PART IIa. Short answer questions (10 points)

This first section (a) is a critical thinking section where you are required to answer three short-answer questions based on a complex problem scenario.

Footwear is one of the biggest users of virgin rubber. In fact, the tire and footwear industries are two of the largest users of virgin rubber.

Many rubber products such as car tires, bumpers and shoe soles are made of vulcanized rubber, which is made by adding sulfur and heat to virgin rubber in order to make a tougher, more durable material — but notoriously difficult to recycle.

In 2014, Timberland announced a partnership with tire manufacturer and distributor Omni United to create the first line of tires ever purposely designed to be recycled into footwear outsoles at the end of their life cycle. More info here (optional): https://www.timberland.com/responsibility/stories/drive-recycle-wear.html

The Timberland Tires portfolio provides market coverage in three distinct categories, with more than 90 sizes covering about 75 percent of the North American passenger vehicle market.

• • The Timberland CROSS tire for small SUVs/crossover vehicles, available in 35 sizes.
  • The Timberland A/T tire for trucks and large SUVs, available in 30 sizes.
  • The Timberland TOUR tire for cars, available in 25 sizes.

Timberland Tires feature a special rubber formulation chosen so that the tires can be easily recycled for a second life in new Timberland^® products.

Once Timberland Tires have reached the end of their product life, they will be reclaimed, separated and recycled into Timberland^® footwear, rather than exported, or ending up in landfills.

To make the tire-to-shoe idea a reality, Timberland and Omni United have established an industry-first tire-return and chain-of-custody process to ensure the tires go directly to dedicated North American recycling facilities to begin their path toward a second life.

Tire retailers will set aside used Timberland Tires for recycling after consumers purchase new tires to replace their worn-out ones.

To achieve this goal, Omni United is partnering with Liberty Tire Recycling and its network of tire collection and recycling firms to sort and segregate the Timberland Tires at the companies’ facilities.

Until a critical mass of supply comes in, Timberland and Omni United are seeking alternative recycled rubber compounds from other sources.

As a result of this initiative, Timberland^® footwear will feature outsoles with 10% recycled tires.

Applying everything you have learned in the last weeks, please answer the following three Timberland’s Drive-Recycle-Wear Initiative.pdf questions.

1. List and briefly explain two advantages for Timberland of engaging in this “circularity” initiative. Total points possible: 2 points (1 for each advantage)

2. List and briefly explain three disadvantages or potential pitfalls (i.e. a hidden or unsuspected danger or difficulty) for Timberland of engaging in this “circularity” initiative. Total points possible: 3 points (1 for each disadvantage).

3. If you were in charge of making the decision regarding putting this initiative forward, what other information would you like to have? List and briefly explain two additional data points/information you would needbefore you sign off on it. Total points possible: 5 points (2.5 each).

Part IIb. Application (20 points)

How would you design McDonald’s ‘Sustainability Management System’?

(also called in practice ’Corporate Sustainability Strategy’, or ‘Environmental Management System’ in other cases where extraction of resources is key)

You have been recently appointed as ‘Chief Supply Chain and Sustainability Officer’ at McDonald’s. A publicly-traded American fast food company, McDonald’s has experienced for over twenty years environmental complaints that have sought to tarnish McDonald’s reputation and reduce global consumption of their products. With legal cases in the US, EU, UK, Malaysia, and Australia, the time is ripe for innovation in their sustainability management practices.

About the company:

McDonald’s is the world’s largest restaurant chain by revenue, serving over 69 million customers daily in over 100 countries across approximately 37,855 outlets as of 2018. The McDonald’s Corporation revenues come from the rent, royalties, and fees paid by the franchisees, as well as sales in company-operated restaurants.

Although McDonald’s is known for its hamburgers, they also sell cheeseburgers, chicken products, french fries, breakfast items, soft drinks, milkshakes, wraps, and desserts. In response to changing consumer tastes and a negative backlash because of the unhealthiness of their food, the company has added to its menu salads, fish, smoothies, and fruit.

According to two reports published in 2018, McDonald’s is the world’s second-largest private employer with 1.7 million employees (behind Walmart with 2.3 million employees).

The current Corporate Sustainability Strategy at McDonald’s focuses on “Using our Scale for Good”. Specifically, they state that:

“as one of the world’s largest restaurant companies, we have the responsibility and opportunity to take action on some of the most pressing social and environmental challenges in the world today.”

As a newly appointed top executive at McDonald’s, and considering the global reach and diversity of their supply chain,

1) What would your sustainability vision be for the company moving forward? (list any organizational steps you would take to define that vision) (5p.)

2) What would you define as the company’s top five sustainability priorities? (5p.)

3) How would you leverage McDonald’s $40 billion Global Supply Chain? (the $40b are currently spent on food, packaging, logistics, toys, technology, equipment, and other services) (6p.)

4) How would you see yourself, your team, and the McDonald’s corporation in five years? In ten years? (4p.)

Be brief but clear in your responses (hint: you don’t have to agree with McDonald’s current programmatic areas –leave your mark by proposing an innovative business strategy!)

If you are vegan or vegetarian, do your best to separate your personal bias from your professional response, although relevant business-forward-type recommendations are welcome.

All, please remember that the Board of Directors at McDonald’s has a fiduciary (legal) commitment to its shareholders (maximize profits), which must be held regardless of principles applied. McDonald’s is a publicly traded company.

To complement this learning exercise, please take a look at:

1) McDonald’s Leadership (scroll down to Francesca DeBiase’s Bio): http://corporate.mcdonalds.com/mcd/our_company/leadership.html

2) McDonald’s Sustainability: http://corporate.mcdonalds.com/mcd/sustainability.html