Looking at Restaurants 
Through an ESG Lens
For Required Conflicts Disclosures, 
please see page 41.
EQUITY RESEARCH  |   JANUARY 5, 2021 
Disseminated: Jan 5, 2021 00:15ET; Produced: Jan 5, 2021 00:13ET

EQUITY RESEARCH
RBC Capital Markets, LLC
Christopher Carril  (Analyst)
(617) 725-2109
christopher.carril@rbccm.com
Sara Mahaffy, CFA  (US
Equity Strategist)
(212) 618-7507
sara.mahaffy@rbccm.com
James Hong  (Associate)
(646) 522-9939
james.hong@rbccm.com
January 5, 2021
RBC ESG Stratify: Restaurants
In this report, we present our initial findings upon examining our restaurants coverage
through an ESG lens, which we expect to be of growing importance for restaurant investors
—and consumers—in 2021 and beyond. Together with our RBC Strategy colleague Sara
Mahaffy, we explore recent ESG investment trends, and provide detail of our coverage
universe's sustainability efforts and goals across key restaurant-specific ESG categories, as
identified by the Sustainability Accounting Standards Board (SASB).
The growing importance of sustainable investing: By our estimate, we’ve identified $476 billion in
dedicated sustainable equity funds (with meaningful assets invested in the US), up from just $182 billion
at the end of 2018. Net inflows into these funds have accelerated in recent years, with 4Q inflows on
pace to hit another new record. In terms of how these funds are positioned in S&P 500 Restaurants,
SBUX is the only name that ranks relatively high in the actively managed funds within our universe. The
other names (MCD, YUM, DRI, CMG, DPZ) either rank in the middle tiers or lower tiers of ownership.
Further improvements in their ESG profiles could allow them to tap into more funds.
We believe labor practices will be an area of increasing focus for ESG investors in a post-COVID
world: While energy usage, waste reduction and supply chain practices remain obvious ESG focus
areas for restaurants, we see human capital management—encompassing labor practices and employee
engagement, diversity and inclusion—as an increasingly important topic moving forward, particularly as
the industry continues to navigate the pandemic. Our belief is that human capital management not only
impacts brand perception, but is also of paramount importance to restaurants' fundamental business
performance. The brands in our coverage are responsible for approximately 18 billion transactions
annually in the US alone (representing nearly a quarter of domestic restaurant sales), with the
vast majority still involving face-to-face interaction between company or franchisee employees and
customers, despite the rise of digital ordering. As such, service quality and operational efficiency—which
we view as closely linked to labor practices and employee engagement—can be a top-line driver for
restaurants, rather than another expense line item. Although external pressures (e.g. government-
mandated wage increases) likely continue to place upward pressure on labor expense longer term,
we encourage investors to consider the offsetting benefits of continued investment in restaurants'
workforces.
Scale matters as the restaurant industry consolidates and large brands gain share—but scale
also highlights the importance of sustainability efforts: A core tenet of our restaurant investment
framework is that scale matters, particularly as COVID-19 has only accelerated share consolidation by
the largest brands. Scale benefits restaurants in areas such as product innovation and marketing, but
also in resources dedicated to sustainability, and we would highlight Outperform-rated MCD and SBUX
as companies within our coverage with significant scale, and among those with the most sophisticated
and detailed sustainability goals and disclosure. In spite of the larger spotlight drawn upon the biggest
brands, we believe our restaurants coverage has largely embraced the challenge and complexity of
crafting and executing upon sustainability strategies.
ESG factors have outperformed within the S&P 500 in recent years: We’ve noticed the following key
ESG trends in recent years: (1) top S&P 500 holdings in dedicated, actively managed sustainable funds
have outperformed, including those stocks that are uniquely popular to sustainable funds; (2) S&P 500
companies with better ESG risk profiles have outperformed those with worse ESG risk profiles; (3) S&P
500 companies with the most improvement in ESG risk scores have outperformed those with the least
improvement on a sector neutral basis. Within the S&P 500 Consumer Discretionary specifically, one
trend that jumped out to us is that companies with stronger workforce ESG scores have outperformed
those with weaker scores since 2011.
Priced as of prior trading day's market close, EST (unless otherwise noted).
All values in USD unless otherwise noted.
For Required Conflicts Disclosures, see Page 41.

Table of Contents 
Introduction: Why ESG Matters in Restaurants ............................................................. 3 
ESG Investing & Performance Trends ............................................................................ 5 
Developing an ESG Framework for Restaurants........................................................... 13 
SASB Dimension: Environment .................................................................................... 16 
SASB Issue Category: Energy Management ...................................................................... 16 
SASB Issue Category: Water & Wastewater Management ............................................... 18 
SASB Issue Category: Waste & Hazardous Materials Management ................................. 19 
Focus Topic: Science-Based Targets .................................................................................. 21 
SASB Dimension: Social Capital ................................................................................... 23 
SASB Issue Category: Product Quality & Safety ................................................................ 23 
Product Quality & Safety Case Study: Chipotle Mexican Grill ........................................... 24 
SASB Issue Category: Customer Welfare ........................................................................... 26 
Focus Topic: Plant-Based Menu Items ............................................................................... 28 
SASB Dimension: Human Capital ................................................................................. 29 
SASB Issue Category: Labor Practices................................................................................ 29 
SASB Issue Category: Diversity and Inclusion .................................................................... 31 
Focus Topic: COVID-19 ...................................................................................................... 33 
SASB Dimension: Business Model & Innovation .......................................................... 36 
SASB Issue Category: Supply Chain Management ............................................................. 36 
Appendix ..................................................................................................................... 39 
Key Company Resources ................................................................................................... 39 
SASB Definitions ................................................................................................................ 39 
 
 
 
RBC ESG Stratify: Restaurants
January 5, 2021
2

Introduction: Why ESG Matters in Restaurants 
The brands within our restaurants coverage universe in 2019 generated global sales of 
approximately $275B, of which over $135B were in the US, representing nearly 25% of 
domestic restaurant industry sales. Given their presence in the fragmented restaurant 
industry, the largest chain brands have drawn attention for their impact on the environment—
specifically around food and packaging waste—as well as for supply chain practices and focus 
on customer safety. These factors can have a meaningful impact on brand perception, 
particularly customer safety. 
However, we believe there are also ESG focus topics where the close relationship with top and 
bottom-line performance is potentially underappreciated. In a typical year—that is, not 
2020—the brands within our coverage universe, between the corporate-owned restaurants 
and franchisees, complete approximately 18 billion transactions in the US alone. And while 
growth of the number of digital transactions—including those for delivery—may drive fewer 
face-to-face interactions between customers and company or franchisee employees over 
time, we believe there are few other companies and/or industries which own brands that 
generate as many direct, face-to-face customer interactions on a daily basis. Given this, we 
believe that labor practices is a potentially underappreciated category within ESG-restaurant 
investment frameworks. We believe that while labor costs have generally been viewed as a 
headwind, it is important to continue to highlight the link between restaurant companies 
providing competitive wages and benefits, and better overall service levels, which should 
ultimately result in consistently stronger top line and stock outperformance. 
Exhibit 1: Number of Annual Transactions (US, 2019) by Company 
 
Source: Technomic, RBC Capital Markets 
 
The companies in our coverage have largely responded to greater demand for transparency 
and the development of more sustainable business practices. Many of these large restaurant 
companies have launched formal initiatives to reduce waste, foster stronger relationships with 
and create more opportunities for employees, and improve supply chain practices. In some 
0.0
1.0
2.0
3.0
4.0
5.0
6.0
MCD
SBUX
YUM
QSR
WEN
DPZ
CMG
DRI
EAT
TXRH
Transactions per Year (Billions; US only)
RBC ESG Stratify: Restaurants
January 5, 2021
3

cases, companies have published quantifiable targets related to sustainability practices. In 
Exhibit 2 below, we highlight the level of disclosure provided by the companies in our coverage 
as it relates to each of the ESG issue categories deemed material for restaurants by the 
Sustainability Accounting Standard Board (SASB). While we would note that we did not come 
across any companies that were falling short of initiatives across all or most dimensions, there 
does remain room for improvement across the investable restaurant universe. In this report, 
we explore each of our covered company’s disclosures on key ESG issues, as well as relevant 
focus topics (e.g. COVID-19; plant-based foods). 
Exhibit 2: RBC Restaurants Universe SASB Heat Map (Darker Blue Indicates More Disclosure, incl. Quantified Targets) 
 
Source: SASB, company reports and websites, RBC Capital Markets 
 
Regarding COVID-19, specifically, we believe it is worth noting that the global pandemic has 
likely sharpened restaurant companies’ focus on key ESG issues. One of these issues is labor 
practices, which has been demonstrated through companies’ support for hourly and corporate 
employees, as well as franchisees. While companies pledged support, so did company 
managements (e.g. TXRH CEO Kent Taylor pledged over $5M to an employee relief fund). And 
while the pandemic has created opportunities for companies to highlight support for and 
commitment to restaurant employees—in particular lower-wage employees working in the 
restaurants—we do note that timelines around certain sustainability objectives (which we 
detail in this report) may be impacted by the pandemic. 
 
 
Casual Dining
Quick Service
Dimension
General Issue Category
EAT
DRI
TXRH
CMG
DPZ
MCD
QSR
SBUX
WEN
YUM
Energy Management
Water & Wastewater 
Management
Waste & Hazardous 
Materials Management
Product Quality & Safety
Customer Welfare
Labor Practices
Employee Engagement, 
Diversity & Inclusion
Business Model 
& Innovation
Supply Chain 
Management
Environment
Social Capital
Human Capital
RBC ESG Stratify: Restaurants
January 5, 2021
4

ESG Investing & Performance Trends 
Growing Importance of Sustainable Investing 
Defining the universe of sustainable equity funds can be difficult, as funds are incorporating 
responsible investing practices into their process to varying degrees. Data from the US SIF 
indicates that total US domiciled assets (across asset classes – equity, fixed income, public, 
private, etc.) incorporating ESG factors to some degree totaled $17 trillion as of the start of 
2020 (up 42% from the start of 2018). Digging down further, we’ve identified $476 billion AUM 
in dedicated sustainable equity funds globally that have a clear, heavy emphasis on sustainable 
investing practices in their process, and have meaningful assets invested in US stocks. Inflows 
into the dedicated sustainable equity funds have been on the rise since early 2019 and so far 
net inflows are on track to hit another quarterly record in 4Q (based on the pace of inflows in 
October & November data, note we will not have final 4Q flows data until mid-January).  
Exhibit 3: AUM in Dedicated Sustainable Funds ($ bn) 
Exhibit 4: Net Flows For Dedicated Sustainable Funds ($ mn) 
 
 
Source: RBC US Equity Strategy, Morningstar, AUM and net flows are as of November 2020, based on our universe of dedicated sustainable equity funds (funds that have a clear & heavy emphasis on sustainable 
investing practices, see appendix for more details on our methodology) that have meaningful assets invested in the US (greater than 20% of AUM) 
 
We expect focus on ESG and sustainability to remain high in 2021 with the incoming Biden 
administration having vowed to make certain ESG related issues a priority and key regulatory 
elements of the EU Sustainable Finance Action Plan coming into focus (including the SFDR, 
which will require asset managers in the EU to disclose on ESG issues).  
Exhibit 5: Google Trends (US): ESG 
 
Source: RBC US Equity Strategy, Google Trends, Bloomberg, as of late December 2020 
 
 
76
66
70
94
106
113
130
178
182
294
476
0
50
100
150
200
250
300
350
400
450
500
2010
2011
2012
2013
2014
2015
2016
2017
2018
20192020 YTD
-10,000
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Latest bar is prelim 4Q20 
(annualized based on 
October & November 
flows); orange dot is actual 
Oct + Nov inflows
0
10
20
30
40
50
60
70
80
90
100
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
Jul-16
Jan-17
Jul-17
Jan-18
Jul-18
Jan-19
Jul-19
Jan-20
Jul-20
RBC ESG Stratify: Restaurants
January 5, 2021
5

Actively Managed Sustainable Funds Have Outperformed In Recent Years 
We think one important pillar of support for inflows has been the performance track record of 
these funds. In 2019 we found that actively managed, dedicated sustainable equity funds had 
stronger track records (both in terms of their ability to beat the benchmark and absolute 
returns) than traditional actively managed equity funds and this trend persisted in 2020. While 
some of the outperformance can be attributed to the outperformance of Tech and 
underperformance of Energy & Financials (as we highlight in Exhibit 15, these funds tend to be 
relatively overweight Tech and relatively underweight the Energy and Financials sectors), we 
have also seen key ESG factors outperform.  
Exhibit 6: % Funds Beating The Benchmark: Actively 
Managed Sustainable Funds vs. Traditional Funds 
Exhibit 7: Median Annual Returns: Actively Managed 
Sustainable Funds vs. Traditional Funds 
 
