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Tulipshare is actively working to engage with McDonald’s on these salient risks, and last reached out to McDonald’s Investor Relations team on June 20, 2024.

Follow this page to stay informed of the progress of our engagement. 

Why It Matters:

Seafood is the largest traded food commodity in the world, with more than 3 billion people relying on wild-caught and farmed seafood as a significant source of protein. Concerningly, the United Nations Food and Agricultural Organization “estimates that 85% of marine fish stocks are either fully exploited or overfished,” posing a threat to this critical global food source. Considering McDonald’s is one of the world’s largest purchasers of white fish globally, the impact of the company’s sourcing policies and practices on marine ecosystems and global food supply chains is massive. The question is whether the impact is positive or negative, and the only way to know whether a company’s purported commitments to sustainable sourcing are truly all that they claim to be - instead of greenwashing or eco-opportunism - is through transparency and accountability.

In response to mounting concerns surrounding overfishing and marine fish stock depletion, Tulipshare has closely examined McDonald’s sustainability initiatives, notably its "McDonald’s Sustainable Fisheries Standard." In examining this standard, Tulipshare has identified significant gaps in transparency and reporting.

Key among these concerns is the lack of clarity surrounding the criteria used to assess sustainability under the McDonald’s Sustainable Fisheries Standard. Without transparent delineation of these standards and metrics, customers and investors lack insight into McDonald’s commitment to sustainable practices. Tulipshare believes that disclosing these criteria, including fishing practices, impact on marine biodiversity, bycatch percentages, and habitat disturbance, is imperative for ensuring accountability and fostering trust among stakeholders.

Tulipshare has sounded alarms over McDonald’s failure to meet its 2020 sustainability goal and the subsequent absence of updated targets or progress reports surrounding “McDonald’s Sustainable Fisheries Standard,” which fisheries must meet to be deemed “sustainable” and count towards the company’s goal of 100% sustainability. Despite McDonald’s pledge to source 100% of wild-caught fish sustainably by 2020, the company has not only failed to reach this goal, but has moved further away from it. While the company annually discloses the percentage of sustainably sourced wild-caught fish, McDonald’s has provided insufficient information on efforts to realize its sustainability goals, which have seen a regression from 96.3% sustainably sourced wild-caught fish for the McDonald’s Filet-O-Fish® in 2021 to 88.8% in 2022. 

So, you may be thinking that, although McDonald’s has failed to achieve its 100% sustainability goal by 2020, 88.8% sustainability isn’t too shabby. But, the reality is that without a clear breakdown of the criteria required to meet the “McDonald’s Sustainable Fisheries Standard,” customers and investors alike face uncertainty regarding the company’s actual progress towards sustainability goals. Moreover, despite the 88.8% self-reported achievement, trawling for the Alaska pollock used in McDonald’s products has resulted in alarmingly high levels of salmon bycatch which threatens the livelihood of indigenous tribes in Alaska, as well as the health of marine ecosystems.

The only way to truly grasp the issues surrounding the lack of transparency in McDonald’s fisheries certifications is to take a deeper dive into the partnerships the company has with the two entities that certify the “McDonald’s Sustainable Fisheries Standard,” as well as some of the effects that McDonald’s sourcing practices are having on marine ecosystems →

In the UK, the Filet-O-Fish® and Happy Meal® Fish Fingers use Hoki or Pollock from Marine Stewardship Council (MSC) certified sustainable fisheries, while in the US, wild-caught Alaska Pollock is used for the Filet-O-Fish® sandwich and MSC certification is no longer a requirement. But, even back in 2013 when it was first announced that McDonald’s would display the blue “Fish Forever” eco-label from the MSC on its fish packaging in restaurants across the US, questions were raised as to whether this meant that the MSC, which previously catered to a small and niche market for sustainable seafood, had acquiesced to inconsistent and weakening certification standards in order to keep up with a growing market trend and certify a mammoth company such as McDonald’s.

Many fisheries scientists question how reliable the MSC’s stamp of approval is. In 2010, Jennifer Jacquet and Daniel Pauly of the University of British Columbia fisheries center, Sidney Holt, one of the fathers of modern fisheries science, Paul Dayton and Jeremy Jackson of the Scripps Institute, and David Ainley, a marine ecologist, all argued that, while the MSC is growing rapidly, “the organization is also rapidly failing on its promise,” and “objections to MSC certifications are growing.” Additionally, many conservation groups, including Greenpeace, the Pew Environment Group and some national branches of the WWF, have protested over various MSC procedures or certifications. 

Fisheries scientists also believe that the MSC certification system “creates a potential financial conflict of interest, because certifiers that leniently interpret existing criteria might expect to receive more work and profit from ongoing annual audits.” Indeed, The New York Times reported that Mike DeCesare, a spokesman for the MSC, said that it receives a 0.5 percent licensing fee on wholesale fish sales when its label is used by a partner. Though MSC certification is now only optional for US-based fisheries, at the time DeCesare shared that statement on licensing fees, McDonald’s USA was advertising full MSC certification and reported sales of more than 200 million Filet-O-Fish sandwiches per year in the United States alone, so, according to The New York Times, the deal likely worked out “to be a substantial windfall for the [MSC] organization.” Similarly, in 2011, when it was first announced that 7,000 McDonald’s restaurants across 39 European countries would achieve certification by the MSC, that translated to around 100 million Filet-O-Fish orders a year. 

