Impact Strategy & Governance
Our Commitment to Addressing Environmental and Social Issues
We believe we have a responsibility to ensure long-term, sustainable value creation by taking action on the environmental and social issues that are most important to our stakeholders and business.
Our shareholders, Franchisees, suppliers, employees, customers and key nongovernmental organization (NGO) stakeholders expect us to proactively manage the issues most relevant to our business operations. We are committed to understanding both how such issues impact our business and how our management of such issues impacts the world, in line with the Company’s purpose to feed and foster communities.
We also believe effectively managing our environmental and social impact through robust governance structures, strategies, goals and performance indicators is part of operating our business responsibly. By doing so, we aim to maximize shared value, ensure trust in our brand and build long-term resiliency.
Our Impact Strategy
Our Impact Strategy is centered around the four Impact Areas of Our Planet, Food Quality & Sourcing, Jobs, Inclusion & Empowerment and Community Connection. Within these Impact Areas, we have established strategies, goals, policies and performance indicators to manage our performance across priority issues.
Our commitments were designed in partnership with, and based on feedback from, external organizations trusted in the environmental and social impact space, intended to help drive industrywide change and make a difference at scale. We hold ourselves accountable through internal governance and stakeholder engagement and by reporting our progress annually – as detailed in our latest Purpose & Impact 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. Read about the full timeline of our Impact Journey so far below.
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 Identify and Prioritize Issues
We prioritize the environmental and social issues that are of the highest importance to our stakeholders and where we believe our business has the greatest impact. Working across the business, our Global Sustainability & Social Impact team and broader Global Impact function continuously gather insights to determine where to focus our efforts, evolve our strategy and enhance our reporting. This includes engaging regularly with both internal and external stakeholders to discuss the nuances of key issues and transparency expectations.
Engaging NGOs and academic advisors through strategic partnerships is a key part of how we have determined environmental and social priorities over the last few decades. We engage with a wide range of NGOs, associations and external experts who provide insights and perspectives that shape our strategies, research, goals, policies and performance indicators. We also monitor emerging laws and regulations concerning environmental and social impact topics and reporting while engaging with policymakers to inform them of our environmental, social and governance (ESG) commitments and progress.
In addition, our enterprise-wide 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 sustainability and social impact 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
We believe a robust governance structure is critical to effectively managing our strategies, goals and performance indicators tied to environmental and social issues. We have defined owners and certifying officers for each of our public commitments and disclosures. Supported by cross-functional working groups, Franchisees and suppliers, these individuals are accountable for progress, elevation of key risks, accuracy and completeness of disclosure. Our Impact Reporting & ESG Governance team supports commitment and disclosure owners in providing relevant updates to the following governance oversight 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, ERM framework and a wide range of ESG topics that are relevant to our business. Five standing Board Committees support our Board’s oversight role:
- Audit & Finance
- Compensation
- Governance
- Corporate Responsibility
- Executive
Our Corporate Responsibility Committee oversees the Company’s initiatives, programs and strategies related to corporate responsibility matters, including brand trust and government relations in a manner consistent with McDonald’s corporate purpose and values. Specifically, the Committee monitors and oversees the development and implementation of our sustainability goals and metrics, as well as Company culture and human rights management, including workplace safety and diversity, equity and inclusion (DEI) efforts. The Corporate Responsibility Committee regularly reports to the Board on its activities and management of ESG-related matters.
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. Additionally, 10 of our 12 Directors are noted as having specific sustainability or corporate responsibility skills. Read more about Board of Director skillsets in our 2024 Proxy Statement (PDF – 2.5 MB).
Senior Leadership Team
McDonald’s Senior Leadership team (SLT) is responsible for overseeing strategies that strengthen and protect our consumer-facing brand and support long-term value creation through the management of ESG-related risks and opportunities. Among other responsibilities, the SLT actively oversees and directs the integration of ESG strategies across all functional and market business strategies.
ESG Disclosure Committee
Our ESG Disclosure Committee is responsible for ongoing oversight of public commitments and disclosures as outlined in the ESG Commitments and Disclosure Policy. This policy formalizes structures and procedures that advance governance of our Impact Strategy and enhance the transparency, consistency and reasonable accuracy and completeness of our disclosures. The Committee comprises primarily of leadership from our Impact, Finance, Legal and Technology functions and is chaired by the Impact Reporting & ESG Governance Director who reports to the Chief Sustainability & Social Impact Officer. The ESG Disclosure Committee meets as often as monthly and no less than quarterly, and occasionally engages other leadership and third parties to assist with its responsibilities as needed.
ESG Governance Council
The ESG Governance Council is responsible for advising and supporting the ESG Disclosure Committee in fulfilling its oversight of public commitments and disclosures. The ESG Governance Council is led by the Impact Reporting & ESG Governance team and comprises at least one member from each of the following teams: Impact Insights; Public Policy; ESG Controllership; Internal Audit; Legal – ESG; Legal – Corporate, Securities and Governance; Corporate Governance; Enterprise Risk Management and Global Technology.
Global Sustainability & Social Impact Team
Led by the Chief Sustainability & Social Impact Officer, the Global Sustainability & Social Impact team includes the greatest concentration of public commitment and disclosure owners within the Company. This team provides leadership, coordination and support for many environmental and social impact policies, programs and reporting, requiring close partnership across global cross-functional teams such as Global Supply Chain, Global People and Global Customer Experience, as well as country-level impact and sustainability staff who support localized execution relevant to our markets.
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. 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.
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, including progress against our commitments on climate; nature, forests and water; 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 communities.
One thing that’s remained unchanged is our commitment to engaging trusted organizations to help us develop strategies, goals, policies and performance indicators informed by best practice science and industry thinking. Read more about the key outcomes of our strategic engagements in 2023 on our Stakeholder Engagement & Public Policy page.
1996 to 2006 – 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 – 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 Corporate Social Responsibility & Sustainability Framework, with commitments on Food, Sourcing and Planet.
- Became a member of the Roundtable on Sustainable Palm Oil (RSPO).
- Became a signatory to the New York Declaration on Forests.
- Became a founding member of the Global Roundtable for Sustainable Beef (GRSB) 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 believe we can make the greatest difference to help 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: 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 2024 – Formalized ESG Governance and Expanded Cross-Functional Oversight of Public Commitments and Disclosures
- Founded our cross-functional ESG Disclosure Committee to formalize engagement across Impact, Legal and Finance functions, as well as to establish a central governing body with oversight accountability for public commitments and disclosures.
- Developed our ESG Commitments & Disclosure Policy to advance governance of our Impact Strategy and enhance the transparency, consistency and reasonable accuracy and completeness of our disclosures.