Source: RBC US Equity Strategy, Morningstar; % beating statistics are relative to funds prospective benchmark; sustainable fund universe is based on the fundamental, actively managed funds within our dedicated 
sustainable fund universe (Morningstar tracked global, US & sector focused equity funds that have a clear, heavy emphasis on sustainable investing practices and have meaningful US assets); traditional fund 
universe includes all other Morningstar tracked global, US & sector focused equity funds that are not included in our sustainable fund universe  
 
The charts below highlight some the key trends we’ve seen within the S&P 500 index: (1) top 
S&P 500 holdings in dedicated, actively managed sustainable funds have outperformed in 
recent years, including those stocks that are uniquely popular to sustainable funds (names like 
XYL, AWK, see pages 44-46 in our latest ESG Scoop for the full list of names that fell in each 
basket as of 2Q20), which are captured in the grey line in Exhibit 8, (2) S&P 500 companies 
with better ESG risk profiles (leveraging ESG risk scores from Sustainalytics) have 
outperformed those with worse ESG risk profiles, including when we look at the data on a 
sector neutral basis, and (3) S&P 500 companies with the most improvement in their ESG risk 
scores (leveraging ESG momentum scores from Sustainalytics) have outperformed those with 
the least improvement / deteriorating ESG risk scores on a sector neutral basis.  
51%
33%
49%
64%
52%
37%
40%
44%
0%
10%
20%
30%
40%
50%
60%
70%
Active Sustainable Equity Funds
Active Traditional Equity Funds
15.3
-7.2
28.4
15.7
15.6
-6.9
26.3
10.3
 (10.0)
 (5.0)
 -
 5.0
 10.0
 15.0
 20.0
 25.0
 30.0
 35.0
Active Sustainable Equity Funds
Active Traditional Equity Funds
RBC ESG Stratify: Restaurants
January 5, 2021
6

Exhibit 8: Relative Performance (vs. S&P 500 Index) of Top 
Holdings In Actively Managed Sustainable Equity Funds 
Exhibit 9: S&P 500 Performance By ESG Risk Score 
(Sustainalytics) 
 
Source: RBC US Equity Strategy, S&P Capital IQ / ClariFi, Morningstar, Sustainalytics, performance as of December 30th, 2020  
 
Exhibit 10: S&P 500 Performance By ESG Momentum Score 
(Sustainalytics) 
Exhibit 11: S&P 500 Sector Annualized Relative Return By ESG 
Momentum Score (Top vs. Bottom Quintile, Since 2011) 
 
Source: RBC US Equity Strategy, S&P Capital IQ / ClariFi, Sustainalytics, performance as of December 30th, 2020  
 
ESG Factor Performance within Consumer Discretionary  
The following table highlights key performance and valuation trends within major S&P 500 
GICS sectors. From a performance perspective, we’ve looked at how companies with stronger 
ESG assessments (both based on companies’ popularity in actively managed dedicated 
sustainable funds and based on third party ESG ratings) and how companies with improving 
ESG profiles (leveraging ESG momentum scores from Sustainalytics) have performed. From a 
valuation perspective, we’ve looked at relative valuation premiums for popular names in 
sustainable funds. 
For the Consumer Discretionary sector specifically, while performance of ESG leaders based 
on 3rd party ratings assessments has been more mixed, we have found that the most popular 
Consumer Discretionary names in actively managed sustainable funds have outperformed. 
They also tend to trade at valuation premiums to the least popular names. In addition, we’ve 
found that companies within the Consumer Discretionary that have seen yr/yr improvement 
in their ESG risk scores have outperformed.  
 
0.90
1.00
1.10
1.20
1.30
1.40
1.50
Top 20 Holdings in Sustainable Funds
Popular in Sustainable & Traditional Funds
Popular in Sustainable But Not Traditional Funds
0.90
1.00
1.10
1.20
1.30
Index Level (Top vs. Bottom Within Index)
Index Level (Top vs. Bottom Within Sectors)
0.90
0.95
1.00
1.05
1.10
1.15
1.20
1.25
ESG Momentum Factor: Top vs. Bottom Quintile Within Index
ESG Momentum Factor: Top vs. Bottom Quintile Within Sectors
-4%
0%
4%
8%
12%
16%
20%
RBC ESG Stratify: Restaurants
January 5, 2021
7

Exhibit 12: S&P 500 ESG Sector Heat Map: ESG Factor Performance & Valuations by Major GICS Sector 
 
Source: RBC US Equity Strategy; factor performance and valuations are based on top vs. bottom quintile within each sector; relative performance by ownership factor is since Dec 2016; relative performance by ESG 
ratings is since Dec 2014; relative performance by ESG momentum score is since Dec 2015; historical valuations by ownership factor are since Dec 2016 
 
Digging down within the overall ESG rating, one trend we found particularly interesting as it 
relates to the Consumer Discretionary sector is the performance of companies by their 
workforce ESG score. Here we leverage workforce ESG scores from Refinitiv (where we have 
longer data history on the component scores), which take into account qualitative (policies) 
and quantitative inputs related to employee engagement & turnover, employee health & 
safety, and diversity & inclusion. While performance trends vary considerably by S&P 500 
sector, we have found that companies with stronger workforce ESG scores have outperformed 
those with weaker workforce ESG scores within the S&P 500 Consumer Discretionary sector. 
Exhibit 13: S&P 500 Sector Performance: Annualized Relative 
Returns By Refinitiv Workforce ESG Scores (Since 2013)  
Exhibit 14: S&P 500 Consumer Discretionary Performance By 
Workforce ESG Scores Over Time (Refinitiv)  
 
Source: RBC US Equity Strategy, S&P Capital IQ / ClariFi, Refinitiv, performance data is through December 30th, 2020; relative performance is based on top vs. bottom quintile within sectors; constituents are 
rebalanced annually  
Factor Performance  Within Sectors
Valuation Premium / Discount 
Within Sectors 
Popularity in Actively Managed 
Dedicated ESG Funds  
ESG Ratings
(Sustainalytics & Refinitiv)
ESG Momentum Scores
(Sustainalytics)
Popularity in Actively Managed 
Dedicated ESG Funds 
Consumer Staples
Outperformed
Mixed
Underperformed
Premium / Above Average
Utilities
Outperformed
Outperformed
Outperformed
Premium / Above Average
REITs
Outperformed
Underperformed
Outperformed
Premium / Above Average
Health Care
Outperformed
Outperformed
Underperformed
Premium / In-line
Energy
Outperformed
Mixed
Outperformed
Premium / Above Average
Materials
Underperformed
Outperformed
Outperformed
Premium / Above Average
Financials
Mixed
Outperformed
Outperformed
Premium / Above Average
Industrials
Outperformed
Outperformed
Outperformed
Premium / In-line
Consumer 
Discretionary
Outperformed
Mixed
Outperformed
Premium / Above Average
Comm Services
Outperformed
Underperformed
Outperformed
Premium / Above Average
Technology
Outperformed
Outperformed
Mixed
Premium / Above Average
-8%
-4%
0%
4%
8%
12%
0
0.4
0.8
1.2
1.6
2
2.4
RBC ESG Stratify: Restaurants
January 5, 2021
8

Sustainable Fund Positioning Within Restaurants  
In the following section we examine how actively managed sustainable equity funds are 
positioned within the Restaurants industry, as well the broader Consumer Discretionary 
sector. Here, we’ve compared average sector weightings among the dedicated actively 
managed sustainable funds in our universe (Morningstar tracked global & US funds with 
meaningful US assets that have a clear & heavy emphasis on sustainable investing practices) 
to traditional actively managed equity funds. 
Exhibit 15: Relative Sector Overweights / Underweights: 
Sustainable Funds Less Traditional Funds 
Exhibit 16: Relative Industry Overweights / Underweights: 
Consumer Discretionary 
 
Source: RBC US Equity Strategy, Morningstar. Includes only fundamental / actively managed sustainable equity funds; excludes sector-focused funds; as of 3Q20 
 
We’ve found that the sustainable funds tend to be relatively underweight the Consumer 
Discretionary sector, primarily driven by Internet Retail (where anti-competitive behavior and 
data privacy & security are two key ESG risk factors) and the Hotels, Restaurants & Leisure 
GICS industries (where human capital management and product governance are among the 
key ESG risk factors facing the industry). While we are not able to carve out the Hotels, 
Restaurants & Leisure industry underweight by subindustry, we suspect that the underweight 
is more driven by Hotels, Resorts & Cruise Lines and Casinos & Gaming subindustries than 
Restaurants. As we highlight in Exhibit 19, generally the Restaurants names rank ahead of 
names in the Hotels, Resorts & Cruise Lines and Casinos & Gaming subindustries, in terms of 
their popularity in these funds. 
Exhibit 17: S&P 500 GICS Sectors Ranked By Their Weighted 
Median Aggregate ESG Risk Score (Higher Score = Higher ESG 
Risk)  
Exhibit 18: S&P 500 Consumer Discretionary Industries Ranked 
By Their Weighted Median Aggregate ESG Risk Score (Higher 
Score = Higher ESG Risk)  
 
 
Source: RBC US Equity Strategy, S&P Capital IQ / ClariFi, Sustainalytics, the Diversified Consumer Services industry has been excluded from the chart on the right due to lack of data 
 
-4
-3
-2
-1
0
1
2
3
4
5
-1.6
-1.2
-0.8
-0.4
0.0
0.4
0.8
0
5
10
15
20
25
30
35
0
5
10
15
20
25
30
35
RBC ESG Stratify: Restaurants
January 5, 2021
9

Looking specifically at ownership of S&P 500 Restaurants, SBUX ranks highest in terms of its 
popularity within actively managed dedicated sustainable funds, falling within the top decile 
of ownership among all S&P 500 stocks. It also ranks a little higher in sustainable funds than 
what we see for traditional active managers (long only funds and hedge funds).  
The other S&P 500 restaurants (MCD, CMG, DPZ, YUM, and DRI) rank a little lower, falling 
within the middle or lower deciles of sustainable fund ownership within the S&P 500. They 
also generally rank a little lower in sustainable funds than what we see in other active manager 
camps. For example, CMG ranks in decile 6 within the S&P 500 in terms of its popularity in 
sustainable funds, but ranks in deciles 4 and 3 in terms of its popularity in traditional long only 
funds and hedge funds, respectively. 
Exhibit 19: S&P 500 Hotels, Restaurants & Leisure – Popularity in Actively Managed Sustainable Funds  
 
Source: RBC US Equity Strategy, Morningstar, S&P Capital IQ / ClariFi, as of 3Q20   
 
Ticker
Company Name
Sub Industry
Popularity In Actively 
Managed Dedicated 
ESG Funds: % Own
Decile Ranking Within 
Entire S&P 500: 
Popularity in Actively 
Managed ESG Funds
Decile Ranking Within 
Entire S&P 500: 
Popularity in Traditional 
Large Cap Long Only 
Funds
Decile Ranking Within 
Entire S&P 500: 
Popularity in Hedge 
Funds
SBUX
STARBUCKS CORP
Restaurants
18%
1
2
2
MCD
MCDONALD'S CORP
Restaurants
6%
4
2
2
HLT
HILTON WORLDWIDE HOLDINGS
Hotels, Resorts & Cruise Lines
4%
6
4
1
CMG
CHIPOTLE MEXICAN GRILL INC
Restaurants
4%
6
4
3
DPZ
DOMINO'S PIZZA INC
Restaurants
4%
6
5
5
MAR
MARRIOTT INTL INC
Hotels, Resorts & Cruise Lines
3%
7
6
2
YUM
YUM BRANDS INC
Restaurants
3%
7
6
3
DRI
DARDEN RESTAURANTS INC
Restaurants
3%
7
5
3
RCL
ROYAL CARIBBEAN GROUP
Hotels, Resorts & Cruise Lines
2%
8
9
6
MGM
MGM RESORTS INTERNATIONAL
Casinos & Gaming
1%
10
9
7
LVS
LAS VEGAS SANDS CORP
Casinos & Gaming
1%
10
4
2
CCL
CARNIVAL CORPORATION & PLC
Hotels, Resorts & Cruise Lines
0%
10
10
4
WYNN
WYNN RESORTS LTD
Casinos & Gaming
0%
10
7
4
NCLH
NORWEGIAN CRUISE LINE HLDGS
Hotels, Resorts & Cruise Lines
0%
10
10
9
RBC ESG Stratify: Restaurants
January 5, 2021
10

Inflows into “E” Focused Thematic Funds Surged Around the US Election  
We estimate that there is roughly $159 billion AUM globally that is managed by thematic funds 
that are exclusively focused on environmental themes, investing in companies whose products 
and services positively benefit the environment and / or companies with superior 
management of environmental risks and opportunities. Recently we have seen net inflows and 
new fund launches accelerate with the incoming Biden administration having vowed to make 
climate change a priority for the US. Already we have seen Biden commit to rejoining the Paris 
Agreement in January. One thing in particular we will be watching for is if the SEC will mandate 
climate risk disclosures under the new administration, something that has been gaining 
momentum globally in recent months (the UK and Hong Kong mandating TCFD disclosures by 
2025 and New Zealand mandating TCFD disclosures for Banks, Asset Managers and Insurance 
companies by 2023 to name a few recent examples). 
Investor engagement on these issues has also intensified. Investors with $52 trillion in AUM 
have signed on to the Climate Action 100+ (an initiative where investors commit to engaging 
with at least one of the 167 focus companies that are strategically important to the net zero 
emissions transition) and investors with $9 trillion in AUM part of the Net Zero Asset Managers 
Initiative (an investor group committed to supporting investing aligned with net zero emissions 
by 2050 or sooner). We expect investor attention on these issues to stay strong in 2021. 
Exhibit 20: Environmental Focused Thematic Funds: 
Quarterly Net Inflows  
Exhibit 21: Fund Inception Date By Year: Environmental 
Focused Thematic Funds (Since 2010)  
 
Source: RBC US Equity Strategy, Morningstar, as of November 2020; data is based on universe of dedicated sustainable funds that are exclusively focused on environmental ESG themes (which we’ve categorized 
based on our own review of investment strategies and fund descriptions; we are including funds focused on broad environmental themes, clean energy, water, waste & circular economy, sustainable materials / 
resources, sustainable transportation, biodiversity, sustainable infrastructure, sustainable agriculture as well as passive funds that have a low carbon / carbon reduction focus. Includes all fund domiciles and all 
investment focuses (including international equity funds).  
 
