McDonald’s Water Stewardship Initiative
May 2015
15.915 Sustainability Lab
Charleen Tong – MBA ‘16
Guillermo Estévez de Cominges – Sloan Fellow ‘15
Kevin Chen – MBA ‘16
Sergio Gonzalez – TPP ‘16
Table of Contents
1. Executive Summary
1.1. Problem statement and Overview
1.2. Objectives
1.3. Summary of Recommendations
2. Introduction
2.1. Water Systems Framework
2.2. The Business Case for Water Stewardship
2.3. Cross sectoral initiatives and consortia on Water Stewardship
3. Analysis of Best Practices in Corporate Water Strategies
3.1. Research Process
3.2. Main conclusions on best practices
4. Benchmarking
4.1. Research Process
4.2. Companies selected for benchmarking analysis
4.3. Main conclusions of benchmarking
5. Assessing Water Impact in McDonald’s Sourcing
5.1. Beef
5.1.1. Beef Metrics
5.1.2. Supplier Action
5.1.3. Discussion
5.2. Coffee
5.2.1. Approach
5.2.2. Findings
6. Recommendations and Conclusions
2 1. Executive Summary
1.1 Overview and Problem Statement
As one of the world’s largest and leading global foodservice retailers with more than
36,000 locations in more than 100 countries, serving 69 million customers each day,
McDonald’s is making effort to improve its sustainability initiatives. With a long-term
vision of sourcing all food and packaging sustainably, McDonald’s sustainable
sourcing focuses on ethics, environmental responsibility and economic viability. In
2009 McDonald’s established a Sustainable Land Management Commitment and in
2013, expanded that commitment to the raw material production level, giving rise to
the McDonald’s Five Pillars of sustainable packaging, developing and operating the
most environmentally efficient restaurants, providing balanced choices,
commitment to their people, and giving back to community. In spite of the
advances, especially in light of the fact that water scarcity and quality issues will
dramatically increase in many parts of the world, McDonald’s needs to raise
awareness on the importance of water stewardship.
1.2 Objectives
Despite the impressive work done in terms of sustainability and sourcing, McDonald’s
is aware of the limited attention water is receiving in the current framework. The
objective of this project is to understand how McDonald’s existing sustainable
sourcing strategies and market solutions do and do not address water stewardship.
1.3 Mehtodology and Approach
We adopted a top-down approach, starting by laying an informational foundation
for the way the team views the global water system. We then moved on to assess
what public and private institutions are doing globally, in the form of water
stewardship guidelines and roundtables. From there, we conducted research on
different corporations in the private sector to identify best practices and actions
taken. Then a benchmarking exercise was conducted to identify gaps between
McDonald’s current water strategy and that of the big industry players. Moving on to
assess McDonald’s in its own right, the team chose to focus on one commodity in
both the animal (beef) and plant (coffee) categories.
1.4 Summary of Recommendations
Based on our research and findings, we recommend the following:
1) Defining the motivations for incorporating water stewardship into the
overarching corporate sustainability strategy, and using specific
recommended tools to assess its water risk and inform its disclosures.
2) Focus on raising awareness internally and externally on the importance of
water, starting with beef and coffee. McDonald’s should commit to a
performance-based stated goal to either reduce water consumption or
increase efficiency, and should also consider developing its own basic
standards for beef and coffee supply.
3) Translate into their strategies best practices that are being promoted by other
leading companies in their respective industries.
3 2. Introduction
The world faces growing scarcity of freshwater quantity and quality. The
consequences are affecting both ecological and manmade systems, resulting in
greater stress on the vitality of both systems. Necessity dictates that businesses can
no longer be ignorant nor negligent of water-related issues. On a global level, 70% of
human water use goes to cultivating crops and rearing livestock, 20% goes to
industry and energy sectors, and the last 10% is consumed by households.1,2 With
nearly 90% of total human water consumption therefore being driven by business, it is
time for water stewardship to take a leading role in business sustainability strategy.
With the food industry requiring the largest proportion of human water use through
their reliance on agricultural supply chains, they will be most hard-pressed as water
scarcity increases, and should therefore lead the business water stewardship effort
worldwide. What follows in this report is how large food corporations should
approach water stewardship and incorporate its related practices into the core of
the firms’ sustainability strategies.
2.1 Water Systems Framework
First, it is important to understand how freshwater scarcity comes about on a
scientific, water life-cycle basis. Water first formed on Earth 4.6 billion years ago, and
its total stock has circulated, contracted, and expanded throughout time.3 It is an
essential part of life on Earth, and takes on a myriad of forms from seawater, to ice
caps, to clouds. Figure 1 below by the U.S. Geological Survey (USGS) details this
cyclical movement pattern and phase transformation on a high-level basis.
Figure 1 – The Water Cycle4
1 Molden, David (ed) (2007), Water for food – Water for life: A Comprehensive Assessment of Water Management in
Agriculture, International Water Management Institute, Colombo and Earthscan, London.
2 World Water Assessment Programme (2009), The United Nations World Water Development Report 3: Water in a
Changing World, UNESCO, Paris and Earthscan, London.
3 Adam R. Sarafian, Sune G. Nielsen, Horst R. Marschall, Francis M. McCubbin, and Brian D. Monteleone. Early
accretion of water in the inner solar system from a carbonaceous chondrite–like source. Science 31 October 2014:
346 (6209), 623-626.
4 Illustration by John M. Evans and Howard Perlman, USGS.
4 What is most relevant to society and the natural environment is the roughly 3/4th of
1% of total water that is not saline, and is usable in the form of aquifers, lakes, rivers,
and soil moisture.5 This extremely small fraction of Earth’s total water is responsible for
sustaining all terrestrial life, and is the same very small fraction human civilization
draws upon for agricultural, industrial, commercial, and residential uses, barring
energy-intensive desalination.
How does the 70% average of total human water use in agriculture fit into this
picture? Figure 1 details a “closed-loop” system where a water molecule’s entire
journey can be explained endogenously. In this case, the system is a typical
watershed, or an area where all received precipitation eventually flows into some
common outlet. For perspective, there are 2,110 watersheds in the continental U.S.,
and they come in all shapes and sizes.6 Depending on which watershed a given farm
sits on, it will draw from the available water in that watershed (groundwater, lake,
river, or manmade reservoirs), or adjacent watersheds if water is being pumped or
canaled across watershed boundaries (e.g. California aqueduct).
The more freshwater that a farm draws from the watershed (i.e. blue water), the less
water becomes available from whatever source(s) it came from. This results in
freshwater quantity scarcity until it is recharged through natural or manmade means.
The used water is then either incorporated into living material (i.e. green water),
disposed into a canal or sewer system (i.e. grey water), or filtered back into the
watershed by groundwater infiltration or surface water runoff (i.e. blue/grey water).
This ultimately results in freshwater quality scarcity, since most water returns to the
watershed without treatment or with insufficient treatment. Figure 2 is a rough
diagram that depicts this process.
