MCDONALD'S CORPORATION | Advisory Vote on Poultry Welfare Disclosure at MCDONALD'S CORPORATION

Status
38.60% votes in favour
AGM date
Previous AGM date
Proposal number
11
Resolution details
Company ticker
MCD
Lead filer
The Humane Society of the United States
Resolution ask
Report on or disclose
ESG theme
  • Environment
  • Social
ESG sub-theme
  • Animal welfare
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
United States
Resolved clause
RESOLVED: Shareholders ask McDonald’s to disclose what exactly the “15 key welfare indicators” being used for the company’s animal welfare program are. The disclosure should include specific details about the KWIs and how the company is using each one to measure and improve the welfare of animals in its poultry supply. It should be made within six months of the 2023 annual meeting, at reasonable cost, and omitting proprietary information.
Supporting statement
"In 2022, controversy surrounding McDonald’s animal welfare program was thrust into the global spotlight. It was featured in the Wall Street Journal, New York Times, Washington Post, Bloomberg, Financial Times, BBC, and many other major news outlets. At issue were irregularities in what the company was publicly reporting―compared to what it was actually doing―on its yearslong commitment to end the confinement of pregnant pigs in cages that are so small the animals can’t even turn around.

Two of the company’s board members at the time, Richard Lenny and Sheila Penrose, were challenged in a proxy contest by Carl Icahn over concerns about these irregularities. When Institutional Shareholder Services (ISS) evaluated the issue in detail, it concluded that only “cautionary support” was warranted for Mr. Lenny and Ms. Penrose, “in recognition of the issues presented and the apparent room for improvement in the company's ESG efforts and communication.”

As ISS also concluded, this issue “serves as a reminder to shareholders to demand greater specificity from corporate leaders seeking to address ESG concerns[.]”

It is precisely that “improvement in the company’s ESG efforts and communication” and “greater specificity” which this shareholder proposal calls for. Here’s the background:

● In 2017, MCD announced a series of commitments centered on improved farming conditions for chickens in its poultry supply. Among its commitments, MCD said it would “Source chickens for the McDonald’s System that are raised with improved welfare outcomes.”
● To help it move forward with this commitment, in 2018, MCD established the McDonald’s Chicken Sustainability Advisory Council (CSAC).
● And in 2019, the CSAC helped MCD define 15 “key welfare indicators (KWIs)” for chickens.
● MCD reports that “System-wide measurement against these indicators started in January 2021” and that it has invested millions of dollars into technology to “automate gathering welfare and behavioral indicators.”
But there’s an issue: MCD has never disclosed to shareholders what these “15 key welfare indicators” are.

Given the foundational importance of the KWIs to MCD’s chicken welfare program, and that the company has invested millions of dollars into technology for this program, improved communication and “greater specificity” (to use ISS’ language) as to what exactly its KWIs are would be a benefit both to shareholders and to ensuring the company is responsibly meeting its animal welfare commitments."

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Anima Sgr For Additional disclosure on how the company is measuring its animal welfare commitments would allow shareholders to better assess the effectiveness of the company's animal welfare efforts and management of related risks.
Rothschild & co Asset Management For

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