In terms of company’s management of climate risks, we have seen a growing number of US 
companies across sectors setting emission and / or energy reduction targets in recent years 
(though they still generally lag behind their European peers in setting targets). We are also 
seeing more companies set policies around their management of environmental risks in the 
supply chain, which is particularly relevant for Restaurants, with the USDA estimating that 
Agriculture accounts for 80% of US consumptive water use and the EPA estimating that 
Agriculture accounted for 10% of US GHG emissions in 2018.  
-5,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Latest bar is prelim 
4Q20 (annualized 
based on October & 
November flows)
0
10
20
30
40
50
60
70
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
RBC ESG Stratify: Restaurants
January 5, 2021
11

Exhibit 22: % S&P 500 Companies Disclosing Emissions 
Reduction Target or Resource Reduction Target Over Time 
Exhibit 23: % of Companies Disclosing Emissions Reduction 
Target or Resource Reduction Target By Sector (FY0) 
 
 
Source: RBC US Equity Strategy, S&P Capital IQ / ClariFi, Refinitiv, data is frozen as of December 30th, 2020; resource reduction target includes energy efficiency or water use target  
 
Exhibit 24: % of S&P 500 Companies With Environmental 
Supply Chain Management or Termination Programs  
Exhibit 25: Total US GHG Emissions by Economic Sector in 2018 
(US)  
 
 
Source: RBC US Equity Strategy, EPA, S&P Capital IQ / ClariFi, Refinitiv, data is frozen as of December 30th, 2020; environmental supply chain management is capturing companies that use environmental criteria in 
the selection process of its suppliers; supply chain termination programs is capturing companies that report or show readiness to end a partnership with a sourcing partner if environmental criteria are not met.  
 
Interestingly, from a performance perspective, we’ve found that S&P 500 companies with the 
most improvement in their emissions intensity have outperformed those with the least 
improvement in recent years on a sector neutral basis. This outperformance has been seen 
within most S&P 500 sectors, including the S&P 500 Consumer Discretionary sector.  
Exhibit 26: S&P 500 Performance By Yr/Yr Emissions 
Intensity Improvement (Sector Neutral) 
Exhibit 27: S&P 500 Sector Performance: Annualized Relative 
Return By Yr/Yr Emissions Intensity Improvement (Since 2011) 
 
 
Source: RBC US Equity Strategy, S&P Capital IQ / ClariFi, Trucost, based on company disclosures and estimates (where companies only partially disclose Scope 1 & 2 emissions intensity); relative performance is 
capturing the top vs. bottom quartile within sectors and constituents are rebalanced annually; performance is as of December 30th, 2020 
 
0%
10%
20%
30%
40%
50%
60%
70%
FY-5
FY-4
FY-3
FY-2
FY-1
FY-0
0%
20%
40%
60%
80%
100%
S&P 500 (US)
S&P 350 (Europe)
0%
10%
20%
30%
40%
50%
60%
70%
FY5
FY4
FY3
FY2
FY1
FY0
Environmental Supply Chain Management
Environmental Supply Chain Termination
Commercial & 
Residential, 12%
Agriculture, 10%
Transportation, 
28%
Industry, 22%
Electricity, 27%
0.95
1
1.05
1.1
1.15
1.2
-4%
-2%
0%
2%
4%
6%
8%
10%
RBC ESG Stratify: Restaurants
January 5, 2021
12

Developing an ESG Framework for Restaurants 
Using the SASB Materiality Map as a Starting Point 
The purpose of this report is to review and assess the sustainability goals and achievements 
for our restaurants coverage universe. Across our coverage—which includes limited-service 
and full-service restaurants—we are seeing commonalities in the disclosures being made 
within the human capital, social capital, environmental, and business model & innovation 
dimensions. Our assessment of material disclosures is in accordance with Sustainability 
Accounting Standard Board (SASB) Materiality Map.  
Exhibit 28: SASB Materiality Map – Restaurants 
 
Dark blue shading indicates material issues for restaurants 
Source: SASB, RBC Capital Markets 
 
According to SASB, the category identified as “Employee Engagement, Diversity & Inclusion” 
is not considered to be of material significance in the restaurants industry. Our report, 
however, considers this general issue category as material. We believe that strong company 
performance within the restaurant industry is driven by good product and service. With that 
Dimension
General Issue Category
Restuarants
GHG Emissions
Air Quality
Energy Management
Water & Wastewater Management
Waste & Hazardous Materials Management
Ecological Impacts
Human Rights & Community Relations
Customer Privacy
Data Security
Access & Affordability
Product Quality & Safety
Customer Welfare
Selling Practices & Product Labeling
Labor Practices
Employee Health & Safety
Employee Engagement, Diversity & Inclusion
Product Design & Lifecycle Management
Business Model Resilience
Supply Chain Management
Materials Sourcing & Efficiency
Physical Impacts of Climate Change
Business Ethics
Competitive Behavior
Management of the Legal & Regulatory Environment
Critical Incident Risk Management
Systemic Risk Management
Leadership & 
Governance
Business Model 
& Innovation
Environment
Social Capital
Human Capital
RBC ESG Stratify: Restaurants
January 5, 2021
13

being said, companies able to differentiate themselves in the human capital dimension are 
likely to retain top talent and optimal performance. We recognize a company’s effort to 
engage its workforce, through diversity & inclusion initiatives, as an essential factor for 
employee retention and top performance.  
Why Differences Across Restaurant Business Models Matters in ESG Assessment 
In assessing restaurant companies from an ESG perspective, it is worth noting that restaurant 
business models vary widely across our coverage—see Exhibit 29 for additional detail. We have 
observed that the largest companies (based on global footprint, market capitalization, etc.) 
generally have more defined sustainability practices and targets, which intuitively makes sense 
to us given relative sizes of the businesses in our coverage universe, and ability to allocate 
more resources to sustainability efforts.  
Exhibit 29: RBC Restaurants Universe Key Metrics 
 
Source: FactSet, company data, RBC Capital Markets; all figures as of Dec. 2019, except market capitalization 
 
Beyond company size, we would also point out other factors impacting companies’ abilities to 
implement and execute against sustainability goals, including geographic footprint and 
franchised mix. Regarding the latter, specifically, some of our covered companies with higher 
franchised mix (e.g. MCD, YUM) ultimately cede some control to franchisees with respect to 
certain ESG initiatives at the restaurant level, including practices around waste and energy 
management, labor, etc. 
Finally, we would highlight other nuances around business models that could ultimately 
influence companies’ ability to effect change. For instance, a significant portion of MCD’s 
revenue (~36% in 2019) is generated through rental income, given its substantial real estate 
ownership, and this may provide the company with relatively more control over certain ESG 
practices (e.g. energy management) than other restaurant companies with less real estate 
ownership. Another business model nuance worth highlighting is that QSR and DPZ each 
operate ingredient and packaging distribution business segments which serve their respective 
franchisees. As a result, the greater degree of control at the supply chain level for these 
companies should warrant additional consideration. 
Corporate Governance 
While SASB has not identified any Leadership & Governance category issues as material for 
restaurant companies, we see corporate governance coming into greater focus. As shown in 
Exhibit 30, most of the companies in our coverage have in place non-executive Board 
Company
Ticker
Segment
Market 
Capitalization 
($MM)
Total 
Global System 
Restaurants
Global 
Franchised/
Licensed %
Global 
System 
Sales ($B)*
US 
System 
Sales ($B)*
Total 
Company 
Revenue ($B)
McDonald’s Corporation
MCD
Quick Service
157.5
38,695
93%
100.2
40.4
21.1
Starbucks Corporation
SBUX
Fast Casual
119.7
31,795
49%
39.2
21.4
27.0
Chipotle Mexican Grill, Inc.
CMG
Fast Casual
39.5
2,622
0%
5.6
5.5
5.6
Yum! Brands, Inc.
YUM
Quick Service
32.4
50,170
98%
52.6
21.4
5.6
Restaurant Brands International Inc.
QSR
Quick Service
18.4
27,086
100%
34.0
14.7
5.6
Domino’s Pizza Inc.
DPZ
Quick Service
15.6
17,020
98%
14.3
7.0
3.6
Darden Restaurants, Inc.
DRI
Casual Dining
15.3
1,799
0%
8.7
8.6
8.7
Texas Roadhouse, Inc.
TXRH
Casual Dining
5.6
611
16%
3.3
3.3
2.8
The Wendy's Company
WEN
Quick Service
5.0
6,788
95%
10.9
9.8
1.7
Brinker International, Inc.
EAT
Casual Dining
2.1
1,675
33%
4.4
4.0
3.3
* Global system sales equals the sum of restaurant sales from company-owned and franchised/licensed restaurants.
RBC ESG Stratify: Restaurants
January 5, 2021
14

Chairpersons, with many requiring separation of the Chair and CEO roles. Furthermore, we are 
beginning to see companies take steps to link executive compensation with certain 
sustainability and other related targets. For instance, SBUX executive compensation, 
beginning in FY21, will be linked to diversity and inclusion goals. 
Exhibit 30: RBC Restaurants Coverage Corporate Governance Snapshot 
 
Source: Company reports, RBC Capital Markets 
 
What We Did 
In the following sections, we have organized detailed company data and goals by ESG subject 
matter. In creating this report, we examined and utilized a number of publicly available 
company resources including, but not limited to: 
 
sustainability reports; 
 
proxy statements; 
 
press releases; and 
 
company websites. 
 
Please note that in the Appendix, we include links to key company sources, including 
companies’ latest sustainability reports (where applicable). 
 
Company
Ticker
Non-Executive 
Chair
Separation of 
Chair/CEO 
Required
Board Diversity
Chipotle Mexican Grill, Inc.
CMG
33% female
Domino’s Pizza Inc.
DPZ
P
P
33% female
Darden Restaurants, Inc.
DRI
P
P
25% female
Brinker International, Inc.
EAT
P
P
30% female
McDonald’s Corporation
MCD
P
P
50% women or minorities
Restaurant Brands International Inc.
QSR
P
9% female
Starbucks Corporation
SBUX
P
P
38% female, 46% ethnic diversity, 23% national diversity
Texas Roadhouse, Inc.
TXRH
The Wendy's Company
WEN
P
P
18% female
Yum! Brands, Inc.
YUM
P
33% female
RBC ESG Stratify: Restaurants
January 5, 2021
15

