Recognizing its unique position to be a driver of change, in 2018, McDonald’s became the first global restaurant company to set a science-based target to significantly reduce its greenhouse gas emissions, and making a formal global commitment to use its scale for good.

Now, the company is renewing its promise to support communities in Canada and sharing its plans to get there. McDonald’s Canada committed to McDonald’s global goal to source 100 per cent of its primary guest packaging from renewable, recycled or certified sources by the end of 2025* and to help the organization achieve net-zero greenhouse gas emissions globally by 2050.

RESPONSIBILITY AT SCALE

With its more than 1,400 corporate and franchised restaurants across the country serving upwards of one million people every day, McDonald’s Canada has been using its scale to drive change over its first 55 years in Canada and is accelerating that effort now.

“When we completed our transition to paper straws in late 2021, our guests could see the change: a paper straw in their order instead of plastic,” said Gemma Pryor, Senior Director of the McDonald’s Canada Impact Team, the group charged with driving change across the organization.

“What they don’t see, is the approximately 370 tonnes^ of plastics eliminated from the Canadian system annually.”

In total, McDonald’s Canada’s initiative to remove certain single-use plastics from restaurants, namely plastic cutlery**, stir sticks and straws, has eliminated approximately 700 tonnes of plastics from the company’s operations annually^.

CHANGES BIG AND SMALL

Scale is the secret sauce in McDonald’s Canada’s journey to help create an impact in the communities where it operates for the planet we share. Already, the changes made to the company’s operations have helped advance its packaging journey, bringing it closer to realizing McDonald’s global goal.

“McDonald’s Canada is one of the country’s largest restaurant companies, and we recognize the role our size and scale play as we help make a meaningful difference in our communities,” said Pryor. “We take the responsibility of this position seriously, and our ambitions highlight that every step we take today is an investment in our future.”

In 2019, the business stopped using extruded polystyrene foam in its gravy bowls and breakfast platters, removing more than 120 tonnes from the Canadian system.

In the same year, the introduction of both a new McWrap® packaging and a 20 per cent smaller, 100% recycled-fibre napkin spared the need for 1,300 tonnes of paper within its Canadian system.

Earlier this year, McDonald’s completed a paper fibre reduction initiative for its McCafé® hot cups, expected to result in the removal of approximately 700 tonnes of paper fibre from the Canadian system annually, based on 2019-2021 data.

LOVE WHAT’S NEXT

As people in Canada become increasingly aware of the role business can play in the future of our planet, McDonald’s Canada plans to continue acting on pressing issues in the communities it serves with people and the planet in mind.

“We’re excited to be marking McDonald’s Canada’s first 55 years by sharing its ambitions for its future. ” said Pryor. “We’re making sure our choices, actions and behaviours as a business show people that what’s important to them is also important to us, and that we’ll keep changing with them so they can feel good about enjoying the McDonald’s they love for years to come.”

In April 2022, McDonald’s Canada, alongside their supply chain distribution partner Martin Brower, added the first-ever electric vehicle (EV) to its distribution fleet. McDonald’s trialled the new, zero tail-pipe emission Volvo VNR Electric Class 8 tractor for distribution in Baie-D’Urfé, a suburb of Montréal.

Starting mid-July, guests in Canada can bring their own clean, reusable travel mug when they order a hot McCafé® Premium Roast Coffee or tea at the front counters of McDonald’s restaurants across the country.

That’s not all; guests who want to relive fond childhood memories of the Golden Arches™ with their families can look forward to even more change. McDonald’s Canada is working towards the company’s global ambition to drastically reduce the amount of virgin fossil-fuel based plastics used in Happy Meal toys, and to offer Happy Meal toys made from more renewable, recycled or certified materials by the end of 2025.

“Taking care of our communities helps us serve our guests even better, and our guests want to know they can trust us to act responsibly,” said Pryor. “We’re proud of the changes we’ve been able to bring to life so far. As we work towards to even bolder ones, we’re excited for our guests in Canada to Love what’s next™.”

Look out for more exciting things from McDonald’s Canada later this year mcdonalds.ca

* Refers to products that are used to package guest food on premises at McDonald’s restaurants, including containers, cups, wraps, bags for food, drink carriers, napkins and Happy Meal® boxes.

**Excluding McFlurry spoons.

^Based on 2018 to 2020 data

This article is “sponsored content” as defined by Corporate Knights’ content disclosure policy. 

