Our 2012 Best of Sustainable Supply is a collection of the “best of the best” innovative sustainable sourcing programs in the McDonald’s supply chain, covering topics such as Climate/Energy, Animal Welfare, Employee Wellness and more.
If there’s one thing we’ve learned over the years, it’s that we can’t achieve our sustainability goals alone. In no area is this more important than in our supply chain. That’s why we work with suppliers who share our values and vision for sustainable sourcing along three foundational areas of impact: Ethical, Environmental and Economic.
It’s also critical that we continue to work with outside experts. We’ve long worked with organizations like Conservation International to help inform and measure our efforts. Sonal Pandya-Dalal, Conservation International’s Senior Advisor, Corporate Leadership Strategies, Center for Environmental Leadership in Business, was a member of our Best of Sustainable Supply selection committee this year. She shares her insights on the learnings she took away from this process below. Take a look at her remarks and the Best of Sustainable Supply and let me know your thoughts.
1. You had an inside look into how McDonald’s and our suppliers approach sustainable supply. What did you think? Any surprises?
I really appreciated seeing how many suppliers have utilized a “systems thinking” approach in which they thought about interconnected parts of their business to achieve process improvements and efficiencies (i.e. cost reductions). Amador Group provides a good example in their use of energy technologies. Amador began with installing solar panels on the rooftops of their poultry farms. They took the idea further by installing energy efficient technology and wastewater treatment facilities in their processing plants. They also found unique ways to reuse waste by building a cogeneration plant to capture heat for conversion to energy and biodigesters to capture wastewater proteins and convert them to biogas. The facility now meets 90% of its feed mills’ energy needs and is reducing up to 25,000 tons of CO2 per year.
I was also impressed to see the number of suppliers making a commitment to continuous improvement over time. Kraft Foods’ zero-waste-to-landfill demonstrates the commitments of suppliers to continually push for efficiencies and utilize innovations in technology such as waste-to-energy.
Diversey’s investment in the Global Water Roundtable demonstrates how a supplier has moved to an important new stage in sustainability, by supporting the development of new tools and standards to better manage their commitments. In this case, the Roundtable will provide a powerful new tool to improve the way water is managed by establishing rigorous, realistic water stewardship standards.
Finally, there is the key role that employees are playing in the success of sustainable supply. JBS USA, operating out of their facility in the water scarce region of Texas, installed water efficient technologies for their plant, but also realized the critical importance that employees need to play in meeting water reduction goals. Tulip Inc. in Europe designed "eco-treasure hunts" so cross-functional teams visiting sites could understand how water could be more efficiently managed.
2. Where do you think we’ve got it right and where do you think we need to focus more so we can do more?
By designing a mechanism for reporting achievements, McDonald’s has created a model to incentivize suppliers to also improve transparency. In future years, it will be important for McDonald’s to also request they begin reporting on key metrics such as CO2 reductions, % waste recovery and improvements to quality and quantity of water. Having such a standardized approach will allow McDonald’s and its suppliers to more transparently report on the achievements they have made over time and also help McDonald’s understand how they can better support suppliers in their future efforts.
On the local level, McDonald’s should encourage more of its suppliers to look deeper into their own supply chains and assess impacts back to the farm level, such as conversion of land, chemical inputs and livestock emissions. Two great examples were provided among this year’s winners. Fresh Start Bakeries Europe found that 42% of their carbon footprint came from the production of wheat on the farm, and mainly from the use of fertilizers. Working with their suppliers, they helped to develop a new fertilizer production method that reduced C02 production by 21%.
Recognizing that up to 80% of the emissions from milk are generated at farm level, Arla Foods initiated a three year on-farm program for all 1,400 members who supply milk to McDonald’s. Each member is offered a free carbon assessment of their farm which reports its strengths and weaknesses. The assessment looks at the whole dairy farming enterprise, covering everything from the use of energy to feed utilization, fertilizer application, slurry storage and chemical use. The program also provides training on how farmers can fine-tune activities to deliver the greatest carbon savings.
Finally, on the global level, McDonald’s has an important opportunity to engage with their suppliers to tackle two inter-linked risks to their business – climate change and food security.
As the population grows (potentially to 9 billion by 2050), so must agriculture productivity. Agriculture is the sector most vulnerable to climate change due to its high dependence on climate and weather. With frequent and intense extreme weather events (e.g. floods, fires), farmers will be required to adapt to changing conditions and build resilience. Best practices include adopting new land management techniques such as no-till; making changes in crop and livestock varieties; changing planting dates; utilizing water use efficiency techniques; and protecting and restoring nature. McDonald’s can play an important role in partnering with suppliers to test best practices and build incentives for farmers to adopt climate resilient practices.
3. What do you think McDonald’s should learn from all of this?
By engaging suppliers, McDonald’s has created a model that motivates adoption of best practices and furthers sustainability commitments. Adopting these changes is no easy task, but suppliers are showing that it is possible to get the job done.
At Conservation International, we talk a lot about how we can replicate and scale models – to achieve conservation and build healthy sustainable economies at a level never before seen. McDonald’s has a great opportunity to serve as a hub for information, best practices and innovations for suppliers - to motivate suppliers to both replicate and scale their efforts regionally and on a global scale.