Last week Francesca, DeBiase, chief supply chain and sustainability officer of McDonald’s, said the company will eliminate deforestation from its beef supply chain by 2020. The company insists that promise builds upon a long history of taking a stand against deforestation, dating back to its Amazon declaration in 1989 to more recently its 2014 endorsement of the New York Declaration on Forests.
But cynics may point out that the fast-food giant has made these deforestation promises before. In fact, DeBiase’s pledge accelerates a commitment the company made in 2015 to revamp its supply chain by 2030. That same year, McDonald’s said it would only buy food and raw materials from suppliers that have no links to deforestation. The company also pledged in 2015 to take steps to ensure its paper-based packaging will also come from either responsibly-managed forests or be made from recycled materials.
However, while McDonald’s showcases a few token “community” farmers that provide its outlets with responsibly-sourced food, the Illinois-based company does not disclose what percentage of its ingredients are free of deforestation.
In fairness, the company is taking more of a stand than several of its competitors. Burger King, for example, has been slammed by NGOs for failing to hold its major suppliers accountable for what critics say is rapid deforestation across South America. The lack of bold action in South America is encouraging unchecked development after the rate of deforestation worldwide appeared to slow down in recent years. Brazil’s government, for example, appears ready to green-light deforestation on what are already protected forests for development into soy plantations or pasture lands for cattle.
On that point, McDonald’s says it is taking bolder action to prevent deforestation in the chaco region of Paraguay and Argentina, as well as within Brazil’s Amazon and cerrado. Critics warned that McDonald’s backed away from its 1989 Amazon pledge by once again sourcing some limited quantities of beef from the region, but the company insists those cattle pastures have long been developed and that ranchers are monitored closely by a multi-stakeholder organization.
McDonald’s also appears mindful of the fact that much of beef’s deforestation problem lies in the growing demand for animal feed ingredients like soy. To that end, the company says it supports expanding the 10-year-old soy moratorium to reach beyond the Amazon forests. By working closely with NGOs such as WWF, cattle grown responsibly for McDonald’s could also provide other beef cuts and materials such as leather for other companies, helping to clean up the meat industry’s global supply chain.
McDonald’s touts a bevy of programs and case studies that it says will lead to slashing deforestation within three years. But mind you: This is not a 100 percent deforestation promise. McDonald’s says it is focusing on the top 10 beef-producing countries that provide the company with 85 percent of its beef; as for that other 15 percent, McDonald’s is silent.
The company has a lot of work ahead if it is going to convince the environmental community that its efforts are sincere and that its leadership can have an impact. Many of McDonald’s corporate website pages that outline its sustainability programs impart a tone that is less about trying to solve a global problem and more about attempting to persuade millennials to trust the company’s brand. After all, when younger consumers make a choice about where to eat out, they are voting with their feet, and those sneakers are certainly not walking into the Golden Arches.
McDonald’s revenues have been unimpressive in recent years, despite a small boost after it released its all-day breakfast menu. As CNBC reported, the company estimates it has lost 500 million customer visits since 2012. Consumers increasingly want to know where their food is coming from and know that it is being produced ethically; McDonald’s has yet to seal the deal on that front.
Furthermore, McDonald’s faces a huge challenge based on the very nature of the global beef supply chain. While NGOs such as the Union of Concerned Scientists acknowledge that the company is a leader when it comes to responsible beef sourcing, there is plenty of room for improvement. In Brazil, for example, despite actions from the country’s leading beef producers, the indirect suppliers that comprise much of the industry’s supply chain often create many problems. The difficulty in traceability means that a head of cattle could be bought and sold several times before slaughter; hence the constant land grabbing and unchecked deforestation that frustrates the efforts of Brazilian beef producers such as JBS, Minerva and Marfrig.
The $25 billion fast-food company has a lot of questions to answer. And as is the case with the global meat industry, becoming “sustainable” will come with a cost. Will McDonald’s pony up the funds needed to ensure protected forests stay protected, and help improve accountability across the entire global beef sector? Moreover, will consumers be willing to pay higher prices when they are already happy to pay a premium to eat at chains such as Panera Bread and Chipotle?
For companies like McDonald’s, it was easy to make promises for 2020 several years back when that year seemed so far away. But now we’re almost there; companies like McDonald’s need to follow through on their promises or risk losing not only more trust, but also more business.
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