McDonald's (NYSE:MCD) has been caving in to public pressure regarding the environmental impact of its packaging since back in 1990. At that time, the company's clamshell Styrofoam boxes had become a symbol of corporate disregard for the environment and when the pressure got loud enough, the company gave in and moved to cardboard boxes. The company wasn't a leader then, and it isn't a leader now, but it's once again making a major change to its packaging due in part to pressure from environmental activists.
The fast-food giant has pledged to make sure all the packaging of food that goes to customers comes from "renewable, recycled, or certified sources" by 2025. The company plans to eliminate foam packaging by the end of 2018, noting that currently about 2% of its packaging, by weight, is foam.
What is McDonald's doing?
The chain is giving in to public pressure, including a shareholder advocacy group, but it's doing so in a way that lets it acknowledge the problem and gives itself a lot of runway to figure out how to solve the problem without hurting the bottom line.
McDonald's has now promised that 100% of "guest packaging will come from renewable, recycled, or certified sources with a preference for Forest Stewardship Council certification" by 2025.
"Our customers have told us that packaging waste is the top environmental issue they would like us to address," said McDonald's Chief Supply Chain and Sustainability Officer Francesca DeBiase in the press release. "Our ambition is to make changes our customers want and to use less packaging, sourced responsibly and designed to be taken care of after use, working at and beyond our restaurants to increase recycling and help create cleaner communities."
That joins an earlier goal where the company pledged that 100% of fiber-based packaging will come from recycled or certified sources where no deforestation occurs by 2020. In addition, as part of this new agreement, McDonald's also plans to recycle guest packaging in 100% of its locations by 2025.
Will this work?
McDonald's move takes the teeth out of any protest. The company may be moving slow, but it's giving activists and environmentalists what they are asking for.
It's also worth noting that the chain is not starting from zero. It currently gets 50% of its packaging from renewable, recycled, or certified sources. It also recycles customer packaging at 10% of its restaurants globally, claiming that the many different laws it operates under is why it set the 2025 timeline for taking that to 100%.
This is a smart play by McDonald's that diffuses tension without really doing much at all. The company now has about seven years to figure out how to live up to its promise. That's likely more than enough time to do so in a way that does not harm the bottom line.