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McDonald’s CSR Report 2017

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McDonald’sCSR Report 2017

Editorial PolicyThis CSR report covers CSR (corporate social responsibility) activities in five domains addressed by McDon-ald’s. By disclosing McDonald’s CSR concept including the company’s approach andthe efforts it undertakes, we are hoping to share these information with many stakeholders that in turn leads to a sustainable society. The contents are focused on CSR and includes URL links to access corporate information found in McDon-ald’s Holdings Japan official website.

Corporate Overview, Corporate Information, Editorial Policy, Contents

Top Message

QSC&Vと CSR

Aiming for a Sustainable Society

Food Safety and SecurityEmploymentEnvironmental Performance

Social Contribution Activities

SourcingPartnerships with Suppliers

FoodFood Safety and ControlQuality Control at RestaurantsInformation Disclosure

PeoplePeople Business

CommunitySocial Contribution Activities

PlanetWaste Countermeasures & Environmental ConservationEnergy Countermeasures & Restaurant Environment

Third-Party Opinion

01

02

03

04

08

09

1 2

1 4

1 6

1 8

Scope of Report, etc.McDonald’s Company (Japan), Ltd. (partial inclusion of McDonald’s Holdings Company (Japan), Ltd.)Jan. 1, 2017 to Dec. 31, 2017General domain of social responsibility (management, society and environment)

March 2019Corporate RelationsShinjuku i-Land Tower 6-5-1 Nishishinjuku, Shinjuku-ku, Tokyo 163-1339, Japan+81 3-6911-5000 (Switchboard)

Organization subject to report:

Time period covered by this Report:Fields covered by this Report:

Next publication issue schedule date: Publisher and contact:

Phone:

Corporate Overview

Shinjuku i-Land Tower, 6-5-1 Nishishinjuku, Shinjuku-ku, Tokyo 163-1339, Japan+81 3-6911-5000 (Switchboard)May 1, 1971100 million yenManagement of a hamburger restaurant chain and all associated businesses2,898490,100 million yen (Total sales by McDonald's-operated and franchised restaurants)Permanent employees: 2,255 (excluding officers, part-time employees, etc.)Part-time employees: Approx. 14,000,000 (total of McDonald's-operated and franchised restaurants)

(As of December 31, 2017)

Address:Phone:

Established:Capital:

Line of business:Number of restaurants:

Sales:Number of employees:

McDonald’s Company (Japan), Ltd.

Corporate InformationPlease visit the McDonald’s Holdings Japan Co., Ltd. official website for information on corporate gover-nance, compliance management, etc.http://www.mcd-holdings.co.jp/

1CSR Report 2017

Based on our policy to put the customer first, we have been making strong efforts to fulfill our social responsibilities around our underlying business activities; the responsibility as a food service company to secure the quality and safety of all ingredients, from procurement to product delivery to customers at our restaurants; the responsibility for our “People” including crew and em-ployees working at our roughly 2,900 restaurants nationwide and those in the office that provide support; and the responsibility towards the environment based on the idea of “acting in consideration of our planet.” Our customers and the society rightfully expect us to accept these responsibilities sincerely and to build upon them. It is also our corporate responsibility to leverage McDonald’s strengths and national scale to contribute to Japanese society. The social activities that we focus on are centered on children who will lead the future, covering such wide ranging areas as support for Ronald McDonald House, sports and food education.

Furthermore, as a part of the McDonald’s brand globally, we will be developing an integrated global CSR framework known as Scale for Good into our local business operations, doing our part to contribute to resolving social and environmental issues and achieve a more sustainable world. Currently, with the world’s rapid population growth, expansion of cities and climate change, we are reaching the limits of basic resources such as water and food. As one of the largest global restaurant companies, we believe it is McDonald’s duty to take on the most pressing social and environmental issues of the world today. Scale for Good was developed considering the impact McDonald’s food business has on society and the environment along with what stakeholders including customers and employees expect from McDonald’s regarding social and environmental issues. However, it’s not something that we intend to carry out by ourselves. It requires the support of customers, employees, franchisees, suppliers, government agencies and the community working together in partnership towards a more sustainable society.

