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McDonald's 2012-2013 Corporate Social Responsibility & Sustainability Report
McDonald's 2012-2013 Corporate Social Responsibility & Sustainability Report
CMYK: 100/31/0/0 pms: 3015 C CMYK: 5/30/72/11 PMS: 7510 C CMYK: 31/11/76/35 PMS: 5767 C CMYK: 14/54/95/62 PMS: 463 C CMYK: 7/100/82/26 PMS: 187 C
2012-2013 HIGHLIGHTS
OFFERED FRUITS, VEGETABLES OR LoW-FAT DAIRY
in Happy Meals in more than
90% REPORTEd RECYCLING USEd COOKING OIL ANd 77% REPORTEd RECYCLING CORRUGATEd CARdBOARd.
100%
OF ThE FIShERIES ThAT mcDONALdS SOURCES WhITEFISh FROm ARE VERIFIEd SUSTAINABLE
7 MILLION CHILDrEN
ANd ThEIR FAmILIES EACh YEAR.
2
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BUSINESS VALUE
SHARED VALUE
SOCIAL VALUE
FOR GOOD.
4
CMYK: 100/31/0/0 pms: 3015 C CMYK: 5/30/72/11 PMS: 7510 C CMYK: 31/11/76/35 PMS: 5767 C CMYK: 14/54/95/62 PMS: 463 C CMYK: 7/100/82/26 PMS: 187 C
We realize that our business and our responsibilities to society are inextricably linked. Now more than ever, customers care about where products come from, how they are sourced, and the environmental, ethical and economic impact of purchase decisions they make each day. At the same time, society, businesses and individuals are continuously faced with significant global issues like the demand for resources of a growing population. The benefits to solving these challenges are significant. From assuring supply and reducing the risk of long-term supply interruptions to encouraging sustainable economic growth for businesses and communities and reducing operating costs through greater efficiencies, the ways we choose to address these challenges will change the world for the better and ensure we maintain an enduring, sustainable and profitable business model. As we continue along this journey, were striving to ensure our actions and our ambitions are both holistic and outcome-based. Im encouraged by the progress were making and our accomplishments along the waya number of which are detailed in the pages of this report. At the same time, we also know that we must continue to expand and evolve our efforts. Thats why we continuously challenge ourselves, our Franchisees and our suppliers to keep working together and finding even better ways to be a force for good. Thank you for your interest in McDonalds and our efforts to do good in the world. And, on behalf of our global system of Franchisees, employees, and suppliers, I invite you to join us as we continue on this journey together.
WE REALIZE ThAT OUR BUSINESS ANd OUR RESPONSIBILITIES TO SOCIETY ARE INEXTRICABLY LINKEd.
J.C. Gonzalez-Mendez Senior Vice President Global CSR, Sustainability & Philanthropy, McDonalds Corporation
OUR FRAMEWORK
We have worked to develop and nalize a Global CSR & Sustainability Framework, with ve clear priority areas, or pillars, to structure our eorts. We identied our aspiration in each pillar with input from key internal and external stakeholders who understand the complexities of our business model and the greatest opportunities to create shared value for our business and society. In 2013, we were able to develop measurable, specic goals for some of these eorts to align McDonalds around common goals for advancing what we call Our Journey Together. For Good.
Top 9 Markets excluding Brazil and Japan. Develop Franchisee goal in 2016.
20% increase in Energy efficiency of Company-owned restaurants Increase energy efficiency through restaurant standards
Top 9 Markets. Develop goals in 2014.
COrE VALUE
create opportunity
Strengthen Communities
The reporting organization of this report is McDonalds Corporation, headquartered in Oak Brook, Illinois, USA. Performance data included in this report generally reflects operations in our top nine markets: Australia, Brazil, Canada, China, France, Germany, Japan, the United Kingdom and the United States. Two of these markets, Brazil and Japan, are entirely operated by Franchisees and we rely on the accuracy of the performance data provided by their management. The designation top markets reflects many factors such as System-wide sales, revenues, operating income, number of restaurants and potential for growth. Together, they represent about 70% of total revenues. Except where noted, reported performance includes restaurants owned by the Company and those owned by Franchisees.
Our global Brand, unless specified otherwise McDonalds Corporation and its majority-owned subsidiaries worldwide The Company, its Franchisees and suppliers are collectively referred to as
the System Also known as McDonalds three-legged stool
WHATS INSIDE
At McDonalds, our CSR & Sustainability approach is guided by the Five Pillars of our CSR & Sustainability FrameworkFood, Sourcing, Planet, People and Community. These pillars establish a clear vision for our critical areas of focus and are aligned with the work were doing to address the issues of highest importance to our internal and external stakeholders. In this, our ninth sustainability report, weve dedicated individual chapters to sharing our progress under each pillar.
ASPIRaTIONaL GOaLS
The aspirational goals included in our framework provide a destination we desire to achieve by 2020. Each of our five pillars is at different stages of progress, governance and resource allocation. Our Framework currently includes goals for Food, Sourcing and Planet, while People and Community represent core foundational values. In addition, our business operates under various constraints that impact our journey to achieve these goals. As a brand we realize that it will be difficult to measure progress in all the countries where we operate, but will strive to motivate the entire System by providing tools and resources to drive engagement and performance across our System. Progress toward the aspirational goals will be aggregated and reported in our annual sustainability report, but market-by-market progress may vary. Plans to achieve the global goals will be created based on market-by-market considerations. We cannot guarantee that we will achieve these stated goals given the above factors. The Company is committed to putting forth good-faith efforts to make progress towards these goals, to report on an annual basis tangible progress and measurements, where possible, and to explain both successes and challenges along this journey.
CompANY EMPLOYEES ANd CompANY-owNEd rEStAurANtS ArE IN our dIrECt SpHErE of CoNtrol. Therefore, many of the measures
start with Company restaurants, with a plan to demonstrate success and expand measurement, as more independent Franchisees choose to implement CSR & Sustainability initiatives.
AloNg wItH tHE VISIoN for EACH GOAL, wE mAY proVIdE AN INItIAl, NArrowEr SCopE for mEASurEmENt purpoSES, If NEEdEd. This scope reflects our available baseline data and short-term
measurement capabilities, which we will continue to improve over time. The majority of our aspirational goals focus on our top 9 markets, as specified.
ABOUT MCDONaLDS
With more than 35,000 locations in over 100 countries, McDonalds serves approximately 70 million customers each day. More than 80% of McDonalds restaurants worldwide are owned and operated by independent Franchisees. An estimated 1.8 million people work for the Company and our Franchisees, helping us deliver on our collective mission to be our customers favorite place and way to eat and drink.
RESTAUrANT OWNErSHIP
COMPANYOWNED FRANCHISED Conventional Franchise Owned and operated by the Company The Company owns the land and building or secures long-term leases for both Owned/Operated under one of the following ownership structures Typically small business owners Provides a portion of the capital required by investing in the restaurant equipment, signage, seating and dcor and is responsible for the day-to-day restaurant operations Leases restaurant location(s) from the Company Contributes to the Companys revenue stream through the payment of initial franchise fees, and rent and royalties based upon a percent of restaurant sales Typically receives a license to operate restaurants within specified territory and may have the right to sub-franchise McDonalds restaurants within their territory to individual Franchisees Will own or lease their own restaurant premises without the Companys investment Contributes to the Companys revenue stream through the payment of initial franchise fees, and royalties based upon a percent of restaurant sales The largest developmental licensee, operating nearly 2,100 restaurants across 19 countries in Latin America, including Brazil and the Carribean, is Arcos Dorados Holdings Inc., a public company The Company makes an equity investment in other companies that operate McDonalds restaurants under license as joint ventures or affiliates The affiliate will typically own or lease the real estate underlying their restaurants and may operate or sub-franchise restaurants within their licensed territory Contributes to the Companys revenue through a royalty based on a percent of restaurant sales and the Companys share of earnings The largest affiliate is in Japan, with nearly 3,200 restaurants operated by McDonalds Holding Company (Japan), Ltd (a 49.9% owned affiliate), a public company Other Countries & Corporate
As of 12/31/13
Affiliate
10
Dollars in millions. The Companys revenues consist of sales by Company-owned restaurants and fees from restaurants operated by Franchisees. Revenues from restaurants operated by conventional franchisees include rent and royalties based on a percent of sales along with minimum rent payments, and initial fees. Revenues from restaurants operated by affiliates (including Japan) and developmental licensees (including Brazil) consist of royalties based on a percent of sales, and generally include initial fees.
VALUES
FRANCHISEES
Our relationships with our independent Franchisees are key to McDonalds success, helping to ensure the right balance between individual autonomy and alignment with our worldwide quality and service standards. Franchisees live and work in the communities they serve. They know the local business environment and are connected with the interests and concerns of their communities. Franchisees develop and implement their own business plans, make their own purchases of goods and services, and hire and manage their own employees. In addition to ensuring that McDonalds restaurants worldwide conform to a strict set of quality, service, cleanliness and safety standards, we collaborate with Franchisees to support responsible business practices.
BUSINESS STRATEGY
MCDONALdS
100+COUNTRIES
POLICIES
MCDONALdS SUPPLIERS
Since McDonalds does not actually produce ingredients used in our menu items, our suppliers are a critical leg of our three-legged stool. We fully expect our suppliers to share our values and commitments and have implemented numerous programs to encourage this. We are aware that our procurement policies can affect producer industries and their employees, and we work to exercise this influence responsibly.
FRANCHISEES
mCdONALdS SUPPLIERS
STAKEHOLDER ENGAGEMENT
Advancing CSR & Sustainability is a team eort. Each of usindividuals, communities, companies and governmentshas an important role to play. Ultimately though, the worlds challenges are bigger than each of us alone. Thats one reason we engage directly with organizations and participate in coalitions, associations and initiatives made up of diverse stakeholders working together for the common good. We contribute our time, knowledge and nancial support to various local, national and global organizations striving for collective solutions.
OVER THE LAST 20+ YEARS OF WORKING ON CSR & SUSTAINABILITY ISSUES FOR MCDONALDS, WEVE WORKED WITH A WIDE RANGE OF SOCIAL AND ENVIRONMENTAL NGOS, SUPPLIERS, ASSOCIATIONS AND OTHER EXPERTS. I TRULY ENJOY IT, AND THEY ENERGIZE AND STIMULATE INNOVATION FOR OUR TEAM. WHAT BETTER WAY TO STAY IN TUNE WITH SOCIETAL NEEDS THAN TO LISTEN AND LEARN FROM THE BEST AND BRIGHTEST IN AREAS SUCH AS ANIMAL WELFARE, THE ENVIRONMENT, AND HUMAN RIGHTS? THEIR AMAZING PASSION AND INSIGHTS HELP US CREATE BETTER SUSTAINABILITY STRATEGIES AND PROGRAMS.
Business for Social Responsibility (member) Sustainability Consortium (member) Global Reporting Initiative (organizational stakeholder - Germany) Global Food Safety Initiative (board member) International Food & Beverage Alliance (member) Alliance for a Healthier Generation (partner) Clinton Global Initiative (member) Conservation Internationals Business and Sustainability Council Global Roundtable for Sustainable Beef (founding member) Roundtable on Sustainable Palm Oil (member) Sustainable Agriculture Initiative (member) World Wildlife Fund (collaborator) Catalyst (global research partner) Multicultural Foodservice & Hospitality Alliance (member)
FOOd
PLANET
SOURCING
PEOPLE
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BOB LANGERT (LEFT), Vice president of CSR & Sustainability, (WITH FORREST ROBERTS, CEO, NATIONAL CATTLEMENs BEEF ASSOCIATION) addressing the issue of sustainable beef.
That said, its not always clear how McDonalds makes sure stakeholder feedback gets into their business process and strategies. Ceres would like to see more transparency regarding complex issues like obesity, climate change, and water scarcity, along with bolder actions McDonalds might take and how they will engage Franchisees in this journey. We would like to know more about how sustainability fits into McDonalds risk management and governance and how social and environmental issues will be addressed as part of their business performance through 2020 and beyond.
Q:
Stakeholder Perspective
What more could McDonalds do to address stakeholder interests?
We are pleased that the process of stakeholder engagement at McDonalds has started to result in more actions and strategic commitments. For instance, we have talked over the years about setting public goals and targets, and those have now been established. We are looking forward to these being strengthened going forward. This framework is particularly important as McDonalds sometimes downplays its influence but, as a prominent global brand, the Company has a responsibility to ensure that sustainability is a core part of its business strategywhen McDonalds acts, other companies can follow suit, influencing the broader market.
13
FOOD: FOCUS ON fOOD AS THE PRIORITY. SOURCING: LEVERAGE MCDONAldS SCAlE ANd mARKET lEAdERSHIP TO INFlUENCE CHANGE ON KEY ISSUES.
PLANET: INCORPORATE CLiMATE CHANGE AND WATER RiSK AVOiDANCE iN OUR STRATEGY. PEOPLE: BE bOLDER IN OUR COMMUNICATIONS, bOTH INTERNALLY AND EXTERNALLY. COMMUNITY: LEVERAGE EMPlOYEES AS A KEY DRIVER OF COMMUNITY STRATEGY.
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Working through global organizations to advance collective improvements, such as sustainable beef production Collaborating with suppliers to support more sustainable agriculture
Estimated system-wide carbon footprint Developed climate and Energy change position Statement Included water risk in environmental scorecard for suppliers Completed water stress mapping for all restaurants Developing enterprise-wide water strategy and beginning watershed-level investigations
Created a CSR & sustainability communications team Aligning with regional McDonalds communications personnel Planning global employee volunteer program and recognition initiative Creating community strategy aligned with brand ambition, CSR & sustainability framework
WANT MCDONALDS TO FOCUS ON FOOD. Specifically, NUTRITION AND SUPPLY CHAIN PRACTICES.
51%
15
1990
Environmental Defense Fund
1991
Global ReLeaf
Participant in Lets Get Growing America, 1992 National Recycling Coalition distributing millions of trees Founding member of Buy Recycled Business Alliance
1993
Student Conservation Association
1993
US Environmental Protection Agency
1984
McDonalds helped found Ronald McDonald House Charities
Founder of ongoing, global network providing comfort and care to children and their families through Ronald McDonald Houses, Ronald McDonald Family Rooms and Ronald McDonald Care Mobiles
2000 2001
Food Animal Initiative Animal Welfare Council
1997 2001
Conservation International Environmental Defense Fund
1996
Dr. Temple Grandin
Member of the Paper Task Force developing recommendations for purchasing environmentally preferable paper
2002
Environmental Defense Fund
2002-2006
Project Kaleidoscope
2003
McDonalds Global Advisory Council
2004
Refrigerants, Naturally!
2005
CERES
Member of global initiative to combat climate change and ozone layer depletion
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ENGAGeMeNT TIMeLINe
2012
KaBOOM!
FOR GOOD.
s, weve collaborated over the last several decade nizations to develop with approximately 25 orga change for society programs that create lasting and our business.
pms: 3015 C PMS: 7510 C PMS: 5767 C PMS: 463 C PMS: 187 C CMYK: 100/31/0/0 CMYK: 5/30/72/11 CMYK: 31/11/76/35 CMYK: 14/54/95/62 CMYK: 7/100/82/26
2013 2012
EPA Green Power Partnership Alliance for a healthier generation
2011
Global Sustainability Framework Stakeholder Team
Commitment to match 30% of energy use in Company-owned restaurants with renewable energy certicates for 2012 2013McDonalds USA
Partnership with Alliance on Clinton Global Initiative commitment to promote balanced food and beverage choices
2010 2006
amazon soy moratorium World Wildlife Fund
2005
Conservation International
Supply Risk Analysis to inform the Companys Sustainable Land Management Commitment; Conveners of Global Conference on Sustainable Beef
2009
Coalition for Sustainable Egg Supply
2005
Sustainable Agriculture Initiative
2008
Global Food Safety Initiative Member of GFSIs Board
17
C ontinuing to enhance the nutritional profile of existing menu oerings f ocusing on childrens well-being by optimizing our childrens menu, promoting
18
EVOLVING TO MeeT THe PReFeReNCeS OF OUR CUSTOMeRS IS CRITICAL TO OUR SUCCeSS AT MCDONALdS. We KNOw THAT QUALITY, CHOICe ANd NUTRITION ARe INCReASINGLY IMPORTANT TO CUSTOMeRS ANd weRe COMMITTed TO CONTINUOUSLY MeeTING THeIR NeedS.
