Climate change is the biggest environmental issue of our time, with impacts that affect communities around the world: from melting ice caps and devastating forest fires, to shifting weather patterns that disrupt agricultural supply chains and threaten food security.
As the world’s largest restaurant company, we have a unique opportunity to mobilize our entire value chain to act now. In collaboration with our Franchisees, and through our relationships with suppliers, farmers and ranchers around the world, we can help to catalyze action around emissions reductions and strengthen climate resiliency.
Reducing emissions and adapting to climate change is critical to the collective success and resilience of the McDonald’s System, and our ability to feed communities today and in the future. While taking action on climate change is challenging and requires significant investment, we believe it will drive business value in the long term by ensuring we are managing operational costs in our energy supply, improving the security of supply of our raw materials and reducing our exposure to increasing environmental risks, regulation and taxes.
We are working in partnership with our Franchisees and suppliers to tackle climate change and transform the food system for the better. We have been on this journey for a number of years and we are proud that, in 2018, McDonald’s became the first global restaurant company to set a science- based target to significantly reduce greenhouse gas (GHG) emissions.
The Company will partner with Franchisees to reduce GHG emissions related to our restaurants and offices by 36% by 2030 from a 2015 base year. Through collaboration with our suppliers and producers, we are also committed to a 31% reduction in emissions intensity (per metric ton of food and packaging) across our supply chain. This combined target has been approved by the Science Based Targets initiative (SBTi).
We expect to prevent approximately 150 million metric tons of CO2 equivalent (CO2e) from being released into the atmosphere by 2030. This is the same as taking 32 million cars off the road for an entire year or planting 3.8 billion trees and allowing them to grow for 10 years.
Taking Action to Cut Our Carbon Footprint
In collaboration with thousands of Franchisees, suppliers and producers, we are prioritizing action on the largest elements of our carbon footprint. These include restaurant energy use and sourcing, packaging and waste, and the sourcing of key ingredients for our menu, such as beef. We are also contributing to the development of GHG accounting methods to demonstrate the impact of factors such as land use change and carbon sequestration to our footprint, to ensure our strategy remains robust and resilient.
Restaurant Energy Usage and Sourcing
Together with our Franchisees, we are working across our restaurants to be more innovative and efficient, with investments in areas such as renewable energy, LED lighting and energy-efficient kitchen equipment. Across the globe, our markets are in various phases of strategy development, and in 2020 we launched a new internal climate data and insights platform to support market-level local climate strategies and track progress.
Packaging and Waste
Packaging helps us serve food quickly and safely to our customers, but we also know that how it is designed, produced, transported and disposed of can have an impact on the planet. Our packaging and waste strategy aims to accelerate a circular economy and design out waste to further help reduce emissions across our operations and supply chain. Read more about Packaging & Waste.
We are one of the biggest buyers of beef in the world, and beef is one of the top three contributors to the overall footprint of our supply chain. This is why we are prioritizing action in this area in partnership with our suppliers, NGOs and climate experts. Since 2011, we have supported and participated in global, regional and national roundtables, bringing together partners to identify, develop and scale the most sustainable agricultural practices. We are now in the process of developing category roadmaps for key ingredients (including beef) to meet our global GHG emissions target.
We are also working with partners to advance the science around sustainable beef farming practices. Our work with the Foundation for Food and Agricultural Research and universities in the U.S., for example, is looking at how regenerative grazing practices can capture more carbon in the soil and increase biodiversity. Read more about Sustainable Agriculture & Beef.
Engaging Our Supply Chain
To achieve our supply chain goals, we work closely with suppliers and producers, particularly our biggest suppliers in the product categories in which we can have the greatest impact. We all share a common commitment to delivering action on climate and driving continuous improvement. We are actively encouraging our globally managed suppliers to set targets, measure emissions and look to make reductions – particularly in Scope 3 emissions – in line with their broader sustainability strategies.
We work with expert partners such as CDP, an organization that helps companies manage their environmental impacts, to support our suppliers in developing their own approach to climate action. Through the CDP Supply Chain program, we engage with our suppliers to better understand the level of action they are undertaking across their own businesses, which, in turn, helps to inform our future approach.
