POWERED BY BRIGHT IDEASSerious about sustainability

McDonald’s UK

Sustainability Update 2015

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We’re focusing on…

Everyone knows McDonald’s – with our famous golden arches, we’re one of the most recognisable brands around the world. But did you know we’re also one of the largest customers of British and Irish farming? That we recycle all of our used cooking oil into biodiesel to power our delivery vehicles? That the small army of staff in our restaurants help keep the UK’s streets clean or that we use renewable electricity in our restaurants?

We do these things and more because we believe in being a modern, progressive, responsible company, making a positive difference in society. Our size and reach means that whatever we do makes an impact – we want that to be a positive impact.

As you’ll see in these pages, we’re achieving our ambitions by continuing to focus on our areas of strength – in particular, our approach to energy, recycling, responsible food sourcing and our work with our people and the communities in which we operate. It’s through this focus that we can make real progress on the things that matter to our customers, our stakeholders, and society. We’ve already achieved much, but we’ll continue to challenge ourselves to achieve even more.

SERIOUS ABOUT SUSTAINABILITY

McDonald’s has a clear goal – to recycle at least 50% of our waste and send zero waste to landfill. For a company of our size, that’s a challenging target. However, through smarter packaging design, re-using and recycling materials, and introducing front-of-house recycling, we’re making great progress.

Packaging, waste and recycling

McDonald’s is proud to be a part of the communities we serve. Around 70% of our restaurants are operated by around 150 franchisees, men and women who are investing in their local communities. Giving something back is an essential part of the way we operate. We do this through supporting RMHC and Tidy groups and local activities such as clean-up events.

Good neighbour

McDonald’s has one of the largest workforces in the UK. Training and education enable staff to gain new qualifications, and by engaging staff in community events we help them develop additional skills and experience.

GOOD PEOPLE

To provide the best-quality food for our customers, we source ingredients responsibly from over 17,500 British and Irish farms and work closely with suppliers who are committed to meeting strict standards, such as MSC certification. We continually look to improve the nutritional profile of our meals.

GOOD FOOD & RESPONSIBLE SOURCING

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A business serving meals to over three million customers a day inevitably uses a lot of energy. We are committed to reducing our carbon footprint, and by focusing on actions such as sourcing renewable electricity we’re achieving that aim. We champion energy efficiency, such as motion-sensitive lighting and effective energy management systems, throughout our restaurants.

ENERGY

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RESPONSIBLE SOURCING

Good food needs a good source Helping to ensure

plenty of fish in the sea

Protecting fish levels

All the fish we serve is Marine Stewardship Council (MSC) certified. Our entire fish supply chain has achieved the MSC Chain of Custody traceability standard and our packaging has carried the MSC ecolabel since 2011, guaranteeing that the fish come from well-managed, sustainable stocks.

McDonald’s is committed to providing good food to our customers. We want our customers to enjoy food that has been sourced responsibly and uses quality ingredients, and to be fully aware of the nutritional value of what they consume.

All about the source We prioritise responsible sourcing for all the ingredients we use. We build long-term relationships with suppliers who have the same commitment –

some of our relationships stretch back over 40 years.

Supporting the farmers’ market

Our financial support for UK agriculture

Our investment in the UK food and agriculture sector has grown over 40 years to more than £850 million annually, supporting 5,500 jobs in the sector.

What we’re made ofIncreasing servings of fruit and vegetables

Since 2007 we have reformulated our foods to reduce the quantities of salt, sugar and saturated fats used, while increasing servings that contain at least one of the daily recommended intake of five a day. In 2014, we served over

66.3 million PORTIONSof fruit and vegetables through several different menu items.

Going beyond sourcing Our unique support programme for farmers

Farm Forward is our long-term programme to support over

17,500 British and Irish farmerswho supply us. Farm Forward has five key areas: quality ingredients; animal welfare; skills and training for young farmers; environmental improvements; and knowledge sharing, for example through our Sustainable Beef Clubs. It includes access for beef farmers to a free online business tool to help highlight cost and carbon-reduction opportunities. Launched in 2012, Farm Forward demonstrates our long-term commitment to this vital industry and how we engage with suppliers.

good food & RESPONSIBLE SOURCING

Rest assuredGuaranteeing welfare standards for pigs

In 2013, we switched to using only British RSPCA Assured (formerly Freedom Food) pork across our entire menu, including all our sausage and bacon products – the first high street restaurant chain to do so. All our pork comes from British farms that meet these strict standards, ensuring pigs have bright, airy environments, bedded pens and plenty of space.

