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McDonald's Social Responsibility Report: One-Year Global Update Continued Progress Reported

- Environment - Animal Welfare - Ronald McDonald House Charities - Healthy Lifestyles

May 2, 2003

On the one-year anniversary of McDonald's first global Social Responsibility Report, the company is reporting continued progress around the world in its social responsibility efforts. In an update that details advances globally during the past year, highlights include environmental and sustainability initiatives, non-governmental organization partnerships, animal welfare audits, support of children's causes and healthy lifestyles activities.

"Social responsibility is not a program that begins and ends. Acting responsibly has always been a part of who we are and will continue to be the way McDonald's does business. It's an ongoing commitment," said McDonald's CEO, Jim Cantalupo. "I'm proud of what our company has accomplished, and we'll continue to do more."

The progress outlined in the Global Social Responsibility Progress Update report includes:

  * Approximately 35 million pounds of reductions in packaging materials

  * Millions of dollars donated through Ronald McDonald House Charities for
    children's health initiatives such as tetanus immunizations and
    preventing childhood blindness

  * Millions of dollars raised through World Children's Day that will
    support the distribution of 150,000 dictionaries, 1,300 hearing aids and
    other health care initiatives for children

  * On-site animal welfare audits of supplier facilities around the world

  * New menu offerings that give customers additional choices with Happy

"Our customers and other key stakeholders continue to tell us they care about what McDonald's is doing on important issues for our communities, workplace, supply chain and the environment," stated Bob Langert, Senior Director of Social Responsibility. "Since last year, we've made considerable progress on issues our customers care about. Some examples include the launch of McDonald's Healthy Lifestyles initiative and the partnership established with Conservation International to integrate sustainable agriculture practices throughout our food production system."


  * Attached are more details about McDonald's Global Social Responsibility
    Progress Update.

  * The Social Responsibility Update is also available at:

      McDonald's Global Social Responsibility Progress Update: 2002

On April 15, 2002, McDonald's issued its inaugural Social Responsibility Report. We sought and received extensive feedback from a wide range of our stakeholders. Generally, they acknowledged the Report as a good first effort, with room to improve in several major areas. Recommendations for the future included:

  * More specific performance data.

  * More commitments to specific goals, with timelines.

  * Greater focus on food and nutrition issues.

  Stakeholder feedback also helped us identify priority areas for future

  * Sustainable agriculture.

  * Nutrition and health.

  * Employment policies and practices.

We heard this feedback and proceeded to develop a significant number of new initiatives to address key priorities and improve our planning and performance measurement processes. Our goal is to issue our next full Social Responsibility Report, reflecting this progress, in 2004.

In the interim, we want to provide our stakeholders with a brief update on some of the most important social responsibility developments at McDonald's in a broad range of areas. We also reaffirm our commitment to thorough performance reporting and ongoing dialogue with all our stakeholders.


  * In 2002, McDonald's global supply chains purchased more than $460
    million in recycled packaging materials. Products with recycled content
    vary by market and may include carryout bags, napkins, drink carriers,
    trayliners, shipping containers, and some types of folding cartons. In
    all, they involve a mixture of post-consumer and pre-consumer materials,
    with a strong preference for post-consumer.

  * Globally, packaging materials were reduced by approximately
    35 million pounds.

  * McDonald's Europe joined the EU's Greenlights Programme, under which
    private companies voluntarily agree to install energy-efficient lighting
    in their facilities. The company will phase in the conversion in the
    process of building and renovating restaurants. Electrical energy
    savings will average an estimated 6,670 kWh per restaurant per year.
    McDonald's USA has been a member of the U.S. Environmental Protection
    Agency's similar Green Lights program since 1992.

  * McDonald's Brazil joined the Sao Paulo State sanitation department's
    water conservation program.

  * McDonald's Austria closed the recycling loop by fueling the trucks that
    supply its restaurants with low-emission biodiesel made from the
    restaurants' used cooking oil.

  * With guidance from The Natural Step, a leading non-profit sustainability
    organization, we completed a comprehensive analysis of the impacts of
    all our major business activities on the environment and the community.
    This study will provide the foundation for a long-range global program
    to implement our commitment to leadership in sustainability so that
    resources and the products and services they provide will be available
    for current and future generations.