Erik Hess Senior Vice President Global Consumer Insights, Menu and Brand Strategy, McDonalds Corporation
HAPPY MEALS OFFERED FRUITS, VEGETABLES, oR LoW-FAT DAIRY IN IN moRE ThAN 95% oF oUR RESTAURANTS. E IN SUPPoRT JoINED ThE INTERNATIoNAL FooD & BEVERAGE ALLIANC Y oN DIET, oF ThE WoRLD HEALTh oRGANIZATIoNS GLoBAL STRATEG PhYSICAL ACTIVITY AND HEALTh.
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LoW Fat
improved nutrition
and choice
WE ARE wORKING HARD TO DEVELOP NEw ITEMS THAT OFFER OUR CUSTOMERS THE CHOICE THEY wANT. MANY MARKETS ACROSS EUROPE OFFER NEw FRUIT OPTIONS IN THE HAPPY MEAL, MAKING THEM FUN AND EXCITING TO EAT.
Nicola Pitman Senior Food Development Manager European Food Studio McDonalds Europe
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McDonalds New Happy Meals in the U.S. Average 18.8% Fewer Calories than Previous Happy Meals
At McDonalds request, academic experts have worked to assess the positive outcomes for customers associated with our Happy Meal changes in the U.S. A 2013 study compared the previous three-item Happy Mealfor which apples were optionalwith the new four-item Happy Meal in the U.S., which automatically includes apple slices and a smaller-sized portion of fries. The research was conducted by Cornell Food and Brand Lab researchers Brian Wansink and Andrew S. Hanks. The research determined that, on average, kids who received the new four-item Happy Meal had an average of 104 (or about 18%) fewer total calories in their meal.
STUDY QUEsTIONs W hat happens if McDonalds lowers calories in the Happy Meal, mainly by reducing the portion size of
French fries? Would lower-calorie changes lead to choices of other, more calorically dense meal items?
STUDY METHODS R esearchers analyzed 232,424 itemized transaction records including a Happy Meal purchase. The data
was collected at 30 representative Company-owned restaurants over the summer months (June-August) in 2011 and 2012. T he 2011 Happy Meal included either a small French fry or apple slices with caramel dipping sauce. The new Happy Meal (introduced March 2012) included both a kid-size fry (52% smaller) and apple slices with no caramel sauce.
KeY Discoveries
- Customers did not appear to compensate by choosing higher calorie entrees within the meal. - 94% of the calorie decrease was due to the smaller size French fry. - More milk was purchased with Happy Meals during the time period of June-August 2012 as compared to that same time period in 2011. - Kids learn that fruit is a natural part of a meal. - Parents can offer smaller portions of favorite snack items instead of eliminating them altogether.
104
FEWER CALORIES
(U.S. HAPPY MEAL)
aN AVERAGE OF
Across Europe, McWraps oer a variety of ingredients, and many McWraps contain about 40-60 grams of vegetables.
Happy Meal fruit, vegetable and low-fat dairy options such as kiwi, apples, tomatoes, corn, carrots and low-fat yogurt oered in countries around the world.
Seasonal fresh fruit including fresh blueberries in the Blueberry Yogurt Crunch and the Blueberry Banana Nut Oatmeal, sold as a limited-time oering in the U.S. in 2012.
21
Our menu has evolved over the years to include more choices.
Grilled chicken, salads, fruits, whole grains, low-fat dairy options, and a variety of tastes and sizes all help our customers create meals that satisfy their nutritional and lifestyle needs.
1950s
1970s
OUR MENU HAS EVoLVED oVER THE YEARS, AND So HAS oUR MINDSET ARoUND HoW WE ENGAGE oUR GUESTS oN NUTRITIoN. THERE ARE REAL DIFFERENCES ACRoSS GEoGRAPHIES WHEN IT CoMES To NUTRITIoN. No MATTER WHERE IN THE WoRLD oUR GUESTS VISIT A MCDoNALDS, WE WANT THEM To HAVE THE INFoRMATIoN THEY NEED To MAKE THE CHoICE THATS RIGHT FoR THEM.
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1960s
1990s
Julia Braun, MPH, RDN, LDN Director, Global Nutrition Global Menu Strategy, McDonalds Corporation
We have been working to reduce saturated fats, sugar, artificial trans fats (which form when plant fats are partially hydrogenated) and sodium in a number of our menu items in various markets. For instance, in 2012 a number of McDonalds markets in Europe reduced saturated fat by approximately 30% in sundaes and shakes. In the U.S., switching from 1% low-fat chocolate milk to fat-free chocolate milk reduced calories by 24% and sugar by 12%, and resulted in a beverage with zero grams of both total fat and saturated fat per 8-fluid ounce labeled serving. All of the fried products that McDonalds U.S. servesincluding French fries, hash browns and fried chicken choiceshave zero grams of trans fat per labeled serving. McDonalds is also working to reduce sodium in our menu items. The timing and reduction amounts vary by country and menu item. Because nutritional values vary around the world, McDonalds markets have different baselines for measuring sodium content and different opportunities to reduce sodium. The number of McDonalds markets and the menu variation among them has made it difficult to calculate an overall improvement that represents all of our operations worldwide. However, we are making progress, including:
Canada worked to reduce sodium in a number of menu items. Two of the ingredients with the biggest sodium reductions are the grilled chicken patty, which had a 45% reduction in sodium, and the crispy chicken patty, which had a 50% reduction in sodium. fries has been reduced by 20% in markets across Europe.
STRIVING TOWArD
Enhancing nutrition and choice is important to McDonalds, and so is sourcing our ingredients responsibly. We are collaborating with other stakeholders to help develop a common set of guiding principles and best practices for sustainable beef.
Sustainable Beef
M cDonalds Australia achieved a 20% sodium reduction in their American cheese slices. D uring the last several years, a number of markets in Europe have been working to reduce salt in their
Chicken McNuggets.
See the Sourcing section for more about our progress toward
sustainable sourcing for beef, sh and other priority ingredients.
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McDonalds has launched many carefully planned nutrition and well-being initiatives, such as reducing the calorie count in the most popular McDonalds USA Happy Meals. This is one of the most exciting innovations in years! But most of McDonalds innovationsas positive as they aremay not necessarily be enough to engage all consumers in significant behavior change. Realistically, McDonalds cant change the world but it can make a positive difference. It has a large customer base, is a global company and is ahead of the curve in terms of menu variety and nutrition. Going forward, McDonalds should develop a cohesive framework around food and physical activity and work to provide tangible evidence of its benefits to children.
Professor Paul Gately Leeds Metropolitan University, U.K. Global Advisory Council
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Q:
Stakeholder Perspective
Considering global food and nutrition issues, what more can McDonalds do to support childrens well-being?
Today more than 95% of our restaurants around the world offer fruits, vegetables or low-fat dairy in Happy Meals.
Apples are now available in Happy Meals in
20 countries. Carrot sticks are oered in 23 countries, and corn cups are oered in 13.
vegetables or fruit options such as carrots, pineapple or apple slices and a number of markets oer low-fat dairy options.
Starting in 2012 the four-item Happy Meal was introduced in the U.S., to automatically include fruit. Since we started automatically including apple slices in every Happy Meal in the U.S., we have served more than 130 million cups of apples to our youngest customers. Calories in the most popular Happy Meals served in the U.S. have been reduced by roughly 18%. A number of markets in Latin America also currently oer Happy Meals which include a side of fruit.
McDonalds CAnada As of 2012, McDonalds Canada Happy Meals include a strawberry yogurt in every meal and sodium-reduced entree options (compared to the prior sodium levels for those same entree options), such as the Grilled Chicken Snack Wrap and Chicken McNuggets.
Happy Meal options include a grilled chicken wrap, apple slices, low-fat avored milk, fruit juice and water.
Wednesday a month, oers easy-to-eat fruit to each child who visits McDonalds and purchases a Happy Meal on that day. As a result of Crunchy Wednesdays, our restaurants in France provided more than 9 million packs of fruit between September 2010 and September 2013. 25
McDonalds France Crunchy Wednesdays, a program by McDonalds France that runs one
McDonalds Canada is a founding member of the Canadian Childrens Food and Beverage Advertising Initiative, which promotes healthy dietary choices and healthy lifestyles through marketing activities directed to children under 12 years of age outside of the Province of Quebec. McDonalds Canada committed to promoting products that represent healthy dietary choices in 100% of its national child-directed advertising. In addition, McDonalds Canada committed to distributing advertising that prominently includes healthy lifestyle messaging designed to appeal to children. McDonalds USA is a founding member of the U.S. Childrens Food and Beverage Advertising Initiative, which established nutrition criteria for calories, saturated fat, trans fat, sodium, and sugar. In addition, the commitment sets requirements for positive nutrient components such as fruits, vegetables, and low-fat dairy for meals promoted to children. McDonalds USA committed to promoting nutrition and/or active lifestyle messages in 100% of national kids communications, including merchandising, advertising, digital, and Happy Meal packaging.
26
WE ARE COMMITTED TO ADVERTISING RESPONSIBLY AND ARE A MEMBER OF THE EU PLEDGE INITIATIVE. COuPLED wITH INCREASED CHOICE AND VARIETY ON OuR MENu, CONSuMER-FRIENDLY NuTRITION INFORMATION AND OuR PROMOTION OF PHYSICAL ACTIVITY AND EDuCATION INITIATIVES, SuCH AS BOOK GIVEAwAYS AND READING PROGRAMS, wE BELIEVE wE ARE SuPPORTING PARENTS IN MAKING THE RIGHT DIET AND LIFESTYLE CHOICES FOR THEIR CHILDREN.
McDonalds Europe reinforced its commitment to responsible advertising to children by joining the EU Pledge, which limits the types of food and beverage products that can be featured in advertising directed to children under 12. Compliance is veried each year through third-party audit. All McDonalds advertisements in Europe directed to children under 12 that feature a Happy Meal bundle show fruit or vegetable options and drinks with only naturally occurring or no added sugar. In 2012, McDonalds Europe went even further, agreeing to industry-wide nutrition criteria for advertising to children.
Pierre Woreczek Senior Vice President and Chief Brand and Strategy Ocer McDonalds Europe
We will not engage in communications related to our food and beverage menu items in schools with children under the age of 12, except where specifically requested by or agreed with the school for educational or charitable fundraising purposes. 6 We will provide nutrition information about our food to help parents and families make informed food choices. 7 We will engage the support of subject matter experts and informed third parties to help guide our efforts for children and families worldwide.
5
In 2011, McDonalds USA established goals related to nutrition, choice and information, which it continues to evaluate relative to its progress. 1 Automatically include produce or low-fat dairy in each Happy Meal. 2 Develop additional vegetable, fruit or low-fat dairy choices for the Happy Meal and roll out over the next few years. 3 Promote Happy Meal options that meet the new, rigorous Council of Better Business Bureaus Childrens Food and Beverage Advertising Initiative food pledge standards. 4 Reduce sodium by an average of 15% overall across the national menu of food choices, excluding beverages, by 2015. 5 Reduce added sugars, saturated fat and calories with varied portion sizes, reformulations and innovations by 2020. 6 Promote nutrition and/or active lifestyle messages in 100% of national kids communications including merchandising, advertising, digital and Happy Meal packaging by the end of 2012. 7 Establish a Kids Food and Nutrition Advisory Board of parents and experts in childrens nutrition, education and behavior to help develop eective nutrition and active lifestyle marketing messages and programming for kids. 8 Provide funding for grassroots community nutrition awareness programs. 9 Expand in-restaurant, website, mobile communications and marketing vehicles, making access to nutrition information even easier. 10 Embark on a listening tour to hear from parents and nutrition experts about how McDonalds can play a role in nutrition. 11 Launch new online parents forum for McDonalds and parents to engage on nutrition topics. 12 Enter into an agreement with a third party to attest to our performance/progress against our commitments.
MCDONALdS OFFERS WHOLESOmE FOOd ANd BEVERAGE CHOICES IN A VARIETY OF PORTION SIZES TO SATISFY INdIVIdUAL TASTES. MCDONALdS USA OFFERS FRUITS, VEGETABLES, LOW-FAT ANd FAT-FREE dAIRY, WHOLE GRAIN ANd PROTEIN OPTIONS. WE CONTINUE TO EVOLVE OUR mENU WITH QUALITY, GREAT-TASTING FOOd THAT CAN FIT INTO A BALANCEd dIET.
Cindy Goody, PhD, RDN, LDN, Senior Director-Nutrition Menu Innovation, McDonalds USA
27
28
HOW WOULD YOU LIKE ThAT INFORMATION? MENU BOARD, PACKAGING, MObILE APP?
McDonalds markets use a variety of approaches to make nutrition information available:
In 2012 consumers accessed U.S. nutrition information on mcdonalds.com over 50 million times. Also:
Weve added calorie counts (or their local equivalents) to the menu boards in a number of major markets, including the U.K., Australia and the U.S. Quick response (QR) codes were added to select carry-out packaging in 2012 in the U.K., making it easier for customers to access nutrition information on the go. In 2013, we added QR codes to carry-out bags and fountain beverage cups in many markets. The QR codes link to nutrition information on local websites or to McDonalds food quality stories in local languages. A new McDonalds Australia mobile app, TrackMyMaccas, took customers behind the scenes to show where their food came from. The app shared information about the sources of our food in a fun and interactive way. A voluntary e-Learning program has helped restaurant sta in about 1,000 restaurants in the U.S. expand their knowledge about the nutritional content of McDonalds menu items.
MObIlE APPlIcATIONS
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e H T in is WHaT UggeT?* CN M en K ic cH
McDonalds Canada Our Food. Your Questions.
Are your fries made from real potatoes? Do you use ller in your burgers? These and more than 22,000 other questions have been askedand answeredabout the food served by McDonalds Canada. After listening carefully to customers McDonalds Canada created a transparent line of communication via the interactive, online Q&A platform, Our Food. Your Questions. The website received nearly 260,000 unique visits in its rst six weeks, while the video serieswhich shows how potatoes are grown for McDonalds Canadas fries, how to make a Big Mac at home and how the eggs are cooked for the McMun sandwicheshas received more than 16 million views.
in canada Chicken McNuggets are made from chicken breast, a few seasonings, along with a natural proportion of chicken skin, used for both flavor and as a binder. The McNuggets are then coated with a tempura-style batter.
*Excerpt from McDonalds Canadas Our Food. Your Questions. website. To ask your own questions and learn more about McDonalds Canadas food, visit: http://yourquestions.mcdonalds.ca/#/
IN AN EFFORT TO ADDRESS MANY OF THE POPULAR MiSCONCEPTiONS SURROUNDiNG OUR FOOD, MCDONALDS CANADA UNDERTOOK THE CHALLENGE OF RECLAiMiNG THE TRUTH THROUGH THE OUR FOOD. YOUR QUESTiONS. CAMPAiGN. THiS ALLOWED CUSTOMERS FROM ACROSS THE COUNTRY TO ASK MCDONALDS CANADA ANY qUESTiONS ABOUT OUR FOOD, AND RECEiVE A PERSONALiZED RESPONSE. THiS TRANSPARENT AND AUTHENTiC APPROACH HELPED SHiFT CANADiANS PERCEPTiONS ABOUT THE qUALiTY OF MCDONALDS FOOD, AS WELL AS OUR PRACTiCES AND PROCEDURES, iN A NEW AND DYNAMiC WAY
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R estaurant employees participate in operations training on a range of critical food safety measures such as
cooking, food handling, product internal temperatures, sanitation, hand washing, equipment settings and many other requirements. storage, preparation and holding.
M cDonalds Restaurant Operations and Training Manual details the procedures for proper food delivery, A ll of McDonalds global food safety procedures require
daily verification at the restaurant level.
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PRODUCE: The majority of McDonalds USAs fresh leafy greens are sourced
from the United States, with some product coming from Mexico as well. Fresh tomatoes are sourced from places like Florida, the Carolinas, California and Mexico.
locations in the U.S. and Canada. We will continue working with our suppliers to source quality foods for consumption in the country where they are produced and in other applicable markets.
For more, please see the Sourcing section.
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FOR GOOD.