Figure 2 – Agricultural Water Use
Depending on where the agriculture is taking place, watersheds will exhibit more or
less freshwater quantity and quality risk than others. The type of crops being grown,
5 Igor Shiklomanov's chapter "World fresh water resources" in Peter H. Gleick, editor, 1993, Water in Crisis: A Guide to
the World's Fresh Water Resources Oxford University Press, New York.
6 U.S. Environmental Protection Agency. “What is a Watershed?” Web. Accessed April, 2015.
<http://water.epa.gov/type/watersheds/whatis.cfm>.
5 the amount of crops being grown on a given area, the source of water being drawn
upon, the replenishment rate of those sources, and the level of wastewater
treatment will determine a watershed’s specific level of water risk. These varying
levels of geographic water risk all have important social and economic ramifications,
making water use in agriculture an important consideration for many stakeholders.
This leads to real economic implications for companies, and a business case to be
made for water stewardship practices. Figure 3 below maps the current water
stressed regions of the U.S., where it can be noted that major cities like New York, DC,
Boston, Philadelphia, Los Angeles, San Francisco, Chicago, Houston, and Miami all
reside in areas of high water stress.
Figure 3 – U.S. Baseline Water Stress, WRI Aqueduct Tool7
2.2 The Business Case for Water Stewardship
What water risk means for the bottom-line is multifold. It can be understood by
breaking down water risk into its relevant business related risks, which include:
Physical risks: any disruptions in water quantity or quality that directly inhibit or limit
business operations (i.e. irrigation, cooling, processing, cleaning), or directly increase
its cost as the cost of water increases.
Reputational risks: any water-related concerns consumers or other powerful
stakeholders might hold against a business brand, and lead them to potentially
boycott or attack the business and its products.
Regulatory risks: any changes in water rights, water quality standards, or water
pricing that can potentially remove the right for a business to operate, or increase its
water-related costs.
7 World Resources Institute (WRI), The Aqueduct Water Risk Atlas. Web. Accessed April, 2015.
6 Legal risks: follow-on to regulatory risks in that changes in regulation can expose or
create potential pollution or water use liability with failure to comply with more
stringent water quality and quota standards.
All four of these risks threaten business’ bottom-lines. A survey of 51 companies—6 of
which represented the food industry—conducted by Pacific Institute and VOX
Global, all identified the above four as top priority risks. The results are displayed in
Figure 4 below. With regards to the food industry, a separate study done by Ceres
found that out of 11 food companies surveyed in 2011, all 11 disclosed physical risks,
1 reported reputational risk, 8 reported regulatory risk, and 6 reported legal risk.8
Physical risk is understandably at the top of most food company worries since water
scarcity will either limit food supply production or increase food supply prices. One
has to look no further than the current draught in California, and its estimated $5
billion in lost revenue from farming and related industries in 2014, to realize this large
concern9.
Ultimately, with 60% of companies believing water challenges will affect business
growth and profitability in the next five years, a large consensus has formed around
the importance of water stewardship, and led to the emergence of a variety of
business roundtables on the topic.10
Figure 4 – Water-Related Business Risks11
8 Berkley Adrio. Clearing the Waters: A Review of Corporate Water Risk Disclosure in SEC Filings. Ceres. June, 2012.
Web. Accessed April, 2015. <https://www.ceres.org/resources/reports/clearing-the-waters-a-review-of-corporatewater-risk-disclosure-in-sec-filings/view>.
9 Oldham, J. and M.B. Marois. “California Drought Impact Seen Spreading From Fires to Food Cost.”
Businessweek.com. February 7, 2014. Web. Accessed April, 2015. <http://www.businessweek.com/news/2014-0207/california-drought-impact-seen-spreading-from- fires-to-food-cost>.
10 Peter Schulte, Ibid.
11 Peter Schulte, Jason Morrison, Stefanie Woodward,
7 2.3 Business Roundtables on Water Stewardship
Given the urgency and necessity for businesses to consider water stewardship, and
the fact that the U.S. Securities and Exchange Commission (SEC) has not intervened
with water reporting requirements, there has been an explosion in corporate water
initiatives developing voluntary water reporting frameworks. CEO-led WBCSD in their
most recent Water for Business report compared and contrasted 18 such water
initiatives (see report for full list).12 The value of these roundtables comes from the
common tools and guidance they provide on water-related reporting, supply chain
engagement, gap analysis, and business risk management. They all help companies
frame, account, and report water-specific metrics from their direct operations and
extended supply chain. Figure 5 below shows an illustrative representation of the five
main activities addressed by all of the initiatives (some focus on a few activities more
than others).
Figure 5 – Five Stages of Corporate Water Management13
With a large number of business roundtables sharing a common vision of corporate
water stewardship, there is naturally significant overlap amongst the initiatives as
they each cross-reference and support one another. There are, however, a few
leading initiatives that have garnered the most corporate attention and buy-in. They
are the best roundtables to consider first in the corporate water stewardship space:
Jen Anderson, Tony Calandro, Sarah Howell, and Leah Stonefeld. Bridging Action with Concern: Are U.S. Companies
Prepared for Looming Water Challenges? Pacific Institute and VOX Global. April, 2014. Web. Accessed April, 2015.
<http://pacinst.org/wp-content/uploads/sites/21/2014/04/bridging-concern-with-action.pdf>.
12 World Business Council for Sustainable Development (WBCSD), International Union for Conservation of Nature
(IUCN), SustainAbility. Water for Business. Version Three. August, 2012. Web. Accessed April, 2015.
<http://www.wbcsd.org/waterforbusiness3.aspx>.
13
WBCSD, Ibid. 8 CEO Water Mandate: a special initiative of the UN Secretary-General and the UN
Global Compact providing a multi-stakeholder platform for the development,
implementation, and disclosure of corporate water sustainability policies and
practices. Endorsing CEOs acknowledge they have a responsibility to make waterresources management a priority, and to work with governments, UN agencies, nongovernmental organizations, and other stakeholders to address this global water
challenge. The mandate covers six elements: direct operations, supply chain and
watershed management, collective action, public policy, community engagement,
and transparency.14
CDP Water Disclosure: a water-specific CDP program designed to guide
corporations through growing water insecurity challenges while helping investors and
companies with large supply chains better understand how their portfolio companies
and suppliers are addressing their water impacts. They survey thousands of
companies to disclose information relating to water, and have a latest 2014 report
written on behalf of 573 investors who collectively manage more than US$60 trillion,
and 174 multinational companies with a combined procurement spend of US$126
billion.15
Alliance for Water Stewardship: a multi-stakeholder organization dedicated to
enhancing water stewardship capacity, and guiding, incentivizing and
differentiating responsible water use. AWS employs three mutually reinforcing
programs to drive improved water stewardship: a standard and verification system,
membership of a multi-stakeholder association, and training. AWS was founded by
30 leading organizations from around the globe who are committed to the principles
of water stewardship, and launched a standard in April 2014.16
These 3 initiatives and the 15 others analyzed by the WBCSD almost all have tools
complimenting the guiding frameworks, and are particularly useful for gap analysis,
increasing transparency, incorporating findings into sustainability reports, and
demonstrating thoughtful concern on water stewardship. [In Section 6 below we will
recommend a list of most helpful tools.]
