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IR/PS CSR Case #08-07

Leveraging Purchase Power to
Preserve Biodiversity:
The Partnership Between the McDonald's
Corporation and Conservation International

By: Lane H. Jost

GRADUATE SCHOOL OF INTERNATIONAL RELATIONS AND PACIFIC STUDIESUNIVERSITY OF CALIFORNIA, SAN DIEGO

Prepared for Professor Peter Gourevitch
Edited by Kristen Parks
Corporate Social Responsibility
Fall 2008

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Table of Contents
Case Overview................................................................................................................... 3
Introduction: Genesis and Motives of the Partnership ................................................. 4
Corporate Social Responsibility at McDonald’s: Ray Kroc’s “Doing the right thing”
Mantra ............................................................................................................................... 6
2001: Sustainable Fisheries .............................................................................................. 8
Formulating a Vision for a Sustainable Global Supply Chain and the Creation of the
Supplier Quality Index (SQI)......................................................................................... 11
Partnership Evaluation: The Benefit to McDonald’s Corporation............................ 13
Partnership Evaluation: The Benefit to Conservation International ........................ 15
Discussion Questions....................................................................................................... 17
References and Interviews ............................................................................................. 18
Appendix A: CI & McDonald’s Partnership Timeline ............................................... 19
Appendix B: McDonald’s responsible fish supply approach...................................... 21
Appendix C: CI Statement on McDonald’s Partnership ............................................ 22

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Case Overview
Beginning in 1990, the iconic fast food franchise empire McDonald’s Corporationentered into a partnership with the Washington, D.C. area-based environmental nonprofit
organization, Conservational International (CI). The relationship marked the first time CI
had entered into an agreement with a corporate partner. Initially, the two parties
collaborated on raising conservation awareness through a series of educational marketing
campaigns aimed at the preservation of the world’s rainforests. The partnership thenadvanced to an analysis of the sustainability of the corporation’s whitefish fish supply
chain. McDonald’s had become increasingly concerned about the future of global
whitefish stocks and turned to CI, a institution dedicated the preservation of biodiversity,
for help in finding sustainable whitefish sources for its Filet-O-Fish sandwich. The
success of this initiative led to the two parties to begin developing a broader strategy tolook at the sustainability of McDonald’s entire global supply chain. The work establisheda set of principles for McDonald’s to initiate dialogue with its suppliers on several
subcategories of corporate social responsibility, including social and environmental
sustainability. As a result of its partnership with CI, McDonald’s has developed its own
supplier monitoring framework called the Supplier Quality Index (SQI), which rates
suppliers of its top five commodities—beef, pork, chicken, buns and potatoes.
This case will chronicle the partnership between CI and McDonald’s from 19902007 with a focus on the partnership’s sustainable supply chain work. The analysis will
evaluate efficacy of leveraging the purchase power of McDonald’s vast business footprint
to advance CI’s mission of preserving biodiversity. The net benefits of the partnership

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appear to favor McDonald’s, which begs the question: what are the long-term strategic
gains to CI’s mission and how can they be proven?
“Addressing today’s most pressing environmental challenges requires solutions for ourcustomers and shareholders that make both economic and business sense. That is what we aredoing through our work with [Conservation International’s] The Center for Environmental
Leadership in Business.”1
William Clay Ford, Jr.
Chairman of the Board and CEO, Ford Motor Company

Introduction: Genesis and Motives of the Partnership
In 1990, Conservation International (CI) decided to make the McDonald’s
Corporation its inaugural corporate partner with the objective of finding initiatives that
could both benefit the environment and improve McDonald’s business. CI’s objective
was to collaborate with the world’s largest food-service provider in order to leverage
McDonald’s considerable international purchase power to preserve global biodiversity. In
2005, McDonald’s spent nearly $18 billion on food and paper products.2 CI’s strategy
with McDonald’s is predicated on scale: $18 billion is a sufficient level of purchasing
power to change business practices in great volume. Rather than taking the traditionalpressure approach in order to induce McDonald’s into reducing its adverse environmental
impacts, CI favored a more integrated, multi-stakeholder approach to address the global
challenges McDonald’s businesses presented. For if McDonald’s decided to insist uponcertain environmental standards from supplies, the suppliers would have to either
comply, or risk losing a chunk of McDonald’s $18 billion business.