  * McDonald's entered into a new collaboration with the Center for
    Environmental Leadership in Business, a division of Conservation
    International. The project is focused on integrating conservation and
    sustainable agriculture into our global food supply chain and on issues
    related to sustainability in the fishing industry. Conservation
    International is a long-time expert advisor to McDonald's, and we have
    worked together on other projects to raise environmental awareness,
    promote sustainable agricultural systems, and conserve biodiversity.

  * McDonald's Denmark opened the world's first HFC
    (hydrofluorocarbon)/HCFC/CFC-free restaurant. The company is testing the
    viability of refrigeration and ventilation equipment that uses
    environmentally-friendly natural refrigerants.  This is an important
    step toward establishing a commercial market for refrigeration and
    ventilation equipment and natural refrigerants that will help protect
    the environment from global warming.

  * McDonald's Sweden continued operations of a restaurant testing a wide
    range of cutting-edge sustainability solutions. The restaurant is part
    of the pioneering GreenZone project, which demonstrates how to build and
    operate businesses in a sustainable way while also reducing costs.


  * On November 20, 2002, McDonald's restaurants around the world hosted an
    unprecedented simultaneous fundraiser for children in their communities-
    World Children's Day. Restaurants in more than 100 countries
    participated and raised more than $12 million (US$) for Ronald McDonald
    House Charities and other children's causes. Proceeds from the event
    will mean:

   - Support for approximately 200 children's health organizations around
     the world.

   - Aid for orphanages throughout eastern Europe.

   - Assistance for close to 70 children's hospitals worldwide.

   - Distribution of nearly 150,000 dictionaries to children in rural areas
     of China.

   - Support for 16 new Ronald McDonald Houses around the world.

   - 1,300 hearing aids for children in Mexico.

   - Additional support for the 134 Ronald McDonald House Charities Chapters
     across the United States and thus for the ongoing operations of Ronald
     McDonald Houses, the Ronald McDonald Care Mobile program, RMHC
     scholarship programs, and grants to local organizations.

  * Eleven Ronald McDonald Houses opened last year, including first Houses
    in Denmark, Spain, and the Honduras. There are now 228 Ronald McDonald
    Houses in 23 countries. On any given night, more than 5,000 rooms are
    available in Ronald McDonald Houses to provide families with
    hospitalized children a home away from home.

  * Two Ronald McDonald Care Mobile programs were launched in 2002, bringing
    the total number in operation to thirteen. Care Mobiles are
    state-of-the-art pediatric healthcare units, which RMHC provides to
    qualifying local clinical service providers so that they can bring
    cost-effective medical and dental services and health education to
    children in underserved communities.

  * In 2002, global Ronald McDonald House Charities and its affiliated local
    Chapters provided nearly $19 million in grants and program support to
    children's organizations. To date, RMHC and its worldwide network of
    local Chapters have provided more than $380 million in grants and
    support. Significant 2002 grants include:

   - $1 million to the United States Fund for UNICEF. This is part of a
     $5 million commitment to UNICEF for immunizations to help eliminate
     maternal and neonatal tetanus.

   - Approximately $707,000 to Project ORBIS, part of a $1.3 million grant
     for education and treatment programs to prevent avoidable childhood
     blindness in India and South America.

   - $300,000 to Prevent Child Abuse America to fund expansion of prenatal
     support services. This is part of a $1.2 million project. Since 1992,
     RMHC has provided more than $3 million to Prevent Child Abuse America's
     Healthy Families America program.

  * Partnering with local RMHC Chapters in the U.S., RMHC provided more than
    $3.9 million in college scholarships, making higher education accessible
    to young people most in need.

  * McDonald's Brazil distributed 8 million public information pamphlets
    about dengue fever in support of a national Ministry of Health campaign
    against the disease.

                            HEALTHY LIFESTYLES

  * McDonald's recently announced a set of healthy lifestyle initiatives,
    including enhanced menu choices, promotion of active lifestyles, and
    work with experts to provide additional consumer nutrition information
    and education. We have worked intensively to develop strategies that
    will address the local needs and preferences of our customers around the
    world and, at the same time, have global impact. Early results include:

   - A commitment to develop additional choices for Happy Meals. Consistent
     with this commitment, Happy Meal options now include:

    -- Fresh fruit packs in the UK.

