Relevant Issues (7 of 26)
- GHG Emissions
- Air Quality
- Energy Management The category addresses environmental impacts associated with energy consumption. It addresses the company’s management of energy in manufacturing and/or for provision of products and services derived from utility providers (grid energy) not owned or controlled by the company. More specifically, it includes management of energy efficiency and intensity, energy mix, as well as grid reliance. Upstream (e.g., suppliers) and downstream (e.g., product use) energy use is not included in the scope.
- Water & Wastewater Management The category addresses a company’s water use, water consumption, wastewater generation, and other impacts of operations on water resources, which may be influenced by regional differences in the availability and quality of and competition for water resources. More specifically, it addresses management strategies including, but not limited to, water efficiency, intensity, and recycling. Lastly, the category also addresses management of wastewater treatment and discharge, including groundwater and aquifer pollution.
- Waste & Hazardous Materials Management The category addresses environmental issues associated with hazardous and non-hazardous waste generated by companies. It addresses a company’s management of solid wastes in manufacturing, agriculture, and other industrial processes. It covers treatment, handling, storage, disposal, and regulatory compliance. The category does not cover emissions to air or wastewater nor does it cover waste from end-of-life of products, which are addressed in separate categories.
- Ecological Impacts
- Human Rights & Community Relations
- Customer Privacy
- Data Security
- Access & Affordability
- Product Quality & Safety The category addresses issues involving unintended characteristics of products sold or services provided that may create health or safety risks to end-users. It addresses a company’s ability to offer manufactured products and/or services that meet customer expectations with respect to their health and safety characteristics. It includes, but is not limited to, issues involving liability, management of recalls and market withdrawals, product testing, and chemicals/content/ingredient management in products.
- Customer Welfare The category addresses customer welfare concerns over issues including, but not limited to, health and nutrition of foods and beverages, antibiotic use in animal production, and management of controlled substances. The category addresses the company’s ability to provide consumers with manufactured products and services that are aligned with societal expectations. It does not include issues directly related to quality and safety malfunctions of manufactured products and services, but instead addresses qualities inherent to the design and delivery of products and services where customer welfare may be in question. The scope of the category also captures companies’ ability to prevent counterfeit products.
- Selling Practices & Product Labeling
- Labor Practices The category addresses the company’s ability to uphold commonly accepted labor standards in the workplace, including compliance with labor laws and internationally accepted norms and standards. This includes, but is not limited to, ensuring basic human rights related to child labor, forced or bonded labor, exploitative labor, fair wages and overtime pay, and other basic workers' rights. It also includes minimum wage policies and provision of benefits, which may influence how a workforce is attracted, retained, and motivated. The category further addresses a company’s relationship with organized labor and freedom of association.
- Employee Health & Safety
- Employee Engagement, Diversity & Inclusion
Business Model & Innovation
- Product Design & Lifecycle Management
- Business Model Resilience
- Supply Chain Management The category addresses management of environmental, social, and governance (ESG) risks within a company’s supply chain. It addresses issues associated with environmental and social externalities created by suppliers through their operational activities. Such issues include, but are not limited to, environmental responsibility, human rights, labor practices, and ethics and corruption. Management may involve screening, selection, monitoring, and engagement with suppliers on their environmental and social impacts. The category does not address the impacts of external factors – such as climate change and other environmental and social factors – on suppliers’ operations and/or on the availability and pricing of key resources, which is covered in a separate category.
- Materials Sourcing & Efficiency
- Physical Impacts of Climate Change
Leadership & Governance
- Business Ethics
- Competitive Behavior
- Management of the Legal & Regulatory Environment
- Critical Incident Risk Management
- Systemic Risk Management
Disclosure Topics (Industry specific) for:
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Restaurant operations have high energy intensity compared to other commercial building operations. Commercial kitchen appliances are extremely energy intensive, and dining areas are typically temperature-controlled for customers. Fossil fuel-based energy production and consumption contribute to significant environmental impacts, including climate change and air pollution, which have the potential to indirectly, yet materially, impact the results of restaurant operations. Regulations on greenhouse gas (GHG) emissions pricing or regulatory incentives for energy efficiency improvements and renewable energy affect conventional and renewable energy prices. Companies that manage energy consumption at company-owned and franchise locations can decrease operational costs through energy efficiency upgrades and limit exposure to GHG emissions regulations through the use of renewable energy resources.