3. Analysis of Best Practices in Corporate Water Strategies
After laying down a foundation for how the team thought about the water system as
a whole, we narrowed the focus to identify some practices that leading corporations
are performing to deal with water stewardship. In order to do that, we did not
confine ourselves to the Food industry, since some creative solutions and best
practices can be shared across sectors. Nonetheless, the Food and Beverage
industry is the major consumer of water. To understand the magnitude of water use in
these sectors, Nestle, The Coca-Cola Company, Anheuser Busch (prior to the
acquisition by Inbev) and Danone used about 575 billion liters of water, which is
equivalent to the “basic water needs of the global population”.17 Following this idea,
14 The CEO Water Mandate. An Initiative by Business Leaders in Partnership with the International Community. United
Nations. New York. January, 2011. Web. Accessed April, 2015.
<http://ceowatermandate.org/files/Ceo_water_mandate.pdf>.
15 Carbon Disclosure Project (CDP). From Water Risk to Value Creation. CDP Global Water Report, 2014. Web.
Accessed April, 2015. <https://www.cdp.net/CDPResults/CDP-Global-Water-Report-2014.pdf>.
16 Alliance for Water Stewardship (AWS). The AWS International Water Stewardship Standard. Version 1.0.
International Standard Development Committee. April 8th, 2014. Web. Accessed April, 2015.
17 “Corporate Water Strategies”, William Sarni. Source: JP Morgan, 2008.
9 the estimate of total annual water use by the five largest Food and Beverage
companies (in 2008, Coca Cola, Nestle, Unilever, Kraft and Danone) was 0.1% of
global total industrial use, or 0.014% of total global water use.
We reviewed the literature and reports already mentioned in this paper regarding
the mechanisms and ideas generated by leading companies in their water
stewardship as a key part of their sustainability strategies.
3.1 Research Process
The process followed these steps:
• Identification of leading companies in water stewardship in different industries.
• Analysis of the most important actions and strategies that distinguished them as
leaders.
• Elaboration of a table (please, see Appendix 2) summarizing the companies,
sectors, strategies, and specific actions carried out to perform them. Finally, we
introduced the source that recognized these companies as best practices.
Table 1 below gathers the names of the companies identified as best practices in
water stewardship for our analysis:
Campbell Soups
Nestle SA
Unliever
Diageo Plc
IBM
Marks & Spencer Group plc
Nike, Inc
The Coca Cola Company
Royal Ducth Shell Australia
Inditex
COMPANY NAME
Anglo American
Colgate-­‐Palmolive
Ford
GE
PG&E
Taiwan Semiconductor Manufacturing
Miller Coors
SAB Miller
Molson Coors
PepsiCo
Table 1: Best Water Corporate Practices
A quick review of the names of the companies in the table allows us to infer that
most, if not all of them, are in some way leaders in their respective industries. These
companies enjoy strong reputations and brands, and have been very successful. This
simple reflection can be more thoroughly understood by realizing that: (i) these
companies consider themselves as leaders, and as a result feel the necessity to be
outstanding in all their activities, being an example of best practices in the industry.
In this case, with relation to water stewardship; (ii) these large companies have been
historically profitable. They have been able to allocate resources to work on water
stewardship and other aspects, achieving a leading position and skilled employees
to develop best practices; and (iii) as a result of their size and global importance,
they need to protect their reputation by avoiding potential problems which may
affect their image.
10 3.2. Implications of Analysis of Best Practices
There are many examples of companies expending great effort to improve their
water stewardship. In the table included in the Appendix we gather some of the
actions performed and the areas where companies can work and improve their
impact in water.
We have identified several similarities and common behaviours amongst companies
developing the best practices. They include:
•
Being proactive: The companies that are developing best practices in the market
are those ones proactively looking to solve water related problems. They are not
waiting for problems to arise, but are taking preventative measures.
•
Use In-house teams: Having internal resources focused on solving these problems
is key, to maximise impact and collaboration with other players and stakeholders.
They can also prioritize their goals, being more efficient in the tasks performed.
•
Partnerships and Alliances: This is essential, not only to help identify problems, but
also to learn and complement the existent knowledge to develop global and
wider solutions and benefit a bigger group of stakeholders. Corporations can
teach NGOs or governments about the business and problems, and NGOs and
governments can identify situations that are beyond corporations’ control.
•
Leadership: Most of the companies identified are or have been leaders in their
respective industries. A leading company should be an example in the sector.
Taking leadership to develop a better framework where other companies can
apply is key to move the industry in a desired direction.
•
Brand and reputation protection: All of the companies identified have a high
valuable brand and reputation to protect. Strategies targeting water problems
are also helping the companies to mitigate risks in the future, so investing in
solving future water stress problems results in a win-win situation.
•
Involvement of employees: In most cases the success of any strategy requires the
commitment of the employees. Even though in many industries the employees
play a tiny part of the impact on water, as a DNA of a corporation it is important
to be sensitive regarding water usage, and that DNA can help to transfer
solutions and actions to other more relevant tasks (for example, by convincing
suppliers about the way to operate).
•
Power: All these companies have strong bargaining power due to their size and
market position. This is important to mobilise industries as a collectective whole to
implement best practices. At the same time, they can promote the existence of
regulations to solve problems.
In summary, the best practices are diverse and creative, depending on the industry
and culture of the companies. The attitude of a company is a critical component for
water stewardship since it translates leadership to other social and environmental
initiatives as well. The analysis shows that leaders in this field have very common
patterns, and forge the path for other companies to follow.
11 4. Benchmarking: Food Industry Players’ Actions
Following the approach defined in the previous section, we move on to analyze the
water stewardship actions by the core players in the Food industry (including some
beverage companies). We performed this industry analysis for several major food
companies. This helped us understand how sophisticated the industry as a whole is
with regards to water stewardship, and get a reference with which to compare other
companies in the space as well.
4.1 Research Process
The analysis consisted of the following steps:
• Selection of companies considered relevant in the industry, which could be
defined as competitors with similar product offerings.
• Analysis of corporate websites and public information of the companies,
searching for data related to water actions from a sustainability viewpoint and
their evolution over time. Using only publicly available information published by
the companies online not only informs us of the water strategies followed by the
companies, but also the type of information that the companies share publicy
with their stakeholders. It also reveals the aspects of their sustainability strategies
that are receiving less attention.
Definition of a few categories to better understand the level of water commitment
by the companies, which were easy to identify in the website and in public reports.
The categories we considered were the following: (i) Existence and publication of a
Corporate Social Responsibility (“CSR”) Report or similar; (ii) Most important
Environmental aspects considered in CSR; (iii) Existence of specific sections related to
water; (iv) Specific name of the section related to water (e.g., “Master Plan in
Water”) (v) Areas of focus of the specific plans and actions of the companies related
to water; (vi) Brief description of the principal actions where the company focusses
the efforts in water (e.g., definition of goals to reduce water, agreements with other
stakeholders, etc.) (vii) Existence of partnerships or collaboration agreements with
others (e.g., NGOs- to develop the plans related to water) (viii) Overall opinion from
the group regarding the level of disclosure and actions performed by each
company based on the public information analysed; (ix) Evaluation of global
environmental aspects in CSR Hub18 tool. We defined 3 levels of commitment:
Negative, Neutral and Positive. Although this is a subjective opinion based only on
our impression of the company websites and publicly available information, it is still a
valuable proxy and qualitative non-judgment on the level of water commitment and
transparency shown by the companies. As potential customers and stakeholders of
these companies, we believe that our opinion in this regard is relevant in assessing
the image projected by each brand.
