Arcos Dorados

Stakeholder engagement
The company discloses the channels it uses to engage with its stakeholder groups.

Sustainable development strategy
The company discloses its process for identifying and prioritising its most relevant sustainability impacts as well as the outcome of this process, in relation to its sustainability strategy.

Scope 1, 2, and 3 greenhouse gas (GHG) emissions
The company has committed to reducing GHG emissions by 15% from all of its restaurants and offices by 2025, based on a 2021 baseline. Additionally, the company aims to reduce GHG emissions by 10% across its supply chain by 2025, also based on a 2021 baseline.

Ecosystem conversion
The company’s conversion-free target covers all its high-risk commodities, and it discloses time-bound targets to achieve conversion-free supply chains.

Plastic use and packaging waste
The company discloses quantitative data with regards to plastic use reduction and use of sustainable packaging.

Responsible marketing
The company discloses that in line with Global Happy Meal Goals, all Happy Meal Bundles advertised to children in Brazil, Argentina, and Mexico met McDonald’s Global Happy Meal Nutrition Criteria and complied with local or regional advertising pledges for marketing to children in 2021.

No leading practices were identified in the social inclusion area.

Act ethically
The company has a public commitment to protecting personal data and  prohibiting bribery and corruption. Furthermore, it has a grievance mechanism for stakeholders to raise concerns and complaints regarding bribery and corruption.

Provide and promote decent work
The company has a publicly available policy statement that commits to ensuring the health and safety of its workers. Moreover, the company conducts Social Workplace Accountability (SWA) audits, which cover various aspects, including human rights, labor standards, and workplace environments, for all its food, packaging, distribution, and marketing suppliers.

In terms of workforce demographics, the company discloses the proportion of its total direct operations workforce across various employee categories and age groups. Furthermore, it provides insight into the representation of women in its workforce across different employee categories. These transparency measures showcase the company’s commitment to accountability and inclusivity in its operations.

Respect human rights
The company discloses a website, an email address, a phone number, and a mail address for reporting grievances. Also, on visiting its website, it is clear that the channel is open for anyone to make a report and there is a choice for the complainant to either remain anonymous or identify themselves. It is accessible to all external stakeholders who may be adversely impacted by the company.

Governance and accountability for sustainable development
The company has an opportunity to strengthen its sustainability governance and accountability by designating an individual or body to implement its sustainability strategy. It could link senior executives’ compensation to targets and objectives which cover nature, including biodiversity, and social issues. Additionally, it could disclose if the highest governance body has expertise in its most material sustainability topics.

Lobbying and advocacy
The company has an opportunity to disclose a list of trade associations of which it is a member. Furthermore, it could provide a clear and detailed framework for assessing the alignment of these trade associations with its sustainability targets and report any (potential) misalignments between the lobbying activities of its trade associations and its sustainability targets.

Stakeholder engagement
The company has an opportunity to disclose an overview of the issues raised during its stakeholder engagement activities.

Sustainable development strategy
The company discloses certain sustainability objectives/targets, including those related to climate and ecosystem conversion. However, there is an opportunity to establish group-wide targets for the most material parts of its value chain. While it reports on some of its targets, including those related to ecosystem conversion, it could report consistently across all its targets.

Scope 1, 2, and 3 greenhouse gas (GHG) emissions
The company has the opportunity to report progress against its Scope 1, 2 and 3 emissions targets, which also have the potential to be aligned with a 1.5-degree trajectory.

Antibiotic use and growth promoting substances
While the company discloses that it has eliminated antibiotics critical for humans used in its Brazil chicken supply chain, it has an opportunity to disclose a policy on reducing the (prophylactic) use of antibiotics and growth promoting substances. It could also disclose targets to phase out their prophylactic use across all species, geographies and products, and report progress against the targets.

Ecosystem conversion
The company has an opportunity to disclose activities to achieve conversion-free supply chains.

Food loss and waste
The company has an opportunity to disclose its food loss and waste (FLW) reduction targets and report progress against these targets. Additionally, the company can consider aligning its FLW reduction goal with SDG12.3, which aims for a 50% reduction by 2030.

