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McDonald's 2010 Corporate Social Responsibility Report

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McDonald's 2010 Corporate Social Responsibility Report

  1. 1. McDonald’s CorporationWorldwide Corporate Social Responsibility2010 Report Nutrition and Well-Being sustainable supply chain Environmental Responsibility EmployEE ExpEriEncE Community whatwe’re made of ®
  2. 2. Table of ConTenTsIntroduction 03Corporate Governance & Ethics 04Message from Jim Skinner 05Progress to Date 06Feature: Farm to Front Counter 11Nutrition and Well-Being 18Sustainable Supply Chain 20Environmental Responsibility 22Employee Experience 24Community 26Where We Are Going From Here 28 abouT This RepoRT We’re taking a more streamlined approach to our report this year, focusing on progress made since our last report was issued in 2009. As in the past, we are primarily reporting on our nine largest markets: Australia, Brazil, Canada, China, France, Germany, Japan, United Kingdom and United States. At the end of each section, we encourage you to “Read More About” related topics, policies and programs found at http://www. We have cataloged our entire Corporate Social Responsibility site, including the content in this report, using the Global Reporting Initiative (GRI) framework.2 McDonald’s 2010 Worldwide Corporate Responsibility Report
  3. 3. inTRoduCTionWhat We’re Made Of100% pure beef... crisp lettuce...fresh eggs... these are just some of theingredients McDonald’s food is made of.Continuous improvement...growth opportunity...commitment to doing theright thing for our customers, our communities and the planet... these aresome of the ingredients McDonald’s as a company is made of.With more than 32,000 restaurants around the world, we know that Guided by McDonald’s company values, we seek to make progressMcDonald’s can have considerable positive impact. We embrace the in five key areas: nutrition and well-being, sustainable supplyopportunity to leverage our size and scope to make chain, environmental responsibility, employeethe world a better place. We’re committed to experience and community. Our bottom linedoing the right thing each and every day in each is achieving quality every stepand in every aspect of our business of the way from the farm to the frontoperations. This extends to our counter – fresh, delicious food,suppliers as well. We all take this productive partnerships, ethicalresponsibility seriously – and we business practices and engagingthink long-term. experiences for our customers and employees.McDonald’s founder Ray Kroc Nutrition and Well-Beingonce said “We had principles We’re proud of the progresswhen we were poor and we’ve made, but we knowwe have never lost them.” there is still a long wayFrom the beginning, these sustainab le sup p ly chain to go. We’re privileged Environmental Responsibilityprinciples have helped our to touch a mosaic ofcompany achieve sustained communities in 117profitable growth for our countries around the worldshareholders. To achieve EmployEE ExpEriEncE and to employ a diverselong-term success, we knowthat we must ensure that Community workforce. We serve a constantly evolving range ofour business operates in an menu options to an averageethical and sustainable manner, of 1,900 guests daily in eachtaking into account our impact on McDonald’s restaurant. Thesociety and the environment. It’s challenges are many, the issuessimply the right thing to do for our ever-changing and the solutions arebusiness, our customers and the planet. both complex and rewarding.Though our Brand is recognizable around the We listen to what customers and otherworld, we operate as a collection of small businesses. stakeholders want and expect from us and thenThe vast majority of McDonald’s restaurants are owned and work with outside experts and all parts of our System to achieveoperated by entrepreneurial leaders in the community. Our System tangible progress. We always strive to be better tomorrow thanbalances the interests of franchisees, suppliers and company we are today. This, more than anything, speaks to who McDonald’semployees, so making progress requires shared commitment, is as a company. It’s what we’re made of.teamwork and effective communication over time.What We’re Made Of 3
  4. 4. COMMUNITY SUPPORT: McDonald’s FrameworkGoveRnanCe and eThiCs RMHC PARTNERSHIPS OWNER/ DISASTER AND AND OPERATOR RELIEF CHILDREN’S SPONSORSHIPS INVOLVEMENT PROGRAMSGovernance and Ethics CHILDREN’S PROGRAMS — TKAmong our company values is a simple statement: We operate our PARTNERSHIPS AND SPONSORSHIPS — TKbusiness ethically. This value is at the heart of all of our corporate OWNER/OPERATOR INVOLVEMENT — TKresponsibility efforts. To support it, we’ve established strong DISASTER RELIEF — TKpolicies and processes, as well as a comprehensive governancestructure led by our Board of Directors and spanning all levels ofthe organization.AROUND THE WORLD:DeliveringResponsible Food matters addressed by the full Board of Directors, Board oversight is alsoIn addition to WoRlDWIDE CoRPoRAtE 16%contributed through six standing committees, including the Corporate Responsibility RElAtIoNS CouNCIlCommittee. This Committee acts in an advisory capacity to the Company’s management 30% Guides and aligns issue positions, 45%regarding policies and strategies that affect McDonald’s role as a socially responsible approaches and communications acrossorganization, such as issues related to product safety, workplace safety, employee McDonald’s System related to socialopportunities and training, diversity, the environment and sustainable supply chain and environmental issues 9%initiatives. These issues are important to the McDonald’s System and a wide range of CoRPoRAtE SoCIAl RESPoNSIBIlIty external stakeholders, including our customers. As such, ongoing dialogue at the highest DEPARtMENt levels of the company is critical. Provides corporate staff leadership,At the corporate level, McDonald’s also has a collective of cross-functional and coordination and support for our globalissue-specific governing bodies that monitor and managemajor geographic day-to-day basis. McDonald’s operations are segmented into four issues on a areas. corporate social responsibility policies, programs and reportingTo learn more about McDonald’s business and profile, take a look at our 2010 USA EuropeAnnual Report. Latin America & Canada Asia Pacific, Middle East & Africa (APMEA) QuAlIty SyStEMS BoARD Leads the development and execution of worldwide food quality strategies, including food safety, and includesCORPORATE RESPONSIBILITY: Oversight and Coordination senior-level supply chain and