It is our strong belief that through a deeper understanding and pursuit of corporate social responsibility, now and for the future,

we will be able to contribute to our many stakeholders and make the world a better place.

President and Chief Executive Officer (CEO), Representative Director McDonald’s Company (Japan), Ltd.

Sarah L. Casanova

Top Message

CSR Report 2017 2

CSREnhancement of QSC&V means wemust fulfill various corporate social responsibilities (CSR) as well. We divide CSR into five categories and listen to the voices of stakeholders and society in each of them, endeavoring to take the best and honest action.

These five categories include 'Sourcing' or relationship with suppliers in obtaining product materials as well as procurement process, 'Food' or quality control to ensure product safety and enjoy meals with peace of mind, 'People' that is based on our philosophy of "individual growth promotes corporate growth", 'Community' with the idea of "we have an obligation to give back to the community that gives us so much", the basis of maing contributions to our society, and 'Planet' based on the idea that environmental consideration is part of corporate social responsibility.

QSC&VAs a quick service restaurant, McDonald’s mission

is to improve “Q, S, C” and develop unique

“V” through infinite challenge and constant

improvement to provide customers with the

best restaurant experience. This philosophy was

introduced by Raymond Albert Kroc, the founder

ofMcDonald’s and remained unchanged.

Quality

Service

Cleanliness

Value

Corporate Social Responsibility

Sourcing Food People Community Planet

CSR Report 2017 3

Food Safety Summit

http://www.mcd-holdings.co.jp/news/2017/csr/csr0831b.html

3rd Food Safety Summit was held in Tokyo on August 8, 2017 Attended by farmers, business partners and restaurant staff supporting McDonald's foods With the theme of "From turnaround to growth", three commitments were adopted with the goal of offering an even more comfortable restaurant experience with peace of mind

Food Safety and SecurityAiming for a Sustainable Society

Information disclosure "Mieru McDonald's Quality"

http://www.mcdonalds.co.jp/safety/good_quality/

http://www.mcdonalds.co.jp/safety/factory/

http://www.mcdonalds.co.jp/safety/allergy_Nutrition/

http://www.mcdonalds.co.jp/quality/basic_information/check.php

Commitment to 100% quality

Journey of food materials

Information on allergies, nutritional issues and producing countries of

raw materials

Nutritional balance check

Initiatives related to food materials

http://www.mcdonalds.co.jp/safety/taskforce/ http://www.mcdonalds.co.jp/safety/food-safety/ http://www.mcdonalds.co.jp/safety/trans_fat/

Initiatives on improving quality

Initiatives on food safety and security Actions on trans fatty acid

McDonald’s global standards

Relevant laws and regulations in Japan

McDonald’s Japan local standards

Quality control system

Number of food materials in

McDonald's products

Number of supplier factories

Number of factory audit visits each year

Number of serious incidents on initial safety

approx. 285 approx. 100 approx. 400 02017 2017 2017 2017

180℃

※Renewed in December 2017

McDonald’s global standards

Relevant laws and regulations in Japan

McDonald’s Japan local standards

CSR Report 2017 4

Company-wide employees 2,255Male employees 1,583 Female employees 672

70.1% 29.9%

Employment ratio of people with a disability

2.23%

2017

2017

Company-wide overtime hours

2017

16.8hr

Number of childbirth and child-rearing

support program users

10849

Number of reduced working hours for

child care program users2017

Number of crew members

approx.140,000

2017

24.5%

Ratio of female restaurant managers

Ratio of female managerial employees (director and above)

15.2%

8.0%

Female officers

(As of December 31,2017)

EmploymentAiming for a Sustainable Society

CSR Report 2017 5

Enhanced dining environment All restaurants with non-smoking environment from August 2014

100%

2017

Energy consumption

TOPICS McDonald's Wins "Food Industry Mottainai (wastefulness reduction) Awards by the Director-General of Food Industry Affairs Bureau, Ministry of Agriculture, Forestry and Fisheries" in recogniation of 'MFY' or Made-For-You operation system http://www.mcd-holdings.co.jp/news/2017/release-170309a.html

