McDonald’s urged to assess civil rights impact in race audit

“A civil rights audit will help McDonald’s identify, correct and avoid negative impacts on its stakeholders,” SOC said. The company, formerly known as CtW Investment Group, works with union-sponsored pension funds that own around 2.5 million McDonald’s shares.

In a statement, McDonald’s said its “focus will remain on continued action to accelerate meaningful and lagging societal change.” The company also said it already holds its executives accountable for maintaining equal pay for women and minorities, and increasing investments in suppliers belonging to various groups.

“McDonald’s is serious about holding ourselves accountable for our public commitments to create fair opportunities for all,” the restaurant company said.

Race reports are increasingly common as companies scrutinize their operations amid an inequality calculation. Citigroup Inc. last month agreed to an in-depth analysis to determine how this might contribute to racial inequity, following a similar decision by fund manager BlackRock Inc. last spring.

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Some companies say civil rights audits are not necessary. Goldman Sachs Group Inc. and Wells Fargo & Co. said they are already taking action to address racial inequality.

SOC, which tabled the Citigroup resolution, said its mission is to hold “companies and their executives accountable for irresponsible and unethical behavior and excessive executive compensation.” The group, which is affiliated with unions such as the Service Employees International Union, recently called for changes at companies such as Activision Blizzard Inc. and Rivian Automotive Inc.

McDonald’s has said it will increase minority representation in its leadership positions in the United States to 35% by the end of 2025, from 29.1% last year, and this year it has linked some from executive compensation to diversity objectives. It is also reorganizing its national supply chain, shifting more spending to women and minorities. This target includes spending by franchisees, who own and operate approximately 93% of restaurants worldwide.

The Chicago-based company meets or exceeds the make-up of the U.S. population in representation for Black, Hispanic, and Asian workers at the executive level, and for Black and Asian workers in occupational categories, according to data compiled by Bloomberg from the company’s file with the Commission for Equal Opportunities in Employment. These figures only include company employees and not those who work in franchises in the United States.

Yet McDonald’s has at times been criticized for its handling of issues of race and social justice. General manager Chris Kempczinski faces backlash from some community groups for comments he made earlier this year blaming the parents of two children who were killed in shootings. Kempczinski apologized in a video to employees, saying he would “listen more and learn more from more people whose life experiences are different from mine.”

Earlier this year, companies controlled by media mogul Byron Allen sued McDonald’s, claiming the fast food chain discriminates against black-owned businesses. At the time, McDonald’s said it would more than double its domestic advertising spending with minority and women-owned media companies.

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