McDonald’s Struggles to Fix Its Massive Methane Problem
Ben Elgin
Wed, December 1, 2021
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McDonald’s Struggles to Fix Its Massive Methane Problem
(Bloomberg) -- With a sprawling empire of 39,000 restaurants in 119 countries, McDonald’s Corp. serves more beef than any other restaurant chain on the planet — between one to two percent of the world’s total. Selling hundreds of hamburgers every second has entrenched the fast-food giant as an outsized contributor to climate change.
Cattle belch out large quantities of heat-trapping methane, making beef the most harmful food for the climate, with at least five-times the warming of pork or chicken and more than 15-times the impact of nuts or lentils. Beef is responsible for about a third of McDonald’s climate footprint. At more than 53 million metric tons of carbon per year, McDonald’s produces more emissions than Norway — and that number is still rising.
For the past decade, McDonald’s has vowed to address the planet-warming problem behind its most popular menu item. In 2011, the fast-food giant helped launch the Global Roundtable for Sustainable Beef, an industry-backed group aimed at improving a variety of cattle-raising practices. Next the company promised to purchase some of its beef from sustainable sources, and followed that move with a 2018 pledge to trim the climate intensity of its food and packaging by 31% by 2030. It went a step further in October, announcing it would zero out its entire climate footprint by 2050.
“When you eat one of our world-famous burgers, you’re joining a movement toward a more sustainable future,” declared McDonald’s in one of its progress reports.
But an in-depth examination of the company’s headway — including a review of its beef sustainability pilot projects as well as dozens of interviews with current and former McDonald’s executives, cattle ranchers, industry experts and scientists — shows that the world’s biggest hamburger chain so far hasn’t reduced the climate impact of its beef. “There does not seem to be any proactive involvement or serious investment by McDonald’s to support its suppliers or make significant changes in its beef supply chain,” says Nic Lees, a senior lecturer in agribusiness management at Lincoln University in Christchurch, New Zealand, who studies beef sustainability programs in several countries.
There’s been a recent flurry of ambitious climate targets announced by other restaurant chains. Burger King’s parent company, Restaurant Brands International, said in September it will cut by half the carbon intensity of the food it serves by 2030. Yum! Brands, the owner of Taco Bell, KFC and Pizza Hut, said it will cut the carbon-intensity of its food and packaging by 46% by the end of the decade. Wendy’s, meanwhile, is still measuring its full climate footprint ahead of establishing what it has said will be similar climate goals.
The pledges cast a spotlight on the enormous challenge facing fast-food companies with brands built around a menu item that is harmful to the climate. McDonald’s doesn’t disclose how much beef it sells, but company officials have said in investor presentations that beef is its “largest menu category and growing” and that burgers are key to expanding its sales.
Overall emissions at McDonald's have gone up by 7% since 2015, but the company says it has reduced the emissions intensity of its food and packaging — measured by the amount of greenhouse gases per ton of product — by nearly 6% in that time. The company declined to provide specifics on how it achieved those improvements.
McDonald's executives say the company has made substantial efforts to clean up its climate impacts, and that beef's complicated supply chain will require collaboration across many different companies and industries. “For more than a decade, McDonald’s and our supplier partners have invested in curbing deforestation, advancing science and establishing industry-wide sustainability programs,” a spokeswoman said in a written statement.
The lynchpin of the fast-food giant’s efforts has been a five-year-old pledge to procure an unspecified quantity of sustainable beef in its ten biggest markets around the world, a goal McDonald’s recently claimed to have fulfilled. But, in many cases, the company has purchased beef through sustainability programs that don’t actually require cattle ranchers to adopt climate-friendlier practices.
In Canada, for instance, McDonald’s says 30% of the beef in its Quarter Pounder burgers there are now coming from “certified sustainable sources,” as verified by a program run by the Canadian Roundtable for Sustainable Beef, an organization that McDonald’s helped create. The Canadian program’s 60-page sustainability standard doesn’t require cattle ranchers to adopt any lower-emission practices. Instead, cattle ranchers only need to show that they are “aware of management practices that support carbon sequestration and minimize emissions.”
