How Arcos Dorados is Addressing Climate Change in Latin America
Sep 13, 2023
auto_awesome
Gabriel Serber, VP of Social Impact and Sustainable Development at Arcos Dorados, discusses how the company addresses climate change in Latin America. Topics include cultural diversity, McDonald's sustainability efforts, regional preferences, and water competition. Additionally, advice is given on integrating sustainability into business practices.
Arco Dorados has developed a comprehensive ESG platform called 'Recipe for the Future' to address climate change, focusing on areas like sustainable sourcing, circular economy, and diversity and inclusion.
Arco Dorados prioritizes environmental conservation through sustainable construction practices, water recycling, renewable energy use, and collaboration with beef suppliers to reduce emissions and prevent deforestation.
Deep dives
Arco Dorados' Commitment to Climate Change
Gabrielle Serber, the Vice President of Social Impact and Sustainable Development at Arco Dorados, discusses the company's commitment to addressing climate change. They have developed a comprehensive ESG platform called 'Recipe for the Future' which includes focus areas like climate change, sustainable sourcing, circular economy, and diversity and inclusion. Arco Dorados has been working towards reducing its greenhouse gas emissions by implementing various initiatives, including sustainable construction of buildings, water recycling, and the use of renewable energy. They are also prioritizing their supply chain emissions, with a particular focus on reducing emissions from beef production. Through their stringent deforestation policies and partnerships with suppliers, they monitor the origin and impact of their beef sourcing to minimize deforestation in regions like the Amazon. Arco Dorados recognizes the importance of diverse menu offerings tailored to regional preferences, but they carefully consider the demand, feasibility, and potential food waste before introducing plant-based alternatives. The company also focuses on other sustainability aspects like sustainable coffee sourcing and water conservation.
The Challenges of Sustainable Growth
As the largest independent franchisee of the McDonald's brand globally, Arco Dorados operates in 20 countries in Latin America and the Caribbean, each with its unique cultural preferences. They work towards providing sustainable solutions while respecting and adapting to the diverse cultures they serve. For instance, they offer specific menu items like pound-ecasier in Brazil and media lunas in Argentina to cater to local tastes. While the business opportunity for plant-based alternatives in the region is growing, Arco Dorados carefully balances offering diverse menu choices that cater to different protein preferences such as chicken and beef. They analyze consumer research data and quarterly business reviews to align menu offerings with customer preferences. However, scalability and logistics pose challenges, and the company aims to ensure that plant-based products make a significant impact before introducing them to avoid unnecessary food waste. Additionally, Arco Dorados emphasizes sustainability in other categories like ice cream and coffee, sourcing responsibly and educating customers about their sustainable practices.
Arco Dorados' Role in Environmental Conservation
Arco Dorados prioritizes environmental conservation in its operations, particularly focusing on restaurant buildings and supply chains. They implement sustainable construction practices, including LED lighting and water recycling. The company collects condensation water from air conditioning systems to reduce water usage and actively engages in recycling initiatives for cooking oil, cardboard, and uniforms. Arco Dorados also embraces renewable energy, steadily increasing its consumption from renewable sources. As the majority of their greenhouse gas emissions fall under Scope 3, which includes the supply chain, they collaborate closely with beef suppliers to reduce emissions associated with cattle production. They encourage sustainable practices such as feed additives to reduce methane emissions, managing land productivity, and sourcing beef from enclosed farms to minimize transportation emissions. Furthermore, Arco Dorados maintains strict policies to ensure responsible sourcing and prevent deforestation, using satellite monitoring to track beef origin and deforestation levels in regions like the Amazon.
Innovative Approaches to Sustainability
Arco Dorados demonstrates its commitment to sustainability through innovative approaches. They recently issued a sustainability link bond, connecting financial incentives to greenhouse gas emissions reduction targets. This bond also extends to executive compensation, aligning the incentives of senior management with the company's environmental goals. Arco Dorados recognizes the importance of education and the power of widespread awareness and engagement. They continuously study and learn from other companies, academia, and governmental frameworks to improve their sustainability practices. By integrating ESG considerations as an essential part of their business operations, Arco Dorados aims to create a positive impact while engaging employees and stakeholders at all levels. They strongly emphasize the effectiveness of education and the necessity to view sustainability as an intrinsic part of daily business rather than a mere compliance measure.
Today’s episode is the first in our 2023 back-to-business school series. The episode features Gabriel Serber, Vice President of Social Impact and Sustainable Development, Arcos Dorados, the largest McDonald’s franchise in the world. He discusses how Arcos Dorados designs and implements climate solutions across the 20 Latin American and Caribbean countries where they operate, the vast cultural diversity across the region, and how his work fits into the larger McDonald’s corporate climate goals