System-wide waste amount Food waste amount

1,000people

25.4m2

488.7kwh

Electricity

Gas

city gas equivalent4.0tons

Water

per customer

※Food service industry target 108kg/1million yen in sales

1 million yen in sales

¥¥¥¥¥¥¥¥¥¥

127,000tons(includes recycling amount) 211,624

88.4kg 31.4g

2017 2017

Packages and containers with FSC® forest certification

※expected to achieve100% by 2020

71.1%

2017

50.1% (Food-service industry

average:24%) (FY2014)

Food waste recyclling rate

kl (Crude oil equivalent)

Environmental performanceAiming for a Sustainable Society

CSR Report 2017 6

Number of participating teams Approximately

9,000 teams across Japan

Charitable activities(in support of Ronald McDonald House)

Donation amount collected at restaurants in 2016

Junior Baseball(Takamadonomiya Cup All-Japan Rubber

Baseball McDonald's Tournament)

Number of security whistles giveaways

Number of classes using the "Food Education Time" educational materials

Sports support Community contribution activities

Educational support (Food educational support)

TOPICS

Number of participating teams Approximately

12,000 teams across Japan 6,15870,020,000yen 873,148

2017 2017 2017 2007-2017

Number of Hello Ronald program

Number of children and school student attended the class

U-12 football(Japan U-12 Football Championship)

7,453 744 175,248

Number of family users

http://www.mcdonalds.co.jp/company/community/donald/ http://www.mcdonalds.co.jp/company/community/sport/ http://www.mcdonalds.co.jp/company/community/community_relations/

http://www.mcdonalds.co.jp/company/community/ne_mc_support/

Social contribution activities

"McDonald's Japan food educational support program" received the "Minister's award from the Ministry of Education, Culture, Sports, Science and Technology for the Outstanding Promotion of "Early to Bed and Early to Rise, Have Breakfast" Program in 2016 http://www.mcd-holdings.co.jp/news/2017/csr/csr0323b.html

Aiming for a Sustainable Society

CSR Report 2017 7

SourcingPartnerships with SuppliersBased on McDonald's policy of "food safety takes priority over everything else", continuous efforts are being made to establish the world's best food control system. This applies equally to our suppliers from production, processing and distribution of food materials. Partnership with our suppliers has important significance to ensure this. This partnership is built around "Suppliers Code of Conduct" as well as "Code of Conduct Program", an audit program by a third-party institu-tion, and "Suppliers Quality Management System" for the purpose of implementing high level of quality management and sanitary control. http://www.mcdonalds.co.jp/safety/food-safety/

Supplier

Partnership

McDonald's

agricultural production process control, HACCP(animal health and welfare, etc.)

Quality Management Program Logistics Quality Control Program

Quality Management Program

Supplier Code of Conduct

Code of Conduct Program

Compliance with all applicable laws and

standards

Compliance with all labor standards, laws and regulationsProhibition of child labor, forced labor,

discrimination and/or abuseRequirements for remuneration and social service

Implementation of suppliers’ voluntary

inspections, McDonald’s rights to conduct audits

Production GAP

Process plant SQMS

Logistics DQMP

CSR Report 2017 8

4Food

HACCP SQMS DQMP HACCP GMP SSOPGAP

Food Safety and Control

Standards

Inspection

McDonald's standards in terms of product quality, safety and sanitation

Seamless quality and sanitation control from farm to restaurant, including traceability

Stable global-scale procurement of all raw materials,

including domestic sources

Social responsibility and sustainable corporate actions

including Code of Conduct2 31

Production sites(farm)

McDonald's inspection / Third party inspection expert institution McDonald's inspection / Third party inspection expert institution External sanitary inspection

Processing plant Logistics Restaurants

McDonald's food safety and control has 4 features to ensure safe and high-quality products.

Standards are placed in each stage to realize seamless quality and sanitation control from production, processing plant, logistics to restaurant. Also, internal inspection including a self-check system and external inspection by a third party institution are being implemented. Further, traceability is established to trace history of the entire production process.