12

http://www.celb.org/xp/CELB/ -- December 1, 2008
McDonald’s 2005 Financial Statement

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At the genesis of the partnership, the notion of an environmental group partneringwith a Fortune 500 company (McDonald’s is currently ranked number 106 with 2007
revenues of $23.2 billion3) was uncommon and CI faced early criticism from thenonprofit community. In 1989, McDonald’s was under heavy scrutiny by activist
environmental groups led by Greenpeace for allegedly sourcing beef from fragile
rainforest areas in South America. A large constituency in the environmental movement
at the time considered McDonald’s to be an insouciant instigator of habitat loss in its
pursuit of profits. For CI, an organization dedicated to the conservation of biodiversity
hotspots—many of which are rainforests—partnering with McDonald’s was anunorthodox move without definitive project metrics.
However CI’s partnership with McDonald’s proved to seminal, as theorganization rapidly increased its work with the private sector by creating The Center for
Environmental Leadership in Business (CELB) which carries the following mission: “Toengage the private sector worldwide in creating solutions to critical global environmental
problems in which industry plays a defining role.”4 Indeed, the purchase power
partnership model is a significant instrument CI employs to pursue its mission. Over thecourse of nearly 20 years, McDonald’s and CI have worked on a myriad of projects (seeAppendix A for a project timeline) designed to fundamentally change the way
McDonald’s does business along its supply chain.
It is important to establish from the outset that CI does not portend to be amonitor or verifier of McDonald’s overall operations, but rather an independent, projectbased consulting partner. McDonald’s does not pay a fee for the consulting services

34

http://money.cnn.com/magazines/fortune/fortune500/2008/full_list/101_200.html -- December 3, 2008
http://www.celb.org/xp/CELB/about/ -- December 1, 2008

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provided by CI. Financial compensation from McDonald’s is bundled towards CI’sannual fundraising and the organization is cognizant of ensuring that all partner projects
receive funding from a diverse pool of sources not dominated by McDonald’s.5 To
properly evaluate the credibility of the partnership, it is necessary to examine the context
in which it began. Partnership models between corporate and nonprofit actors presuppose
vested interests, so it is necessary to understand how McDonald’s aligns its corporatesocial responsibility initiatives with its business model. CI’s interests in preserving theenvironment are clear, as its existence—sustainable donation growth—depends on
credibly showing that it protects some of the world’s most threatened resources.
McDonald’s direct interest in preserving the environment is not obviously apparent.
Corporate Social Responsibility at McDonald’s: Ray Kroc’s “Doing the right thing”
MantraWhile skeptics might argue that McDonald’s interest in heralding its relationshipwith CI on its website and Corporate Social Responsibility reports (see Appendix B) is aclear case of green-washing, McDonald’s would counter that the partnership is a naturalextension of the business values of its founder, Ray Kroc. As the first CEO of the
McDonald’s Corporation, who opened its first franchise in Des Plaines, Illinois in 1955,
Kroc believed that McDonald’s success hinged on the quality, consistency and value of
its products. For Kroc, this meant that all suppliers must be held accountable for
ingredient and quality standards.6 It is perhaps fair to say that Kroc was a supply chain
innovator in his day. He made it an operational imperative to regularly inspect suppliers

5

Conversation with John Buchanan, Senior Director Business Practices, Center for Environmental
Leadership in Business, Conservation International – November 7, 2008
6
Ray A. Goldberg and Jessica D. Yagan, “McDonald’s Corporation: Managing a Sustainable Supply
Chain” (Boston: Harvard Business School Case Study, 2007), p. 2.

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and terminate relationships with those that failed to consistently provide high-quality
products in high-volume. Those that did meet Kroc’s standards were rewarded withadditional business.7 The key to McDonald’s corporate strategy has been preserving
quality and value across its supplier relationships. It is under Kroc’s “Doing the rightthing” mantra that McDonald’s bases its corporate social responsibility ethos.
Today, McDonald’s CSR initiative is chiefly responsible for aligning thecompany’s environmental strategy with its business strategy. Just as CI decided in theearly 1990s that working closer with private business could yield larger conservation
feats, McDonald’s believes in a strong company-wide policy environmental policy thatseeks the inclusion of stakeholders from the environmental community.8 Nonetheless,the environmental challenges facing McDonald’s business footprint are staggering. In the
U.S. alone, it is estimated that each of its over 9,000 restaurants create more than 300
pounds of non-recyclable waste a day.9 McDonald’s environmental strategy has reflecteddifferent trends in the environmental movement over time. Beginning in 1989, when theEnvironmental Defense Fund (EDF) approached the company about reducing its solid
waste disposal specifically through the elimination of the polystyrene clamshell
containers, the company responded by shifting to containers that did not containchlorofluorocarbons (CFCs). However, when Burger King—McDonald’s chiefcompetitor—shifted its packaging to a purportedly biodegradable containers, thecompany began taking a more aggressive approach to offering consumers the most

