Environmental Management Plan for the McDonalds Corporation and Kentucky Fried Chicken - Case Study Example

Environmental Management Report Executive Summary This report critically examines environmental management plans for two major fast food restaurants namely, the McDonalds Corporation and Kentucky Fried Chicken (KFC). It compares the environmental management initiatives put in place by these fast food restaurants particular in relations to restaurant operations, corporate operations, sustainable supply, advocacy and partnerships and communication and culture. The findings of this report show that environmental sustainability frameworks developed and executed by both McDonald’s and KFC, focus on addressing environmental issues such as pollution, resource depletion, waste management, water consumption, waste generation, greenhouse gas emissions and energy use. However, some environmental activist groups have found these restaurants culpable of breaching some of their environmental policies and frameworks. For instance both McDonalds and KFC have been accused of excessive waste generation and contributing to deforestation. Nonetheless, this report establishes that, these companies have made substantial progress towards addressing environmental issues brought about by their business operations by adapting to reusable food packages, developing initiatives aimed at encouraging recycling, reducing waste and energy consumption and creating awareness on environmental issues. 1.0 Introduction Over time, the general public has become increasingly aware and keen on the role that multinational companies play in addressing environmental issues such as pollution, land degradation, climate change, resource depletion and energy issues among many other environmental concerns (Solomon 2011; Straughan and Roberts 1999). Moreover, consumers have become increasingly concern with the impact that large companies have on the environment that they operate in. The media, environmental groups and the general public have particularly criticised companies whose, processes, products and practices bring about negative impact on the environment directly or in-directly(Lash and Wellington 2007). Consequently, a considerable number of companies have had to adopt policies and practices that are more responsive to environmental issues and promote environmental sustainability. In order to maintain their competitive edge in today’s competitive market, most companies have developed environmental stewardship blueprints and shifted to the production, provision outsourcing and marketing of “green”, eco-friendly or environmentally safe products and services (Doole & Lowe 2008). The McDonald’s Corporation is a good example of a company which has over the years, strived to become responsive to environmental issues and build its reputation as an environmental steward. The company’s responsiveness to environmental issues is guided by an environmental sustainability framework that accentuates on five main themes namely; restaurant operations, corporate operations, sustainable supply, advocacy and partnerships and communication and culture (McDonalds 2012). Similarly, other fast food restaurants such as Kentucky Fried Chicken (KFC) have developed different benchmarks and initiatives in order to become responsive to environmental issues and build their reputation (Duram 2010; Kaiser & Lien 2006). This report seeks to compare and contrast the environmental responsiveness benchmark developed by KFC against the five themes set out by McDonalds Company in it environmental sustainability framework. It will further review the efficacy of the benchmarks developed by these two companies in reference to criticism by environmental groups, the media and the general public. 2.0 Literature Review A considerable number of studies have examined the impact that fast food restaurant have on the environment. For instance, Nanda and Warms (2008) observe that, the proliferation of fast food chains around the world has resulted in an increase in demand for beef. The increasing demand for beef has in turn led investors around the world to facilitate the clearing of tropical forests in order to obtain land needed for cattle rearing (Nanda and Warms 2008). Similarly, Erickson-Davis (2008), notes that fast food restaurant chains such as McDonalds, Pizza Hut, KFC and Wendy’s are among the largest consumers of paper products. Every year thousands of trees have to be cut down in order to meet the demand for papers used in the packaging of fast food. Furthermore, large amounts of waste litters emanating from fast food restaurant chains clog landfills and litter roadways (Erickson-Davis 2008). Generally, fast food companies have been attributed to environmental issues such as pollution, resource depletion, land degradation and deforestation (McConnell & Abel 2007; Nanda & Warms 2008). Price and Lawson (1992) observe that as result of the environmental issues associated with fast food chains, the fast food industry is in a flux state mainly due to increasing pressure and emphasis on environmentalism. Solomon (2011) observes that, concerns over environmental issues has prompted the media, the government, environmental activist groups and the public in general to put pressure on business operators to become more responsive to environmental issues (Solomon 2011). Consequently, major fast food chains have become eager to build their reputation by portraying images that convey they are keen advocates of environmental issues (Price & Lawson 1992). Svoboda (1995) notes that, in the 1980s, McDonalds was at receiving end of criticism and protests from several environmental activist groups for its environmental policies and practices particularly those relating to packaging and waste management. In response to these criticisms and practices, McDonalds in conjunction with the Environmental Defense Fund (EDF) created a joint task force to formulate more responsive and acceptable environmental policies and practices. After much research and deliberation, the taskforce developed an environmental policy accentuating on the company’s commitment to protect the environment. The policy outlined