Soil health and agrobiodiversity
The company has an opportunity to disclose activities and targets to improve soil health or agrobiodiversity in its production or sourcing practices, and report progress against them.

Water withdrawal
The company has an opportunity to enhance its disclosures relating to water use and withdrawal.

Availability of nutritious foods
There is potential for the company to improve its reporting on efforts to reduce sugar, salt, and fat, as well as increase the presence of fruits, vegetables, nuts, and whole grains in its entire global portfolio. Additionally, it has the opportunity to adopt a nutrient profiling system and set a sales-based target to increase the proportion of more nutritious food offerings, aligning with government-endorsed or externally validated nutritional guidelines.

Food safety
The company has an opportunity to demonstrate that 100% of its own operations are certified to a GFSI food safety scheme/certification programme or other widely recognised (industry-specific) certification. Additionally, it can disclose the percentage of food suppliers certified to a GFSI-recognised food safety scheme.

Responsible marketing
The company has an opportunity to disclose a responsible marketing policy specifically tailored to children that is aligned with international codes and guidelines and applicable across all media channels.

Farmer and fisher livelihoods
The company has an opportunity to demonstrate how it identifies living income benchmarks and assesses living income gaps for some regions or commodities. Also, it could demonstrate how it improves farmers’ income resilience through its procurement practices and supply chain relationships.

Forced labour
The company has an opportunity to disclose forced labour requirements for its operations and supply chain such as a prohibition to pay recruitment fees, to retain workers’ personal documents or to restrict workers’ freedom of movement. Further, it could provide evidence of how it builds the capacity of its suppliers to prevent forced labour impacts.

Living wage
The company has an opportunity to set a target for paying a living wage across its direct suppliers and describe how it determines a living wage for the regions where it sources. Also, it could disclose the percentage of workers across its own operations or suppliers that are paid a living wage.

Act ethically
The company could describe the process for identifying bribery and corruption risks and impacts within specific locations or activities, particularly within its own operations. Furthermore, it could incorporate anti-bribery and anti-corruption clauses into its contracts with business relationships.

In terms of political engagement and transparency, the company can establish a comprehensive approach by formulating a policy that outlines its lobbying and political engagement strategy. Additionally, the company has an opportunity to demonstrate its commitment to responsible corporate behavior by disclosing a publicly available policy statement specifying that it does not make political contributions.

To enhance transparency further, the company could consider disclosing its expenditures on lobbying activities. Additionally, it can reinforce its commitment to ethical lobbying practices by requiring third-party lobbyists to comply with its lobbying and political engagement policy.

Provide and promote decent work
The company has opportunities to strengthen its commitment to ethical practices. It can require suppliers to prioritize worker health and safety. Additionally, the company can establish time-bound targets for ensuring all workers receive a living wage and disclose the methodology used for determining this wage in various regions. Furthermore, the company can actively collaborate with suppliers to support the implementation of living wages.

In the realm of gender equality and empowerment, the company can publicly affirm its commitment and set clear, time-bound targets. Currently, the board comprises 20% women, but the company could aim for at least 30% to align with diversity standards. Lastly, to address gender pay disparities, the company can disclose salary and remuneration ratios between men and women across different employee categories and significant locations of operation. These actions will reinforce the company’s dedication to social and gender-related responsibilities.

Respect human rights
The company presently has a public commitment to respect human rights, yet there’s room for improvement by formalizing and strengthening this commitment. Beyond specific pledges concerning workers’ rights, the company can elevate its policy by including all ILO-declared fundamental rights at work within a formal policy document. Furthermore, extending this commitment to its suppliers to uphold these fundamental rights throughout the supply chain would demonstrate a comprehensive approach to human rights.

In terms of transparency, the company can enhance its reporting by disclosing its methodology for identifying human rights risks and impacts, particularly within specific locations and the supply chain. Additionally, it could detail its process for identifying salient human rights issues and share the results of its human rights risk assessment. To solidify its global commitment to human rights, the company might consider disclosing the existence of a global system designed to address, prevent, or mitigate its salient human rights issues.