In 2019, we asked 108 of our global suppliers to report to CDP Climate and Forests, up from 55 in 2018. We were also proud to be counted among CDP’s Supplier Engagement leaderboard in 2019, receiving an “A” for supplier engagement.
While we are working on specific plans for each of our key commodity groups, we are also involved in several more wide-ranging areas, including:
Farm management – On farms, sustainability and efficiency are interconnected; a carbon footprint is an indicator of a farm’s overall proficiency and therefore its profitability. When farmers are able to optimize their resources, they also improve their economic viability and minimize their carbon footprint. We are improving our insight into the farming systems that supply the food for our menu, and our suppliers work with farmers to help them improve their efficiency and reduce emissions by adopting more sustainable practices.
Rebuilding soils – Progressive grazing techniques and other agricultural practices can bolster soil’s ability to store carbon and improve climate resiliency while optimizing the nutrition it can provide animals. We support initiatives to help farmers adopt management practices that improve soil health, and at the same time ensure that farming systems that actively sequester carbon are recognized in GHG measurements.
Conserving forests – Forests play a pivotal role in absorbing GHG emissions, creating oxygen and supporting ecosystems – yet around the world they are under threat from deforestation and degradation. Deforestation is estimated to account for 15% of the planet’s global GHG emissions, and presents a real risk to our shared environment, as well as our business, supply chain and customers. We are working with partners across our global supply chains to verify that the products sourced for our menu are not putting forests at risk, and we are committed to eliminating deforestation from our global supply chains by 2030. Read more about Conserving Forests.
Post-farm efficiency – We are constantly looking for new opportunities to cut emissions throughout the rest of our supply chain, and are working on initiatives that include improving energy usage at supplier facilities, transportation efficiency and reducing food waste.
Keeping Our Transport and Logistics Impact Low
We have a twofold approach to working with our suppliers to achieve world-class logistics operations with the lowest possible environmental footprint:
- Using fewer miles and less fuel through continuous routing improvements, innovations like engineless cooling and air deflectors, and ongoing driver training.
- Increasing the use of alternative fuels with lower emissions.
In 2019, our two largest logistics providers, HAVI and Martin Brower (MB), also signed up to the SBTi, and have committed to cutting carbon emissions from their operations by 40% per metric ton of goods delivered by 2030, respectively, from a 2015 base year. Since then, all of McDonald’s Global and North American independent logistics suppliers have set science-based targets, approved by the SBTi.
McDonald’s logistics network transports our food products more than 250 million miles every year. Our logistics providers are working to minimize the environmental footprint of our distribution activities by reducing the distances our products travel, moving toward alternative fuels and making product journeys as efficient as possible.
Innovation in transportation goes hand-in-hand with our efforts to eliminate waste from our kitchens and supply chains. For instance, rather than relying on a separate collection service, trucks in some countries “back-haul” waste from McDonald’s restaurants when returning to the distribution centers. This helps to recycle waste streams like cardboard, used cooking oil, some plastics and cups, while reducing mileage and emissions in the process.
We encourage all our logistics providers to use carbon-efficient fuels. This includes alternative fuels such as renewable natural gas created from biowaste, biofuels, hydrogen, natural gas, propane and electricity. Where possible, these biofuels are generated from by-products rather than crops grown for food. In 2017, McDonald’s and our logistics providers became signatories to sustainability specialist BSR’s Sustainable Fuel Buyers’ Principles, supporting growth in the market for low-carbon vehicles.
Managing Climate-Related Risks and Opportunities
We recognize the importance of understanding and disclosing climate-related risks and opportunities for our business and we look to the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) to guide our approach. The recommendations provide a pathway for climate risk as an integral part of corporate governance and can help our Company, Franchisees and suppliers understand and manage the impacts of climate change on our business.
The TCFD framework consists of four core elements:
Our Board of Directors’ Sustainability and Corporate Responsibility Committee reviews and monitors ’ strategies and efforts to address our performance as a sustainable organization, including updates and discussion on our climate change strategy, risk management practices, commitments and progress, and the development and implementation of performance metrics with respect to sustainability priorities.
