MCDONALD'S AUSTRALIA LIMITED AUSTRALIAN PACKAGING COVENANT - ACTION PLAN 2013 TO 2015

Page created by Brittany Benson
 
CONTINUE READING
MCDONALD'S AUSTRALIA LIMITED AUSTRALIAN PACKAGING COVENANT - ACTION PLAN 2013 TO 2015
McDonald’s Australia Limited
Australian Packaging Covenant
         Action Plan 2013 to 2015
MCDONALD’S AUSTRALIA LIMITED
                                             ABN: 008 496 928
                                    21 – 21 CENTRAL AVENUE
                                      THORNLEIGH NSW 2120

                                                  PO Box 392
                                     PENNANT HILLS NSW 2120

                                             P: +61 2 9875 6666
                                             F: +61 2 9875 6565

McDonald’s Australia Limited                                  2
Copyright © 2013 McDonald's
CEO Forward
At McDonald’s Australia, environmental responsibility spans the entire life cycle of our
products. It starts with the fresh ingredients at the farm and the design of our packaging, and
extends through food manufacture to our restaurants, customers, and waste disposal.

Our choice of packaging is important to ensuring our customers receive their food and
beverages at the right temperature, and in an easy manner to consume. Environmental
impact is one of five criteria incorporated into McDonald’s process of developing food and
beverage packaging. The other four are functionality, cost, availability of materials and
impact on our operations.

Historically, we have shown a willingness and commitment to reducing the environmental
impacts of our packaging and have always sought opportunities to actively engage in
environmental initiatives at all stages in the life of a package, from its design through to
disposal.

In 1971, when the first Australian McDonald’s restaurant was opened in Sydney, the
restaurant conducted daily litter patrols – a practice that continues at all our restaurants
today. In 1991 we changed from foam burger packaging to paper and incorporated a “Be
Tidy” logo to discourage littering and later, we introduced recycled content to some
packaging.

Since 2000 we have been encouraging our suppliers to reduce the environmental impacts
associated with the manufacture and supply of McDonald’s products. Our Australian review
process was in fact used to develop a template for McDonald’s global reporting on supplier
environmental commitment and performance.

We have continued to make notable improvements not only to our packaging and waste
practices, but to how we measure and report against them.

We introduced a detailed environmental evaluation tool (Eco-Filter) to compare the
environment impact of packaging options. This enables our product development teams to
more objectively assess the environmental credentials of our packaging.

We placed a keen focus on partners at the paper-based products converter and raw material
supplier level and, in doing so, helped them increase their level of sustainable forestry.. We
also completed the removal of all foam packaging from our restaurants, as well as plastic
plates from our McCafe operation.

In addition, we enhanced and re-launched our restaurant litter patrol program, and drove
increased awareness of the impacts of inappropriately discarded waste with our 90,000 staff
as well as all Australians, through our ongoing support of Clean Up Australia and its flagship
annual event – Clean Up Australia Day.

What has become clear over the past years is the fact that our customers – who total
approximately 1.7 million Australians every day – want us to continue focusing on packaging
materials and design, along with waste and recycling. They are some of the most visible
areas in which we have an impact on the environment and also the areas in which, given the
scale of our business, even small improvements can make a big difference.

McDonald’s Australia Limited                                                                   3
Copyright © 2013 McDonald's
In 2010 we decided to take a staged approach to preparing our Packaging Covenant action
plan. We know from experience that to implement meaningful change on a large-scale
across our operations, we need to approach that change in stages, where careful
consideration is applied to the results gathered at each stage before decisions are made and
further plans are articulated and implemented.

Our 2011 to 2012 action plan was executed with positive results. We have taken the
learning’s of our 2011 to 2012 action plan, and used these to guide the creation of a new
action plan that will drive our focus between 2013 and 2015. The actions committed to in this
plan will enable us to further engage with industry on challenges and opportunities, and to
continue to trial a number of potential solutions to waste and packaging issues. We believe
this is the right approach: it means our plan is robust, and provides our System – inclusive of
corporate and restaurant-based staff, our licensee and supplier communities – with relevant
and finite actions to carry-out within a short-to-medium timeframe.

This action plan will keep us focused on the packaging sustainability journey – a journey our
entire System is committed to continue travelling over the coming years.

Catriona Noble
CEO/Managing Director
McDonald’s Australia Limited

McDonald’s Australia Limited                                                                  4
Copyright © 2013 McDonald's
Executive Summary
As a signatory to the Australian Packaging Covenant (APC), McDonald’s Australia Limited
has prepared this action plan with the goal to further reduce the environmental impacts of
McDonald’s packaging at all stages in the life of a package.

Our plan addresses the strategies adopted in the Sustainable Packaging Guidelines, with
actions listed against the three key performance goals of the APC; design, recycling and
product stewardship.

We have noted the overarching objectives and targets of the Covenant and have reviewed
our waste stream in order to develop a realistic plan for the McDonald’s System that
encompasses the principles of product stewardship. The journey to sustainability is an
ongoing one and we acknowledge we have a way to travel with regard to minimising waste
to landfill, including diverting resources to recycling. We will continue to work alongside
industry to ensure we move in the right direction as efficiently as possible.

Our aim is to build on past achievements and we recognise that the entire McDonald’s
System – inclusive of corporate and restaurant-based staff, our licensee and supplier
communities – is important to the implementation of this plan.