SASB Dimension: Environment 
Restaurant companies are reducing energy and water consumption through the adoption of 
green building (i.e. sustainable building design) strategies for new unit construction, or by 
installing energy management systems. These efforts are reducing, and in certain cases 
eliminating, impact on the environment, while also generating cost savings (e.g. utility and 
maintenance costs). Though most of our quick service restaurants are seeking to reduce 
environmental footprint with green building design, highly franchised business models 
presents an added hurdle, given the sometimes necessary additional investment by 
franchisees. Similarly, for companies that offer recycling programs to divert waste, 
participation for franchisees may be optional. Opportunities also exist to reduce costs 
associated with certain packaging, as various restaurant brands are making progress or 
committing to reusable solutions, though execution may depend consumer acceptance. 
SASB Issue Category: Energy Management 
Brinker International, Inc. (EAT) 
EAT invests in restaurant technology that identifies ways to reduce energy costs. Since 
implementing the technology, EAT has been able to train restaurant operators to minimize 
energy usage. 
Chipotle Mexican Grill, Inc. (CMG) 
CMG installed energy management systems—which allow energy usage to be monitored and 
controlled—in all compatible restaurants during 2019 (resulting in a 7.7% reduction in average 
energy usage). These systems are also installed in newly built restaurants. Regarding 
renewable energy, CMG increased the amount sourced to 21.33% (against a 20% baseline set 
in 2018). 
Darden Restaurants, Inc. (DRI) 
DRI has focused on modifying existing and new restaurants to be more ecofriendly by adding 
LED light fixtures, efficient HVAC systems and promoting daylight harvesting. All new 
restaurant prototypes are designed to align with LEED (Leadership in Energy and 
Environmental Design) standards. 
Domino’s Pizza Inc. (DPZ) 
DPZ has reduced energy at supply chain centers across the US, via the conversion of trucks to 
more fuel efficient vehicles and new ecofriendly kitchen appliance designs. Stores that are 
reimaged in the Pizza Theater design (introduced in 2012, with the majority of US and 
international stores converted to the design by 2019) conserve energy via the incorporation 
of LED signs. 
McDonald’s Corporation (MCD) 
MCD’s energy management strategy includes investing in renewable energy, LED lighting, solar 
structures and energy efficient equipment. In 2019, MCD committed to two renewable energy 
projects in Texas (virtual power purchase agreements or “VPPAs”) to expand the amount of 
available renewable energy in the US. In 2020, MCD completed three new VPPAs related to 
projects across four states (Illinois, Oklahoma, North Carolina and Ohio). In aggregate, the 
energy produced by the five total VPPA projects would be enough to operate approximately 
8,000 McDonald’s restaurants. Once these five renewable energy projects are operational, the 
emissions reductions from the deals will bring MCD roughly halfway toward completing its 
goal of reducing GHG emissions 36% by 2030. MCD is also collaborating with its franchisees 
globally, designing ecofriendly buildings (some of which are LEED certified). 
RBC ESG Stratify: Restaurants
January 5, 2021
16

Restaurant Brands International Inc. (QSR) 
As a part of its green building strategy, QSR has committed to designing, building and operating 
restaurants to be more ecofriendly and reduce the amount of energy consumed. Some 
examples of the sustainable designs include LED lighting, solar panels, daylight harvesting and 
high efficiency HVAC systems. 
Starbucks Corporation (SBUX) 
SBUX has opened more than 1,600 LEED (Leadership in Energy and Environmental Design) 
certified stores globally and has developed the Greener Stores framework (a new store 
verification program) to exceed LEED standards and further reduce environmental footprint. 
Additionally, SBUX buys sufficient renewable energy to power 100% of its company-owned 
stores in North America and the UK. To enhance these efforts, SBUX has committed to: 
 
building and operating 10,000 “Greener Stores” (incl. existing stores, new builds and 
renovations) globally by 2025; and 
 
investing in 100% renewable energy to power global operations globally by the end of 
2020. 
 
SBUX is also a partner in the U.S. Department of Energy’s Better Buildings initiative. As noted 
on the initiatives website, the energy used to power SBUX stores, offices and roasting plants 
accounts for more than 80% of the company’s direct carbon footprint, and as a result, SBUX 
has committed to reducing its energy use via LED lighting retrofits, energy management 
systems, proactive asset replacement and new store improvements. Through SBUX’s portfolio 
in 6,500 buildings (~12MM sq. ft.), SBUX has improved energy performance by 10% from its 
2009 baseline, and continues to work toward its goal of a 25% reduction. 
Exhibit 31: Starbucks Energy Use Intensity (vs. 2019 Baseline 
and Goal) 
Exhibit 32: Number of Starbucks Properties by Cumulative % 
Improvement 
Source: Better Buildings – US Department of Energy, RBC Capital Markets 
Source: Better Buildings – US Department of Energy, RBC Capital Markets 
 
Texas Roadhouse, Inc. (TXRH) 
TXRH has committed to reducing energy consumption by incorporating LED light fixtures, 
energy efficient kitchen equipment, solar panels (in two Arizona restaurants) and optimal 
HVAC performance across its restaurants. Additionally, TXRH’s Support Center offices were 
renovated to include design concepts that reduce electricity use. 
400
450
500
550
600
650
700
750
800
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
0
500
1,000
1,500
2,000
2,500
<=0%
0-2%
2-6%
6-10%
10-15%
>15%
RBC ESG Stratify: Restaurants
January 5, 2021
17

The Wendy's Company (WEN) 
WEN’s Squarely Sustainable approach to ecofriendly practices considers energy efficiency in 
the selection of equipment, building construction and transportation methods for delivery 
services. WEN has made progress by implementing the use of LED light fixtures for new and 
remodeled units, high efficiency HVAC equipment in new units and high efficiency cooler 
motors. WEN has committed to reducing energy consumption in company-owned restaurants 
by 20% per transaction by 2025. More than 1,500 restaurant locations are participating, 
including 17 franchise owners. 
Yum! Brands, Inc. (YUM) 
YUM has a green building strategy in place to reduce energy consumption in newly developed 
company-owned restaurants and participating franchisees. A combination of new 
technologies and ecofriendly operating practices are employed globally in restaurants, such as 
LED light fixtures, solar energy systems and energy monitoring tools. YUM has committed to 
reducing their average restaurant energy use by an additional 10% by the end of 2025. 
SASB Issue Category: Water & Wastewater Management 
Brinker International, Inc. (EAT) 
EAT has installed low water urinals in new restaurants and in existing units where maintenance 
is essential. 
Chipotle Mexican Grill, Inc. (CMG) 
CMG sources some ingredients from farmers who make efforts to mitigate water usage via 
drip irrigation. 
Darden Restaurants, Inc. (DRI) 
DRI has a wide range of water saving initiatives, some of which include low-flow sinks, low-
flow flush valves, drip irrigation systems and hands-free faucets. 
Domino’s Pizza Inc. (DPZ) 
New refrigeration equipment designs have helped to reduce the consumption of water.  
McDonald’s Corporation (MCD) 
MCD prioritizes water saving in the following areas: water management, irrigation, public and 
staff amenities, and cleaning and beverage services. Surveys are conducted to identify and 
prioritize water saving opportunities. Initiatives such as low-flow urinals, high-efficiency 
faucets and water-efficient fixtures have all attributed to conservation. MCD has targeted a 
20% reduction in water usage in the US by 2020. 
Restaurant Brands International Inc. (QSR) 
As part of QSR’s green building initiative, water systems (such as low volume faucets) have 
been added in some new and existing restaurants.  
Starbucks Corporation (SBUX) 
SBUX’s Greener Stores framework aims to implement practices that deliver 30% water savings. 
In terms of water usage from suppliers, SBUX follows C.A.F.E. (Coffee and Farmer Equity) 
Practices verification program and measures farmers against their ability to conserve water 
and protect its quality. SBUX made a commitment to conserve or replenish 50% of all the water 
drawn (for operations and coffee production) by 2030, with a focus on communities and basins 
with high water risk. 
RBC ESG Stratify: Restaurants
January 5, 2021
18

Texas Roadhouse, Inc. (TXRH) 
Through a utility management system, some TXRH locations are working on ways to cut back 
on water usage. In 2019, TXRH collaborated with WaterStep, a non-profit organization that 
aims to provide developing countries with clean water supplies. Working with WaterStep, 
TXRH has invested in solutions that help women and children gather water for their families. 
The Wendy's Company (WEN) 
Two WEN franchisees (Wendium of Florida and Carlisle Corporation) joined the Better 
Buildings Water Challenge and committed to reduce water usage by 20% (from 2018 levels 
over a ten year period). Additionally, WEN is sourcing tomatoes served in its in North American 
restaurants from indoor greenhouses and hydroponic farms. 
Yum! Brands, Inc. (YUM) 
Water usage in YUM restaurants is mitigated with low-flow fixtures, high-efficiency kitchen 
equipment and improved irrigation techniques. YUM is targeting an additional 10% reduction in 
average restaurant water consumption by the end of 2025, with a focus on high water-stress areas. 
SASB Issue Category: Waste & Hazardous Materials Management 
Brinker International, Inc. (EAT) 
EAT reduces waste through various packaging and recycling efforts. 100% of EAT’s packaging 
falls into one of the following eco-friendly categories: sustainably sourced raw materials; made 
from recycled materials; or recyclable/reusable/compostable.  
Chipotle Mexican Grill, Inc. (CMG) 
CMG has invested in a full-time Diversion Coordinator that leads diversion program efforts in 
restaurants. Waste audits are also performed on an annual basis to gather insight on sources 
of waste. CMG’s diversion rate was 47% in 2019 (up 5% from the previous year). CMG has also 
committed to the following goals: 
 
divert 50% of waste from landfills by the end of 2020, against a 37% baseline in 2016 (42% 
at the end of 2018); 
 
ensure 100% of restaurants are participating in a landfill diversion program by 2020, 
against a baseline of 81% at the end of 2016 (88% at the end of 2018); 
 
set up and maintain a recycling program at 95% of all restaurants by 2020, against a 
baseline of 80% at the end of 2016 (87% at the end of 2018); 
 
reduce overall average waste per restaurant per week by 30% (to 22 cubic yards) by 2020, 
from a baseline of 32 cubic yards per week in 2016; and 
 
set up and maintain a composting program at 25% of all restaurants by 2020, against a 
baseline of 10% at the end of 2016 (18% at the end of 2018). 
 
Darden Restaurants, Inc. (DRI) 
DRI manages food waste via its forecasting system that aligns food distribution with expected 
demand, and by donating any excess food through the company’s Harvest Food Donation 
Program. Additionally, DRI is working to integrate organic composting and participates in the 
Food Waste Reduction Alliance to further reduce discarded food.  
Domino’s Pizza Inc. (DPZ) 
DPZ’s pizza boxes are made from ethically sourced materials, and are incorporated into the 
operations of franchised restaurants. Earlier this year, DPZ worked with its primary supplier on 
increasing the recycled content in its pizza boxes from 40% to 72%. More recently, DPZ 
launched a new feature on its website that allows customers to enter their zip code and learn 
more about local guidelines for pizza box recycling.  
RBC ESG Stratify: Restaurants
January 5, 2021
19

McDonald’s Corporation (MCD) 
MCD has four main strategies to reduce the amount of paper and plastic packaging used and 
encourage recycling. These strategies include: 
1) eliminating packaging via reusable solutions (reusable cups, straw-less lids, fiber based 
product packaging, etc.);  
2) shifting material to use 100% renewable, recycled or certified content;  
3) recovering and recycling by improving current systems making it more convenient; and  
4) closing the loop by increasing usage of recycled materials in packaging. 
 
MCD has also made the following commitments: 
 
100% of guest packaging will come from renewable, recycled or certified sources by 2025; 
and 
 
recycling of guest packaging in 100% of restaurants by 2025. 
 
Restaurant Brands International Inc. (QSR) 
QSR aims to increase recycling and utilization of reusable packaging alternatives across its 
business, and this past October Burger King and Tim Hortons announced a partnership to pilot 
a reusable packaging system for food and beverages on the go (see more detail below). QSR 
has committed to the following goals: 
 
to phase out expanded polystyrene (EPS) foam in all guest packaging globally by 2021; 
 
100% of approved guest packaging will come from renewable, recycled, or certified 
sources by 2025; 
 
to recycle guest packaging in 100% of Burger King and Tim Hortons restaurants in Canada 
and the US by 2025; and 
 
to phase out non-biodegradable plastic toys from Burger King globally by 2025. 
 
Regarding the commitment to source 100% of guest packaging from renewable, recycled or 
certified sources (by 2025), Burger King and Tim Hortons Canada have partnered with Loop, a 
reusable packaging startup, to pilot reusable packaging in select restaurants starting in 2021. 
Starbucks Corporation (SBUX) 
In an effort to increase the recyclability of cups, SBUX introduced a new hot cup prototype, 
which is compostable and recyclable (in markets where allowed). Patrons are encouraged to 
reuse non-single-use cups of their own or those purchased in-store (though this is currently 
not an option due to the pandemic), and are offered discounts for doing so. Straw-less lids and 
other sustainable alternatives to straws are an ongoing effort for SBUX. The company had 
targeted eliminating its use of plastic straws globally by the end of 2020, however due to 
COVID-19, the new anticipated target date is spring 2021. SBUX has set the following goals: 
 
double the recyclability of cups from 2016 to 2022;  
 
develop 100% compostable and recyclable hot cups by 2022; 
 
to use 20% recycled content in hot cups by 2022; 
 
double the use of reusable cups from 2016 to 2022; 
 
eliminate single-use plastic straws globally by 2021; and 
 
a 50% reduction in waste sent to landfill from stores and manufacturing. 
 
 
RBC ESG Stratify: Restaurants
January 5, 2021
20

Texas Roadhouse, Inc. (TXRH) 
Food waste is minimized through the Made from Scratch Model, which allows excess 
ingredients to be incorporated into other menu items. Additionally, many TXRH restaurants 
are transitioning from plastic to 100% recyclable to-go bags and recycling fryer oil for biofuel. 
The Wendy's Company (WEN) 
 
WEN’s food is made to order every day, which aligns distribution with demand and 
reduces left over ingredients. To reduce its packaging footprint, WEN offers 100% 
recyclable cup carriers, 100% recyclable plastic & paper carryout bags, 50% recyclable 
unbleached napkins. WEN also collects used cooking oil so it can be refined and used as 
an ingredient. WEN has also committed to reducing food loss and waste by 50% by 2030 
as part of the USDA and EPA program US Food Loss and Waste 2030 Champions. 
 