(Hazard Analysis and Critical Control Point)

(Distributor Quality Control Program)

(Service Quality Management System)

(Hazard Analysis and Critical Control Point)

(Good Manufacturing Practice)

(Good Manufacturing Practice)

(Sanitation Standard Operating Procedures)

McDonald’s establishes global standards of quality, safety and sanitation. Inaddition, McDonald’s Japan adopts local standards based on domestic lawsand regulations, as well as scientific expertise and social environments.

http://www.mcdonalds.co.jp/safety/food-safety/

McDonald’s global standards

Relevant laws and regulations in Japan

McDonald’s Japan local standards

CSR Report 2017 9

Food

Quality Control at Restaurants

"Food safety takes priority over everything else" is the McDonald's philosophy. To achieve this, restaurants are implementing a proprietary sanitary control system. Also, sanitation inspection is conducted by a third-party institution. Sanitary control system is based on HACCP, GMP and SSOP.Food Safety Checklist and Planned Maintenance Calendar (PMC) are used to ensure the implementation of these standards and to always keep the restaurant at optimal conditions.Our responsibility is to always provide products of assured quality to our customers and offer the best-in-class restaurant experience with peace of mind.

HACCPSanitary control system to minimize risks

that affect food safety

GMPControl standards to maintain buildings and

facilities at clean conditions.

SSOPProcedures for hand-washing, handling of raw materials and execution sanitary

and correct operations

External sanitary

inspection

CSR Report 2017 10

FoodInformation Disclosure

McDonald’s Wonder Explorers -Secrets of Tastiness-

(revamped in December)Nutritional balance check

McDonald’s official website includes "Mieru McDonald's Quality", a disclosure of information on food quality to enjoy our foods with peace of mind.Product information on country of origin, allergy and nutritions are always updated. Customers can use the QR code printed on product packages for quick access of product information.Also, the "McDonald’s Wonder Explorers - Secrets of Tastiness" webpage contains McDonald's food ingredients and our commitment to tastiness.

From kids to adults, McDonald's commitment on foods and tastiness are illustrated in the original movie series with so much fun.

This food education content is intended to support a healthy, balanced diet on a daily basis. You can check the amount of daily energy and nutritional needs covered by McDonald's menu items, read nutritional advice from a nutritionist and learn more about nutritions. These useful tools are provided to select menu items and have a balanced nutrition.

Allergy informationDetailed inspection results of all raw materials are disclosed and are constantly being updated, including changes in food ingredients specification and cross contamination during the production and/or cooking process. A list of seven allergens for which labeling is mandatory and twenty allergens for which labeling is recommended by the Food Labeling Act is disclosed. Also available are "Allergen information list (PC website)" and "Allergen Search" to find out the use of any allergens in raw materials.

Nutritional informationThis information is disclosed in the form of numerical values of nutritional analysis based on Nutrition Labeling Standards using standard product specifications and cooking. Some food materials are using quotations from the "Standard Tables of Food Composition in Japan - 2015 - (Seventh Revised Version)" (Ministry of Education, Culture, Sports, Science and Technology. "Nutritional Information List (PC website)" as well as "Nutritional Balance Check", an easy way to find out the individual's daily energy and nutritional needs according to gender, age and physical activity level, based on consumption of a single or set menu are provided as well.

Country of origin informationDisclosure of information about the production countries of raw materials and the final processing countries.

※ QR code is a registered trademark of Denso Wave Incorporated

CSR Report 2017 11

PeoplePeople BusinessIt is the "people" that supports corporate growth. This approach has not been changed since the foundation of our business.

As long as you’re green, you’re growing. As soon as you’re ripe, you start to rot.

Ensure that individuals working at McDonald's will always stay green and keep growing...this philosophy is still alive in all areas of McDonald's business in various forms.

Which is to become the best employer in any town

People VisionAround the world, is upheld on a global scale towards each and

every person working at McDonald's.

We value and cherish our people, including their growth and the contributions they make.

People Promise

McDonald's promise to all staff to achieve "People Vision"; that's our "People Promise".We respect each and every one of them by offering growth opportunities, enhancing their skills, developing

leaders and rewarding their performance.

At McDonald's, we provide many more offerings to our people according to what they value.

Employee Value Proposition: EVP

Employee Value Proposition (EVP) is a set of offerings and values that our people receive in return for the work and commitment they provide.