Our focus in the area of design will continue to be on reducing the impact of our packaging
from design and sourcing of materials through to its end life. Eco-Filter2.1 is a detailed
environmental evaluation tool and will play a key role in comparing the environment impact
of packaging options, and assessing each for viability. We have long-term relationships with
our suppliers, including packaging suppliers, and are aligned on our principles and goals.
We will continue to leverage these relationships to make progress against APC key
indicators and performance goals.

This plan also details activities that will enable McDonald’s to continue to drive market
development in the area of recycling and use of recycled materials through the purchase of
products made from recovered recyclable materials. This action will be applied across the
relevant business units from consumer packaging, to restaurant construction and fittings.

In addition, our product stewardship focus will see us play a role in reducing litter through a
focus on participation in our Restaurant Litter Patrol program, along with consumer
packaging and other initiatives.

McDonald’s Australia Limited                                                                      5
Copyright © 2013 McDonald's
Contents
Forward ................................................................................................................................................................. 3

Executive Summary .............................................................................................................................................. 5

Contents ................................................................................................................................................................. 6

Introduction .......................................................................................................................................................... 7

    The Organisation ............................................................................................................................... 7
    Site Locations ...................................................................................................................................... 7
    Other Site Details ................................................................................................................................ 8
    Contacts .............................................................................................................................................. 9
    Our Values .......................................................................................................................................... 9
    Our Stakeholders .............................................................................................................................. 10
    Supporting Australian Packaging Covenant Goals ..................................................................... 11
   Design ................................................................................................................................................ 11
   Recycling & Use of Recycled Materials ............................................................................................. 14
   Product Stewardship .......................................................................................................................... 14
    McDonald’s Packaging Review against Sustainable Packaging Guidelines ............................ 15
   Packaging Review Timeline ............................................................................................................... 15
    Key Performance Indicators .......................................................................................................... 16
   Covenant Goal 1 - Design .................................................................................................................. 16
   Covenant Goal 2 - Recycling ............................................................................................................. 17
   Covenant Goal 3 - Product Stewardship ........................................................................................... 19

McDonald’s Australia Limited                                                                                                                                              6
Copyright © 2013 McDonald's
Introduction
The Organisation
The McDonald’s story started in 1955 in Chicago, Illinois USA when Ray Kroc opened the
first franchised McDonald’s restaurant. There are now 33,000 McDonald’s restaurants in 119
countries around the world serving 68 million customers every day. Some 80 per cent of
these restaurants are owned and operated locally by almost 5000 business men and
women.

The global business is managed by McDonald’s Corporation as four distinct geographic
segments: United States; Europe; Asia Pacific, Middle East and Africa (APMEA); and Latin
America and Canada. McDonald’s Australia is part of the APMEA group and this segment
represents more than 9,500 restaurants across 37 countries, and nearly 20 per cent of the
total revenue of the global system. Within this group Australia, Japan and China make up
nearly 2/3 of total APMEA sales.

Australia, along with the United States, Canada, France, Germany, United Kingdom, China
and Japan, is considered to be a major market for McDonald’s worldwide. These eight major
markets comprise approximately 70 per cent of total revenues.

The first Australian McDonald’s restaurant opened in the western suburbs of Sydney in
1971. There are now (as at May 2013) 897 McDonald’s restaurants across Australia serving
approximately 1.7 million customers every day. Table 1 provides details of where these
restaurants are located and the distribution of franchise and company operations.

Site Locations (as of June 2013)
           State                Company       Franchise          Offices          Total Sites
                               Restaurants   Restaurants

           A.C.T                   0             18                 0                 18
            NSW                   111            190                5                306
            QLD                    31            169                2                202
            VIC                    37            193                2                232
             SA                    8             46                 2                 56
            WA                     27            45                 1                 73
            TAS                    0             17                 0                 17
             NT                    0              6                 0                 6
            Total                 214            684               12                910
Table 1

McDonald’s Australia Limited is an unlisted Australian public company. It is a franchise
business with more than 70% of the restaurants in Australia owned and operated by
individual, local business men and women. The remainder of the restaurants are run by
company staff. Most franchisees enter into a 20 year agreement with McDonald’s and many
own and operate more than one restaurant. The franchise structure allows our restaurants to
meet the needs of their individual communities within a framework that ensures high safety,
quality and accountability standards.

McDonald’s Australia Limited                                                                7
Copyright © 2013 McDonald's
McDonald’s and our franchisees employ approximately 90,000 people in restaurants and
management offices across Australia. Table 2 shows the locations of each of our office and
training facilities in Australia.

McDonald’s Australia reports to the President Asia Pacific, Middle East and Africa -
McDonald’s Corporation who in turn reports into McDonald’s Corporation senior
management in the US. In this way, the operation of McDonald’s Australia is governed by
the global McDonald’s System. This System is decentralised providing great freedom for
individual countries to operate the business to best suit the needs of their customers within a
framework that ensures each market adheres to the same core values, principles and
standards.

The following are registered trademarks of McDonald’s Corporation and its affiliates:
McDonald’s, Chicken McNuggets, Happy Meal, Deli Choices, Salads Plus, McCafe,
McHappy, Made to Order, Ronald McDonald House, Ronald McDonald House Charities,
Ronald McDonald Learning Program, Ronald McDonald Family Room and Ronald
McDonald Family Retreat.

