When will McDonald’s (and our choices) be “Future Fit”?

 In Investments

When you think of McDonald’s you think of obese children, too much sugar and inhumane cattle feedlots that are destroying the planet.  Surely no self-respecting impact investor would invest in them.

Right?

Well, looking just at their share price performance, there is a lot of economic value that they have created over the last 20 years.

And in terms of social and environmental performance, they certainly claim to be doing the ‘right’ thing:

… they provide some of the best training of any franchise, for their budding QSR managers, including a University, giving many aspiring business managers and future business owners very structured skills to own and run their own business after the training.

… they engage with the community through meaningful school and sports team sponsorships and charitable donations that go far beyond just Ronald McDonald House.

… they provide a no charge drug-free and safe playgrounds for children (even in an age of litigious stupidity) who, in many underserved communities otherwise may never experience an unfettered childhood play environment.

… they do environmental audits that lead practices amongst their competitors aiming to not just reduce their carbon footprint but even to sink it, and

… they have heeded and engaged with consumer trends for healthier food options like salads and tofu/vegan burgers.  In some food deserts they are the only option for cost-effective meals – their absence, in those communities could arguably lead to hunger and social dissent.  We don’t all have access to home cooking and organic mung beans!

According to CSRHub, McDonald’s has a high ESG rating of 60. This makes it one of the most environmentally, community orientated hotel or QSR listed groups in the world, well ahead of USA competitors or even corporate trends.

So are organizations like McDonald’s good or bad for our world or are they just evidence of our own demand for thoughtless consumption? Is it not maybe the underlying financial system, that demands annual share price growth of x% that is the issue?  

If McDonald’s decided to exclusively serve vegetarian, GM-free products, with only biodegradable packaging, would consumers have the sense to reward them with purchase loyalty?  Or would they simply flock in their hordes to other equivalent product companies who are not held to the same standards of accountability?

McDonalds’ franchises in Sweden have already modeled businesses that at the very least do what must be done to achieve a “Future Fit” world that is sustainable. They are using local organic produce and rooftop solar, for example. There is no reason this model could not be replicated globally.  

Fast food does not need to cause obesity while starving clients of real nutrition.

Nutrition starts with healthy topsoil and healthy topsoil is the goal of sustainable agriculture.

So why then does McDonald’s not make the supply chain responsible for an organic product? Healthy nutrition should be the core of any restaurant’s mission.

Simply put, is it because organic is more expensive and consumers tell businesses like McDonald’s that price matters more than their own health.  This need not be true.

Ironically, farms under 50 acres serving local organic produce have been the fastest growing and most profitable agricultural segment in the US for decades. Most massive agribusinesses are corporate write-offs and increases in revenues are mostly swallowed up in forced capital expenses with no net gain in profit except to equipment manufacturers.

It is not McDonald’s trashing the world.  Consumers are. When you accept the plastic fork or demand the straw or buy the coke over tap water, you are driving degradation.  

It is not McDonald’s trashing the world.  Shareholders are. Until the likes of Vanguard and BlackRock (who own 8% and 5% respectively) go beyond lip service and force McDonald’s executives to ensure that they provide sustainable, nutritious products and account for their externalities, the impetus to change will always be weaker than the impetus to drive profit.

Perhaps then McDonald’s is exactly the type of organization that impact investors should be investing in?  Let us know your thoughts?

At Scarab Funds, we live Positive Impact and Positive Growth – If you want to be an investor in a “future fit” world investor@scarabfunds.com, or

If you are looking for capital to scale a small, but successful and innovative environmental or community tech solutions company, supporting any of the 17 UN Sustainable Development Goals, please contact us at investee@scarabfunds.com.

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