“It’s a low bar to being called sustainable,” says Darren Vanstone, who helped work on some of the Canadian program’s criteria in his former role as a manager for the nonprofit World Animal Protection.Canadian Roundtable officials defend the program. More awareness among cattle producers leads to greater adoption of climate-friendly practices, said Monica Hadarits, the group’s executive director, who adds that standards are always improving. A new version is expected in 2023.
Another point of emphasis for McDonald’s has been its funding of programs that help cattle ranchers and farmers improve the health of their lands, which will sometimes allow more carbon to be stored in the soil. But the dollar amounts are microscopic for a company that notched $19.2 billion in sales and $4.7 billion in profits last year.
In one of its most-publicized projects, McDonald’s is working with Cargill, the Walmart Foundation, and the World Wildlife Fund to improve grazing practices across the northern Great Plains of the U.S. The restaurant chain’s contribution: $1.6 million over five years, or about $320,000 per year. In another, McDonald’s has teamed up with Target, Cargill, and the Nature Conservancy to spend a combined $8.5 million over five years to improve land-management practices in Nebraska. McDonald’s won’t disclose its contribution; if spread equally, the cost would be $425,000 per year for each participant.
McDonald’s annual tab for the two projects likely amounts to just over one hour’s worth of its net profits.
“Companies like McDonald’s get a lot of positive press for making these commitments,” says Jennifer Jacquet, an associate professor of environmental studies at New York University. “But then there’s very little follow up and follow through.”
McDonald’s officials defend the company’s commitment to sustainable beef and point out its efforts have gone far beyond just a couple of partnerships. They also stand by the company’s approach, including letting the beef industry define what “sustainable” beef means. “If we had taken the approach from the jump to just go in and tell the ranching community to do X, Y, and Z, we would have failed upon arrival,” says Jenny McColloch, chief sustainability officer at McDonald’s. “What we’ve done a lot of is listening, connecting, meeting and visiting ranches and farms…[We] want to show them that we’re partners and we’re here to celebrate their sector rather than tell it to do something else.”
McColloch says this approach has helped McDonald’s build relationships, trust and industry coalitions — including a number of sustainable-beef roundtables — over the past decade so that now there’s a framework in place to make substantial progress. “We’re in that transition stage,” she says. “We’ve been investing in these programs region-by-region the last several years.”
Slashing emissions from a global beef supply chain is an incredibly daunting task. While McDonald’s declines to provide specific details about its supply chain, company officials have said in the past they purchase hamburger patties from about twenty suppliers around the world. Those hamburger suppliers procure beef from thousands of slaughterhouses, which obtain cattle from millions of different ranches and feedyards.
Historically, McDonald’s has interacted little with cattle producers at the other end of the beef supply chain. “Customers logically view McDonald’s as having knowledge and control of the Big Mac all the way from farm to fork,” wrote former McDonald’s executive Bob Langert in a 2019 book about the company’s sustainability efforts. “But the truth is that we know how to grill burgers, make fries, and clean the bathrooms — not how to use antibiotics or raise animals.”
Langert, who left the firm in 2015, said in an interview that McDonald’s deserves substantial credit for embarking on these sometimes-awkward conversations with cattle producers, while gently prodding them to think more about environmental impacts. “Getting them to recognize that sustainability is part of the business is a big first step,” he says. “But now’s the time for making progress.”
Some cattle ranchers, however, remain openly hostile to the idea of companies like McDonald’s inserting themselves into discussions about how animals are raised. At a 2019 conference organized by R-CALF USA, an industry group that represents more than 5,000 cattle producers, Wyoming rancher Tracy Hunt gave an hour-long speech entitled “Truth About the Global Roundtable for Sustainable Beef.” He joked about lynching one of the roundtable’s founders and warned the audience of dark motives behind sustainable beef. “It’s about an unprecedented attack on you, your family, your private property, your liberty, your way of life,” he said. “They want to put you out of business.” (Reached by phone, Hunt said he stands by his concerns and called his lynching comment “hyperbole.”)
Many cattle ranchers still question who will pay for changes. Some academics have identified intensive rotational grazing — moving cattle quickly from one pasture to another, which protects the health of grasslands and prevents overgrazing — as one way ranchers in certain areas can store more carbon in their soil. But it might cost tens of thousands of dollars for additional infrastructure, like fencing and water pipes.