Other Site Details
       NEW SOUTH WALES                 NEW SOUTH WALES                 NEW SOUTH WALES

Head Office, NSW State Office,   Training Centre &                New South Wales: Sydney
Reg’d Office                     Tech Services Workshop           CBD
21 – 29 Central Avenue           14 – 20 Central Avenue           Cnr Pitt & Park Streets
Thornleigh NSW 2120              Thornleigh NSW 2120              Sydney NSW 2000
P: 02 9875 6666                  P: 02 9875 6666                  P: 02 9875 6666
F: 02 9875 6565                  F: 02 9875 6515                  F: 9267 8054
       NEW SOUTH WALES                 NEW SOUTH WALES                 SOUTH AUSTRALIA

Hunter: Regional Office          Southern NSW: Regional Office    South Australia: State Office
23 Maitland Road                 312 Queen Street                 36 Bank Street
Hexham NSW 2322                  Campbelltown NSW 2560            Adelaide SA 5000
P: 02 9875 6666                  P: 02 9875 6666                  P: 02 9875 6666
F: 02 4964 9702                  F: 02 4628 0099                  F: 08 9475 5900
             VICTORIA                       VICTORIA               QUEENSLAND & NORTHERN
                                                                         TERRITORY
Victoria: State Office           Victoria: Training Centre        Queensland / Northern
2 Smith Street                   6-10 Mason Street                Territory: State Office and
Collingwood VIC 3066             Collingwood VIC 3066             Training Centre
P: 02 9875 6666                  P: 02 9875 6666                  1364 Gympie Road Aspley
F: 03 9418 5595                  F: 03 9418 5595                  QLD 4034
                                                                  P: 02 9875 6666
                                                                  F: 07 3838 3263
      NORTH QUEENSLAND                      TASMANIA                  WESTERN AUSTRALIA

North Queensland: Regional       Tasmania: State Office           Western Australia: State
Office                           302 South Arm Road               Office
PO Box 856 Castletown            Lauderdale TAS 7021              18 Lyall Street
Hyde Park QLD 4812               P: 02 9875 6666                  Ascot WA 6104
P: 02 9875 6666                  F: 03 6248 1244                  P: 02 9875 6666
F: 07 3630 3999                                                   F: 08 9385 1086
Table 2

McDonald’s Australia Limited                                                                      8
Copyright © 2013 McDonald's
Contacts
 MAIN CONTACT – Covenant Officer              OTHER CONTACT

 Susanne Craig                                McDonald’s Customer Service
 Sustainable Supply and Quality Manager
 A: 21 – 29 Central Ave, Thornleigh 2120      A: 21 – 29 Central Ave, Thornleigh 2120
 A: PO Box 329, Pennant Hills, NSW            A: PO Box 329, Pennant Hills, NSW 2120
 2120                                         P: 02 9875 6666
 P: 02 9875 6689                              F: 02 9875 6565
 F: 02 9875 6530                              W: www.mcdonalds.com.au
 E: Susanne.Craig@au.mcd.com

Table 3

Our Values
McDonald’s Australia has a clear set of corporate values in place which are communicated
to all employees from casual crew to senior management. Our values are expressed in a
manner that is easy for everyone to put into action in their everyday working life but they also
guide our broad strategic direction and corporate planning. To achieve our mission of
becoming our customers’ favourite place and way to eat, the following seven core values are
fundamental to our business operations.

We place the customer experience at the core of all we do.
Our customers are the reason for our existence. We demonstrate our appreciation by
providing them with high quality food and superior service, in a clean, welcoming
environment, at great value. Our goal is outstanding quality, service, cleanliness and value
(QSC&V) for each customer every time.

We are committed to our people.
We provide opportunity, recognise talent and develop leaders. We believe that a diverse
team of well-trained individuals working together in an environment that fosters respect and
drives high levels of engagement is essential.

We believe in the McDonald’s System.
The McDonald’s business model, depicted by the “three-legged stool” of franchisees,
suppliers and company employees, is our foundation, and the balance of interests among
the three groups is key.

We operate our business ethically.
Sound ethics is good business. At McDonald’s, we hold ourselves and conduct our business
to the highest possible standards of fairness, honesty and integrity. We are individually
accountable and collectively responsible.

We give back to our communities.
We take seriously the responsibilities that come with being a leader. We help our customers
build better communities, support Ronald McDonald House Charities (RMHC), and leverage
our size, scope and resources to help make the world a better place. We are committed to
sustainable business practices and are determined to conduct our operations in a manner
that does not compromise the ability of future generations to meet their needs.

McDonald’s Australia Limited                                                                   9
Copyright © 2013 McDonald's
We grow our business profitably.
Our stakeholders support our ability to serve our customers. In return, we work to provide
sustained, profitable growth for all members of our System and our investors.

We strive continually to improve.
We consider ourselves a learning organisation that is green and growing and that anticipates
and responds to changing customer, employee, System and community needs through
constant evolution and innovation.

Our Stakeholders
Stakeholders are those individuals, organisations and groups whom we affect and who affect
us. Our stakeholders include:

•     Customers – the 1.7 million Australians who visit us every day. These are a wide range
      of people from children to senior citizens who come to our restaurants in cities,
      suburbs, regional centres and small towns all over Australia;

•     Business partners – our 271 franchisees and our approximately 9,000 suppliers and
      service providers;

•     Employees – the more than 90,000 people employed in our restaurants and offices all
      over the country;

•     Opinion leaders and experts – health professionals, government, environmental
      groups, media and more. These are the people we learn from and consult with on a
      range of issues affecting our business.