food safety specialists and QA directors from each CR COMMITTEE OF THE BOARD OF DIRECTORS of our major geographic sectors SuStAINABlE SuPPly StEERING WORLDWIDE CORPORATE RELATIONS COUNCIL CoMMIttEE Guides the development of the strategies and tools necessary to CORPORATE SUSTAINABLE SOCIAL GLOBAL ENVIRONMENTAL QUALITY SYSTEMS SUPPLY accomplish McDonald’s vision of a RESPONSIBILITY STEERING DEPARTMENT COUNCIL BOARD COMMITTEE sustainable supply system GloBAl ENvIRoNMENtAl CouNCIl Identifies global strategic environmentalWORLDWIDE CORPORATE RELATIONS COUNCIL – Guides and aligns on issue positions, priorities and acts as a forum for bestapproaches and communications across McDonald’s system related to social &environmental issues. practice sharing on local environmentalCORPORATE SOCIAL RESPONSIBILITY DEPARTMENT – Provides corporate staff leadership, initiatives and programscoordination and support for our global corporate social responsibility policies,programs and reporting.QUALITY SYSTEMS BOARD – QA directors in each of our major geographic sectors andsenior-level supply chain and food safety specialists lead the development andexecution of worldwide food quality strategies, including food safety.SUPPLY CHAIN LEADERSHIP BOARD – Guides the development of the strategies and toolsnecessary to accomplish McDonald’s vision of a sustainable supply system.GLOBAL ENVIRONMENTAL COUNCIL – Identifies global strategic environmental prioritiesand acts as a forum for best practice sharing on local environmental initiatives andprograms.4 McDonald’s 2010 Worldwide Corporate Responsibility Report
  5. 5. MessaGe fRoM MCdonald’s Ceo JiM skinneRDoing Well By Doing GoodI’ve had the good fortune to be a part of the McDonald’s Systemfor nearly 40 years – and to observe firsthand what this companyis made of. I’ve seen it in the decisions we make, the quality foodwe offer, and the steps we take to give back to the communitieswe serve.Our actions around the world are guided by our values, one of which is a commitmentto continuous improvement. We understand that we can always do better … and wedefine “better” not just in terms of “doing well” but also “doing good.” Consumers are morediscerning than ever about the brands they choose. When making purchasing decisions,they consider not only the quality of a company’s offerings, but the integrity of its actions.Being a socially responsible company is a part of McDonald’s heritage, and it startswith the experience we deliver in our restaurants. We listen to our customers and,consequently, we have evolved our menu to address balance and choice. In recent years,we’ve expanded our offerings to include salad and grilled chicken platforms, wraps, freshfruit, smoothies and more. We’re proud of these steps and remain committed to beingpart of the solution around family well-being. We will continue broadening our array ofmenu choices while always delivering the taste, quality and experience that McDonald’scustomers expect.Meanwhile, we continue to intensify our work across the broad spectrum of corporateresponsibility, from conservation to animal welfare to sustainable sourcing. In the courseof serving communities around the world, we know we use our fair share of resources. Thisdoesn’t come without consequence. McDonald’s embraces the responsibility that comeswith our global presence. Each year, we set our goals higher – continuously challengingourselves to reduce our impact on society, strengthen the communities around us andhelp maintain a world that can carry all of us well into the future.We learned a long time ago that we don’t have all the answers – and we can’t achieve thebest results alone. We are proud to partner with NGOs, academics, governments andothers in the industry to help us reach our goals. Recently, we celebrated two decadesof sustainable progress, which began with our breakthrough partnership with theEnvironmental Defense Fund and continues with the partnership and collaboration fromexperts and organizations around the world.Moving forward, we will keep partnering with others and communicating our progress inan open and transparent manner. With that, I invite you to examine our 2010 CorporateResponsibility Report and learn more about what we’re doing today, where we’ve hadsuccess, and where we still have room to grow.I am proud of McDonald’s as a business and a brand – from the quality food choices weoffer customers … to the opportunities we provide our employees … and our efforts thataddress the challenges our society and planet are facing. Our latest report highlights allof this and will give you a better understanding of what McDonald’s is made of.Jim Skinner, CEOMcDonald’s CorporationWhat We’re Made Of 5
  6. 6. 2008-2010 pRoGRess assesMenT andkey peRfoRManCe indiCaToRsOur Progress To Date key peRfoRManCe indiCaToR 1 suMMaRy In our 2008 Corporate Responsibility Report, we established goals related to key social Since first establishing key performance and environmental performance categories. The Progress Snapshot below provides a indicators in 2006, we have continued current summary of our achievements and, in some cases, areas where additional work to refine our approach to gathering and still needs to be done. evaluating quantitative measures of our performance. In addition, we continue to While we’re reporting on our progress to date here, it’s important to note that many of evaluate options for additional and/or these goals are long-term priorities that we will continue to pursue for the foreseeable alternative key performance indicators that future. The overarching goal of our corporate responsibility strategy is to focus on contribute to our continuous improvement continuous improvement. Sometimes, progress comes more slowly than we would like, goals and meet the transparency expectations but the key is that we are always moving forward. of our stakeholders.1. Accelerate and expand food and beverage choices for kids progress goal met offering Menu Choice Average number of items, per market menu,Throughout the world, McDonald’s continues to innovate around kids’ meal offerings, that contain at least one serving of fruitwhile increasing the appeal of existing food and beverage choices for kids. In multiple or vegetablesmarkets around the world, special promotions and sampling tests are being conducted,such as free fruit offerings with Happy Meals. Our objectives are two-fold – to increase 2006 2007 2008 2009awareness of fruit and the improved nutritional options available as part of the Happy 6.1 6.1 6.4 6.92Meal and to leverage the fun of McDonald’s Happy Meals to positively influence kids’perceptions of eating fruit. Average number of items, per