There’s also a cost and paperwork burden for cattle producers to track and report the fine-grained data that will be needed by brands, such as McDonald’s, to accurately measure changes in their carbon footprints. “These programs require a lot of time and energy to keep track of that information,” says Erika Murphy of Coyote Creek Ranch, a cattle-breeding operation outside of Steamboat Springs, Colo. “If we do it, how do we get rewarded for that? There hasn’t been much conversation about how that will happen.”
McDonald’s, like other fast-food brands, is reluctant to pay more for climate-friendlier ranching practices. “We see it as a sector-wide and society-wide responsibility to help support these transitions, because we can’t do it alone,” says McColloch of McDonald’s.
Part of the problem is that hamburger chains buy lean trim, which is only about one-third of the meat that comes from a cow. Most of the carcass consists of pricier ribeye steaks and roasts, which fast-food companies don’t purchase.
It would be particularly difficult for a brand like McDonald’s, which specializes in selling $1 hamburgers, to single-handedly incentivize better environmental practices, because it’s hard for them to recoup any added cost from customers, according to Leonardo Lima, a former sustainability executive at Arcos Dorados, the largest McDonald’s franchisee, which operates over 2,200 restaurants in Latin America.
“For companies like McDonald’s, Burger King and others, hamburgers are like a commodity; our price is almost standard,” says Lima. “This is a cost that we can’t assume in our products.”
While some cattle ranchers understand this predicament, they say progress will be minimal without additional funds. Lyle Perman, who raises more than 500 cows at Rock Hills Ranch in South Dakota, has been showcased by McDonald’s in its marketing materials for his sustainable practices – such as cutting back on synthetic fertilizer and halting tillage on his lands, which promotes soil heath and can sequester more carbon.
But, he said, convincing large numbers of ranchers to adopt these practices will take a financial incentive that doesn’t currently exist. Adds Perman: “The marketplace, so far, has not provided a signal to cattle producers to use more sustainable practices.”
If one of the world’s biggest beef buyers can’t make headway on its own, that means industry groups such as the Global Roundtable for Sustainable Beef and its offshoots in individual countries are potentially even more important. But progress has been glacial. When the global roundtable was created 10 years ago, McDonald’s nearly quit the group because it moved at a “snail’s pace,” according to Langert’s book. Today, there are still very few tangible programs linking up large beef buyers and producers to incentivize climate-friendlier practices.
In the U.S., for instance, McDonald’s teamed up with Tyson Foods and others to run a two-year pilot project, involving three dozen cattle ranchers, which sought to test how sustainability metrics could be implemented and measured. After declaring the project a success and wrapping it up in 2019, McDonald’s hasn’t announced plans to continue or expand such a program in the U.S. (In its written statement, McDonald’s said it will “continue to hold ourselves accountable to a science-based net zero pathway” and invest in solutions with suppliers, ranchers, governments and other partners.)
“A few discontinued pilots and voluntary roundtables isn’t a bold commitment and doesn’t reflect the urgency of the climate crisis,” says Jennifer Molidor, who leads sustainable food initiatives for the nonprofit Center for Biological Diversity.
Fast-food companies like McDonald’s could alter their menus today to address the climate crisis and “redefine what American fast food looks like,” adds Molidor. “Instead, they’re making a triple cheeseburger.”
McDonald’s insists that its menu caters to the desires of its customers, who might eat somewhere else if significant changes were made. “We don’t really see ourselves in the role of telling people which protein to eat because of environmental concerns,” says McColloch of McDonald’s. Rather, she says, the company prefers to “make sure we’re serving that protein in as responsible a way as possible.”
But therein lies the company’s quandary. If McDonald’s won’t steer customers to climate-friendlier alternatives and professes to have limited power to shrink the footprint of beef, how can the company sell ever-more hamburgers while claiming to be on a path to dramatically decarbonize its business?
“I’m taken aback by the greenwashing by McDonald’s,” says Kari Hamerschlag, deputy director of the food and agriculture program at nonprofit Friends of the Earth. “There’s a fundamental contradiction here between the corporate imperative to grow and the ecological imperative to reduce emissions.”
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