Impact Strategy & Governance
Our Commitment to Addressing Environmental and Social Issues
As the world’s leading global foodservice retailer, we believe we have a responsibility to ensure long-term, sustainable value creation for shareholders while taking action on some of the world’s most pressing environmental and social challenges important to our stakeholders.
Our shareholders, Franchisees, suppliers, employees and key nongovernmental organization (NGO) stakeholders expect us to proactively manage the issues most relevant to our business operations. We are committed to addressing both how these issues impact our business and how our management of these issues impacts the world, in line with our purpose of feeding and fostering communities.
We believe that understanding and effectively managing our environmental and social work through robust governance structures, strategies, goals and performance indicators is part of operating our business responsibly. The benefits are aimed at maximizing shared value, ensuring brand trust and building long-term resiliency.
Our Impact Strategy
Our commitments are designed in partnership with, and based on feedback from, customers and trusted external organizations, so that we can help drive industrywide change and make a difference at scale across our Company and within communities. We hold ourselves accountable through our internal ESG governance, stakeholder engagements and by reporting against our goals annually – detailed in this report and summarized on our Goal Performance & Reporting page.
We’ve been integrating environmental and social considerations into our business for decades. Over this time, our ambitions have expanded from a collection of targeted strategies to today’s holistic Impact Strategy. See the full timeline of our Impact journey so far.
Our Planet
Food Quality & Sourcing
- Food Safety
- Nutrition & Marketing Practices
- Responsible Sourcing
- Animal Health & Welfare
- Responsible Antibiotic Use
Jobs, Inclusion & Empowerment
Community Connection
How We Prioritize Issues
We prioritize the environmental and social issues that are of the highest importance to our stakeholders and customers, and where we have the opportunity to create the greatest impact, in line with our purpose of feeding and fostering communities. Working across the business, our Global Sustainability & Social Impact team and broader Global Impact function continuously gather internal and external insights to assess what is important to our stakeholders and understand where to prioritize our efforts, evolve our strategy and tailor our reporting. This includes tracking customer insights and engaging regularly with shareholders, Franchisees, suppliers, employees, communities and NGO stakeholders to discuss the nuances of key issues and transparency expectations in the shifting external landscape.
To continue monitoring the environmental, social and governance (ESG) issues that are most relevant to our business, including identifying and tracking new risks as they emerge, our enterprise risk management (ERM) framework is designed to identify, assess and prioritize strategic, financial and reputational risks that could have a sustained impact on our Company. The ERM framework leverages internal risk committees with cross-functional leadership, including ESG leaders and team members. These committees meet regularly to evaluate and prioritize risks in the context of our business strategy, with further escalation to our CEO, Board and/or Board Committees, as appropriate.
Our Governance Approach
Robust governance is critical to managing the strategies, goals, policies and performance indicators tied to environmental and social issues. The leaders and teams with responsibility for our Impact Strategy guide our actions and progress across issues. Supported by working groups, Franchisees and suppliers, our cross-functional teams manage these issues and seek to deliver long-term value for customers, stakeholders and communities. Our Board and Cross-Functional Leadership team are our key governance bodies.
Our Board of Directors
As part of our commitment to strong corporate governance, our Board oversees our business in an honest, fair, diligent and ethical manner. Among other responsibilities, our Board actively oversees our strategic direction, objectives and ERM framework. Six standing Board Committees support our Board’s oversight role – Audit & Finance, Compensation, Governance, Public Policy & Strategy, Sustainability & Corporate Responsibility and Executive.
In addition, our Board oversees the wide range of ESG topics that are relevant to our business. Our Sustainability & Corporate Responsibility Committee oversees the development and implementation of our sustainability goals and metrics, including goals and metrics to address human capital management and Company culture and programs.
Our Public Policy & Strategy Committee oversees our strategies and efforts to address matters that could materially affect our performance, reputation and image, as well as our government affairs strategies and priorities.
Our Governance Committee recommends to our Board corporate governance principles addressing, among other matters, the size, composition and responsibilities of our Board and its Committees.
These committees regularly report to our Board regarding their activities. In addition, from time to time, other committees and/or our full Board receive reports and updates on our management of ESG issues as circumstances warrant.
To achieve our goals and fulfill our purpose, we believe it is crucial that our Board reflects a wide range of varied backgrounds, viewpoints, perspectives and experiences to support the diverse demands of our global business. We are proud that more than half of our Board comprises Directors who are women or racially/ethnically diverse.
Cross-Functional Leadership Team
Our cross-functional senior leadership approach was established in 2016, bringing together senior executives from across the Company who are accountable for leading McDonald’s Impact Strategy. In 2020, we announced the newly created role of Executive Vice President (EVP) and Global Chief Impact Officer to oversee our ongoing efforts to have a positive impact around the world. This team of leaders has evolved with our strategy and reports to our CEO. Leading officers currently include:
- EVP and Global Chief Financial Officer
- EVP and Global Chief Legal Officer
- EVP and Global Chief Impact Officer
- EVP and Global Chief Marketing Officer and New Business Ventures
- EVP and Global Chief People Officer
- EVP and Global Chief Supply Chain Officer
Supported by our CEO, team members meet multiple times each year to discuss strategy and progress. These leaders and their teams work together as our organization strives to fulfill our overall global aims, goals and actions related to Impact Strategy and Impact Areas.
Together, they have responsibility for establishing plans and monitoring progress to achieve our goals and commitments.
Global Sustainability & Social Impact Team
The McDonald’s Global Sustainability & Social Impact team provides Corporate Staff leadership, coordination and support for our global sustainability policies, programs and reporting. This includes close partnership with global cross-functional teams, such as Global Supply Chain, Global People and Global Customer Experience, and support for country-level impact and sustainability staff for localized execution relevant to our markets.