We prepared a summary table (please, see Appendix 3) gathering our findings in the
analysis for each one of the companies, including information in each of the
categories defined above.
18
Sustainability and Corporate Social Responsibility Ratings on over 14,411 of the world’s largest public and private companies from 128 countries. 12 4.2 Companies selected for the benchmarking analysis
Next, table 2 shows the name of the 16 companies selected for the analysis:
Companies analyzed
McDonald's Corp.
Wendy's International, Inc.
Burger King
Jollibee
Tim Hortons
Jamba juice
Starbucks Corporation
Shake Shack
Yum! Brands, Inc. (Pizza Hut, Taco Bell, OSI Restaurant Partners, LLC
Subway
Smash Burger
Costa Coffee
Darden Restaurants, Inc.
Domino
Autogrill S.p.A.
Table 2: Companies selected for the benchmarking analysis
The first task in the analysis was to select companies to be analyzed and the criteria
chosen to do it. In this industry, where restaurants sell a wide range of products, these
companies can be considered competitors if we understand that, for example, a
person buying a coffee at a McDonalds restaurant would probably also buy a
coffee at a Starbucks restaurant. Even though we may think that these two
restaurants are different, they are competitors for some key products (like coffee).
Our idea is to compare apples to apples so that our opinions—negative, neutral or
positive—make objective sense.19
We selected well-known brands with a large presence in their markets. Most of them
are multinational corporations large enough to have significant impact on water
sustainability, whose size necessitates protection of their reputation and brand value.
This was an important critieria for us to find reliable and accurate data in their
websites (the information analyzed must be precise and have high levels of
accuracy in order to be credible). The size and profitability of the companies was
also important to better understand the internal resources—time, human, and
economic—that could be allocated to sustainability in general, and to water
stewardship specifically.
The companies selected ranged from fast food restaurants to coffee and juice
shops. For all of them water plays an important role in their business supply chain,
operations, and product offerings. On the one hand, fast food restaurants such as
McDonalds and Burger King were chosen due to the importance of water in their
global supply chain (considering for example beef and irrigation in agriculture,20 or
coffee farming); and on the other hand, coffee and juice shops were chosen for the
importance of water not only in agriculture to grow crops, but also as the most
important component of the final product to be sold.
4.3 Main conclusions of benchmarking
After the benchmarking analysis, we found that in general water has not been
prioritised within the sustainability strategy of most of the companies analyzed. In
some of them, even CSR seems to be irrelevant (for example, while McDonalds has a
section on its website related to sustainability and provides complete reports such as
In this respect, it is obviously quite difficult to find companies so similar in terms of organization, products, strategy,
size, international presence, etc.
20 Global largest water use.
19
13 the Corporate Social Responsibility and Sustainability Report or the Global Best of
Green 2014, Burger King merely publishes some very general principles in
sustainability without explaining concrete actions and performance).
The general impression is that the companies analyzed have focused more on other
areas of sustainability, such as public health issues, and have only recently started to
think about water as a key part of their strategy, just beginning to define some goals
and specific commitments around water stewardship. Although only 6 of the 16
companies failed to mention water in their websites or sustainability reports, the other
10 mention water vaguely, and demonstrate that their water strategy is much less
defined than other sustainability initiatives. We find that McDonalds, Tim Hortons,
Starbucks, Yum!, Subway or OSI are performing relatively more water-related actions
in the field, with clearer objectives and defined policies around water stewardship.
However, most of the strategies are focused on reduction of water usage in
restaurants or factories, and not necessarily in other parts of the supply chain –
specially supplying of key agricultural commodities which have much higher impacts
from an environmental perspective (e.g. irrigation, livestock wastewater lagoons).
With regards to water management in the supply chain, we factored in our initial
findings with others found in literature specific to the Food and Beverage industry. We
reviewed academia and consultant research reports published by NGOs and
associations involved in water stewardship. We specifically refer to the insights from
William Sarni21, the report published by CERES22, and the “CDP23 Water Disclosure
2010 Global Report”. The conclusions of their analysis are aligned with the ones
found in our review. Companies in the Food sector have mainly focused on reducing
consumption in their manufacturing operations, taking different measures like
creating metrics on water usage, setting targets on water consumed per unit of end
product (water ratios), and implementing water-efficiency initiatives and reports on
water performance. Some of these actions can be identified in Starbucks, Tim
Hortons, Yum!, Subway, Domino, OSI, Darden Restaurants, and Autogrill as well. We
conclude from the literature that because companies consider water as a global
issue and report it on a global basis, they ignore the local nature of water and the
importance of reporting water impact on a regional or local basis. Generally
speaking, the companies in our analysis also followed this pattern. The information
related to water was very general and only in some rare cases there was information
about specific projects affecting some high-risk watershed basins.
Regarding the water risk existent in the supply chain, the findings in the sources
consulted are aligned with the ones in our analysis. Willian Sarni concludes:
1. Water scarcity is an “underestimated risk factor” in the Food sector.
2. Water scarcity is an underestimated driver in the agricultural sector in general.
3. Water footprint is a more appropriate method to gauge a company’s water
risk. Total water use is far too general to estimate risk from water scarcity.
Based on the global analysis performed and the conclusions arrived at by
academia, consultants and associations, the specific set of companies chosen for
our analysis is well aligned with the research and findings of the industry. As a whole,
21
22
23
“Corporate Water Strategies”, Earthscan, 2011.
“The Ceres Aqua Gauge: A framework for 21st Century Water Risk Management”,
“Carbon Disclosure Project”.
14 water has been an overlooked part of the industry’s sustainability strategy.
Companies are, however, starting to integrate it into the core of their sustainability
strategies. This is done not only internally (i.e. manufacturing, restaurants, distribution),
but also in relation with the whole external supply chain, and in some cases
specifically on agriculture’s impact in water stressed regions.
5. Assessing water impact in McDonald’s sourcing
The team narrowed its focus on McDonald’s sourcing strategies and did not look into
its restaurant operations. Given the large amount of food and packaging products in
McDonald’s system, the current scope of the Project would not allow an in depth
analysis of each component. The team honed in on one type of representative
product each from the livestock and plant categories (beef and coffee), starting off
by examining how water is used in each of these sectors. We then examined
currently existing standards and what meaningful actions some large food
corporations have taken regarding water stewardship. We wrap up each section
with some suggestions on the steps McDonald’s could take to raise water’s visibility
within its sustainability initiatives.