market menu, that contain at least 1/2 serving of fruit2. Continue to enhance children’s well-being through programs and initiatives that or vegetables provide “fun with a purpose” 2006 2007 2008 2009 progress goal met 9.9 10.9 11.4 11.92Globally, McDonald’s introduced a series of animated online music videos for kids and moms focused on the fun and good taste of fruits and vegetables. The videos were viewed Providing Nutrition Informationon various McDonald’s websites, Facebook and YouTube. As part of the Shrek Forever Percent of Top 9 markets that make nutritionAfter™ Global Happy Meal promotion, McDonald’s enlisted the help of these popular information availablecharacters to dial up the taste and fun of fruit, vegetable and dairy Happy Meal choiceitems around the world. In-restaurant (i.e. trayliners, nutrition brochures)3. Continue to provide useful nutrition information in ways most relevant to 2006 2007 2008 2009 today’s consumers 100% 100% 100% 100% progress goal met Out-of-restaurant (i.e. websites)In many markets around the world, McDonald’s has enhanced merchandising efforts to 2006 2007 2008 2009make it easier for parents to make balanced food choices for themselves and their kids.In our top nine markets, we continue to invest in making nutritional information available 100% 100% 100% 100%in the store, as well as online.6 McDonald’s 2010 Worldwide Corporate Responsibility Report
  7. 7. 2008-2010 pRoGRess assesMenT andkey peRfoRManCe indiCaToRs4. Educate and communicate with our supply system about sustainability Supplier Workplace Accountability progress goal met Percent of food, packaging and tier-1We continue to communicate with our suppliers about sustainability in multiple ways. It equipment suppliers that have affirmed our Code of Conduct3is part of our supplier performance review and a key element of our global product boardmeetings. We have had annual supplier sustainability conferences and an internal website 2006 2007 2008 2009dedicated to providing our suppliers with tools and resources. In 2010, we launched theBest of Sustainable Supply website, a collection of leading supplier best practices on a 93.5% 92% 95% 95%range of sustainability issues. Environmental Impacts of 5. Develop a comprehensive global forestry policy that will apply to all products Consumer Packaging4 we purchase Amount of packaging used, by weight, progress goal met per transaction count (in lbs) 2006 2007 2008 2009We have developed a global forestry policy that is part of our overall Sustainable LandManagement Commitment. We envision working with our suppliers and their suppliers to 0.1385 0.1355 0.1296 0.1307buy certified sustainable wood fiber. Percent of packaging material that is made from recycled paper6. Further rollout of our global forestry standards for consumer packaging, 2006 2007 2008 2009 expanding into other areas of the world, specifically the u.S., Canada and Asia Pacific, Middle East and Africa (APMEA) 33.1% 5 29.8% 5 30.8% 29.2%7 progress goal met Percent of packaging derived from certified land managed sourcesFor consumer packaging, we have developed a global forestry policy that is part of ouroverall Sustainable Land Management Commitment. We are working with our direct 2006 2007 2008 2009suppliers and their suppliers, in Europe, North America and APMEA to encourage N/A N/A N/A 31%increased use of certified, well-managed renewable raw materials, such as wood fiber. Animal Welfare7. Continue to integrate environmental considerations into our packaging design through rollout of our global packaging scorecard into our nine largest markets Percent of supplier meat (including beef, pork and poultry) processing plants audited progress goal met 2006 2007 2008 2009All of McDonald’s markets use the Eco-Filter global packaging scorecard to evaluatepackaging changes. The Eco-Filter uses criteria such as packaging weight reduction, use N/A 99% 97% 100%of recycled materials and reduction of greenhouse gas in its evaluation. Percent of supplier (including beef, pork and poultry) processing plants that received a passing score on their first or second audit 2006 2007 2008 2009 N/A 99% 99% 100%What We’re Made Of 7
  8. 8. 2008-2010 pRoGRess assesMenT andkey peRfoRManCe indiCaToRs8. Increase best practice sharing within our System to enhance the transfer and Energy usage in the Restaurant scaling of the most efficient and innovative initiatives Kilowatt hours used per transaction progress goal met count (kWh/TC)We established the Global Energy Leadership Board (GELB) in the fall of 2010 and 2006 2007 2008 2009developed a global energy strategy to further align our System in the following key areas: N/A8 N/A 8 1.76 9 1.689operations, equipment, building and technology. The GELB has also moved quickly toadvance energy-efficient solutions such as energy management systems for broaderSystem adoption. In 2010, McDonald’s issued the second edition of the Global Best ofGreen, a collection of best practices that includes a chapter on energy.9. Continue to find ways to maximize energy efficiency in our restaurants progress goal metImproving the measurement of energy performance in our restaurants continues to bea significant area of opportunity. We have made steady progress in working with ourequipment suppliers and introducing new energy-efficient equipment that was showcasedat our 2010 Worldwide Convention. There is more we can and will do to increase adoptionof this energy-efficient technology and equipment in our restaurants. As a decentralizedSystem with the vast majority of our restaurants operated by independent businessowners, we do not have a centralized database or uniform method for tracking energyusage. So gauging performance across our System continues to be a challenge. We havemade incremental improvements in the data collection process in 2010 with our majormarkets; however, there is still a significant amount of variance from market to market inhow and to what extent energy data is collected.8 McDonald’s 2010 Worldwide Corporate Responsibility Report
