About 64 million people visit McDonald’s every day. That’s a stunning number. They’ll see changes in the year ahead, some driven by a renewed sustainability push at the $24-billion fast-food giant.

LED lights in new and renovated stores. “Greener” packaging. Eco-labels on fish sold in Europe.

None of this is earth-shattering or, more importantly, earth-saving, but it’s the start of something big, says Bob Langert, McDonald’s v.p. for sustainability.

“We’re on a path to mainstream sustainability,” Bob told me by phone the other day. “This is transformational for us. We want to be bolder, and we want to make a bigger impact.” Most important, he said, the company wants to embed sustainability into its operations and, eventually, into its brand.

Business-friendly environmentalists who work with McDonald’s–groups like the World Wildlife Fund, Conservation International and Environmental Defense Fund–will applaud any sign that the company is ready to integrate sustainability into its core business and dig deeper into its supply chain to find ways to raise beef and chicken that are better for the planet. Skeptics, and there are many, will call this greenwashing, or perhaps “farmwashing,” a term I hadn’t heard until yesterday when I saw this anti-McDonald’s posting in Grist.

In a way, McDonald’s is like Walmart–it’s never going to be beloved in the Whole Foods-shopping, arugula-eating, tony precincts of Berkeley, Brooklyn or Bethesda. But the company is much too big to ignore or wish away.

Today, McDonald’s released its 2011 Sustainability Scorecard. Under the umbrella of sustainability, the company includes environmental responsibility, its supply chain, nutrition and well-being, employees and community grants and programs, albeit in a way that highlights accomplishments and isn’t easily transparent. (Please let me know if you can find an accounting of the company’s carbon footprint or a greenhouse gas reduction goal, because I couldn’t.)  But McDonald’s can feel good about a couple of big initiatives in the year just past.

First, as you’ve probably read, McDonald’s will reformulate all of the Happy Meals sold in the U.S. and Latin America to automatically include fruit and reduce the overall amount of calories and fat, mostly by serving smaller portions of frees. This is a big deal if you choose to blame the obesity crisis on the companies that sell food. I don’t. (See my blogpost, Mmm…mmm..who’s to blame for obesity?) It’s dangerous to confuse corporate responsibility with personal responsibility.

Companies are, however, responsible for what they buy and here McDonald’s is making meaningful progress, moving forward with its sustainable land management commitment, which is supposed to “ensure that, over time, the agricultural raw materials for our food and packaging originate from legal and sustainably managed land sources.”

Just what this will mean in practice isn’t clear, but the company has, as an example, joined with the World Wildlife Fund and The Nature Conservancy, as well as Cargill and Walmart, to form the Global Conference on Sustainable Beef, which will try figure out how to make the beef production system more sustainable. For a host of reasons, not the least of which is the company’s desire to sell as many burgers as it can, I’m skeptical about this effort (see my blogpost, Meat: bad for you, bad for the climate) but the fact is that people will go on eating lots of beef. So we should wish McDonald’s and its allies good luck as they try to “green” the hamburger.

Meanwhile, McDonald’s has promised to source only certified sustainable palm oil by 2015, to buy more coffee certified by independent organizations like the Rainforest Alliance and to insure that its chicken products haven’t been fed soy from the Amazon. These are unglamorous initiatives that probably won’t drive sales, but they matter because of the company’s scale.

“We see our impacts on the supply chain as being paramount,” Bob told me. “We don’t buy niche products. We buy from the mainstream.” When McDonald’s says that beef needs to be raised differently, an entire industry will have to listen.

Bob Langert

It’s partly because I’ve known and trusted Bob for many years that I take these efforts seriously. He’s been in charge of the company’s corporate responsibility effort (now rebranded as sustainability) for nearly 20 years. (See my blogpost, What a long, strange trip it’s been for McDonald’s Bob Langert.) Most of that work, he told me, has been reactive and defensive. Remember Fast Food Nation? Or Super Size Me? Even McDonald’s involvement with the Marine Stewardship Council grew out of a crisis. “We had fisheries disappearing,” Bob said. More than 99% of McDonald’s fish now comes from MSC certified fisheries.