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If the pilot goes well, McDonald’s will join the growing ranks of restaurants and meat producers that are betting the farm on plant-based meats. And none too soon, by the looks of the latest research from Coller FAIRR, a $16-trillion investor network that raises awareness of the environmental, social and governance (ESG) risks and opportunities caused by intensive livestock production.

The Index assesses 60 publicly listed animal protein producers with a combined market cap of $324 billion. FAIRR’s key findings?

• Suppliers to McDonald’s, Tesco, Nestlé and Walmart ranked as worst offenders in areas such as greenhouse gases, antibiotics and deforestation, despite pledges.

• 77% of major meat, fish and dairy producers don’t measure all greenhouse gas (GHG) emissions and don’t have meaningful targets to reduce them, undermining the climate commitments of major brands.

The world’s meat, fish and dairy industries are under serious threat from climate change impacts, said Jeremy Coller, founder of FAIRR and chief investment officer at Coller Capital. He added, “The weight of evidence highlighted by the Coller FAIRR Index has left investors concerned that the sector is failing to act. The Paris Agreement is impossible to achieve without tackling factory farm emissions. Coal is a stranded asset, and cows are the new coal.”

On the bright side, the Index found “plant-based investments booming”: 25% of animal protein producers (15 of 60 firms) now have some investments in alternative proteins such as plant-based meats, including Canada’s Maple Leaf Foods and Tyson Foods in the U.S..

And the Canadian Prairies just so happen to be at the heart of that boom, as veg-friendly companies like Beyond Meat turn to yellow peas for protein. Canada is the world’s largest grower and exporter of yellow peas, but most pea protein processing has happened offshore. That’s starting to change. Manitoba recently scored its second pea-protein processing facility, a $65-million plant near Winnipeg. The province is already in the process of building a $400-million pea-protein plant – the world’s largest.

In 2017, Avatar director and environmental advocate James Cameron (owner of Verdient Foods) opened a multimillion dollar pulse processing plant southwest of Saskatoon (the province is world’s leading exporter of lentils and dried peas).

Whether McDonald’s restaurants in Prairies will carry Beyond Burgers remains to be seen.

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On January 1, 2019, Jair Bolsonaro began his tenure as the president of Brazil. In Bolsonaro’s first eight months in office, his administration has had a profound impact on Brazil’s forests and its Indigenous population, and critics now link Bolsonaro’s anti-environment policies and rhetoric with the wildfires affecting Brazil’s Amazon rainforest. But Bolsonaro is not the only one fuelling the fire as agro-businesses expand into forested regions, driven by global demand for Brazilian commodities. Consumer goods like beef and soy are largely to blame for the need to clear land. Thus, food producers sourcing ingredients in Brazil, financial industries and trading governments all have a role in addressing deforestation and human rights issues in Brazil.

Bolsonaro’s destructive policies

Less than a year in power, Bolsonaro’s impact on the environment and Indigenous peoples has been far-reaching. Deforestation levels in Brazil between July 1 and 22 of this year alone were 111% higher than they were in all of 2018. Over 120 pesticides were authorized in 2019 to date, some of which have been classified by the U.S. Environmental Protection Agency as “dangerous” or “extremely dangerous” for humans and the environment. All this occurred under the auspices of the Brazilian Ministry of Agriculture, whose powers have increased at the expense of the Ministry of Environment. The MoE and its anti-deforestation agency, Ibama, have suffered drastic budget cuts since Bolsonaro came into power, lessening their ability to identify and penalize instances of illegal deforestation. The new Minister of Environment, Ricardo Salles, dismissed environmental fines as ‘ideological’, leading civil servants in the Ministry to distance themselves from the minister in an open letter in April.

The Bolsonaro administration has also proposed transferring the protection of Indigenous rights to the Ministry of Agriculture again after congress voted against the initial proposal. Because of his strong ties to Brazil’s agribusiness, many are concerned the Minister of Agriculture will further subordinate Indigenous land rights to agricultural industry interests. During his campaign, Bolsonaro swore “to not demarcate another centimetre of Indigenous land” for protected status. Roughly 12% of Brazil’s lands are Indigenous lands, spread over 700 territories, of which about a third is waiting for official recognition.

