Investor coalition secures SBTs from six fast food giants

$11trn group progresses three-year engagement on emissions reductions

A coalition of more than 90 investors, representing $11trn in assets, has succeeded in securing science-based targets for greenhouse gas emissions from six fast food companies.

Over three years, the Global Investor Engagement on Meat Sourcing coalition targeted Chipotle Mexican Grill, Domino’s Pizza, McDonald’s, Restaurant Brands International (owners of Burger King), Wendy’s Co. and Yum! Brands (owners of KFC, Pizza Hut and Taco Bell), urging them to de-risk their meat and dairy supply chains by setting ambitious targets to reduce greenhouse gas emissions, while reducing water usage and their impacts on water quality.

All six have now agreed or set targets, up from five last year.

Chipotle has committed to reduce scope 1, 2 and 3 emissions by 50% by 2030. Wendy’s and Domino’s have confirmed they will submit targets for approval by Science-Based Targets initiative (SBTi).

Masaru Okubo, senior stewardship officer at Sumitomo Mitsui Trust Asset Management, said: “It is imperative that companies implement strong policies governing how they source meat and dairy, and engage suppliers to align their supply chains with corporate targets on climate and water.”

Animal agriculture

However, lack of transparency and ambition in the targets set remain a concern.

In its 2022 update, the coalition found 90% of these companies’ emissions come from scope 3 emissions where suppliers of meat and dairy products are a key concern and play a significant role.

Only two of the six firms, Restaurant Brands International (RBI) and Yum!, disclosed total emissions derived from animal agriculture.

Both companies listed meat and dairy suppliers as responsible for more than half (57% and 51% respectively) of their total emissions.

Investors warn this lack of transparency in the animal agriculture supply chain could undermine the efforts of food brands to tackle climate risk.

Cristina Figaredo, senior manager, research and engagement at FAIRR, a coordinator of the coalition said: “Regulators and influential frameworks such as the SBTi are tightening requirements for the food sector to report and act on climate.

“So, investors are very concerned that ambitious climate targets by fast food companies are not translating into action along the supply chain.

“The lack of alignment of supplier policies with corporate climate ambitions risks undermining the efforts of these high-street brands to tackle climate risk. Their performance on water is also alarmingly poor, and efforts to mitigate risks related to water scarcity and pollution have stagnated over the past year.”


The group said none of the fast-food firms have set targets to reduce water pollution and consumption across their supply chains, despite finding the food industry ranking as the largest driver of water consumption, water pollution, and other water-related impacts globally.

It said while some companies, including Wendy’s, McDonald’s and Yum!, have begun setting targets to address their water impacts in their operations, they are failing to address larger risks within the agricultural supply chain.

The agricultural supply chain makes up the bulk of companies’ water footprint. Domino’s’ 2020 materiality assessment found the production of ingredients accounted for 88% of its overall water consumption.

Currently, RBI has not disclosed analysis of water risks in its operations, while McDonald’s is the only company that has conducted a comprehensive water risk assessment that includes its supply chain.

Daniel Shepard, senior associate of investor engagement, water at Ceres, said: “When investors come together to move companies to action on climate and water risks, we see the power of capital markets to accelerate the shift to a more just, sustainable economy.

“While there is much more to do, the results of this engagement show that we are making progress.”


Natasha Turner

Natasha was global editor at ESG Clarity, part of Mark Allen Financial, and a financial journalist for seven years. She has been shortlisted for Story of the Year and Investment Journalist of the Year...