5.1 Beef
We chose to focus on beef as the livestock component of the analysis since the beef
cattle sector consumes one third of the volume of all the water used in global animal
production. Within the beef cattle sector, 98% of water is used in the feed for the
animals. McDonald’s has taken steps towards sustainable beef by committing to
purchasing sustainable beef by 2016.
We defined water footprint as total volume of fresh water that is used to produce the
goods and services consumed by an individual or community.
Three main
contributing factors are feed conversion efficiency of the animal, feed composition,
and origin of the feed. Feed conversion efficiency is a measure of the amount of
feed required per unit of animal product. The more feed is required per unit of
animal product, the more water is necessary (to produce the feed). The
unfavourable feed conversion efficiency for beef cattle is largely responsible for the
relatively large water footprint of beef.
Although the type of production system (grazing, mixed, industrial) influences all
three factors and therefore warrants further scrutiny, for the purposes of this report
and in recommending actions for McDonald’s to take in the short term, we suggest
attempting to optimise on feed composition as the low hanging fruit to improve
water consumption. There are certain types of crops and by-products with almost
zero water footprint since the water footprint is attributed to the main crop products,
for example, sugar beet, bran and straw. This will undoubtedly involve a delicate
balancing exercise because over demand for by-products has the possibility of
impacting the water footprint of the main product, but utilising left-overs from other
crops could be a tangible first step in helping to reduce the water footprint. With
careful selection of feeds that meet the nutrient requirement of the animals and at
the same time has a smaller water footprint per ton, McDonald’s could significantly
15 reduce the indirect use of freshwater resources associated with animal production24.
Furthermore, working with suppliers to produce grass-fed beef versus concentrated
feeding operations, and other processes for fattening cattle headed to market,
would also reduce the overall water footprint.
5.1.1 Beef Metrics
McDonald’s launched multiple regional sustainable beef initiatives in Europe, UK,
Ireland, New Zealand and Canada, among others. We chose to highlight Canada
because it is relatively advanced. Enabling factors include the country’s relatively
robust traceability system and the fact that the country’s packing industry is very
simple, dominated by just two players—Cargill and JBS (reviewed below)—which
service one facility in Spruce Grove that makes all of the burger patties for
McDonald’s Canada, making the logistics of creating a verified system much easier.
Canda also has an on-farm food safety program, Verified Beef Production (VBP).
Canada also has in place a Beef InfoXchange System to capture and exchange
economically beneficial individual animal data and information. The system seeks to
benefit beef supply chain participants by improving communications and individual
animal information sharing across the entire beef chain. Although the verification
methods in Canada are more advanced than many other countries, in terms of
environmental impact there is room for improvement. The VBP’s focus is not so much
on environmental initiatives, but on food safety (especially antibiotics and
medication), and animal welfare. Good environmental stewardship will require
looking beyond food safety and placing emphasis on other factors such as an
environmental farm plan, compliance with animal welfare protocols, and audits.
Nonetheless, this program is worth mentioning because this type of standardised
metrics should be the ultimate goal of the beef value chain.
Beyond Canada, the Sustainable Agriculture Network’s Rainforest Alliance
Certification program contains well-defined metrics. Companies compliant with the
Sustainable Agriculture Standards (SAS) will receive certification. The SAS’ stated
goals are to mandate activities to conserve water and avoid wastage, to prevent
contamination of surface and underground water, requiring companies to
undertake water monitoring and analysis programs, and to build capabilities for recirculation and reuse. The standards include best practices for irrigation, in which
companies must employ mechanisms to precisely determine and demonstrate that
the volume of water applied are not wasteful or excessive25.
The Global Roundtable on Sustainable Beef (GRSB), of which McDonald’s is a
leading participant, represents an encouraging and tangible step forward, but the
GRSB is not a certification program; because it is not a measure of performance, it
cannot stipulate metrics or prescriptive management practices.
Furthermore, GRSB deliberately avoids setting metrics in order to encourage more
widespread engagement, and the principles are not meant to be restrictive
measures forcing suppliers to conform, but about providing information so that the
UNESCO IHE Institute for Water Education. The green, blue and grey water footprint of farm animals
and animal products, 2010. Web. Accessed April 2015 <http://doc.utwente.nl/76912/1/Report-48WaterFootprint-AnimalProducts-Vol1.pdf>
24
Sustainable Agriculture Standard, July 2010, Web. Accessed April 2015 ,<http://www.san.ag/biblioteca/docs/SANS-1-1.2_Sustainable_Agriculture_Standard.pdf>
25
16 whole beef value chain can continue to improve. Although a strong case can be
made for not prescribing measures that suppliers would balk at, the resulting mention
of water is high level and not entirely specific.
Principle 1 of the GRSB, which addresses natural resources, states:
6. Water resources (including quality and quantity attributes), are responsibly and
efficiently managed to support ecological function and availability.
9. Where available, feed sources are sustainably-produced.26
Following on from GRSB, a group of beef value chain participants have come
together this year to form the United States Roundtable on Sustainable Beef (USRSB).
The beef industry is definitely moving forward in their efforts to establish metrics and
criteria that will be used to benchmark the present and help measure improvements
in the sustainability of American beef.
McDonald’s has already started building its own assessment system for Canada, with
a set of 40 ‘indicators’ to assess sustainability; these indicators form a scoring system
to grade ranches, feedlots and others in the beef value chain. It has also chosen an
American verification company to oversee the process. This Canadian pilot should
help McDonald’s perform better estimates of its Burger Patty composistion. It might
be a few years before the patties are 100% sustainable, but even knowing what
percentage of the meat came from verified sustainable sources represents a big
step forward. Hopefully the Canada pilot will be successful and when it has matured
enough, can be translated across nations.
5.1.2 Supplier Action
Down the value chain, beef producers are the ones with the substantial ability to
influence water stewardship. Tyson, Cargill, and JBS are McDonald’s major suppliers
who have taken meaningful action towards improved water usage and efficiency.
Below is a brief overview of what they are doing in terms of water stewardship:
Tyson has reduced their absolute water use by 2.9% since 2004. They operate 34 fulltreatment and 43 pretreatment wastewater facilities in North America. Their longterm goal is to eliminate Notices of Violations and permit exceedances and to
conserve and reuse water. The company formed a water council in 2013 to establish
a comprehensive approach to sustainable water use. The water council seeks to
understand the current landscape for water management and to identify
geographic water risk assessment for all US operations. The company recently
completed a review of water usage, infrastructure, conservation practices, and
scarcity risks of U.S. operations to help ensure a complete picture of the current
operational sustainability of the company’s water supplies. Stemming from the
review, metrics were established to allow the council to gauge progress in its water
sustainability efforts. Tyson also put in place electronic tools for proactive monitoring
of the performance of treatment systems. The company also does internal education
through best management practices, water reclamation systems, and team
Global Roundtable for Sustainable Beef, September 2014, Web. Accessed March 2015.