  9. 9. 2008-2010 pRoGRess assesMenT andkey peRfoRManCe indiCaToRs10. Increase the number of Hamburger university-certified restaurant managers opportunity, training and progress goal met Development10 Percent of worldwide top management teamCurrently, we have seven Hamburger Universities – state-of-the-art training centers for who started in the restaurantrestaurant employees and corporate staff – around the world. Our newest location inShanghai, China opened in April 2010. We continue to focus our efforts on increasing the 2006 2007 2008 2009number of restaurant managers who are HU-certified. The percentage of restaurants in 42% 42% 42% 42%our top nine markets with managers who are graduates of HU in June 2010 was 96.2%. (In2008, the percentage was 93.3%.) Percent of company-owned restaurants with HU-certified managers11. Continue to enhance our employee value proposition (EvP) to drive employee 2006 2007 2008 2009 engagement N/A N/A 93.3% 96.2% progress goal met Percent of crew members satisfied that theyAfter initial introduction to company leadership during the 2009 People Summit (an receive the training needed to do a good jobinternal meeting attended by leaders from Human Resources, Training & Development, 2006 2007 2008 2009Information Technology and Operations), the EVP was introduced to the entireMcDonald’s System at the 2010 Worldwide Convention. Today, our global EVP of Family & 82% 84% 85%11 83%12Friends, Future, and Flexibility has become our Global Strategic People Platform and is Percent of managers who feel the personreflected in market-level business and people plans. they report to supports their professional development12. Continue to integrate McDonald’s values into key people programs, from hiring to training to career development 2006 2007 2008 2009 progress goal met 82% 13 83% 12 82% 11 83%14 In 2009, we initiated the next phase of values activation with the establishment of the Management opportunities Values Activation Council, which includes representation from 15 McDonald’s markets for Women10 around the world. Values Catalysts from each market meet regularly to share experiences,challenges and best practices related to integrating our values into everyday decision- Percent of worldwide top management teammaking and long-term planning. (VP and above) who are women 2006 2007 2008 2009 26.4% 26.7% 27% 26.5% Percent of company-owned restaurant managers who are women 2006 2007 2008 2009 46.2% 49% 47% 49%7What We’re Made Of 9
  10. 10. 2008-2010 pRoGRess assesMenT andkey peRfoRManCe indiCaToRs13. Increase financial and volunteer support to Ronald McDonald House Charities Philanthropic Activities (Worldwide) (RMHC) through communication outreach Total corporate cash and in-kind contributions progress goal met 2006 2007 2008 2009Ronald McDonald House Charities® (RMHC®) has been McDonald’s “Charity of Choice” $13.6M $10.6M $15.2M $19Mfor more than 36 years. In addition to various programs occurring at the local level,McHappy Day®/Give a Hand® continues to be McDonald’s signature fundraiser benefiting RMHC and other children’s causes around the world. This fundraiser is just one more way local Economic Impacts McDonald’s, its employees, owner/operators, suppliers, and customers demonstrate how Total capital expenditures in Top 9 marketssmall contributions can add up to make a huge difference in the lives of children. Since (investments in new and existing restaurants)2002, countries around the world have raised $170 million during McHappy Day/Give aHand events. 2006 2007 2008 2009 $1.7B $1.8B7 $1.8B7 $1.5B714. Continue to increase the awareness of RMHC and its core programs Total social taxes paid by McDonald’s in progress goal met Top 9 marketsTo support RMHC and highlight the work the Charity does to help nearly 4.5 million 2006 2007 2008 2009families a year, McDonald’s utilizes several vehicles to help increase awareness for $493M7 $621M7 $616M7 $568M7RMHC and its three core programs, the Ronald McDonald House®, the Ronald McDonaldFamily Room® and the Ronald McDonald Care Mobile®. In 2010, participating McDonald’s Total income taxes paid by McDonald’s inrestaurants in the U.S. began making a contribution from the sale of each Happy Meal® Top 9 markets (in billions)and Mighty Kid Meal®. Additionally, McDonald’s restaurants continue to support the 2006 2007 2008 2009largest ongoing source of fundraising for RMHC through the RMHC Donation Boxprogram. The restaurants provide valuable space on their front counters and in their N/A $1.2B7 $1.1B7 $1.1B7drive-thrus to raise awareness and funds for RMHC and its local chapters. In 2010 alone,RMHC Donation Boxes in the U.S. generated nearly $27 million in contributions fromMcDonald’s customers.15. Facilitate and encourage volunteer activities through an online management tool progress goal metIn January 2010, McDonald’s launched a more formalized corporate volunteer program thatincludes an online volunteerism management and tracking tool developed in partnershipwith VolunteerMatch, group volunteer activities, and incentives such as a monthly rafflefor a donation to the winning volunteer’s charity of choice. Participation rates amongHome Office employees continue to rise and currently stand at almost 25%.1 Except as otherwise noted, figures are for the 6 In 2008, the report methodology for the US and represent approximately 19% of total restaurants following markets: Australia, Brazil, Canada, China, Canadian markets was changed. This resulted in an as December 31, 2008. The restaurants for which France, Germany, Japan , the U.K. and the U.S. overall decrease in total packaging weight which was data are reported in 2009 represents approximately not solely attributed to changes in packaging design. 18% of total restaurants as of December 31, 2009.2 Data does not include Brazil, France. 7 Data does not include Brazil. 10 Data for restaurant employees are for company-3 Total number of suppliers varies year to year operated restaurants. based upon business needs. This metric includes 8 Data reported in 2006-2007 cannot be compared suppliers identified to and confirmed by our program with the most recent data and have been excluded 11 Data does not include Canada. management firm as having signed the Code. Data from this chart to avoid confusion. reported are based on a cumulative total. 12 Data does not include China, France. 9 The data and methodology for calculating the energy 13 Data does not include Canada, Japan.4 Consumer packaging does not include pre-packaged KPI for 2008 and 2009 differ from the years prior. items such as salad dressings. Unlike 2006 and 2007, the 2008 and 2009 data 14 Data does not include Canada, China, France. include estimated energy usage beyond electricity,5 Data does not include China. such as natural gas, propane and fuel oil. Does not include data from Australia, Brazil or China. The restaurants for which data are reported in 200810 McDonald’s 2010 Worldwide Corporate Responsibility Report
  11. 11. feaTuRe: faRM To fRonT CounTeR What We’re Made Of ... Farm To Front Counter The taste and quality of every McDonald’s menu item starts with its ingredients – where they are sourced, how they are handled and, ultimately, how they are prepared in the restaurant. We focus on every aspect of this journey in order to ensure quality and safety, work toward greater sustainability and continuously create opportunities for people and communities – all while delivering a great value to our customers. Join us as we follow some of our most frequently- used ingredients on their journeys from farm to front counter.What We’re Made Of 11