Yum! Brands, Inc. (YUM) 
As it relates to waste and hazardous materials management, YUM has set goals to:  
1) divert 50% of back-of-house operational waste (measured by weight) generated in US 
restaurants by the end of 2020; and 
2) reduce food loss and waste by 50% by 2030, as part of the US Department of Agriculture 
(USDA) and the US Environmental Protection Agency (EPA) program US Food Loss and 
Waste 2030 Champions. 
 
To achieve these goals, efforts to use sustainable packaging, promote reusable containers and 
reduce food waste are being made across all brands. KFC, in particular, made a pledge that all 
plastic-based, consumer-facing packaging will be recoverable or reusable by 2025. Taco Bell 
(US), meanwhile, has begun using recyclable lids and cold cups.  
Separately, YUM’s Harvest program, in partnership with Food Donation Connection, is 
responsible for donating surplus food to food banks, soup kitchens and other nonprofit 
organizations. Since 1992, YUM’s three largest brands (KFC, Pizza Hut and Taco Bell) have 
collectively donated nearly 200 million pounds of food (at a total value of over $1B). 
Focus Topic: Science-Based Targets 
The US election has put more focus on how companies are managing environmental risks, with 
the incoming Biden administration vowing to make climate change a priority. We are also 
seeing more attention paid to how meaningful the goals that companies are setting are. 
On this point, we have seen a growing number of companies commit to and/or officially set 
science-based targets. These targets follow the criteria set forth by the SBTi, a partnership 
between CDP, WRI, WWF, and UN Global Compact that aims to mobilize the private sector to 
take the lead on climate action. Emissions targets are considered to be science-based if they 
are in line with what the latest climate science deems necessary to meet the goals of the Paris 
Agreement – limiting global warming to well-below 2°C above pre-industrial levels and 
pursuing efforts to limit warming to 1.5°C. Targets are also validated, giving them additional 
credibility.  
In addition to setting targets around a company’s emissions through their own operations, the 
initiative also requires companies to have a Scope Level 3 target (addressing emissions through 
the supply chain), depending on the sector. 
RBC ESG Stratify: Restaurants
January 5, 2021
21

Exhibit 33: Number of Public US Companies Committing or 
Setting Science-Based Targets By Sector 
Exhibit 34: Number of Public US Companies Committing or 
Setting Science-Based Targets By Cons. Discretionary Industry 
 
Source: RBC US Equity Strategy, SBTi, charts only include US companies and exclude private companies 
 
Looking at the US Restaurants under RBC’s coverage, MCD is the only company that has set a 
science-based target, though SBUX and CMG have committed to setting one (note that 
companies have 24 months from signing their commitment letter to develop, validate and set 
their target). 
Exhibit 35: RBC Restaurants Coverage: Companies Committing or Setting Science-Based Targets  
 
Source: SBTi, Company reports, RBC Capital Markets 
 
 
0
5
10
15
20
25
30
Targets Set
Committed
0
1
2
3
4
5
6
7
8
Targets Set
Committed
Ticker
Company Name
Status
Date
Target
MCD
McDonald's Corporation
Targets Set
03/01/2018
American multi-national fast food company McDonald's Corporation will partner with 
franchisees to cut greenhouse gas emissions to McDonald's restaurants and offices by 36% 
by 2030 from a 2015 base year.  Through collaboration and partnership with our suppliers 
and producers, McDonald's also commits to a 31% reduction in emissions intensity (per 
metric ton of food and packaging) across our supply chain by 2030 from 2015 levels.
SBUX
Starbucks Coffee Company
Committed
01/01/2020
N/A
CMG
Chipotle Mexican Grill, Inc.
Committed
03/31/2020
N/A
RBC ESG Stratify: Restaurants
January 5, 2021
22

SASB Dimension: Social Capital 
Though restaurants have outlined commitment to extensive measures in place to ensure 
food safety and quality, the significant number of points of distribution—both company-
owned and franchised—and transaction frequency present challenges in monitoring food 
safety practices, including within supply chains. With regard to supply chains, specifically, 
many restaurant brands have sought to improve the quality of ingredients, including 
targeting the removal of antibiotics from various ingredients. CMG and SBUX, however, have 
improved menu transparency even further by allowing customers to explore ingredient 
sourcing via digital traceability.  
SASB Issue Category: Product Quality & Safety 
Brinker International, Inc. (EAT) 
EAT has trained food safety professionals that establish procedures to ensure food safety and 
quality. Restaurants are audited at least four times per year by third parties against these 
standards. Suppliers are required to follow a code of conduct, and are also audited by food 
safety agencies. 
Chipotle Mexican Grill, Inc. (CMG) 
CMG has implemented a more comprehensive food safety program following the occurrence 
of illnesses related to the brand’s restaurants. CMG’s Food Safety Advisory Council and Board 
of Directors oversee the internal policies and procedures put in place to ensure food safety. 
Employees are also given wellness checks before each shift, to reduce the risk of exposing 
ingredients to sick staff members. CMG requires their restaurant management teams to be 
trained and certified in food safety by ServSafe, a third-party program that covers areas such 
as food safety, cross-contamination control, etc. Please see the CMG case study in the 
following section for more detail. 
Darden Restaurants, Inc. (DRI) 
DRI implements food safety and total quality programs in restaurants and with suppliers, on a 
daily basis. Suppliers that produce high-risk products are subject to evaluation by DRI 
personnel at least annually. DRI’s total quality managers, as well as third-party auditors, visit 
each restaurant throughout the year, to review food handling procedures and provide food 
safety training. 
Domino’s Pizza Inc. (DPZ) 
DPZ requires suppliers to meet strict quality standards to ensure food safety. Suppliers’ quality 
assurance programs are examined through third-party audits, on-site examinations and 
product evaluations. DPZ has the right to terminate arrangements with its US meat and cheese 
suppliers for any quality failures. 
McDonald’s Corporation (MCD) 
MCD implements food safety standards at all restaurants and conducts annual food safety 
audits with suppliers, distribution centers and restaurant locations. Food safety standards and 
procedure checks are conducted on a daily basis in the restaurants. Restaurant employees and 
operators are provided food safety training on a regular basis, and corporate staff members 
may receive food safety training through e-learning modules. MCD is on the board of the 
Global Food Safety Initiative. MCD plans to implement a digital food safety system in all 
markets by 2021, making it easier for employees and managers to implement food safety 
procedures more efficiently. 
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Restaurant Brands International Inc. (QSR) 
QSR’s vendors are required to have certification under the Global Food Safety Initiative 
system. Routine restaurant and vendor audits are conducted under QSR’s food quality 
assurance program to ensure compliance with preventative food safety measures. All QSR 
restaurants are subject to regular food safety inspections. New menu items that receive 
approval are also assessed for compliance by food safety experts, and these experts work with 
QSR’s operations teams on developing effective food safety practices for restaurants. 
Franchisees are required to conduct comprehensive food handling training with all employees. 
Starbucks Corporation (SBUX) 
SBUX’s Supplier Guidance Global Requirements outlines the minimum amount of operational 
standards that suppliers must comply with to ensure food safety and quality. In short, suppliers 
are expected to provide transparency into their operations, policies and processes. SBUX’s 
food suppliers should be able to share audit reports benchmarked to Global Food Safety 
Initiative standards or other safety audit reports deemed acceptable. SBUX has the right to 
conduct product quality and food safety tests along with audits on any company facility that 
supplies products (branded, non-branded or custom-made). Audits and inspections that are 
onsite can be unannounced or announced. 
Texas Roadhouse, Inc. (TXRH) 
TXRH has a product coach team that aids kitchen staff at all restaurants system-wide, with 
food safety and quality training. Product coaches and food team members are certified 
professionals with designations from the National Environmental Health Association. TXRH has 
food safety and sanitation audits conducted regularly by third-party teams and product 
coaches. 
The Wendy's Company (WEN) 
WEN has established a Code of Conduct that holds suppliers to food safety and quality 
assurance standards. Quality assurance audits are conducted regularly by WEN at farms, 
facilities, plants and other supplier locations. To maintain product quality and safety, WEN and 
its suppliers agree to adhere to strict food safety testing programs, retain products suspected 
to be unsafe until a food safety review is completed and monitor and improve procedures.  
Yum! Brands, Inc. (YUM) 
YUM has a quality assurance team in place for each division, managing food safety and 
monitoring suppliers. Suppliers are subject to quality system audits that verify compliance with 
food safety standards. YUM conducts approximately 3,000 food safety supplier audits 
annually. Third-party food safety professionals conduct food standards compliance check 
audits at restaurants a minimum of two times per year. Food safety training is required for all 
employees globally as part of onboarding and on a regular basis. YUM’s Supplier Tracking 
Assessment and Recognition system allows for the exchange of food safety information among 
suppliers, distributors and franchisees, offering performance transparency. 
Product Quality & Safety Case Study: Chipotle Mexican Grill 
As noted earlier, CMG has implemented a more comprehensive food safety program following 
the occurrence of illnesses related to its restaurants. Below, we show how acute food safety 
issues can have a meaningful impact on brand trust and sales, highlighting the direct link 
between a key ESG topic and stock performance. 
Timeline of Events (see Exhibit 36 below) 
1) In July 2015, CMG experienced an E.coli outbreak at a restaurant located in Seattle, 
Washington. Of the five cases, three people had to be hospitalized.  
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2) From early August through late September 2015, an outbreak of salmonella caused by 
contaminated tomatoes led to 115 illnesses (81 confirmed and 34 probable; 
17 hospitalizations) at 17 different restaurants located in Minnesota. During the week of 
August 18th, there was a norovirus outbreak at a restaurant located in Simi Valley, 
California, resulting in illnesses of 98 people (80 customers and 18 employees).  
3) From late October through early December 2015, an E.coli outbreak infected 55 people 
across 11 states. Out of the 55 infected people, 21 of them were hospitalized.  
4) In December 2015, another outbreak of E.coli was reported across three states (with 
illness onset dates ranging from November 18th through November 26th). Only one person 
was hospitalized. Another norovirus outbreak also occurred in December, infecting 136 
people who ate at a restaurant located in Boston, Massachusetts. Of the 136 cases, more 
than 120 cases were from Boston College students. 
5) In July 2017, more than 135 people became ill after eating food from a Chipotle located in 
Virginia. 
6) In July 2018, an outbreak of Clostridium perfringens, led to more than 600 people 
becoming ill, after eating in restaurants located in Ohio. 
 
Exhibit 36: CMG Stock Price and Average Unit Volume/Sales 
 
Source: FactSet, company data, press reports, RBC Capital Markets 
 
Chipotle’s Response 
As a result of the outbreaks, CMG enhanced its food safety program for its restaurants and 
suppliers in order to prevent future incidents and earn back the trust of the brand’s guests. 
The program has restaurant policies in place that are overseen by CMG’s Board of Directors 
and a Food Safety Advisory Council, consisting of independent food safety experts, and then 
implemented by an internal food safety team. CMG’s restaurants operate under the US Food 
and Drug Administration’s (FDA) Hazard Analysis and Critical Control Points (HACCP) systems, 
which allow the company to detect food safety threats and administer preventative measures. 
The company’s sanitation and HACCP systems intended to maintain cleansing and food prep 
protocols were further improved in 2018, with efforts aimed at eliminating pathogens and 
preventing restaurants from becoming contaminated. Each restaurant has a food safety leader 
who keeps track of daily HACCP logs and confirms that all food safety protocols are followed. 
To reduce the risk of employees working while sick, Chipotle has a policy in place that permits 
three days of sick leave from the first day of employment, in addition to wellness checks 
required at the beginning of every shift. Restaurant managers and crew members are 
incentivized to prioritize food safety measures in order to receive quarterly bonuses.  
$1.0M
$1.3M
$1.6M
$1.9M
$2.2M
$2.5M
$2.8M
$200
$400
$600
$800
$1,000
$1,200
$1,400
LTM Average Unit Volume (RHS)
CMG Share Price (LHS)
1-2
3
4
5
6
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With regard to its supply chain, CMG’s suppliers are required to implement preventative 
measures of their own, comprised of advanced technologies and HACCP procedures, to verify 
the efficacy of food safety control measures on a routine basis and to document the 
effectiveness of food safety procedures within certain operations. Advanced technologies are 
also utilized in all restaurants for raw ingredients, consisting of a vacuum-sealed packaging 
process for meats with temperature monitoring, a blanching process for jalapenos and 
inhibitors in beans and corn. Chipotle’s Supplier Food Safety Team routinely visits suppliers’ 
operations (often unannounced) to ensure processes are being adhered to. Local growers are 
provided financial aid and training through Chipotle’s Local Grower Support Initiative, which 
covers the cost of facility upgrades needed to ensure measures are in place to comply with 
food safety and quality regulations. To mitigate the risk of defective ingredients reaching 
restaurants, Chipotle developed a traceability program that tracks food ingredients from 
supply chains to restaurants (via an electronic system) by marking them with unique 
identifiers. This eliminates the time once allotted to identifying the source of bad ingredients 
and allows CMG to swiftly address food safety and quality issues. 
SASB Issue Category: Customer Welfare 
Brinker International, Inc. (EAT) 
EAT brands provide customers with transparency regarding nutritional information and 
allergens, available online or in restaurants. EAT also offers menu diversity with vegan and 
vegetarian options. 
Chipotle Mexican Grill, Inc. (CMG) 
CMG’s menu offers transparency into its ingredients and nutrition information, available  
in-store, via mobile app or online (including a nutrition calculator). In late 2020, the company 
launched Real Foodprint, a sustainability impact tracker, made available with digital orders on 
the mobile app or website. This feature allows customers to explore CMG’s sourcing efforts by 
comparing ingredients and sourcing standards to an industry average. Real Foodprint 
compares values for each of the brand’s ingredients to conventional counterparts against the 
following metrics: 
1. less carbon in the atmosphere (measured in grams); 
2. gallons of water saved; 
3. improved soil health (measured in square feet); 
4. organic land supported (measured in square feet); and 
5. antibiotics avoided (measured in milligrams). 
 
