MCDONALD'S CORPORATION | Advisory vote on adoption of anti-biotic policy (1) at MCDONALD'S CORPORATION

Status
16.60% votes in favour
AGM date
Previous AGM date
Proposal number
5
Resolution details
Company ticker
MCD
Lead filer
Green Century Capital Management, Inc., Benedictine Sisters of Mount St. Scholastica
Co-filers
Missionary Oblates of Mary Immaculate, Dominican Sisters of Springfield Illinois, The Sisters of St. Francis of Philadelphia, Benedictine Sisters of Cullman
Resolution ask
Adopt or amend a policy
ESG theme
  • Social
ESG sub-theme
  • Public health
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
United States
Resolved clause
RESOLVED: Shareholders request that McDonald’s adopt an enterprise-wide policy to phase out the use of medically-important antibiotics for disease prevention purposes in its beef and pork supply chains. The policy should include, in the discretion of board and management, global sourcing targets with timelines, metrics for measuring implementation, and third-party verification.
Supporting statement
SUPPORTING STATEMENT:  A policy meaningful to shareholders would include:
Establishment of a glidepath for the phase out, inclusive of interim reduction targets;A commitment to annual disclosure of enterprise-wide antibiotic use including reporting by shared class of antibiotics1WHEREAS: The World Health Organization (WHO) and the U.S. Centers for Disease Control and Prevention2 (CDC) report that antibiotic resistance is a global public health crisis that threatens to reverse many medical advances made over the last century. 
According to the CDC, antibiotic use, both in food animals and human medicine, is the “single most important factor” driving this crisis.3 Nearly two-thirds of medically important antibiotics sold in the U.S. are intended for livestock use4 with around 80 percent of those sales consisting of cattle and swine.5 McDonald’s is the single largest purchaser of beef in the U.S. and a major buyer of pork.6
In 2018, McDonald’s published its Global Vision for Antibiotic Stewardship in Food Animals which included a goal to prohibit routine preventive use of antibiotics by meat suppliers and committed to developing “species-specific policies outlining our requirements and implementation timelines for suppliers providing chicken, beef, dairy cows, pork and laying hens for use in McDonald’s restaurants.” It also announced the goal of setting reduction targets for medically-important antibiotics across 80 percent of its global beef supply by the end of 2020.
McDonald’s did not fulfill its promise. In March 2022, it replaced its commitment to set targets for ‘reducing use’ of medically important antibiotics with targets for the ‘responsible use’ of the drugs.
However, if responsible use does not incorporate absolute reduction targets, then McDonald’s pledge is not aligned with the WHO’s imperative to achieve absolute antimicrobial reductions (inclusive of medically important antibiotics) by at least 30-50% by 2030.7
By abandoning its 2018 promise, McDonald’s again exposes itself to reputational risk. Last year McDonald’s failed to fully implement its 2012 pledge to eliminate gestation crates from its pork supply chain, motivating several investors to mount a proxy fight for two board members’ seats, an effort that garnered mainstream media attention.
Consumer demand for meat raised with limited or no antibiotics is high – surveys have found that the majority of consumers are more likely to eat at restaurants that serve such surveys meat.  U.S. producers, including Tyson, supply beef raised without antibiotics.  Failure to offer meat raised with minimal antibiotics endangers McDonald’s market share.
_________________________
1  https://exploreanimalhealth.org/antibiotics-used-farm-animals/#:~:text=Some%20antibiotics%20are%20approved%20for,drug%20used%20in%20human%20medicine.
2  https://www.cdc.gov/drugresistance/biggest_threats.html
3  https://www.cdc.gov/drugresistance/pdf/ar-threats-2013-508.pdf
4  https://amr-review.org/sites/default/files/Antimicrobials%20in%20agriculture%20and%20the%20environment%20-%20Reducing%20unnecessary%20use%20and%20waste.pdf
5  https://www.fda.gov/AnimalVeterinary/NewsEvents/CVMUpdates/ucm588086.htm
6  http://www.chicagotribune.com/business/ct-mcdonalds-antibiotics-0824-biz-20170823-story.html
7  https://www.who.int/news/item/25-11-2022-quadripartite-welcomes-new-political-commitments-in-fight-against-antimicrobial-resistance

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Anima Sgr For Shareholders would benefit from officially adopting a policy that would phase-out use of these antibiotics in light of current industry and regulatory trends. Indeed, there are growing public health concerns about the use of medically-important antibiotics in the animal farming industry, as this practice has been found, by regulatory and research bodies, to facilitate the development and spread of drug-resistant pathogens. Furthermore, consumer interest in the conditions under which food is grown, produced, and processed seems to be increasing. Finally, a number of McDonalds' peers in the fast-food industry have adopted policies eliminating or phasing out the use of medically important antibiotics for growth promotion and disease prevention purposes in their supply chains.
Rothschild & co Asset Management For

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