<http://grsbeef.org/Resources/Documents/GRSB%20Principles%20and%20Criteria%20for%20Global%20Sustainable%2
0Beef_091514.pdfhttp://grsbeef.org/Resources/Documents/GRSB%20Principles%20and%20Criteria%20for%20Global%
20Sustainable%20Beef_091514.pdf>
26
17 Member education27.
Even in 2009 water was on the top of the environment initiatives list, as can be seen
their the company’s 2009 sustainability report. Tyson is transparent about the actions
it takes and readily admitted the shortcomings in their system. Most notably, as a
requirement of the company’s Environmental, Health, and Safety Management
System Standards, any facility in the United States or Mexico that uses more than one
million gallons of water per week must document and implement a Water
Conservation Plan that sets forth a goal for water reduction and a timeframe for
achieving that goal.
Cargill has stated a goal of improvement in freshwater efficiency by 5% (from its 2010
baseline) in 2015 and has already achieved 8% improvement in 201428.
In addition to working with farmers in the US to perfect irrigation methods and
increase crop production efficiency, Cargill recognizes that its China operations
account for 65 percent of their total water consumption and identified previously
used inefficient flood irrigation as the main culprit. They are now training farmers on
water-saving irrigation, scientific planting, and animal nutrition29.
JBS is one of the largest producers of beef in the US and operates their own
subsidiary feedyard – JBS Five Rivers Cattle Feeding (Five Rivers). With access to cows
coming from other suppliers, this company has a huge potential to impact water
usage up and down the beef value chain.
JBS has a dedicated section in their sustainability disclosures for water and energy,
listing specific projects undertaken. Their water projects are specific to different
plants. In Five Rivers it has developed a recycling and reuse system in which they use
overflow water from drink tanks and stormwater runoff. By reusing stormwater for their
pen sprinklers, JBS reduces demand for surface or underground water. The Tolleson
Beef processing plant has reduced water usage using reverse osmosis technology to
supply make-up water to steam boilers. Work has also been undertaken in their
chicken plants, with dedicated water conservation and waste minimization team to
identify opportunities and implement best practices to limit use of natural resources30.
5.1.3 Discussion
In general, it is heartening to observe the level of attention water is receiving up and
down the value chain. Given McDonald’s aspiration to lead in sustainability,
McDonald’s has to raise more awareness on water both internally and externally.
McDonald’s active participation in roundtables such as GRSB and USRSB are
meaningful first steps, and its Canadian beef pilot would be a good place to start
incorporating water goals. McDonald’s can incorporate the more effective
measures its suppliers are implementing into its own reporting and strategy.
Tyson, 2014. 2009 Tyson Foods Sustainability Report. Web. Accessed April 2015
<http://www.tysonsustainability.com/downloads.aspx>
28 Cargill, 2015. Web, Accessed April 2015 , http://www.cargill.com/corporate-responsibility/responsible-supplychains/environmental-performance/index.jsp>
29 Cargill, 2015, Helping farmers in China save water. Web, Accessed April 2015, ,
<http://www.cargill.com/connections/saving-water-in-china/index.jsp>
30 JBS, 2015. “Conserving Energy and Water” Web. Accessed March 2015.
<http://jbssa.com/sustainability/stewardship/conserving-energy-water/>
27
18 McDonald’s should continue developing its own metrics and basic beef certification
scheme for use across its global operations.
To be more specific about water, McDonald’s should start by framing goals. From the
preceding sections on metrics and supplier action, there are generally two types of
goals relating to water stewardship: performance-based with actual numeric goals,
both relative and absolute (e.g. reduce water consumption to [volume] by [date],
improve water efficiency by [x%] by [date]); and process-based standards with
overarching, general goals, such as gaining better information on feed composition
and instituting programs and processes to improve the water footprint.
For example, McDonald’s current statement on beef sustainability states: “In 2013,
we calculated McDonald’s carbon footprint using a widely recognized life cycle
analysis approach... We found that about 70% of our greenhouse gas emission
impacts are in our supply chain, and of those, around 40% are related to beef. Even
though our purchases represent less than 2% of the total beef and dairy industry, we
are working with other end users and the broader beef industry to address this
important topic.”
McDonald’s could consider something similar for water. An example statement
could be: “In 2015, we calculated McDonald’s water footprint using the [blank]
framework. We found that 98% of the beef water footprint is used in feed for the
animals. McDonald’s is committing to reducing its water usage by [x]% by [year],
and increase water efficiency by [x]% by [year].”
McDonald’s should also consider forming a water council (like Tyson’s) to review and
extract best industry practices and systems that could be incorporated into the
current operations. McDonald’s needs to take steps (for example, reducing the
number of suppliers, organising supplier educational programs, inviting more
suppliers up the chain to sign onto GRSB, etc) to move suppliers toward disclosing
their water footprint and risk. Particular attention must be paid to establishing
methods to optimize the type of feed consumed by the cows supplied to
McDonald’s. In the ideal world, McDonald’s would be able to build an informationsharing platform across its global supply chain, one in which every sector (cow-calf,
backgrounder, feedlot, and packer) shares its data to ensure transparency and
cooperation.
By improving water efficiency, taking steps to work with suppliers globally to
implement efficient irrigation systems and reusing and recycling storm water,
McDonald’s could significantly reduce its water footprint. Further, McDonald’s has
the ability to take meaningful action in partnering with different governments,
suppliers, and even competitors to examine cattle feeding practices to drive to
higher conservation and efficient use of water.
Given the size and complexity of McDonald’s operations (cows and beef may
change hands four or five times between farm and finished patties), establishing
global metrics will be a prolonged process. Cows are merely the beginning of a
value chain that includes ranches, dairy farms, cattle stockers, feedlots, beef
packers and processors. Despite the enormity of the task, this is one area in which
McDonald’s must seek to mobilise the whole food industry and engage and
educate stakeholders up and down the value chain.
19 The verification system McDonald’s is currently undertaking in Canada should be
replicated because the transparency and communication it encourages will be key
to mobilising the beef industry. The confidential nature of reporting process enables
participants to receive benchmark data from the program, hopefully driving the
suppliers to compare, contrast and identify room for improvement. McDonald’s can
also hold workshops to explore lessons learned, and facilitate information sharing.
Although it might not be the company’s intention to create a McDonald’s standard,
in order to move the industry, McDonald’s should consider leading the charge to
establish a system that people can build upon to kickstart the momentum of
continuous improvement. The hope is that one day McDonald’s can form something
similar to the Canadian standards and third-party verification system that all industry
players can use to procure verified sustainable beef that fits into a global framework.
A good case in point is the work McDonald’s done to improve its practices in terms
of humane animal treatment. The engagement with Dr. Temple Grandin, a wellknown expert on animal behavior, resulted in animal welfare standards (adopted by
competitors and the broader retail food industry) for cows, chickens and hogs—as
well as a supplier-audit program. This is the type of impact McDonald’s would
eventually want to drive in the water stewardship segment. With the same
determination, McDonald’s can eventually move the industry towards best practices
and collaboration in water stewardship as well.
5.2 Coffee
With 1.4 billion cups consumed a day and the most traded commodity after oil31,
coffee is one of the world’s most important crops. As one of McDonald’s six priority
products and displayed prominently in their five pillars of sustainability32, coffee is
obviously significant to McDonald’s. Identifying the gaps in water stewardship for
coffee is useful as water is a key input in production and processing, and sustainable
coffee is highly regarded among consumers.