ESG Disclosure Committee
Our ESG Disclosure Committee is responsible for overseeing the procedures and processes related to the governance of our ESG Disclosures, including external ESG reporting. Among other responsibilities, the Committee oversees current and future ESG Disclosures, risks and opportunities. It is comprised primarily of leadership from our Impact, Finance and Legal functions.
The ESG Disclosure Committee may engage other third parties from time to time to assist with its responsibilities. At the beginning of each year, the ESG Disclosure Committee will meet and align on the targeted publishing dates for each ESG external report.
Partnering With Franchisees and Suppliers
Our independent Franchisees are an integral part of our business, which is why we engage with them regularly through Franchisee-led groups, such as the National Franchisee Leaders Association in the U.S. Led by elected Franchisees, these groups connect directly with leaders of our Company on a regular basis to advocate for our Franchisees.
In the U.S., the National Franchisee Leaders Association often engages through teams focused on fundamentals such as franchising, economics, marketing, supply chain, people and technology, among others. It also engages through diversity networks.
Additionally, we host our Worldwide Convention every two years to bring together Franchisees, suppliers, crew members and Corporate Staff to learn from one another, celebrate collective successes and plan for the future of the McDonald’s brand. At this event, we recognize Franchisees who put their customers and people first, lead with integrity, promote inclusion in their community and champion the McDonald’s System through the Fred L. Turner Golden Arch Award.
We also work closely with our suppliers, farmers, ranchers and producers to inform, shape and partner on our strategies, working toward more sustainable agriculture practices. We leverage their insights, expertise and partnerships to drive effective action across the supply chain.
Together with our suppliers, we have an ongoing commitment to supporting deforestation-free supply chains across our primary commodities (beef, soy for chicken feed, palm oil, coffee and fiber for guest packaging) and we continue to hold our suppliers accountable to defined standards. We also partner across our supply chain to drive progress against our commitments on climate action, forests, animal health and welfare, and human rights.
Our Impact Journey
We’ve been working to integrate environmental and social considerations into our business for decades. Over the years, our strategic ambitions have grown and expanded from a collection of focused strategies for targeted issues to today’s holistic Impact Strategy that is grounded in our corporate purpose to feed and foster the communities we serve.
One thing that’s remained unchanged is our commitment to engaging trusted organizations through strategic partnerships to develop strategies, goals, policies and performance indicators informed by best practice science and industry thinking. Read more about the key outcomes of our strategic partnerships in 2022 on our Stakeholder Engagement & Public Policy page.
1996 to 2006 – We Partnered With Trusted Organizations to Build Sustainability Considerations Into Our Business
- Collaborated with Dr. Temple Grandin to develop McDonald’s Animal Welfare Auditing Program.
- Established McDonald’s Animal Welfare Council and guiding principles.
- Partnered with FAI Farms on our agriculture programs, including the Agricultural Assurance Program in Europe.
- Partnered with Conservation International to develop our Sustainable Fisheries Program and Supplier Environmental Scorecard.
- Collaborated with the Environmental Defense Fund to create our Global Antibiotics Policy.
- Collaborated with Project Kaleidoscope to promote sustained compliance with labor standards.
- Formed a global expert panel on nutrition and children’s well-being.
2007 to 2017 – We Supported Industrywide Change Through Strategic Partnerships and Global Commitments
- Became a member of the Global Food Safety Initiative Board.
- Worked with World Wildlife Fund on a supply risk analysis to inform our Sustainable Land Management Commitment.
- Established the Global Sustainability Framework Stakeholder team to inform McDonald’s global aspirational goals.
- Established our Global CSR & Sustainability Framework, with commitments on Food, Sourcing and Planet.
- Became a member of the Roundtable on Sustainable Palm Oil.
- Became a signatory to the New York Declaration on Forests.
- Became a founding member of the Global Roundtable for Sustainable Beef and numerous regional roundtables.
- Partnered with Alliance for a Healthier Generation to promote balanced food and beverage choices.
2018 – Launched Our Scale for Good Platform to Drive a More Focused and Holistic ESG Strategy
- Focused our goals and commitments where we could best leverage our large-scale System to drive sustainability and impact through our food, restaurants and communities.
- Centered five global priorities across the business in areas where we could make the greatest difference and drive industrywide change in areas that matter to our brand, customers and stakeholders. The identified priorities were Beef Sustainability, Climate Action, Packaging & Recycling, Commitment to Families and Youth Opportunity.
- Informed our approach with stakeholder and customer insights, and enhanced ESG reporting and disclosures.
2020 – Launched Enhanced Impact Strategy Aligned More Explicitly to Our Purpose of Feeding and Fostering the Communities We Serve
- Evolved our strategy to align impact with our corporate purpose and refined values.
- Aligned around four key focus areas of Our Planet; Food Quality & Sourcing; Jobs, Inclusion & Empowerment; and Community Connection. Through these areas, we organize commitments and cross-functional programs business-wide.
- With central coordination by Global Impact, we focused on harnessing and directing the full strength of McDonald’s ongoing efforts to help effect positive change around the world, with the support of our Government Relations, Public Policy, Communications and Sustainability & Social Impact teams.
2021 to 2022 – Formalized Our ESG Approach so That Our Impact, Legal and Finance Functions Have Oversight of This Work
- Formalized our cross-functional ESG Disclosure Committee to govern accountability in our approach to ESG disclosures. The Committee also promotes transparency and places responsibility on cross-functional leaders. We have established clear roles and responsibilities to enhance the consistency, accuracy and completeness of our ESG disclosures.