7

Ibid.
Susan Svoboda, “Case A: McDonald’s Environmental Strategy” (Ann Arbor: University of Michigan
Corporate Environmental Management Program, 1995), p. 3.
9Goldberg & Yagan, p. 8.
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environmentally friendly packaging available to protect against losing market share.10
This case illustrates McDonald’s CSR strategy for the environment: engage outside
stakeholders—mainly nonprofits such as CI—where the knowledge gained can add value
to the company’s bottom line. This was certainly the objective McDonald’s carried when
it approached CI about its whitefish supply chain concerns.

2001: Sustainable Fisheries“Working with McDonald’s and its fish suppliers, I have seen first-hand the value of partneringwith purchasers of this size, who can influence markets and send clear signals to governments toimprove the fisheries they manage.”11
Jim Cannon, Formerly with Conservation International
Now Executive Director of the Sustainable Fisheries Partnership, Europe

As previously explained, McDonald’s seeks at the most basic level, a holistic
view of it supply chain, that guarantees the consistent delivery of high-quality products,
safe products in a sustainable manner. In 2000, whitefish suppliers for McDonald’s FiletO-Fish sandwich began raising concerns about the considerable declines they were seeingin their catches. The company’s supply chain management team immediately initiatedconversations with the CSR team in order to assess the situation and determine next
steps. McDonald’s Senior Director of Worldwide Supply Chain Proteins, Gary Johnsonsummarized the problem: “Catches were going down and quotas were being reduced bygovernments, but there were black markets forming. We could not have the fisheries outof control.”12 McDonald’s concern was primarily one of business continuity: how would

10

Svoboda, p. 1.
Quotation taken from McDonald’s 2006 Corporate Social Responsibility Report, p. 27.
12
Goldberg & Yagan, p. 5.
11

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declining whitefish stocks in its supply chain affect the company’s ability to meetcustomer demand for Filet-O-Fish sandwiches? The company turned to CI, anorganization it previously worked with for over a decade, for ways to insure thesustainability of the whitefish supply.
CI was interested in elevating its work with McDonald’s when the company
began initiating conversations about its whitefish concerns. Previously, the partners had
focused on marketing, education and awareness of conservation issues, but had yet to
fundamentally change McDonald’s business activities. Prior the sustainable fisheries
initiative, the two parties had not collaborated on a so-called “Triple Bottom Line”
strategy, where multi-stakeholder engagement—the combination of for profit andnonprofit environmental and social interests can simultaneously deliver environmental,social and financial returns.13 From CI’s perspective, there was a substantial opportunity
to preserve ocean biodiversity by convincing McDonald’s to find alternate sources offish, which would meanwhile guarantee McDonald’s ability to profit of the sandwich.
This would serve one of CI’s priorities in South America, which was to encourage thefishing industry to collaborate on the development of more sustainable aquaculture
practices. On the McDonald’s side, the company was very concerned about the future of
its Filet-O-Fish product and sought CI’s expert council on establishing fish sustainability
guidelines. On the whitefish supply issue, the interests of CI and McDonalds were fairly
well aligned to overcome the collective action problem CI had struggled with: how to
begin convincing the fishing industry to shift more sustainable procurement methods.

13

Andrew Savitz and Karl Weber, The Triple Bottom Line (New York City: Jossey-Bass, 2006).