In the coming months and years, we will continue advancing toward our 2020 goals. McDonalds participating markets will develop action plans that support these goals in their markets, and we anticipate working both at the global and regional level to continue evolving our menu and the ways we support our customers in making informed choices to t their lifestyle needs. 33
Looking forward to 2020 - our GLOBAL Aspirational Goals for Good Sourcing
1. BEEF: SUppORT SUsTaINabLE PROdUcTION
Lead development of global principles and criteria in 2014. Develop goals and begin purchase of veried sustainable beef by 2016. Veried as supporting sustainable production
OPERATING SUSTAINABLY HAS BECoME A GREENS FEE FoR A GLoBAL SUPPLY CHAIN LIKE oURS. ToGETHER WITH oUR VAST NETWoRK oF SUPPLIERS, WE HAVE AN ENoRMoUS AND HUMBLING oPPoRTUNITY To LEAVE A LASTING AND PoSITIVE IMPACT oN THE PLANET BY DRIVING INNoVATIoN IN FooD PRoDUCTIoN. Jos Armario Executive Vice President Worldwide Supply Chain, Development, and Franchising McDonalds Corporation
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Optimize cattles impact within ecosystems and nutrient cycles C are for the welfare of the cattle throughout their lives P ositively impact the lives of their employees and the communities in which they operate
I AM SO EXCiTED ABOUT OUR STRATEGY BECAUSE I BELiEVE WE HAVE A REAL OPPORTUNiTY TO MAiNSTREAM SUSTAiNABLE BEEF GLOBALLY. OUR GOAL iS TO BE A LEADER iN THiS AREA AND TO BE THE FiRST iN OUR iNDUSTRY TO PURCHASE EXTERNALLY VERiFiED SUSTAiNABLE BEEF AROUND THE WORLD, BUT WE CANNOT DO THiS ALONE.OUR PARTNERSHiP WiTH THE GLOBAL ROUNDTABLE FOR SUSTAiNABLE BEEFAS WELL AS OUR WORK WiTH BEEF SUPPLiERS AND FARMERSWiLL ENSURE THAT WHAT WE DEVELOP CAN BE PRACTiCALLY REALiZED AT THE FARM LEVEL.
Stakeholder Perspective:
Q:
Yes, the beef industry can become sustainable, and we at GRSB envision a world in which all aspects of the beef value chain are environmentally sound, socially responsible and economically viable. Cattle ranchers, graziers and other producers are already proud stewards of the land, their animals and the people and families that raise cattle; they are a solid foundation to build upon. McDonalds commitment is significant because they have taken the leap to put this marker out there in the marketplace; they represent a huge range and number of consumers. I hope many other food retailers make similar commitments in order to reach the tipping point we need to make sustainable beef become mainstream.
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Can beef really be sustainable, given its wide range of impacts? Since McDonalds purchases less than 2% of beef in the marketplace, can McDonalds commitment to purchase sustainable beef truly make a difference?
Field Projects
In 2013, the Company invested approximately $1.8 million in on-farm field projects in collaboration with local governments and our suppliers. Examples include: TRACEABLE BEEF
McDonalds Brazil is developing a pilot program to trace beef throughout the entire value chain.
IVE ALWAYS FOUND FARMiNG TO BE iNCREDiBLY REWARDiNG, BUT iTS HARD TO REMAiN PROFiTABLE GiVEN CURRENT MARKET CONDiTiONS, AND WERE A FAMiLY FARM. THATS WHY iT MAKES A HUGE DiFFERENCE WHEN A COMPANY LiKE MCDONALDS iNVESTS iN SiMPLE, PRACTiCAL ON-FARM TOOLS TO MAKE LiFE ON THE FARM THAT LiTTLE BiT EASiER. THE WHAT IF CARBON CALCULATOR GiVES ME A QUiCK OVERViEW OF THE FARMS CARBON FOOTPRiNT AND SHOWS ME HOW SMALL CHANGES WiLL STRENGTHEN THE EFFiCiENCY OF MY BUSiNESS.
SUstAINABLE FARMING
More than 1,000 farmers are part of the BEST beef project implemented by McDonalds Germany. The project rewards sustainable farming practices with bonus payments and aims to positively influence the beef industry in Germany while providing for responsibly sourced, traceable beef.
AGRO-ECOLOGICAL StRAtEGY
McDonalds France is working to identify key issues for five core McDonalds ingredients, including beef, and to identify agricultural practices to help address issues in four areas: minimizing greenhouse gas emissions, protecting water resources, nurturing biodiversity and improving animal welfare.
Regionally, McDonalds participates in several organizations working toward sustainable beef: G TPSBrazilian Roundtable on Sustainable Livestock F ounding member of Canadian Roundtable for Sustainable Beef C attle Council of Australia Rising Beef Champions Initiative McDonalds USA is collaborating with the National Cattlemens Beef Association and others to drive sustainable beef production in the U.S. In 2013, three workshops brought more than 80 participants together for presentations, expert panels, discussion, and field tours focused on beef sustainability.
Regional Collaboration
Carbon Footprinting
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McDonalds Europe chairs the Sustainable Agriculture Initiative (SAI) Platform Beef Working Group, which is working toward a comprehensive framework for sustainable beef production in Europe, including a carbon footprinting methodology for the beef sector. France, Germany, the U.K. and Ireland are working to reduce on-farm greenhouse gas emissions from beef production. The U.K.s Farm Forward Programs What If tool provides a carbon calculator to support beef farmers in measuring and reducing greenhouse gas emissions.
SAI finalized Principles for Sustainable Beef Farming in Europe in November, 2013. As a member of the GRSB, SAIs work is important to the development of globally relevant principles for sustainable beef.
Read more about the role of beef and other supply chain products in our System-wide carbon footprint summary on pages 56-57.
Stephen HobbsA Forward-Thinking Farmer Stephen Hobbs has been working on the family farm since agricultural college in 1980. He currently farms 119 hectares of arable crops and 63 hectares of grassland, and rears a herd of 60 Simmental Cross and Limousin Cross suckler cattle. As part of McDonalds Farm Forward program, Stephen was one of the first beef farmers to measure the carbon footprint of his beef enterprise using the freeWhat If? tool. Stephen Hobbs Beef farmer Buckinghamshire, U.K.
DEsIgN
Optimize weight and simplify the number of materials used in our packaging Increase use of recycled or certified raw materials Work to use recoverable packaging with viable end-of-life options
SoURcINg REcoVERY
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PACKAGING KPIs
2013 performanceBetween 2012 and 2013 we saw a 4.6% increase in certified virgin or recycled fiber-based packaging. Looking ahead, we plan to work with our suppliers to increase the availability of certified fiber with documented chain of custody from the forest to the final product. In addition, we have begun to integrate the certified and recycled fiber requirements into McDonalds supplier qualification process.
Based on ber-based consumer facing packaging for all McDonalds restaurants globally. Packaging categories included without limitation are the following: hot cups, cold cups, carry out bags, folding cartons, clamshells, wraps, food service bags, napkins, salad bowls, Happy Meal containers, drink carriers. Packaging metrics do not include operational supplies or pre-lled food packaging (e.g., sauce packets, salad dressings). 2 Methodology for calculating metric was modied in 2012 to be in line with other ber certication standards by requiring chain of custody documentation.
1
2011 58.1
2012 56.9
2013 57.5
2013 performanceWhile we do not have a target set for this metric, we are focused on optimizing our packaging for our product mix. While we saw a 2% reduction in packaging weight per transaction count from 2011 to 2012, we saw a 1% increase between 2012 and 2013. Between 2012 and 2013 for the top 9 markets, we did see an overall increase (just over 0.5%) in the proportion of fiber based packaging weight and a similar decrease in the proportion of resin (plastic) based packaging weight.
3
Except for Brazil, based on consumer packaging (including ber, resin and wood-based packaging) information managed by HGS. Some examples of packaging include: paper or plastic hot cups, cold cups; paper or plastic carryout bags; paper or plastic salad bowls; folding cartons, clamshells, wraps, food service bags, napkins, Happy Meal containers, drink carriers, stir sticks, straws, lids. Packaging metrics do not include operational supplies or pre-lled food packaging (e.g., sauce packets, salad dressings).
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100% of the fisheries that McDonalds System sources whitefish from are verified sustainable sources.
Filet-o-fish
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LEVERAGE OUR SIZE to make a positive, meaningful impact on land management practices. PARTNER WITH SUpplIERS to find the best solutions. SEEK THE BEST SCIENTIFIC ADVICE to guide our work. FOCUS OUR EFFORTS on the areas where we can achieve the greatest impacts. IDENTIFY WAYS TO VAlIDATE and measure our progress. SUppORT CREDIBlE, MUlTI-STAKEHOlDER EFFORTS to promote sustainable
land management.
BAlANCE TRADE-OFFS between land conservation and regional economic development needs.
In APMEA, McDonalds serves only wild-caught whitesh from veried sustainable sheries.
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BUYING CERTIfIEd (ANd VERIfIEd) COffEE: Globally in 2012, about 25% of our total coffee
bean purchases were from farms that were Rainforest Alliance Certified, UTZ Certified or certified by Fair Trade USA or Fairtrade International. The majority of these certified coffee purchases are from Rainforest Alliance Certified farms, including 100% of espresso in the U.S. and Canada, and all of our coffee in Australia and New Zealand. McDonalds markets in Europe* source 100% of their coffeewith the exception of decaffrom farms that are Rainforest Alliance Certified, UTZ Certified or certified by Fairtrade International.
COFFEE PRODUcERS FAcE MANY cHALLENGES, FROM FOOD INSEcURITY TO THE EFFEcTS OF cLIMATE cHANGE ON THEIR cROPS. THATS WHY WE DEcIDED TO TAKE A DIVERSIFIED APPROAcH THAT INcLUDES BOTH THIRDPARTY VERIFIcATION AND FARMER TEcHNIcAL ASSISTANcE TO EMPOWER cOFFEE-PRODUcING cOMMUNITIES. OUR INTERESTS OVERLAP WITH THOSE OF cOFFEE FARMERS SUPPORTING HIGH-QUALITY, SUSTAINABLY GROWN cOFFEE THAT cONTRIBUTES TO FARMERS LIVELIHOODS AND A STABLE LONG-TERM SUPPLY.
nature, our efforts begin locally. McDonalds USA, McDonalds Canada and their Franchisees are investing over $6 million in a 4.5 year time period on a farmer technical assistance program. They are collaborating with TechnoServe, an international non-profit and leading provider of agricultural technical assistance, as well as SCAN (Sustainable Commodities Assistance Network), to train up to 13,000 farmers in Guatemala and Central America. This effort includes providing farmers with technical assistance and training to produce coffee in a more sustainable manner. Through these efforts, we endeavor to strengthen local economies, preserve biodiversity and give farmers the tools they need to improve their production. When farmers can deliver a more consistent, high-quality bean, it increases the chances that their yield can be sold for a higher price, helping to improve their livelihood. It also helps our business because by supporting the development of sustainable farming practices, we hope to ensure coffees long-term availability in the region.
*Excludes Morocco, which is considered by McDonalds as part of its geographic segment in Europe.
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MAKING PROGRESS
In 2011 we set a goal of requiring all of our suppliers of palm oil to become members of RSPO by the end of 2011, and we met this goal. In 2011 we also set a milestone of using only certified sustainable palm oil in restaurants and for par-fry for chicken and potato products by 2015. The palm oil industry continues to change and evolve. As a result, we have modified our 2011 approach and 2015 milestone to include support for growers of sustainable palm oil through various methodologies recognized by RSPO. As a first step in our journey, we now believe that one of the best ways today to support sustainable palm oil production is through the purchase of GreenPalm certificates, also called the Book and Claim system. The Book and Claim system allows RSPO certified growerstoearn saleable GreenPalm certificates for every metric ton of sustainable palm oil that they produce. The Company and our suppliers can then purchase these GreenPalm certificates to cover a specific amount of palm oil used in their businesses. RSPO certified growers get revenue from both the direct sale of their palm oil and from the sale of GreenPalm certificates. We believe the GreenPalm Book and Claim system is an effective way to contribute to the production of sustainable palm oil by helping to get benefits directly into the hands of growers and encouraging them to continue operating sustainably to RSPO standards and practices. Supporting sustainable production through the purchase of GreenPalm Book and Claim certificates supports the palm oil industrys efforts by demonstrating market demand for sustainably produced palm oil while reducing the logistical challenges associated with our complex supply chain.
McDonalds suppliers to par-fry chicken and potato products will be RSPO certified sustainable or covered by GreenPalm Book and Claim certificates. B y 2020100% of all palm oil or palm kernel oil used as an ingredient by McDonalds suppliers for use in McDonalds products will be RSPO certified sustainable or covered by GreenPalm Book and Claim certificates. Moving toward these goals, several of McDonalds markets in APMEA began using RSPO certification methodologies for restaurant cooking oil and supplier ingredients starting in 2012. McDonalds restaurants in the U.S. and European markets do not use palm oil in restaurant cooking, so they have begun to use RSPO certification methodologies, including GreenPalm Book and Claim certificates, to cover a portion of their suppliers use of palm oil and palm kernel oil as ingredients in McDonalds products. All McDonalds markets will further advance these plans throughout our supply chain in the years ahead.
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FIELd PROJECTS: Identifying, planning and implementing field projects to inform principles and scale sustainable VERIFICATION: Developing on-farm verication processes, engaging assurance programs and piloting verication systems PERFORMANCE ASSESSMENT: Evaluating baseline performance in McDonalds global supply chain against principles for
sustainablepoultryproduction
STEPS to Poultry Sustainability in Europe
The poultry Sustainable Three Esethics, environment, economicsProject (STEP), is a three-year initiative launched in 2012 by McDonalds Europe. The initiative aims to review and improve the existing agricultural standards for chicken production across our European supply chain. The project will drive further progress on key issues such as animal health and welfare and the environmental impacts of chicken production, by identifying and scaling best practices from across the European supply chain. The project will also explore the potential for using new techniques to further improve our standards. Results will help to inform global principles for sustainable poultry production.
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TO SUPPORt OUR SYStEM-WIdE CARBON FOOtPRINt ANALYSIS INCREASE USE OF BIOFUELS from used cooking oil or non-food sources
500K Liters
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*Average annual values, 2008-2013
See the Planet chapter to learn more about how McDonalds restaurants collaborate with our distributors to recycle used cooking oil into biodiesel for their fleets. The Planet chapter also contains additional information about the development of our water strategy.
% achievement 98%
Complies with customer contract terms as related to pesticides, workers, and food safety. Steward environment Has in place conservation practices on areas of the farm. Can document some practices beyond legal requirements. Has participated and passed in sustainability/environmental audits. Expert Has goals established for environmental improvement. Applies environmental principles to whole farm. Is certified for sustainable, environmental, and worker practices. documented some level of environmental or resource improvement. Master Has Participates or assists planning of resource conservation or pesticide use education.
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Animal Health AND Welfare FrieslandCampina, Dairy Cow Welfare through Collaboration and Knowledge Transfer The FrieslandCampina Foqus planet strategy supports almost 20,000 member dairy farmers in making their businessesand the broader dairy farming industrymore sustainable. To date, more than 4,000 member dairy farmers have participated in workshops on the responsible use of animal medicines and the program has also provided workshops on udder and hoof health. Water Inghams Enterprises, Water Stewardship in Action Inghams implemented advanced water treatment technology through a multi-barrier approach that allows for reuse and reduces reliance on the water supply by more than 70% with no impact on product quality. Land and Biodiversity (two category winners): Espersen A/S, Innovative Trawling Equipment to Preserve Marine Biodiversity Espersen partnered with fishermen, scientists, and gear designers to re-engineer traditional trawler gear that reduces the impact on plant and animal life on the seabed, increases the catch per trawling hour by 20%, and saves fuel. International Paper, Education, Collaboration, and Certification to Support Sustainable Forests IP formed Certified Forest Management LLC to educate landowners about the benefits of certification, provide resources, shoulder the cost, and provide incentives for preferential fiber purchases from certified lands. Since the program began in 2012, it has increased certified lands by more than 42,000 hectares. Community Impact Cargill, Rural Development Initiative In 2008, Cargill and CARE launched the five-year, $10 million Rural Development Initiative, which has since helped improve the livelihoods of more than 100,000 farmers and their families around the world, and has become a model for CAREs engagements with other corporations. Economics Dawn Meats, Boosting Revenues in Irish Beef Farming To support Irish beef production, Dawn Meats implemented four key projects, including the Dairy Beef Club that promotes knowledge transfer; the Save Our Sucklers Scheme, which includes financial incentives to produce calves; a reporting system to detect liver fluke infection and improve herd health; and premium payments for cows from certified farms.
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In addition to the Supplier Code of Conduct, a detailed supplier guidance document, annual self-assessments and on-site third-party audits are used to monitor compliance with our standards and to promote continuous improvement in performance. These requirements apply not only to our direct suppliers, but to their suppliers as well.
