McDonald’s Corporation is asking the SEC for the go-ahead to exclude from its 2025 proxy statement a shareholder proposal addressing the fast-food chain’s ability to reach its climate goals.
Green Century Equity Fund, which is advised by Green Century Capital Management, has filed the resolution. It requests that McDonald’s ‘disclose an assessment of whether its current climate transition plans and related resource commitments can reasonably achieve its 2030 and 2050 emissions reduction targets, or whether additional plans or commitments are necessary.’
The proponent recommends that this assessment include:
- ‘Quantifying the emissions reduction impact of each of McDonald’s current climate strategies
- ‘Assessing whether [the company’s] livestock dependency makes its climate targets unachievable
- ‘Integrating quantitative, timebound protein diversification targets.’
‘McDonald’s business is dependent on livestock, with beef accounting for about one third of [the company’s] total [greenhouse gas (GHG)] emissions,’ Green Century writes. ‘Although McDonald’s is committed to reducing Scope 3 emissions, which comprise 99 percent of its GHG footprint, by 50.4 percent by 2030 and reaching net zero by 2050, it has not disclosed a roadmap for achieving these targets.’
According to Green Century, this omission exposes McDonald’s to ‘material’ supply chain, competitive and legal risks. For example, it states that ‘alternative proteins [ie plant-based and food-technology products] offer the highest emissions savings per dollar of invested capital of any industry, and competitors including Burger King offer alternative proteins in every US restaurant. Nevertheless, alternative proteins are absent from McDonald’s public US climate strategy.’
‘Micromanagement’
In its letter to the SEC, McDonald’s argues that it should be given no-action relief to omit the proposal per Rule 14a-8(i)(7) because it deals with matters related to the company’s ordinary business operations by looking to micromanage the company. It does this by requesting a ‘highly prescriptive and detailed assessment that will require the company to gather, analyze and report on a significant range of internal and external information,’ McDonald’s argues.
The proposal also tries to micromanage the company by ‘limiting management’s discretion regarding the establishment, measurement and fulfillment of the company’s emissions reduction targets, regardless of changing regulations, market conditions, business strategy or other circumstances,’ McDonald’s writes.
It adds: ‘The board has determined the appropriate path toward managing the company’s emission targets [and its] strategies are publicly disclosed on its website. [McDonald’s] approach reflects guidance and input from across the company’s various specialized departments, as well as outside experts. The company, rather than shareholders, is best equipped to consider, understand and address the nuances and complexities of its emissions targets.’
McDonald’s also argues that the proposal’s references to policy issues such as climate change and climate risk does not preclude it from being excluded per Rule 14a-8(i)(7).
McDonald’s filed its 2024 proxy statement on March 20 ahead of its AGM on May 22. The company did not respond immediately to a request for comment.
Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
