Wendy’s to Tie Compensation to ESG Targets, Address Overall Emissions

Wendys ESG

(Credit: Pixabay)

by | Apr 27, 2022

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Wendys ESG

(Credit: Pixabay)

Wendy’s will tie executive compensation to environmental, social and governance performance and is also working to target reductions across Scope 1, 2, and 3 emissions, according to its 2021 corporate responsibility report.

Additionally, the fast-food company reported its 2020 climate data to the CDP for the first time in 2021. Wendy’s is continuing to move toward sustainable packaging and move away from hard-to-recycle single use products, according to the report.

The company’s board of directors made the decision to begin tying executives’ 2022 incentive compensation linked to the company’s achievements with its Food, People and Footprint goals. The company says it believes the move will drive more progress toward achieving its ESG goals.

Wendy’s compensation plan is similar to restaurant chain Chipotle, which is also tying up to 15% of its executives’ annual incentives to ESG progress.

Wendy’s says its climate report with CDP resulted in a grade of B. That is an important step as it prepares to set a science-based target to track and reduce emissions in its operations and supply chain, the company says. Wendy’s plans to start disclosing Scope 1, 2, and 3 emissions in 2023.

Nearly all of Wendy’s emissions are Scope 3 and the company says its greatest areas of improvement will come through purchased goods and services, packaging, and franchised operations.

Wendy’s will keep working toward sustainable packaging and will sustainably source all of its customer-facing packaging in the United States and Canada by 2026. The company says the percentage of packaging meeting its sustainability goal reached 48% in 2021.

Last year the company outlined plans to start using recycled plastic in large cups in 2022 with a goal of having it in all its drink cups by 2023 as part of an effort in collaboration with packaging company Berry Global and plastics and chemical company LyondellBasell to develop the cups. Addressing single-use materials is a growing topic in the food industry and McDonald’s last year started a similar effort in Canada.

Wendy’s also joined the How2Recycle label program and is adding labels to its packaging.

Wendy’s will include more energy efficiency improvements in its science-based targets and in 2021 it purchased renewable energy for the first time. It says seven restaurants will receive renewable energy from solar sites in 2022 to power all of its operations.

In 2021 Wendy’s says it reduced water usage by 25% in its US restaurants and facilities compared with a 2018 baseline. The company also exclusively grew tomatoes and lettuce in greenhouses last year, which resulted in using 90% less water, and sourced coffee which met standards for protecting natural areas and waterways.

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