HUMAN RIGHTS
At McDonalds, our core values are integral to how we do business, and we expect our suppliers to respect and promote these values. At a minimum, we require that all suppliers and their facilities meet the standards and promote the principles outlined in this Code, which are intended to advance McDonalds commitment to all aspects of sustainability.We expect suppliers to hold their supply chain to the same standards contained in this Code.
From McDonalds Supplier Code of Conduct
WORKPLACE ENVIRONMENT
THE UPDAtED SUPPLIER CODE OF CONDUct cOVERs A NUMBER OF tOPIcs. IN ORDER tO sUPPORt tHE IMPLEMENtAtION OF tHE sUPPLIER cODE OF cONDUct, WE PROVIDE ONLINE tRAINING, A sUPPLIER GUIDANcE DOcUMENt, AND A PRE-AUDIt GUIDELINE WHIcH DEtAILs sPEcIFIc REQUIREMENts FOR OUR sUPPLIERs AND tHEIR FAcILItIEs. THIs sUPPORts tHEIR ABILItY tO MEEt OUR EXPEctAtIONs AND DRIVE tHIs tHROUGHOUt tHEIR OWN sUPPLY cHAIN.
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Working to ensure the supply chain is free of Under-age and Forced Labor
McDonalds Supplier Workplace Accountability audit program includes many aspects. Maintaining a workplace free of under-age and forced labor of any kind is just one focus area. The Supplier Code of Conduct outlines our expectation that every McDonalds supplier will comply with all labor laws and with our own standards for minimum work ages and conditions of employment. McDonalds suppliers and the facilities and subcontractors within their supply chains shall not employ anyone younger than the minimum employment age according to the laws of the facilities country. Regardless of the countrys minimum working age, suppliers and their facilities and subcontractors may not employ anyone younger than 14. Likewise, the Company values the freedom of workers to accept or leave a job voluntarily. Involuntary prison, forced, bonded or indentured labor, human trafficking and slavery are prohibited. Suppliers and their facilities and subcontractors must ensure their hiring practices, as well as those of any labor or recruitment agencies and subcontractors within their supply chain, provide workers who meet our expectations.
As a sustainable and responsible investment firm, Calvert has engaged in dialogue with McDonalds over several years regarding labor and supply chain risks. We commend the companys efforts to engage investors and stakeholders in designing a new approach to sustainability and in the shaping of the 2012 Supplier Code of Conduct. The Code has some important new elements that strengthen protections for workers across McDonalds supply chain, particularly the support for freedom of association. We expect continuous improvement of the Supplier Code and other workplace policies and practices as they are implemented throughout the companys operations. We also encourage the company to assess progress regularly.
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Q:
Stakeholder Perspective
Where should McDonalds focus next steps to continue supporting positive supplier workplaces?
W orking 21+ days without a rest day of at least 24 consecutive hours E mergency exits that are locked and/or blocked H arassment, abuse or discrimination A ny worker not being paid at least minimum wage E ligibility to work documentation either not available or not completed properly U nder-age labor (either current or historical) F orced labor H ealth and safety issues that may threaten life, limb or function of the worker D enial of access to auditors B ribe or offer of gift to auditor
If any noncompliance is found, a Corrective And Preventative Action Plan (CAPA) must be developed and uploaded to our data system within 30 days. The McDonalds Supplier Workplace Accountability program stipulates that this CAPA is reviewed by one of our monitoring firms who will then conduct a re-audit within a timeframe set by us, in line with the severity of the issue and the time required to correct sustainably.
Percent of food, packaging, equipment, development and marketing suppliers that have signed the Code of Conduct 1
100 80 60 40 20 0
1
99%
99%
99%
2011
2012
2013
2011
2012
2013
Percentages reect a snapshot of suppliers that have signed the Supplier Code of Conduct at year end. Because suppliers have 30 days to sign, there is a natural uctuation between 99% and 100% over the year.
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SAFETY
First and foremost, the Company provides its customers with safe food products. Food safety is our number one priority.
QUALITY
The Company believes treating animals with care and respect is an integral part of an overall quality assurance program; it makes good business sense because having healthier animals is one of the first steps to providing safe food.
ANIMAL TREATMENT
The Company supports the Five Freedoms related to animal health and welfare. We maintain an ethical commitment to improve the health and welfare of animals in our supply chain.
PARTNERsHIp
The Company works with our direct suppliers, other retailers, the broader industry and NGOs to ensure continuous improvement through ongoing dialog as the science of animal health and welfare continues to evolve.
LEADERsHIp
The Company is committed to working with our suppliers and industry experts to advance animal welfare practices and technology.
PERFORMANCE MEASUREMENT
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COMMUNICATION
The Company will communicate our process, programs, plans and progress surrounding animal health and welfare.
IN MANY AREAS, LEADERSHiP BY RETAiLERS iS iMPROViNG THE HEALTH AND WELFARE OF POULTRY AND LiVESTOCK MORE THAN LAWS AND REGULATiONS. MCDONALDS WORK WiTH RESEARCHERS AND SUPPLiERS SUCH AS THROUGH THE ANiMAL HEALTH AND WELFARE TEAMTO APPLY THE LATEST SCiENCE, TECHNOLOGY, AND ETHiCS TO THE TREATMENT OF ANiMALS iS ALREADY LEADiNG TO iMPORTANT CHANGES iN THE WAY ANiMALS ARE RAiSED, HOUSED, AND TRANSPORTED.
JOY MENCH Professor of Animal Science and Director of Center for Animal Welfare University of California-Davis, Animal Welfare Council Member
The Company sets annual performance objectives to measure our improvement and to ensure our purchasing strategy is in alignment with our commitment to animal welfare issues.
Academic ADVISORS
Dr. Mike ApleyKansas State University Dr. Harry Blokhuis Swedish University of Agricultural Sciences Dr. Anna Johnson Dr. Candace CroneyPurdue University Dr. Linda Detwiler Mississippi State University Dr. Pilar DonadoCorpoica, Bogot, Colombia Dr. Temple GrandinColorado State University Dr. Alan Harris Rush Medical College, Chicago Dr. David Jordan New South Wales Department of Primary Industries, Australia Dr. Guy LoneraganTexas Tech University Dr. Joy MenchUniversity of CaliforniaDavis Dr. Suzanne MillmanIowa State University Dr. Ed PajorUniversity of Calgary Dr. Stuart Reid Dean Royal Veterinary College, London Dr. H. Morgan ScottTexas A&M University Dr. Janice SwansonMichigan State University Dr. Yvonne Vizzier Thaxton University of Arkansas Dr. Dan ThomsonKansas State University Dr. Kurt VogelUniversity of Wisconsin River Falls Karl WilliamsFAI Farms, Oxford U.K.
McDonalds Suppliers
CargillDr. Bob Evans, Dr. Mike Siemens, Rosalind Zils Dean FoodsDr. Jennifer Walker Inalca ItalyGabriele Mezzadri JBSDr. Lily Edwards-Callaway KeystoneDr. Ken Opengart OSIJoon Wong SmitheldDon Butler Tyson FoodsJoe Harmon
McDonalds Representatives
Global LeadBruce Feinberg Asia/Pacific, Middle East, AfricaEden Huang North AmericaDr. Justin Ransom Latin AmericaFrancisco Centeno Europe Ignacio Blanco Traba and Norbert Rank CommunicationsSarah Kafenstok Global Supply ChainDaniel Boer
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DEVELOP GENERaL GUIdELINES applicable to any housing system and specic to conventional,
cage-free, enriched and free-range housing systems.
ALIGN THE COMPANYS REQUIREMENtS aNd aUdIt cRItERIa to the most applicable
scientic evidence and OIEs General Principles for Animal Welfare.
IdENtIFyING OPPORtUNItIES within the McDonalds supply chain. DEFINING EFFEctIVE StUNNING aNd INSENSIBILIty in an effort to establish a
single, global McDonalds standard that is applicable across stunning systems in use around our global System, taking into consideration the variety of electrical water bath stunning systems, the expanding use of controlled atmosphere stunning and the exploration of emerging technologies like low atmospheric pressure stunning.
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A GLOBAL SuRVEY TO CAPTuRE THE INCIDENCE RATES OF SEVERAL ISSuES THAT REQuIRE AN ANIMAL TO BE CuLLED IN ORDER TO PRIORITIZE OuR EFFORTS.
2. CREATE
AN ASSESSMENT FRAMEWORK TO ASSIST PRODuCERS, FARMERS AND RANCHERS IN RECOGNIZING HEALTH-RELATED PROBLEMS AND RESPONDING TO THEM IN A TIMELY AND RESPONSIBLE MANNER.
The work of our Global Animal Health and Welfare team will continue as long as the science related to animal health and welfare continues to evolve. As the current work assigned to the three sub-teams is completed and deployed across our System, new initiatives will be assigned. Future sub-team work that has already been identied includes evaluating programs and industry standards related to onfarm initiatives, making certain they are continuously improving and reect best practices. Where appropriate, McDonalds promotes animal health and welfare improvements throughout the food industry. For instance, McDonalds Europe was a founding member of the European Animal Welfare Platform, a multi-stakeholder initiative that achieved broad consensus on key issues and best practices in beef and dairy, poultry and eggs, pork and sh. And our work with the Global Roundtable for Sustainable Beef is integrating animal health and welfare standards into beef sustainability for the industry worldwide.
Early recognition of problems and prompt, appropriate treatment are key factors in improving the health and welfare of animals and preventing loss. Producers are encouraged to work with their herd veterinarians for early intervention treatment and culling decisions, while maintaining compliance with local laws for the treatment and transport of animals.
Our 2020 goals for sourcing represent our continued journey toward a sustainable supply chain. We have set interim goals to guide us along the way, such as developing global principles and criteria for sustainable beef and purchasing some veried sustainable beef by 2016. This will mean ongoing collaboration with partners in the Global Roundtable for Sustainable Beef and other groups. We will also work with other industry and NGO stakeholders to meet our aspirational goal to source 100% of the ber-based packaging from certied or recycled sources. For other priority products such as coee, palm oil and sh, an important challenge will be maintaining the progress we have already achieved, doing so as we grow and as sustainable supplies and markets shift.
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COMPANY-OWNE COMPAN D RESTAUR Y-OWNE ANTS D RESTAUR & CORPORA ANTS TE & OFFICES
41%
BEEF
ELECTRICITY
71%
other2
17%
waste3
12%
17% Other
1
ELECTRICITY
66%
6%
OTHER2
20%
WASTE3
12% chicken
6% PAckaging 6% CHEESE
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23%
14%
71%
6% DAIRY
5% BUNS & BAKERY
3% TRANSPORTATION
4% PRODUCE
1. Represents estimated emissions from all food and packaging product categories not shown on the chart above. 2. Represents estimated emissions from natural gas combustion, upstream activities related to energy production, refrigerant discharges, employee commuting & travel. 3. Represents estimated emissions from in-restaurant waste and carry-out waste.
Implications for Action Across Our System Our estimated new carbon footprint validates the appropriateness of our focus on mitigating our Systems GHG Implications for Action Across Our System
emissions impacts over time, especially through our beef sustainability strategy in our supply chain and in our Our carbon footprint validates the appropriateness of our focus on mitigating our Systems GHG emissions energy management focus in the restaurants. impacts over time, specifically through our beef sustainability strategy and our energy management focus in the restaurants. Since the majority of our Systems impacts are beyond our direct controlfor example, our suppliers and Franchiseeswe need to work collaboratively with all parts of our System to make progress. Due to the impact of supply chain and Franchise activities on our Systems carbon footprint, we must rely on the strength and breadth of the entire McDonalds System to successfully address the main emissions drivers. We are working collaboratively with our Franchisees and suppliers to make progress.
CATTLE RAISING TO PRODUcE OUR BEEF, cHEESE AND DAIRY; MAJOR DRIVERS INcLUDE ENTERIc FERMENTATION AND FEED-LOT MANURE MANAGEMENT MANAGEMENT. ELEcTRIcITY USAGE USAGE AcROSS AcROSS FARMS, FARMS,PLANTS PLANTSAND ANDDISTRIBUTION DISTRIBUTIONcENTERS. cENTERS GRAIN FARMING TO PRODUcE OUR BUNS, BAKED GOODS AND FEED FEED FOR ANIMALS FOR ANIMALS.
GHG emissions from Company offices and all Restaurants, including Franchisees, represents nearly 30% of GHG the total. emissions Electricity from usage McDonald is the primary s restaurants driver. and A smaller offices, proportion including Franchises, is associated represents with in-restaurant nearly 30% waste of the and total. Electricity on-site gas combustion usage is for the hot primary water heating driver. and A smaller cooking. proportion is asssociated with in-restaurant waste and on-site gas combustion for hot water heating and cooking.
The Sourcing and Planet chapters detail our strategies and actions to address these major impact areas, and we will report our progress as these environmental strategies evolve in the future.
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Environmental pressures present both challenges and opportunities for the future of the planet. As a Company and brand with a large global footprint, we have a responsibility to take meaningful action as environmental stewards to address the impacts of the McDonalds System. Serious challenges, including the impacts of climate change and dwindling resources, are already aecting our society and will only continue to rise in importance to our business.
OUR OPPORTUNITY
Now more than ever opportunities for shared value are clear for our business and society. We have designed our strategies to address global environmental pressures and to reduce our Systems impacts, while helping us to build a better business and create value for our shareholders.
MORE FOCUSED STRATEGY
Environmental stewardship is not new to McDonalds, but with the launch of our CSR & Sustainability Framework, our Planet strategy is more focused than ever. Towards 2020 and beyond we will heighten our focus on energy management, waste minimization and recycling. Water eciency and availability are also of increasing importance in our System, requiring our continued attention in the years to come. We operate in a wide range of geographies and some McDonalds markets are further along than others. This is natural. The strength of the McDonalds System is that we can leverage approaches from around the world to drive innovation and use our scale and scope to make a positive dierence.
I mproving our carbon intensity through enhanced energy efficiency in our restaurant operations and innovations in restaurant design and equipment.
OVer mY more tHan 25 Years at McDonaLds, I HaVe seen firstHand How we can capitaLiZe on tHe power of tHe SYstemacross oVer 35,000 restaUrantsto driVe sHared VaLUe across oUr BUsiness, FrancHisees, and sUppLiers. As we proGress toward oUr 2020 Vision, we HaVe tHe cHance to appLY practicaL, enVironmentaL soLUtions to oUr operations tHat not onLY do Good for tHe BUsiness, BUt do Good for tHe pLAnet, and ULtimateLY do Good for tHe Brand.
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Ken Koziol Executive Vice President and Global Chief Restaurant Ocer McDonalds Corporation
INPUTS
OUTPUTS
Building Environmental Stewardship from the Ground Up
Ric Richards acquired his first McDonalds restaurant in 1988. Since then, he has owned restaurants in three states, twice earning the Ronald Award, a prestigious recognition for Franchisees. In 2009, Ric opened the first-ever LEED (Leadership in Energy and Environmental Design) Gold-Certified McDonalds in North Carolina, and is seeking his second LEED certification for a restaurant opened in 2013. Ric is also a 14-year member of the Board of Trustees for the Ronald McDonald House of Durham, North Carolina.
As a proUd McDonaLds FrancHisee, I feeL stronGLY tHat taKinG adVantaGe of tHe LEED VoLUme ProGram to BUiLd a Green-certified, enVironmentaLLY-friendLY restaUrant is definiteLY wortH tHe effort. Residents and cUstomers appreciate tHe fact tHat we are GiVinG BacK to tHe commUnitY BY saVinG water and eLectricitY. THeY feeL Good aBoUt sUpportinG a BUsiness tHat Has made sUcH a stronG commitment to enVironmentaL stewardsHipand it maKes oUr manaGers and crew memBers feeL Good, too.
LOPED CLIMATE CHANGE POsITION STRENGTHENING ENVIRONMENTAL sTRATEGIEs: DEVE NT FOLLOWING GHG PROTOCOL, AND sTATEMENT, EsTIMATED SYsTEM-WIDE CARBON FOOTPRI s WORLDWIDE. ANT LONG-TERM WATER sCARCITY MAPPING FOR REsTAUR sURVEYED IN 2013, 90% REPORTED WAsTE AND RECYCLING: OF THE 34,113 REsTAURANTs CLING CORRUGATED CARDBOARD. RECYCLING UsED COOKING OIL AND 77% REPORTED RECY OF MORE ENERGY EFFICIENT KITCHEN ENERGY: INsTALLED APPROXIMATELY 300,OOO PIECEs IDE. AND BUILDING EQUIPMENT IN REsTAURANTs WORLDW
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Serves as the overall conduit and coordinator for our worldwide environmental efforts, our external stakeholder advisors, and our CSR & Sustainability Framework as a whole.