We use various tools and resources to engage with our stakeholders on the issues that
matter to them. These include surveys and research, one on one communication and
meetings and our participation in forums, conferences and exhibitions. Our dialogue with
individual stakeholder groups impacts our activities both reinforcing and determining our
priorities.

McDonald’s Australia Limited                                                              10
Copyright © 2013 McDonald's
Supporting Australian Packaging Covenant Goals
McDonald’s Australia’s Australian Packaging Covenant Action Plan supports the APC
objectives of design, recycling and product stewardship and builds on our past
achievements. It is robust and provides our entire System – inclusive of corporate and
restaurant-based staff, our licensee and supplier communities – with relevant and finite
actions to carry-out within a short-to-medium timeframe.

McDonald’s position in the packaging supply chain is a Brand Owner / Packaging User.

HAVI Global Solutions (HGS) is McDonald’s global packaging procurement partner. HGS
are based within McDonald’s Head Office and attend all relevant internal meetings that affect
packaging, such as Product Development and New Product Implementation Cross
Functional Teams. As our strategic partner for packaging procurement, HGS manage
McDonald’s expectations and APC commitments with regards to retail packaging and retail
packaging suppliers. HGS brings to the table a depth of knowledge both locally, and from a
zone and global level on packaging supply including materials, sustainability, alternative
sources and regulations.

Design
Environmental impact is one of five key criteria McDonald’s incorporates when developing
food and beverage packaging. We look to balance the environmental aspects of packaging
with functionality, cost, availability of materials and impact on operations.
From an environmental perspective, we focus on reducing the impact of our packaging from
design and sourcing of materials through to its end of life.

Packaging Material Strategy
McDonald’s Australia’s packaging material strategy is aligned with our global strategy and is
embedded in our packaging development through the use of the Eco-Filter2.0 tool to
compare different types of packaging options during development.

McDonald’s Australia’s packaging material strategy seeks to:

     •    Ensure that packaging solutions are developed in alignment with the material
          hierarchy and McDonald’s policies.
     •    Ensure that the packaging portfolios meet end of life requirements.
     •    Provide support for further standardisation of the packaging portfolio to drive
          consistency in branding.

To implement this strategy, McDonald’s Australia will leverage HGS, to:

     •    Develop technical and policy briefs to support product development and strategic
          procurement in alignment with the material preferences, for example, evaluation of
          sustainability issues related to using bioplastics produced from various feedstocks.
     •    Ensure that Product Development works closely with environmental experts to
          identify new materials/developments that could improve the profile of the packaging
          portfolio.
     •    Continue to leverage the Eco-Filter tool to evaluate individual packaging items and
          use the EFPAT (Eco-Filter Portfolio Analysis Tool) to evaluate and improve on the
          total packaging portfolio across Australia, and to help identify gaps, set targets and
          evaluate progress.
McDonald’s Australia Limited                                                                       11
Copyright © 2013 McDonald's
•    Ensure packaging suppliers adherence to specifications and focus on sustainability
          including fibre sourcing and ethical sourcing activities (Social Accountability) in
          facilities.

Specifically in Australia, the packaging material hierarchy is focused on the following key
areas:
1. Can the item minimise packaging weight through optimisation?
    One aspect of optimising packaging design is using the least amount of material required
    to provide the required packaging performance. The amount of material affects the
    environmental impact at the front end, during use and during end of life.

2. Can the packaging item be made using recycled materials? (Preference for post
   consumer recycled content where permitted by law).
    To ensure compliance with local regulatory requirements and standards, as a general
    principle, recycled content paper and plastic will only be used in the countries or markets
    where the materials are produced.

3. Can the packaging item be made from renewable materials?
    With regards to renewable raw materials for consumer packaging, as part of McDonald’s
    Sustainable Land Management Commitment, McDonald’s is committed to:
     •    Working with suppliers to ensure that renewable raw material-based products
          originate from legal and acceptable sources. McDonald’s will not knowingly
          purchase from suppliers that source otherwise.
     •    Giving preference to the purchase of renewable raw material-based products that
          have earned credible, third-party certifications.
     McDonald’s longer term goal is for all renewable raw material-based products to be
     sourced from sustainably-managed land sources that are verified by credible, third-party
     certification. We will encourage suppliers to demonstrate continuous improvement
     towards this goal by working over time to achieve assurance for their raw materials.

4. If recycled materials cannot be used for the packaging, can virgin paper be sourced from
   certified sustainable forestry sources?

5. If performance requires plastic-like properties, is there an option for a polymer made
   from renewable resources?
    If not, polyolefin (PET, PE, PP) is preferred to polystyrene.

McDonald’s environmental packaging review tool, Eco-Filter, has been used for the analysis
of all new packaging formats since 2010. The tool has been reviewed by GreenBlue, the US
non-profit sustainability institute, of which the Sustainable Packaging Coalition (SPC) is a
project. GreenBlue provided the following comment in relation to the Eco-Filter 2.0:
“The stated intention for the Eco-Filter tool is to enable a consistent approach to the
evaluation of packaging designs/formats against key environmental metrics aligned to
McDonald’s corporate values and sustainability goals. Overall Eco-Filter2.0 is well suited to
that task."