    -- Baby carrots, vegetable nuggets, milk, juice, and a low-calorie soft
       drink in Sweden.

    -- Creamy yogurt-style cheese in Brazil.

    -- A toasted cheese and tomato sandwich, raisins and orange juice in

    -- A "create your own" Happy Meal, which allow customers to choose from
       a variety of entrees and accompaniments, in Spain.

   - Additional new menu offerings, including:

    -- A Lighter Choices menu, including three salad offerings, sandwiches
       on whole wheat buns, and a fruit and yogurt parfait in Canada. The
       parfait is also available in our U.S. restaurants.

    -- A "Best of Crudites" menu, including a sandwich, a salad with
       vegetables, and a choice of bottled water, orange juice, or a soft
       drink in France.

    -- New main course salads in the U.K. and the U.S. France also has main
       course salad offerings.

   - Creation of McDonald's Advisory Council on Healthy Lives-a panel of
     independent experts-to help guide our strategic focus on healthy

   - The assignment of a senior-level corporate executive, Ken Barun, to
     lead our healthy lifestyles activities and coordinate the work of the

   - New collaborations with the World Health Organization and the
     U.S. Department of Health and Human Services to help educate consumers
     about the role of nutrition and fitness in maintaining good health.

   - Expanded online nutrition information in a number of our markets,
     including the UK, Sweden, and the U.S. New nutrition information and
     education brochures have also been produced.

   - McDonald's continued its longstanding significant support for amateur
     athletics and local sports programs.

    -- The corporation served as a principal sponsor for the Winter Olympic
       Games in Salt Lake City and the FIFA World Cup tournament in
       Seoul, Korea.

    -- McDonald's Europe announced it would again sponsor the Union of
       European Football Association's soccer championship games. The
       company also launched a "Grassroots to Glory" initiative aimed at
       encouraging physical activity, particularly among youth, by
       supporting community-level soccer programs.

    -- McDonald's UK initiated collaborations with the Football Associations
       in England, Scotland, Wales, and North Ireland to develop
       community-based coaches for youth soccer. The projects represent a
       commitment of approximately $31.5 million (US$) and are projected to
       recruit, train, and certify approximately 10,000 new volunteer
       coaches, drawn from local primary schools and McDonald's own

    -- McDonald's Sweden announced its sponsorship of the 2003 Gothia World
       Cup Soccer Tournament-the world's largest soccer tournament for
       youth. The company will also sponsor a nationwide Happy Mile event
       for children and families, with the proceeds going to increase local
       sports opportunities for children with disabilities.

    -- McDonald's USA, in collaboration with POWERade, inaugurated the
       POWERade/McDonald's All-American High School Soccer Games-a
       tournament for the nation's best high school senior boy and girl
       soccer players.

    -- McDonald's USA also again sponsored the McDonald's All-American Boys
       and Girls Basketball Games. The All-American Boys Basketball Games
       are now in their 27th year and the All-American Girls Basketball
       Games are in their third year.

    -- McDonald's Poland continued its long-time support for "Light
       Athletics Thursdays," weekly sports events for school children that
       are intended to promote a healthy way of life and provide a means for
       identifying promising athletes. In 2002, approximately 100,000 young
       people from several dozen Polish towns participated.

    -- McDonald's Brazil entered into a collaboration with the Sao Paulo
       Secretary of Health in a program to encourage the population to
       exercise. The company also continued its sponsorships of an
       inter-school sports competition, a program to promote the
       socialization of underprivileged youth through sports, and Saber em
       Movimento (Learning in Motion) a program that integrates
       multidisciplinary activities with physical education. More than
       14,000 students have benefited from Saber em Movimento.

    -- McDonald's Australia awarded more than $26,500 (US$) in grants to
       support restaurant employees' participation in sports and
       sports-related activities. Total grants awarded now exceed
       $240,000 (US$).

   - McDonald's Australia/Queensland completed its twenty-second year as
     sponsor of Little Athletics-a program to develop positive attitudes
     and healthy lifestyles in children through family and community
     involvement in athletic activities. Over 12,000 children and families
     participate in Little Athletics.


