Governance & Stakeholder Engagement
Our customers, employees, investors and other certain stakeholders expect us to proactively manage important environmental, social and governance (ESG) issues. We are committed to addressing both how these issues impact our business and how our management of these issues impacts the world.
Understanding and effectively managing ESG issues through ongoing stakeholder engagement and robust governance structures is part of operating our business responsibly. The benefits include minimizing risk, maximizing shared value, ensuring brand trust and building long-term resiliency.
Prioritizing ESG Impact Areas
McDonald’s prioritizes environmental and social issues that are of the highest importance to our stakeholders and where the business can have the greatest impact. We continuously gather internal and external insights to help us understand where to prioritize our efforts and to help us evolve our strategy and tailor our reporting. This includes engaging with certain stakeholders to help inform our approach and the evolution of key issues, quantitative and external data gathering, and internal reviews.
The Company’s risk management process also identifies and addresses a broad range of risks that can directly or indirectly impact the organization, including risks related to environmental and social issues. The risks are determined as substantive based on a variety of quantitative and qualitative factors that our risk management process uses to monitor and assess the complexity of these topics. This includes engaging stakeholders about our approach and the evolution of key issues, quantitative and external data gathering, internal reviews and analytics.
In addition, our prioritization of issues is informed by the United Nations Sustainable Development Goals (SDGs), launched in 2015. The goals aim to support global challenges across sectors, such as those related to inequality and climate change. The SDGs helped us look more closely at where we can contribute with our partners, and today, our Impact Strategy takes into account a range of connections to these multi-stakeholder efforts. For more detail on how our work contributes to the SDGs, please see each relevant impact page. We have also compiled this information into a single document, available to download.
Good governance is essential to manage our priority ESG issues, drive collaboration and accountability across the business and help us deliver long-term value for stakeholders. The following are our key governance bodies:
Our Board of Directors
As part of the Company’s Corporate Governance, the McDonald’s Board of Directors is responsible for the oversight of our business in an honest, fair, diligent and ethical manner. Among other responsibilities, the Board actively oversees and reviews the Company’s strategic direction, objectives and enterprise risk management. To achieve our goals and fulfill our purpose, we believe it is crucial that our Board reflects the diversity of the communities where we operate. We are proud that half of our Board members are women or self-identify as members of historically underrepresented racial or ethnic groups. In addition, we actively engage Board members across ESG topics and look for members to possess the specialized ESG expertise needed to effectively guide our efforts.
Six standing Board of Directors committees - Audit & Finance, Compensation, Governance, Public Policy & Strategy, Sustainability & Corporate Responsibility, and Executive - support the Board's oversight.
In particular, the Sustainability & Corporate Responsibility Committee monitors and oversees the Company’s strategies and management of environmental and social issues. The Committee also monitors the Company’s development and achievement of sustainability goals and metrics. The Committee regularly reports to the full Board regarding its activities. From time to time, other Board committees and the full Board receive reports on the Company’s management of environmental and social issues as circumstances warrant.
Cross-Functional Leadership Team
McDonald’s 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 a newly created role of Executive Vice President and Chief Global 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 the President and Chief Executive Officer (CEO) of McDonald's Corporation. Leading officers include:
- Executive Vice President and Chief Global Impact Officer
- Executive Vice President and Global Chief People Officer
- Executive Vice President and Chief Supply Chain Officer
- Senior Vice President and Global Chief Marketing Officer
- Senior Vice President Global Restaurant Development & Restaurant Solutions Group
- Executive Vice President and General Counsel and Secretary
Supported by our CEO, the team meets 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 priority impact areas.
Together, they have responsibility for establishing plans and monitoring progress to achieve our goals and commitments. From time to time, we share our progress globally through our brand communications and across the local markets.
Cross-Functional Working Groups
The cross-functional leadership team is supported by cross-functional working groups made up of representatives from departments across our global business. These groups work to implement global and local strategies that drive action and progress against our priority impact areas. They also work with third-party organizations to monitor and collaborate on issues, coordinate and prioritize engagement with stakeholders, strengthen data systems, promote internal alignment and oversee the execution of our global impact reporting strategy.
Partnering With Franchisees and Suppliers
The leaders of each McDonald’s market have responsibility for working with their teams to engage local Franchisees in our initiatives and programs. Our local community presence is foundational to our global brand. Each of our priority impact areas comes to life through leadership from local Franchisees, investments in local community partnerships, engagement in the communities of farmers and suppliers, and through the experiences of millions of customers in their local McDonald’s restaurants.
Beyond commercial, food and product safety, and food quality responsibilities, the Global Supply Chain function has responsibility for managing our global supply chain policies, goals and commitments, setting responsible sourcing expectations for suppliers and coordinating with market supply chain teams to engage suppliers at the local level.
Our business environments and markets are constantly evolving, influenced by global trends and concerns that affect us all. With this in mind, we regularly work with key external stakeholders to engage on issues that matter most and to learn from their insights and relevant expertise.
We’ve developed lasting relationships with experts from academia, nongovernmental organizations (NGOs), the socially responsible investment community and others. Through this collaboration we can better understand and advance progress on a range of impact areas.