McDonald’s Australia Limited                                                                  12
Copyright © 2013 McDonald's
GreenBlue review of Eco-Filter2.0 tool

The Eco-Filter2.0 scoring system includes the following six weighted criteria:
1. Package weight
2. Recycled vs. virgin material content
3. Renewable materials preference
4. Material health/regulated chemicals associated with the packaging material production
5. Greenhouse gas (GHG) emissions associated with the package (raw material extraction,
   conversion, disposal)
6. End of Life disposition (opportunities for recycling, composting, incineration with energy
   recovery)
A platform update to the Eco filter tool was made in 2011 and hence Eco-Filter 2.1 is the
current version now in use.

McDonald’s Global Packaging Standards
Consistency is synonymous with the McDonald’s brand. The quality criteria for our global
core menu items are clearly defined by Gold Standards. These standards include sensory
attributes, appearance and safety. McDonald’s have established a set of Gold Standards for
packaging in addition to food, to ensure consistency of delivery to our customers. Packaging
is globally and regionally reviewed for compliance to Gold Standard.

McDonald’s Packaging Standards include the following criteria:
•   Operational performance (how the packaging is handled within the restaurant)
•   Product performance (e.g. heat retention)
•   Consumer performance (e.g. staining, moisture resistance, heat transfer, accessibility)
•   Regulatory compliance (e.g. food contact compliance, environmental compliance)
•   Material
•   Dimensions
•   Design
•   Sustainability (minimum Eco-Filter2.1 score)
•   Brand image / Graphics
•   Barrier / Coating
Packaging choices may be constrained by the requirements to meet Gold Standards.

McDonald’s Australia Limited                                                                    13
Copyright © 2013 McDonald's
Recycling & Use of Recycled Materials

McDonald’s Australia will continue to drive market development through purchase of
products made from recovered recyclable materials. This action will be applied across the
relevant business units from consumer packaging to restaurant construction and fittings. We
have processes in place to quantify the recycled material in our packaging and will develop
and implement processes in the other areas of our business to capture volumes.

In Australia, all of our plastic beverage cups and sundae cups are at least 35% recycled PET
(rPET). Our take-out bags contain 50% recycled fibres and drink and dessert carriers are
made from 100% recycled fibre.

A majority number of our restaurants recycle the cardboard cartons that consumer
packaging and ingredients are delivered in. Cardboard cartons account for approximately
30% of our solid waste. We are investigating opportunities to increase the diversion of waste
to recycling, including restaurant trials. We will be working with industry groups to better
understand Australia’s recycling capability including existing and future infrastructure to
assist us in developing action plans to increase the recyclability of our waste packaging.

A number of packaging items within our restaurants are re-usable, for example, our transport
packaging for buns and English muffins are delivered in re-usable plastic crates, our dine-in
orders are served on re-usable trays and our dine-in McCafe customers’ orders are served
on crockery.

Product Stewardship
McDonald’s procures packaging, ingredients and services from reputable suppliers.
McDonald’s ensures that businesses that it does direct and indirect business with meet our
minimum expectations with regards to supplier workplace accountability (employment
practices). This is verified by independent audits. In addition, all packaging suppliers
supplying food-contact packaging must meet food safety requirements. The finished
packaging product is tested for food approval biennially to international standards in an
international laboratory.

McDonald’s works closely with Martin Brower, a company dedicated to the distribution of
McDonald’s restaurant supplies. Martin Brower collects and recycles all waste incoming
cardboard and pallet wrap at each of their six (6) Australian DCs. In addition, Martin Brower
provides a backhauling service to a number of our suppliers where it makes economic and
geographic sense. In 2012, Martion Brower commenced collection of waste cooking oil from
our Victorian restaurants which is converted to biodiesel and used to fuel the majority of their
Victorian fleet.

All of our branded packaging is labelled with an anti-litter message:

McDonald’s Australia Limited                                                                  14
Copyright © 2013 McDonald's
McDonald’s Packaging Review against Sustainable Packaging
Guidelines
We have categorised our branded consumer packaging based on construction type and
material. We will review new packaging construction types as they are developed and will
progressively review existing packaging construction types as per the Packaging Review
Timeline below. A new graphic (e.g. promotional product) is not considered to be a new
packaging construction type.

Packaging Review Timeline
Packaging Category                Packaging       No. Packaging     Review
                                  Material        Items             Commencement
                                                                    Date*
Bags                              Paper              8              Q1 2015
                                  Coated
Cold and hot cups                                    10             Q3 2013
                                  paperboard
Lids - paper cups                 Plastic            7              Q3 2013
Folding cartons                   Paperboard         23             Q1-2015
Plastic cups and lids             Plastic            12             Q1 2014
Salad and dessert packaging       Plastic            6              Q3 2013
Straws                            Plastic            2              Q4 2013
Cutlery                           Plastic            10             Q4 2013
Napkins / miscellaneous           Paper              1+             Q2 2014
Wraps                             Coated paper       4              Q2 2014
Traymats                          Paper              1              Q1 2015
Liners                            Paper              1              Q1 2015
Stickers                          Compound           2              Q1 2015

Table 4

* NB Reviews are expected to be completed within six (6) months of commencement. This
includes decisions by key stakeholders but excludes implementation, which will be managed
on a case by case basis. Progress against both decisions and implementation, will be
reported in Annual Reports.

McDonald’s Australia Limited                                                               15
Copyright © 2013 McDonald's
Key Performance Indicators

Covenant Goal 1 - Design
Optimise packaging to achieve resource efficiency and reduce environmental impact.