  * McDonald's is committed to ensuring that our employees, owner/operators
    and suppliers reflect and represent the diverse populations we serve
    around the world. Like diverse menu offerings that accommodate local
    tastes and architectural styles that suit local environments, diversity
    in our people helps us do well as we do good.

   - In 2002, our restaurants around the world were, as in the past, locally
     owned and operated, locally staffed and, for the most part, locally or
     regionally supplied, making the McDonald's system as diverse as the
     118 countries where we do business.

   - In the United States:

    -- As of December 31, 2002, 38.2 percent of McDonald's franchisees were
       minorities and/or women. At the end of 2001, 37.3 percent were
       minorities and/or women. There are more minority and women
       franchisees in the McDonald's system than in any other major U.S.
       quick service restaurant chain.

    -- We purchased more than $3.2 billion in food and paper products from
       minority and women suppliers. In dollar value, this is approximately
       40 percent of our total U.S. food and paper purchases.

   - As in the past, McDonald's earned significant recognition for
     outstanding employment practices, including selection as:

    -- Among the Top 3 Best Companies to Work For (for the third year in a
       row), by Exame magazine (Brazil).

    -- Among the Top 10 Best Places to Work, by the Oxford Group (Denmark).

    -- Investor in Human Capital by the Institute of Management and
       Institute of Labor and Social Affairs (Poland).

                              ANIMAL WELFARE

  * McDonald's issued its first global animal welfare progress report
    highlighting major 2002 developments in all zones. The report is
    available online at

  * Our chief expert advisor for animal welfare, Dr. Temple Grandin,
    conducted onsite audits and provided training in Latin America, the Far
    East, and the United States. Since our audit program was initiated in
    1999, Dr. Grandin has audited and worked with McDonald's suppliers in
    ten countries and all four of our global zones.

  * McDonald's Europe issued comprehensive standards for all the
    agricultural raw materials used in McDonald's food products, including a
    general policy and numerous specific requirements for ensuring animal
    welfare from farm to slaughterhouse. The company has had standards for
    slaughterhouses in place for several years.

                              PRODUCT SAFETY

  * In 2002, as in the past, McDonald's record for toy safety exceeded the
    record of the toy industry. This reflects the high priority placed on
    the safety of McDonald's toys by the corporation, our suppliers, and the
    independent safety laboratories that extensively review and test the
    toys before, during, and after production, using state-of-the art

                        SUPPLIER SOCIAL COMPLIANCE

  * In 2002, in keeping with our emphasis on capacity-building and
    continuous improvement, employees of more than 300 suppliers were
    trained to prepare their facilities for an assessment of their
    compliance with our Supplier Code of Conduct. The Code establishes
    standards for supplier and subcontractor employment practices and
    workplace conditions. Compliance is a condition for doing business with

  * Our independent monitoring firms conducted more than 150 onsite
    assessments of supplier and subcontractor facilities to ensure
    compliance with our Supplier Code of Conduct. Most of the assessments
    were of facilities in Asia, but there were also audits of facilities in
    Central and South America, Europe, Canada, and the U.S.


  * McDonald's Brazil issued its first comprehensive social responsibility
    report. The report and a summary, in English and Portuguese, are
    available on the McDonald's Brazil Web site at

  * McDonald's Switzerland issued its third report on its environmental
    programs. The report includes concrete measures of progress and
    numerical results in ten areas. It is available, in English, French and
    German, on the McDonald's Switzerland Web site at

  * McDonald's adopted, as a goal, the Global Reporting Initiative
    guidelines, a leading framework for sustainability reporting. The
    guidelines will be used initially in reporting the social responsibility
    performance of McDonald's USA and subsequently expanded, as feasible, to
    other markets. Adopting the GRI guidelines will help ensure that our
    social responsibility measurement and reporting systems include
    appropriate issues and performance indicators and also facilitate
    comparability with our prior performance. We are currently developing
    additional performance metrics for use in our next full Social
    Responsibility Report.

McDonald's 2002 Social Responsibility Report and additional information about McDonald's social responsibility initiatives are available online at

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SOURCE: McDonald's Corporation

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