McDonald’s Global Sustainability team provides corporate staff leadership, coordination and support for our global sustainability policies, programs and reporting, as well as country-level sustainability staff for localized execution relevant to our markets. The team liaises with other departments throughout the business and Franchisees to address climate-related issues. By collaborating with our Supply Chain teams, the Global Sustainability team works with independent suppliers to embed sustainability considerations, including climate change, into global sourcing decisions for food and packaging. They also work with McDonald’s Restaurant Solutions Group to increase energy efficiency of our restaurants through operations, equipment, design and technology. Read more about our management’s role in assessing climate risks and opportunities, as well as our Board’s role in overseeing climate change risk management, in our CDP Climate Change disclosure. For further information on our Governance of ESG issues please visit our Governance & Stakeholder Engagement page.
We disclose the impacts of climate-related risks and opportunities on our business in our latest CDP Climate Change disclosure, and leverage learnings from this to further advance our climate mitigation and resilience strategies. We will also continue to develop our own reporting on this issue based on best practice guidance, including that of the TCFD.
We report on our process for identifying, assessing and managing climate-related risks and opportunities in our CDP Climate Change disclosure. The scope and approach for responding to identified risks depend on the cost and operational impact on the organization and the calculated impact on the environment. Our approach includes, but is not limited to, engaging our suppliers and Franchisees to develop mitigation and adaption plans and strategies, and partially informs our approach to setting commitments, such as our science-based target on Climate Action.
We have recently committed additional resources to focus on climate-related risks. We are in the process of conducting climate scenario modeling to identify risks and opportunities, and we are working with expert partners to analyze the potential material impacts on our System. Once complete, we plan to share these findings with functions across the Company, our Franchisees and supply chain partners. We have also developed a supply chain cross-commodity working team dedicated to supply chain resiliency, including climate.
Metrics and Targets
We disclose the climate-related metrics that we currently track and report through our annual CDP Climate Change disclosure. We also report on progress against our science-based targets in the Our Performance section below. We will continue to enhance our methodology and data quality in future years.
Collaborating to Drive and Advocate for Transformative Change
We know that addressing climate change requires a collective effort across our global community. That is why we’re partnering with our suppliers, Franchisees, industry, governments, NGOs and others to take action. Knowing we are stronger working in partnership with others, McDonald’s works with other organizations and coalitions to advocate for further progress on climate action.
As part of the We Are Still In (WASI) Leader’s Circle, we are working together with a coalition of businesses, cities, states, faith groups, cultural institutions, healthcare organizations and universities to continue to support climate action and meet the goals of the Paris Agreement.
In 2020, we became members of the Ceres Business for Innovative Climate and Energy Policy (BICEP) Network where, alongside nearly 70 other organizations, we are supporting the development of strong climate and energy-efficiency policies in the U.S.
Since announcing our climate commitment in 2018, McDonald’s has been meeting with members of U.S. Congress and their staff to share our commitment to climate action and also to discuss important topics such as recycling, soil health and renewable energy. We believe public policy is a critical part of the solution and our advocacy work in Washington D.C. is driven by our U.S. Environmental Sustainability Policy Principles.
Across the world, we collaborate with supplier partners and industry peers on a range of projects and to help develop tools and best practices:
We helped found the Global Roundtable for Sustainable Beef (GRSB) to bring together key players in the beef value chain around a common purpose to help ensure that all aspects of the beef value chain are environmentally sound, socially responsible and economically viable. Membership is helping us deliver meaningful impact through a more sustainable beef supply that is scalable, more transparent and backed by ongoing performance measurement and third-party audits.
In collaboration with other organizations, we’re supporting regenerative agriculture practices that help reduce emissions, mitigate climate change and support livelihoods. This includes the Ranch Systems and Viability Planning network inwithin the Northern Great Plains region, providing ranchers with technical expertise, training and tools to implement regenerative cattle grazing practices, and a project in Nebraska to support farmers into implementing regenerative soil health practices. Implementing these practices is critical to help improvinge carbon absorption in soil and helping ranches be more resilient and economically viable for the long -term. Read more about these projects and our work on Sustainable Agriculture.
