Fast-Food Industry ESG Thematic Report, 2023

Environmental, Social and Governance (ESG) in the Fast-Food Industry

Sustainable and responsible investments have become key trends in the current era, where investors, governments and the companies are trying to create an impact by setting off ESG policies.

The fast-food industry is one of the sectors, where leading players of the industry are aware of the impact of industry on environment and society respectively. The market in the pre pandemic era witnessed a surge in the demand, due to globalization and economic development, majorly in countries like India. However, post pandemic the growth of the market has stalled, to which a variety of factors such as the lack of physical contact between suppliers and consumers and the health consciousness among consumers have contributed. Environmental degradation caused due use of raw materials such as bread, meat, and usage of fresh waters is another set of factors that has slowed the expansion of the fast-food market.

ESG Trends

Post pandemic, companies operating in the fast-food industry have started to focus on the environment and social aspects of ESG. Companies in the market have taken up SBT’s i.e., science-based targets to reduce the emissions, where scope 1 and scope 2 emissions are reduced by at least 67% and scope 3 emissions by 2035.

One of the leading companies of the market have created animal welfare policy, which deals with the improvement of sourcing the meat in an ecofriendly and responsible manner. The same company has made policies regarding sustainable agriculture and vendors policies, where the first one deals with the methods and codes that deal with the farming as the raw materials such as vegetables are sourced from the plantations and farms, by promoting the sustainable farming practices, which help in preserving the natural ecosystems. The latter deals with the code of conduct of the raw material suppliers and vendors, where it focuses on prioritizing the vendors based on their ethical values, thereby creating positive effect on the global and local communities i.e., the society and ecologically.

Palm oil is one of the major ingredients used in the fast-food market. The RSPO (Roundtable on Sustainable Palm Oil) is an organization, which certifies the palm oil used in the preparation of the product, where some of the US based leading companies are sourcing the RSPO palm oil, reducing the ecological degradation. The excessive usage of palm oil in the fast-food products are reported to increase cholesterol levels in the body, which over a period of time may cause negative health effects. The adverse effects caused by the excessive usage of palm oil is essentially contrary to the United Nations’ Sustainable Development Goal 3: Good Health and Well-being.

Although companies in the market are making policies that are ecofriendly in nature, there are certain challenges that are still needed to be solved. EPS are non-biodegradable plastics, where it is still used in minute amounts, making the 100% elimination of such plastic is still a challenge. Further, in the global value chain, the logistics and storage are the significant components, where the carbon footprint is basically off set through the ecofriendly policies. Some companies in this sector have made sustainable packaging policies, where the packages are designed 100% recyclable and biodegradable and compostable, also aiming at reducing the carbon footprint, by eliminating the EPS and PFA’s in their packaging materials.

Growth of the Fast-food Market

As of 2020, the fast-food Market economical magnitude was estimated around USD 529.5 billion and is expected to grow with a CAGR (compound annual growth rate) of 4.6% from 2021 to 2028. Innovative approaches towards combating the climate change and reducing the carbon footprint through decreasing the usage of non-recyclable plastic as well as making policies that promote sustainable agricultural practices are a few parameters, which influence the ESG in the fast-food market.

Key Companies in this theme

    • Auntie Anne’s Franchisor SPV LLC

    • Domino’s Pizza, Inc.

    • CKE Restaurants Holdings, Inc.

    • Firehouse Restaurant Group, Inc.

    • Jack in the Box, Inc.

    • McDonald’s

Scope of the Fast-Food Industry ESG thematic report

    • Macro-economic and ESG-variable analysis of the industry, including regulatory, policy, and innovation landscape

    • Key insights on infrastructure developments and ESG issues affecting the theme

    • Identify key initiatives and challenges within the industry

    • Identify ESG leaders within the industry

    • Understand key initiatives and the impact of companies within the sector to fuel an informed decision-making process

    • Analysis of industry activities based on multi-media sources, including significant controversies and market sentiment

Key Benefits of the Fast-Food Industry ESG Thematic Report:

    • Offers a global perspective in the fast-foods industry and the policies and measures taken by the players, for overcoming the challenges faced in terms of Environment, Social and Governance.

    • Key insights into the sustainability practices of major players in the market.