Brings together McDonalds environmental leads from around the world to share and align global guidelines, policies, and initiatives that can be adapted within McDonalds markets to address local issues while meeting the global goals.
Includes energy leads from each Area of the World who collaborate on energy management policies and best practices. The board is coordinated by the Companys Restaurant Solutions Group to maintain close alignment with restaurant strategies, and works to make our many energy environmental initiatives more cohesive.
IN DEVELOPING oUR CSR & SUSTAINABILITY STRATEGY, stRoNg leadeRsHip coMMitMeNt FOSTERED BY RobUst goveRNaNce Has eNHaNced oUR ability to eNgage tHe systeM aNd aligN oUR MaRKets aRoUNd a coMMoN FRAMEWORK. OveR tHe yeaRs, oUR MaRKets Have developed best pRactices tHat Have iNspiRed oUR systeM, AND Have beeN scaled globally. WitH iMpRoved aligNMeNt aNd leadeRsHip accoUNtability, we caN acceleRate oUR peRfoRMaNce as a bRaNd, CONNECT WITH OUR CUSTOMERS MORE, AND DRIVE MORE FOCUSED EFFORTS.
Jeffrey Hogue Senior Director of Global CSR & Sustainability McDonalds Corporation
When we talk about the Planet Pillar in this chapter, we focus on the development and operation of McDonalds restaurants. Obviously, our supply chain has impacts on the planet, too, which we outline in the Sourcing chapter.
WE INCORPORATED ENVIRONMENTAL AwARENESS INTO OUR CREw TRAINING SO THEY CAN HELP SAVE ENERGY AND wATER RIGHT AwAY. WE HOLD REGULAR ENVIRONMENTAL MEETINGS, SHARE INFORMATION wITH OTHER OwNER/OPERATORS AND INVOLVE LOCAL GOVERNMENT COUNCILS, POLICE, COMMUNITY GROUPS AND THE LOCAL MEDIA. IN 2013, wE ASKED OUR CUSTOMERS TO VOTE ON THE COMMUNITY SITE THEY wANTED US TO CLEAN UP IN OUR ANNUAL LITTER PICK, AN EVENT THAT INCLUDED CREw AND MANAGERS FROM ALL 11 OF OUR RESTAURANTS.
Amy McDyre Training Ocer and Planet Champion Employee of Glyn Pashley, McDonalds Franchisee Rugby, U.K.
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RECYCLING AND WASTE REDUCTION: WASTE MANAGEMENT WITH McRECYCLE McDonalds Austria achieved an overall 95 percent recycling rate in its restaurants with the McRecycle program.
ANTI-LITTERING: LEADING THE WAY TOWARD CLEANER STREETS IN AUSTRALIA Through a focus on litter reduction for more than 20 years, McDonalds Australia works to establish a leadership position by engaging its restaurant employees, sta and customers to control the impacts of litter around restaurants in Australia. NEW RESTAURANT EARNS FIRST LEED GOLD CERTIFICATION IN ARGENTINA The rst green restaurant in Pilar, Argentina, built by Arcos Dorados, McDonalds developmental licensee in Latin America, became the rst new building in the country to receive LEED Gold for New Construction certication. GREENING THE WORKPLACE: CREW MEMBERS PARTICIPATE IN POWER SAVING CAMPAIGN McDonalds Japan helped nearly 5,500 of its crew members achieve a 15 percent reduction in their power usage from July through September 2011.
LOGISTICS: BIODIESEL AND REVERSE LOGISTICS IN THE UAE McDonalds distributors entire eet of supply trucks in the United Arab Emirates currently run on 100 percent biodiesel made from vegetable oil recycled from McDonalds restaurants.
COMMUNICATIONS: McDONALDS SPAIN ADDed ENVIRONMENTAL TRAINING FOR ALL For McDonalds restaurant employees in Spain, environmental training is a core element of orientation and training.
MCDonalds ENERGY: CALCULATE YOUR CARBON FOOTPRINT Europes innovative carbon footprint measurement toolkit, which was launched in 2009, set the stage for identifying future carbon reduction opportunities.
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*Based on datasets from 2010-2012 collected for 2-3 week periods at four restaurants in dierent climate zones across the U.S. There can be signicant intra-restaurant variability in energy consumption based on the time of year, location, guest counts, and menu. In the top 9 markets in 2013, the estimated average annual energy consumption per restaurant was 694,372 kWh.
To execute against our 2020 energy efficiency aspirational goal, weve identified five key areas to continue focusing on going forward:
4. RENEWABLE ENERGY
PerforManCe MeasureMent, 5. TRACKING, and reportinG
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2012 3
0.222 1.115 1.337
2013 4
0.247 1.138 1.385 2,903
2012 2
2013 2
Direct energy consumption: kWh/GC2 Indirect energy consumption: kWh/GC Overall energy consumption: kWh/GC Overall energy consumption: GWh
0.173 1.726
0.185 1.658
2,875
2012
0.393
2013
0.430 1.313 1.743 15,777
Estimated direct energy consumption: kWh/GC Estimated indirect energy consumption: kWh/GC Estimated overall energy consumption: kWh/GC Estimated overall energy consumption: GWh
1.026 6.619
1.084 6.804
1. These figures represent estimates based on the best available energy data in our top 9 markets. Currently we do not have Company-owned restaurants in Brazil or Japan. 2. GC represents total transactions for the calendar year. Direct energy data reflects the use of natural gas, propane, fuel oil and liquefied petroleum gas. Indirect energy data reflects electricity usage. We categorized them in this fashion to show their relationship to Scope 1 and Scope 2 of our estimated System-wide GHG emissions. Due to a change in our data collection methodology in 2012, we do not present a side-by-side comparison with data from 2011 or earlier. 3. 2012 figures reflect primary data from 4,217 out of 4,265 Company-owned restaurants and 6,825 out of 21,828 Franchisee restaurants in our top 9 markets, totaling 11,042 out of 26,093 restaurants overall. Primary energy data was extrapolated to estimate energy consumption for all restaurants in the markets and ownership types reported. The top 9 markets included approximately 76% of the restaurants worldwide (26,093 out of 34,480 as of December 31, 2012). 4. 2013 figures reflect primary data from 4,296 out of 4,310 Company-owned restaurants and 7,386 out of 22,236 Franchisee restaurants in our top 9 markets, totaling 11,682 out of 26,546 restaurants overall. Primary energy data was extrapolated to estimate energy consumption for all restaurants in the markets and ownership types reported. The top 9 markets included approximately 75% of the restaurants worldwide (26,546 out of 35,429 as of December 31, 2013).
1. For our 2012-2013 analysis, we worked with Enviance to launch an updated methodology to estimate GHG emissions from McDonalds restaurant energy use and refrigerant emissions worldwide. 2. Best available primary energy data from our top 9 markets (see table at left) was extrapolated to estimate energy consumption and GHG emissions for all restaurants worldwide as of December 31, 2012 (34,480 restaurants) and December 31, 2013 (35,429 restaurants). Refrigerant emissions were estimated using input/output analysis of McDonalds data and U.S. industry average emissions information. 3. Enviance addressed uncertainty in GHG emissions estimates by conducting 1 million Monte Carlo simulations to establish 95% confidence intervals around each data point for 2012 and 2013.
*Please see pages 56 -57 and the Appendix for additional information about our System-wide carbon footprint for 2011.
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2152
SILVER
1078
GOLD
40
PLATINUM
REMODEL GUIDELINES
Similarly for European remodeling projects, there are three levels of standards based on similar principles Silver (minimum required), Gold and Platinumwhich focus on solutions feasible in remodeling projects. The standards address construction practices affecting lighting, water, heating, ventilation and air conditioning (HVAC), refrigeration, energy management and renewable energy installations. These standards provide LED bulb, cash and hat/spatula potential GHG reductions of 950 metric tons of CO2e per restaurant/year.
Between 2010 and 2013,restaurant some 3,200 of the 4,190 new, remodeled and reimaged restaurants in Non-descript Europe were built to the McDonalds European Green Building Guidelines. These guidelines are internal only and not an independent third party certification.
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In tHe U.s., OUr LEED proJects HaVe GiVen Us tHe opportUnitY to Learn aBoUt aLternatiVe BUiLdinG eLements and practices, remain reLeVant to oUr cUstomers, and HaVe a redUced impact on tHe enVironment. WE continUe to focUs on sUstainaBLe BUiLdinG practices, tHe LEED ratinG sYstem, How to Best inteGrate tHose practices into oUr new and eXistinG restaUrants, and tHe pUrsUit of continUed edUcation to Keep mcdonaLDs Usa weLL-positioned for fUrtHer sUstainaBLitY sUccesses.
John Rockwell Sustainability Manager, McDonalds U.S. Restaurant Development Oak Brook, Illinois, USA
Standard PrototYpe Items 1 White Roof 2 High-Efficiency HVAC 3 High-Efficiency Cooking Exhaust 4 High-Efficiency Plumbing Fixtures 5 LED Dining Room Lighting 6 LED Building Signage 7 Bulk Cooking Oil 8 Energy Management Systems (EMS) AdVanced DesiGn Items 1 Drought Tolerant Landscaping 2 Smart Irrigation 3 Permeable Pavement 4 LED Parking Lot Lighting 5 Photovoltaic Solar 6 Electric Vehicle Charging 7 Waste Recycling 8 LEED Certification
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A rgentina, Pilar: Arcos Dorados first McDonalds restaurant in Argentina to achieve LEED
Gold certification for new construction from the U.S. Green Building Council.
A ustralia, Kilsyth: First quick service restaurant in Australia to achieve Green Star certification A ustria, Stockerau: One restaurant achieving klima:aktiv certification for climate
protection measures from the Austrian Ministry of Agriculture, Forestry, Environment and Water Management. the Brazil Green Building Council.
B razil, Riviera So Loureno: McDonalds first LEED certified restaurant in Brazil from B razil, So Paulo: McDonalds Hamburger University building was certified in the LEED
Commercial Interior category after its 2011 renovations. certification from the Canada Green Building Council. construction & operations, respectively. certification from GBCI.
F rance, Revel & Plaisance-du-Touch: High Environmental Quality (HQE) certifications for M exico, Parque Hundido: Arcos Dorados first restaurant in Mexico to receive LEED Gold P uerto Rico, Guaynabo: Arcos Dorados first McDonalds restaurant in Puerto Rico and the
Caribbean to achieve LEED certification for Retail: New Construction from the GBCI.
S ingapore: The first restaurant in Singapore to be awarded the Building and Construction T he Netherlands, Amsterdam: Won the European Commission GreenBuilding Award
Authority (BCA) Platinum Green Mark Award. Two other McDonalds restaurants earned the Gold Green Mark Award, and a third was Green Mark certified. in 2013 for their restaurant designed to the McDonalds Europe Platinum Green Building Guidelines. status from the U.S. Green Building Council, including the McDonalds Corporation Campus Office Building (Platinum), McDonalds USA Plaza Building (Gold), and McDonalds Hamburger University (Silver). and McDonalds USA seeks 25 more through the LEED Volume Program.
U SA, Oak Brook, Illinois: All corporate headquarters buildings achieved LEED certified
We learn a lot from our approach to green buildings. The restaurants at left serve as learning laboratories for our approach to scaling improvements into our building standards and design. We will continue to evaluate what we learn from these special restaurants and carefully select when certifications make sense and can provide valuable learnings to scale on a market level.
U SA, Various Locations: Four U.S. restaurants have achieved LEED certification to date,
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A new generation of low oil volume (LOV) fryer that uses about 40% less oil while consuming
4% less energy in operation P roprietary Universal Hoods for kitchen ventilation that reduce the exhaust air rate by about 40% compared to previous models, reducing overall energy usage
T he High Density Universal Holding Cabinet that increases hot holding capacity and reduces
energy use by about 31% compared to the previous holding cabinet
New bun toasters that provide up to 55% better energy efficiency than the previous model
OUR SUPPLY CHAIN SHARES THE RESPONSIBILITY OF MINIMIZING IMPACTS ON THE ENVIRONMENT. WE ARE wORKING DILIGENTLY wITH OUR KITCHEN EQUIPMENT SUPPLIERS TO ENSURE THE DESIGN OF OUR EQUIPMENT, AS wELL AS ITS MANUFACTURE, DISTRIBUTION AND USE MINIMIZES LIFE CYCLE IMPACTS ON THE ENVIRONMENT. ITS THE RIGHT THING TO DO FOR OUR SYSTEM AND THE wORLD AT LARGE.
*Building equipment refers to solutions such as LED lighting, exhaust fans, and building signage, among others. Kitchen equipment refers to solutions such as low oil volume fryers, grills, ice and beverage machines, and refrigeration units, among others. Savings or Carbon footprint gfx saved means the estimated annual amounts saved on a going forward basis when a new approved model of equipment replaces a prior approved model (such as in building remodels) and the amounts avoided when the equipment is installed in new restaurants (such as in new construction). These estimated gures are self-reported by equipment suppliers based on standardized parameters of 18 hours of operation/day, open 365 days/year, $0.10/kWh and/or $0.876/Therm. We have a strategic equipment sourcing strategy that has Fruit, skim milkinand whole on pillars been in place for several years, and we will continue to work with our approved suppliers the years ahead grain as we strive for better eciency.
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Non-descript restaurant
33 MILLION USD
2802 Frozen Fry Dispensers 503 Juice Dispensers 688 Ice Machines
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The Company has varied approaches to renewable energy. Our primary focus is to improve energy efficiency first, then support renewable energy in a variety of ways, including the purchase of Renewable Energy Credits (RECs) and long-term renewable power purchase agreements with utility providers. McDonalds Europe has pursued various renewable energy initiatives over the past decade. For example, McDonalds U.K. has committed for a 20-year period to purchase renewable energy from new infrastructure, including an innovative waste-to-energy plant. By enabling the development of renewable energy generating infrastructure in this manner, McDonalds U.K. anticipates saving on energy costs over the long term. Eight other European marketsAustria, Belgium, France, Ireland, Germany, the Netherlands, Sweden and Switzerlandhave achieved or are working toward purchasing 100% renewable energy for their restaurants.
THERE ARE MULtIPLE REASONS FOR MCDONALdS tO FURtHER EXPANd ItS COMMItMENtS tO RENEWABLE ENERGY. INCREASING tHE AMOUNt OF GREEN POWER IN tHE SYStEM CAN HELP tO ACCELERAtE MARKEt tIPPING POINtS, At WHICH CLEAN ENERGY IS COSt COMPEtItIVE WItH tRAdItIONAL FOSSIL SOURCES. THE BENEFItS WOULd BE SHAREd WItH ALL OF tHE COMPANYS StAKEHOLdERS.
Chris Perceval Formerly, Director of Corporate Relations World Resources Institute Washington, D.C., USA
McDonalds USA
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Liquids
Plastics Paper
Cooking Oil
Plastics
Corrugated Cardboard
Organics
Other
Read more about our strategies to continually develop more sustainable packaging in the Sourcing chapter.
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3% From outside McDonalds (68 lbs) 4% Other (91 lbs) 9% Cooking Oil (200 lbs) 10.5% Plastics (233 lbs) 15% Paper (333 lbs)
2% Liquid (42 lbs) .5% Metal (12 lbs) 30% Corrugated Cardboard (667 lbs) 26% Organics (568 lbs)
Based onanalysis select studies in U.S. restaurants in 2012,with average weekly Based on detailed of a traditional free-standing restaurant average volume in 2012. on-premises restaurant waste totaled 2,214 lbs. Average weekly on premises restaurant waste totaled 2,214 lb.
Biodiesel innovations
MCDonalds DEvelopMental LiCensee in the United Arab EMirates
operates a 100% closed-loop biodiesel system. More than 25,000 liters of used cooking oil are being collected from McDonalds approximately 108 restaurants each month and converted into biodiesel. At the end of 2013, the McDonalds UAE logistics providers trucks had traveled 2,710,000 kilometers on used cooking oil from McDonalds outlets. Used cooking oil is stored at the restaurants in a specially designed container. When making a delivery to McDonalds restaurants, the distribution trucks pick up the container before going back to the distribution center, which has a co-located biodiesel facility. Drivers drop off the used cooking oil and fill their trucks with biodiesel made from the used cooking oilall at the same location. Since the program began, more than 1.75 million liters of biodiesel have been generated from used cooking oil and used to power the distribution fleet. Excess biodiesel can be sold, helping other companies reduce their transportation impacts. Many other McDonalds markets have implemented innovative recycling programs:
U.K.: In 2013, McDonalds U.K. logistics providers replaced more than 3 million liters
of diesel fuel with biofuel made from used cooking oil collected at approximately 1,200 restaurants. The biodiesel covers an estimated 118,000 deliveries per year. cooking oil to fuel restaurant delivery trucks across Victoria.
