Beyond the altruistic merits of green initiatives, analysts and climate change experts say the move by one of the world’s most dominant restaurant chains reinforces the idea that companies can’t afford to ignore customer interest in their carbon footprints, or that of their cheeseburgers.
“Where McDonald’s goes, usually the rest of the restaurant industry eventually follows,” said Sara Senatore, a senior research analyst at Sanford C. Bernstein & Co., who focuses on the restaurant industry. “It’s hard for other companies not to follow suit eventually.”
Senatore pointed to past examples when McDonald’s has taken a stance on social-responsibility issues, including when the chain transitioned to antibiotic-free chicken.
Rivals that fail to match efforts can wind up regretting their decision.
“It starts to be something that works against you,” Senatore said.
Though hardly alone, McDonald’s core products — the burger or sandwich — present their own environmental issues. According to the World Resources Institute, a research organization, more than three-quarters of all agricultural land is used to produce meat and dairy. One third of all the water used to produce meat and dairy is for beef. In fact, if the world’s cattle formed a nation, WRI says, it would be the third-largest greenhouse gas emitter after China and the United States.
In its announcement, McDonald’s said it would reach its targets through energy-efficient kitchen equipment, LED lighting, sustainable packaging, recycling in restaurants and investing in sustainable agricultural practices. The company noted that beef production, restaurant energy usage and sourcing, packaging, and waste account for roughly 64 percent of McDonald’s global emissions. The company did not name specific changes to its menu to reach its environmental goals.
McDonald’s also became the first restaurant company to set targets approved by the Science Based Targets initiative, which helps companies determine goals for reducing emissions. Hundreds of other companies have committed to setting targets or have had their targets approved. Those companies represent industries from pharmaceuticals to real estate and include the likes of Walmart and PepsiCo.
McDonald’s sheer size — 37,000 locations in more than 100 countries — is an encouraging sign for global climate change action, said Cynthia Cummis, director of private sector climate mitigation at the World Resources Institute, which is a partner of the Science Based Targets initiative. Unlike many of its competing chains, McDonald’s exercises a unique dominance over the beef industry, she said.
“With the need to feed a growing population and the growing demand for protein, how are we going to meet that need in a sustainable way?” Cummis said. “I think that’s where McDonald’s needs to play an important role.”
This week was not the first time McDonald’s rolled out green initiatives. Earlier this year, the company committed to having all of its packaging come from renewable, recycled or certified sources by 2025. And in 2015, McDonald’s sought to address the impacts of its supply chain on deforestation.
Francesca DeBiase, chief supply chain and sustainability officer for McDonald’s, said meeting targets will require collaboration across the board — from suppliers to franchise owners to customers. Over 90 percent of McDonald’s restaurants worldwide are owned and operated independently, meaning that, for example, the company would have to lean on those partners to invest in energy-efficient equipment like LED lighting, she said.
“Our focus is always looking forward and determining what the next big steps are for a brand like ours, and finding the intersection between what’s important to us as a business and what’s important to our customers with what’s important to the environment, DeBiase said. “Climate change fits squarely into that.”
Whether other major restaurant chains adopt similar targets, Senatore and Cummis agree, will have to play out over time.
Companies “understand that this is a reputational issue,” Cummis said. “This is an important indicator of being a leader and protecting their brand.”