We have a policy of providing support to what our people value the most and are focused on implementing programs to offer even more values.

http://www.mcdonalds.co.jp/recruit/fresh/mcdonalds/index.php5

CSR Report 2017 12

PeoplePeople Business

AJCC

Work environmentEducational Institution

AJCC is a program that recognizes the top of the top crew members in Japan, where crew members show their acquired skills from the day-to-day training at restaurants. This program, designed to offer a restaurant experience that exceeds customer expectations, started in 1977 and now in its 41th time this year. AJCC promotes training programs to develop the entire crew members. By raising the skills of each participating crew members, the AJCC supports the realization of "People Promise" and the philosophy of "individual growth promotes corporate growth".

McDonald's is working on providing a friendly work place for individuals with different personality and lifestyle, such as the introduction of flex time and work from home program, promotion of taking annual paid vacation, foster and support women to take active roles & work-life balance (includes nursing and child rearing), as well as the introduction of online people development program, enhancement of talent management and work efficiency.https://www.mcdonalds.co.jp/recruit/fresh/our_voice/voice01.php5

McDonald's has global systems with universal standards. One of them is Hamburger University, a professional education institution utilizing the latest educational theory and methods to promote people growth and system development. Various educational programs, training sessions and tools are available for our people in any position, from crew to management.

Hamburger University

ALL JAPAN CREW CONTEST

work-life balance

http://www.mcdonalds.co.jp/recruit/fresh/our_voice/voice38.php5

http://www.mcdonalds.co.jp/recruit/fresh/our_voice/voice05.php5

Employee performance evaluation program

Career development

Diversity and Inclusion

Performance development system (PDS) is an employee performance evaluation program, designed to support performance and growth of individual staff. PDS is consistent, easy-to-understand, fair and offers feedbacks on performance and development goals. Also, it provides the mindset, approach and actions needed to achieve business plans.

http://www.mcdonalds.co.jp/recruit/fresh/our_voice/voice06.php5

http://www.mcdonalds.co.jp/recruit/fresh/our_voice/voice28.php5

http://www.mcdonalds.co.jp/recruit/fresh/our_voice/voice15.php5

McDonald's does not have a fixed career path. We offer various growth and career development opportunities to take up challenging job and providing career development. For example, personnel transfer is based on a strategic approach of developing and positioning people, and 'internal job posting system' is in place to post jobs within the company. We are also proactively looking forand hiring permanent employees fromamong the crew.

McDonald's believes that building an organization where each individuals can work in a lively manner and play an active role will enhance the corporate strength. This includes showing respect to all kinds of diversity regardless of gender, age, nationality, career backgrounds or disability, achieve various way of work and offer a career development opportunity.

Employment and people development at restaurants

Our restaurants proactively hire people from various backgrounds, including students, housewives, senior citizens, foreigners and person with disabilities, offering a people-friendly work place respecting cultural diversity. Orientation and training programs are integrated into a single, easy-to-understand booklet that uses many images and videos. Also, a study style with a combination of workbooks, image & video materials, discussion and hands-on training is provided to maximize learning opportunity and growth at restaurants, aiming to deliver a valuable part-time work experience.

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CSR Report 2017 13

CommunitySocial Contribution Activities

Charitable activities

Give our children a happier futureMcDonald's practices social contribution activities in various ways, which are centered on charitable activities, sports support, educational support and community contribution activities.

Support to Ronald McDonald House is the main focus of our charitable activities, which is provided through a donation box setup at front counter of McDonald's nationwide restaurants, "McHappy Day" and other charitable events. The entire construction and operation costs of the 12 Ronald McDonald's House in Japan are supported by local volunteers, and McDonald's Japan is proud to be part of the companies that provide support.

Charitable activitiesMcDonald’s supports “Ronald McDonald House” to assist sick childrenand their family, and also engages incharity activities to further cultivate aculture of charity in Japan.

Sports supportWith the purpose of healthy developmentof children’s body and mind, McDonald’sis involved in a wide range of sportssupport activities to supportthe hopes, dreams and passions of ourchildren.

