8-K: Restaurant Brands International Highlights Sustainability Efforts in 2024 'Restaurant Brands for Good' Report

Restaurant Brands International (RBI) released its 2024 'Restaurant Brands for Good' report, showcasing progress across its Food, Planet, and People & Communities pillars.

Summary

• Restaurant Brands International (RBI) released its annual Restaurant Brands for Good report, highlighting its sustainability efforts across its four brands: Tim Hortons, Burger King, Popeyes, and Firehouse Subs.
• In 2024, RBI was named to the Dow Jones Best-in-Class North America Index for the third consecutive year.
• The company expanded its plant-based menu options and made advancements in water stewardship.
• The Firehouse Subs Public Safety Foundation provided over $11 million to first responders and public safety organizations in the U.S. and Canada.
• Tim Hortons charitable campaigns, including Smile Cookie and Camp Day, raised over C$44 million.
• RBI is committed to reducing its environmental footprint, including setting science-based targets to reduce greenhouse gas emissions.
• The company is working towards eliminating deforestation from its supply chain by 2030 or sooner.
• RBI is also focused on improving animal health and welfare, including transitioning to cage-free eggs globally by 2030 and eliminating the use of gestation crates for sows by 2035.
• The report details various initiatives to support communities, including scholarships, emergency funds, and donations to local charities.
• RBI is committed to ethical conduct and human rights throughout its business and supply chain.

Sentiment

Score: 7

Explanation: The document presents a positive outlook on RBI's sustainability efforts, highlighting achievements and ongoing initiatives. While there are some challenges and areas for improvement, the overall tone is optimistic and forward-looking.

Positives

• RBI was recognized for its sustainability efforts with inclusion in the Dow Jones Sustainability North America Index.
• Significant charitable contributions were made through the Firehouse Subs Public Safety Foundation, Tim Hortons campaigns, Burger King Scholars program, and Popeyes Food Love Grants.
• RBI is actively working towards reducing its environmental impact through science-based targets for GHG emissions reduction.
• The company is making progress in responsible sourcing, including palm oil certification and antibiotic-free chicken supply.
• Advancements have been made in animal welfare, particularly in sow housing compliance.
• Burger King opened its 16th and 17th pop-up restaurants featuring plant-based menus in Costa Rica.
• Burger King Germany, France, Spain, Portugal, United Kingdom, and Switzerland have transitioned to plastic-free wraps for sandwiches.
• Tim Hortons Canada has transitioned to wax-free paper for all wraps.
• Tim Hortons Canada piloted plastic-free, recyclable fibre lids for hot beverages in 39 restaurants in Prince Edward Island and Ottawa.

Negatives

• RBI's Scope 1 emissions increased by 27% in 2024 compared to the 2022 baseline, largely due to an increase of corporate-owned and operated restaurants.
• The company acknowledges challenges in meeting cage-free egg transition targets due to external factors like Highly Pathogenic Avian Influenza (HPAI) outbreaks.
• Compliance volumes for broader EMEA region are lower than 2023 Restaurant Brands for Good report due to incorrect compliance data provided in 2023, which has since been corrected.

Risks

• Climate change poses risks to key commodities, requiring ongoing assessment and mitigation strategies.
• External factors like disease outbreaks (e.g., HPAI) can disrupt supply chains and impact sustainability goals.
• Achieving deforestation-free supply chains by 2030 requires ongoing monitoring and traceability efforts.
• The complexity of recycling infrastructure globally requires tailored solutions for packaging waste management.
• Maintaining ethical standards and human rights throughout the supply chain requires continuous vigilance and assessment.

Future Outlook

RBI is committed to continuing its sustainability journey, focusing on reducing its environmental footprint, improving animal welfare, and supporting communities. The company plans to update its Restaurant Building Standards in 2025 based on the results of emissions reduction pilots. RBI is also developing a water stewardship plan in 2025 to mitigate water risks across its operations and supply chain.

Management Comments

• Josh Kobza, Chief Executive Officer of Restaurant Brands International, stated, 'We want to be a company that leverages its global scale for good.'
• Kobza also mentioned, 'I'm excited about the advancements we've made together with our suppliers, restaurant owners and guests. But there's more work to do and I look forward to the journey that lies ahead in doing what's right alongside our commitment to delivering excellent quality, service, and convenience.'

Industry Context

This announcement aligns with the increasing focus on sustainability within the quick-service restaurant industry. Competitors are also implementing similar initiatives to reduce environmental impact, improve animal welfare, and support communities. RBI's commitment to science-based targets and transparent reporting positions it as a leader in this area.

Comparison to Industry Standards

• Many major QSR companies have set similar targets for reducing GHG emissions, transitioning to cage-free eggs, and eliminating deforestation.
• McDonald's has committed to reducing GHG emissions by 36% by 2030 from a 2015 base year.
• Starbucks aims to reduce carbon emissions, water usage, and waste by 50% by 2030.
• Yum! Brands (KFC, Pizza Hut, Taco Bell) has set science-based targets to reduce Scope 1, 2, and 3 emissions.
• RBI's focus on traceability in the beef supply chain aligns with industry efforts to address deforestation risks.
• The company's commitment to cage-free eggs by 2030 is in line with commitments made by other major QSR brands.
• RBI's engagement with organizations like the Roundtable for Sustainable Palm Oil (RSPO) and the Round Table on Responsible Soy (RTRS) reflects industry best practices for responsible sourcing.

Stakeholder Impact

• Shareholders: The report provides transparency on RBI's ESG performance, which can influence investment decisions.
• Employees: The report highlights the company's commitment to ethical conduct and human rights, which can impact employee morale and engagement.
• Customers: The report showcases RBI's efforts to offer sustainable and responsible food options, which can attract environmentally conscious consumers.
• Suppliers: The report outlines RBI's expectations for responsible sourcing and ethical practices, which can impact supplier relationships.
• Communities: The report details RBI's community support initiatives, which can improve the company's reputation and social license to operate.

Next Steps

• RBI will update its Restaurant Building Standards in 2025 based on the results of emissions reduction pilots.
• The company is developing a water stewardship plan in 2025 to mitigate water risks across its operations and supply chain.
• RBI will continue to improve data collection and quality to more accurately measure and track its footprint and the impacts of water stewardship activities.
• The company will actively monitor the KWI data we collect and plan to develop a roadmap with major suppliers around the most impactful and deliverable aspects of chicken welfare, starting with housing and enrichments.
• Tim Hortons will apply learnings from pilots as they iterate on our packaging designs.

Key Dates

Keywords

sustainability, ESG, Restaurant Brands International, RBI, Tim Hortons, Burger King, Popeyes, Firehouse Subs, greenhouse gas emissions, animal welfare, responsible sourcing, packaging, recycling, community support, ethics, human rights