Now, Bob says, the company sees sustainability as an opportunity, and it’s willing to put real dollars behind it. “We’re investing a lot more into energy efficiency and green building,” he says, hundreds of millions of dollars to  rebuild and refresh restaurants, making LED lights standard. The company is buying renewable energy certificates to support the development of clean energy.

“Sustainability is going to be higher on the agenda for our senior management team,” he says.

To put its considerable muscle behind those words, McDonald’s needs to set some ambitious goals and targets, and report in a transparent way on its progress. Unlike, say, my local farmer’s market or yours, this is a company that can move the needle on environmental issues in a meaningful way.

Plastic bags, SUVs and hamburgers: No right-thinking tree-hugger would endorse them, at least not in public. But here’s the thing: While we can replace plastic bags with reusable ones, and we can electrify our SUVs, the world’s consumers will almost surely demand more, not less, beef in the years ahead.

Which is why the World Wildlife Fund has begun a conversation about, of all things, sustainable beef.

The WWF, led by Jason Clay, its iconoclastic senior vice president for “market transformation,” last fall convened a Global Conference on Sustainable Beef, bringing together environmentalists, academics and industry giants including McDonald’s, Walmart, Cargill and JBS, a Brazilian company that calls itself “the largest animal protein processing company in the world” and owns U.S. brands Swift and Pilgrim’s Pride.

The goal? To improve sustainability within the beef industry.

Are CAFOs the answer?

The surprise? That one solution may be–may be–to encourage beef producers around the world to behave more like those in the U.S. and Europe, which rely on much-maligned Concentrated Animal Feeding Operations (CAFOs) to produce more beef while using less land, water and feed than producers elsewhere. The issue, Jason says, is whether it is better to have animals on pasture for four years (as in Brazil) and producing a lot of methane, or whether it’s better to slaughter animals in two years or less,  including some time in a CAFO to increase the weight to acceptable levels.

Needless to say, this is likely to be a controversial undertaking.

Still, one thing we can agree upon is this: There’s lots of room for improvement in the beef biz.

In his presentation (available for download, here), Jason says beef production generates about 1.3% of the world’s calories but uses 60% of all the land used to produce food. Beef production also consumes disproportionate amounts of water and energy, and is a leading cause of deforestation in Brazil.

It’s hard to imagine a less efficient way to feed people. An oft-quoted but sometimes disputed  2006 report by the United Nations Food and Agriculture Organization (FAO) found that livestock raised for meat or milk production cause more greenhouse gas emissions than the entire transport industry–between 14 and 22 percent of global emissions.

That UN report also said: “Global meat production is projected to more than double from 229 million tonnes in 1999/2001 to 465 million tonnes in 2050, while milk output is set to climb from 580 to 1043 million tonnes.” People tend to consume more meat as their income grows.

To feed a growing population on a finite planet, Jason says: “We need to freeze the footprint of food…We need to use resources more efficiently and intensify production.”

When we spoke by phone, he elaborated a little on what sustainable beef might look like. What’s required, above all, is setting aside emotion and focusing on a series of science-based, measurable outcomes; they would likely include reducing land use, water use, energy use and greenhouse gas emissions, as well as protecting natural habitat.

“Beef is not going away, so it needs to be more efficient,” Jason says. “ The best producers are 100 times more productive than the worst—because of lack of knowledge, poor soils, poor lands, lack of rainfall, whatever.”

The U.S. and Brazil are the world’s biggest producers of beef, while the U.S. and China are the biggest consumers. (The chart at left covers all meat, but China is also the No. 2 consumer of beef.)

U.S. beef producers, however, are far more efficient than the Chinese, according to a presentation from JBS and Cargill. (Available for download here as Overview Global Beef.) It says that U.S. producers generate 49.9 kilograms of beef per hectare of pasture per year, compared to 14.4 kg for the Chinese. U.S. producers also get 125.7 kilograms of beef per cow, far more than the Brazilians or the Chinese.

That’s because CAFOs can be a lower-impact way to produce beef, though there is a lot of variation globally, says Jason.

Others, though, argue that CAFOs externalize their costs. In an influential 2008 article about meat in The Times, food writer Mark Bittman said:

Global demand for meat has multiplied in recent years, encouraged by growing affluence and nourished by the proliferation of huge, confined animal feeding operations. These assembly-line meat factories consume enormous amounts of energy, pollute water supplies, generate significant greenhouse gases and require ever-increasing amounts of corn, soy and other grains, a dependency that has led to the destruction of vast swaths of the world’s tropical rain forests.

