DEAR FELLOW SHAREHOLDERS:

BlackRock says the need to lower food waste “has never been greater,” ISS calls it “a growing area of concern,” and Glass Lewis says it “comes at a significant expense” to companies. Plus, reducing food waste has proven financial benefits.

As the National Restaurant Association reports, “Many operators are tracking food waste as a waste prevention method, but there’s an opportunity to positively impact the bottom line too.”1

In fact, SASB’s article titled Wasted Food is Wasted Money reported that data across 700 companies found that “99% of sites saw a positive return on investment in preventing food waste, with a median benefit-cost ratio of 14:1” and that “restaurants saw some of the highest returns.”2

Thus, companies should be addressing the issue—including heavily franchised ones.

RBI says its results “are closely tied” to its franchisees’ success and warns that “reduced franchisee profitability” poses material risks to the company. Therefore, we believe it’s important for RBI to help franchisees succeed—and that reducing food waste, even among franchisees, is something it could prioritize.

Indeed, RBI’s ESG reporting says it already collaborates with franchisees “to raise awareness of ESG topics and offer tools and opportunities for improvement” and that, “[t]ogether, we set objectives, monitor progress, and engage in shared innovation.” In fact, its Annual Reports say it can even “mandate certain strategic initiatives” for franchisees and, with their support, successfully implement them.

Yet, RBI discloses almost nothing about food waste, despite its proven economic impacts. Its (inaugural) 2016 ESG report called waste reduction “a key area of focus.” But—unlike other restaurant companies—it doesn’t disclose either measurable food waste reduction targets or food waste measurements. In fact, the only measurement in any of its ESG reports is a line in the 2016 report about an unspecified number of Tim Hortons in southern Ontario having diverted over 1,300 tonnes of coffee grinds. And the only recent description of any specific food waste initiative comes in the 2023 report—about a mobile app that lets customers buy surplus food at certain Tim Hortons restaurants.

We believe adopting this proposal would enhance the company’s food waste oversight.

If the company claims that, in fact, it already has robust reduction programs, then adoption is warranted so shareholders can assess their efficacy. (Indeed, the more a company invests in food waste reduction, the more shareholders deserve progress measurements.) And if it doesn’t have robust reduction programs then we think it should, given the proven financial benefits and that the company’s had ample time to address the issue since identifying waste reduction as a “key” focus area in 2016. Thank you.

www.bit.ly/NRA-FoodWasteArticle
See also: www.bit.ly/BusinessCaseForReducingFoodWaste