Coffee sustainability certification has been around for nearly 20 years as the
groundbreaking crop for sustainability standards.
Studies have shown that
sustainable coffee also commands a price premium, ranging from 1% to 30%33. Due
to this price premium and consumer demand, the share sustainable coffee occupies
among global production has increased by 28% per annum since 2008, reaching
40% in 201234. Sustainable coffee appeals to the consumer for two reasons. The
limited processing from production to consumption and the prominence of coffee
beans in the final retail product ensure that consumers can trace and relate to the
sustainability component.
Eriyagama, et al., “A methodology for quantifying global consumptive water use of coffee,” Journal of Water and
Climate Change (05.2.2014), pp. 128.
32 McDonald’s, “Corporate Social Responsibility & Sustainability Report 2013,” pp. 7,
http://www.aboutmcdonalds.com/mcd/sustainability/sustainability_CR_reports.html, accessed April 2015.
33 State of Sustainability Initiatives, “The State of Sustainability Initiatives Review 2014,”
https://www.iisd.org/pdf/2014/ssi_2014.pdf, pp.8, accessed April 2015.
34 Ibid.
31
20 Although just 2% of water used for global crop production is attributable to coffee,
coffee still has the largest water footprint per ton at 14.4 million litres35. This means
that coffee production levels and costs are dependent on local watersheds, as
evidenced by a 9% rise in coffee prices in Brazil during the drought in 201436. Thus, the
importance of water stewardship being a component of sustainable coffee is
apparent, especially with the increasing scarcity of water in different locales.
5.2.1 Approach
To find out what next steps McDonald’s should take with regards to sustainable
coffee, we must first analyse how current sustainable coffee certifications cover
water stewardship.
With such a long history of sustainability, there is a myriad of certification schemes.
We narrowed our research to three schemes that are currently used by McDonald’s,
which are:
1. Rainforest Alliance
2. Fair Trade USA
3. UTZ Certified
These three certification schemes do not have a large share of global coffee
production, with UTZ Certified having 9%, Fair Trade having 5% and Rainforest
Alliance having 3%37. This may be why McDonald’s has only been able to procure
25% of their global coffee needs from these sources in 2012. However, their target
has been to purchase 100% sustainable coffee by 202038.
Other major schemes that we did not analyse include USDA Organic and the 4C
Association. While the USDA Organic certification does not have any water
stewardship element as part of their certification, the 4C Association has a basic and
general approach to water stewardship. The water stewardship criteria in these two
certifications seem less stringent than those currently used by McDonald’s.
Discussion
We will first discuss general findings, followed by a specific discussion on each of the
three certification schemes. We have extracted the key water stewardship standards
of these schemes in Appendix 1.
In general, the certification schemes represent a step towards basic water
stewardship, with at least a mapping of water withdrawal, recording usage and
treating wastewater appropriately. They also lean towards a principled and relative
approach rather than a scientific approach with numerical targets.
M. M. Mekonnen and A. Y. Hoekstra, “The green, blue and grey water footprint of crops and derived crop
products,” Hydrology and Earth System Sciences (15,2011), pp. 1577.
36 Principles for Responsible Investment, “Coordinated Engagement on Water Risks in Agricultural Supply Chains Investor Guidance Document,” http://www.unpri.org/publications/pri-coordinated-engagement-on-water-risks-inagricultural-supply-chains-investor-guidance-document, p.11, accessed April 2015.
37 State of Sustainability Initiatives, “The State of Sustainability Initiatives Review 2014,”
https://www.iisd.org/pdf/2014/ssi_2014.pdf, pp.167, accessed April 2015.
38 McDonald’s, “Corporate Social Responsibility & Sustainability Report 2013,” pp. 7,
http://www.aboutmcdonalds.com/mcd/sustainability/sustainability_CR_reports.html, accessed April 2015.
35
21 The Rainforest Alliance has standards set by the Sustainable Agricultural Network,
and water conservation is the fourth among their ten principles39. Within the water
conservation principle, there are nine criteria to satisfy. These criteria represent a
generalized guidance towards water stewardship, and could be broadly applied
across different crops. However, these criteria do not prescribe a ban on high-risk
water basins, a conservation metric nor any ongoing improvement metric, leading us
to conclude that the water stewardship element in Rainforest Alliance certification is
a general and relative assessment.
For Fair Trade, we analysed the Farming component, where there were five
objectives. Water stewardship is a subset of the environmental stewardship
objective40. We were impressed with a criterion that required companies to evaluate
and identify risks to local water sources. However, there was no ban on using water
from a high-risk source, merely the need to engage the local authorities for a
dialogue or to solve the problem together. We also opined that this was another
relative based certification, and was dismayed that there was no water criteria listed
as high priority (i.e. no mandatory water criteria).
In contrast to the above two certifications, UTZ Certified has its roots in coffee
certification. Uniquely, certification requires the company to fulfil criteria in four
“basic blocks”, plus a sustainability module that is tailored to the crop. Within the four
basic blocks, water stewardship is found within the Farming Practices block and the
Environmental block. For the coffee module, water is one of the three main sets of
criteria. We appreciated that water stewardship permeated in the different areas of
sustainability, and that this was the only scheme where there was a numerical target
on water usage (10lt/kg of water for green coffee in coffee processing). However,
this was also the only numerical target within all the criteria, and was not contextbased (e.g. there was no ban on using high-risk water).
From these three certification schemes, we can see that the current certifications
view water stewardship from a rather basic and relative approach. For McDonald’s
to drastically improve and benchmark their water conservation efforts, it will
probably need to develop their own metrics and certification scheme. Currently,
there are two corporate coffee sustainability schemes, the Nespresso AAA
Sustainable Quality and Starbucks Coffee And Farmer Equity (C.A.F.E.) schemes.
While it is highly unlikely that Nestle or Starbucks would certify McDonald’s coffee
sustainability, we believe that this approach is justified given the current weakness in
existing third party coffee sustainability certifications. For example, Starbucks C.A.F.E.
has managed to incorporate measures that include agricultural buffer zones to
protect water bodies, six extensive water consumption numerical targets and
minimum quality of discharged wastewater (e.g. oxygen demand and pH levels).
6. Recommendations and Conclusion
For high level information, we recommend that McDonald’s
Sustainable Agricultural Network, “Sustainable Agriculture Standard,”
http://www.san.ag/biblioteca/documento.php?id=162, accessed April 2015.
39
Fair Trade USA, “Farm Workers Standard,”
http://fairtradeusa.org/sites/all/files/wysiwyg/filemanager/FWS_Guidelines_EN_041014.pdf, accessed April 2015.
40
22 1. Define Water Stewardship “Ends”
When setting out to incorporate water stewardship into the overarching corporate
sustainability strategy and related reports, it is critical for the firm to define for what
reason or “ends” it is doing so. It could be for any of the business case reasons, for
greater awareness and gap analysis reasons, for philanthropy and public service
reasons, for brand equity and competitive reasons, for improved reporting and
stakeholder engagement reasons, or for any combination of the sort. Whatever the
reason(s), it is essential for the firm to define their water stewardship objectives so the
corresponding initiatives, tools, partnerships, and frameworks can be more easily
determined, strategically chosen, and effectively used.