standards and steps that the company will uphold in order to address environmental issues revolving around; solid waste management, recycling and pollution. Over the years, McDonalds has reviewed and updated its environmental policy in order to become more responsive to emerging environmental issues (Svoboda 1995). Just like McDonald’s, KFC has over the years been on the receiving end of criticism and protests from several environmental activist groups for its environmental policies and practices KFC has particularly been criticised for contributing to the destruction of rainforests and abusing animal rights (Greenpeace 2006; PETA 2013). In response to these criticisms, the company has put in place policies and measures that aim at addressing various environmental issues. The company has expressed its commitment to recycling, reducing its environmental blue print , using earth friendly packaging and outsourcing suppliers who are responsive to environmental issues (Shankleman 2012; Environmental Leader 2009; KFC 2011). 3.0 Environmental Themes Both McDonalds and KFC have developed frameworks of promoting environmental sustainability. The frameworks developed by these companies mainly revolve around themes highlighted below; 3.1 Restaurant Operations In its environmental sustainability plan, McDonalds acknowledges that the company’s impact on the environment is mainly instigated through its restaurant operations particularly in relations to areas such as water consumption, waste generation, greenhouse gas emissions and energy use. In order to address issues relating to greenhouse gas emissions and energy use, the company takes part in the Federal governments Energy Efficiencies Opportunities (EEO) Program, the company reports on its greenhouse gas emissions and endeavors to minimise its consumption of electricity. In relations to its water usage, McDonalds participates in the Sydney Water Every Drop Counts business program which enables the company to monitor its water usage and improve its water management practices. Moreover, the company addresses issues relating to waste generation through a program referred to as “Our clean street” which mainly focuses on keeping restaurant environs clean and tidy through a liter patrol initiative which facilitates regular litter pick up within the restaurant and its environs. Through this program the company also puts in place signage to remind customer to avoid littering (McDonalds 2012). Similarly, KFC has an environmental sustainability framework that seeks to address environmental issues instigated by its restaurant operations. The company’s environmental sustainability framework is built upon three main tenets namely; supply chain, education and green building design. The framework also focuses on areas such as; water, energy, packaging, waste and green building design and construction (Yum 2009). According to the company’s 2010 CSR report, the company introduced a reusable food side container in order to minimise its plastic and packaging use. This initiative is mainly aimed at addressing waste generation issues (Cheeseman 2010). In addition to this KFC has introduced a comprehensive recycling program aimed at recycling waste emanating from its restaurant operations (KFC 2011). In relations to greenhouse gas emissions and energy use, KFC’s goal is to minimise its global energy consumption and water use by at least 10% by gradually adopting to the use of biodiesel, removing over-door heaters, minimizing energy lighting and signage and using dual-flush cisterns in toilets (KFC 2008). 3.2 Cooperate Operations McDonald’s environmental sustainability framework also highlights practices or measures put in place in its corporate operations in order to promote environmental sustainability. According to this framework, the company’s corporate facilities have been designed in a manner that promotes energy and water saving. For instance in the company’s corporate facilities sensor lightings, water restrictors, rain water tanks and dual flush toilets have been installed so as to minimise water and energy use (McDonalds 2012). KFC has put in place similar measures in its corporate operations and facilities in order to save energy and water. In its corporate facilities, the company has installed waterless urinals, dual-flush cisterns in toilets, odour control systems, solar water heating systems and power perfectors (KFC 2008). 3.3 Sustainable supply In its environmental sustainability framework, McDonald’s has outlined a set of guidelines or criteria for selecting suppliers. These guidelines aim at promoting sustainable environmental practices at the supply chain level. These guidelines emphasises on suppliers to demonstrate efficiency in water use, reducing emissions, recycling, energy use, waste management, preservation of natural habitat and species and maintenance of soil health and fertility (McDonalds 2012). Similarly, KFC’s environmental sustainability framework accentuates on the company’s commitment to work only with suppliers who demonstrate sustainable environmental practices. The company stipulates it commitment to purchase products such as paper, wood and pulp from suppliers with sustainable and well-managed sources (KFC 2012). KFC is known for cutting ties with paper suppliers with unsustainable sources (Grover 2012). 3.4 Advocacy and partnerships In order to become more responsive to environmental issues and promote environmental sustainability, McDonalds has expressed its commitment to collaborate with the government, environmental groups and experts. For instance, in 2010, the company signed up for a NSW government sustainability program referred to as “Sustainability Advantage.” Moreover, the company has formed partnerships with the National Packaging Covenant and Sydney Water among other environmental stakeholders. Additionally, the company offers support to environmental organisations and initiatives such as Australia Zoo, Earth Hour and Clean Up Australia (McDonalds 2012). Similarly, KFC’s environmental sustainability framework emphasises on the company’s partnerships with suppliers, the government and environmental groups in order to addressing environmental issues in areas that it operates in. (KFC 2012; KFC 2008). For instance, KFC partnered with Closed Loop Recycling to develop an in-store recycling program. The company is also a signatory to the Australian Packaging Covenant (KFC 2011b). 