Just in time for Earth Day, McDonald’s has released a new global deforestation commitment. While this policy is new, the company is no stranger to the issue. In fact, McDonald’s was one of the first companies to be confronted in the 1980s as consumers began to recognize the “Hamburger Connection” between beef production and tropical forests. In response, the company established its Amazon Policy, which prohibited the sourcing of beef from the Amazon. Seventeen years later, McDonald’s was instrumental in creating the Soy Moratorium, an industry-wide effort which has effectively halted soy expansion on native vegetation in the Amazon Biome. (Soy is a major source of feed for chickens and other livestock).
Now, following a wave of commitments from agricultural giants such as Cargill and ADM, the new global policy is a first-of-its-kind in the fast food sector and, if executed correctly, could stand as a shining example for other companies in the food business to follow. As one of the world’s most recognized brands, McDonald’s knows any commitment with such a large impact on the planet – tropical forests are one of the largest contributors to, and buffers against, climate change – will be heavily scrutinized. So, what do we need to know as we watch this journey unfold? To radically simplify, four things come to mind:
- McDonald’s has done its homework. McDonald’s staff has consulted with stakeholders (including EDF) in putting this policy together. As a result the commitment is strong and its key elements are in line with the most progressive out there. Among its many features, it covers all suppliers and all commodities in its supply chain around the world, is consistent with “No Deforestation, No Exploitation, No Peat” policies that seek to protect both vulnerable communities and ecosystems, and is dedicated to stakeholder engagement to get implementation right.
- This new commitment gets a responsible company off the sidelines and into the game. McDonald’s Amazon Policy made a lot of sense when the company established it in 1989. At the time there was really no other option. The company could not continue to source beef from the region and uphold its values. But, a lot has changed over the past 25 years and many producers in the Amazon are working hard to ensure that their products don’t contribute to deforestation while supporting the economic needs of communities. The market influence of a company like McDonald’s will make a big difference in assuring that suppliers and producers who do things the right way in the Amazon will be rewarded. The decision to think more globally and comprehensively about sourcing from sensitive regions is in many ways a bold move for the company to make and surely there are strong economic and operational rationales behind the decision as well. But, if done right, it could signal a new era for responsible producers in the Amazon.
- The commitment covers legal compliance up front, which is essential. In Brazil, this means compliance with The Forest Code, which, among many things, requires that all rural properties be registered with the Rural Environmental Registry (Portuguese acronym CAR). Getting more rural properties registered with the CAR will enable transparency, help government agencies better target enforcement of violations, and facilitate an understanding of the legal reserve liability among producers (many properties currently do not meet the 80% of forested land required in the Amazon). In short, a large number of suppliers are likely in violation of the law and their customers may not know it. Even properties that are in compliance with the Soy Moratorium may still be illegal. In fact, soy farmers are about 5 times more likely to violate the Forest Code than the Moratorium. This is because the Moratorium covers only the portion of property dedicated to soy and not all commodities. A producer could be doing fine on soy, for example, but deforesting other portions of their property for maize or palm oil. Commitments like this can help accelerate the process of getting property owners in compliance with their legal obligation – ending illegal clearing and planting more trees where required.
- It includes management elements essential for success. A key criticism we often have of commitments of any kind, not just deforestation, is that they are often vague on implementation details. Sometimes this is okay (if the goal is meant to be aspirational and nobody really knows how to get there). When commitments are meant to address a specific and pressing challenge, however, vagueness doesn’t cut it. McDonald’s new policy is off to a good start with three core ingredients that will make the job easier. First, it addresses priority commodities like palm oil, beef, and soy first. This is important because these products represent the bulk of the deforestation challenge. Second, it assigns responsibility internally. We won’t be left guessing who is on the hook for getting this done. Finally, the commitment is time bound with a target of 2030 for all commodities. While, we would ideally like to see a more aggressive timeframe – the 2020 timeframe set by the Consumer Goods Forum is a stronger schedule – the company expects to achieve this goal sooner for priority commodities.
As strong as all of these elements are, however, the proof will ultimately be in the McNugget. A commitment represents the beginning, not the end, of the process. McDonald’s will be judged not by the quality of the commitment itself, but on how it translates that commitment into action. We’ve been impressed at the company’s sustainability successes in the past, like our partnerships on packaging and antibiotics in poultry. We are eager to ensure this trend continues – the lungs of our planet depend on it.
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