McDonald’s Gets a Warning From New York’s Pension Fund Over Chickens

(Bloomberg) -- McDonald’s Corp. has long been on the receiving end of calls to take better care of its chickens. Earlier this month, actors and musicians, including Kristen Bell, Joan Jett and Weird Al Yankovic, have lent their names to demands for more humane treatment.

Now there’s a new name on that list, and it carries a lot more weight. In a letter dated Aug. 22, 2018 and obtained by Bloomberg News,  New York State Comptroller Thomas P. DiNapoli expressed concerns over the “potential financial and reputational risks associated with McDonald’s chicken welfare practices.” DiNapoli was writing in his capacity as trustee of the New York State Common Retirement Fund, the third-largest public pension fund in the U.S. and—as of July 31—holder of more than $300 million in McDonald’s stock. 

The warning, addressed to McDonald’s Chairman Enrique Hernandez, Jr. and Chief  Executive Officer Stephen J. Easterbrook, follows a broad media campaign by the Humane Society of the United States, including a television ad running in McDonald’s home town of Chicago and a letter with 20 celebrity signatories. They all urge the restaurant giant to follow competitors such as Burger King and Subway in making “modest reforms” to its chicken welfare policies, including transitioning to more humane breeds and slaughter practices.

While McDonald’s, the nation’s largest restaurant chain, has committed to using cage-free eggs by 2025 and gestation crate-free pork by 2022, it has yet to join competitors in promising these specific steps for chickens, by far the most populous animal on American farms.

DiNapoli called on the company to adopt precise standards for broiler chicken welfare, like those provided by the Royal Society for the Prevention of Cruelty to Animals (RSPCA) or the Global Animal Partnership (GAP). The point, though, isn’t just to take better care of animals, he said. It’s to protect the company, and thus its investors—including such big, institutional ones as New York.

“Although these standards are important from an animal welfare perspective,” the letter states, “they also make business sense.” DiNapoli cited both increased consumer demand for higher welfare animal products, and the negative publicity McDonald’s has garnered by lagging behind. He concluded his letter with a request for “a response detailing what the company is doing to build on its recent chicken welfare policy and align it with widely accepted best practices like RSPCA and GAP.”

The Humane Society’s complaints about McDonald’s treatment of chickens center on their crowded housing, as well as the breed, which is selected for its fast growth but prone to health problems, including broken legs.

The group applauded DiNapoli’s letter. “That McDonald’s is allowing chickens to gravely suffer in its supply chain while its competitors take steps to improve their treatment certainly should cause concern for anyone invested in the company,” said Josh Balk, vice president of the Humane Society’s farm animal protection. “We’re glad the state of New York recognizes this and is taking steps to protect its investment by urging McDonald’s to do better.”

DiNapoli spokesman Matthew Sweeney said that the office has yet to hear from McDonald’s. In response to a request for comment by Bloomberg News, the fast-food chain didn’t directly answer DiNapoli’s request for an accounting—or say whether it would address the Humane Society’s concerns. 

“Last October, we announced a new policy establishing eight global commitments, which will measurably improve chicken welfare across our supply chain,” the company said. These include “requiring chickens be raised in housing environments that promote natural behaviors, implementing on-farm monitoring systems to gather key welfare indicators, establishing third party audits and the creation of an independent Global Chicken Sustainability Advisory Council.”

McDonald’s said it works with “suppliers, NGOs, academics and industry experts to advance the sustainability of the chicken served at our restaurants. We believe this outcome-based approach provides the most comprehensive way forward to measurably improve chicken welfare.” Oak Brook, Illinois-based McDonald’s rose $3.35 to $164.15 at 1: 50 p.m. in New York trading.

Balk of the Humane Society called McDonald’s statement a series of empty promises. “It’s disappointing McDonald’s continues to use vague PR statements that don’t contain clear actions to reduce the suffering and pain of chickens raised for their menu,” he told Bloomberg in an email. 

To contact the editor responsible for this story: David Rovella at drovella@bloomberg.net

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