AUSTRALIA: Logistic providers and some product suppliers use biodiesel from used
McDonalds UAE logistics providers use recycled cooking oil from McDonalds restaurants to power their trucks.
EUROPE: Some markets in Europe have progressed further along in closing the circle
on biodiesel systems, including Austria, Switzerland and the U.K. (see above). Across markets in Europe, the used cooking oil from more than 80% of the McDonalds Europe restaurants is being converted into biodiesel.
that has recycled more than 187,000 liters of used cooking oil into 65,000 liters of biodiesel since 2009, for use in five trucks that deliver to the restaurants. Arcos Dorados and Martin Brower donated a portion of the savings to Ronald McDonald House Charities.
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One of our primary challenges is measuring waste in all of the restaurants by weightwe do not have an effective system to do so today in most markets. Waste and recycling companies that service the restaurants mainly keep track of the number of pickups per week, and sometimes only the volume. The previously mentioned 2013 estimation of 36% in-restaurant recycling by weight comes from a combination of internally reported recycling rates in the top 9 markets for commonly recyclable waste streams such as used cooking oil and corrugated cardboard, and the percentages that those materials represent, by weight, in the total waste stream from restaurant waste audits. Therefore, through 2014 and 2015, we plan to develop a process for better measuring waste and waste diversion activities. In the same time frame we intend to develop global waste management guidelines, seek to establish minimum standards, where possible, and share our best practices from around the world, in order to advance the progress already made in many local markets. We will continue to collaborate with local communities, other food service organizations, suppliers and logistics providers to develop diversion solutions.
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In addition, we are also working with our suppliers and NGOs to understand water scarcity implications across our agricultural supply chains and supplier processing facilities, as explained in the Sourcing chapter.
In Australia, where water scarcity is a significant concern, water conservation is an important focus for McDonalds restaurants. Current water management initiatives include: Rainwater harvesting for irrigation and toilet flushing Water-efficient fixtures with flows set to optimize use, including a water-efficient spray rinse gun, which has reduced the flow rates and water consumption Crew and manager training on water usage Detailed landscaping guidelines
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ON-SITE RESTAURANTS
McDonalds built four temporary restaurants for the London Games. After the Olympic and Paralympic Games ended, the restaurants were de-constructed. We recycled the furniture and equipment that could be re-used, and nearly all of the building materials, for restaurants in the U.K. The majority of the packaging was recyclable or compostable at the McDonalds Olympic venue restaurants. We also adapted our packaging to include the Organizing Committees on-pack recycling labels to help customers recycle on the Park.
We engaged our suppliers to repurpose cooking oil from our four Olympic venue restaurants and convert it to biodiesel to fuel the trucks that deliver supplies to restaurants.
McDonalds U.K. was a member of the Organizing Committees Food Advisory Group and helped shape the organizing committees food vision for the Games. McDonalds exceeded the vast majority of the Organizing Committees benchmark standards thanks to our strong British-ingredient-led supply chain.
McDonalds U.K. wanted to showcase the British farms and farmers who supplied the ingredients that helped feed the athletes, coaches, officials, media and spectators. Our suppliers provided open doors to some of the British and Irish farms that supply the menu, allowing the public to understand the practices at the farm level.
McDonalds Europe published a summary of the HFC-free equipment available for use in McDonalds restaurants, including detailed specifications for freezers, drink machines, ice dispensers and other equipment. McDonalds U.K. provided Franchisees with a booklet of energy-saving technologies and a return-on-investment calculator. As a way to share energy best practices across the McDonalds System, McDonalds USA recognizes Energy All-Starsrestaurant managers, Company employees, Franchisees and their employees whose focus on proper maintenance, education and energy conservation provide leading examples for others to follow.
McDonalds Australia proactively engages restaurant employees, staff and customers in efforts to minimize the impacts of litter around existing restaurants. McDonalds Australia is a founding partner of Clean Up Australia, the organization behind Clean Up Australia Day, celebrating over two decades of partnership. Clean Up Australia Day is now a community icon and one of Australias biggest annual volunteer events.
responsible disposal of hard-to-recycle items such as batteries and electronics, and host competitions between departments to motivate green activity. The Company recently added composting to the recycling opportunities in our Home Office buildingsas of 2013, the landfill diversion rate was almost 80% by weight. We hope to improve on these achievements in 2014 and beyond. Some of McDonalds offices and training centers are LEED certified as well, including our corporate headquarters, McDonalds USA headquarters, U.S. Hamburger University and McDonalds University in Brazil. Along with our restaurants, these efforts help us refine our approach to sustainable building design and operations, providing valuable learnings that can boost efficiency in future offices and restaurants.
FOR GOOD.
DOING MORE GOODWorld Wildlife Funds Living Planet Report* is a leading, science-based analysis on the health of our planet and the impact of human activity. Its key finding is that humanitys demands exceed our planets capacity to sustain us. This is not the future we want for our children and future generations. Our Company, the restaurant business in general, and the extended food and agricultural network have environmental impacts to mitigate. In addressing these mounting environmental pressures, we need to shift our collective thinking away from doing less bad, to doing more good. As this chapter details, for our restaurant operations we are focused on two key areas: energy and climate change, and waste and recycling. The Sourcing chapter details our aspirations to source our food and packaging from verified sustainable sources, with environmental actions embedded within this work. Together with our Franchisees and suppliers, NGO experts, industry stakeholders, and others in the food service business, we are poised to do more good for our planet and generate benefits for our business as well.
* WWF. 2012. Living Planet Report 2012. WWF International, Gland, Switzerland.
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Good PEOPLE
global workforce.
C REATING OPPORTUNITY by providing lifelong skills and career opportunities for our P ROMOTING diversity and inclusion by fostering a work environment that values
the unique contributions of all.
PeOpLe ARe tHe fAce Of OUR BRANd, OUR GReAteSt ASSet. PROVIdING OUR GLOBAL wORKfORce wItH OppORtUNItIeS fOR GROwtH ANd cAReeR deVeLOpmeNt cONtINUeS tO Be ONe Of OUR tOp pRIORItIeS BecAUSe we UNdeRStANd HOw ImpORtANt It IS tO OUR LONG-teRm SUcceSS.
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Above, McDonalds Hong Kong employees celebrate their 2013 recognition as a Best Employer in annual research conducted by Aon Hewitt.
Our Approach is Guided by Our Core Values and Our Standards of Business Conduct
For more than 50 years, McDonalds has been a Company guided by Core Values. One of the basic principles that guides our behavior, actions, and decisions every day is that we are committed to our people. We demonstrate that commitment in many ways, including through the Companys Standards of Business Conduct (for more information see pg. 109). These standards provide clarity, guidance and resources on a wide range of issues that stand for operating with fairness, honesty, and integrity. As it relates to our people, these standards include:
C onducting our activities in a manner that respects human rights as set out in the
United Nations Universal Declaration of Human Rights
T reating employees with fairness, respect and dignity E nsuring employees have the right to work in a place that is free from harassment,
intimidation or abuse, sexual or otherwise, or acts or threats of physical violence
E mbracing the diversity of employees, Franchisees, customers and suppliers P roviding equal treatment and equal employment opportunity Providing a safe, productive and healthful working environment S triving to work with suppliers that are committed to our universal principles
of doing business in a responsible and ethical manner
2013 HIGHLIGHTS
ON THEY REPORT TO 7% OF RESTAURANT MANAGERS FEEL THE PERS* 8 SUPPORTS THEIR PROFESSIONAL DEVELOPMENT. ED BY RESTAURANT MORE THAN 3.1 MILLION LEARNING MODULES COMPLET (IN BOTH NE. MANAGEMENT AND MID-MANAGEMENT IN THE U.S. ALO COMPANY-OWNED AND FRANCHISED RESTAURANTS.)
in Canada, Germany, the U.K., and the U.S., *Data reects numbers from Company-owned restaurants well as restaurants in Brazil and Japan. as
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of restaurant crew members were satised that they receive the training needed to do a good job*.
in Canada, Germany, the U.K., *Data reects numbers from Company-owned restaurants Japan. and Brazil in nts restaura as well as and the U.S.,
89%
Across McDonalds, employees have been clear about what they want to get out of working at McDonalds. Based upon research conducted with 10,000 crew and managers in 55 countries, we identied three critical elements known as our Employee Value Proposition.
Working in an enjoyable, energizing atmosphere where everyone feels part of the team Having a challenging, varied job with the exibility to t into employees lifestyles Having the opportunity to grow and progress by learning personal and work skills that will last a lifetime
These elements are incorporated into people programs at regional and market levels in a variety of ways.
I HAVE BEEN WiTH MCDONALdS SiNGAPORE FOR OVER 20 YEARS ANd MCDONALdS iS A SECONd HOmE TO mE. I LOVE mY WORK ANd iNTERACTiNG WiTH mY CUSTOmERS. WHEN mY CUSTOmERS ARE HAPPY, I Am HAPPY. YOU mAY ASK, HOW dO YOU dO YOUR JOB SO WELL? ONE OF THE KEY REASONS iS THAT MCDONALdS PLACES STRONG EmPHASiS ON TRAiNiNG OF EmPLOYEES AT ALL LEVELS TO HELP US SUCCEEd iN OUR JOBS. I HAVE BENEFiTTEd TREmENdOUSLY BOTH PROFESSiONALLY ANd PERSONALLY FROm THE TRAiNiNG IVE RECEiVEd iT iNSPiRES mE TO GiVE THE BEST OF mYSELF EVERY dAY.
Susan Low Party Planner, McDonalds Singapore, also a 3-time Gold Award winner of Singapores Store Activities Representative (STAR) Award.
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PEOpLE ARE THE MOST IMpORTANT ASSET OF OUR BUSINESS. AS AN OWNER-OpERATOR, I VALUE THE MANY CONTRIBUTIONS OUR EMpLOYEES MAKE EACH DAY FOR MCDONALDS AND FOR OUR CUSTOMERS. AT MCDONALDS, OWNER-OpERATORS HAVE THE OppORTUNITY TO MAKE A DIFFERENCE IN THE WORK EXpERIENCE OF OUR CREW AND MANAGERS BY pROVIDING TRAINING AND CAREER OppORTUNITIES THAT ALLOW OUR CREW AND MANAGERS TO GROW pERSONALLY AND pROFESSIONALLY. I AM pROUD TO BE pART OF A BRAND THAT IS COMMITTED TO CREATING AND MAINTAINING A PEOpLE FIRST CULTURE WHERE EMpLOYEES FEEL VALUED AND pART OF THE TEAM.
More than 80% of McDonalds restaurants are owned and operated by independent Franchisees. The Company expects its Franchisees to maintain high standards of integrity and to abide by all applicable laws and regulations, including laws regarding human rights, dignity and respect, workplace safety, and worker compensation and treatment. Ultimately, Franchisees define and implement people practices in their local restaurants. One of the greatest strengths of the McDonalds business model is the entrepreneurial approach Franchisees take to meet the needs of their operating environments. Cynthia Booth lives this approach in the way she manages her seven restaurants in Greater Cincinnati, Ohio. She also is the Owner-Operator Co-Lead of the McDonalds U.S. National People Team, a team whose mission is to share best practices about the employees experience in such areas as hiring, on-boarding, training and development.
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Fredis Gutirrez Store Manager, Ray Kroc Award winner Dallas/Fort Worth, Texas, USA
BEFORE I TOOK THE CLASS, I DiDNT FEEL CONFiDENT TALKiNG WiTH PEOPLE OR WiTH MY CUSTOMERS. THERE iS A biG DiFFERENCE bEFORE ENGLiSH UNDER THE ARCHES AND AFTER. NOW, I SEE MORE OPPORTUNiTiES iN MY FUTURE AND iN THiS COMPANY.
consultancy
CREW
management
CREW MEMBER
QuaLIfIcatIon: CertIfIcates In aduLt LIteracY and numeracY (LeveL 1 + 2)
Apprentice
QuaLIfIcatIon: IntermedIate apprentIceshIp In hospItaLItY and caterIng (LeveL 2)
CREW TRAINER
QuaLIfIcatIon: dIpLoma In shIft management (LEveL 3) award In supervIsIng food safetY In caterIng (LeveL 3) fIrst aId at work
shift manager
TRAINEE manager
assistant manager
fIrst assIstant manager & second assIstant manager
Business manager
QuaLIfIcatIon: foundatIon degree In managIng busIness operatIons
Fredis Gutirrez has been affiliated with a McDonalds in the Dallas/Fort Worth airport for a decade. Since graduating from English Under the Arches, he has been promoted to store manager and won the McDonalds Ray Kroc Award, an honor bestowed on the top 1% of McDonalds restaurant managers in the country.
Anne had a successful and long-running career in information technology, but had always wanted to operate her own business. Today, she runs three McDonalds restaurants and employs about 220 people in a diverse, multi-generational environment.
We develop and provide quality training that meets McDonalds high standards. In the U.S. there are over 80,000 full- and part-time trainers in Company-owned and Franchised restaurants, and training programs are available in English and Spanish. In 2013 post learning surveys, 93% of respondents taking the Restaurant Department Manager curriculumindicated the training will positively affect quality and guest service. The McDonalds USA learning strategy has been recognized externally with honors such as the Elliott Masie Innovation Award, Top Young Trainers, and Chief Learning Officer Learning Collaboration 2012 Gold Award. In 2013 McDonalds USA was ranked as the #2 Training Organization in the World by Chief Learning Officer Magazine.
Tim Fenton started as crew in 1973 in Utica, N.Y. By 79 he was Manager of the Year. Throughout his 40 years of McDonalds operations and leadership experience in the U.S., Europe, and APMEA, McDonalds Chief Operating Officer has continued to reach for opportunities to learn, grow and lead, And he has encouraged McDonalds employees to do the same. 83
WORLDWIDE, More than 334,000 McDonalds Franchisees, managers and employees have graduated from Hamburger University since opening.
Like nothing else, McDonalds Hamburger University embodies our commitment to training that fosters talent, develops leaders and leverages life-long learning. And despite its name, Hamburger University is about a whole lot more than learning the best way to cook a burger. Since its 1961 founding by former chairman Fred Turner in a restaurant basement, Hamburger University has grown to seven campuses around the world, with training provided in 28 languages. McDonalds Franchisees, managers and employees are trained in restaurant procedures, quality, food safety, service, cleanliness and value. Students in some areas are even eligible to receive university credits for their Hamburger University courses, helping them earn advanced degrees while building their careers. Both our Hamburger University curricula and our regional and local training programs reect real-world business experience and practical management competencies that can be used in a host of career paths.
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In The U.S., Hamburger University receives college accreditation from the American Council on Education so that students can earn college credit for their successful course work. Completion of the U.S. management curriculum provides the McDonalds restaurant manager with an equivalent of 18 recommended credit hours that can be transferred to many colleges and universities and applied toward a two- or four-year degree. Completion of the mid-management curriculum oers up to 24 recommended credit hours. In 2012, 398 Hamburger University transcripts were sent to colleges on behalf of employees, the highest in more than a decade. We are proud to be one of only 8 Fortune 500 companies to receive college accreditation for training.
sta obtain degrees. To promote continuing education among restaurant employees, McDonalds France obtained Validation of Acquired Experience (VAE) for the professional experience and training of restaurant employees. McDonalds France encourages employees to take part in VAEs to develop professional competencies, receive degrees through the VAE program and be better prepared for the wider job market.
I GOT TO DO THE FOUNDATiON DEGREE PROGRAM, WHiCH TOOK 12 MONTHS. I LOOK AT WHAT I ACHiEVED AND I THiNK TO MYSELf: MCDONALDS HAS REALLY DONE ME A fAVOR HERE.
2013, more than 5,000 people have graduated from McDonalds University.
partnered with Manchester Metropolitan University to oer business managers a Foundation Degree in Managing Business Operations. The university awards the degree, which is delivered and assessed by McDonalds.