Educational supportMcDonald’s offers educational supportfocusing on food education to help children gain accurate knowledge on foods and cultivate the right eating habits, with the hope of assisting as many children as possible to discover thepleasure of eating.

Community contribution activitiesMcDonald’s is committed to “beinga good neighbor in local communities”and actively participate in communitycontribution activities to create safe andsecure communities, including town beautification, clean-up activities and crime prevention activities.

Ronald McDonald House provides accommodation to support hospitalized children and their families far-away fromtheir homes. Located in 12 areas in Japan, families can stay in these Houses for a 1,000 yen donation per person per night.

http://www.mcdonalds.co.jp/company/community/

CSR Report 2017 14

Since 2011, McDonald's is supporting the "Japan U-12 Football Championship", the biggest tournament for grade school children who are part of the Japan Football Association Type 4 team (U-12).

CommunitySocial Contribution Activities

Sports support Educational supportJunior Baseball U-12 Football

Security whistles

Hello Ronald

Local emergency shelter

for children

Clean Patrols

Child-rearing support

食育プログラム

小学校 中学校 高等学校

マックアドベンチャー 職場体験 インターンシップアドバンス・インターンシップ

McDonald's supports the "Takamadonomiya Cup All-Japan Rubber Baseball McDonald’s Tournament", the biggest tournament for junior baseball players and known as the "Koshien for grade school children". As part of the support, tournament poster is displayed at McDonald's restaurants, introduce prefectural representative teams on SNS, arrange inaugural meetings at local restaurants and offer a free giveaway original sport notebook to junior baseball players.

Various food education programs are conducted in elementary, junior high and high schools according to growth stage, provided in the form of food education classes to hands-on practice at McDonald's restaurants.

Junior baseball and U-12 football activities are our main focus of support. In addition to tournaments, McDonald’s assists inaugural meetings by inviting prefectural representative teams to local McDonald's restaurants and offering a free giveaway of original sports notebook.

Starting school brings a new and wider scope of activity for children. To support their safety, we work together with the local board of education and police departments to give away security whistles to first graders across Japan every year.

Our nationwide restaurants are engaged in town beautification activities. Also, we proactively participate in clean-up activities led by local municipals and citizen groups.

We participate in the “Child-rearing support passport project”, promoted by the Japanese government and local municipals.

This nationwide program helps children learn rules and manners in everyday life.

We work together with local police departments to create safer towns for our children.

Community contribution activities

McDonald's is engaged in locally-rooted activities including town beautification and child-rearing programs.

http://www.mcdonalds.co.jp/company/community/

Our main activity centers around educational support, focusing on food education to help children gain accurate knowledge on foods and cultivate the right eating habits, with the hope of assisting as many children as possible to discover the pleasure of eating. Developed in 2005, "Food Education Time" educational materials are used in supporting food education classes conducted at schools.

CSR Report 2017 15

Planet127.0 93.9

Waste Countermeasures & Environmental Conservation

System-wide waste amount

(+9.9% compared to previous year)(+1.3% compared to previous year)

Amount of waste per 1,000 customers

Waste amount in 2017

kt/yearg/customer

Food waste

Paper waste

Plastic waste

Others

42.4

33.0

5.3

46.3

kt/year

kt/year

kt/year

kt/year

Reducing the amount of waste is the basis for waste countermeasures; in line with this, we use raw materials with less environmental impact and ensure environment protection. Made-For-You system (made to order) in menu production and yield control with numerical targets in raw material management are being implemented to ensure the above basis. Also, nearly all the used cooking oilare recycled and review is being undertaken with distributed recycling in various ways.

Environmental conservationWith paper containers and packages, we are aiming to complete the transition to paper packages and containers with FSC® forest certification by the year 2020.

71.1% of all paper containers and packages are FSC certified as of the end of 2017.

http://www.mcdonalds.co.jp/company/community/eco/

Ecosystem considerationsPolyphenoda pollack, a raw material of Filet-O-Fish, is a natural fishery resource, and therefore we use only the fish caught in the fishery as raw materials in consideration of sustainability to prevent the depletion of natural resources.

