By Koji Kitazume, 2010 EDF Climate Corps fellow at McDonald’s Corporation, Joint degree MBA/MEM candidate at The Fuqua School of Business and Nicholas School of the Environment, Duke University, Member of Net Impact
On average, it serves 60 million customers a day through more than 32 thousand restaurants in nearly 120 countries around the world – that’s McDonald’s, where I worked as an EDF Climate Corps fellow this summer. I helped the worldwide energy team with its energy efficiency efforts in restaurant buildings and kitchen equipment. The most thrilling part of the job? Realizing the scale of the potential impact such an organization could make and being involved in that process.
Equally as exciting was my role as a part of a long-standing partnership at the intersection of business and the environment. McDonald’s collaboration with Environmental Defense Fund goes back to 1990, when the two first joined forces to explore whether the company could benefit the environment without affecting the bottom line. A major outcome of this initial partnership was the replacement of polystyrene foam sandwich packaging with paper-based wrapping, which reduced packaging volume, landfill space, energy usage, pollutant releases and all the associated costs.
Another rippling outcome of the partnership was the improvement in energy efficiency. By 2000, a decade after the parties examined various opportunities for reducing environmental impact in ways that made business sense, McDonald’s cut more than 510 million kilowatt-hours of electricity usage and 4,000 tons of greenhouse gas emissions through installing energy-efficient lighting in its restaurants. And the ripple continues to prevail – Today, new McDonald’s restaurants in the U.S. are equipped with energy-efficient features such as LED signage, high-efficiency HVAC systems and low-proximity kitchen equipment exhaust hoods, to name a few.
As excited as I was about working with McDonald’s this summer, given all that’s been done over the last 20 years I had to ask myself, “What’s left there for me to do?”
In my first weeks, I learned about trends over the recent years that have made energy management even more challenging. For example, many of McDonald’s restaurants now operate for longer hours; McDonald’s has been putting more kitchen equipment into its restaurants to support menu expansion; and energy has been deregulated in many markets. While McDonald’s continues to drive energy efficiency in spite of these trends, prioritizing efforts and tracking results continue to pose additional challenges.
So my role this summer was to help McDonald’s address these challenges with an outside-in perspective. As part of this project, I worked with the McDonald's worldwide energy director to develop a tool that quantifies financial and environmental impact of the company's energy efficiency efforts and investments for prioritization. I was stunned when I first tried analyzing a sample set of data and found that I couldn’t open the file with Excel due to the massive volume – there’s a lot of square footage, revenue, guest counts, utility rates, climate zones, emission factors and other variables to deal with.
I’m proud to report that by the end of my summer fellowship, I was able to use the very tool I had developed to calculate that the company could cut approximately 2,993,000 kWh of electricity usage and avoid 1,799 metric tons of CO2 emissions annually if it were to install occupancy sensors for lighting control in non-dining and non-kitchen areas in 775 company-owned restaurants in the U.S.
McDonald’s partnership with EDF 20 years ago was an innovation, as I see it in two ways. First, it was extremely rare at that time for a company and an NGO to partner for positive results. Second, the partnership created a transformational industry change – Nowadays, many quick-service restaurants adopt paper-based packaging over polystyrene foam where they can. But the QSR industry has yet to become more energy-efficient or more transparent about their approaches toward energy efficiency and their progress. Very few QSRs communicate such, and as a consequence, only a handful of companies in this space are rated by the Carbon Disclosure Project.
I am hoping my work at McDonald’s can contribute to creating another transformational industry change here, building on the heritage of partnership between McDonald’s and EDF. How do I like the innovation that grew from EDF’s first partnership with McDonald’s, you ask? I’m lovin’ it.