The New York Times also reported that some of the MSC’s decisions have been met with wide criticism, including the certification of a fish called the New Zealand hoki that McDonald’s serves in Filet-O-Fish sandwiches outside the US. The MSC has also certified fisheries as “sustainable” for which scientists argue “the data is so scarce that any management plan is pure guesswork, including those of the Antarctic krill and the Antarctic and Patagonian toothfish.”

Now, MSC certification has expanded to McDonald’s restaurants across China - the largest fishing nation in the world. But, McDonald’s USA no longer uses the MSC for certifying its fish-based products - meaning that US-based Filet-O-Fish® is no longer held to the MSC Chain of Custody Standard which purportedly ensures an unbroken supply chain “where certified seafood is easily identifiable, separated from non-certified products, and can be traced back to another certified business.” Instead, McDonald’s USA reports that the Sustainable Fisheries Partnership (SFP) annually verifies whether the suppliers of the fast food chain’s wild-caught fish are compliant with the “McDonald’s Sustainable Fisheries Standard.” But it remains unclear exactly what the “McDonald’s Sustainable FIsheries Standard” is; the company does not disclose any of the criteria assessed or metrics used to certify its suppliers with this standard.

McDonald’s began working with the SFP in 2002 to improve the sustainability of its seafood supply chain. A year later, “McDonald’s Global Sustainable Fisheries Policy” was developed with the help of the founder and CEO of SFP. 

Though the SFP has some information regarding its business relationship with McDonald’s, it’s difficult to find much information about the McDonald’s Global Sustainable Fisheries Policy. A press release issued in 2011 announcing MSC certification of McDonald’s fish products across Europe states that the policy requires that an annual independent assessment is conducted by the SFP and carried out at each of the fisheries from which McDonald’s sources. The SFP then rates each fishery according to three criteria: fish stock status, management quality, and marine environment and biodiversity conservation. Surprisingly McDonald’s does not report on any of this, including what the remediation process is for fisheries from which it sources that are found to be non-compliant with the McDonald’s Sustainable Fisheries Standard.

Current Controversy:

As recently as April 2024, policymakers on the North Pacific Fishery Management Council, the federal commission that regulates commercial fishing in the American waters of the Bering Sea, are grappling with what to do about the trawl industry that currently threatens the fish stocks of two species of Alaskan salmon. The Bering Sea trawl industry supplies 2 billion pounds of pollock each year to make products such as McDonald’s Filet-O-Fish®. The enormous scale of the pollock harvest results in massive amounts of bycatch - tens of thousands of king salmon and hundreds of thousands of chum salmon. Western Alaskan tribes are currently pleading with the Council for a crackdown on the pollock trawling industry that drags wide-mouthed nets through the water to target pollock, but can also accidentally swallow thousands of salmon. 

The tribes are currently sharing gut-wrenching stories of empty summer fish camps and barren cupboards that have to be filled with expensive groceries shipped in from the road system. While the trawling industry, annually harvesting $1.5 billion worth of pollock, argues that warming oceans are to blame for the dramatic decline in salmon populations and that reducing bycatch would not improve the numbers, the tribes staunchly contend that the pollock trawling industry is to blame, and the imposition of bans and limits on salmon harvests in their villages - where salmon are an essential subsistence food - is not the answer. Last week, one tribal leader decried a potential seven-year moratorium on salmon fishing for tribes along the Yukon River at a public meeting hosted by the Alaska Department of Fish and Game, and asked: “Well, what about the high seas? What kind of punishment are they getting for making all the money and starving us?”

Key Takeaways:

Eco-opportunism—the hidden self-interest-seeking behavior that undermines the transition toward sustainability through intentional deceit—is something that investors need to be wary of. Despite the positive role played by certifications, their effectiveness may be hampered by eco-opportunism in some cases, thereby highlighting the need for continuous vigilance and scrutiny of the certification process to ensure that it remains true to its objectives. A lack of transparency on these crucial sustainability standards exposes McDonald’s to reputational, regulatory, and financial risk.

Although McDonald’s highlights the Marine Stewardship Council certification as an optional step for fisheries in its sustainability reports -  a certification that has faced allegations of greenwashing - investors still lack insight into the criteria applied by McDonald's when certifying fisheries under its own standard.

McDonald’s states that the company’s strategy in terms of responsible sourcing is to “uphold our brand value of doing the right thing and to our long-term ability to provide quality food to customers, we are committed to creating transparent and trusted supply chains.” 

McDonald’s acknowledges that fish is one of its six “priority ingredients” whereby the company’s “scale and influence” on sourcing practices “can have the greatest impact” on the planet. This acknowledgment is important. But without adequate disclosure of the criteria McDonald’s utilizes in certifying its fisheries as “sustainable,” the fact remains that one of the largest companies in the world is left to monitor and ultimately certify its own impact on the health and long-term viability of a major food source and pillar of marine ecosystems without the assurance of true oversight.

This is why investors are calling on McDonald’s to become an industry leader in transparent and verifiable environmental stewardship. Tulipshare urges McDonald’s to seize this opportunity and uphold its dedication to sustainability for the preservation of marine ecosystems and global food security.

We will continue to engage with the company on this issue and will keep you informed on the progress of our engagement.