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The sustainable fishing standards created by CI for McDonald’s included
guidelines for managing fishery quality, fish stock status and marine conservation.14 CI’s
biggest concern with fisheries is the problem of by-catch, or the accidental animals thatare caught in a fishery.15 It is currently estimated that every year, 7.3 metric tons ofmarine life are thrown overboard—8% of all fish caught.16 By 2005, McDonalds began
reporting that it had used CI’s guidelines to shift more than 18,000 metric tons of fishpurchases to more sustainable sources. Beyond writing the guidelines and advising
McDonald’s on methods to find new sources of fish, CI has never “certified”
McDonald’s new fish supply chain. The 18,000 metric ton figure is a metric provided by
McDonald’s a without any verification through a third party. On the sustainable fishery
work, CI stopped consulting with McDonald’s in 2007. The organization decided it had
achieved all that its objective with respect to McDonald’s fishery issue, and did not feelthat continued work on the whitefish issue served its mission. Currently, Jim Cannon, aformer principal who led CI’s fishery work with McDonald’s, has spun off his own NGO
that seeks to replicate the model used with McDonald’s with other major seafoodpurchasers globally.17 However, even though CI and McDonald’s no longer work directly
on fishery matters, the project did spawn a more ambitious initiative: an analysis of thesustainability of McDonald’s overall supply chain, focusing on the top directcommodities.

14

Goldberg & Yagan, p. 6.
http://www.sustainablefishery.org/index.php?option=com_content&task=view&id=58&Itemid=38 –December 4, 2008
16
K. Kelleher, “Discards in the world's marine fisheries: An update,” FAO Fisheries Technical Paper. No.
470 (Rome, FAO), p. 131.
17
Conversation with John Buchanan, CI – November 7, 200815

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Formulating a Vision for a Sustainable Global Supply Chain and the Creation of the
Supplier Quality Index (SQI)
Following the sustainable fisheries initiative, McDonald’s Senior Vice Presidentof Worldwide Supply Chain Frank Muschetto, decided the company needed to a morerobust mechanism to ensure its vision of a fully sustainable global supply chain.18
Muschetto and CI grappled with the following questions in order to proceed with a new
supplier framework:
1. How should McDonald’s prioritize sustainability relative to other supply
chain goals (ensuring food safety and minimizing costs)?
2. How should McDonald’s reconcile different sustainability expectations
and priorities around how the world with the understanding that local
practices sometimes impact the global brand?
3. How should McDonald’s engage suppliers, activists, and otherstakeholders in its sustainable supply chain efforts?19
CI and McDonald’s decided the auditing system should focus on the sustainability of thecompany’s top five sourced commodities: beef, pork, chicken, buns and potatoes.
McDonald’s continued to envision a secure and sustainable global supply chain,
while CI’s was determined to use its credibility garnered from the whitefish project tohave McDonald’s ask its suppliers to become better stewards of water and energy use andwaste emissions. Finding tangible sustainability guidelines for a fishery is a considerablyeasier task than doing it for a vast agricultural supply chain, as there is great deal ofheterogeneity across suppliers and not as much data exists for benchmarking in

18
19

Goldberg & Yagan, p. 1.
Ibid., pp. 1-2.

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agribusiness.20 The full extent of the supply chain vision agreed upon by the two parties
through a memorandum of understanding (MOU) was a complete vertical integration of
the top give commodities from restaurant all the way down to the farm or feedlot. This
meant that CI’s goal was for McDonald’s to not simply work with its beef patty suppliers,
but rather with the entire beef value chain from patty provider to abattoir to rancher. This
was an ambitious auditing framework, which would require a significant and sustainedcommitment from McDonalds. Nonetheless, the company believed it had to moveaggressively in this area and agreed to engage CI on the creation of the supplierscorecard.
CI and McDonald’s piloted a test of the new supplier Environmental Scorecard in2004 with direct suppliers. The Scorecard contained metrics that measured water use,energy consumption, solid waste production and air emissions. By 2006, pilot results
show that most suppliers reduced environmental impacts between 2003 and 2004, andMcDonald’s sought to expand use of the audit system to all direct suppliers in its top ninemarkets (see Appendix F for summary statistics).21 The perceived success the index hadon making suppliers alter their practices to reduce their environmental footprint was so
encouraging to McDonald’s that it decided to expand the standards and create its own
supplier assessment tool call the Supplier Quality Index (SQI). The SQI was created with
input from CI, but has a much more significant focus on social performance than onenvironmental impact. The SQI scoring framework includes the following five metrics,
for which a supplier is rated on a 1 (poor) to 5 (excellent scale):22

20

Conversation with John Buchanan, CI
Goldberg & Yagan, p. 6.
22
McDonald’s 2006 Corporate Social Responsibility Report21

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Supplier understands key areas involving social responsibility andcomplies with all local requirements.

