MCDONALD'S CORPORATION | Advisory Vote on Disclosure on Climate Transition Plans at MCDONALD'S CORPORATION

Status
10.48% votes in favour
AGM date
Previous AGM date
Proposal number
5
Resolution details
Company ticker
MCD
Lead filer
Green Century Capital Management, Inc.
Resolution ask
Report on or disclose
ESG theme
  • Environment
ESG sub-theme
  • GHG targets / emissions
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
United States
Resolved clause
Shareholders request that McDonald’s, at reasonable expense and omitting proprietary information, disclose an assessment of whether its current climate transition plans and related resource commitments can reasonably achieve its 2030 and 2050 emissions reduction targets, or whether additional plans or commitments are necessary.
Whereas clause
"Whereas: Each 1°C of temperature rise reduces global GDP up to 12%.1 The Intergovernmental Panel on Climate Change (IPCC) advises that greenhouse gas (GHG) emissions must reach net zero by 2050 to avoid exceeding 1.5°C of warming.

The livestock sector accounts for 11-20% of anthropogenic GHG emissions.2 To limit warming to 1.5°C, livestock production emissions must drop by 2030 and absolute livestock numbers must peak globally by 2025.3 A 2023 IPCC report found that most GHG emissions from beef production cannot be eliminated through existing or anticipated technology. Instead, experts advise reducing production of ruminant meat to lower emissions.4

McDonald’s business is dependent on livestock, with beef accounting for about one third of McDonald’s total GHG emissions.5 Although McDonald’s is committed to reducing Scope 3 emissions, which comprise 99% of its GHG footprint, by 50.4% by 2030 and reaching net zero by 2050, it has not disclosed a roadmap for achieving these targets.6

This omission exposes McDonald’s to material risks:

● Supply chain risk: Physical and transition impacts of climate change are projected to cause cumulative losses of $1.3 trillion by 2030 for 40 of the world’s largest livestock companies, including Tyson and JBS.7 Bloomberg estimates that Tyson and JBS comprise nearly 20% of McDonald’s ingredient-related costs.8 McDonald’s acknowledges that raw material costs may increase due to climate change,9 indicating that failure to diversify protein offerings may narrow margins.
● Competitive risk: Alternative proteins offer the highest emissions savings per dollar of invested capital of any industry,10 and competitors including Burger King offer alternative proteins in every U.S. restaurant.11 Nevertheless, alternative proteins are absent from McDonald’s public U.S. climate strategy.
● Legal risk: The New York Attorney General sued JBS, alleging that JBS’s net zero commitment is misleading because it is incompatible with JBS’s plans to increase beef production.12 Tyson faces a lawsuit alleging that its “climate-smart beef” labeling and emissions goals are false marketing.13 Because McDonald’s Scope 3 target is dependent on emissions reductions from JBS and Tyson, its climate targets may be similarly misleading."
Supporting statement
Supporting Statement: The essential purpose of this proposal is to elicit quantitative, forward- looking disclosures demonstrating whether McDonald’s policies and actions can be reasonably expected to achieve its emissions reduction targets. In developing these disclosures, proponents recommend, at management discretion:

● Quantifying the emissions reduction impact of each of McDonald’s current climate strategies;
● Assessing whether McDonald’s livestock dependency makes its climate targets unachievable;
● Integrating quantitative, timebound protein diversification targets.

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