(+3.7% compared to previous year)

(+11.9% compared to previous year)

(+14.3% compared to previous year)

(+12.8%compared to       previous year)

Food waste

31.4

24.4

3.9

34.2g

g

g

g

per customer

(+5.2% compared to previous year)

(-4.3% compared to previous year)

(+3.0% compared to previous year)

(+5.4% compared to previous year)

50.1%

Food waste recycling rate

(Food-service industry

average: 24% in FY2014)

Paper waste

Plastic waste

Others

CSR Report 2017 16

Planet Energy Countermeasures & Restaurant Environment

System-wide energy usage per category Energy usage per 1,000 customers across different categories

Entire energy consumptionEnergy consumption in basic units

Greenhouse gas emissions

Restaurant environment

34.4million m3/year

661.7million kWh/year Gas 547.5

million m3/year

Water

Electricity

1,000 people

25.4m3

488.7kWh Gas

Electricity

4.0 m3

Water

CO2 emissions equivalent

(+5.8% compared to previous year)

(-2.5% compared to previous year)

(-1.3% compared to previous year)

Crude oil equivalent

kl/1,000 register counts

t-CO2/100 million register count

211,6240.2657

56,037

When it comes to environment, McDonald’s follows the philosophy of “Think and act for our planet.” Specifically, it means to keep an eye on our business and minimize unnecessary impact to our environment. We are taking two different initiatives to ensure the above; programmed energy management at restaurant level and capital investments in introducing energy-saving and high-efficiency equipment. These initiatives are linked together and being implemented continuously through the PDCA cycle.

To provide a comfortable dining experience to our customers, air-conditioning control is made by judging the ambient conditions. Also, no smoking policy was adopted at McDonald’s restaurants nationwide in August 2014. This would provide cleaner air and better dining environment to our health for all customers including family with children.

http://www.mcd-holdings.co.jp/news/2014/release-140815a.html

(+2.6% compared to previous year)

(+17.0% compared to previous year)

(+8.1% compared to previous year)

(±0% compared to previous year)

(-5.4% compared to previous year)

(+10.8% compared to previous year)

kl/year

Crude oil equivalent

Energy usage in 2017

CSR Report 2017 17

As declining birthrate, aging population and regional depopulation are becoming evident in Japan, limitations in food and resources due to global population increase and climate change are producing a heightened sense of crisis. All these suggest an urgent shift to a sustainable society. As a global restaurant company, McDonald's announced "Scale for Good"in January 2018, followed by McDonald's Japan's top message regarding its commitment to contribute to the earth's future. I look forward to witnessing the works with high motivation.

I read McDonald's Japan's CSR Report. Based on the philosophy of "quality, service, cleanliness and value", McDonald's Japan states to fulfill its social responsibility in the five areas of "raw material procurement, food and quality control, people, social contribution and environment." Also, as a restaurant company close to consumers, McDonald's Japan is committed to food safety and security, discloses information in a "visible" way to the public, and the CSR report to easy to understand, and these provide confidence to the company.

In terms of environment, the switch from preparing foods in advance to preparing foods after receiving orders greatly reduced the amount of food waste, and as a result, the company received the "2017 Food Industry Mottainai (wastefulness reduction) Awards." This shows that balancing environment and economy is possible by utilizing wisdom and innovative ideas. In the "2030 Targets for Sustainable Development (SDGs)", the United Nations aims to reduce the amount of food loss and wastes by 50%. I expect McDonald's Japan to lead the society in this regard. Also, I hope the company will continue to engage in food education, crime prevention, sports, support in sickness and other locally-rooted social contributions that support our children, the future generation.

Lastly, the decline in CO2 emissions was marginal, but improvement was seen in the areas of wastes and energy. I truly look forward to seeing the company making greater challenges toward "Scale for Good" and other initiatives for a sustainable future.

A third-party opinion on CSR Report of McDonald’s Company (Japan), Ltd.

Yuko SakitaJournalist and Environmental counselorChairwoman of NPO GENKI Net for Creating a Sustainable SocietyDirector representative of NPO Shinjuku Environmental Activities

NPO GENKI Net for Creating a Sustainable Society

NPO Shinjuku Environmental Activities

http://www.genki-net.jp

http://www.sean.jp

CSR Report 2017 18