| www.mcdonalds.com |
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| Share Price (3/15/07): | $43.47 |
| OVERVIEW: | |
| Market Value (3/15/07): | $52.3 BIL |
| Revenue (2006): | $21.6 BIL |
| Employees: | 1.6 Million |
| Return on Equity 2006: | 18.7% |
| HIP PRACTICES: | |
| Vision: | As a "food company, not a fitness company," seeks to offer selections that are socially responsible as well as high quality, great value. See this triad as "three legged stool" in concert with owner-operators, employees and suppliers. |
| Metrics: | 2007 will be fourth year of environmental supply chain scorecard gradual rollout, developed in collaboration with environmental experts in packaging LCA. Other collaborations have been undertaken with experts in animal husbandry, fisheries, nutrition and lifestyle. Offering increased product choice (fruit and vegetable options) and nutrition information for customers and their families and promoting physical activity. |
| Financials: | Quality, value and sustainability each have competing impacts on the bottom line -- consumer selection will affect the priorities. Largest cost is people, so employee-friendly practices pay back quickly; next highest cost is paper and packaging (described later) and energy is third-largest cost, with high-intensity per square foot. |
| Accountability: | Senior VP of corporate responsibility reports to CEO. Worldwide "balanced impact lifestyle council" meets on monthly basis; is one of few councils with a responsibility to the Board, to whom it gives a full briefing three times a year. Sustainability reports every 2 years, considering more frequent. |
| Decision-Making: | Restaurant audit system for review of operations with built-in measures for how franchises handle energy issues in addition to people, training and management. |
| HIP OUTCOMES: | |
| Health: |
Lack of metrics other than number of visits to the restaurant, and number of servings with fruit or vegetable (at least six choices on the menu). Still vague about actual health impacts. |
| Wealth: |
Average wage is $7.50 per hour, below the poverty line for 3 people. However, in Brazil, staff earns 29% more than the average industry wage. Low food cost per calorie, but quality of calories may not be healthiest fuel for body. |
| Earth: |
83% of the packaging used for food and drink is made of some form of paper or other wood-fiber material; recycled paper made up 31.5% of the total material used in McDonald's packaging. In 2005, redesigned the inside of the North American fry boxes, reducing packaging weight by more than 1,100 tons annually. New bulk-cooking oil-delivery system eliminates the need for both plastic jug containers and the corrugated boxes to hold them, eliminating 1,500+ lbs. of packaging waste per restaurant per year. Buys 50,000 metric tons of whitefish annually; more than a third of tonnage now purchased from fisheries that meet sustainability criteria. |
| Equality: |
40.7% of all McDonald's owner operators are women and minorities. 15.3% of worldwide top managers are women. 2 of 9 executive team members are women. Minority and women-owned suppliers sales to company exceed $3 billion. |
| WHAT'S NEXT: | |
| Practices: | Increased reporting on health impacts, and ways to mitigate or transform into positive health outcomes, are needed. Opportunity to drop energy costs further with renewables strategy. |
| Outcomes: | Increased market share possible from healthy food options, which could mean competing with Whole Foods Markets. Large-footprint retailers could accelerate market for renewable energy sourcing by unifying procurement standards (e.g. Walgreen's, Starbucks, Wal-Mart). |
| OTHER RATINGS: | |
| KLD: Companies are rated from negative (0) to positive (6) in seven areas. | Community: 1.6 Governance: 5.6 Diversity: 5.6 Employees: 1.5 Environment: 5.3 Human Rights: 1.0 Product: 2.6 Included in KLD Indices for: Dividend Achievers Social Index |
| Calvert Rating: Companies are rated on a scale of 1 (substantially below Calvert standards) to 5 (superior). | Environment: 5 Workplace: 2 Business Practices: 4 Human Rights: 3 Community Relations: 5 Included in Calvert funds: No |
| RESOURCES: | |
| Sustainability or CSR Report: | CR Reports |
| Annual Report: | Annual Report Archives |
--Sara Olsen and Ruthie Ackerman