KPI 1 - Implementing the SPG for design or procurement of packaging

Action                                                Responsibility                Baseline data                                      Performance Target
Maintain policy and procedures for evaluating and     HGS Packaging Services QA &   Eco-Filter2.0 has been used to review new          Maintain review of 100% of new consumer packaging
procuring packaging consistent with the sustainable   PD Manager                    packaging construction types since 2010            construction types against Eco-Filter2.1 ongoing.
packaging guidelines (SPG) and McDonald’s
values.                                                                             Eco-filter reviewed and version 2.1 released
                                                                                    for use in 2013

Review existing consumer packaging using Eco-         HGS Packaging Services QA &   One round of reviews already completed in          2nd round review for 100% of existing consumer
Filter 2.1 as per the timetable (Table 4)             PD Manager                    years 2011-2012.                                   packaging items against Eco-Filter2.1 as per timetable
                                                                                                                                       (Table 4).
                                                      Key stakeholders
                                                                                                                                       Publish packaging changes resulting from reviews in
                                                                                                                                       Annual APC reports.
Implement initiatives that deliver significant        HGS Packaging Services QA &   EFPAT score is used to assess sustainability       EFPAT score calculated and reported annually. Baseline
improvements on the brands key metrics for            PD Manager                    of the packaging portfolio. EFPAT scoring          determined by December 2013
packaging sustainability                                                            criteria is currently being reviewed and a
                                                                                    baseline 2012 EFPAT Score as per the               Year on year improvements in the EFPAT score.
                                                                                    revised criteria will be determined during 2013.

Table 5

McDonald’s Australia Limited                                                                                                                                                             16
Copyright © 2013 McDonald's
Covenant Goal 2 – Recycling
Efficient collection and recycling of packaging.

KPI 3 - On-site recovery systems for recycling used packaging
Action                                                      Responsibility                    Baseline data                                               Performance Target
Collaborate with waste service providers to expand          National Sustainability Manager   Cardboard from distribution packaging is collected          Maintain current practice of Cardboard collected
the recovery of resources, including consumer                                                 from 100% of Company-owned restaurants where                for recycling in 100% of Company-owned
packaging from our restaurant waste on-site where                                             waste services are not managed by centre                    restaurants where feasible.
waste services are not centre managed and where                                               management and where appropriate infrastructure
appropriate infrastructure exists and appropriate                                             exists. Based on 2012 data, the average restaurant
costing is available.                                                                         recycles approx 12 tonnes of cardboard annually.

                                                                                              Trials being conducted with organic recycling in 20         Complete a review of restaurant organics trial and
                                                                                              NSW restaurants with a diversion rate of 44%.               develop a detailed list of improvement
                                                                                              Operational issues with staff not separating waste          opportunities by July 2013.
                                                                                              streams correctly.

                                                                                              Milk Bottles are disposed of in general waste.              Implement a Milk bottle recycling trial by March
                                                                                                                                                          2014 at a minimum of 10 restaurants.

                                                                                                                                                          Complete review of trial and develop business
                                                                                                                                                          case for full rollout to all company owned
                                                                                                                                                          restaurants where feasible by September 2014.

                                                                                              POP translites are disposed of in general waste.            Complete investigation of infrastructure available
                                                                                                                                                          to recycle POP translites from restaurants and
                                                                                                                                                          present the opportunity for consideration via a
                                                                                                                                                          business case by December 2013.

                                                                                              A goal to divert 60% of waste from landfill for             Improve diversion from landfill year on year across
                                                                                              company owned restaurants has been included in              company owned restaurants focused on achieving
                                                                                              waste contracts since 2010. In 2012, average                the 60% goal.
                                                                                              restaurant diversion rate was 33% based on the
                                                                                              available data provided by waste contractors nationally
                                                                                              in 2012.
Increase staff training on restaurant waste                 National Sustainability Manager   In restaurant training conducted by approved crew           Online training module for restaurant crew in place
management and APC goals.                                                                     training staff using a checklist based approach. No         by June 2014.
                                                                                              specific waste management training provided.
                                                                                                                                                          Completion of training reviewed annually.
Collaborate with our dedicated distribution provider        Distribution QA Manager           Plastic recycling at the Raymond Terrace DC during          Increase recovery of used pallet wrap from
Martin Brower, to identify reverse logistics                                                  2012 was 7.8 MT for the calendar year which can be          restaurants by Integrating pallet wrap recovery via
opportunities to recovery clean waste streams from                                            directly attributed to return of the pallet wrap from our   reverse logistics in all states and DC’s by
our restaurants.                                                                              restaurants. This pallet wrap would previously end up       December 2015.
                                                                                              in general waste.
Maintain a policy for the recycling of used office and      National Sustainability Manager   A policy has been established to facilitate a consistent    Review policy annually and adjust as necessary
print paper, and printer cartridges in all state offices.                                     Approach to recycling of all office print toners. Recycle   where continuous improvement opportunities exist.
                                                                                              bins are located at every work station and document
                                                                                              Security bins are provided.

