PGGM and McDonald’s sign a resolution withdrawal agreement

At the end of Q1 2024, PGGM came to a signed agreement with McDonald’s Corporation to withdraw a shareholder resolution we filed with three other shareholders (including Allianz Global Investors and the New York State Common Retirement Fund) in Q4 2023. This resolution asked for the company to assess the feasibility of implementing targets for reducing water consumption in its supply chain.

In exchange for the withdrawal, McDonald’s has committed to additional water-related disclosures in the short-term and to a timeline for developing a strategy to address its impact on water scarcity in water stressed areas, which will be developed with the support of PGGM and the co-filing shareholders. We appreciate McDonald’s readiness to collaborate during this process and for their willingness to address this critical topic.

We started engaging with the company in 2019 in collaboration with the NGOs Ceres and FAIRR and other investors under the ‘Global Investor engagement on Meat Sourcing’ initiative, which focused on the sustainability policies of fast-food companies. The fast-food industry plays a significant role in today’s food system, with around 85 million adults in the United States consuming fast food every day.

This industry continues to expand rapidly, with a significant portion of products entirely or partially made from meat and dairy, which have serious environmental impacts. Besides McDonald’s, the engagement program also targeted Domino’s, Restaurant Brand International (owner of Burger King), Chipotle, Wendy’s, and Yum! Brands.

Our engagement with McDonald’s continued in 2022 when PGGM joined the ‘Valuing Water Finance Initiative’ by CERES. This initiative entails collective engagement with companies on several fronts: actions taken to ensure current practices do not adversely impact water quality and water availability; integration of water management into business processes, including board oversight and policy engagement; efforts to ensure access to the essentials (water and sanitation) across the value chain; and the protection of ecosystems critical to freshwater supplies.

During the period of engagement, McDonald’s made commendable progress on the topic of climate, which included increasing the ambition and scope of its climate targets in 2021 and 2023. However, we were not satisfied with the pace of action on managing water related risks.

McDonald’s, as one of the largest buyers of beef and pork in the world, can have a significant influence on global water security through its supply chain and the company currently lacks publicly disclosed water-related targets. This prompted us to file the resolution in Q4 2023, which we have now withdrawn in exchange for further attention paid to this topic and closer collaboration with the co-filing shareholders. PGGM sees this agreement as a positive step and we look forward to working with the company.

You can read more about PGGM’s engagement on nature and biodiversity here: Nature and biodiversity | PGGM