2. Tools
Given the large number of initiatives and their related tools, it can be overwhelming
for corporations and investors to decide which ones to use and for what purpose.
Asides from the WBCSD list of helpful tools, below are the four tools we recognize as
most helpful for their given purpose(s):
Name: Corporate Water Disclosure Guidelines
By: The CEO Water Mandate
For: Corporate Water Awareness, Stakeholder Engagement, Reporting
Link: http://ceowatermandate.org/disclosure/
Name: Water Risk Monetizer
By: Ecolab, Trucost
For: All Business Case Reasons
Link: https://tool.waterriskmonetizer.com
Name: The Aqueduct
By: World Resources Institute
For: Supply Chain Awareness
Link: http://www.wri.org/applications/maps/aqueduct-atlas/
Name: Aqua Gauge
By: Ceres
For: Corporate Water Awareness, Gap Analysis, Reporting
Link: http://www.ceres.org/issues/water/
3. Sourcing
In McDonald’s specific sourcing strategies for beef and coffee, our recommendation is
that McDonald’s persevere with the initiatives currently in place and seriously consider
forming its own standards and certification schemes. For beef, this entails continued work
on the different regional pilots. McDonald’s must utilise its key advantage of strong
relationships with key suppliers to enlist a critical mass of the global beef industry to
engender a tipping point in production techniques. Eventually McDonald’s must also
engage competitors such as Burger King, Wendy’s and other beef-centric fast-food
chains to join in the uphill battle for sustainable water use in food procurement. For coffee,
McDonald’s could use Starbucks and Nespresso as an example to develop its own
metrics.
23 4. Adopt Best Practices
McDonald’s should analyze and translate into its business applicable strategies and
actions carried out by other leading corporations in water stewardship. A general pattern
identified is the existence of a public commitment of the companies with the stakeholders
and the promotion of partnerships and associations with them with the aim to find more
global, inclusive, efficient and long initiatives and solutions. As a leader in the food
industry, we believe that McDonald’s has to initiate proactive actions in order to be
considered a leader in this field as well, driving the change in the food industry (that looks
a little less developed than other sectors) also in water stewardship.
24 Appendix 1
Rainforest Alliance key water stewardship criteria excerpts41
4. Water Conservation
4.1 The farm must have a water conservation program that ensures the rational use
of water resources. The program activities must make use of the best available
technology and resources. It must consider water re-circulation and reuse,
maintenance of the water distribution network and the minimizing of water use. The
farm must keep an inventory and indicate on a map the surface and underground
water sources found on the property. The farm must record the annual water volume
provided by these sources and the amount of water consumed by the farm.
4.3 Farms that use irrigation must employ mechanisms to precisely determine and
demonstrate that the volume of water applied and the duration of the application
are not excessive or wasteful. The farm must demonstrate that the water quantity
and the duration of the application are based on climatic information, available soil
moisture, and soil properties and characteristics. The irrigation system must be well
designed and maintained so that leakage is avoided.
4.4 The farm must have appropriate treatment systems for all wastewaters it
generates.
4.5 Critical - The farm must not discharge or deposit industrial or domestic
wastewater into natural water bodies without demonstrating that the discharged
water complies with the respective legal requirements, and that the wastewater’s
physical and biochemical characteristics do not degrade the receiving water body.
4.7 Critical - The farm must not deposit into natural water bodies any organic or
inorganic solids, such as domestic or industrial waste, rejected products, construction
debris or rubble, soil and stones from excavations, rubbish from cleaning land, or
other materials.
4.8 The farm must restrict the use of septic tanks to the treatment of domestic
wastewater (grey water and sewage) and non-industrial wastewater to prevent
negative impacts on underground or surface water.
Fair Trade USA key farm workers standard water stewardship criteria excerpts42
4. Environmental Stewardship – 4.6 Soil and Water (SW)
ES-SW 4: The company ensures that waste water discharged from any system with
which the organization is involved must be handled in a way that does not:
– pollute water that might be used as part of a human or animal drinking
supply.
– contaminate soil or crops with chemicals or their by-products.
– contaminate crops or soil with excessive nutrients or contaminate
harvestable crops with pathogenic microbes.
ES-SW 7: The company maintains an inventory of water sources that are used for
irrigation and processing of Fair Trade crops.
ES-SW 8: The company implements procedures to make efficient use of water
sources. These procedures include:
– Prediction of volumes of water needed to irrigate the crop.
– Measuring (or estimating) volumes of water extracted from sources and
volumes actually used in irrigation and processing.
– Providing maintenance to the water distribution system.
Sustainable Agricultural Network, “Sustainable Agriculture Standard,”
http://www.san.ag/biblioteca/documento.php?id=162, accessed April 2015.
42 Fair Trade USA, “Farm Workers Standard,”
http://fairtradeusa.org/sites/all/files/wysiwyg/filemanager/FWS_Guidelines_EN_041014.pdf, accessed April 2015.
41
25 Adopting, as applicable, methods to re-circulate, reuse and/or recycle
water.
ES-SW 9: The company has conducted an evaluation identifying the risks to local
water sources (e.g. whether water sources are being depleted; in a critical situation,
or under excessive pressure). If local environmental authorities or other entities
consider water sources to be depleted, in a critical situation or under excessive
pressure, the company engages in a dialogue with the authorities to identify possible
ways to be involved in research or problem solving.
ES-SW 10: The company uses the best available irrigation and processing technology
to optimize water use.
–
UTZ Certified key water stewardship criteria excerpts43
Core Code of Conduct
Block B - Farming Practices
G.B.68 Irrigation water is used efficiently. Efficient water use takes into account water
needs, timing, and rainfall information (forecast and records).
G.B.70 Irrigation water is extracted from sustainable sources.
G.B.71 Practices are implemented to adapt to water scarcity, such as rainwater
harvesting.
Block D - Environment
G.D.110 There are documented measures in place for efficient water use in
production and processing.
Measures for efficient water use take into account e.g.:
– Water
needs
(depending
on
e.g.
individual
supply,
regional/community resources and access, rainfall)
– Activities where water withdrawal, discharge, and potential run-off
occurs
– Minimizing water pollution
– Suitable water harvesting mechanisms
Coffee Module
– CF.D.8 When possible, water is recycled during wet processing. Clean water
and contaminated water are separated.
– CF.D.9 Activities to reduce water consumption during wet processing are
implemented. The target water consumption is below 10 lt/kg of green coffee
(approximately 2 liters per kg of coffee fruit/cherries).
– CF.D.10 A water treatment system is in place to eliminate or reduce pollution
caused by coffee wastewater resulting from the wet process.
– CF.D.11 In central wet mills and wet mills from individual farms and estates, a
water quality analysis and monitoring program is implemented.
UTZ Certified, “Core Code for Group Certification” & “Coffee Module,”
https://utzcertified.org/ndp?article&id=26584812, accessed April 2015.
43
26