3. 5 Culture and communication McDonald’s environmental sustainability framework describes the company’s overall business culture as one that focuses on environmental sustainability. The framework describes, as part of the company’s culture, environmental issues are taken into account in decision making and the company’s day to day operations. Furthermore, the company has put into place various communication channels in order to create awareness on environmental issues and encourage the public’s participation in initiatives that promote environmental sustainability (McDonalds 2012). Similarly, KFC has environmental policy accentuate on the company’s strong commitment towards environmental sustainability. In addition to this the company through its various franchises has over the years developed initiatives geared towards creating awareness on environmental issues (KFC 2011b). Discussion A critical look at the policies or environmental sustainability frameworks developed by both McDonald’s and KFC, it is evident that the elements embedded in these blueprints or initiatives focus on addressing environmental issues such as pollution, land degradation, climate change, resource depletion, waste management, water consumption, waste generation, greenhouse gas emissions and energy use. These frameworks have basically outlined what the companies are doing and intend to do in order to address these environmental issues. Nevertheless, it is worth questioning, in as much that these companies have expressed their plans towards becoming responsive towards environment issues, are they genuine? Do they practice what they preach? Based on some media reports and criticisms directed towards these fast food companies by some environmental groups, it is plausible to argue that, to some extent, McDonald’s and KFC are not genuine about their professed commitment towards promoting environmental sustainability. For example in 2012, KFC was allegedly accused for packaging its chicken it buckets produced by suppliers who sourced timber by clearing rainforest in Indonesia. Similarly, McDonald’s has been accused by Greenpeace environmental group for contributing to the deforestation of the Amazon rain forest by purchasing soya from suppliers who cut down trees in order to pave way for soya farming (Green peace 2006). Although these companies have stipulated their commitment to purchasing products from suppliers with sustainable and well-managed sources, these allegations evidently show that KFC and McDonalds to some extent contravene with their own environmental policies and blue prints (Shankleman 2012; KFC 2012). Recommendations Based on the findings of this report, it is evident that, when it comes to promoting environmental sustainability, supplier selection is a key area of weakness for both McDonalds and KFC. Generally, these companies are faced with the challenge of outsourcing products from suppliers with sustainable and well-managed sources. In order for these companies to address this challenge they should regularly evaluate the credentials of their suppliers and follow up on their supply sources and ensure that they have sustainable sources and comply with their environmental policies. Conclusion In as much as environmental groups are quick to criticise KFC and McDonalds, it goes without noticing that, over the years these two companies have made substantial progress towards addressing environmental issues brought about by their business operations. For instance, both companies have adopted reusable food packages and container in order to minimise their plastic and packaging use (Cheeseman 2010). Moreover, these companies have developed initiatives aimed at encouraging recycling, reducing waste and create awareness on environmental issues (McDonalds 2012). Furthermore, a company such KFC is known for cutting ties with paper suppliers with unsustainable sources (Grover 2012). Additionally, these companies have formed partnerships with suppliers, the government and environmental groups in order to become more responsive to environmental issues (McDonalds 2012; KFC 2011b). References Cheeseman 2010, Parent Company of KFC and Taco Bell Releases CSR Report, viewed on 25 February 2013 Doole, I. & Lowe, R 2008, International Marketing Strategy: Analysis, Development and Implementation, Cengage Learning, London. Duram, L 2010, Encyclopedia of Organic, Sustainable and Local Food, ABC-CLIO, Santa Barbara. Environmental Leader 2009, KFC Switches to Earth-Friendly Packaging, viewed on 25 February 2013 Erickson-Davis, M 2008, Fast-food industry destroying forests in the Southern US, viewed on 25 February 2013 Greenpeace 2006, KFC exposed for trashing the Amazon rainforest for buckets of chicken, viewed on 25 February 2013 Grover, S 2012, KFC UK Cuts Ties With Unsustainable Paper Suppliers, viewed on 25 February 2013< http://www.treehugger.com/corporate-responsibility/kfc-uk-severs-ties-unsustainable-paper-suppliers.html> Kaiser, M. & Lien, M. 2006, Ethics and the Politics of Food, Wageningen Academic Publication, The Netherlands. Kentucky Fried Chicken (KFC), 2011, KFC Recycling, viewed on 25 February 2013 Kentucky Fried Chicken (KFC), 2011b, Helping to Make the World So Good, viewed on 25 February 2013< http://www.kfc.com.au/about-us/so-good.asp> Kentucky Fried Chicken (KFC) 2008, Sustainability, viewed on 25 February 2013 Kentucky Fried Chicken (KFC) 2012, Packaging and KFC UK and Ireland, viewed on 25 February 2013 Lash, J. & Wellington, F 2007, “Competitive Advantage on a Warming Planet”, Harvard Business Review, March 2007, viewed on 25 February 2013 McDonalds 2012, Environment, viewed on 25 February 2013 McConnell, R. & Abel, D., 2007, Environmental issues: An introduction to sustainability, Prentice Hall, New York. Nanda, S. & Warms, R. 2008, Culture Counts: A Concise Introduction to Cultural Anthropology, Cengage Learning, London. 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