Foodies, meanwhile, say they love the taste of grass-fed beef. But Jason told me: “As we start looking at greenhouse gases, grass-fed beef is probably the worst option.” That’s largely because allowing cattle to roam freely requires a lot of land, a 100% grass diet produces lots of methane that cannot be captured in the pasture; also,  large-scale ranches can contribute to deforestation and water pollution.

The only way we’ll sort all this out is with good science. Jason says environmentalists will work with the industry to identify and disseminate science-based best practices and standards around beef, just as WWF has done before with similar efforts that led to  the Marine Stewardship Council (to promote sustainable fishing) and the Forest Stewardship Council.

Wouldn’t it be better, I asked Jason, for groups like WWF to urge people to eat less beef? A diet with more vegetables and less meat is likely to be healthier for people and the planet.

“People in the U.S. and Europe should eat less beef,” he replied. “But I don’t think the world should produce less beef and that we should all become vegetarians…Animal protein is important in diet and nutrition, whether it’s mother’s milk or cow’s milk….Also, most of the land used for beef couldn’t be used to grow vegetables.”

Hmm. The search for a “greener’ hamburger is going to be interesting to watch.

Can a hamburger be "sustainable"?

]]> http://www.marcgunther.com/2011/01/04/how-to-green-a-hamburger/feed/ 5 http://www.marcgunther.com/2009/12/02/the-strange-power-of-prizes/ http://www.marcgunther.com/2009/12/02/the-strange-power-of-prizes/#comments Thu, 03 Dec 2009 00:41:22 +0000 Marc http://www.marcgunther.com/?p=3095

Prizes are powerful incentives.

In 1927, Charles Lindbergh flew across the Atlantic to win the $25,00 Orteig prize.

Tartan Racing, a collaboration between students at Carnegie Mellon and General Motors, won a $2 million prize in the 2007 DARPA Grand Challenge, a competition to develop an  autonomous ground vehicle for the military.

And, of course,  kids since 1912 have been tearing open Cracker Jack boxes to get at the prize inside.

Prizes are fun. The difference between a spelling test and a spelling bee is a prize.

These days, as never before, private companies, foundations and government are turning to prizes as a way to spur technological and environmental innovation. This proliferation of prizes tells us some interesting things about ourselves and about the limits markets, as I’ll argue in a moment.

Best known of the prize-givers is the X Prize Foundation, whose slogan is “revolution through competition.” It’s offering prizes of at least $10 million each for safely landing a robot on the moon (sponsored by Google),  for building a super-efficient car (sponsored by Progressive Automotive) and for breakthroughs in genomics.

The U.S. Department of Energy has an L-Prize for high performance lighting and an H-Prize to “advance the research, development, demonstration, and commercial application of hydrogen energy technologies.”

On a more modest scale, the World Wildlife Fund runs the annual International Smart Gear Competition to reward practical, innovative fishing gear designs that reduce bycatch – the accidental catch of sea turtles, birds, marine mammals and other species.

“Prizes are becoming an industry, in many ways,” says Hillary Chen, a policy analyst with the White House Office and Technology Policy. The White House, she says, is looking at prizes to help solve a variety of problems, ranging from childhood obesity to high school graduation rates.

“There’s a lot of enthusiasm for prizes inside the administration,” she said.

Chen spoke today at Resources for the Future, the environmental think tank, which organized a panel on the role of prizes in innovation and entrepreneurship.

Why the plethora of prizes? Hard to say. If you believe everything you learned in Econ 101 and listen to free market acolytes, a functioning market economy should be able to deliver the things we need: autonomous ground vehicles to the military, efficient lighting systems or breakthroughs in genomics.

That’s why we have patents, which reward invention, and profits, which flow, at least in theory, to  people who devise useful products and services.

But if that’s so, what’s with Progressive Automotive Prize? Its goal is

To inspire a new generation of viable, super-efficient vehicles that help break our addiction to oil and stem the effects of climate change.