  12. 12. From Farm to Front Counter: BEEF Our burgers are 100% beef. From cheeseburgers to Big Macs, our beef patties are minimally processed and contain no fillers, extenders or preservatives. McDonald’s works with suppliers to ensure that every step of the journey from farm to front counter is accomplished as humanely and sustainably as possible, minimizing environmental impacts and continuously improving the social and animal welfare aspects of beef production. WoRkING to MAkE BEEF MoRE PRotECtING tHE RAINFoRESt SuStAINABlE FoR MoRE tHAN 20 yEARS In November 2010, McDonald’s joined McDonald’s commitment to protect faRM World Wildlife Fund as a lead sponsor of the first Global Conference on Sustainable valuable rainforest land began in 1989 when we established a policy against Beef. More than 300 stakeholders from sourcing beef from deforested areas in all parts of the beef supply chain gathered Brazil. We built on this commitment in in Denver, Colorado, for three days to 2006 when we partnered with Greenpeace discuss current practices, identify areas International, the Brazilian government of opportunity and drive continuous and others in the industry to establish aCows are raised on ranches, cattle improvement throughout the global moratorium on the purchase of soya forfarms, dairy farms or feed lots around beef system. feed from recently deforested regions ofthe world. The objectives of the conference were the Amazon. (Soya is a major component of feed for both cattle and poultry). The to raise awareness of sustainableDID you kNoW? Most McDonald’s beef is moratorium has been extended each year beef production issues, presentsourced within the area of the world where since then and best of all, has successfully current research, case studies andthe burgers are served. stemmed the tide of deforestation due to best management practices, and to soya farming. build consensus around the key globalWHAt otHERS SAy: “We are glad to see environmental impacts of beef production In 2009, we took this many steps furtherMcDonald’s looking at its supply chain as the foundation for a sustainable beef with the development of our Sustainableupstream to identify ways to source its work plan. The conference was just a first Land Management Commitment. Createdproducts from certified, sustainable step. In 2011, additional regional beef in collaboration with World Wildlife Fund,sources. At World Wildlife Fund, we have sustainability roundtables will take place this commitment states that we will workdeveloped a High Conservation Value to build on the conference objectives. with suppliers over time to ensure thatapproach and see the work at McDonald’s agricultural raw materials for McDonald’sas in step with preserving the most food and packaging originate from legalimportant places biologically on earth.” and sustainably managed land sources. In—Jason Clay, SVP, Markets, 2010, we worked with World Wildlife FundWorld Wildlife Fund-US (WWF) to establish priorities for action. WWF conducted a thorough assessment of our supply chain impacts related to our Sustainable Land Management Commitment, with beef identified as our number-one priority.12 McDonald’s 2010 Worldwide Corporate Responsibility Report
  13. 13. feaTuRe: faRM To fRonT CounTeR BuRGERS FoR GooD – CuStoMERS HElP uS HElP kIDS Sometimes we leverage our burgers for pRoduCTion ResTauRanT a cause we believe in. For example, as part of McDonald’s annual McHappy Day fundraiser, 100% of the proceeds from all Big Macs sold in McDonald’s Brazil restaurants on August 28, 2010 were donated to Instituto Ronald McDonald, the Ronald McDonald House CharitiesCattle are processed at abattoirs Frozen beef patties are delivered chapter in Brazil. The 1.5 million Big Macs(animal handling facilities) in keeping to our restaurants and kept frozen sold that day surpassed records set inwith McDonald’s animal welfare until use. Crew members use a 2008 and 2009 for the annual McHappystandards, which were developed specially designed “clam shell” grill to Day fundraiser. Instituto Ronald McDonald provides support to sick children andwith the assistance of Dr. Temple cook both sides of the patty at once their families through Ronald McDonaldGrandin, a leading authority on animal until a timer signals it’s done. Daily Houses, Ronald McDonald Family Roomswelfare. Employees working in these checks occur at every restaurant to and other programs.facilities are also protected by our ensure that the product is cookedCode of Conduct for Suppliers, which to a food-safe temperature. BEEF AND So MuCH MoREestablishes minimum requirements for At approximately 250 calories andemployment and workplace practices. DID you kNoW? 96% of all McDonald’s less than 10 grams of fat, McDonald’s restaurant managers are accredited by one hamburger remains a hallmark of our of our seven Hamburger Universities (HU) menu – one of the seven items offeredMeat patties are created from 100% around the world. HUs offer restaurant when our first restaurant opened its doorspure beef – no extenders, fillers or managers, as well as corporate staff, a in 1955. Over the years, our menus aroundpreservatives are added. Patties are then wide range of management training and the world have evolved to include variousfrozen, boxed and sent to McDonald’s leadership skills to help make a job at burger options and portion sizes, from theDistribution Centers. From there, they are McDonald’s a growth opportunity, no Quarter Pounder to the one-third pounddelivered to individual restaurants. matter what role they play in the business. Angus Burger. In 2011, we celebrate the 50th anniversary We’ve also moved beyond beef to add aAuDItING ANIMAl WElFARE PRACtICES of the first HU. host of additional choices, from chickenMcDonald’s requires all processing and salads to wraps and oatmeal. Our goalfacilities used by our beef suppliers to lESS IS MoRE WItH BuRGER PACkAGING remains to continuously expand choiceadhere to our animal welfare principles, and variety so that our customers have Larger sandwiches typically needdesigned to ensure that animals are free options that can support a balanced, active more packaging, which can increasefrom cruelty, abuse and neglect. In addition, lifestyle. We are also working to evolve our environmental impacts. McDonald’sabattoirs used by our suppliers are most popular menu items to have better worked