Table 6

McDonald’s Australia Limited                                                                                                                                                                            17
Copyright © 2013 McDonald's
KPI 4 - Policy to buy products made from recycled packaging

Action                                                   Responsibility               Baseline data                                             Performance Target

Principles of sustainable procurement for consumer       HGS Packaging Services       18% of fibre used in 2012 was from recycled sources.      100% of fibre for consumer packaging is recycled
branded packaging including preference for recycled      Director                     82% virgin fibre from legal and acceptable sources.       or from legal and acceptable sources ongoing.
content are embedded in current business practice
and performance is measured.
Identify 2 key projects to introduce recycled fibre to   HGS Packaging Services       No specific targets to introduce recycled fibre to        2 projects identified in 2013 with targeted
products where no recycled content currently exists.     Director                     products previously set                                   execution in 2014.
Implement a system to measure recycled content of        Sustainable Supply Manager   Systems have been set up that require Suppliers to        System fully implemented and information entered
distribution packaging.                                  and National Purchasing      specify recycled content of packaging used for new        by all suppliers by December 2013
                                                         Manager.                     and existing products but have not been fully
                                                                                      implemented.
Review the use of recycled content of distribution                                                                                              A review of the recycled content used for
transport packaging.                                                                                                                            distribution packaging complete by March 2014

Formalise a policy on use of recycled materials with                                  No formal policy exists to specify recycled content for   Formal policy developed and integrated into
a preference for post-consumer recycled content                                       distribution packaging.                                   existing business practices including supplier
                                                                                                                                                reviews by July 2014

Table 7

McDonald’s Australia Limited                                                                                                                                                                 18
Copyright © 2013 McDonald's
Covenant Goal 3 - Product Stewardship
Demonstrated commitment to product stewardship

KPI 6 - Formal processes for working with others to improve design, procurement and recycling of packaging

Action                                                Responsibility                    Baseline data                                            Performance Target

Improve packaging design.                             Refer to KPI 1 and our commitment to the SPG

Include resource recovery targets and reporting of    National Sustainability Manager   All states except NSW have single provider, state        All Company owned restaurants to sign on to
performance in new waste management contracts for                                       based contracts for waste collection for company         State-based waste service contract at time of
Company-owned restaurants                                                               owned restaurants.                                       renewal.

                                                                                        A target 60% waste diversion from landfill is included   Contracted Waste service providers report to
                                                                                        and reported against for new and renewed waste           McDonald’s monthly on diversion rates and weight
                                                                                        contracts since 2010.                                    collected by restaurant. Transition reporting to
                                                                                                                                                 web-based reporting for easy access where
                                                                                                                                                 feasible for 100% of company owned restaurants
                                                                                                                                                 under waste contracts by September 2014.

                                                                                        Reporting is manual through a spreadsheet system.        Implement a sustainability report covering key
                                                                                                                                                 recycling and other KPI’s back to company owned
                                                                                                                                                 restaurants to measure performance by December
                                                                                                                                                 2014
Work with our packaging suppliers to ensure that      HGS Packaging Services            2012 Forestry Survey Results                             100% completion of RRMSG Survey across all
wood fibre used in our supply chain originates from   Projects Coordinator                   •    100% Legal Fibre Sources                       renewable raw material suppliers annually.
sustainable sources aligned with the principles of                                           •    100% Acceptable Fibre Sources                       •    100% Legal Fibre Sources
McDonalds Sustainable Land Management                                                        •    100% surveys completed                              •    100% Acceptable Fibre Sources
Commitment. To this end, all suppliers are required
to verify the origin and legality of fibre sources.                                                                                              Develop a Fibre Certification roadmap identifying
                                                                                                                                                 path and actions required to achieve targets by
                                                                                                                                                 December 2013

                                                                                                                                                 Prepare system partners to institute business
                                                                                                                                                 processes necessary for Chain of Custody
                                                                                                                                                 certification by establishing and co-hosting FSC
                                                                                                                                                 and PEFC Chain of Custody Training seminars for
                                                                                                                                                 converters during 2013/14.

                                                                                        0% Packaging/Fibre certified chain of custody as of      100% Packaging/Fibre certified chain of custody at
                                                                                        December 2012                                            converter level by 2020

McDonald’s Australia Limited                                                                                                                                                                  19
Copyright © 2013 McDonald's
KPI 6 - Formal processes for working with others to improve design, procurement and recycling of packaging - CONTINUED

Action                                                  Responsibility                    Baseline data                                          Performance Target

Work with industry to improve recycling and             National Sustainability Manager   Analysis of waste network in Australia was performed   Continue collaborative efforts to identify and
recyclability of packaging materials by better          / HGS Packaging Services          in 2012.                                               prioritise viable business solutions and develop a
understanding the recyclability of our restaurant       Director                                                                                 business case to move forward during 2014.
waste packaging and availability of infrastructure by
region
Formal Business reviews completed with all Key          National Purchasing Manager /     Quarterly Business reviews completed with all Key      Quarterly Business reviews completed and
suppliers inclusive of sustainability initiatives.      HGS Packaging Services            suppliers                                              documented with all Key suppliers
                                                        Director
                                                                                          Annual Supplier Performance formally measured for      Annual Supplier Performance formally measured,
                                                                                          suppliers that make up top 80% of food, paper and      discussed and documented for suppliers that
                                                                                          operational supplies                                   make up top 80% of food paper and operational
                                                                                                                                                 supplies
Advertise participation in the APC, and inform our      Sustainable Supply manager        Commitment to APC shared through our website and       Statement prepared and shared with suppliers by
suppliers of our commitment to its principles.                                            CSR report.                                            Dec 2013