McDonald’s is taking a leading role as one of the UK’s biggest restaurant

chains serving only RSPCA Assured pork. It marks a major milestone for farm animal welfare and it’s also an impressive achievement by McDonald’s. They have shown that it is possible to bring higher welfare food to the everyday consumer at an affordable price and on a national scale.”Jeremy Cooper, CEO RSPCA Assured

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Where’ve you bean?Our sustainable breakfast

All of our coffee and tea comes from Rainforest Alliance Certified™ farms that meet high environmental standards as well as protect the rights and welfare of workers. But did you know that most of our breakfast is also ethically sourced? The pork we use in our bacon and sausage patties comes from British, RSPCA Assured scheme farms, all of the eggs we use are free-range, and we are the

third-largest purchaser of organic milk from the UK, with over 24 million litres sourced from UK dairies.

Serving up the factsProviding nutritional information to customers

We have been providing nutritional information about the food in our restaurants since 1984 – the first restaurant chain in the UK to do so. We now provide nutritional information about all our food on menu boards, tray liners, packaging, our website and via our mobile phone app.

GOOD FOOD & RESPONSIBLE SOURCING ENERGY

Running over 1,200 restaurants uses lots of energy, but through focusing on key areas such as renewable power, energy efficiency and promoting best practice among staff members, we can substantially reduce our impact.

Full of energy

Powering our future

Our long-term commitment to reducing our footprint

We’ve signed long-term agreements with renewable energy operators who will provide over 80% of our annual electricity for the next 13 years. With a few exceptions at landlord-supplied sites, the vast majority of our restaurants now use

100% renewable electricity.

Here comes the sun

Maximising natural light in buildings

All new restaurants are designed to make the most of natural light, utilising ‘sun pipes’ and carefully designed glazing to assist with internal lighting and heat retention.

More customers, less energyIncreasing energy efficiency through investment

Although our customer numbers have risen, we’ve improved energy efficiency significantly since 2007 and now use 27% less energy per customer. All new restaurants are built to the platinum standard for green building guidelines for energy efficiency. This includes energy management systems to control lighting, heating and air conditioning, energy-efficient kitchen equipment, solar panels and motion-sensitive lighting.

We’ve seen the lightReducing energy consumption

All new McDonald’s restaurants have 100% LED lighting, which uses 50% less energy than fluorescent lighting. Over 120,000 LED lights have now been installed across our UK restaurants, right down to the bulbs in the emergency lighting.

Tree-range eggsEnhancing conditions for hens

We serve only free-range eggs across our entire menu – and that’s not all. Our range enrichment programme means that producers have planted over half a million trees on their ranges to improve animal welfare standards and egg quality.

Tonnes of improvements

Improving our menu’s nutritional value

Our reformulation work means that in 2014 we used 235 fewer tonnes of salt, 767 fewer tonnes of saturated fat and 341 fewer tonnes of sugar across our menu compared with 2007.

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McDonald’s goal is to achieve zero waste to landfill by 2020, recycling at least 50% of waste and ensuring what can’t be recycled is disposed of responsibly.

Over 85% of our kitchen waste (including food, plastic and paper packaging) is already being recycled. Our customers also have their part to play, and we’re engaging with them through messaging and key initiatives such as our new in-restaurant recycling facilities.

Bin the waste

Size matters

Reducing packaging through better design

We continue to redesign our packaging, such as our Big Mac® containers, which we made smaller, resulting in a massive saving of 434 tonnes of packaging material.

Tapping into water savings

Reducing our water use

Conserving water, a precious resource, is crucial for the environment. That’s why we have installed water-saving technologies and devices in our restaurant washrooms and kitchens, which means an

annual SAVING OF OVER 150 MILION LITRES OF WATER

delivering emissions reductionsCreating fuel from waste

All of our used cooking oil is converted into biofuel for use by our delivery lorries. Almost half of our UK delivery fleet now runs on this biodiesel, creating over 7,500 tonnes fewer CO2 emissions than ultra-low sulphur diesel (about the same amount as 5,000 years of watching TV!).