Corporate deforestation pledges 

Bolsanaro’s reputation as “the most environmentally dangerous head of state in the world,” as The Economist recently put it, doesn’t just affect Brazil’s forests and Indigenous communities. International firms will want to keep a watchful eye on exactly how they’re doing business in Brazil. The Brazilian beef and soy industry has been singled out for fuelling many of the roughly 26,000 fires recorded in the Amazon this month, as land is typically cleared by farmers and ranchers to grow crops and raise cattle. Brazil is the largest beef exporter in the world with around 25% of the global beef market. In the last year, it has also surpassed the U,S. as the world’s largest exporter of soy (much of that soy is used as animal feed). As well, global demand for Brazil’s timber exports is contributing to the deforestation. Chances are high that firms taking advantage of less rigorous regulations may be doing so on disputed or demarcated Indigenous territories.

Despite Brazil’s regulatory rollbacks, countries and companies importing from Brazil have their own commitments on deforestation and human rights to uphold. Given the misalignment of these commitments with Brazil’s policies and practices, continuing to buy commodities from Brazil could prove to be contentious and pose reputational risks. In May 2019, several UK food retailers were named and shamed in the media for continuing to purchase products from Brazil’s JBS (the world’s largest meat processing company) despite the fact that investigations found the company was sourcing cattle from illegally deforested areas in the Amazon.

Over 50 of the world’s biggest companies (including Cargill, McDonald’s, Walmart, and Lloyds Banking Group) have pledged to halve deforestation in their supply chains by 2020 under the 2014 New York Declaration on Forests. This after a 2010 alliance on deforestation driven by the Consumer Goods Forum (CGF) saw 400 international companies pledge to zero net deforestation supply chains for palm oil, soy, beef and pulp and paper by 2020. American agri-giant Cargill, one of the largest exporters of Brazilian soy, has been heavily criticized for recently announcing that it would not meet its 2010 pledge. It’s also facing a backlash for backtracking on its commitment to a soy moratorium in Brazil’s Cerrado region – known as the world’s most biodiverse savanna.

Forest-related commitments in agricultural supply chains

Being implicated in the deforestation of Brazil’s traditional Indigenous lands could also put companies at odds with their public commitments on human rights, which are aligned with the interests of the UN’s Office of the High Commissioner for Human Rights (OHCHR). The 2007 UN Declaration on the Rights of Indigenous Peoples was seen as a landmark development for the OHCHR. Providing mechanisms for Indigenous peoples to provide free, prior, and informed consent for projects in the Brazilian Amazon may be a way forward for companies looking to ease current tensions. In April, an Ecuadorian court suspended government plans to auction off Indigenous Waorani territories for oil exploration stating that the government didn’t receive the tribe’s consent.

Role of the Financial Sector

Multinational corporations aren’t alone in their exposure to Brazil’s Amazon and Cerrado. Banks play a central role as an intermediary between the financial markets and the consumer goods sector, including food and agricultural companies. Boycotts of Brazilian beef and byproducts overseas could lead to longer loan payback terms and negatively impact banks’ credit portfolios. Similarly, if improvements to environmental standards take priority in EU-Mercosur trade negotiations, banks operating within Brazil will be under increased exposure to ESG integration against financials risks.

Sustainalytics looked at the financing policies of 13 of the biggest domestic and foreign banks in Brazil by assets (10 domestic, 3 foreign).  Only three of the Brazilian banks (Banco do Brasil, Caixa Econômica Federal, and Itaú Unibanco Holding S.A.) have general environmental and social guidelines that mention or address deforestation, Indigenous peoples or cattle ranching practices. Notably, none of the banks in our research sample has a standalone policy addressing Indigenous peoples and rights. The three foreign banks (Barclays PLC, BNP Paribas SA, and JPMorgan Chase & Co.) had policies addressing deforestation and soft commodities (i.e., cattle ranching, timber products, soy, etc.).

In the absence of stronger environmental protections from the Brazilian government, bank financing policies can be influential in ensuring borrowers respect international norms and standards. Poor or non-existent policies can exacerbate the deforestation practices fueling Brazil’s fires.  Domestic and foreign banks operating within Brazil can manage their exposure to reputational and other ESG risks by establishing or improving social and environmental lending policies for sensitive sectors like agriculture and soft commodities.

For instance, French international banking group BNP Paribas encourages its agricultural commodities producers to have their crops or plantations certified against Round Table on Responsible Soy, Better Cotton Initiative, Bonsucro or UTZ principles and standards by 2020. It encourages cattle farmers to have their production systems certified by 2020 against the Standards for Sustainable Cattle Production Systems by the Sustainable Agriculture Network.

