Fast food chains must act on water and climate, say investors

27 January 2020

Investors have called on fast food firms to take “faster and deeper action” to manage climate and water risks in their meat and dairy supply chains.

The global investor coalition, which represents more than $11.4tn of assets, urged six global fast-food companies to set “aggressive targets” to reduce greenhouse gas emissions, water usage and water quality impacts in their supply chains.

The coalition, which is facilitated by the Farm Animal Investment Risk & Return (FAIRR) initiative and sustainability organisation Ceres, has engaged with Chipotle, Domino’s, McDonald’s, Restaurant Brands International (owners of Burger King), Wendy’s, and Yum! Brands (owners of KFC and Pizza Hut). The firms collectively run over 120,000 restaurants worldwide.

Efforts by the restaurants “do not sufficiently mitigate their exposure to the considerable physical, regulatory, and reputational risks climate change poses to animal agriculture”, according to the coalition. 

The firms were also accused of “not responding at the pace required to match the magnitude of their environmental impacts”.

Analysis by FAIRR and Ceres found just two companies – McDonald’s and Yum Brands! – have set, or publicly committed to set, science-based emission reduction targets. Restaurant Brands International has stated its intention to set an emissions reduction target for its restaurants in the US and Canada.

Only McDonald’s publicly disclosed that it has conducted a water risk assessment specifically for meat and dairy suppliers. Restaurant Brands International plans to conduct a life-cycle assessment, which will consider its water footprint, among other impacts.

None of the fast food brands have set specific requirements on climate and water for meat and dairy suppliers, with unclear compliance monitoring systems across the board.

Aarti Ramachandran, head of research and engagements at the FAIRR Initiative, said: “Feed for livestock alone uses around a third of annual global water withdrawals and is a major emitter of greenhouse gases. 

“Failure by the global fast food sector to tackle the environmental issues in their supply chains puts the long-term financial sustainability of their businesses under threat. Investors are asking the industry to manage these risks, using tools such as water risk assessments and science-based emissions targets, but the companies are failing to respond at the pace and with the detail required by investors.”

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