentage of direct imports and CVS significant investment Brand product factory agreements and suppliers located in high contracts that include risk countries have gone human rights clauses through a human rights or that underwent screening human rights screening Ensuring Human Rights Considerations, p. 89 Global Supplier Audit Programs, p. 91

Child Labor HR5 Operations and Zero-Tolerance Incidents, suppliers identified as p. 92 having significant risk for incidents of child labor, and measures taken to contribute to the effective abolition of child labor

Supplier Human HR10 Percentage of new Global Supplier Audit Rights Assessment suppliers that were Programs, p. 91 screened using human rights criteria

Supplier Human HR11 Significant actual and Zero-Tolerance Incidents, Rights Assessment potential negative p. 92 human rights impacts in the supply chain and actions taken

Information Customer Privacy PR8 Total number of There were no significant Security substantiated complaints regarding and Customer complaints regarding privacy or data breaches Privacy breaches of customer in 2014. privacy and losses of customer data Managing Information Security and Governance, Privacy Program, p. 87

108 Material Material Response/Page/Link External Indicator Indicator Omissions Issue Aspect for DMA and Indicators Assurance Labeling and Product and PR3 Type of product and CVS Health reports on Transparency Service Labeling service information this metric in relation to required by the prescription labeling. All organization’s prescriptions dispensed procedures for are labeled to meet both products and regulatory requirements service information and our company’s internal and labeling, and standards. To ensure the percentage of safety of patients, we also significant product continuously assess and and service explore enhanced labeling categories subject opportunities. to such information requirements Enhancing Prescription Accuracy, Safety and Effectiveness, p. 41

Packaging Materials EN2 Percentage of We will continue to evaluate At this materials used that opportunities to incorporate time we do are recycled input more recycled content into not have materials the packaging materials of accurate CVS brand products. data to report on the percentage of recycled content used in our packaging.

Patient and Customer Health PR1 Percentage of Support for Patients with Customer and Safety significant product Chronic Diseases, p. 35 Safety and service categories for which health and safety impacts are assessed for improvement

Political Public Policy SO6 Total value of political Participating in the Disclosure contributions by Political Process, Political country and recipient/ Donations, p. 84 beneficiary

Prescription Products and EN28 Percentage of Pharmaceuticals are Drug Abuse Services products sold and designed to be completely and Disposal their packaging consumed in use. As materials that are such, instead of measuring reclaimed by category the percentage of pharmaceuticals sold and reclaimed, we report on efforts to reclaim pharmaceuticals through our safe prescription drug disposal initiatives.

Supporting Drug Take Back Programs, p. 44

109 Material Material Response/Page/Link External Indicator Indicator Omissions Issue Aspect for DMA and Indicators Assurance Product Products and EN27 Extent of impact When we look at Ingredients Services mitigation of CVS Brand products, environmental impacts the ingredients and of products and packaging are the services areas that might have environmental implications. In both cases, we describe our approach in the Planet in Balance section

Choosing the Right Ingredients, p. 59 Partnering for Sustainable Packaging Opportunities, p. 60

Tobacco Indirect Economic EC8 Significant indirect Help People Lead Cessation Impacts economic impacts, Tobacco-Free Lives, p. 45 including the extent of impacts

Marketing and PR6 Sale of banned or Help People Lead communications disputed products Tobacco-Free Lives, p. 45

Waste Effluents and Waste EN23 Total weight of waste Waste and Recycling, CVS Health identified waste by type and disposal p. 55 as a material issue, given method the size and scale of our Hazardous waste and business. However, at this disposal methods are time we do not have reported at the end of accurate data that measures this Index total solid waste by type and disposal across our entire company. This is something we continue to work on.

Water Water EN8 Total water withdrawal Water, p. 54 by source

HAZARDOUS WASTE DISPOSAL METHODS FOR 2014 Disposal Methods Waste in Tons Percentage of Total Waste to Energy 1,842 60.75 Recycle/Metals Recovery 487 16.09 Fuels Blending 378 12.47 Incineration 218 7.18 Neutralization/Waste Water Treatment 63 2.08 Stabilization/Landfill 44 1.43 Total Waste Shipped 3,032

REFERENCES: Specialty spending is expected to quadruple by 2020, reaching more than $400 billion per year. Insights 2013: Specialty Drug Management Where to Go Next, at www.cvshealth.com/research-insights/cvs-health-research-institute#specialty-medication. The rising costs are compounded by the significant number of patients who do not take their medications as prescribed and the nearly $300 billion each year in unnecessary and avoidable costs associated with medication non-adherence. Thinking Outside the Pillbox: A System-wide Approach to Improving Patient Medication Adherence for Chronic Disease, New England Healthcare Institute, 2009 at www.nehi.net/publications/17-thinking-outside-the-pillbox-a-system-wide-approach-to-improving-patient-medication-adherence-for-chronic- disease/view. Some 16 million people in the U.S. already have at least one disease from smoking, and each year approximately 480,000 die from smoking or exposure to secondhand smoke. The annual cost of smoking in the U.S. tops $300 billion. The Health Consequences of Smoking — 50 Years of Progress: A Report of the Surgeon General, 2014. www.surgeongeneral.gov/library/reports/50-years-of-progress/fact-sheet.html. According to the Fifth Assessment Report from the Intergovernmental Panel on Climate Change (IPCC), keeping global temperatures in check requires “an urgent and fundamental departure from business as usual.” IPCC, 2014: Climate Change 2014: Synthesis Report. Contribution of Working Groups I, II and III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Core Writing Team, R.K. Pachauri and L.A. Meyer (eds.)]. IPCC, Geneva, Switzerland, 151 pp. Full-time colleagues earn a full benefits package, which includes comprehensive medical and prescription coverage with a company contribution to a Health Savings Account (HSA); vision and dental coverage with contributions payable on a pretax basis; a 401(k); an employee stock purchase plan; fertility and adoption benefits; life, accident and disability insurance; flexible spending accounts; paid time off; tuition reimbursement; and an employee discount at our stores, as well as access to many other employee discounts. Must work an average of 30 hours per week, except in California (23 hours per week) and Hawaii (20 hours per week).

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