McDonald’s CSR Commitments Go Multi-tier – But is the Fast Food Giant Ready?

McDonald’s recently announced an important commitment to sustainability by moving to eliminate suppliers that engage in any potential deforestation practices in its supply chain. For quick background reading on the topic, see McDonald’s Corporation Commitment on Deforestation pledge. Here are some highlights:

  • “McDonald’s is committed to eliminating deforestation from our global supply chains. We expect our suppliers to operate their businesses ethically and abide by all applicable laws and regulations.”
  • The fast food company will “move to suspend or eliminate purchases from a supplier if an audit or other credible source reveals or confirms that the supplier is seriously violating McDonald’s requirements, and if that supplier does not acknowledge and immediately move to acceptably remediate the concern.”
  • “This commitment applies to all our raw material supply chains. To begin, we are focusing on our food and packaging supply chains and are actively working on the following priority products: beef, fiber-based packaging, coffee, palm oil and poultry. In 2015, we will build on our existing priority product goals by developing time-bound deforestation-free targets for these products.”

On the surface, the pronouncement would seem to have corporate social responsibility teeth (much as Apple made strong commitments to addressing labor concerns as a follow-up to the Foxconn scandals in the past). But even more than Apple, McDonald’s is bringing itself into new territory from a monitoring perspective by truly focusing on multi-tier elements for raw materials.

As an example, McDonald’s suggest that “for beef and poultry, it will include ‘criteria for feed production such as that from soy,’” and that the restaurant giant will be “assessing our approach for other supply chains beyond food and packaging (e.g. wood for restaurant decor).”

For anyone engaged in third-party or supplier management efforts, it should become radically clear that by going multi-tier, McDonald’s is increasing by a log-scale the order of magnitude challenge it plans to address. In a follow-up post, we will address how McDonald’s can learn from other multi-tier supplier management efforts in the past – including the strength of multi-tier supplier diversity programs and the delay/failures of Conflict Minerals programs.

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