Regenerative Agriculture Programs

Resolution Text

RESOLVED, shareholders ask that the board of directors institute a policy that the Company (“McDonald’s”) comply with World Health Organization (“WHO”) Guidelines on Use of Medically Important Antimicrobials in Food-Producing Animals (“WHO Guidelines”)1 throughout McDonald’s supply chains.

SUPPORTING STATEMENT: McDonald’s is the largest beef purchaser in the United States and one of the largest in the world; its policies thus have tremendous influence on the market as a whole. Investor activists applauded2 McDonald’s when it committed in 2018 to reduce antibiotics use in all beef sold in its restaurants, and to announce reduction targets by the end of 2020.3 McDonald’s has not done so. To the contrary, McDonald’s has been weakening its antibiotics use commitments in its more recent statements,4 and recently dropped its commitment to reduction targets altogether.5

Antibiotics overuse is known to exacerbate antimicrobial resistance (“AMR”), which the WHO describes as “one of the top 10 global public health threats facing humanity.”6 AMR poses a systemic threat to public health and the economy. When the efficacy and availability of life-saving drugs are compromised, the entire economy suffers. And when the economy suffers, investors lose. By 2050, AMR could cause $100 trillion in lost global production,7 thus lowering the economy’s intrinsic value.

McDonald’s policies deviate from the WHO Guidelines, which recommend that “farmers and the food industry stop using antibiotics routinely to promote growth and prevent disease in healthy animals” and provide evidence-based recommendations and best practices. Moreover, a recent investigation found Tyson Foods—which McDonald’s named “Global Supplier of the Year” in 2022—sold numerous meat products between 2015 and 2020 that were contaminated with campylobacter and salmonella, more than half of which were antibiotic-resistant strains.8

As another company with a meat supply chain explained, robust AMR protections raise “[t]he challenge of individual costs and widely distributed societal benefits.”9 But for diversified investors, the portfolio-wide costs associated with AMR are paramount.

McDonald’s decision not to prioritize broad AMR risks does not account for its diversified owners’ interests in optimizing public health, the economy, and their long-term portfolio returns. By engaging meat suppliers that use medically important drugs beyond WHO Guidelines, McDonald’s adds to the economic threat AMR poses to its diversified shareholders: reducing the economy’s intrinsic value will directly reduce diversified portfolios’ long-term returns.10 McDonald’s profit gain that comes at the expense of public health is a bad trade for McDonald’s diversified shareholders, who rely on broad economic growth to achieve their financial objectives.

By changing its policies and adhering to the WHO Guidelines, McDonald’s could save lives, contribute to a more resilient economy, and protect its diversified investors’ portfolios.

1 https://apps.who.int/iris/bitstream/handle/10665/258970/9789241550130-eng.pdf
2 https://www.npr.org/sections/thesalt/2018/12/11/675559302/there-are-lots-of-antibiotics-in-the-beef-supply-mcdonalds-vows-to- change-this
3 https://corporate.mcdonalds.com/content/dam/gwscorp/scale-for-good/McDonalds_Beef_Antibiotics_Policy.pdf
4 https://www.nrdc.org/sites/default/files/chain-reaction-vi-restaurants-antibiotic-use-2021-report.pdf
5 https://www.keepantibioticsworking.org/blog/reduceantibiotics
6 https://www.who.int/news-room/fact-sheets/detail/antimicrobial-resistance
7 https://amr-review.org/sites/default/files/160518_Final%20paper_with%20cover.pdf
8 https://www.thebureauinvestigates.com/stories/2022-03-16/superbugs-on-the-shelves-diseased-chicken-being-sold-across- america
9 https://www.yum.com/wps/wcm/connect/yumbrands/41a69d9d-5f66-4a68-bdee- e60d138bd741/Antimicrobial+Resistance+Report+2021+11-4+-+final.pdf?MOD=AJPERES&CVID=nPMkceo
10 https://www.unepfi.org/fileadmin/documents/universal_ownership_full.pdf

Resolution Text

RESOLVED: Shareholders request that McDonald’s adopt an enterprise-wide policy to phase out the use of medically-important antibiotics for disease prevention purposes in its beef and pork supply chains. The policy should include, in the discretion of board and management, global sourcing targets with timelines, metrics for measuring implementation, and third-party verification.

SUPPORTING STATEMENT:  A policy meaningful to shareholders would include:

Establishment of a glidepath for the phase out, inclusive of interim reduction targets;
A commitment to annual disclosure of enterprise-wide antibiotic use including reporting by shared class of antibiotics1

WHEREAS: The World Health Organization (WHO) and the U.S. Centers for Disease Control and Prevention2 (CDC) report that antibiotic resistance is a global public health crisis that threatens to reverse many medical advances made over the last century. 

According to the CDC, antibiotic use, both in food animals and human medicine, is the “single most important factor” driving this crisis.3 Nearly two-thirds of medically important antibiotics sold in the U.S. are intended for livestock use4 with around 80 percent of those sales consisting of cattle and swine.5 McDonald’s is the single largest purchaser of beef in the U.S. and a major buyer of pork.6

In 2018, McDonald’s published its Global Vision for Antibiotic Stewardship in Food Animals which included a goal to prohibit routine preventive use of antibiotics by meat suppliers and committed to developing “species-specific policies outlining our requirements and implementation timelines for suppliers providing chicken, beef, dairy cows, pork and laying hens for use in McDonald’s restaurants.” It also announced the goal of setting reduction targets for medically-important antibiotics across 80 percent of its global beef supply by the end of 2020.

McDonald’s did not fulfill its promise. In March 2022, it replaced its commitment to set targets for ‘reducing use’ of medically important antibiotics with targets for the ‘responsible use’ of the drugs.

However, if responsible use does not incorporate absolute reduction targets, then McDonald’s pledge is not aligned with the WHO’s imperative to achieve absolute antimicrobial reductions (inclusive of medically important antibiotics) by at least 30-50% by 2030.7

By abandoning its 2018 promise, McDonald’s again exposes itself to reputational risk. Last year McDonald’s failed to fully implement its 2012 pledge to eliminate gestation crates from its pork supply chain, motivating several investors to mount a proxy fight for two board members’ seats, an effort that garnered mainstream media attention.

Consumer demand for meat raised with limited or no antibiotics is high – surveys have found that the majority of consumers are more likely to eat at restaurants that serve such surveys meat.  U.S. producers, including Tyson, supply beef raised without antibiotics.  Failure to offer meat raised with minimal antibiotics endangers McDonald’s market share.

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1  https://exploreanimalhealth.org/antibiotics-used-farm-animals/#:~:text=Some%20antibiotics%20are%20approved%20for,drug%20used%20in%20human%20medicine.

2  https://www.cdc.gov/drugresistance/biggest_threats.html

3  https://www.cdc.gov/drugresistance/pdf/ar-threats-2013-508.pdf

4  https://amr-review.org/sites/default/files/Antimicrobials%20in%20agriculture%20and%20the%20environment%20-%20Reducing%20unnecessary%20use%20and%20waste.pdf

5  https://www.fda.gov/AnimalVeterinary/NewsEvents/CVMUpdates/ucm588086.htm

6  http://www.chicagotribune.com/business/ct-mcdonalds-antibiotics-0824-biz-20170823-story.html

7  https://www.who.int/news/item/25-11-2022-quadripartite-welcomes-new-political-commitments-in-fight-against-antimicrobial-resistance