Impact Strategy & Governance

A McDonald's employee standing in front of the McDonald's logo

Our Commitment to Addressing ESG Issues

As the 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 organizations (NGO) stakeholders expect us to proactively manage the environmental, social and governance (ESG) 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.

We believe that understanding and effectively managing McDonald’s ESG 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.

 

How We Prioritize ESG Issues

McDonald’s prioritizes ESG issues that are of the highest importance to our stakeholders and customers, and where the business can have the greatest impact. In partnership with teams across nearly every aspect of the business, our Global Sustainability & ESG Strategy team continuously gathers internal and external insights to help us understand where to prioritize our efforts, evolve our strategy and tailor our reporting. This includes tracking customer insights globally and engaging regularly with shareholders, suppliers, employees, communities and key NGO stakeholders to discuss the evolution of key issues and transparency expectations in the shifting external landscape.

The Company’s enterprise risk management framework is designed to identify, assess and prioritize strategic, financial and reputational risks with the potential to have a sustained impact on our Company. The framework leverages internal risk committees comprised of cross-functional leadership, including ESG leaders and team members, which meet regularly to evaluate and prioritize risk in the context of our strategy, with further escalation to our CEO, Board and/or Committees, as appropriate.

Overview of Our Impact Strategy

In 2020, we announced our Impact Strategy, 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 ESG issues. These commitments are designed in partnership with, and based on feedback from, customers and trusted external organizations, so that we can help make a difference at scale and drive industry-wide change across our Company and within communities. We hold ourselves accountable by reporting against our goals annually.

Our Impact Areas

The Purpose & Impact section of our website is designed to be a living reporting platform where our stakeholders can track how we’re progressing each year. To find the latest on our approach and performance across ESG issues, check out each of the ESG issue pages below.

 

Our Planet

 

 

Food Quality & Sourcing

 

 

Jobs, Inclusion & Empowerment

 

 

Community Connection

 

Business Resilience

We are a trusted brand around the world, and we deliver that trust every day by being resilient and agile in the face of challenging circumstances beyond our control. We work to anticipate risks and develop robust mitigation plans through our evolving enterprise risk management, business continuity and crisis management processes. We think holistically about resilience throughout the McDonald’s System, to help secure what’s necessary in the near term, while building the flexibility to deliver quality, value and trust over the long term.

Governance of ESG Issues

Established governance is critical to managing the strategies, goals, policies and performance indicators tied to ESG issues. The leaders and teams with responsibility for our ESG strategies guide our actions and performance 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 of Directors and Cross-Functional Leadership team 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 support the Board’s oversight. These are Audit & Finance, Compensation, Governance, Public Policy & Strategy, Sustainability & Corporate Responsibility and Executive.

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 ESG 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 the 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 currently 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.

  • Executive Vice President and Chief Legal Officer.

 

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.

 

Global Sustainability & ESG Team

Within Global Impact, the McDonald’s Global Sustainability & ESG 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 and Customer Experience, and support for country-level sustainability staff for localized execution relevant to our 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 with respect to 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 farmer and supplier communities, 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.

Roadmap of Our ESG Journey

We’ve been working to integrate ESG 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 2021 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 industry-wide 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 time-bound commitments on Food, Sourcing and Planet.

  • Became a member of the Roundtable on Sustainable Palm Oil.

  • Became a signatory to the NY 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 industry-wide 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 brand 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 effect positive change around the world, with the support of our Government Relations, Public Policy, Communications and Sustainability & ESG teams.