with our packaging supplier, HAVIrequired to be audited by external experts nutritional profiles, while still delivering Global Solutions, to create a lightweightevery year. In 2009, 100% of facilities were the taste, quality and experience that clamshell carton for the launch of the Maudited and 100% passed their audits. today’s customers expect from McDonald’s. Burger in France and Germany – a uniqueFacilities that do not pass their audits on sandwich containing a beef patty withthe first or second try are given a defined Batavia lettuce and Emmenthal Cheese onperiod to make improvements or they will ciabatta-style removed from our supply chain. The result was a packaging design asWHAt otHERS SAy: “McDonald’s efforts to unique as the M burger itself, resultingintegrate animal welfare standards and in a 20% reduction in weight comparedimprovements into its quality assurance to packaging containers for comparably-program have made a huge difference. sized sandwiches. Each carton is madeI have been in this business for more of virgin fiber, with 74% coming fromthan 30 years, and I have never seen such certified well-managed forests. Thea transformation.” packaging was awarded the sustainability—Dr. Temple Grandin, prize by Europe’s Pro Carton ECMA awardAnimal Welfare Expert in 2008 and recognized as an honorable mention by the U.S. DuPont Award in 2009.What We’re Made Of 13
  14. 14. From Farm to Front Counter: POTATOES Only the best potatoes make the cut. From field to freezer to fryer, McDonald’s potatoes are on a sustainability journey of their own. We work with our suppliers to incorporate sustainable practices at all stages of the supply chain and to ensure that each potato meets our high standards of quality, safety, appearance and taste. GRoWING PotAtoES SuStAINABly REDuCING PEStICIDE uSE By PotAto GRoWERS McDonald’s sustainability work in the area of potatoes varies considerably by Working with the Integrated Pest faRM region, but our focus is always on ensuring that growers meet standards for good Management Institute, the National Potato Council and growers in the U.S. agricultural practices that contribute and Canada, McDonald’s USA has to quality, safety and sustainability. In developed a comprehensive audit process Europe, two initiatives have helped potato that analyzes the use of pesticides, as growers (as well as producers of other well as fertilizer and water, on crops. raw materials such as eggs, produce, By the end of 2010, 100% of potatoPotatoes are planted, grown beef and pork) lead the way in enhancing growers and processors supplyingand harvested in farms around the sustainability performance: McDonald’s had completed the voluntaryworld in keeping with a set of good audit. In 2011, a report showing scoring McDonald’s Agricultural Assurance Programagricultural practices (GAP) developed (MAAP) measures supplier performance per category (basic, steward, expert and against target standards. master), as well as an overall performanceby McDonald’s employees, suppliers index will be made available.and outside consultants. The Flagship Farms website supports the WHAt otHERS SAy: “The work done exchange of ideas among European farmers with McDonald’s to evaluate the useDID you kNoW? McDonald’s has only four by featuring agricultural practices that of Integrated Pest Management in theapproved potato varieties (out of the are environmentally sound, economically positive and ethically valuable. production of potatoes has been incrediblyhundreds that exist in the world) for use useful and collaborative. Growers nowin making our fries. Within those varieties, McDonald’s USA has taken this focus one have a state-of-the-art tool to benchmarkthere are very strict requirements for size, step further with an initiative designed their performance and learn from theshape, consistency and more to achieve to reduce pesticide use among potato experience of other growers, supply chainthe perfect texture, color, length and growers in its supply chain. partners and consumers, which will ensureappearance of each fry. the efficient production of high quality potatoes. McDonald’s has been a real leader in identifying a path forward that is truly a win/win for all involved.” —John Keeling, National Potato Council14 McDonald’s 2010 Worldwide Corporate Responsibility Report
  15. 15. feaTuRe: faRM To fRonT CounTeR FRoM tHE FRy StAtIoN to tHE C-SuItE In 1978, Jan Fields applied to work at a McDonald’s restaurant in Dayton, Ohio, pRoduCTion ResTauRanT attracted by the flexible hours. She spent her first day making French Fries, then went home and cried. “I was convinced it was too hard,” Fields said. “I thought they had too many rules for French Fries – though I now understood why they taste so good!”Potatoes arrive and are washed, Fries are delivered to restaurants and Fields stuck with it, and three decadespeeled, washed again and inspected stored in the freezer until use. Fries later, she is now the first female chieffor blemishes. Potatoes are then cut are then cooked, salted and served executive officer of McDonald’s USA,into shoestring-style strips that are crisp, hot and fresh to customers. overseeing 673,000 employees at nearly 14,000 restaurants. During the last fourinspected, then blanched in hot water years, Fortune has ranked her among theto preserve texture. After drying, the McDonald’s French Fries are served in 50 most powerful women in business and every McDonald’s market around thepotato strips are partially fried, then Forbes has listed her among the world’s world. In addition, we use potatoes in otherfrozen and packaged for transport to 100 most powerful women. regional menu items such as hash browns,McDonald’s Distribution Centers. potato wedges, and in some markets, veggie burgers. Not All FRyERS ARE MADE tHE SAMEDID you kNoW? In the U.S., there are The fryers we use to make our French DID you kNoW? It’s been five years sincemore than 200 inspection points between Fries and other products have come a long McDonald’s discontinued offering the way since 1978, when Jan Fields began herfarm and front counter to ensure that Supersize portion for drinks and fries as a career. McDonald’s has developed a next-McDonald’s fries meet our quality and regular item on our menus. generation “low oil volume” (LOV) fryer thatsafety standards. uses about 40% less cooking oil and 4% tHE SAME GREAt tAStE WItH A less energy. Electric and gas versions arekEEPING SCoRE FoR tHE ENvIRoNMENt BEttER NutRItIoN PRoFIlE now available to our restaurants aroundWhen potatoes reach our suppliers’ the world. In response to customer requests, andproduction facilities, they are well- as part of our ongoing