Darden Restaurants, Inc. (DRI) 
DRI provides its customers across all brands with transparency regarding nutritional content, 
dietary restrictions or allergens. Regarding antibiotics, DRI is committed to purchasing chicken 
raised without the use of medically important antibiotics by 2023. 
Domino’s Pizza Inc. (DPZ) 
DPZ has gradually reduced the amount of sodium in pizza sauce and eliminated MSG, along 
with all artificial food coloring, from products in the US. 100% of the chicken used for menu 
items is free of antibiotics that are medically important to human beings. In addition, 
BHA/BHT, PHOs and trans-fat were removed from core products. DPZ provides its entire 
ingredient list for customers online, for nutritional transparency in addition to allergen 
information. 
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McDonald’s Corporation (MCD) 
MCD offers transparency to customers with its nutritional analysis of menu items to help 
customers balance their diet (via website or mobile app). MCD will be testing plant-based 
menu items through its McPlant rollout (contingent upon consumer demand) in 2021. MCD’s 
Happy Meals offer balanced menu options for kids, including fruits, vegetables and low-fat 
dairy options. MCD has committed to five Global Happy Meal Goals to be achieved by 2022, 
centered on offering balanced meals, transparency, simplified ingredients and marketing. 
Restaurant Brands International Inc. (QSR) 
QSR provides consumers transparency about nutritional, ingredient and allergen information 
within restaurants, online or via mobile device. QSR is aiming to remove artificial sources, 
artificial flavors and artificial preservatives across all brands in the US and Canada by 2021. 
This past September, Burger King announced the removal of colors, flavors and preservatives 
from artificial sources from one of its core products (the Whopper) in all markets across the 
US. 
Starbucks Corporation (SBUX) 
SBUX provides transparency with nutritional information via menu labeling (available in store, 
online or through the mobile app). On menu innovation, SBUX plans to expand its plant-based 
options globally. A digital traceability tool was launched to allow customers to meet farmers, 
roasters and baristas virtually and learn more about regions around the world that produce 
coffee. 
Texas Roadhouse, Inc. (TXRH) 
TXRH provides consumers with gluten-free menu options, as well as detailed nutritional 
information at all restaurants and online.  
The Wendy's Company (WEN) 
WEN offers consumers nutritional and food allergen information in restaurants, online and via 
mobile app. Menu innovation efforts from the Fast Food Done Right initiative have led to the 
testing of plant-based burgers and chicken products in North America and select international 
markets. 
Yum! Brands, Inc. (YUM) 
YUM has a team of nutritionists and food innovation professionals responsible for 
implementing menu nutrition strategy. YUM also conducts market research on trends in 
consumer lifestyles and preferences on a regular basis. Nutritional and allergen information is 
provided on each of its brands’ websites. Nutrition brochures can be found in restaurants with 
menu items tailored toward a balanced diet. YUM has also committed to the following:  
 
to remove artificial colors and flavors and preservatives, where possible, from core food 
ingredients by 2020; 
 
Pizza Hut US plans to remove antibiotics important to human medicine from chicken used 
for wings by 2022;  
 
Taco Bell plans to reduce antibiotics important to human health in its U.S and Canada beef 
supply chain by 25% by 2025; and 
 
by 2030, 50% of menu offerings will be consistent with YUM global nutrition criteria for 
meal options. 
 
 
 
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Focus Topic: Plant-Based Menu Items 
Plant-based menu items have come into greater focus for restaurants in recent years as 
demand has grown for meat and dairy alternatives across different categories (burger, coffee, 
etc.). The current environment, impacted by the COVID-19 pandemic, may also serve as a 
tailwind for plant-based food demand, as consumers reexamine eating habits, particularly as 
they may relate to immunity. With that said, we see long-term growth potential for plant-
based alternatives within our investment universe, particularly limited-service restaurants. 
Factors such as cost effectiveness and availability (versus other ingredient sources), however, 
may be near-term hurdles. And while we acknowledge that recent short-term gains from new 
plant-based product introductions don’t necessarily guarantee long-term demand, shifting 
consumer behaviors as a result of the current environment may provide a larger tailwind than 
previously thought. 
A number of companies within our coverage have made recent efforts to expand their plant-
based menu options, including: 
Chipotle Mexican Grill, Inc. (CMG) 
One of CMG’s key plant-based menu additions—and the brand’s first protein addition in many 
years—occurred in 2014, with its launch of Sofritas (a vegan protein alternative). Later, in 
2019, CMG extended its Lifestyle Bowls menu platform with two “Plant-Powered” options 
(vegan and vegetarian bowls). 
McDonald’s Corporation (MCD) 
In November 2020, MCD announced that it will be introducing a new plant-based food menu 
line (“McPlant”), which will be a flexible platform, based on geography and market demand. 
The first menu item to be introduced as part of the McPlant lineup will be a burger, with other 
menu items (e.g. chicken substitutes and breakfast sandwiches) to potentially follow. 
Restaurant Brands International Inc. (QSR) 
In 2019, Burger King notably expanded its menu with the Impossible Whopper in the US and 
the Rebel Whopper (which features a vegan patty) in certain European markets. In 2019, QSR’s 
Tim Hortons brand had offered Beyond Meat items, though by early 2020 had eliminated them 
from menus. 
Starbucks Corporation (SBUX) 
SBUX continues to focus on and innovate around non-dairy milk alternatives (soy milk, almond 
milk, etc.), and more recently expanded its food menu with the Impossible Breakfast Sandwich 
(US; June 2020) and the Beyond Meat, Cheddar and Egg Breakfast Sandwich (Canada; February 
2020). 
The Wendy's Company (WEN) 
In early 2020, WEN added the plant-based Plantiful Burger to its menu in Canada locations. 
Previously, WEN had tested a black bean burger, as well as a plant-based chicken sandwich, 
and opportunities to add plant-based menu options have been noted in the recent past. 
Yum! Brands, Inc. (YUM):  
KFC’s Beyond Fried Chicken—the first plant-based protein to be offered at a national chicken 
chain in the US—was first introduced last year in Atlanta and has since been tested in select 
markets (e.g. Nashville, Charlotte, Southern California). YUM recently partnered with Beyond 
Meat to add plant-based protein alternatives to the menus of KFC, Pizza Hut and Taco Bell, 
with tests in international markets prior to US introduction. 
 
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SASB Dimension: Human Capital 
In addition to various health and retirement benefits, a number of companies within our 
coverage have begun to offer educational benefits, with a focus on hourly restaurant 
employees. Through various partnerships, some companies are providing employees 
opportunities to earn higher education degrees at limited or no cost. With regard to diversity 
and inclusion, restaurant companies typically offer employee-led resource groups, allowing 
members to build a community through common identity, while also providing opportunities 
for professional development. Some restaurants are holding themselves accountable via 
diversity hiring targets, and in some cases benchmarking executive pay to such targets. 
Finally, some restaurant companies have also donated money to fund or launch initiatives 
aimed at improving inequality in areas such as education, entrepreneurship, etc., as well as 
to support employees experiencing certain hardships. 
Exhibit 37: Number of Employees by Restaurant Company 
 