-

Supplier has established plans on how this discipline is managed.

-

Supplier has a clearly defined plan with goals, measured targets and aperson appointed to manage these plans for the organization.

-

Best practices have been established and these are recognized by theirindustry.

-

Supplier has established relationships with outside councils andgroups. Reports have been written. Targets have been attained.

13

The SQI continues to be a part of McDonald’s sustainable supply chain strategy, as it
seeks both influence supplier practices and offer reports on their progress in becoming
more sustainable. CI is continuing to push McDonald’s to fulfill the objective of rating
suppliers at every level of the value chain, but progress deeper down the value has yet tobe fully seen.

Partnership Evaluation: The Benefit to McDonald’s Corporation
It is evident that McDonald’s partnership with CI has benefited the corporationconsiderably in both tangible and intangible ways. When the partners first engaged in theearly 1990s, the environmental community had McDonald’s in their cross hairs for thecompany’s contribution to habitat loss in the Amazon basin, as well as for its use of toxic
packaging. CI has proven to be a reliable partner in helping the company defend against
its PR problems, as well as problem solve on vital supply chain vulnerabilities,
particularly in the case of the whitefish initiative.

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Although accusations of greenwashing are bound to surround McDonald’s
motives in working with CI, there have been myriad examples of the company using its
relationship with CI to respond in a productive manner to such claims. A notable example
is McDonalds’s response to Greenpeace’s 2006 piece, “Eating up the Amazon,” whichattacked company for using soya from deforested Amazonian forests to feed its chickens(the chickens has been sourced from Cargill). The attack was leveled at McDonald’s after
it had been working with CI on both the sustainable fisheries initiative, as well as the
SQI. Instead of fighting Greenpeace’s claims through standard corporate PR,
McDonald’s immediately engaged in public dialogue with the key environmental
stakeholder and successfully forced Cargill to stop feeding its chicken soya fromthreatened rainforests. Although CI was not directly involved in the Greenpeace/Cargill
response, this is a clear example of how the company could use its purchaser power toforce a supplier to adopt more sustainable practices. Greenpeace went on to publicallypraise McDonald’s and the company continues to engage other stakeholders from theenvironmental community on various topics surrounding the impact of its business
operations on the environment. It seems safe to conclude the without first establishing a
comfortable partnership with a key environmental stakeholder such as CI, McDonald’s
would have had neither the facility or the inclination to engage with Greenpeace.
There’s no doubt from reading McDonald’s CSR reports from 2002-2008, thecompany wants the public to believe it is cognizant of the impacts its business operations
have on the environment. The level of sophistication of the language of the reports alongwith constant mentions of partnerships with key stakeholders like CI on behalf ofsustainability certainly look good. And yet, McDonald’s is a business whose core

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competency is selling cheap, consistent fast food in over 118 countries in the world. Its
primary customer market has probably very little concern over what sort ofenvironmental footprint a Filet-O-Fish sandwich has. While the corporation’s partnershipwith CI is not aimed at its average customer, it certainly elevates the company’s image
and even adds value to their business. From the perspective of McDonald’s, and not justfrom the perspective of its CSR initiative, the partnership with CI has been an
unequivocal home run.

Partnership Evaluation: The Benefit to Conservation International
While McDonald’s seem to have gained a great deal from its work with CI at avery low cost, the benefit to CI’s mission seems a great deal more opaque. It is certainly
true that the nonprofit has successfully engaged McDonald’s in ways the company canuse its purchase power to encourage more sustainable business practices across its global
supply chain. Clearly, big business wants to engage with CI following its work with
McDonald’s. Since 1990, when McDonald’s became CI’s first corporate partner, theCenter for Environmental Leadership in Business (CELB) has gone on to work with over
50 corporations23, all the way from Wal-Mart and Ford to the Walt Disney Company andStonyfield Farm. But key questions remain with respect to CI’s work with McDonald’s:

23-

How can the impact of purchase power partnership be measured?

-If it cannot, what is better way to evaluate the effectiveness of the model?

http://www.celb.org/xp/CELB/partners/ -- December 8, 2008

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16-

How can we benchmark 18,000 metric tons of more sustainable fish sources
as seen in the whitefish initiative?