Banks could also work with NGOs that monitor the environmental and social impacts of deforestation and set up ESG funds that exclude poor performers with respect to deforestation practices. They could also introduce or bolster requirements for consultation with Indigenous Peoples.

Altamira, Brazil. Photo by Victor Moriyama/Greenpeace.

Call for a regulatory crackdown by Europe

While the EU has enforced legislation on illegal timber, illegal fishing and conflict minerals, there is no regulation on agricultural goods linked to deforestation. As a major trading bloc and a significant consumer of agricultural products associated with global deforestation, the EU holds some responsibility and has an opportunity to drive change and set best practice standards.

The European Commission has received numerous requests from academics and stakeholder initiatives, such as the Amsterdam Declaration, calling for regulations requiring proof that goods placed in the EU market don’t contribute to either global deforestation or human rights abuses. A 2017 motion by the European Parliament called for regulation of the EU’s footprint on the world’s forests and highlighted the need for effective protection of Indigenous peoples rights and forest-dependent communities.

We all have a role in making sure Brazil’s rainforest is safeguarded well into the future. Governments can regulate beef, soy, timber and other imports linked to deforestation. The financial sector can leverage its role and influence companies to reduce deforestation and improve relationships with Indigenous peoples. It’s also incumbent on the consumer goods industry to uphold its voluntary commitments in the face of weakened regulations and protections. Much will depend on the willingness of the actors involved, be they cattle farmers, multinationals, consumers, banks or investors, to recognize the power they hold, and to act on it.

Jean-François Obregón is a Senior Associate, Insurance, Real Estate and Asset Management Research at Sustainalytics and based in Toronto.

Jessica Grant is an Associate, Consumer Goods Research at Sustainalytics and based in Amsterdam.

Thijs Huurdeman is an Associate, Consumer Goods Research at Sustainalytics and based in Amsterdam.

A version of this story first appeared on Sustainalytics.com.

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When diners head to the McDonald’s on Wonderland Road South in London, Ont. or the Vancouver spot on Hastings Street starting August 19, they’ll notice several differences between those restaurants and the country’s 1,448 others.

Instead of plastic, wooden cutlery and stir sticks as well as paper straws will appear at the two “green concept restaurants” as part of a pilot for the multi-billion dollar chain. The stores will also serve fully recyclable soda cups with new fibre lids that diners can sip from straw-free.

Across Canada, the company has already begun selling McWraps in thin paper wrapping instead of a thicker carton, ditching foam gravy bowls and breakfast platters, emblazoning Happy Meals with recycling instructions and serving coffee in “light-weighted” cups. All told, the moves will remove more than 1,500 tons of packaging materials from the McDonald’s Canada system annually. It’s all part of an ambitious plan to ensure that 100 per cent of McDonald’s consumer packaging comes from renewable, recycled or certified sources by 2025.

Many have applauded the push. When a fast food giant as prolific as McDonald’s makes bold moves to increase sustainability, it’s bound to have an impact and persuade competitors to follow suit, they reason.

After all, McDonald’s was rated by Forbes Magazine as the 10th most valuable brand in 2019, placing it in the same realm as Apple, Google, Microsoft and Amazon. The closest fast food competitor on the list was Starbucks, which ranked just 35th. Its influence has been engrained in North American culture since the brand debuted in California in the 1940s and Canada in 1967 and quickly became the largest fast food restaurant chain in the world. But in the past decade, competitors have been taking a bite out of the brand. In 2011, Subway surpassed McDonald’s to become the world’s biggest quick service restaurant in terms of store units. By 2015, the business press was asking whether the golden days of the golden arches were over.

It has spent the last few years renovating stores, introducing all-day breakfasts, announcing cage-free egg and deforestation-free pledges as well as discounted items, and it’s finally paying off. According to July’s second quarter earnings report, global same-store sales expanded by 6.5%, more than they have in seven years. Its stock hit an all-time high.

The brand isn’t staying complacent. It’s been introducing digital ordering kiosks to restaurants, more all-day breakfast options and partnering with delivery services. But the chain mainly sat back and watched while quick-serve competitors including Recipe Unlimited restaurants like Harvey’s and Swiss Chalet as well as A&W got out ahead of the growing discontent over plastic pollution by committing to scrap plastic straws last year. McDonald’s made the switch in the U.K. and Ireland and started testing alternatives in the U.S., but left Canadians sipping from plastic straws.