Source: Company reports, RBC Capital Markets 
 
SASB Issue Category: Labor Practices 
Brinker International, Inc. (EAT) 
EAT offers employees competitive wages (with potential for an annual bonus); healthcare 
coverage; 401(k) matching; paid time off; and other benefits. Employees (who work at least 
24 hours/week for a minimum of 90 days) have access to the Best You EDU educational 
program, which provides bilingual coaching, GED opportunities and Associate’s programs at 
no cost. Additionally, EAT created the Brinker Family Fund to help employees support each 
other when dealing with unexpected challenges such as death, illnesses or natural disasters. 
The voluntary donations have helped more than 100K employees across the US, assisting them 
with ~$1M in funding annually. Employees who complete up to 40 hours of unpaid volunteer 
work are eligible to receive $500 per year through EAT’s Passion Points program. 
Chipotle Mexican Grill, Inc. (CMG)  
CMG offers benefits to crew members and restaurant managers, including but not limited to: 
401(k) matching (after 1 year of employment); paid time off; healthcare; paid breaks; quarterly 
bonuses; and annual bonuses (after 1 year of employment). CMG has also provided all 
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
SBUX
MCD
DRI
CMG
TXRH
EAT
YUM
WEN
DPZ
QSR
Given different sizes and 
business models, the 
number of employees 
varies widely across 
restaurants companies, 
with the vast majority 
hourly employees 
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employees with the opportunity to participate in its debt-free degrees and GED/ESL tuition 
reimbursement programs. Through its partnership with Guild Education, CMG covers 100% of 
upfront tuition costs for degrees in business and technology.  
As it relates to employee turnover, CMG has targeted less than 25% general manager turnover 
by 2020. In 2019, general manager turnover was 32.9%.  
Darden Restaurants, Inc. (DRI) 
DRI offers its employees a wide range of benefits such as: competitive pay; dental and vision 
coverage; wireless phone service discounts; and matching 401k contributions after 1 year of 
employment. The company also provides restaurant management internships to employees 
that are college students pursuing hospitality degrees, along with a Manager in Training 
program for recent college graduates. DRI is also focused on promoting from within the 
organization, noting that: approximately half of DRI managers are promoted from hourly 
positions; ~1,000 team members are promoted into management annually; and 99% of all 
general managers and managing partners are promoted from within DRI. 
Domino’s Pizza Inc. (DPZ) 
Full-time employees of DPZ’s company-operated restaurants are offered a wide range of 
insurance program benefits. DPZ also offers the Blueprint for Wellness program, which focuses 
on the overall health of employees, and those who participate receive credits toward their 
medical plan premiums. DPZ offers an Educational Assistance Program that reimburses a 
portion of tuition expenses for full-time corporate employees with at least one year of service. 
McDonald’s Corporation (MCD) 
MCD employees receive benefits such as: healthcare; 401(k) matching; performance bonuses; 
and tuition assistance (at eligible/approved schools). Archways to Opportunity, MCD’s global 
education program, offers eligible employees system-wide the opportunity to earn a college 
degree or high school diploma. In the US, Archways to Opportunity has awarded $100M in 
high school and college tuition assistance and provided over 54,000 people with access to 
education. MCD’s Hamburger University, meanwhile, provides training for company-owned 
restaurant employees and eligible franchisee employees, consisting of a five-day course 
covering education in management, leadership and company culture. 
Restaurant Brands International Inc. (QSR) 
QSR provides employees with professional development programs, formal education and  
on-demand resources. QSR’s Restaurant Support Centers offer several talent development 
programs, one of which is a leadership development program that provides new graduates the 
opportunity to gain hands-on experience and develop skills in a multi-functional rotational 
program. QSR has committed to following the guidelines provided in their Code of Business 
Ethics and Conduct for their employees and vendors. The Vendor Code guidelines include 
wages, benefits and working hours in compliance with laws, no forced labor, no child labor, 
freedom of association, and a safe working environment.  
Starbucks Corporation (SBUX) 
SBUX offers its employees benefits such as: comprehensive healthcare coverage; 401(k) 
matching; mental health support; and paid time off. In November 2020, media reports noted 
that SBUX will be implementing wage increases of: at least 10% for baristas, supervisors and 
café attendants; at least 11% for partners (i.e. employees) with 3 years of continuous service; 
and at least 5% to starting rates. SBUX has also established the Starbucks College Achievement 
Plan, an online partnership with Arizona State University, which provides all eligible US 
employees (who work an average of 20+ hours/week) an opportunity to earn a bachelor’s 
degree, with full tuition coverage. SBUX’s goal is to graduate 25,000 employees by the end of 
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2025. The company also offers the Starbucks Global Academy, which similarly offers access to 
courses for personal and professional development at no cost. SBUX’s Global Human Rights 
Standard outlines its commitment to human rights due diligence among other commitments. 
Texas Roadhouse, Inc. (TXRH) 
TXRH offers eligible employees (incl. support center staff) benefits such as: dental and vision 
insurance; paid vacation time; an annual bonus; tuition reimbursements up to $5.25k/year, 
100% paid maternity leave, and medical coverage. TXRH also has a restaurant profit sharing 
program in place for its employees, with thousands of employees receiving TXRH stock on a 
quarterly basis. Both managing and market partners receive annual compensation consisting 
of a base salary and a percentage of pre-tax income generated from each restaurant they 
operate. TXRH has also created The Andy’s Outreach Fund, to assist employees that are 
struggling financially due to unexpected challenges such as death, natural disasters, personal 
injury, etc. The fund has helped over 10,000 employees, assisting them with >$15M of funding. 
The Wendy's Company (WEN) 
WEN offers eligible employees benefits such as health care, flexible schedules, and 401(k) 
matching in addition to the Employee Assistance Program, that provides employees and their 
families access to free 24/7 counseling support that is confidential. WEN has a biannual survey 
that allows company-owned restaurant employees to provide confidential feedback about 
their job and work environment. Franchisees are also given access to this survey for a fee. On 
an annual basis, WEN rewards its employees by acknowledging the top 200 general managers 
selected from over 6,700 restaurants worldwide. 
Yum! Brands, Inc. (YUM) 
YUM employees receive a range of including, but not limited to: medical benefits; education 
scholarships; tuition reimbursement. In March 2020, YUM acquired Heartstyles, a company 
that offers hands-on leadership and development programs, in order to strengthen its talent 
base. The company plans on offering the program across all brands, to more than 2,000 
franchisees. YUM’s Leading Culture to Fuel Results program aims to instill leadership qualities 
in all of its employees and franchisees. Within its brand portfolio, Taco Bell has several 
leadership programs in place to develop general managers, while KFC’s Leading With Heart 
program aims to build more authentic work cultures. Additionally, Pizza Hut formed Life 
Unboxed EDU, an educational partnership allowing all employees and their immediate family 
members to earn college degrees with financial support. 
SASB Issue Category: Diversity and Inclusion 
Brinker International, Inc. (EAT) 
EAT has benchmarked diversity within its organization via its Diversity Composite (defined as 
females and underrepresented males, as a % of overall population), which most recently 
reached over 60%. Additionally, EAT offers Communities of Interest, resource groups designed 
to support and promote inclusion for groups such as the LGBTQ community, women and 
multicultural employees. EAT is committed to ongoing inclusion training for all, consisting of 
leadership workshops and/or unconscious bias training. 
Chipotle Mexican Grill, Inc. (CMG) 
CMG’s Culture Committee has established Employee Resource Groups that support the LGBTQ 
community and women. More recently, CMG introduced UNIFIED (United Network of 
Influencers Furthering Inclusion and Ethnic Diversity), a new multicultural ERG, to raise 
diversity and inclusion awareness across the organization. CMG also expanded its debt-free 
degree program to include Paul Quinn College (its first HBCU) and cover 100% of tuition costs 
up front (for business and technology degrees). 
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Darden Restaurants, Inc. (DRI) 
In addition to diversity and inclusion training, DRI aims to seek diverse talent and source from 
diverse supplier communities. ERGs are also available to employees.  
Domino’s Pizza Inc. (DPZ) 
DPZ has expressed its commitment to diversity and inclusion via its Diversity Mission 
Statement, highlighting the contributions of customers, employees and suppliers. In June 
2020, DPZ donated $1M to create a Black Franchise Opportunity Fund and Program, aimed at 
supporting current and future black team members. The goal of the program is to increase the 
number of Black-owned franchisees in DPZ’s system. 
McDonald’s Corporation (MCD) 
MCD’s efforts around diversity and inclusion include creating diverse talent pipelines, 
advancing and retaining diverse talent and its commitment to black future leaders. In 2019, 
MCD launched its Black & Positively Golden campaign, designed to uplift communities and 
provide resources in areas such as education, empowerment and entrepreneurship. In June 
2020, MCD US launched the $500,000 Black & Positively Golden Scholarship Fund to help 
students continue their educations at historically black colleges and universities, despite the 
impact of COVID-19. As an extension to this, MCD recently launched the Black & Positively 
Golden Mentors Program, pairing industry leaders with mentees in the same fields. MCD has, 
through its Better Together: Gender Balance & Diversity strategy (launched in 2019), 
committed to improving the representation of women at all levels, achieving gender equality 
in career advancement and championing the impact of women on the business by 2023. 
Restaurant Brands International Inc. (QSR) 
QSR’s diversity and inclusion commitments are provided on the company website, including 
but not limited to: recurring implicit bias training; zero tolerance policies; and hiring and 
rewarding diverse talent. QSR made a commitment to having at least 50% diverse final round 
candidates for any role. Since making the commitment, QSR has hired diverse candidates for 
>50% of all open positions. 
Starbucks Corporation (SBUX) 
In 2019, SBUX commissioned a Civil Rights Assessment—conducted by Covington & Burling, 
and led by former Attorney General Eric Holder—to evaluate its efforts related to diversity, 
equity and inclusion. SBUX also hired its first Chief Inclusion and Diversity Officer in November 
2019, to guide practices including hiring and leadership across the company. To increase its 
diverse talent base, SBUX committed to introducing an improved applicant tracking system. 
The company is targeting the following female and BIPOC (Black, Indigenous and People of 
Color) partner representation by 2025: 40% representation in retail; 40% representation in 
manufacturing; and 30% representation in corporate. SBUX has also committed to 100% 
gender pay equity globally, and has achieved its goal of 100% for US employees. 
SBUX has also aimed to cultivate inclusion and diversity awareness through its anti-bias 
employee training. In September 2019, SBUX launched To Be Welcoming, a 15-part curriculum 
program designed to address implicit bias, in partnership with Arizona State University. More 
recently in October 2020, SBUX announced that it would mandate anti-bias training for 
executives, and tie executive compensation to increasing minority representation in the 
workforce.  
Texas Roadhouse, Inc. (TXRH) 
TXRH has committed to providing opportunities to all employees and applicants. As a part of 
its open-door culture, employees are encouraged to use their voice and raise any concerns 
that they may have. 
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The Wendy's Company (WEN) 
WEN focuses on diversity and inclusion through ERGs in support of the LGBTQ community, 
women and multicultural employees, all of which provide opportunities for learning, inclusion, 
and career development. In 2019, WEN implemented implicit bias awareness training in its 
hiring programs. In June 2020, WEN also pledged to donate $500K to support social justice, 
youth and education in Black communities, including continued support for the Thurgood 
Marshall College Fund (which provides HBCU students with professional development and 
training opportunities).  
Yum! Brands, Inc. (YUM) 
YUM works to increase diversity and inclusion awareness through efforts such as unconscious 
bias training and employee engagement in ERGs for women, the LGBTQ community and YUM’s 
multicultural community. Top management oversees diversity and inclusion initiatives 
through the Leading Inclusion for Today & Tomorrow (LIFT2) council, held two times per year. 
In 2018, YUM committed to achieving gender parity in leadership roles by 2030. This year, 
YUM launched Unlocking Opportunity Initiative, committing $100M over the next five years to 
address inequality in the areas of equity & inclusion, education and entrepreneurship. 
Focus Topic: COVID-19 
Brinker International, Inc. (EAT) 
EAT pivoted its business model to off-premise in response to the pandemic to protect 
customers and employees. In addition to safety protocols (e.g. requiring employees to wear 
face masks; dining rooms reconfigured to ensure social distancing; disinfectant stations), EAT 
also provided support to employees affected by COVID-19 through an emergency relief fund.  
Chipotle Mexican Grill, Inc. (CMG) 
CMG developed new protocols to keep its employees and customers safe, including, but not 
limited to: hand sanitizer stations; face mask requirements (for employees and guests); 
handwashing procedures (for employees); and staffing of employees dedicated to cleaning 
and sanitizing dining rooms. For employees directly affected by COVID-19, CMG has offered 
pay equal to their upcoming two-week schedule or the average of hours worked. CMG also 
paid discretionary bonuses (equivalent to $9M), to support employees and their families. 
Darden Restaurants, Inc. (DRI) 
DRI brands pivoted to no contact and limited contact curbside pickup at the start of the 
pandemic, to protect its employees and customers. For restaurants operating with indoor 
capacity, employees are required to wear masks, dining rooms were reconfigured to ensure 
proper distancing and there is ongoing sanitation of customer and employee touchpoints. DRI 
furloughed hourly employees unable to work due to dining room closures and introduced a 
three-week emergency pay program. For those contributing to DRI’s medical insurance, 100% 
of weekly medical insurance plan premiums are covered for those unable to work, until they 
are asked back to work. Hourly employees working in restaurants received additional pay to 
help cover unexpected costs resulting from the pandemic, such as transportation and 
childcare. 
Domino’s Pizza Inc. (DPZ) 
DPZ increased pay in the form of regular “Thank You” bonuses for all hourly corporate store 
and supply chain employees, from March through the end of May. Paid sick leave was also 
expanded for full and part-time hourly employees working in the corporate stores and supply 
chain centers. Hourly employees that were required to quarantine were paid, as well. All US 
stores and supply chain centers received thermometers, gloves and masks. DPZ recently 
announced in December 2020, that more than 11,500 hourly employees at company-owned 
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33

stores and supply chains (including drivers), will receive frontline worker bonuses up to $1,200 
(an aggregate commitment of nearly $10M). For its customers, DPZ updated its ordering and 
delivery procedures to reduce the amount of interaction between customers and employees. 
McDonald’s Corporation (MCD) 
MCD implemented new safety measures including: protective barriers; wellness checks; gloves 
and masks. Employees are offered paid sick leave (for those affected by COVID-19), 24/7 
access to the Blue Cross Blue Shield nurses hotline (extended to family) and emotional support 
counseling (extended to family). Additionally, MCD US offered bonuses to corporate-owned 
restaurant employees (equivalent to 10% of pay earned in May) and doubled incentive 
bonuses received in the first quarter (for qualifying restaurant managers). Franchisees have 
also provided compensation programs to employees consisting of appreciation pay and 
bonuses. 
Restaurant Brands International Inc. (QSR) 
QSR enhanced its restaurant cleaning measures across all restaurants and made hand sanitizer 
available to its guests and employees. QSR also deployed thermometers to its restaurants for 
employee use prior to shifts. To support employees, Tim Hortons Canada established a $40M 
CAD support fund to pay employees affected by COVID-19 (for up to 14 days). Burger King US 
and Popeyes US provided paid sick leave (for up to 14 days) to corporate-owned restaurant 
employees affected by COVID-19. In April, QSR also paid bonuses to employees at North 
American corporate stores. To support franchisees, QSR provided cash advances and rebates, 
while also temporarily converting its rent expense structure from fixed to variable for eligible 
locations for Tim Hortons (Canada) and Burger King (US and Canada). Additionally, QSR 
deferred rent payments for up to 45 days. 
Starbucks Corporation (SBUX) 
SBUX has mandated facial coverings and social distancing while visiting store locations. 
Enhanced cleaning measures, Plexiglas shields and bar guards are in place to protect 
employees and customers. Numerous contactless pay methods are available such as drive-
thru, curbside pickup and grab and go. SBUX expanded its catastrophe pay and compensated 
all employees, whether they chose to come to work or not, for a period of time (through May 
3rd). Catastrophe pay was also extended through the balance of May for those diagnosed or 
exposed to the virus. SBUX also offers compensation for two rounds of isolation. Other notable 
benefits include hardship grants and the temporary expansion of Care@Work (childcare 
program) to assist employees dealing with school closures. 
Texas Roadhouse, Inc. (TXRH) 
At the onset of the pandemic, TXRH shifted its service from dine-in to a to-go/curbside 
method. To ensure the safety of its employees and guests, TXRH ordered PPE gear and began 
conducting symptom surveys of employees. In March, TXRH provided its front-line employees 
with a stimulus package, which included early vacation use and paid health insurance 
premiums. Shortly after, TXRH provided its employees another stimulus package in April. CEO 
Kent Taylor also pledged his salary ($800K), as well as another $5M, to an employee relief fund. 
The Wendy's Company (WEN) 
WEN closed dining rooms and shifted focus to delivery and drive-thru service at the onset of 
the pandemic. Enhanced safety protocols were put in place across the system to protect 
customers and employees. For hourly employees of company-owned restaurants, WEN 
implemented a new emergency sick leave policy providing 14 days of paid leave (for  
COVID-19-related matters) and a 10% hourly pay increase over a five week period. WEN also 
applied travel restrictions for company employees and shifted to work-from-home 
arrangements for those working in offices. To support its franchisees, WEN deferred base rent 
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34

payments by 50% (over a 3-month period) and extended payment terms for marketing and 
royalty fees by 45 days (over a 3-month period). 
Yum! Brands, Inc. (YUM) 
YUM’s brands enhanced safety measures by requiring PPE gear and providing thermometers. 
Restaurants across all brands shifted to curbside pickup, contactless delivery and minimum 
drive-thru contact to protect employees and customers. YUM also made available to company-
owned restaurant employees: pay for those required to stay home; a global employee medical 
relief fund to assist those diagnosed with or are caring for someone diagnosed with COVID-19 
(at company and franchised-owned stores); and one-time bonuses for general managers. KFC 
US franchisees also created a grocery assistance fund to support US employees.  
 
