MCD McDonalds Corp

By Dieter Holger

Fast-food giant Yum! Brands Inc. (YUM) will pursue time-bound targets on its greenhouse gas emissions in response to investor pressure, following in the footsteps of rival McDonald's Corp. (MCD) as fast-food chains face mounting calls to tackle the environmental problems that they both contribute to, and are threatened by.

Yum, which owns Taco Bell, KFC and Pizza Hut, agreed Thursday to first evaluate emissions in its operations, franchises and supply chain, and then develop targets that align with the Paris Agreement, said Jon Hixson, vice president for global government affairs and sustainability. The U.S. company will also explore renewable energy and conservation options to lower its environmental footprint.

Yum didn't answer questions on when it expects to complete the evaluation of its emissions or when it might announce the targets.

The decision comes as investors raise concerns about the risks the food industry faces from climate change, such as drought, and companies' environmental impact. Livestock production accounts for 15% of GHG emissions globally and close to one-third of all water used in agriculture, according to the United Nations.

In January, investors representing more than $6.5 trillion urged fast-food multinationals--including Yum--to more aggressively cut emissions and water use in their meat and dairy supply chains.

McDonald's and Yum are the first major fast-food chains to pursue targets approved by the Science Based Targets Initiative, an organization that verifies if a company's aims are in line with limiting average global warming to 1.5 degrees Celsius by the end of the century, compared with pre-industrial levels. McDonald's set its targets last year.

Yum agreed to pursue the targets after investors associated with Ceres--an advocacy group of around 160 institutional investors managing more than $26 trillion--agreed to withdraw a shareholder resolution calling on the company to study the feasibility of setting targets on renewable energy and climate change-mitigation strategies, Ceres said.

"We're looking forward to continued engagement to ensure they get there," said Mindy Lubber, chief executive officer and president at Ceres.

Write to Dieter Holger at dieter.holger@dowjones.com; @dieterholger

(END) Dow Jones Newswires

April 18, 2019 06:30 ET (10:30 GMT)

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