YUM! BRANDS, INC. | Report on water pollution at YUM! BRANDS, INC.

Status
Filed
Previous AGM date
Resolution details
Company ticker
YUM
Lead filer
Mercy Investment Services, Inc.
Resolution ask
Report on or disclose
ESG theme
  • Environment
ESG sub-theme
  • Waste and pollution
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
United States
Resolved clause
Shareholders request YUM! Brands issue a report, prepared at reasonable expense and omitting proprietary information, assessing the Company’s options for establishing targets and implementing actions to reduce water quality-related risks. The assessment could consider, at the board’s discretion, the feasibility of setting time-bound, science-based, or contextual targets to measurably reduce water quality-related risks in the supply chain.
Whereas clause
Agriculture, including protein production, is the primary driver of freshwater degradation globally. Eutrophication, caused by excessive nutrient loading often from manure and fertilizer-related runoff, leads to fish die-offs, human health impacts and declining water quality.[1]



Quick-service restaurants have significant vulnerability to the pervasive threats to water quality driven by their protein supply chain. YUM! Brands’ top commodities are proteins, including chicken, cheese, beef and pork products, exposing the Company to significant water risk if not properly managed.[2] The Company’s water risk assessment identifies that there are water quality risks in the supply chain, yet YUM!’s disclosures do not discuss the goals or efforts to mitigate these risks within its agricultural supply chain.



Due to significant water quality-related risks stemming from agricultural supply chains, companies are increasingly setting targets related to water quality. For example, Cargill, a major beef, chicken and poultry supplier,[3] has a water quality target for its operations and supply chain, confirming that Yum! could support their protein suppliers to develop and implement similar targets and strategies. Investors are also increasingly asking companies to address risks related to water quality in alignment with the Corporate Expectations for Valuing Water.[4]



Given YUM!’s extensive protein supply chain exposes the Company to significant water quality-related risks and the Company provides limited disclosure on efforts to mitigate water pollution, investors cannot be assured that YUM! is effectively managing water quality-related risks across its supply chain. Since Yum! has conducted a water risk assessment inclusive of its supply chain, the Company has the information necessary to set a water quality target and implement actions to reduce risks.
Supporting statement
Proponents defer to management on the precise content but believe meaningful disclosure should align with frameworks such as CDP and include:
• An assessment of YUM’s impacts and dependencies on freshwater systems, including the percentage of key agricultural products sourced from regions with high water quality risk.
• YUM’s plans to meet the allowable level of basin-wide nutrient load as per the established regulatory guidelines or thresholds, and those recognized by commonly accepted frameworks, such as Science Based Targets Network.
• YUM’s plans to develop a supply chain water quality-related target to mitigate water quality risk.
• Disclose progress towards establishing a water quality-related target and specific actions being taken to address water quality in the supply chain.

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