In ASia, Hamburger University courses are accredited by major universities in mainland China, Hong Kong, and Taiwan.
self-paced training programs for crew that lead to nationally recognized qualications, credit toward university degrees and a foundation for a management career. Also in Australia, the online platform Metime provides management and crew training resources, including orientation information, me-learning, the operations and training manual, and traineeship resources. 85
THE DEVELOPMENt tHAt IVE RECEiVED tHROUGHOUt MY CAREERFROM MY tiME iN tHE REStAURANtS iN BRAZiL, tO bEiNG AN H.U. PROFESSOR, AND ALL tHE WAY tO MY POSitiON AS AN EXECUtiVE iN tHE COMPANYHAS PROVEN tO ME tHAt tALENt iS tHE NUMbER ONE PRiORitY At MCDONALDS.
How McDonalds Restaurant Crew and Managers Feel About Their Training and Development Opportunities1
Percent of crew members satisfied that they receive the training needed to do a good job Percent of managers who feel the person they report to supports their professional development
All data on this chart reects numbers from Company-owned stores in the top 9 markets, as well as stores in Brazil and Japan, unless otherwise designated. Excludes China and France. 3 Excludes China and Germany. 4 Excludes Australia, China and France.
1 2
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McDonalds former Vice Chairman and CEO, Jim Skinner, knows a lot about the importance of training and leadership development. After starting his career in a McDonalds restaurant in 1971, Jim was promoted to higher and higher levels of responsibility across a range of operational areas, and assumed the role of Vice Chairman and CEO of McDonalds in 2004. Along the way, Jim recognized the importance of a strong commitment to people and made people development a key priority during his tenure. Upon Jims retirement in 2012, the Leadership Institute was renamed in his honor.
TodaYs Leaders:
ENSURE THE COMPANY HAS THE LEADERSHIp TALENT AND CApAbILITIES TO DRIVE ENDURING bUSINESS SUCCESS.
LeadersHIp CUltUre:
Tomorrows Leaders:
We create a deep pipeline of diverse and talented future leaders
kudos #8 BEST
We maintain an organizational culture that supports talent and leadership development consistent with our Values at all levels
to advance mutual goals and inspire them to become brand ambassadors and advocates.
Q:
Focusing on diversity, culture, and inclusion improves the organizations cultural intelligence. Paying close attention to the various groups that McDonalds engages with positions the Company to deliver better business results through increased engagement and innovation. McDonalds should continue to focus on its objectives, and making continued investments.
kudos
McDonalds
TIED FOR 5TH OUT OF 100 large companies for diversity in the 2013 Calvert Investments
ranking. The score was based on 10 criteria, including policies, internal and external diversity initiatives, family-friendly benets, board diversity, director selection criteria, disclosures and other commitments and practices.
Gerry Fernandez, Sr. President and Founder Multicultural Foodservice & Hospitality Alliance
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Stakeholder Perspective
Our inclusion and intercultural management mission is evident everywhere we operate, while the strategies that bring it to life are as diverse as the local values of our local communities. the Companys Inclusion and Intercultural Management department supports the Companys business strategy, focusing on four diversity and inclusion (D&I) pillars.
workshops designed to build skills and behaviors to contribute to McDonalds global business growth. The engaging and spirited workshops help us move from awareness to action.
The Intercultural Learning Lab provides a spirited and action-oriented day of classroom learning that develops change agent behaviors and skills to foster a respectful intercultural environment in the U.S. Through customized workshops, the Intercultural Learning Lab helps participants:
INCLUSION: This function provides coaching for management and leadership, aligns the employee
business networks and resource groups with McDonalds larger business goals, and helps to expand McDonalds online mentoring program. The following are U.S. Business Networks and Resource Groups:
EMpLOYee BUsINess NeTWORKs Asia/Pacic Middle East Network Hispanic Employee Network McDonalds African-American Council McDonalds Gay, Lesbian and Allies Network Womens Leadership Network ResOURCe GROUps Veteran Resource Group Working Mothers Council Young Professionals Network
Understand how each generation denes success Explore less obvious forms of discrimination and how to address them
STRATEGIC DIVERSITY ANd INCLUSION: The function plans and executes on its vision, mission
and values.
EXTERNAL PARTNERSHIpS: The function builds and maintains relationships to support the eorts of
diverse organizations that serve communities where McDonalds operates.
OUR INCLUSIoN AND INTERCULTURAL MANAGEMENT MISSIoN IS EVIDENT EVERYWHERE WE oPERATE, WHILE THE STRATEGIES THAT BRING IT To LIFE ARE AS DIVERSE AS THE LoCAL VALUES oF oUR LoCAL CoMMUNITIES.
2012 Intercultural Learning Lab for a McDonalds U.s. REgional Human Resources department
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McDonalds Global Womens Initiative supports the recruitment, development, retention and advancement of women at all levels of the Company, while creating a culture where women can thrive in their careers. Recognized with the prestigious Catalyst Award in 2011, the Global Womens Initiative has helped McDonalds develop and advance women around the world. Five Womens Leadership Networks are active across the Company.
THE WOMENS LEADERSHIP NEtwORK HAS SHAPED OUR GENDER DIVERSItY wORK ACROSS OUR REGION tO DEMONStRAtE tHE SPIRIt OF lIFtING SElF, lIFtING OtHERS, AND lIFtING tHE BRAND. WHEN YOU INVESt IN tRAINING AND DEVElOPMENt, YOURE lIFtING YOURSElF. WHEN YOU DONAtE YOUR tIME, tAlENt AND wISDOM tO SERVE AS A MENtOR, YOURE lIFtING OtHERS. AND wHEN YOU BECOME A VISIBlE lEADER OPERAtING At YOUR FUll POtENtIAl, YOURE lIFtING tHE BRAND.
28%
WOMENS LEADERSHIP
During 2013 McDonalds committed to a new global Womens Leadership Network project to build an even stronger female leadership pipeline by supporting the career progression of Company-owned restaurant managers. Already, we have assembled a working group of women from each McDonalds area of the world to assess the opportunity and identify ways to best support womens career growth.
Emily Pang Co-Chair, Asia-Pacic, Middle East and Africa Womens Leadership Network Vice President, Training, Learning & Development, McDonalds China Dean of Hamburger University China
More than 70% of U.S. Spending with Minority and Women-Owned Suppliers
In 2013, the McDonalds U.S. system purchased approximately $8.8 billion in goods and services from minority and women-owned suppliers. Collectively, this represents 75% of our total U.S. expenditures for food, packaging, equipment, uniforms and premiums. We will continue promoting greater supplier diversity among secondary suppliers so that the benefits of diverse ideas, approaches and resources can reach further into our supply chain.
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CANADA
2012-2013 HIgHlIgHts
APMEA
Held career development road shows in the three major Canadian markets to explore what makes a great leader, with special focus on womens leadership Expanded Canadas WLN to include two additional career levels and held an orientation meeting and webcast to welcome new members to the network Provided the inaugural womens leadership award at the restaurant operators and managers event
LATIN AMERICA
R olled out a Winning with Inclusion and Diversity webinar for women throughout the region H eld events for female employees through 11 local Womens Leadership Network chapters B egan interviews with McDonalds managing directors throughout the region to better understand the M cDonalds Hong Kong earned the Best Employer for Women Award from AON Hewitt. They also earned
recognition from AON Hewitt for Best Employer in Hong Kong and Asia Pacific. McDonalds Malaysia was named Best Employer in Malaysia, in part for high employee engagement unique needs and opportunities related to womens leadership
W ith McDonalds Hamburger University in Brazil, developed course content to raise awareness about the Launched a new mentoring program with a focus on gender diversity Led Womens Workshops in Brazil, Argentina, Mexico, Colombia, Venezuela and Puerto Rico Developed a diversity scorecard to track progress
USA
EUROPE
D elivered a Womens Career Development train-the-trainer workshop and held a customized career S ponsored learning events that addressed womens leadership in the Company and began mapping next C ontinued McDonalds leadership role in Womens Foodservice Forum, participating in the annual P rovided resources and tools for WLN U.S. chapter leads on building talent and other topics
conference, sponsoring attendees and holding a reception to support networking steps for womens talent development development session for women in information technology
Expanded the European Womens Leadership Network (EWLN) Vision and Mission by creating our
strategic imperative, Breaking Down Barriers. This imperative encourages both men and women to participate in actively dismantling barriers to female progression in Europe. Gender diversity was identified as a top priority in Europe for 2014 E xpanded the scope and awareness of Gender Diversity as a key business driver through increasing the number of local chapters by 80% C onceptualized, designed, and facilitated first ever Local Chapter Workshop, which enabled best practice sharing in womens leadership chapters between established and emerging chapters D rove creation of quarterly pan-European gender reporting by global level by market Established strategic agenda for biennial EWLN Conference
core VALUE
Our continued success depends on a talented, engaged, and diverse workforce. From energized crew members and managers to committed leaders, the people who make up McDonalds around the world are at the center of our shared journey, now and in the future. As we go forward, we will continue seeking new ways to create rewarding opportunities in a work environment that trains and develops employees for success, values their contributions, and fosters diversity and inclusion so that all employees have the chance to achieve their full potential. 91
Good COMMUNITIES
physical activity.
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FOR OVER 50 YEaRS, tHE McDONaldS SYStEm HaS bEEN cOmmittEd tO giViNg bacK tO tHE cOmmUNitiES iN wHicH wE OPERatE aNd liVE. WE dO tHiS tHROUgH OUR SUPPORt Of RMHC, OUR CHaRitY Of CHOicE, aNd OtHER lOcal ORgaNiZatiONS tHat maKE a mEaSURablE imPact ON tHE wEll-bEiNg Of cHildREN aNd tHEiR familiES. THiS cORE ValUE HaS bEEN a KEY iNgREdiENt Of OUR SUccESS aNd will cONtiNUE tO bE aN iNtEgRal PaRt Of OUR COmPaNY.
J.C. Gonzalez-Mendez Senior Vice President Global CSR, Sustainability & Philanthropy, McDonalds Corporation
RMHC is an independent charity that receives support from multiple organizations, including all three legs of the McDonalds System, our customers and the public at large. RMHC is recognized as a public charity under U.S. Internal Revenue Code section 509(a) with 501(c)(3) status. The mission of RMHC is to create, find, and support programs that directly improve the health and well-being of children.
WHat I lOVE mOSt, PERSONallY, iS HOw OUR cREw aNd maNagERS SUPPORt maNY actiVitiES tHat bENEfit RMHC. THE aNNUal wEEK-lONg CHaRitY BiKE RidEwHicH tRaVElS OVER 650 KilOmEtERS aNd ViSitS maNY tOwNSiS a HigHligHt EacH YEaR. tHiS iNitiatiVE RaiSES aPPROXimatElY $140,000 (AUStRaliaN dOlLARS). WE gaiN a SENSE Of tEamwORK aNd PRidE iN HElPiNg familiES tHat aRE dEaliNg witH a tOUgH SitUatiON. AS a PaRENt, mY HEaRt gOES OUt tO tHESE familiES, wHicH iS wHY I dO mY bESt tO SUPPORt tHE miSSiON Of RMHC.
MIKE BOLTON McDonalds Franchisee and RMHC National Board Member Australia
Around the world, the way we support communities is very local. Franchisees like Mike Bolton play a key role by lending their time and support to organizations that benet people in the communities where we operate. Mike has been a proud member of the McDonalds family for 30 years. After working as a manager and regional manager for McDonalds for more than two decades, he became a Franchisee in 2005. Since then, he and his wife Jan have earned a number of awards for their six restaurants, including the National People Excellence Award, National Golden Spatula Award, the Regional Outstanding Restaurant Award, and the Golden Arch Award. Mike has been a committed RMHC supporter for many years and a member of the RMHC National Board in Australia and several Chapter boards.
Chloe Tang liao REcENt GuEst OF RONALd McDONALd HOusE chAritiEs OF chicAGOLANd ANd NOrthWEst INdiANA
THE LIVES OF MCDONALdS SUPPORT HAS HELPEd RMHC TO ImPACT 7 mILLION CHILdREN ANd THEIR FAmILIES EACH YEAR. RESTAURANTS, RAISEd mORE THAN $26 mILLION FOR RMHC IN OUR IN THE U.S. ALONE.
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IMPRovINg THE LIvES oF cHILdREN ANd THEIR FAMILIES THRoUgH oUR SUPPoRT oF RMHC
Doing our part to help children grow up happy and well has been part of McDonalds culture since our beginnings. We work to make a positive dierence in the lives of children and their families by supporting organizations that foster childrens well-being, as well as through our employee volunteer programs, charitable contributions, and community development in emerging economies. For 40 years, RMHC has been McDonalds Charity of Choice, providing continued support that has enabled RMHC to provide stability and resources to millions of families and children.
RoNALd McDoNALd HoUSE CHARITIES
RONALD MCDONALD HOUSES provide a home away from home for families with seriously ill
and regions
in 35 countries
HoUSES
336
by the Numbers
children receiving treatment at nearby hospitals. More than 8,000 families. stay in Ronald McDonald Houses each night.
RONALD MCDONALD FAmILY ROOmS oers families a place to relax and refresh in the hospital
setting. The Family Rooms provide comfort to more than 4,000 families each day.
RONALD MCDONALD CArE MOBILES are state-of-the-art mobile clinics that deliver pediatric health
care services to 154,000 children in vulnerable rural and urban communities every year. Through these programs and other initiatives, RMHC provides a bridge to quality care and gives children and families the time they need together to heal faster and cope better. Every day, more than 20,000 families benefit from RMHC programs around the world. Annually, RMHC impacts the lives of 7 million children and their families.
192
FAMILy RooMS
in 23 countries and regions
50
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15 RoNALd McDoNALd HoUSES, oering 12,500 more families a year a place to nd comfort and
support to be close by their hospitalized child.
21 RoNALd McDoNALd FAMILy RooMS, providing a respite for 5,250 more families who spend
countless hours in hospitals, helping their children cope better and heal faster.
RMHC DONATION BOXES placed on the counter and the drive-thru at participating McDonalds
2 RoNALd McDoNALd CARE MobILES, oering more medical care, dental services, and
health education to 6,160 more children.
restaurants. This is the largest source of fundraising for the charity. In 2013, more than $26 million was raised through RMHC Donation Boxes in the U.S. alone.
McHAPPY DAY/GIVE A hANd, an annual fundraiser supported by McDonalds restaurants around the
world through a variety of fun activities.
POrTIONS OF ThE PrOcEEdS from Happy Meals or other items in participating markets also
support RMHC and its local Chapters throughout the year.
OThEr FUNd-rAISErS, such as open houses, garage sales, fun runs, bowling events and golf
tournaments sponsored by restaurant owners and other organizations provide donations throughout the year.
And, while every RMHC initiative reects a shared mission and values, strategic direction in each country is based on cultural relevance, community engagement, and need. For example, in the Philippines, the Bright Minds Read Program teaches children how to read. In Australia, the Ronald McDonald Learning Program helps seriously ill children catch up on the education they missed due to illness, improving academic performance, self-esteem, and condence when returning to school.
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A.
No event better illustrates McDonalds commitment more than helping children through McHappy Day. Since 1977, when the first McHappy Day took place in Canada, this initiative has expanded worldwide, uniting McDonalds restaurants around the globe to raise funds for RMHC and other local charities. Depending on the location, restaurants donate some or all of the proceeds from Happy Meals, Big Mac sandwiches, fries, or other popular items, along with individual customer contributions (e.g., Give A Hand cutouts), which add up to huge benefits in the lives of children and their families. McHappy Day has inspired creativity at McDonalds restaurants around the world. The System and its employees often participate, along with local dignitaries and community members. 96
I LiKE THE FACT THAT MCHAPPY DAY ALLOWS THE RESTAURANTS TO GiVE diRECTLY TO A LOCAL CAUSE THAT HELPS CHiLdREN. WHEN WE RALLY TO HELP ANd SUPPORT THiS iNiTiATiVE, WE KNOW THAT THE dOLLARS WE ARE SPENdiNG ARE diRECTLY imPACTiNG OUR COmmUNiTiES ANd THiS iS SOmETHiNG I STRONGLY BELiEVE iN.
In russia,
sports and media personalities, politicians, and local celebrities join sta to greet customers and work behind the counter.
In Canada,
McDa Feliz features celebrities, journalists, sports personalities, and members of the national media volunteering at McDonalds restaurants.
In Guatemala,
restaurants sell items like Helping Hand cutouts, donating 100% of the prots to RMHC.