Water & Wastewater Management
Water is used throughout restaurant operations, from cooking and dishwashing to cleaning. The restaurant format, size, and equipment all affect water use. Restaurants located in water-stressed regions may be exposed to water usage restrictions or face high water costs. Long-term historic increases in the costs of water, and expectations around continued increases due to overconsumption and constrained supplies resulting from population growth and shifts, pollution, and climate change, indicate the heightened importance of water management. Companies can reduce water use and associated operational costs through implementing water-efficient practices and using water-efficient commercial kitchen equipment.
Waste & Hazardous Materials Management
Food & Packaging Waste Management
Restaurants produce waste in two main forms: food and packaging. Food waste is generated during the preparation process as well as by unconsumed food. Food waste results in loss of resources, such as water, energy, land, labor, and capital, and produces GHG emissions as a result of decomposition. Moreover, food ingredient deliveries to restaurants are a significant source of packaging waste. Packaging waste includes packaging received from suppliers and packaging disposed by consumers in the restaurant areas. In addition, limited-service restaurants make heavy use of disposable tableware to serve customers. Municipal and federal regulations around packaging are likely to continue evolving to reduce packaging or improve recyclability or biodegradability of packaging. Companies that are able to stay ahead of regulations will not only see a positive impact on brand reputation, but will likely reduce their cost of compliance. Companies that are able to reduce waste through various methods, including food recovery, diverting waste from landfills, and packaging reclamation programs, can reduce waste handling costs and improve operational efficiency.
Product Quality & Safety
Both food preparation methods and quality of ingredients can impact food safety in the Restaurants industry. Restaurant food safety is especially challenging to manage with a broad supply chain. The global nature of the industry as well as the franchising model make it difficult for restaurant companies to ensure the safety of their food supplies. Failure to monitor the quality of supplied products may increase a company’s risk of supply disruptions as well as negative publicity. Food safety issues, such as foodborne illness concerns, in either company-owned or franchise-operated locations can affect the core of a restaurant’s reputation. Reputational damage from food safety issues tends to have a long-term impact. Companies that adhere to industry standards for food preparation and safety are likely to be better positioned to protect shareholder value.
Public health concerns around obesity have put the Restaurant industry under a spotlight. Restaurants are increasingly pressured to improve the nutritional content of menu offerings and to increase transparency around the content of menu offerings, such as publishing calorie counts. Demand in the Restaurant industry is increasingly driven by consumer preferences for choices that are more healthful. Companies that are able to offer more nutritious menu options are likely to capture new markets for health-conscious consumers and improve market share with consumers. A higher share of nutritious options may have a beneficial effect on a company’s reputation and revenue growth in the long term.
The Restaurant industry is labor-intensive, and many of the staff are hourly, part-time, or seasonal workers. The industry is among the top job creators and is an entry point for young and migrant workers to join the workforce. Restaurant employees in franchised or licensed locations may be employed by a third party. In addition, since many restaurant chains exist across continents, ensuring consistent labor standards can be a challenge for restaurant employees in both company-owned and franchise locations. Labor issues at franchises affect brand image because customers cannot make a distinction between company-owned and franchised restaurants. Restaurants that are able to properly manage human capital by offering competitive wages, safe working environments, and other opportunities for professional growth will likely improve employee morale while reducing turnover rates and the associated administrative costs involved in employee acquisition and training.
Supply Chain Management
Supply Chain Management & Food Sourcing
Restaurants source ingredients and products from a wide range of suppliers. Supply chain management is crucial for restaurants to ensure food safety, protect their reputations, and improve revenues. Sourcing quality ingredients to maintain a consistent level of quality across different locations can be operationally challenging, This problem is exacerbated by the global nature of the industry. Demand from food and beverage industries, including restaurants, drives and shapes agricultural production, indicating that actions by industry players have larger impacts on society. Therefore, sustainable and ethical sourcing by industry players is necessary to ensure continued future supply and to minimize lifecycle impacts of company operations. Sourcing from suppliers that have high quality standards, employ environmentally sustainable farming methods, and honor labor rights will better position companies to protect long-term shareholder value. By increasing the amount of food supply sourced in conformance with environmental and social standards, as well as conformance with animal welfare standards and best practices, restaurant operators will be able to maintain food quality, manage food safety issues, enhance their reputation, and expand their market share.
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