We are working with other organizations as part of the C-Sequ working group, to help develop a clear methodology to account for carbon sequestration in lifecycle analysis (LCA) calculations. The group aims to improve accounting techniques to provide more certainty when organizations are investing in projects to sequester and store carbon through agricultural activity. We are also supportive of work to more accurately define the action of methane as a greenhouse gas.
We are members of the GHG Protocol Land Based Technical Working Group, which is developing new technical guidance and standards on how companies account for and report emissions, reductions and removals from land use activities in their GHG inventories.
As part of the Cool Farm Alliance, we have supported the development of the Cool Farm Tool that provides farmers in multiple countries and farming sectors with free access to a GHG measurement system, which they can use to assess their carbon footprint.
As members of the Gold Standard – a not-for-profit established to ensure projects that reduced carbon emissions featured the highest levels of environmental integrity – we work with others to test new techniques of carbon accounting in the supply chain and deal with challenges around traceability.
Supporting the Sustainable Development Goals
Our climate change work supports the UN Sustainable Development Goals, a global agenda to end poverty, protect the planet and ensure prosperity for all, in particular:
Adding Renewable Energy to the Grid
In 2019, McDonald’s committed to two renewable energy projects in Texas, both of which took the form of virtual power purchase agreements (VPPAs). These were a first for the company and helped us join other leading corporate renewable energy buyers in adding new large-scale renewable energy to the U.S. grid.
Once online, the energy generated by these wind and solar projects will be equivalent to over 2,500 restaurants-worth of electricity and is expected to contribute a further 6% reduction from our 2015 baseline. McDonald’s portion of these renewable energy projects will help to prevent approximately 700,000 metric tons of CO2e emissions each year.
Our renewable energy purchases in Europe in 2019 covered over 6,500 restaurants-worth of electricity across 11 markets. McDonald’s restaurants in France, Portugal, and the UK & Ireland are already close to sourcing, or have achieved, 100% of their energy from renewable sources.
Creating McDonald’s First Net Zero Energy-Designed Restaurant
In 2020, McDonald’s unveiled a first-of-its-kind Net Zero Energy-designed restaurant at Walt Disney World Resort in Orlando, Florida. The global flagship restaurant is designed to create enough renewable energy on-site to cover 100% of its annual energy needs, and will serve as a learning hub to test solutions for reducing energy and water use.
The restaurant includes:
A solar-paneled roof, photovoltaic glass panels integrated throughout the building, and solar-powered parking lot lights.
An automated energy system and passive ventilation dining-room that circulates air and regulates temperature, allowing the building to “breathe.”
Family-friendly educational elements such as static bikes that generate electricity and illuminate McDonald’s Golden Arches and tablet games that teach children and adults about renewable energy.
To reinforce the restaurant’s Net Zero Energy status, we are working towards the International Living Futures Institute’s Zero Energy Certification. Data and learnings from the restaurant will also inform McDonald’s global sustainability efforts, including progressing towards our Science Based Target.
Read more about our net zero energy-designed restaurant.
Through addressing their own carbon footprint, McDonald’s has shown leadership in helping tackle the climate challenges our planet is currently facing. The design of their global flagship restaurant is another positive step in how McDonald’s is bringing proven renewable energy solutions under one roof and most importantly educating their customers about the importance of sustainable practices and renewable energy sources.
Marty Spitzer, Senior Director, Climate and Renewable Energy, World Wildlife Fund
Operating Sustainable Restaurants Around the World
We are focused on designing and delivering the most resource-efficient restaurants possible. This means minimizing our use of energy and water, and maximizing the use of renewable energy, wherever possible. In 2017, we allocated $5 million to McDonald’s restaurants globally for LED upgrades. This has achieved a net cost saving of $14.3 million and a CO2 reduction of 100,587 metric tons – equivalent to removing 21,539 cars from the road for a year.
Our Global Restaurant Building & Equipment Standards are reviewed annually and include minimum requirements and recommendations on issues such as lighting, refrigeration and the energy efficiency of heating, ventilation and air conditioning systems, as well as energy management and even the way in which buildings are constructed to optimize solar gain.