Hmm. As Timothy Brennan of RFF, who moderated the panel, noted: Wouldn’t you think this is what the best brains at GM, Ford, Honda and Toyota do every day?

Perhaps not.

Prizes can play a role when entrenched industries are either holding back innovation–because their business model depends on selling the stuff they already make–or are stuck in their ways.

Prizes also tap into our emotions in a way the monetary rewards do not. Michele Gittleman, a project manager at Carnegie Mellon, said the idea of researching a self-directed vehicle that navigate a desert obstacle course was not all that exciting to her until a prize was attached to it by DARPA.

“I’m fairly competitive,” Gittleman said. “That had a lot of appeal.”

Prizes can be designed to promote long-term goals that markets can’t. As this video explains, Google’s Lunar X Prize is designed to promote a “revolution in space to benefit all humanity,” perhaps by enabling private companies to mine the silicon in the lunar soil to provide “clean, affordable, limitless energy” for solar satellites.

Prizes also drive collaboration in ways that markets don’t. A $1 million Netflix prize, designed to improve the accuracy of predictions about how much someone is going to enjoy a movie based on their movie preferences, was won by a team of engineers who work for, among others, Yahoo and AT&T. The winning team members worked in Israel, Montreal, Austria and New Jersey, according to Slate.

Deadlines are also a key feature of prizes. A research project inside a company or the government can always be delayed by scientists, pleading that they need more time. But a prize has an endpoint.

Ned Stetson of DOE told me that the agency expects to award first stage of the H-Prize in 2011. “If we make it, we will have accelerated the pace of research,” he said. The prize, he said, will also attract “a much larger pool of groups and organizations” than those that customarily seek government grants.

What’s more, prizes add pizzazz and drama to scientific research, which can otherwise be a bit dull.

There’s a danger here, of course. Prize fatigue could ensue. Government lawyers are already said to be studying what can be done with prizes and what can’t. Lawyers– especially government lawyers–just might squeeze some of the fun out of prizes.

But I don’t think they will.  Just before he died, the comedian George Carlin won the Mark Twain Prize for American Humor. Carlin, a masterful student of language, was pleased, or so the story goes.

Awards are for adults, he said. Prizes are for kids.

The strange power of prizes just may be that they make us feel like kids again.

Ridiculous as it sounds, that’s the charge from Rush Limbaugh, who watched a video produced by the World Wildlife Fund in D.C. about the Copenhagen climate talks, featuring the children of WWF staffers. Says Limbaugh:

These people are using their own kids, brainwashing their own kids for the advancement of a hoax! Using and brainwashing their own kids about a lie, all for the purpose of advancing a policy that’s going to result in restricted freedom for these kids. They’ll have no chance at prosperity because of high energy taxes.

What’s the hoax? What’s the lie?

That polar bears are dying? That the earth is getting warmer?

Or that kids will have no chance–no chance!–at prosperity because of high energy taxes.

Funny, I watched the video and thought it was cute. Decide for yourself.

Public interest groups need more scrutiny. So a forthcoming book called Green Inc: An Environmental Insider Reveals How a Good Cause Has Gone Bad (Lyons Press) by a journalist and activist named Christine MacDonald piqued my interest. MacDonald argues that big green environmental groups – specifically Conservation International (where she worked briefly), The Nature Conservancy and the World Wildlife Fund — have become too cozy with corporate America.

The big conservation groups are “deforming themselves,” engaging in “questionable practices” and cultivating “unsavory corporate ties,” she writes. They are conflicted because they take corporate money. They are too quick to provide cover for bad actors:

Groups that once dedicated themselves solely to saving pandas and parklands today compete for the favors of mining operations that remove entire mountaintops, logging and paper companies that clear-cut old growth forests, and homebuilders who contribute to urban sprawl. They rely on funds from cruise ship companies, despite the industry’s record for polluting the oceans. Among the most generous donors are the biggest environmental scofflaws of all: energy companies.

It’s an explosive charge—but MacDonald fails to prove it. The book is spotty, uneven and ultimately disappointing, for the most part lacking the specifics that would show how conservation groups either enabled or covered up bad corporate behavior. But Green Inc. does raise provocative questions about the business models of some of America’s most important green groups.