-

Why has McDonald’s taken the SQI in-house?

-

Are the SQI metrics accurate predictors of sustainability? What are the water,energy and waste emission categories benchmarked against?

-

If this is not green-washing, why does CI allow McDonald’s to use its
branding in its marketing collateral: website, CSR reports, etc.?

-

What control does CI have over McDonald’s use of its logo?

This case has endeavored to answer all these questions, but discovered that mostof them are difficult to answer beyond anecdotal and limited quantitative evidence
provided through McDonald’s glossy CSR reports between 2004-2008 (see Appendix E
for 2006 report). While CI also reports on the partnership on its website and in its annual
reports, there are no consistent evaluation tools used to fully understand partnershipoutcomes. Perhaps CI is primarily benefitting by expanding dialogue with the corporate
world, galvanizing business to continues developing environmental or Triple Bottom
Line principles in their operations.
The lines between the nonprofit and private sectors have certainly blurred since
1990, with the CELB being a significant example of this. Nonetheless, until CI can offer
more rigorous outcome evidence, it will remain difficult to gain a precise understandingof the benefit they derive from working with McDonald’s. Perhaps this will be answeredover time as more data becomes available, but for now, CI seems to be content to receive
the positive externalities and spillover its work with McDonald’s has created.

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Discussion Questions
1. What are the pros and cons of the purchase power partnership model employed by
CI with McDonald’s?
2. What do you believe are McDonald’s motives in partnering with CI?
3. What do you believe CI’s motives are in partnering with McDonald’s?
4. Does the partnership pose risks to CI’s credibility?
5. Is CI being transparent about its relationship with McDonald’s?
6. What benchmark data would make the sustainable fishery initiative moreconvincing?
7. Should McDonald’s care more about its environmental impact or the security of
its whitefish supply?
8. Does the fact CI no longer works to directly consult on MCD’s supply chain raisequestions?
9. What benchmark data would make the SQI more convincing?
10. Should conservation groups stick to the “pressure” strategy as opposed topartnerships? Can a combination of the two work?
11. Why does McDonald’s publish such sophisticated CSR reports and employ alarge CSR staff if their primary constituency is indifferent to its environmental
impacts?

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References and Interviews
Goldberg, Ray A. and Jessica D. Yagan. “McDonald’s Corporation: Managing a
Sustainable Supply Chain.” Cambridge: Harvard Business School Case Study,
April 16, 2007.
Kelleher, K. “Discards in the world's marine fisheries: An update,” FAO Fisheries
Technical Paper. No. 470 (Rome, FAO).
Savitz, Andrew and Karl Weber. The Triple Bottom Line. New York City: Jossey-Bass,
2006.
Svoboda, Susan. “Case A: McDonald’s Environmental Strategy.” Ann Arbor: Universityof Michigan Corporate Environmental Management Program: 1995.
Conservation International. 2007 Annual Report. Washington, D.C.
McDonald’s Corporation. 2008 Corporate Responsibility Report. Oak Brook, Illinois.
McDonald’s Corporation. 2006 Worldwide Corporate Responsibility Report. Oak Brook,
Illinois.
McDonald’s Corporation. 2004 Worldwide Corporate Social Responsibility Report. Oak
Brook, Illinois.
McDonald’s Corporation. 2002 Worldwide Corporate Social Responsibility Report. Oak
Brook, Illinois.
Conversation with John Buchanan, Senior Director, Business Practices, The Center for
Environmental Leadership in Business (CELB). Conservation International:
November 7, 2008.