To advance the overall sustainability of McDonald’s restaurants in Europe, we also operate to Green Building Guidelines, which are part of our continuous efforts to reduce energy consumption by sharing best practice and using the latest technologies.
Progress we are making around the world:
UK – New McDonald’s restaurants have 100% LED lighting, which uses 50% less energy than fluorescent lighting. Over 120,000 LED lights have been installed across McDonald’s restaurants, right down to the bulbs in our emergency lighting.
France – With a focus on energy efficiency and water reduction, a typical McDonald's restaurant in France uses LED lighting and consumes, on average, just seven liters of water per meal, compared to 10 to 20 liters in traditional restaurant kitchens.
Germany – We have successfully reduced energy consumption through LED lighting in the interior and exterior of the restaurants, and achieved an overall reduction in energy consumption of 14%, as measured in 2017 compared to 2011.
Australia – Together with engineering, energy and sustainability consultants and internal global experts, McDonald’s Australia is undertaking a review of the mechanical systems within its restaurants (including cooling, ventilation, filtering and exhaust), while also investigating and implementing renewable procurement opportunities. The review will identify industry-leading equipment and technology to achieve substantial reductions in energy use.
U.S. – Our environmental sustainability program, US 20x2020 By Design, aims to reduce energy and water use by 20% by 2020 through the use of innovative strategies in the design of new restaurants. This includes LED lighting, low oil-volume fryers, high-efficiency hand dryers, toilets and faucets, and low-spray valves. Compared to our 2005 building design, we have achieved a 16.7% reduction in electricity consumption and a 19% reduction in water use. Our hot water remains hot, but we have managed to reduce the energy needed to heat it by over 26%. These figures reflect progress as of 2015, with final figures to be reported in 2021.
U.S. – We are enhancing our kitchen equipment so that it uses less energy. The Next Gen Grill provides energy savings of approximately 16% compared to the previous model, and the High-Density Universal Holding Cabinet increases hot holding capacity and reduces energy use by 31%.
China – McDonald’s China put in place an action plan to focus on green restaurants and green packaging. It expects to open more than 1,800 restaurants by 2022 and that these restaurants target LEED (Leadership in Energy and Environmental Design) certification standards in the “Interior Design & Construction” category, issued by the United States Green Building Council. For the existing restaurants, McDonald’s China has been continuously updating and optimizing the energy management systems, including the use of LED energy-saving lamps, as well as more efficient air conditioning and kitchen equipment.
Installing Electric Vehicle Charging Points
To help our customers embrace more sustainable technologies, we are in the process of rolling out electric vehicle (EV) charging points at numerous restaurants around the world.
Through a collaboration with electricity producer Vattenfall, every Drive-Thru in the Netherlands will have two fast-charging points installed. This will enable EV drivers to charge their car within half an hour, using green electricity fully generated by Dutch wind turbines.
McDonald’s Sweden has worked with Fortum (a Finnish power company) since 2012 to establish fast chargers for electric cars in Sweden. Customers can charge their electric or hybrid car at 52 restaurants in Sweden and an additional 15–20 restaurants will be added to the network by the end of 2020.
McDonald’s UK has entered a partnership with InstaVolt to introduce EV rapid-charging points as standard across new Drive-Thru restaurants.
Creating Supply Chain Climate Action Strategies
Through our climate data and insights platform, we know which suppliers and food sourcing categories contribute the most to our emissions. This allows us to work with these suppliers to create strategies that support our science-based target and reduce our impact on the climate.
The first stage of this process is to share a commitment through target setting. In 2019, we clearly communicated our expectations to all suppliers of the importance of setting science-based climate targets for their own businesses. We now regularly reinforce the importance of taking action during supplier webinars and reviews, while also supporting our suppliers with a Climate Action Toolkit.
As well as target setting, we have an expectation that suppliers will instigate emissions monitoring and reduction programs, and report progress through the CDP Supply Chain program. We now request annual CDP reports from 108 key global suppliers, which account for the majority of our annual spend. This encompasses all globally managed suppliers of beef, chicken, dairy, cheese, bakery and baked goods, logistics, produce, liquid products and potato. It also includes the top 80% of our fiber-based packaging and key equipment suppliers.