Save cups, save trees

Encouraging customers to recycle cups

Customers in new or recently refurbished restaurants are now encouraged to place cups into separate front-of-house recycling bins, potentially leading to three million cups each week being recycled and thousands of trees a year saved. Customer recycling stations will be in most Scottish restaurants by the end of 2015, and across the UK by the end of 2018.

Fuelled by food

Creating energy from food waste

Using anaerobic digestion, 41,000 tonnes of waste, including egg shells and coffee grounds, were diverted from landfill and converted into gas for energy in 2014. In some restaurants, the staff also donate coffee grounds to local allotments for use as fertiliser.

Jumbo savings

How we’re reducing waste

Recycling the corrugated cardboard boxes used in our restaurants avoids over 15,000 tonnes of waste a year going to landfill – the equivalent of 38 fully laden 747 jumbo jets. This is just one of the ways we are working hard towards achieving zero waste to landfill.

Packaging, waste and recycling

Sustained effort

Reducing the environmental impact of packaging

Around 90% of the packing materials we use comes from certified or recycled sources and wherever possible we re-use delivery packaging, reducing the need to use raw materials and energy on making new items.

All of the fibre packaging we use in the UK comes from renewable sourcescertified by either the Forestry Stewardship Council (FSC) or the Programme for Endorsement of Forest Certification (PEFC).

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EVERYBODY NEEDS GOOD NEIGHBOURS

KEEPING THE UK BEAUTIFULOur commitment to stopping litter

McDonald’s is an active supporter of national Tidy groups, such as Keep Britain Tidy, Keep Scotland Beautiful, Keep Wales Tidy and Keep Northern Ireland Beautiful, and works closely with them on litter prevention campaigns. Since 2010 people working in McDonald’s restaurants have run over 1,800 events, engaging 56,000 colleagues and community members in litter prevention.

McDonald’s, both through its business practices and its support

for Keep Britain Tidy, has demonstrated an ongoing commitment to reducing litter and helping to change the behaviour of those customers who drop litter. They are leading the way in the sector and developing a model of good practice that others should look to in their approach to litter.”Allison Ogden-Newton, CEO, Keep Britain Tidy

We aim to be a good neighbour wherever our restaurants are located and have a long-standing commitment to combatting litter and keeping localities clean. We’ve run daily litter patrols around our restaurants

for over 30 years and work closely with national Tidy groups.

We also make a positive impact through our support for community initiatives.

Good neighbour

We have an obligation to give something back to

the community that gives so much to us.”Ray Kroc, McDonald’s founder

A TIDY EFFORTHow we’re keeping the streets clean

We’ve been running street litter patrols by employees for over 30 years – up to

four patrols a day, or 1.5 million annually. It’s estimated that employees walk over

150,000 miles a year to keep the streets clean for everyone.

Charity begins at home

How we support our communities

Together with our customers and suppliers, in 2014 we raised around £5 million for Ronald McDonald House Charities, and provided around

6,000 families with accommodation close to their children when they were in hospital.

good PEOPLE

McDonald’s has one of the largest workforces in the UK. For many of these people, it’s their first step on the career ladder. We offer them training and education opportunities, and we help them to develop additional skills and experience through community activities.

We believe that through engaging our employees with sustainability and being a good neighbour through our Planet Champion programme, not only do we create happier, more motivated employees, we also increase our positive impact on our planet and the communities in which we operate.

An engaging approach

Championingthe causeEngaging employees through sustainability

Planet Champions is our pioneering programme to engage employees and embed sustainability in our organisation. Our 1,500 volunteer Planet Champions are our very own environmental super heroes, championing the cause of sustainability and encouraging and motivating colleagues across our restaurants every day. Planet Champions bring real value to the business: they help the planet by driving reductions in energy use, increasing recycling, controlling litter around the restaurants, and helping to organise local community clean-ups. Over 80% of our Planet Champions also say that helping engage colleagues in environmental issues has increased their own job motivation.

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Getting on the ladder

Giving young people opportunities

Around 70,000 people working in our restaurants are aged 16–25, while

90% of restaurant managers started as crew members, demonstrating our commitment to social mobility and opportunities for career progression.

Training for life

Supporting the education of people working in our restaurants

McDonald’s has supported nearly 18,000 young people to gain apprenticeships and

66,000 to gain other nationally recognised qualifications, including our own university -accredited Foundation Degree – all valuable qualifications for life.

