Yum! Brands took “an important first step” to mitigate its impacts on climate change and align with investor expectations on greenhouse gas emission reductions, according to investors who reached an agreement today with the fast food giant.
The parent company of KFC, Taco Bell, and Pizza Hut committed to pursue a science-based target to reduce greenhouse gas emissions from its operations, franchises and supply chain (Scope 1, 2, and 3 emissions), and to explore purchasing renewable energy. The commitment came after investors agreed to withdraw a shareholder resolution proposal filed by Sister Marge Clark of the Sisters of Charity of the Blessed Virgin Mary, supported by Francis Sherman of Seventh Generation Interfaith Coalition for Responsible Investment and the sustainability nonprofit organization Ceres. The proposal called on the company to study the feasibility of setting targets for increasing the company's use of renewable energy and other climate change mitigation strategies.
“Global Restaurant Companies like Yum! Brands are well-positioned to minimize risk and capture opportunities by significantly reducing greenhouse gas emissions,” said Clark. “As shareholders, we’re particularly encouraged by the company’s agreement to tackle not only the emissions from the company and its franchisees but those in its agricultural supply chain -- which make up the lion’s share -- as well.”
“We’re encouraged by Yum! Brands’ commitment to set emissions reduction targets that go beyond energy efficiency measures to implement multiple strategies to mitigate its exposure to climate risk,” said Sherman. “Fast food companies, through their operations and agricultural supply chains, are particularly vulnerable to climate risk, and it’s important that Yum! Brands take steps to manage these risks.”
Yum is working with a consulting firm to more comprehensively assess the greenhouse gas emissions from their supply chain (known as Scope 3 emissions). “As Yum! grows as a business, we aim to do so in a way that respects the planet.” Said Jon Hixson, vice president for global government affairs and sustainability for Yum. “We remain committed to energy and climate initiatives to minimize the environmental impact of our restaurants and supply chain. To continue on this journey across our brands, franchises and suppliers, our study will initially evaluate our greenhouse gas (GHG) data to better understand our footprint, to help refine GHG reduction targets and to identify emission reduction initiatives, such as renewables and conservation measures, to further improve our environmental performance on the path to developing approved science-based targets."
Yum! Brands’ commitment to begin the process of setting a science-based emissions reduction goal comes one year after McDonald’s became the first restaurant chain in the world to set an approved science-based target.
“Companies in the fast food sector have a long way to go when it comes to reducing both their contribution to the climate crisis and their exposure to climate risk,” said Mindy Lubber, CEO and President of Ceres. “It’s encouraging to see Yum! Brands begin the work of aligning the company with global efforts to tackle climate change. We hope to see swift, concrete action to meet these targets by procuring renewable energy, increasing energy efficiency, and eliminating deforestation from their supply base. We’re looking forward to continued engagement to ensure they get there.”
Investors have recently ratcheted up pressure on the fast food sector around its greenhouse gas emissions and its exposure to climate, water and deforestation risks. In January, the sustainability nonprofit organization Ceres and the investor network FAIRR Initiative coordinated a group of 80 investors, with more than $6.5 trillion in assets under management to publicly urge the 6 largest U.S. fast food companies (including Yum! Brands’) to address exposure to climate, water and deforestation risks associated with their meat and dairy supply chains.
“Yum! Brands commitment to reduce greenhouse gas emissions including from its supply chain is an encouraging step forward. With the livestock industry responsible for 14.5% of the world’s greenhouse gas emissions, food companies urgently need to step up in order to meet the goals of the Paris Agreement on climate change. It’s critical that fast food giants fast-track their climate mitigation,” said Aarti Ramachandran, Head of Research & Engagements at FAIRR.Â
About Ceres
Ceres is a sustainability nonprofit organization working with the most influential investors and companies to build leadership and drive solutions throughout the economy. Through powerful networks and advocacy, Ceres tackles the world’s biggest sustainability challenges, including climate change, water scarcity and pollution, and inequitable workplaces.