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19

Appendix A: CI & McDonald’s Partnership Timeline· In June 2008, McDonald's announced its support of CI’s program to protect wild pandas
one of the Earth’s most threatened species. This latest initiative builds on the 20-year
partnership between the two organizations to create positive environmental solutions forour planet.
· In May 2008, to celebrate the debut of McDonald's "Kung Fu Panda" Happy Meal
promotion, McDonald's, DreamWorks Animation SKG, Inc. and CI created Panda-mania
worldwide by inviting kids and families to a one-of-a-kind "Kung Fu Panda" party. R· In 2007, McDonald’s and CI collaborated on the launch of “The Bee Movie” Happy
Meal. CI helped develop an online feature for the Meals, called “Bee Good to the Planet”
pledge, which encourages children to become more active with environmental issues andget outside to enjoy what their local environments have to offer. In addition, McDonald’s
generously pledged funds to go directly to assisting crucial bee habitat in Mexico andSouth Africa that will help to ensure that these important species will continue topollinate for a long time to come.
· In 2001, CI and McDonald’s launched an initiative to examine how McDonald’s, withmore than 30,000 restaurants in 120 countries, could encourage use of best practices
throughout its global supply chains by building incentives for improved environmental
stewardship into supply chain management systems. McDonald’s and CI joint work inthis area focused on fisheries and agricultural-based food supply chains.
· McDonald's is a founding member of CI's Business & Biodiversity Council (BBC), a
community of companies committed to leveraging their business experience andresources to conserve biodiversity.
· From 1991-1997 McDonald's, Texas A&M, Clemson University and CI partnered on
the Amistad Conservation and Development Initiative. The project worked directly withsmall farming communities in Costa Rica and Panama on issues including forestry,
agriculture, soil conservation, environmental education and community development.
· In 1990, McDonald's supported a joint project by CI and Kurtis Productions to produce
a video entitled The Rainforest Imperative. The video aired on the A&E Network over a
two-year period. A 20-minute version of the video continues to be used as part of theRain Forest Teaching Kit for teachers which McDonald's distributes free on its website
through the companies Educational Resource Center.

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20· McDonald's and CI designed and released the Discover the Rain Forest Happy Meals in
1991. A portion of each sale went directly to support rainforest conservation efforts.

Source: Conservation International

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Appendix B: McDonald’s responsible fish supply approach
The initial environmental guidelines on fish sourcing that we are developing andbeginning to implement evaluate whitefish fisheries according to three criteria important
to ensuring long-term fishery health: the quality fisheries management, the status of fishstocks in the fishery and conservation of the marine environment and biodiversity.

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22

Appendix C: CI Statement on McDonald’s Partnership“At Conservation International, we are
excited that around the world, a newgeneration of leadership is recognizing
the implications of current
environmental trends and beginning totake action to protect biological diversity
and natural resources. Current trends are
dire. Twenty-four percent of all
mammals appear on The World
Conservation Union’s (IUCN) red list of
threatened species, and within 45 years,
the percentage of people living in waterscarce regions will grow from 8% to40%. But solutions do exist. And what isneeded are leaders to encourage theirspread. That is why we’re thrilled towork with McDonald’s. In the course of
our 13-year partnership, we’ve seen
McDonald’s recognize the business
importance of a healthy environment,
both to sustain the trust of customers andto sustain yields of high-quality raw
materials for their products. Today, weare collaborating with McDonald’s andits suppliers to develop procurement
strategies that will signal interest inenvironmentally - sound techniques andcreate incentives for suppliers to adopt
environmental measures that reduce
impacts on natural resources and create
benefits for biodiversity conservation.
These strategies will influence behavior
within McDonald’s own supply chain,
but we also believe they will help provethat conservation and profitability arecompatible - and that this will create
ripple effects far beyond the
McDonald’s System. While steps toprotect the environment makecompelling long-term sense forbusinesses, competing short-term
priorities and the specter of added cost
can complicate progress. That is why
practical solutions are so important. For
example, we are working with
McDonald’s and their fish suppliers to
identify ways they can help strengthen
fisheries management and marine
conservation in the fisheries from which
they source. This work will help toprotect long-term fish supplies andimprove the health of the surrounding
marine ecosystems and biodiversity. The
environmental solutions McDonald’s
seeks to encourage are not decided by
McDonald’s alone. These are systemic
problems requiring the collaboration ofmany parties to solve. We hope more
food and agricultural companies begin toact similarly, and we recognize that
McDonald’s actions and example are
significant steps that will help pave theway for broader cooperation.”
Conservation International and
McDonald’s Corporation first partneredmore than a decade ago to produce avideo and educational Happy Meal about
rainforest conservation. Today, thepartnership aims to develop anddemonstrate ways to incorporate social
responsibility and conservation criteria
into McDonald’s food supply chain.
Further information about Conservation
International is available atwww.conservation.org.

Copyright 2008. No quotation or citation without attribution.
Glenn Prickett, Senior Vice President, Conservation International
Executive Director The Center for Environmental Leadership in Business

Source: McDonald’s 2004 Worldwide Corporate Social Responsibility Report23