Investors get fast food giants to commit to science-based targets, call for more action on water
A three-year global investor engagement with fast food giants has resulted in the six major brands setting or committing to science-based targets, but investors are still warning that more needs to be done to cover supply chain emissions and water usage.
Coordinated by the $11trn investor coalition FAIRR and Ceres, major fast-food brands including Chipotle Mexican Grill, Domino’s Pizza, McDonald’s, Restaurant Brands International (owners of Burger King), Wendy’s Co. and Yum! Brands (owners of KFC, Pizza Hut and Taco Bell) have now set science-based emissions reduction targets or have committed to doing so.
These fast-food firms have a combined market cap of more than $280bn and were engaged by more than 90 investors to set emissions reduction goals and explore ways to improve water quality and efficiency.
FAIRR has today (14 June) confirmed that all six firms have agreed to the science-based targets criteria, with some already approved by the Science Based Targets initiative (SBTi). The targets are largely set to 2050, but Chipotle has committed to reducing scope 1, 2 and 3 emissions by 50% by 2030.
However, investors have expressed concern about a lack of action on Scope 3 emissions, given that they can account for 90% of an organisation’s total carbon footprint. Only two of the six firms, RBI and Yum! have disclosed emissions from animal agriculture in the value chain. Emissions from these sources were 57% and 51% respectively.
As such, investors are calling on the organisations to pay more attention to value chain emissions.
FAIRR’s senior manager of research and engagement Cristina Figaredo said: “Regulators and influential frameworks such as the SBTi are tightening requirements for the food sector to report and act on climate. So, investors are very concerned that ambitious climate targets by fast food companies are not translating into action along the supply chain.
“The lack of alignment of supplier policies with corporate climate ambitions risks undermining the efforts of these high-street brands to tackle climate risk. Their performance on water is also alarmingly poor, and efforts to mitigate risks related to water scarcity and pollution have stagnated over the past year.”
The research collected by the investors also shows that none of the fast-food firms have set widescale targets to reduce water consumption and pollution across the supply chain.
Wendy’s, McDonald’s and Yum!, have begun setting targets to address their water impacts in their operations, the research notes, but the brands are still failing to address more widescale risks by looking across their agricultural supply chains.
FAIRR notes that the agricultural supply chain makes up the bulk of companies’ water footprint, citing that Domino’s’ 2020 materiality assessment found that the production of ingredients accounted for 88% of its overall water consumption.
Separate research has warned that some $301bn of business value is at risk because of water stewardship challenges, yet it would take corporates just $55bn to deliver appropriate mitigation and adaptation initiatives.
That is according to CDP, based on data from the 2,934 companies that disclosed information through its water security questionnaire in 2020.
CDP warned that most companies are unable to prove they are doing enough to combat the most pressing water-related issues and minimise the related risks. More than one-third of the respondents increased water withdrawals, and more than 95% were not able to evidence progress against pollution targets.
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