The world’s largest fast food companies have been urged to take faster and deeper action to manage and mitigate climate and water risks in their supply chains.
Since launching in January 2019, a global investor coalition led by FAIRR and sustainability organisation, Ceres, has been engaging with the biggest fast food companies on climate and water risk management.
Since then, it has grown to represent more than $11.4 trillion of assets, engaging with Chipotle Mexican Grill, Domino’s Pizza, McDonald’s, Restaurant Brands International (owners of Burger King), Wendy’s Co. and Yum! Brands (owners of KFC and Pizza Hut).
The firms are being asked to set aggressive targets to reduce their greenhouse gas emissions, water usage and water quality impacts of their meat and dairy supply chains.
One year into the engagement, the results show some progress across the key requests made by the investors, according to new analysis released today by Ceres and FAIRR.
However, the fast food companies’ efforts thus far do not sufficiently mitigate their exposure to the considerable physical, regulatory, and reputational risks climate change poses to animal agriculture.
What’s more, the companies are not responding at the pace required to match the magnitude of their environmental impacts.
Of the six engaged companies two (McDonald’s and Yum Brands!) have set or publicly committed to set science-based emission reduction targets, which are adequate for limiting global warming to well below 2 degrees Celsius above pre-industrial levels, with the aim of limiting warming to 1.5 degrees.
Restaurant Brands International has stated its intention to set an emissions reduction target for its restaurants in the US and Canada.
Only one (McDonald’s) has publicly disclosed that it has conducted a water risk assessment specifically for meat and dairy suppliers. Restaurant Brands International plans to conduct a life-cycle assessment which will consider its water footprint, among other impacts.
None have set specific requirements on climate and water for meat and dairy suppliers, with unclear compliance monitoring systems across the board.
Kirsten James, Director of Water at Ceres, said: “Fast food companies have long lagged behind other high-emitting and water-intensive industries that take these material, financial and reputational risks seriously.
“It is time for these companies to have a plan and take urgent steps to ensure their meat and dairy supply chains are resilient to the impacts of rising temperatures and extreme droughts and flooding.
“Investors are not only demanding action, but they want more information about the concrete steps that companies are taking to tackle supply chain issues — the cost of ignoring them is too high.”
The second phase of the Ceres/FAIRR engagement launches today (27 Jan) with the investor coalition writing to each company with specific tailored requests based on their current strategies.