MacDonald’s basic point—that conservation groups work closely with polluters—is both true and unremarkable. No one would expect the pastor of a church to close its doors to sinners; why, then, should we ask environmental groups to refuse to work with oil companies, mining companies, home builders or giant retailers like Wal-Mart. (McDonald, as it happens, also uses religious language to make her case, writing at one point that CI and others are “guilty of making deals with the devils of deforestation, habitat destruction, and global warming.”) Hey, people rob banks because that’s where the money is. Environmentalists need to get their hands dirty and deal with polluters.

It’s important to understand the role that CI, TNC and WWF play in the NGO ecosystem. They are collaborators, not activist groups. Other green NGOs are activists, and many are both essential and effective—the Rainforest Action Network, Greenpeace, Forest Ethics and Earthworks, to name just a few. But after they raise a ruckus, big companies frequently turn to groups like CI, TNC and WWF for guidance and help in making those pesky activists go away. (You can almost think of the Rainforest Action Network as the business development arm of CI.) Other NGOs like the Environmental Defense Fund and the Natural Resources Defense Council juggle both roles—they are sometime allies, sometime critics of corporate behavior. They’ll sue a company one day, then make nice the next. Hey, the world’s a complicated place.

The key question is, what impact do the collaborative groups have after they engage? I’ve spent a lot of time looking at work done by Conservation International (with Wal-Mart, Starbucks, McDonald’s and Marriott), less with World Wildlife Fund (mostly with Coca-Cola) and none with The Nature Conservancy. My strong belief—informed by reporting—is that they do a lot more good than harm. CI helped guide Wal-Mart through its ambitious and impressive sustainability drive. (By coincidence, I was on a reporting trip today with people from both Wal-Mart and CI who are working together to clean up a big, polluting industry. More to come…) WWF is doing superb work around water and supply chain with Coke, and Jason Clay, who works there (and who I wrote a column about last month), is an important thinker around the question of how to make agriculture more sustainable

Having said that—MacDonald tells a couple of stories that I’d like to know more about. She writes about CI’s work with Bunge in Brazil, saying that CI has allied itself with the company and against local groups protesting deforestation for soy. She accuses an alliance of companies, NGOs and governments called the Business and Biodiversity Offset Program of helping a mining consortium develop valuable forests in Madagascar. LI’d like to know more—so anyone who has insight into these projects, please email me.

I’ve also come away from this book wondering whether CI, WWF and TNC pull their punches because they don’t want to offend corporate donors. I think these groups and others need to be more transparent about their funding sources, particularly since they ask the public for money. They say they don’t depend on corporate donations or fees. (CI’s Glenn Prickett tells me that less than 10% of their funds come from corporate contributions.) But that accounting does not include donations from corporate executives acting as individuals or family foundations. MacDonald writes that CI got $21 million from the Walton Family Foundation (founding family of Wal-Mart) in 2005, representing nearly a quarter of its revenues that year. I wonder about CI’s partnership with Fiji Water, especially since one of the company’s owner sits on the CI board. (Shouldn’t a conservation group discourage consumption of bottled water?) MacDonald also writes that TNC received “hundreds of thousands of dollars in Shell donations” before giving the company a leadership award. If true, that’s yucky.

Here’s a thought: Whenever an NGO produces a press release praising a company, or announcing a partnership, or giving an award, maybe it should disclose how much money it has been paid by the company for consulting and how much money executives, company founders and their foundations have donated.

You might argue that it would be simpler for these groups to refuse all corporate money. I disagree. They provide valuable advice and expertise to companies; there’s no reason that individual or foundation donors should foot the bill when CI helps Starbucks develop a program for rewarding coffee growers who embrace sustainable practices or WWF helps the sugar industry develop more sustainable growing practices.

But more transparency would help. To that end, I will ask CI how much money it has taken in from Fiji Water and WWF how much it has gotten from Coke. (In the interests of transparency, you should know that CI is a programming partner of Fortune’s Brainstorm: Green, a conference on business and the environment that I chair; my wife works for Greenpeace; occasionally I am paid for giving speeches and moderating panels but if the client is a public company, I give the money away; and my daughter’s a summer intern at Edelman, a PR firm with a big sustainability practice. I try to set all that aside when I write.)

Your thoughts?