Table 8

McDonald’s Australia Limited                                                                                                                                                                  20
Copyright © 2013 McDonald's
KPI 7 - Demonstration of other stewardship outcomes e.g. litter reduction

Action                                                     Responsibility                    Baseline data                                              Performance Target

McDonald’s Environmental scorecard is used as a            Sustainable Supply Manager        Direct supplier facilities supplying bakery, beef, pork,   Report generated annually that assesses progress
continuous improvement tool for our suppliers to           and HGS Packaging Services        poultry, potato, and packaging located in Australia        against goals for Zero waste, carbon reduction,
demonstrate leadership in environmental                    Projects Coordinator              complete and submit an environmental scorecard             and water stewardship.
responsibility and to enable quantitative                                                    within each annual reporting period.
measurement of the environmental impacts in the
manufacturing of our products.
Recognize leadership among our restaurants and             Sustainable Supply Manager        McDonalds Best of Sustainable supply and Best of           Submissions received by September 2013 for
suppliers, and Encourage the sharing of best thinking                                        Green are run every two years and was last run in          review. Winners will be recognized on
and practices throughout the McDonald’s system via                                           2012. Programs invite suppliers / restaurants to submit    www.AboutMcDonalds.com and at the Worldwide
McDonald’s Best of Sustainable supply and Best of                                            initiatives. Entries to be judged by McDonald’s Global     Convention in April 2014.
Green programs.                                                                              Sustainable Supply Steering Committee and a Panel
                                                                                             of judges consisting of McDonald’s executives and
                                                                                             external experts for global recognition.
Introduction of Digital Menu boards                        National Sustainability Manager   Currently we have 31 restaurants with an internal          New restaurant design and remodels to transition
                                                           / Design                          digital menu board solution                                to Digital Menu Boards where feasible post June
                                                                                                                                                        2013.
Introduction of LED Lighting. LED lights have a life       National Sustainability Manager   Existing restaurants use many lighting combinations        Retrofit existing restaurants with LED lighting
span at least 5 times longer than other light globes                                         including Halogen, Compact Fluro, T8 Tubing, and           (where budgeting permits) to reduce electrical
leading to a reduction in light globe waste to landfill.                                     Incandescent & Mercury Vapor.                              consumption and demand.
                                                                                                                                                        New lighting standard including LED lights front of
                                                                                                                                                        house and T5 tubes in back of house implemented
                                                                                                                                                        by July 2013 for all new designs.

Deliver internal training/engagement on                    HGS Packaging Services QA &       No formal training/engagement conducted.                   Develop an internal training module aligned with
environmental packaging policies, procedures, tools        PD Manager                                                                                   APC objectives and deliver to relevant
and achievements,                                                                                                                                       stakeholders on a minimum annual basis. 1st
                                                                                                                                                        training delivered by December 2013.
Continue to include action plan outcomes in                Corporate Communications          APC-relevant outcomes included in most recent 2010         Inclusion of APC-relevant outcomes in McDonald’s
Corporate Social Responsibility reporting.                 Manager                           CSR report.                                                Australia CSR reports.

Improve the work lives of employees in our supply          Sustainable Supply Manager        100% suppliers signed code of conduct                      100% suppliers signed code of conducts
chain through systems that promote leadership and          and HGS Packaging Services        93% of supplier facilities completed an annual online      100% of supplier facilities complete annual online
accountability in accordance to Mcdonald’s Supplier        Projects Coordinator              self assessment in 2012                                    self assessment
Workplace Accountability (SWA) programme.                                                    96% of supplier facilities have had one or more onsite     100% of supplier facilities have had one or more
                                                                                             audits as of Dec 2012.                                     onsite audit.

Table 9

McDonald’s Australia Limited                                                                                                                                                                          21
Copyright © 2013 McDonald's
KPI 8 - Reduction in the number of packaging items in the litter stream.

Action                                            Responsibility                    Baseline data                                              Performance Target

Maintain restaurant litter patrol frequency and   National Sustainability Manager   From July 2010, litter patrols increased from 1 to 2       100% of restaurants completing patrols at required
compliance                                                                          daily, for restaurants with extended trading hours and     frequency (Where safe to do so)
                                                                                    who have a safe environment to do so

Maintain and grow Clean Up Australia Day          National Sponsorship Manager      In 2011 438 McDonald’s restaurants participated in         Clean Up Australia Day restaurant participation
commitment                                                                          CUA Day.                                                   increased by 10% each year.

                                                                                    In 2012 268 McDonald’s sites were registered               Leverage McDonald’s marketing and in-store tray
                                                                                    participants in CUA Day with the reduction attributed to   liners to support Clean Up Australia Day
                                                                                    inclement weather and flooding in parts of NSW.
Investigate options to reduce the number of       HGS Packaging Services QA &       No review of product packaging pieces undertaken.          Identify a multipart packaging solution where ONE
separable packaging items per product.            PD Manager                                                                                   element can be removed by December 2013.
                                                                                                                                               Full Implementation of viable solution by
                                                                                                                                               December 2014
Maintain branded packaging disposal labelling     HGS Packaging Services            McDonald’s Litterman logo is used on all branded           McDonald’s Litterman maintained as a standard
                                                  Procurement Operations            packaging                                                  inclusion on all branded packaging ongoing.
                                                  Manager

Table 10

McDonald’s Australia Limited                                                                                                                                                               22
Copyright © 2013 McDonald's
You can also read