This partnership approach will help us to tailor supplier-led reduction initiatives that are specific to our supply chain, as well as foster new supplier collaborations to achieve an even greater impact.
Converting From Diesel to Alternative Fuels
HAVI, one of McDonald’s logistics suppliers, announced a five-year joint plan with vehicle maker Scania in 2017 to improve its carbon footprint. The plan aims to significantly reduce the number of diesel-powered vehicles it uses and convert around 70% of its fleet to alternative fuels in a number of European countries by 2021. By the end of 2019, HAVI had already achieved 37% of the target.
Martin Brower is also continuously expanding its capabilities and use of alternative fuels. Over 90% of its global fleet is currently capable of operating with some level of biodiesel mixes – which is a big step toward carbon reduction while other alternative fuels such as natural gas and electricity become more commercially viable.
We are also finding ways to recycle our used cooking oil into biodiesel for delivery trucks. Learn more on our Packaging & Waste page.
Achieving SmartWay Excellence
In 2017, 2019 and 2020, McDonald’s U.S. received a SmartWay Excellence Award for outstanding environmental performance and leadership, having been a semifinalist in 2018. The SmartWay Excellence Award is the Environmental Protection Agency’s highest recognition for demonstrating leadership in freight supply chain energy and environmental performance.
In addition, based on the performance of McDonald’s freight transportation operations in 2019, EPA has named us a 2020 SmartWay High Performer. Our freight partners were recognized for achieving 98% of miles, or ton-miles, as SmartWay shipped, with strong performance in areas such as data reporting and validation, educational and collaborative work, and community links.
Engaging Crew to Take Action
Several countries have found ways to tap into the enthusiasm of restaurant staff and engage them in initiatives to lower the environmental impact of restaurants. McDonald’s France has developed a digital environmental management system called EcoProgress, which helps restaurant teams manage their environmental impact and includes a platform that provides training, tool, and examples of best practice. It also involves a countrywide annual challenge that rewards the McDonald’s restaurants with the highest performance.
Other markets such as the U.S., Russia, Portugal and Sweden run internal sustainability campaigns to engage crew around the importance of taking action on climate. So far, the campaigns have included activities such as competitions and quizzes, with ongoing encouragement for crew members to share best practice examples from their restaurants.
We hold ourselves accountable by measuring emissions data annually and partnering with experts to leverage leading methodologies for data collection and measurement. In 2020, we launched a new internal enterprise-level climate tracking system that pulls together restaurant, office and supply chain climate data. It runs parallel with our supply chain sustainability reporting system and uses common sources of information. We also work with the CDP Supply Chain program to integrate the actions of key suppliers on climate and forests.
The climate tracking system is also a way to share actionable data and benchmarking insights with key internal audiences in order to inform strategy development. We will continue to evolve the system via annual improvements on both the data quality and climate accounting methodology, as well as insights and benchmarking capabilities.
For our latest comprehensive disclosure on climate action, see McDonald’s CDP Climate Change (2020) Report.
The figures below reflect the latest enhancements to our 2015 base year emissions and 2018 emissions estimates, which have been updated based on best practice guidance on leveraging the latest methodology and data available. As we continue to enhance our methodology and data quality over future reporting cycles, we expect the baseline and annual progress figures to further adjust.
By 2030, partner with Franchisees to reduce GHG emissions related to McDonald’s restaurants and offices by 36% from a 2015 base year.
As of the end of 2019, we have made a 3.7% reduction in our restaurants’ and offices’ absolute emissions from the 2015 baseline.
This means approximately 10.3% of our target has been achieved.
Once online, the U.S. renewable energy deals referenced above are expected to contribute an additional further 6% reduction from the 2015 baseline.
By 2030, reduce emissions intensity (per metric ton of food and packaging) by 31% across our supply chain from 2015 levels.
As of the end of 2019, the emissions intensity of our supply chain has decreased by 0.9% from the 2015 baseline.
This means we are 2.9% of the way toward our target. We continue to partner with our suppliers to make progress and we are seeing an increase in the number of our suppliers setting climate targets and implementing strategies to reduce emissions intensity that are tailored to their own supply chains.