In Australia,
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McDonalds Australia Orchestrates Scholarships and Grants to Advance performing Arts Studies
For the past 25 years, McDonalds Australia has sponsored the McDonalds Sydney Eisteddfod, the countrys largest performing arts competition with an 80-year history and 30,000 participants. McDonalds Australia also funds two major scholarships for ballet and opera studies. In 2013, McDonalds Australia awarded 25 grants to celebrate its partnership with the McDonalds Sydney Eisteddfod.
proud sponsor ds has been a g arts in For 25 years McDonal to support performin 80th year will continue and in this their and goals. realise their dreams and help young people od of the Sydney Eisteddf the community
2012 24.01.13 J367 Syd Eisted Ad 213 x 276mm 4:54 PM January 24, 2013
______________ ______________
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99
These Champions of Play children from around the world got a behind-the-scenes look at select venues, and learned firsthand the value of physical activity and sport. In addition, an exclusive play room offered games and physical activities. McDonalds markets developed their own local programs: featured the Great McDonalds Mascotathon in which children used Happy Meal toys to get active and power the Mascots to the Opening Ceremonies by logging their hops, skips, and jumps online.
CHAMPIONS OF PLAY
sponsored an essay contest that encouraged kids to address what they love most about their sports club.
In Australia, McDonalds
encouraged physical activity and provided tips on being active. A special website featured Olympians in a series of imaginative challenges led by ve-time U.S. Olympic Swimmer and 12-time medalist Dara Torres as the Global Ambassador of the program. Kids participated in these challenges by doing real-life activities of their own and logging those activities online.
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AS a COMMUNITY-CENTERED NON-PROFIT DEDICaTED TO BRINGING PEOPLE TOGETHER FOR YOUTH DEVELOPMENT, HEaLTHY LIVING aND SOCIaL RESPONSIBILITY, COLLABORaTING ON a NEW PLAYGROUND WITH THE MCDONaLDS FOUNDaTION aND K BOOM! WaS a NaTURaL FIT FOR US. THE PLAYGROUND NOT ONLY GIVES CHILDREN a WONDERFUL PLACE TO PLAY aND GET aCTIVE, BUT aLSO HELPED OUR LARGER COMMUNITY COME TOGETHER FOR THE COMMON GOOD.
The first Play Day sponsored by the McDonalds Foundation and K BOOM! partnership took place at a newly built playground in Chicagos South Side. K BOOM! is dedicated to giving kids the childhood they deserve by bringing play to those who need it most.
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ONE oF THE WAYS WE ARE MAKING A DIFFERENCE IS WITH oUR YoUTH WITH A FUTURE oR JVENES CoN FUTURo PRoGRAM. WE oFFER 18 To 24 YEAR oLDS A CHANCE To CoMBINE oN-THE-joB TRAINING WITH SKILLS CERTIFICATIoN. BEFoRE WE HIRE THEM, THEY HAVE No joBS AND HAVENT FINISHED SCHooL. ONCE WE HIRE THEM, THEY WoRK AT MCDoNALDS FoUR TIMES A WEEK, WITH SALARY AND MEDICAL CoVERAGE. THEY ALSo TAKE TRAINING 6 HoURS A WEEK AT TECHNICAL SCHooL. SINCE WE BEGAN THE PRoGRAM IN ARGENTINA IN 2011, 91 YoUNG MEN AND WoMEN HAVE TAKEN PART. AT THE END oF THE 10 MoNTH PRoGRAM, THEY GRADUATED AS MAINTENANCE TECHNICIANS, WITH A CERTIFICATE RECoGNIZED BY THE MINISTRY oF LaBoR. THATS WHY WE WANT To GRoW JVENES CoN FUTURo: To GIVE MoRE YoUNG LaTIN AMERICANS A CHANCE To HAVE A WHoLE NEW FUTURE.
An estimated
7,00
0+ r e
stau rants
9.5B 7.6B
($10.5 billion U.S.) Estimated total impact on regional/local economies of salaries and wages paid by McDonalds Europe and Franchisees
As an NEO founding partner, Arcos Dorados committed to creating 30,000 new jobs. Arcos Dorados is proud to make a difference in 20 countries in Latin America and the Caribbean, one job at a time.
$23.6M $21.5M
2011 2012
$21.7M
2013
cAPITAL EXPENdITURES
$2.4B $2.1B
2011 2012
$2.5B
2013
$2.7b
$3.0b
$2.8b
2011
2012
2013
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The Companys Matching Gifts Program is designed to encourage employee support of qualified education, arts and culture, medical research, youth, civic, and social organizations. The program, which is open to eligible Company employees based in the U.S., provides matching funds for donations totaling up to $5,000 per eligible employee ($10,000 for Company Officers) in a calendar year. In 2013, the Company matched 2,125 employee gifts, contributing almost $1.2 million.
In the U.S., the Companys legal department maintains a pro bono program that provides legal assistance to low-income individuals and helps elementary and secondary students from diverse backgrounds develop the skills and knowledge to serve their communities as active, responsible citizens. Through the award-winning program, the Companys attorneys and legal staff collaborate with various legal service and community development organizations to deliver support and resources to individuals and families.
he McDonalds China Volunteer Club enables T employees to get active in charitable activities. Through the club, employees visit orphanages and volunteer their time to make a positive difference in the lives of children and their families.
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THE GOOD NEIgHBOR PROgRAM IS VItAL BECAUSE It BRIngS pEOpLE tOgEtHER. It IS A WIn-WIn InItIAtIVE FOR OUR COLLABORAtORS AnD SOCIEtY. WHEn CUStOMERS LEARnED ABOUt tHE pROgRAM, tHEY gOt EXCItED ABOUt COntRIBUtIng, AnD AS FOR OUR EMpLOYEES, tHEY FEEL HAppY AnD pROUD tO WORK AnD HELp tHE COMMUnItY.
core VALUE
As we continue on our shared journey to give back to the communities where we operate, we will continue working toward a global strategy that can further align our extensive community programs. We hope this will elevate the collective impacts of our corporate giving, volunteering, and disaster relief eorts. McDonalds will continue supporting the work of RMHC and promoting physical activity and education. We will continue striving to understand the societal issues and causes closest to our customers, employees, Franchisees, and suppliers around the world. And as good neighbors, we will continue fostering collaboration throughout the System to drive our shared journey together for good. 107
Reviewing reports related to social, political, economic and environmental trends that may have a significant Reviewing global sustainability and corporate responsibility reports issued by the Company in connection Overseeing the Companys charitable giving policies and programs
with the Global Reporting Initiative and review the Companys disclosure controls and procedures related to those reports
THE BAsIs FOR OUR ENtIRE BUsINEss Is tHAt WE ARE EtHICAL, tRUtHFUL ANd dEPENdABLE WE ARE BUsINEss PEOPLE WItH A sOLId, PERmANENt, CONstRUCtIVE EtHICAL PROGRAm tHAt WILL BE IN stYLE YEARs FROm NOW EVEN mORE tHAN It Is tOdAY.
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MCDONALds sUCCEss Is BUILt ON A FOUNdAtION OF INtEGRItY ANd tRUst. THE COmPANY HAs EARNEd tHIs tRUst BY BEING EtHICAL, tRUtHFUL, ANd dEPENdABLE OVER mANY YEARs, ANd BY HAVING mANAGEmENt tHAt sUPPORts POsItIVE OUtCOmEs FOR PEOPLE ANd tHE PLANEt, tHROUGH tHEIR sUPPLY CHAIN PRACtICEs, EmPLOYmENt PRACtICEs ANd PHILANtHROPY. As CONsUmER EXPECtAtIONs CONtINUE tO RIsE ANd tHE ENVIRONmENt FOR BUsINEss OPERAtIONs GEts INCREAsINGLY COmPLICAtEd, Its EssENtIAL tHAt tHE COmPANY CONtINUEs tO INtEGRAtE CSR & SUstAINABILItY tHINKING INtO CORE BUsINEss stRAtEGIEs ANd OPERAtIONs.
Walter E. Massey Member, McDonalds Board of Directors Chair, Sustainability and Corporate Responsibility Committee
Leads the development and execution of worldwide food quality strategies, including food safety. Includes senior-level supply chain and food safety specialists, as well as quality assurance directors from each of the Companys major geographic sectors.
Guides development of the strategies and tools necessary to accomplish McDonalds vision for sustainable sourcing.
Compliance is Fundamental
The Global Compliance Office oversees compliance with the Standards of Business Conduct and many other Company policies. Local and regional business units also play an important role in implementing policies for legal compliance throughout our markets. Numerous policies and guidelines outline the requirements and procedures for a variety of topics ranging from confidentiality to conflict of interest. Additional elements of our global compliance program include:
Global Compliance staff train employees in identifying and responding to the highest risk areas for particular markets. Global Compliance staff members engage with service providers to help conduct due diligence on third parties to support well-informed decisions about business relationships. The Global Anti-Corruption Policy includes, among other things: Guidance on complying with anti-corruption laws Prohibitions on facilitating or grease payments Prohibitions on commercial bribery Guidance on appropriate gifts, favors and business entertainment Guidance on dealing with government officials, suppliers, contractors and agents appropriately Importance of keeping accurate books and records
N ew sections referencing existing policies on:Dating and Nepotism, Fraud, Financial Crime, Money
Laundering and Anti-Terrorism, Export/Import Controls, and Related Persons
R evisions to reect changes in law and the Companys policies and practices related to: Condential
Information, Data Privacy and Protection, Human Rights, Conicts of Interest, Business Records and Communications, Anti-Corruption, and Internal Investigations
C ondential information and records management E-compliance associated with email and
web-based communications for supplier relationships
THE ETHICS CHAmPION PROGRAm RECOGNIZES EmPLOYEES ACROSS THE GLOBE WHO ARE ADVANCINg ETHICS AND INTEgRITY BY:
T aking a leadership role in promoting awareness C oaching others on ethical decision-making H elping the Global Compliance team coordinate training G oing above and beyond expectations in demonstrating ethics
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Anti-Corruption Practices
McDonalds Global Anti-Corruption Policy is the foundation for the anti-corruption compliance program. This Policy applies to all directors, officers and employees of the Company, as well as third parties acting on the Companys behalf.Examples of such third parties include consultants, contractors, tax advisors, brokers, architects, attorneys, lobbyists, licensing or permitting agents, public relations firms and others who are retained to represent the Company. The Global Compliance team provides anti-corruption training for Company employees, with priority given to markets considered to have high levels of corruption based on a risk matrix. In addition to in-person compliance visits, in 2013 a new mandatory online training course focused on anti-corruption was distributed to all Company employees. This specialized training supports compliance with all applicable anti-corruption laws, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and local laws and regulations. The Global Anti-Corruption Policy has also been translated into numerous languages, and was updated in 2013. Additionally, a two-page quick reference summary was developed for Company employees on key policy and procedural requirements.
Political Contributions
McDonalds Political Contribution Policy, which has been in place since 2006, was amended in 2011 to reaffirm our long-standing practices regarding contributions to political parties, candidates for public office and political organizations. Generally, the Company does not make political contributions to political parties, candidates for public office or political organizations. However, because public policy issues have the potential to affect McDonalds restaurants and the communities in which McDonalds operates, political contributions may be appropriate in certain cases. The Political Contributions Policy is designed to ensure that contributions are consistent with law and our Standards of Business Conduct and appropriate in the overall context of our business and meet other requirements, including advance approval. In the U.S., the Company does not make any independent expenditure or pay for any electioneering communications, as those terms are defined by applicable law. In keeping with the policy, management reports semi-annually to the Board of Directors Sustainability and Corporate Responsibility Committee on corporate political contributions. Contributions made in the U.S. are also disclosed semi-annually on our corporate website.
Additional Policies
A variety of other standards, codes, policies and frameworks that provide guidance about the Companys commitments, expectations, and practices can be found on our corporate website. Examples include: Animal Health & Welfare Guiding Principles Global Childrens Marketing Guidelines Energy and Climate Change Position Global Environmental Commitment Political Contribution Policy Global Policy on Antibiotic Use in Food Animals Rainforest Policy Supplier Code of Conduct 111
COMMUNITY ENGAGEMENT
GLOBAL ENVIRONMENTAL COUNCIL WORLDWIDE SUSTAINABLE SUPPLY STEERING COMMITTEE GLOBAL SUPPLIER WORKPLACE SUPPLIER ACCOUNTABILITY WORKING GROUP
GLOBAL ANIMAL HEALTH & WELFARE COUNCIL GLOBAL MENU COUNCIL GLOBAL HR LEADERSHIP TEAM
USA
CANADA
LATIN AMERICA
EUROPE
APMEA
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APPENDIX
PERFORMANCE METRICS
Since establishing our social and environmental indicators in 2006, we have continued to refine our approach for gathering and evaluating quantitative measures of our performance. In addition, we continue to evaluate options for additional key performance indicators that contribute to our continuous improvement goals and meet the transparency expectations of our stakeholders. This report includes 2012 and 2013 performance data, as well as historical data for indicators established in previous years. We have established 2012 as our baseline year for tracking progress toward our 2020 goals, with the exception of our energy efficiency goal. In addition, select indicators from the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines, as described in GRI 3.1, are included in this report. The GRI Index, available as a separate addendum on our corporate website, details our alignment with the GRI guidelines. Because application levels have been eliminated with the latest iteration of the GRI guidelines, we have not declared an application level, but we are pleased that this report includes more indicators than our last report in 2010 and reflects continued growth in our reporting. Specific performance periods are shown in the appropriate chapters of the report. Of course, good work is not limited to our top 9 markets, so we have also included stories from other markets around the world. Some of these initiatives were launched in 2012 or 2013, while others began earlier but achieved a milestone during the reporting period.
BETTER PERFORMANCE =
MEASUREMENT
Clearer
PROGRESS
our goals
toward
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E nviance used available data on energy consumption and refrigerants from our top 9 markets to extrapolate O ur global carbon footprint based on Enviances analysis accounted for carbon impacts at each tier of E nviance applied the GHG Protocol Scope 1, 2, and 3 accounting standards. E nviance incorporated input-output data to refine results. W e compared results to previous assessments conducted in 2007 and 2010. T ogether with Enviance we further investigated the Scope 3 results to identify hotspots within the
supply chain, including activities such as farming and environmental outcomes such as methane production from livestock.
and estimate worldwide restaurant emissions, Company office energy consumption, expenditures on our top 20 commodities, and restaurant waste data adjusted for recycling. the McDonalds supply chain, extending from the distribution centers that purchase raw materials from suppliers to the farm.
SCOPE 1: All direct GHG emissions SCOPE 2: Indirect GHG emissions from consumption of purchased electricity, heat, or steam SCOPE 3: Other indirect emissions, including those from our supply chain and Franchises
For McDonalds, Scopes 1 and 2 reflect GHG emissions associated with our Company-owned restaurants and offices, and include purchased fuel, electricity, and refrigerants. Most Scope 3 emissions are mostly associated with Franchisee restaurants and our supply chain.
Disclaimer
Care and diligence has been taken in collecting and processing the data contained in this report. Nevertheless, it is not always possible to exclude errors and inaccuracies entirely. This report contains statements about future developments in addition to past occurrences, and is based on information presently available and on assumptions derived from current forecasts. Even where great care has been taken in preparing the latter, numerous variables that cannot now be anticipated may result in deviations.
P lease note that the results of Enviances analysis are approximate, based on limited best available data, E nviance quantified our 2011 Scope 1, 2, and 3 GHG impacts based on our available data to identify the
greatest sources of impacts throughout our System and determine priorities. For Scope 1 and 2 analyses, Enviance utilized fuel and country-specific emissions factors from the GHG Protocol. and Purchased Goods and Services beyond the Food and Packaging supply chain (Scope 3), due to lack of available data in the format Enviances analysis required. We intend to include all relevant, but currently excluded, GHG Protocol emissions categories in future analyses as data becomes available.
T he analysis of 2011 data excluded information on Company vehicles (Scope 1), Capital Goods (Scope 3),
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At McDonalds, our CSR & Sustainability journey is a collective eort that includes the contributions of individuals from all legs of our three-legged stoolOur Company employees, our Franchisees and our suppliers. We all have a role to play. Below are just a few of the people who are helping us advance our commitment to creating shared value for our business and society.
Vice President, Strategic Sourcing, World Wide Supply Chain Management McDonalds Corporation
FRANcEScA DEBIASE
STEpHEN HObbS
Beef farmer, Buckinghamshire, U.K.
PAT HA
NIcOLA PITmAN
aining, University, Chin sident, Tr Vice Pre n of Hamburger s China d Dea McDonal
RIc RIcHARDS
KELLY Lu DWI
PIERRE WOREcZEk