McDonald's: A Sustainable Finance Case Study

Abstract

This is the third in a series of RSM case studies on sustainable finance. Using a list of questions, we show how to integrate sustainability into investment analysis by connecting sustainability to business models, competitive position, strategy and value drivers. Here the questions are answered for McDonald’s, a company that faces substantial sustainability challenges, on both the social (health) and environmental (footprint) dimensions. Our findings suggest that McDonald’s is not as well positioned as Philips, but much better than Air France-KLM. Unlike the latter, McDonald’s does have significant options to deal with its sustainability issues. However, our ability to properly assess its transition preparedness is hampered due to the absence of essential data: McDonald’s sustainability reporting is limited and lacks targets and numbers. Unfortunately, this is typical of current reporting practices.

Keywords: sustainable finance, ESG, sustainable investing, Case study, externalities

JEL Classification: G24, G32, G34