Biodiversity loss is a global systemic risk. Investors and governments worldwide are increasingly acting to address the impacts and dependencies of economic activity on natural systems. At the United Nations Biodiversity Conference in 2022, 190 countries agreed to take steps to prevent biodiversity loss. The resulting Global Biodiversity Framework calls on businesses to assess and disclose biodiversity dependencies, impacts and risks, and reduce negative impacts.

Failure to comprehensively assess its natural capital impacts and dependencies and ultimately mitigate them may expose McDonald’s to unnecessary risk, including:

Systemic Risk: More than half of the world’s GDP is either moderately or highly dependent on nature’s services, and the Food and Beverages industry depends on natural services for $1.4 trillion of value generation. By some estimates, tens of billions of dollars in assets could be at risk of stranding over the next five to ten years.[1]

Regulatory Risk: The recently adopted European Sustainability Reporting Standards, which apply to certain U.S. companies that do business in the EU, include mandatory reporting of biodiversity and ecosystem impacts and risks, and mandatory biodiversity reporting in line with Taskforce on Nature-related Financial Disclosure (TNFD)[2] is under discussion in the UK.[3] The International Sustainability Standards Board is reviewing the work of the TNFD as it considers developing natured-based disclosures.[4]

Operational and Reputational Risk: Failure to adequately assess and mitigate dependencies on nature could impair the Company’s ability to procure key commodities that are at risk from nature loss and failure to mitigate the Company’s impacts on nature could harm McDonald’s family-friendly reputation.

McDonald’s has made a number of commitments to avoid and reduce key drivers of nature loss across its value chain, and is part of the TNFD Forum, collaborating with industry peers on the frameworks, metrics and tools that will be used to address nature-related risks and opportunities, yet it has not published a systematic review of its dependencies and impacts on biodiversity and natural capital. Without a comprehensive assessment of the company’s nature and biodiversity impacts, dependencies, risks, and opportunities to inform its business strategy and activities, McDonald’s may subject itself to unnecessary risk.