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Leadership & Governance

  • Business Ethics
  • Competitive Behavior
  • Management of the Legal & Regulatory Environment
  • Critical Incident Risk Management
  • Systemic Risk Management
General Issue Category
(Industry agnostic)

Disclosure Topics (Industry specific) for:

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Energy Management

Energy Management

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 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

Food 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.

Customer Welfare

Nutritional Content

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.

Labor Practices

Labor Practices

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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