Scaling for good: can McDonald’s raise the bar for sustainable food?

At Environmental Defense Fund, we believe that environmental progress and economic growth can and must go hand in hand. EDF+Business works with leading companies and investors to raise the bar for corporate sustainability leadership by setting ambitious, science-based goals; collaborating for scale across industries and global supply chains; publicly supporting smart environmental safeguards; and, accelerating environmental innovation.

This is the 10th in a series of interviews exploring trends in sustainability leadership as part of our effort to pave the way to a thriving economy and a healthy environment.

Let’s turn back the clock to 1990. It was a milestone year for McDonald’s, as the company opened its first restaurants in Moscow, mainland China and Chile. It was also when the largest restaurant company in the world joined forces with Environmental Defense Fund to launch a groundbreaking partnership that would find ways to reduce McDonald’s solid waste. The results? $6 million in savings, more than 300 million pounds of packaging eliminated, and 1 million tons of corrugated boxes recycled.

2018 is shaping up to be a big year for McDonald’s too, with a packaging waste goal set in January and an announcement to reduce emissions across its supply chain in March. Led by Executive Vice President and Chief Supply Chain and Sustainability Officer Francesca DeBiase, McDonald’s has raised the corporate leadership bar with these ambitious sustainability targets. But now, the difficult and complex work of meeting these goals begins.

I caught up with Francesca ahead of the Global Climate Action Summit this week to ask her about what the roadmap to meeting these goals looks like, and how they’ll collaborate with their suppliers and the industry to prioritize action on the areas where McDonald’s has the biggest opportunity to reduce greenhouse gas emissions, including responsible beef production

Here’s an edited transcript of our conversation.

You spent nearly 10 years in finance roles at the company before becoming head of McDonald’s supply chain and now, you also wear the chief sustainability office hat. How does your expertise in finance and supply chains influence your role as a sustainability champion?

For me to make the sustainability case to our leadership, our suppliers, our owner-operators, and our franchisees, I have to understand the business implications behind the changes and the investments that I’m proposing. Finance is the common business language that allows me to do that I can make a stronger case for sustainability when I put it into a business context.

At McDonald’s, our supply chain is our biggest environmental impact. When I talk to our leadership team about making an impact in our supply chain, they know I’m also accountable for making these changes from a sustainability standpoint. That gives me more credibility and greater leverage to embed sustainability into the entire business which is critical.

I actually said I wouldn’t take the job of chief sustainability officer by itself, even though I have a huge passion for it. I felt that I could do so much more by keeping one foot in our supply chain and driving the changes throughout our business.

How did you build the business case for your ambitious sustainability goals?

We talked with owner-operators, customers, nonprofit partners, and our executives to determine the critical areas where we wanted to focus. These areas are at the intersection of being important to our business and having a significant impact on the environment, where we can use our size and scale to drive change. One of those areas was packaging and waste it’s the number-one environmental issue of concern for our customers.

It took a couple of years for us to socialize the idea of a big recycling goal within the company, because when we talk about recycling in every single one of our restaurants, we know that the infrastructure doesn’t exist everywhere the challenge was daunting. But now, the sustainability goals are embedded across the company, and we have an opportunity to talk with consumers in our restaurants, and drive change and influence legislation we’ll be engaging a lot more on policy around recycling than we have in the past.

There is an increasing expectation that sustainability leaders need to set goals that extend across their supply chains. How will you engage the supply chain, whether it’s farmers, producers, or franchisees, in the years ahead?

We’re a 95% franchised organization, and we don’t own any of our production facilities or manufacturing facilities. That’s why partnering and collaborating with others will be key to meeting our goals.

We’re very fortunate though in that we have about a dozen suppliers that make up the majority of our business. We have long-standing relationships with them, which allows us to talk about and invest in long-term goals together. We work with them on sustainability initiatives in the same way we work with them on quality, food safety, and cost.

With our franchisees, we’ve been working with them in finding ways to integrate energy efficiency and recycling into the business goals that we set as we start to renovate and remodel our restaurants. And as we move towards 2020, a portion of our sustainable beef will be going into their restaurants.

Ultimately, our customers equate McDonald’s with beef and we are proud to be one of the largest burger companies in the world. When it comes to our beef supply, this is an opportunity to collaborate with suppliers, farmers and ranchers, other companies as well as scientists and academics to identify, elevate, and support practices that reduce greenhouse gas emissions, optimize positive impacts through agriculture, and support resilient farms and farmer livelihoods at the same time.

And when you think about how to conserve forests, without good, reliable data, it’s hard to ensure that we’re meeting our goals. We will need to work with credible and verifiable third parties. On the clean energy front, we’ve been working closely with the Renewable Energy Buyers Alliance (REBA) to help us scale best practices for energy management in our restaurants.

Beef is a big driver for global climate emissions. How does sustainable beef production factor into meeting the new 2020 goal, and what do you say to people who are skeptical about your ability to make progress on sustainable beef?

We know that beef sustainability is an area where McDonald’s has significant potential to be a leader in creating positive change. We embrace our responsibility to work with the beef industry, including farmers and ranchers around the world, to take steps now to meet the world’s beef demand sustainably.

We’ve made commitments to source a portion of beef from sustainable sources by 2020 in our top 10 beef sourcing markets, which make up 85% of our beef purchases.

In addition to our 2020 commitments, we’ve identified four key drivers that will allow us to greatly reduce emissions in our beef supply to help accomplish our climate target: working with farmers to scale best practices in farm management; rebuilding soils though practices such as progressive grazing techniques that help strengthen soil’s ability to hold carbon; ensuring no deforestation occurs in our beef supply chain; and, looking for opportunities to reduce emissions throughout the rest of our supply chain like food waste and energy use.

We’ve also set up a Flagship Farmer Program, to share sustainable agriculture best practices more broadly among the farming community and to celebrate the good work of farmers in our global supply chain.

What’s your favorite thing about the new McDonald’s headquarters in the heart of downtown Chicago?

The building has applied for LEED certification, and we have a green roof as well as a lot of outdoor spaces.

On the first floor of the new building is a McDonald’s restaurant, where we have some really fun international menu items. It is frequently updated but we’ve had a spicy chicken sandwich from Hong Kong, an Angus burger from Canada, a fantastic McFlurry from Brazil, and a couple of salads from France. We’re really trying to showcase the best of the best from around the world in our new headquarters.