Two Canadian locations will pilot plastic-free straws starting August 19.

Rob Dick, a supply chain officer at McDonald’s Canada, had been hearing the calls for paper straws in particular. His staff noticed they were being offered at other restaurants long before McDonald’s decided to pilot them in Canada.

“We [were thinking], man, we need to do that, but to think about the infrastructure required to produce paper straws for a system that has 1,450 restaurants is much different from the infrastructure that’s required to produce paper straws for two restaurants,” he said.

“The packaging supply in particular for quick service restaurants has been built over the past 50 years,” said Dick. “We’re going to try and change it in five or six and that’s not going to be easy.”

Of course, packaging is just the proverbial tip of the iceberg if McDonald’s truly wants to refashion itself as a sustainability champ.

Experts like Kernaghan Webb, the director of the Ryerson University Institute for the Study of Corporate Social Responsibility, are happy to see McDonald’s latest packaging efforts, but say there’s still plenty more work for the brand to do to become truly planet-friendly.

He sees the green concept store project as falling short since it only tests packaging innovations, not product innovations that have sustainability implications, including how crops are cultivated and livestock are raised. “A focus on environmental and social sustainability concerning the food itself, and not just the packaging, should be an ongoing central preoccupation for McDonald’s and its competitors,” said Webb.

Transitioning from a McWrap carton to a thinner paper wrap is one of several “light-weighting” initiatives which will curb 1,500 tons of packaging from McDonald’s Canada stores annually.  

The company has said it’s implementing sustainability assessments on farms and is piloting sustainable beef certification in Canada, but greening its global supply chain has been a challenge. McDonald’s soy feed for its chicken has been linked to Amazon rainforest deforestation, despite repeated pledges to help end deforestation in its beef, soy, palm oil and paper products. Last month, McDonald’s main chicken and beef supplier, Cargill, was named the ‘worst company in the world’ by the environmental nonprofit Mighty Earth because of ongoing deforestation issues related to animal feed in Brazil’s Cerrado region along with pollution and meat contamination concerns.

McDonald’s also plummeted from tier two to tier three on the 2018 Business Benchmark on Farm Animal Welfare rankings, which measure 150 companies practices around the treatment of animals.

Robert Carter, a food expert with research firm NPD Group, said plant-based proteins should be the next move on McDonald’s radar. The fast food giant has been testing its Big Vegan burger made of soy (no word on whether any of that soy comes from Cargill) and wheat in some European and Israeli locations, but it’s lagging behind the competition in the North America market. Plant-based products are already a fixture on the menus of fast food chains like A&W, Tim Hortons, Harvey’s and Burger King.

“I would imagine that deep within the organization there is definitely testing going on and they would come out with a version of the plant-based protein offering within the next 12 months,” said Carter.

He also expects McDonald’s to scrap plastic Happy Meal toys within the next 18 months. It’s already testing alternatives to plastic in the U.K. after a British petition (now signed by more than 415,000 people) demanded that McDonald’s dump its plastic toys. The U.K.’s environment minister, Thérèse Coffey, took up the cause when she called on the brand in October to make “symbolic change, even if the amount of plastic involved is not actually that much.”

McDonald’s Canada says it has been “investigating different options,” including books, to offer as an alternative to toys.

Regardless of what measures McDonald’s rolls out, the company has its work cut out for it.

Competitors are also scrambling to boost sustainability to meet shifting consumer demands for more planet-conscious offerings. A 2018 Restaurants Canada survey of those managing 6,920 restaurants in the country revealed 56% have plans to reduce the number of single-use items in their operations. Another survey from the organization that year showed that 92% of the operators of 4,694 establishments plan to continue or improve on their current level of environmentally sustainable operations over the next three years.

Unless the sector adapts quickly, “the fast food industry may see its own potential extinction or at least it may become greatly diminished if it doesn’t change,” says Deborah De Lange, who has researched the intersections between entrepreneurship, climate change and sustainable development.

But Dick is confident the company can prove McDonald’s critics wrong, learn from its pilot restaurants and meet its goal to have 100 per cent of its consumer packaging derived from renewable, recycled or certified sources by 2025.

“We’re on a journey here at McDonald’s,” said Dick. “It’s a journey to a more sustainable planet.”

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