McDonald's to Use Region-Specific Standards To Buy Sustainable Beef

Bloomberg BNA — McDonald's plans to implement its recent pledge to purchase sustainable beef using region-specific standards for its suppliers, one of the company's sustainability officials told Bloomberg BNA May 21.

McDonald's, which is one of the largest buyers of beef in the U.S., vowed in January to begin purchasing verified sustainable beef by 2016, with the goal of eventually buying all of its beef from sustainable sources.

Achieving this goal will depend on sustainable beef metrics and indicators that will be defined at the regional level, according to Jeffrey Hogue, McDonald's senior director of global corporate social responsibility and sustainability.

At McDonald's, “Innovation often occurs at the market level and bubbles up to other markets, rather than being corporation-driven,” Hogue said at the annual conference of the Forum for Sustainable and Responsible Investment (U.S. SIF).

One example of this bottom-up approach is the shift away from refrigerants that contain hydrofluorocarbons (HFC) in European restaurants that is now being copied in restaurants in the U.S., he said. Hogue also cited the “Track My Macca's” app developed in Australia, which allows consumers to trace the supply chain of their Big Mac or Chicken McNuggets down to a particular farmer or rancher.

“That's one that we're looking to scale in other markets as well,” he said.

Sustainable Beef by Region

Hogue said McDonald's also will allow for market-driven efforts to achieve its sustainable beef pledge.

The company will ask its beef suppliers to follow principles being developed by the Global Roundtable for Sustainable Beef, with indicators that are specific to their regions, he said.

“If you look at beef, it can be grown basically anywhere,” Hogue said, but “the environmental impacts in one place will be a lot different than the environmental impacts in another place.”

The roundtable's regional indicators and metrics will help ensure that “there's more sustainability improvements that are relevant to the sustainability impacts that are occurring in that area,” he said.

Hogue said McDonald's is taking the same market-driven approach for its energy efficiency goal.

McDonald's has set a target of a 20 percent improvement in the energy efficiency of company-owned restaurants in top markets by 2020. The company is allowing restaurants in different markets to develop an individualized road map and plan for how to get there, he said.

For example, some restaurants might choose to install more-efficient fryers, while others may choose to install LED lights. Efficiency also could take different forms for new restaurants compared to existing ones, he said.

“So we're trying to drive the relevant innovation contextualized in the market rather than say ‘Here are the 10 solutions you guys have to put in play,’ ” Hogue said.

No One Size Fits All

DuPont faces a similar situation, with about a dozen different business units, from seeds to chemicals to nutrition and health.

“There's not a one-size-fits-all” solution to drive sustainability across units, Dawn Rittenhouse, DuPont's director of sustainable development, said at the conference.

Instead, DuPont focuses on “seeing around the corner” in terms of identifying issues that are likely to affect the company's ability to grow and be successful in those businesses, Rittenhouse said.

She said water is one of DuPont's biggest sustainability challenges because, in many instances, there isn't a business case to reduce water use.

“What we have chosen to do to take that on is look at water risk as opposed to the cost,” Rittenhouse said. DuPont uses a mapping tool from the World Resources Institute to identify sites worldwide with highest water risk and then focuses its efforts to reduce water use in those areas, she said.

The company has set a goal to reduce water consumption by at least 30 percent at sites that are located where the renewable freshwater supply is determined to be either scarce or stressed.

“But it's still a frustration how long it takes to get on the radar screen of a business when obviously there's lots of things that they can spend their money on,” she said.

Correction: A previous version of this story inaccurately characterized how the pledge will be implemented. It should have said McDonald's suppliers, not restaurants, will implement the pledge based on region-specific standards being developed by the Global Roundtable for Sustainable Beef. The actual amount of sustainable beef will be set after the company determines how the roundtable's standards roll out into different regions and markets internationally. The story also should have said McDonald's is one of the largest buyers of beef in the U.S.

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