 
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SASB Dimension: Business Model & Innovation 
The majority of our companies have animal welfare policies in place, with goals to source 
from suppliers that provide better living conditions for animals. Restaurants with global 
supply chains implement their animal welfare policies as regions outside of the US allow. 
Some restaurants are also supporting their supply chains through funding/donations, as well 
as educational opportunities. 
SASB Issue Category: Supply Chain Management 
Brinker International, Inc. (EAT) 
EAT has mandates to serve sustainably sourced ingredients and works with its suppliers to 
ensure all food ingredients can be traced back to their source.  
EAT is targeting the following goals: 
 
to source exclusively cage-free eggs across supply chain by 2025; 
 
to work with suppliers to implement group housing systems for all pork products by the 
end of 2025; and 
 
to work with suppliers, farmers and animal welfare experts to enhance broiler welfare in 
the following key areas by 2024: responsible broiler breeding; improved living conditions; 
lighting and litter; additional space per bird; and improved humane processing methods. 
 
Chipotle Mexican Grill, Inc. (CMG)  
CMG’s Food With Integrity commitment requires its suppliers to certify that: animals are 
responsibly raised; cows are free of rBGH (Recombinant Bovine Growth Hormone); dairy cows 
are outdoor-raised; and all ingredients are GMO-free. Ingredients are required to be traceable 
in areas such as point of origin, growing, handling and harvesting practices. CMG supports 
farmers in various ways, including a local produce program, commitment to young farmers via 
the Chipotle Cultivate Foundation and efforts to ensure fair compensation.  
CMG has committed to the following goals: 
 
increase both the total pounds and total percentage of organic rice, beans and tortillas 
purchased, by 2021; 
 
increase non-GMO feed given to chickens in their supply chain to 45%, by 2020; and 
 
expand its Local Growers Program beyond produce to include meat, dairy and other 
applicable ingredients, by 2020. 
 
Darden Restaurants, Inc. (DRI) 
DRI has an animal welfare policy committed to the Five Freedoms framework (defined above), 
and also announced its intention to form an external Animal Welfare Advisory Council to 
ensure effectiveness. The policy is overseen by senior executives and implemented by DRI’s 
Animal Welfare Working Group. This group addresses the non-compliance of suppliers and 
measures DRI’s progress against its commitments. Protein suppliers are monitored and require 
third-party audit verification. Non-compliance may result in a temporary suspension or 
termination of business.  
DRI has committed to sourcing only gestation-crate free pork by 2025. 
Domino’s Pizza Inc. (DPZ) 
DPZ is a purchaser of meat (pork, beef and poultry) products, and sources from farmers that 
abide by local, state and federal guidelines and industry best practices. Suppliers outside of 
the US and Canada meet the requirements of the market in which they operate. As a member 
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of the Roundtable on Sustainable Palm Oil (RSPO), DPZ sources 100% certified sustainable 
palm oil product (used for pan pizza dough). 
McDonald’s Corporation (MCD) 
MCD’s animal welfare policy standards are global, and are integrated into the various 
geographic regions in which they operate. As a significant purchaser of beef, MCD has 
committed to supporting the beef industry’s sustainability efforts via its involvement in the 
Global Roundtable of Sustainable Beef (GRSB). Slaughterhouses are also subject to third-party 
verification audits (on an annual basis) to confirm humane practices. To ensure supply chain 
compliance, MCD has a global and market quality systems team that reviews supplier 
performance and affirms whether policies are adhered to on a consistent basis.  
MCD is targeting the following goals: 
 
to phase out the use of gestation stalls (small enclosed pens) for housing pregnant sows 
by 2022; 
 
to source 100% cage-free eggs by 2025; and 
 
to source chickens raised with improved welfare outcomes on or before 2024. 
 
Restaurant Brands International Inc. (QSR) 
QSR has an animal welfare focus in place for its global supply chain, centered on the Five 
Freedoms defined as the following: freedom from hunger and thirst; freedom from discomfort; 
freedom from pain, injury or disease; freedom to express normal behavior; and freedom from 
fear and distress. Globally, all Burger King beef and poultry raw material vendors submit third-
party audits annually (including animal welfare standards).  
QSR is targeting the following goals for Tim Hortons and Burger King restaurants: 
 
transitioning to 100% cage-free eggs globally, with the aim to accomplish this goal in 
Canada, Mexico, Latin America and the United States by 2025; 
 
sourcing pork globally only from vendors that do not use gestation stalls in North America 
by 2022 and in Latin America by 2025; and 
 
for broiler chickens, to make improvements in areas of breed, stocking density and 
environment in Canada and the United States by 2024. 
 
Starbucks Corporation (SBUX) 
SBUX follows the standards of C.A.F.E. Practices, a verification program that measures farms 
against sustainability criteria, to certify that the brand’s coffee ingredients are ethically sourced. 
In addition to this, SBUX launched Cocoa Practices, and partnered with Ethical Tea Partnership, 
to ensure that its tea and cocoa are sustainably sourced. Currently, SBUX uses 99% ethically 
sourced coffee and tea. The company also supports its coffee farmers in various ways, such as 
donating coffee trees, investing in its Global Farmer Fund and offering open source agronomy 
through its nine farmer support centers. The farmer support centers are available to all farmers 
in coffee communities around the world (whether they supply SBUX or not).  
SBUX has committed to the following goals: 
 
100% ethically sourced coffee; 
 
100% ethically sourced cocoa by 2020, for all Starbucks cocoa based beverages; 
 
100% ethically sourced tea by 2020; 
 
to invest $50 million in farmer loans by the end of 2020; and 
 
to provide 100 million coffee trees to farmers by 2025. 
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Texas Roadhouse, Inc. (TXRH) 
TXRH’s beef suppliers follow North American Meat Institute and National Cattlemen’s Beef 
Association’s Beef Quality Assurance animal handling standards. For its poultry, TXRH is 
working toward sourcing from suppliers that offer farm-raised and cage-free chickens. Egg 
suppliers participate in United Egg Producers certification, which measures and audits egg 
suppliers on animal care. 
The Wendy's Company (WEN) 
WEN improved its animal welfare policy with the launch of its Animal Care Standards Program 
(ACSP), an evaluation tool for its ingredients (beef, pork, chicken and eggs) that provides  
in-depth accounting of animal welfare practices within its supply chain. An Animal Welfare 
Council established by WEN evaluates suppliers in order to ensure compliance with its animal 
welfare policy.  
WEN is targeting the following goals: 
 
to have at least 50% of beef supply participating in Progressive Beef (or a similar program) 
by 2021; 
 
to source 100% of pork supply from group housing environments by 2022; and 
 
to ensure that at least 75% of pork supply chain is traced and monitored by 2022. 
 
Yum! Brands, Inc. (YUM) 
YUM’s animal welfare policy standards are centered on the Five Freedoms (defined above) and 
implemented globally, as regions allow. YUM guides supplier production practices through its 
five Sustainable Animal Protein Principles: food safety and quality; animal health and well-
being; environmental stewardship; food security; and responsible suppliers. Suppliers are 
offered third-party consultation and science-based education programs. YUM has begun to 
develop unified auditing systems and policies for production of all meat used (i.e. pork, beef 
and poultry). 
 
 
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Appendix 
Key Company Resources 
Brinker International, Inc. 
Link to sustainability section of company site  
Chipotle Mexican Grill, Inc. 
Link to sustainability section of company website, including sustainability report 
Darden Restaurants, Inc. 
Link to sustainability section of company website  
Domino’s Pizza Inc. 
Link to sustainability report 
McDonald’s Corporation 
Link to sustainability section of company website, including sustainability reports 
Restaurant Brands International Inc. 
Link to sustainability section of company website 
Starbucks Corporation 
Link to sustainability report 
Texas Roadhouse, Inc. 
Link to sustainability report  
The Wendy’s Company 
Link to sustainability report 
Yum! Brands, Inc. 
Link to sustainability section of company website, including sustainability report 
SASB Definitions 
The SASB Materiality Map defines and identifies the following general issue categories, as 
likely to affect operating performance or financial conditions within the restaurants industry:  
 
Energy Management: The category addresses environmental impact associated with 
energy consumption. It addresses the company’s management of energy in 
manufacturing and/or provision of products and services derived from utility providers 
(grid energy) not owned or controlled by the company. More specifically, it includes 
management of energy efficiency and intensity, energy mix, as well as grid reliance. 
Upstream (e.g., suppliers) and downstream (e.g., product use) energy use is not included 
in the scope.  
 
Waste & Wastewater Management: The category addresses a company’s water use, 
water consumption, wastewater generation, and other impacts of operations on water 
resources, which may be influenced by regional differences in the availability and quality 
of and competition for water resources. More specifically, it addresses management 
strategies including, but not limited to, water efficiency, intensity, and recycling. Lastly, 
the category also addresses management of wastewater treatment and discharge, 
including groundwater and aquifer pollution.  
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 
Waste & Hazardous Materials Management: The category addresses environmental 
issues associated with hazardous and non-hazardous waste generated by companies. It 
addresses a company’s management of solid wastes in manufacturing, agriculture, and 
other industrial processes. It covers treatment, handling, storage, disposal, and regulatory 
compliance. The category does not cover emissions to air or wastewater nor does it cover 
waste from end-of life of products, which are addressed in separate categories. 
 
Product Quality & Safety: The category addresses issues involving unintended 
characteristics of products sold or services provided that may create health or safety risks 
to end-users. It addresses a company’s ability to offer manufactured products and/or 
services that meet customer expectations with respect to their health and safety 
characteristics. It includes, but is not limited to, issues involving liability, management of 
recalls and market withdrawals, product testing, and chemicals/content/ingredient 
management in products. 
 
Customer Welfare: The category addresses customer welfare concerns over issues 
including, but not limited to, health and nutrition of foods and beverages, antibiotic use 
in animal production, and management of controlled substances. The category addresses 
the company’s ability to provide customers with manufactured products and services that 
are aligned with societal expectations. It does not include issues directly related to quality 
and safety malfunctions of manufactured products and services, but instead addresses 
qualities inherent to the design and delivery of products and services where customer 
welfare may be in question. The scope of the category also captures companies’ ability to 
prevent counterfeit products. 
 
Labor Practices: The category addresses the company’s ability to uphold commonly 
accepted labor standards in the workplace, including compliance with labor laws and 
internationally accepted norms and standards. This includes, but is not limited to, 
ensuring basic human rights related to child labor, forced or bonded labor, forced or 
bonded labor, exploitative labor, fair wages and overtime pay, and other basic workers’ 
rights. It also includes minimum wage policies and provision of benefits, which may 
influence how a workforce is attracted, retained, and motivated. The category further 
address a company’s relationship with organized labor and freedom of association. 
 
Employee Engagement, Diversity & Inclusion: The category addresses a company’s ability 
to ensure that its culture and hiring and promotion practices embrace the building of a 
diverse and inclusive workforce that reflects the makeup of local talent pools and its 
customer base. It addresses the issue of discriminatory practices on the bases of race, 
gender, ethnicity, religion, sexual orientation, and other factors. 
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Companies mentioned
Brinker International, Inc. (NYSE: EAT US; $53.58; Sector Perform)
Chipotle Mexican Grill, Inc. (NYSE: CMG US; $1,319.12; Sector Perform)
Darden Restaurants, Inc. (NYSE: DRI US; $116.24; Outperform)
Domino's Pizza, Inc. (NYSE: DPZ US; $379.50; Outperform)
McDonald's Corporation (NYSE: MCD US; $210.22; Outperform)
Restaurant Brands International Inc. (NYSE: QSR US; $59.39; Outperform)
Starbucks Corporation (NASDAQ: SBUX US; $103.10; Outperform)
Texas Roadhouse, Inc. (NASDAQ: TXRH US; $74.26; Sector Perform)
The Wendy's Company (NASDAQ: WEN US; $21.38; Sector Perform)
Yum! Brands, Inc. (NYSE: YUM US; $105.82; Sector Perform)
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Distribution of ratings
RBC Capital Markets, Equity Research
As of 31-Dec-2020
Investment Banking
Serv./Past 12 Mos.
Rating
Count
Percent
 
Count
Percent
BUY [Outperform]
828
54.83
 
299
36.11
HOLD [Sector Perform]
615
40.73
 
166
26.99
SELL [Underperform]
67
4.44
 
12
17.91
 
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