dedication topositioned to become McDonald’s French offering quality products and balancedFries in as sustainable a manner as possible. choices, McDonald’s restaurants in severalGlobally, our potato suppliers complete markets have effectively eliminated—oran annual Environmental Scorecard substantially reduced—the trans-fattythat measures water, energy, air and acids (TFAs) in our cooking oils. Thiswaste impacts. Developed in partnership includes additional products andwith Conservation International, the ingredients such as apple pies, bakedEnvironmental Scorecard is not only a cookies, crispy chicken breast, Chickentangible symbol of our commitment to McNuggets and more. In addition, we haveenvironmental responsibility, it’s also smart made significant progress reducing thebusiness. Using fewer natural resources amount of saturated fat in these items. Formakes our supply chain more efficient example, in Europe, the maximum amountand cost-effective, too. of saturated fat is 12%.For example, McCain Foods, one ofMcDonald’s largest potato suppliers, began using the scorecard in 2005 to track theutilization of “biogas” (a by-product ofwastewater treatment that can be used toreplace fossil fuels in plant boilers or togenerate “green” electricity). The scorecardhelped McCain identify improvementopportunities that increased biogas usagefrom about 65% to more than 86%. Theclean renewable energy resulting from thisincrease is enough to power a city of about20,000 people for one year.What We’re Made Of 15
  16. 16. From Farm to Front Counter: LETTUCE AND TOMATOES We’re keeping it green. Whether destined for sandwiches or salads, McDonald’s lettuce and tomatoes travel from the farm to the front counter fresh, with no preservatives added. We go to great lengths to ensure their quality, freshness and sustainability. WHAt otHERS SAy: “The food safety and safety program, and a worker-to- systems McDonald’s has developed worker education process – to more than and implemented during the past three 90% of the Florida tomato industry. All faRM decades are the global standard for the three growers that McDonald’s USA uses in food service industry. I know I can eat at Florida have signed onto the agreement. any McDonald’s restaurant in the world and enjoy a safe and tasty meal.” MEASuRING ouR WAtER FootPRINt —Michael P. Doyle, Ph.D., Center for IN EuRoPE Food Safety, University of Georgia In 2009, McDonald’s Europe completed aMultiple varieties of lettuce and “water footprint” pilot focused on lettuce IMPRovING CoNDItIoNS FoR and potato growers in Spain, Germanytomatoes are grown on farms around toMAto FARM WoRkERS and the UK. They calculated the quantitythe world in keeping with good of rainwater, irrigation and polluted McDonald’s expects employee safety andagricultural practices (GAP) developed water in crop production and analyzed well-being to be a priority throughout ourby McDonald’s employees, suppliers the condition of local water sources to supply chain, and we support our suppliers’ assess the water risk of each raw material.and outside consultants. Individual efforts in various ways. In April 2007, Results revealed that multiple factorslettuce plants and tomatoes are McDonald’s USA, its produce suppliers influence a water footprint, including and the Coalition of Immokalee Workerspicked and packed in containers temperature, rainfall, length of growing (CIW) agreed to address wages andfor transport. cycle and type of irrigation. It also became working conditions for farm workers who clear that the quality and availability of pick Florida tomatoes that are served inDID you kNoW? Once our lettuce leaves water at the growth site is more important McDonald’s U.S. restaurants.the farm, every leaf is kept at a constant than the quantity of water used to McDonald’s USA and our suppliers produce the crop.temperature of below 40° F (less than 4°C) continue to support the payment of anto ensure freshness and safety. McDonald’s Europe shared the results of additional penny per pound for Florida the study with the farms involved and is tomatoes, as well as other initiatives. For now promoting good water practices in example, the CIW and the Florida Tomato two ways: through the produce standard Growers Exchange (FTGE) have reached in the McDonald’s Agricultural Assurance an agreement that will extend the CIW’s Program (MAAP) and through the sharing Fair Food principles – including a code of leading practices on the Flagship of conduct, a cooperative complaint Farms website. resolution system, a participatory health16 McDonald’s 2010 Worldwide Corporate Responsibility Report
  17. 17. feaTuRe: faRM To fRonT CounTeRFlAGSHIP FARMS SHARE SuStAINABlE MCDoNAlD’S uSA’S JouRNEy tHERE’S MoRE GREEN BEyoND lEttuCEPRACtICES to SuStAINABlE SuPPly McDonald’s is focused not only on ethicalPentaflora Horticola, a grower in Spain To better align with McDonald’s corporate and environmental responsibility, but alsothat supplies baby lettuce for McDonald’s, commitment to sustainability, McDonald’s on economic responsibility. Strugglinghas some ideas to share. From altering USA created a Supply Chain Sustainability economies are a major topic of concernseed rates at different times and in Council in 2009, including representatives around the world these days. In earlydifferent weather conditions to providing from 15 direct suppliers and McDonald’s 2010, McDonald’s USA conducted a studywork permit support to fixed contract USA. The group assessed the depth and to quantify the economic contributionsworkers, these sustainable practices status of current sustainability programs of our restaurants. Collectively in 2009,have positively impacted their crops and practices, looking at such areas as McDonald’s 13,980 U.S. restaurants:and their business. employee health and welfare, animal health Spent nearly $16 billion nationwide and welfare, manufacturing, design, rawFarmers across Europe can read about (or nearly $43.3 million per day) materials, lifecycle assessments andthese practices and more on McDonald’s economic responsibility. Created more than 1.9 millionEurope’s “Flagship Farms” website. additional jobsDeveloped in conjunction with the Food In July 2010, the group sponsored theirAnimal Initiative (FAI), the site encourages first-ever Sustainable Supply Summit. Returned nearly 48 cents of every dollarthe exchange (and hopefully replication) More than 340 participants spent two earned to their local economiesof ideas among the European farm days discussing priorities and sharing best Had a combined investment of nearlycommunity. Case studies can be submitted practices in the areas of energy, water $28.2 billion in the nation’s