April 30--McDonald's Corp. is setting new bars for everything from how it sources food to how much healthy food it serves as it tries to do a better job of connecting with socially conscious customers.
Chief Executive Don Thompson announced the strategy this week at a biannual convention for franchisees and others who work with the world's largest restaurant company. The corporate social responsibility and sustainability framework focuses on goals McDonald's aims to achieve by 2020 in five areas -- food, sourcing, planet, people and community.
McDonald's targets have the potential to lead to big changes at its more than 35,000 restaurants around the world and the massive network of suppliers that sell it everything from beef to boxes. They could also lead to higher sales if they catch on with diners, a boost McDonald's could use after turning in a string of disappointing results.
"We do have a track record of really good work, but now it's a new era. We're raising the bar on this," said Bob Langert, McDonald's vice president of corporate social responsibility and sustainability. "Our customers care. They want to do business with people and companies that have the same values about people, society, environmental issues (and) the sourcing of our products."
Some restaurants already make sustainability part of their push. Chipotle Mexican Grill Inc., which McDonald's once invested in, touts its "food with integrity" in ads and mentions sourcing on its menus. Until now, McDonald's largely has not promoted efforts such as recycling almost all of its used oil into biodiesel fuel, or getting whitefish only from fisheries that are verified as sustainable.
Among its goals, McDonald's wants to get all of its fiber-based packaging from sources certified by an environmental group or verified as recycled fiber, up from roughly 14 percent now; increase recycling at its restaurants to 50 percent, from roughly 36 percent; and double the amount of fruit, vegetables, low-fat dairy products or whole grains it sells. It also plans to develop goals next year for reducing salt or sodium, sugar, saturated fat or calories across its menu.
It makes sense for companies to focus their social responsibility strategies on their core product areas, which for McDonald's means focusing on food, said Aron Cramer, president and CEO of Business for Social Responsibility, which advises businesses on such efforts and counts McDonald's as a member.
A large number of companies started to be more public about their social responsibility targets and achievements around 2000, and got a wake-up call in 2005, when two major bellwethers -- Wal-Mart and General Electric -- made big, public environmental commitments, Cramer said.
"The trick is always in setting goals that are ambitious, not guaranteed to be achieved, but within reach," he said. "I think McDonald's has done a pretty good job of setting targets that fit that description."
The company has been trying for years to stand out as a better corporate citizen. It came under fire decades ago over packaging, including its Big Mac containers, which are now fiber-based.
"We were really a big focal point back in the late '80s for packaging waste, representing a disposable society, the polystyrene clamshell. That was the first time McDonald's was ever really under attack for a societal issue," Langert said.
This is McDonald's ninth corporate responsibility report. It published the first one in 2002. The goals are largely for the Oak Brook-based company's top nine markets, which account for about 70 percent of its revenue: Australia, Brazil, Canada, China, France, Germany, Japan, the United Kingdom and the United States.
McDonald's also plans to source all of its coffee and palm oil from suppliers that are verified to support sustainable production. It estimates that about 25 percent of the coffee it currently buys is sustainable.
Getting palm oil from tropical areas such as Indonesia and Malaysia can threaten rain forests. Palm oil is used in some McDonald's restaurants for frying and by some suppliers to par-fry chicken and potato products, and is in items such as baked goods and sauces.
The company estimates that about 14 percent of its palm oil already supports sustainable sources. Now it wants all of the palm oil it uses to be certified by the Roundtable on Sustainable Palm Oil or be covered by the purchase of GreenPalm certificates, a program set up to encourage sustainable production.
"Regardless of the type of commitment, it does send a signal, and it creates additional demand for sustainable palm oil, which is really important," said Bambi Semroc, senior strategic adviser for the Center for Environmental Leadership in Business at Conservation International.
McDonald's has been a member of Conservation International's business and sustainability council since its founding in 2003 and one of its corporate partners since 1991. Its other environment-related memberships include serving as a founding member of the Global Roundtable for Sustainable Beef.
Earlier this year, McDonald's said it aims to develop global criteria for supporting sustainable beef production and to buy some verified sustainable beef by 2016. The hamburger chain buys less than 2 percent of the world's beef supply.
McDonald's faces the task of trying to get the entire company, including thousands of restaurant owners and operators, to buy into every goal. The company plans to provide updates on its progress, and stakeholders will be watching.
"The company has committed publicly, and in today's world you really can't step back from public commitments," social responsibility advocate Cramer said.
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