Governance & Stakeholder Engagement
Our customers, employees, investors and other 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 well. The benefits of this 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 most 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 conducting stakeholder engagement about 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 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. For example, climate, forests, water and other environmental related risks are assessed based on both breadth as well as depth of impact to the McDonald’s System.
In addition, our prioritization of issues is informed by the United Nations Sustainable Development Goals, launched in 2015. The goals aim to address global challenges, including those related to inequality and climate change. The SDGs helped us look more closely at where we can have the biggest impact, and today, our impact strategy is carefully mapped against the goals, with each impact area corresponding to one or more of them. On each of the pages where we detail how we’re managing those issues, we also include an overview of which SDGs our work contributes to.
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. Six standing Board of Directors committees – Audit & Finance, Compensation, Governance, Executive, Public Policy & Strategy, and Sustainability & Corporate Responsibility – support the Board’s oversight.
In particular, the Sustainability & Corporate Responsibility Committee monitors and provides input on our management of environmental and social issues. The Committee also monitors the Company’s strategies and efforts to address McDonald’s brand trust through its performance as a sustainable organization. The Committee regularly reports to the full Board regarding its activities, and from time to time, other Board committees and the full Board receive reports on the Company’s sustainability efforts as circumstances warrant.
Cross-Functional Leadership Team
To drive accountability across the business and to ensure leadership oversight of priority impact areas, we have leveraged a cross-functional leadership team over recent years. These leaders have shared accountability and report to the President and Chief Executive Officer of McDonald's Corporation. Leading officers include:
Executive Vice President and Chief Supply Chain Officer
Senior Vice President and Global Chief Marketing Officer
Executive Vice President and General Counsel and Secretary
Executive Vice President and Chief Global Impact Officer
Executive Vice President and Global Chief People Officer
The team was formed in 2016, bringing together senior executives from across the Company who are accountable for leading McDonald’s Impact Strategy. These leaders and their teams work together to ensure the organization fulfills its overall global aims, goals and actions related to priority impact areas.
Together, they ensure that we establish plans and monitor progress to achieve our goals and commitments, and that we share our progress globally through our brand communications and across the local markets. Supported by our CEO, the team meets multiple times each year to discuss strategy and progress.
Cross-Functional Working Groups
The cross-functional leadership team is supported by cross-functional working groups comprised 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 and crew, 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 engage with our key stakeholders to identify the issues that matter most to them and to learn from their insights and expertise.
We’ve developed lasting relationships with experts from academia, non-governmental organizations, the socially responsible investment community and others. Through this collaboration we can better understand and advance progress on a range of impact areas.
Investors and 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 through our website. In response to investor feedback, for the first time in 2020 we have leveraged the Sustainability Accounting Standards Board (SASB) Reporting Guidance and published a SASB Index to help investors find relevant information through this framework.
In response to investor feedback, for the first time in 2020 we have leveraged the Sustainability Accounting Standards Board (SASB) Reporting Guidance and published a SASB Index to help investors find relevant information through this framework.
We engage with a range of Non-Governmental Organizations (NGOs) to help provide external insights and perspective that informs and shapes our strategies and management of ESG issues. Working with external experts complements and stretches our thinking, often resulting in greater impact. We also partner with NGOs to help us develop initiatives on the ground and to facilitate multi-stakeholder and industry-wide collaborations that drive change at scale.
For example, World Wildlife Fund (WWF) led an independent analysis of our supply chain in 2010 to help us identify the raw materials that represented the biggest sustainable sourcing opportunities for us to prioritize and to help shape our 2020 sustainable sourcing commitments. 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:Plastic 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 and 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 develop more sustainable agriculture practices, leveraging their own insights, expertise and partnerships to drive effective action within the supply chain.
Crew and 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 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 and 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.
Through the Global Roundtable on 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
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, and Inclusion
As far back as 1996, we have worked with Dr. Temple Grandin to develop our animal welfare auditing program. Read more about Animal Health and Welfare
Our membership with 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