Grounds for success

How Planet Champions make a real difference

Initiatives that have come directly from Planet Champions include donating coffee grounds to local allotments to be used as fertiliser, and organising ‘sustainable transport days’ – encouraging colleagues to cycle or walk to work instead of driving.

GOOD PEOPLE

I’m very proud to be working for a company

that cares about the environment. Through relatively small changes a company like McDonald’s can have a massive impact.”Jon Davidson, Planet Champion of the Year 2015

The Planet Champion programme has offered

us fantastic results. We see a huge influence on energy savings and waste reduction, staff are becoming true sustainability ambassadors and we have been able to build a strong relationship with the local community.’Cherry Lewis-Taylor, franchisee

Looking AheadSupply chain successes

We are proud of our work to improve animal welfare and introduce more sustainable working practices, which has been recognised by a number of recent prestigious awards, including:

What we’ve achieved

ronald McDonald House CharitiesWe are also proud of our continued work through the Ronald McDonald House Charities, which has helped tens of thousands of families with hospitalised children over the last 25 years. The money raised by McDonald’s, our franchisees and our customers helps support families by providing free ‘home away from home’ accommodation.

Chartered Institute of Logistics and Transport Supply Chain

Best Practice Award 2013

Compassionin WorldFarming

Good Sow Award 2013 – Commendation

Pig and Poultry Marketing Awards 2014

Training Initiative of the Year Award – Highly Commended for training initiative – young farmers

RSPCA Freedom Food Alistair Mews Award

for Food Service 2014

SustainableRestaurantAssociationRaymondBlanc HeroAward

Sustainability Hero Award 2014

Compassionin WorldFarming

Good Egg Award 2015

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To drive our sustainability work forwards we have a series of goals for 2020:

To increase recycling to a minimum of 50% of waste and send zero waste to landfill

To increase the energy efficiency of our restaurants by a further 20%

To double the amount of fruit and vegetables we serve

To support sustainable beef production

To help make our communities cleaner and greener places in which to live, through working to prevent litter

To further engage our people with sustainability actions through developing an online training programme.

Beefing up our standardsSetting standards for sustainable beef

We are committed to purchasing beef from verified sustainable sources, and have worked with WWF and Cargill to develop the Global Roundtable for Sustainable Beef (GRSB). The Roundtable includes stakeholders from across the beef supply chain, including JBS and Solidaridad, among others, and has now published the first-ever set of internationally accepted principles and best practices for the beef industry, supporting our journey to begin purchasing sustainable beef from 2016.

But beef production varies widely around the world and the industry needs local solutions. In Europe, McDonald’s chairs the Sustainable Agriculture Initiative (SAI) Platform’s Beef Working Group which is scheduled to publish a Sustainability Assessment for beef farms in Europe. SAI Platform is the global food value chain initiative for sustainable agriculture (www.saiplatform.org).

things we’re PROUD OF… WHAT NEXT?

Saving the wood for the treesOur commitment to ending deforestation

Protection of forests and areas of biodiversity are important issues. That’s why McDonald’s announced a commitment to end deforestation across the entire global supply chain, for which we will begin developing specific time-bound sourcing targets in 2015. The pledge focuses initially on priority products including beef, fibre-based packaging, coffee, palm oil and poultry (including soy feed).

WWF helped us define our supply chain priority areas in 2010, and we continue to work with them on sustainable sourcing. McDonald’s also supports the Brazilian Soya Moratorium, which helps prevent deforestation in the Amazon biome, and we’ve committed to purchasing only RTRS (roundtable sustainable soy) and ProTerra certified soy for use in our chicken feed.

Getting involvedFind out more

We hope you’ve enjoyed reading about the many actions we’re taking to become a more sustainable business. If you’d like to understand more about our goals and

achievements, you can find futher details in our global sustainability framework at www.aboutmcdonalds.com/

mcd/sustainability/sustainability_CR_reports.html

Have your sayWe think we’ve made great progress towards achieving sustainability. However, we also know there is still work to be done and we don’t have all the answers. We’d like to know where you, as a valued stakeholder, think we should be heading next, and how we might be able to work with you to achieve these goals. We’d really

welcome your comments, ideas and suggestions to help us on the next stage of our sustainability journey.

Please email us with your thoughts at planet.team@uk.mcd.com