communitiesin the areas of environment, economics and solid waste.and ethics. Every farm that submits a case Paid a total of nearly $1.1 billion in businessstudy must meet strict environmental taxes, licenses and payroll taxes, plusand social criteria. additional sums for state and federal income taxes on profits GEt youR vEGGIES HERE McDonald’s features salads on the menu in almost every market around the pRoduCTion ResTauRanT world. A small garden or side salad is the most common item, but more and more countries are adding entrée salads that include crispy or grilled chicken on top (or seared, if you are in Australia). McDonald’s different entrée salads typically containUpon arrival at the production facility, Lettuce and tomatoes are delivered two to three servings of vegetables, to restaurants and stored in coolers. close to the daily amount recommended bylettuce and tomatoes are inspected most governments.for damage and freshness. They are Shredded lettuce is stocked at the Caesar salads seem to be a favorite ofwashed and then shredded, sliced or food assembly tables to be added McDonald’s customers around the worldcut to size (depending on whether they to Big Macs, McChicken and other – you can find some version of a Caesar inare destined for sandwiches or salads). sandwiches as they are ordered. the U.S., Canada, Australia and multipleThe produce is packaged according Salads are assembled daily, with countries in Europe. From there, options vary depending on local tastes. Canadato type and shipped to McDonald’s crew members adding appropriate offers Mediterranean or Spicy Thai salads,Distribution Centers. toppings depending on the market and while the U.S. has its Premium Southwest the customer’s preference. These can and Premium Bacon Ranch options. TaiwanDID you kNoW? McDonald’s uses more include tomatoes, carrots, grilled or offers a corn salad, while customers inthan 15 different types of lettuce in the Middle East can select a tuna salad. crispy chicken, bacon and shreddedsandwiches and salads around the With all these choices, it’s no wonderworld, including romaine, batavia, rocket, cheese. And don’t forget the dressing – McDonald’s serves more salads than anyradicchio, tatsoi and lollo rosso. most restaurants have multiple regular other quick service restaurant in the world. and low fat options to choose from.What We’re Made Of 17
  18. 18. Giving our customers quality,choice and valueWhether it’s a quick breakfast, lunch on the go or dinner with thekids, customers come to McDonald’s for quality food at a greatvalue. Our goal is to continuously improve our classic offeringsand increase the number and variety of new options that deliverthe great taste and balance our customers seek. WhaT We’ve aCCoMplishedIn addition to an evolving array of menu items, we also offer NExt-GENERAtIoN HAPPy MEAlSmany ways for customers to learn about the nutrition information Over the last several years, Happy Mealof our food. We pay particular attention to our offerings for offerings around the world have been enhanced to offer a range of side and drinkchildren and how we communicate about them to both children options such as yogurt, fruit bags, carrots,and their parents.THREE E’S: McDonald’s Sustainable Supply Chain Vision apple slices, corn cups, soy milk, water and juices. After a multi-year effort to increaseWith guidance from our Global Advisory Council (GAC), we continue the breadth and depth of Happy Meal choice items, we now offer a fruit, vegetable ortoRESPONSIBILITY ENVIRONMENTALapproach, while supporting our individual evolve our overall RESPONSIBILITY ETHICAL RESPONSIBILITY ECONOMIC dairy option for Happy Meals in all of ourmarkets in meeting the specific needs and requirements of their top nine markets. Moving forward, welocal cultures and governments. Since 2004, the GAC has provided continue to seek ways to expand choice options and improve the overall nutritionalMcDonald’s guidance on key areasthat followas global nutrition ETHICAL RESPONSIBILITY — We envision purchasing from companies such profile of the Happy Meal.labeling, McDonald’s “what i eat, what ensuring the practices to ensure the health and safety of our suppliers’ employees; and i do” children’s well-being welfare and humane treatment of animals in our supply chain. In an effort to further enhance the Happyplatform, the development of the sourcing of our materials to gauge our ENVIRONMENTALRESPONSIBILITY — We envision influencing internal metrics Meal experience, McDonald’s France and ensuring that the design of our products, their manufacture, distribution, and use;progress, and approaches for motivating children to eat more minimizing lifecycle impacts on the environment. encouraged kids to eat more fruit in 2010 with their “Les Mercredis a Croquer”fruitstrade practices, limiting the spread of agricultural diseases, and positively and vegetables. ECONOMIC RESPONSIBILITY — We envision delivering affordable food, engaging in equitable (Crunchy Wednesdays). On the first impacting the communities that our suppliers operate in. Wednesday of each month, kids received a free bag of apple slices and grapes with theWELL-BEING: McDonald’s Holistic Approach purchase of a Happy Meal. McDonald’s USA is currently testing the concept of including an additional fruit or vegetable side option CONSUMER- in every Happy Meal. They are also testing a FRIENDLY HIGH-QUALITY CHOICES NUTRITION COMMUNICATE RESPONSIBLY breakfast Happy Meal that would include at INFORMATION least one serving of fruit. We find that the best Happy Meal choice ideas tend to originate at the market levelHIGH-QUALITY CHOICES — Continue to develop high quality menu offerings that provideour customers with a range of choices that meet their needs and preferences and that and then travel around our System. Cornfit into a balanced diet. cups were first introduced in China in 2006CONSUMER-FRIENDLY NUTRITIONAL INFORMATION — Enable them to make the right and are now offered in Japan, South Africa,decisions - continuing to provide easier access to user-friendly nutritional information. Malaysia and multiple countries in LatinCOMMUNICATE RESPONSIBLY — Continue to refine our marketing and communication America. We are also seeing more beveragepractices, particularly to children. options in our Happy Meals around the world, including soy milk, natural fruit juicesENVIRONMENTAL RESPONSIBILITIES IN THE RESTAURANT and flavored waters. SUSTAINABLE PACKAGING GREEN ENERGY AND RESTAURANT EFFICIENCY WASTE DESIGN MANAGEMENTENERGY CONSERVATION — TKSUSTAINABLE PACKAGING AND WASTE MANAGEMENT — TKGREEN RESTAURANT DESIGN — TK18 McDonald’s 2010 Worldwide Corporate Responsibility Report