Minimize Divert & Recycle McDonald's Global Waste ... AWS

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Sustainability / Planet / Minimizing Waste

e W tsatn aru aR tseg ni trevD id n ag nizm inM i Our customers have told us that one of the most important environmental issues in our restaurants is waste and recycling. We agree that we must join together with our customers and crew to tackle this issue, as packaging and waste are priority environmental issues for our restaurants' along with energy usage. Our ultimate vision is to avoid waste in the first place. We are constantly seeking to optimize our packaging and testing more environmental friendly alternatives. Our packaging remains key for quality and food safety and we want it to be recycled into valuable resources whenever possible. We will not meet our vision without learning together, engaging our customers and crew, along with the broader community and the waste hauling industries that we rely upon. In this section, we outline our approach to minimizing and recycling waste in our restaurants. We set an aspirational goal to recycle 50% of our in-restaurant waste by 2020. In 2013, we estimated that restaurants in the top 9 markets recycle about 36% of the in-restaurant waste by weight. We are currently adapting our global recycling metrics and measurement approach to share more recent progress on markets' recycling activities. While our strategy is focused — creating waste diversion plans in our top 9 markets — we know there will be challenges to attain our goal due to the differences in local infrastructures in each market.

Globally, waste volumes and compositions vary based on a variety of factors including the menu, location, restaurant volume, and drive-thru or parking lot characteristics. McDonald’s restaurants in airports or shopping malls have different customer traffic patterns and waste profiles than restaurants with a high volume of drive-thru traffic, especially for the front-ofcounter waste. For example, when we looked at a sample of two U.S. restaurants, one with a higher percentage of drive-thru customers, and the other with a higher percentage of dine-in customers, overall on-premise waste averaged about 2,214 pounds generated per week.

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Increase amount of in-restaurant recycling to 50% and minimize waste. (Top 9 Markets.)

Around the world, McDonald’s restaurants are recycling waste materials, including used cooking oil and corrugate, or cardboard, for a wide range of secondary uses. For example, from 2011-2015, McDonald’s UAE’s delivery fleet completed over 5 million kilometers fueled by biodiesel converted from restaurant cooking oil. At this time we do not have sufficient global waste data to be able to report our 2015 progress against this goal. We are developing a better, more holistic recycling tracking methodology applicable to waste streams across all restaurants in the top 9 markets.

Too Good to Waste Next steps to minimize waste and increase recycling include: Establishing a better, holistic measurement methodology, consolidation and reporting process for the 2020 goal Developing waste and recycling best practices framework, as part of global guidelines for the Company’s geographic regions Advancing recycling pilots at the restaurant level to identify widely scalable practices

The Company is evaluating the best ways to measure all waste streams, including and beyond oil and corrugate, and working developing restaurant waste guidelines with the input of suppliers and others. For instance, McDonald’s USA is working with a waste management service provider to identify ways to estimate other forms of recycling, with more results available in 2016. In addition, the Company continues to launch in-restaurant recycling programs in selected markets.

Continued Progress on Zero Waste in Europe Twenty-six countries are contributing to McDonald’s European vision of zero waste to landfill and incineration by recycling. Road maps have been set in 3-year intervals, with annual tracking through an online questionnaire. As of 2014, the most recent data we have available, an average of 34% of total waste (by weight) from restaurants in 24European countries was being recycled. The European recycling efforts have been driven in part by zero waste guidelines, including the European recycling minimum standards, and customer involvement. At the time of this report, 2015 data for our European markets was still being finalized. Currently some of the bigger EU countries like France and UK are implementing or rolling out front of counter waste separation, which will further drive overall recycling and advance progress toward zero waste.

Reducing Waste, Connecting with Community To make our delicious McCafe beverates, McDonald's restaurants use literally tons of coffee grounds and espresso beans each year, which can contribute to greenhouse gas emissions

when they begin decomposing in a landfill. Luckily, coffee grounds make a great soil amendment for gardening! Recycling these used grounds gives McDonald’s a great way to connect with customers and crew, and further our waste diversion efforts. To take advantage of this valuable waste stream, McDonald's USA implemented a used coffee grounds composting program called "Good Neighbor, Good Grounds" in 2015 to reduce the amount of organic waste being sent to landfills. Through the program, participating restaurants rebag coffee grounds and give them to community members to use in their home gardens or donate them to community gardens. This not only helps the environment, it fosters community engagement and creates connections with the McDonald's brand. Over 1,000 McDonald's restaurants in Oklahoma, Hawaii, California, Oregon, Washington and Arizona are now part of this program, including a new partnership between McDonald's, our franchisees and 150 statewide schools in the Arizona Department of Education School Garden Program! Watch Arizona media coverage on the program here. Recently, the US North West Region confirmed that 380 restaurants are onboard for coffee ground recycling with the community garden connection as of Spring 2016. McDonald's Canada is planning to roll out the program in 2016. These efforts in North America build on the great momentum by many McDonald's markets in Europe to recycle or donate coffee grounds, food scraps and other kitchen waste streams. McDonald's continuing effort to try and source 100% sustainable coffee globally continues. Read more about our coffee sustainability journey and certified sustainable fiber hot cups in the Sourcing pages.

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