INTRODUCTION OUR FIRST SOCIAL RESPONSIBILITY REPORT: HOLDING OURSELVES ACCOUNTABLE management tool for continuous improvement, Our goal with this initial McDonald’s social and that is in a format that is easy to responsibility report is to share with you a understand and facilitates comparison with review of McDonald’s progress and plans others, contributing to credibility. GRI also related to the community, environment, and provides flexibility and encourages incremental people. progress toward meeting these guidelines. This is important to McDonald’s because of our The principles behind our commitment to challenges in gathering information when more social responsibility were ingrained in our than 70% of our restaurants are owned and culture by McDonald’s Corporation founder, operated by some 5,500 individual Ray Kroc, who spoke nearly half a century ago entrepreneurs in 121 countries around the of the importance of giving back to the local world. communities our restaurants served. Ray Kroc did not articulate this as a corporate strategy nor would he have listed social responsibility “Corporate social responsibility is on a corporate balance sheet. He simply knew achieving commercial success in ways its worth because being a good neighbor and that honor ethical values and respect corporate citizen are intrinsic to McDonald’s for COMMUNITIES, the natural approach to business. ENVIRONMENT, and PEOPLE.” – Business for Social Responsibility ... socially responsible leadership begins a (BSR), a non-governmental organization whose mission is to process that involves more awareness on promote corporate social the issues that will make a difference ... responsibility Making the commitment to being a socially As you learn more about our social responsible leader begins a process that responsibility performance, we invite you to let involves more awareness on the issues that will us know what you think. Visit our social make a difference – within communities, on responsibility web site and send us your behalf of the environment, and with the people comments or questions at: who are McDonald’s. So, we consider this www.mcdonalds.com/corporate/social/ report a beginning and a template by which we will measure our progress in the area of social responsibility. We have organized this report keeping the emerging Global Reporting Initiative (GRI)* Guidelines in mind. We have strived to achieve GRI goals of providing information that is clear, that provides stakeholders with reliable and relevant information to invite further discussion, that serves as an internal * The Global Reporting Initiative (GRI) is an international, multi-stakeholder effort to create a common framework for voluntary reporting of the economic, environmental, and social impact of organization level activity. The GRI mission is to elevate the comparability and credibility of sustainability reporting practices worldwide. The GRI incorporates the active participation of businesses, accountancy, human rights, environmental, labor, and governmental organizations. 2 TABLE OF CONTENTS McDonald’s Commitment to Social Responsibility ........... 4 Organization ........................................................................................ 7 Performance........................................................................................ 10 Community ............................................................................... 12 Ronald McDonald House Charities Local Support and Involvement Community Development Environment ............................................................................. 18 Environmental Organization Environmental Impacts People........................................................................................... 28 People Promise Advanced Training and Development Diversity Marketplace............................................................................... 36 Supplier Social Compliance Working with Experts Animal Welfare International Scientific Advisory Council Happy Meal™ Toys and PlayPlace™ Safety Governance.......................................................................................... 44 Disclaimer This McDonald's inaugural Social Responsibility Report, issued in April 2002, provides information about pertinent aspects of our business related to the communities we serve, the environment, our people, and our relationships with suppliers. The report presents our progress through the end of 2001 and a snapshot of our company as it was in early 2002. Forward-looking statements included in the report reflected management's expectations regarding future events and our future performance as of April 2002. Since that time, McDonald's has continued to launch new initiatives and make changes to our business. These developments, together with the uncertainties inherent in forward-looking statements, mean that programs and results may differ from those envisioned when the report was issued. 3 McDONALD’S COMMITMENT TO SOCIAL RESPONSIBILITY A MESSAGE FROM THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER Thank you for our customers tell us matter to them, including your interest in animal welfare, the environment, food safety, and McDonald’s. We children’s charities. We know there is always welcome your more work to do, and we are working on our curiosity, and we next Social Responsibility Report, which will value your take a closer look at each of these areas, and perspectives – more. whether you are a customer, a One of my top priorities is maximizing neighbor, a McDonald’s support of healthy, active lifestyles. supplier, a McDonald’s was built upon offering high quality shareholder, a menu choices. Throughout our history, we have student, a parent, or a McDonald’s employee. expanded these choices by listening to our consumers. Their input was the impetus for our Strong principles are part of our heritage. decision to provide detailed nutritional Our corporation’s founder, Ray Kroc, information about our menu items 30 years ago. committed McDonald’s to being a responsible corporate citizen in 1955 with a very simple We are now implementing a worldwide, idea – that every McDonald’s should give back comprehensive approach to active lifestyles, to the community in which it does business. fitness, and nutrition. Important first steps have This commitment serves as the foundation for already been taken. McDonald’s is adding more all of our social responsibility efforts. choice to our Happy Meals around the world. Countries are offering various selections, McDonald’s has the honor of serving more including fruit and vegetable selections, milk, and customers around the world than anyone else. other healthy choices. We have also established With this privilege comes a responsibility to be an external global Advisory Council on Healthy a good neighbor, employer, and steward of the Lifestyles comprised of leading health and fitness environment, and a unique opportunity to be a experts to help McDonald’s develop superior leader and a catalyst for positive change.We programs that support our customers’ healthy, recognize the challenges and the obstacles, but active lives. You will see an expansion of these believe strongly in the importance of social efforts in the future. responsibility. Acting in the best interests of our customers, This report, McDonald’s first Social the communities we serve, and the environment Responsibility Report, was published in April, is an evolving process. Your feedback helps us 2002. It describes McDonald’s philosophy and understand how we’re doing. Please let us values, details a wide range of initiatives in the know what you think. areas of Community, Environment, People, and Marketplace, and outlines a series of goals and our plans to meet them. Since the publication of this report, we have Jim Cantalupo launched several new initiatives that extend our Chairman and CEO social responsibility commitment to areas that May, 2003 4 A GOOD START ON REPORTING On behalf of the Corporate Responsibility Committee of McDonald’s Board of Directors, I am proud of the company’s initial effort to report extensively on our social responsibility efforts. This report is a good beginning, establishing a benchmark on where McDonald’s is today, what the goals are, and the plans the company has established to reach those goals. I hope you will find the company’s forthright assessment of where we are and where we want to be in all aspects of our commitment to the community, environment, and people as reassuring as I did. It is good to know that these plans for the future are rooted in a heritage of giving back to communities, innovative environmental programs, and core values and ethics that will provide a strong foundation and momentum for the company’s social responsibility plans. In an effort to make the world a better place, McDonald’s has set forth on a journey that puts it on a path of continuous improvement. The road to being a socially responsible corporation is not only long, but it’s one that requires constant attention as new and unanticipated issues arise. This report provides a valuable roadmap that will enable McDonald’s to measure its progress and enhance its standards of performance. It’s the direction that’s important, and that’s what you will find in this report. On behalf of my fellow members, I encourage your continued interest in our progress. Walter E. Massey, Ph.D. Chairman of the Corporate Responsibility Committee McDonald’s Corporation Board of Directors 5 WHERE SOCIAL RESPONSIBILITY FITS INTO BUSINESS