Investors & Shareholders
We know that our investors and shareholders are increasingly interested in ESG issues and engaging directly with businesses to drive continuous improvement. We keep our investors informed of our progress and efforts through regular webcasts, direct meetings and annual reporting on our website. In response to investor feedback, we continue to leverage the Sustainability Accounting Standards Board (SASB) Reporting Guidance and publish a SASB Index to help investors find relevant information through this framework. We recognize the importance of understanding and disclosing climate-related risks and opportunities for our business and look to the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) to guide our approach.
We engage with a range of certain NGOs to help provide external insights and perspective that inform and shape our strategies and management of ESG issues. Working with external experts complements and stretches our thinking, driving greater impact. We often partner with NGOs to help us develop and implement initiatives on the ground and to facilitate multi-stakeholder and industry-wide collaborations that drive change at scale.
For example, World Wildlife Fund (WWF) helped us shape our 2020 responsible sourcing commitments through an independent analysis of our supply chain in 2010, which helped us identify the raw materials that represented the biggest sustainable sourcing opportunities for us to prioritize. Since then, WWF has continued to be a key advisor on our environmental strategies, such as our forests commitment, in addition to partnering on specific programs with suppliers and other companies, such as the ReSource: platform.
We engage with policymakers to inform them of our commitments and progress in relation to ESG issues and to collect feedback that informs our work.
Franchisees, Suppliers & Producers
Our independent Franchisees, suppliers, farmers and producers are an integral part of our business; we work closely with them to inform, shape and partner on our Impact Strategy. For example, together with our suppliers, we work toward more sustainable agriculture practices, leveraging their insights, expertise and partnerships to drive effective action across the supply chain. Additionally, because most of our restaurants are run by independent Franchisees, McDonald’s has deep roots in supporting communities, whether that’s providing a delicious meal, volunteering in the neighborhood or helping during a time of need.
Crew & Corporate Staff
Whether in restaurants or office buildings, the people who work at McDonald’s are the face of our brand and critical to our success. As such, we want to keep them involved with everything that happens at McDonald’s. To do so, we have developed several channels through which crew members in our corporate-owned restaurants and corporate staff can communicate their thoughts, concerns and ideas for improvements. We also host town hall meetings and offer face-to-face meetings to keep everyone up to date with the latest company developments.
Customers & Communities
We value the opinions of our customers and communities all around the world and understand their desire to support companies that share their views on responsible business. We keep our customers engaged through our social media platforms and communication portals, as well as offering a hotline where they can get in touch to share their thoughts and ideas.
We have a long legacy of initiatives designed to provide our neighbors with crucial support and care. We also work with a range of local organizations to provide aid during times of crisis.
- Nearly 50 years ago, McDonald’s came together with other community organizations to build the first Ronald McDonald House Charities® (RMHC) house. Read more about RMHC.
- We have worked with WWF since 2010 to develop our responsible sourcing practices, climate action strategy, and packaging and waste journey, and to assess deforestation risks in our supply chains. Read more about Conserving Forests.
- Through the Global Roundtable for Sustainable Beef (GRSB), which McDonald’s was a founding member of in 2011, we work to drive action around beef sustainability. Read more about Sustainable Agriculture & Beef.
- McDonald’s was the first global restaurant company to set greenhouse gas emissions reduction targets approved by the Science Based Targets initiative. Read more about Climate Action.
- Alliance for a Healthier Generation has supported us since 2013 in evolving our menu to offer more healthy options for kids and families. Read more about Nutrition & Marketing Practices.
- In partnership with Conservation International, we developed our McCafé Sustainability Improvement Platform, supporting coffee suppliers to develop more resilient communities and sustainable livelihoods. Read more about Farming Communities.
- Our employee business networks (EBNs) help promote an inclusive work environment, foster relationships, support career development opportunities and grow the business. Read more about Diversity, Equity & Inclusion.
- In 2014, we signed onto the New York Declaration on Forests, a shared commitment to end deforestation by 2030. Read more about Conserving Forests.
- In 2020, McDonald’s engaged Mayo Clinic, a global leader in serious and complex healthcare, to provide counsel and expertise in infection prevention and control. Learn more about how McDonald’s works with Mayo Clinic.
- We continue to advocate for responsible climate policy, including serving in the Leaders’ Circle of America Is All In (formerly We Are Still In), and with Ceres as members of their Business for Innovative Climate and Energy Policy (BICEP) network. With these networks and a coalition of businesses, cities, states, faith groups, cultural institutions, healthcare organizations and universities, we recently supported the United States government’s efforts to elevate the importance of climate change and meeting the Paris Agreement. Read more about Climate Action.
- As far back as 1996, we have worked with Dr. Temple Grandin to develop our animal welfare auditing program. In 2018, McDonald’s formed the Chicken Sustainability Advisory Council (CSAC), which includes genetics experts, farm management consultants such as FAI Farms, leading academics and researchers, such as Dr. Temple Grandin and Dr. Harry Blokhuis, and NGOs, including the WWF. Read more about Animal Health & Welfare.
- Our membership of the Roundtable on Sustainable Palm Oil highlights McDonald’s commitment to only source sustainable, deforestation-free palm oil for our products. Read more about Responsible Sourcing.
- Through our Flagship Farmers Program, launched in 2007, we are working with and showcasing farmers who are pioneering best practices in agricultural sustainability. Read more about Farming Communities.
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