Carl Icahn criticizes McDonald’s for its animal welfare practices in fiery letter to investors
“McDonald’s Board … is failing shareholders and stakeholders by presiding over animal welfare violations, supply chain failures and what I perceive to be an environmental, social and governance agenda (“ESG”) void,” he wrote. “A company’s reluctance to improve its audit policies and methods poses a serious risk to a company, its bottom line and the world around us.”
Icahn said he only owned 200 shares of the company, McDonald’s noted at the time.
“While the company looks forward to promoting increased industry collaboration on this issue, the current pork supply in the United States would make this type of engagement impractical,” McDonald’s said.
The letter set out clear demands, including a commitment to eliminate the use of gestation crates entirely from McDonald’s supply chain by the end of next year, among others.
Making the changes requested by Icahn would increase prices for customers, the company said in a statement in response to the filings.
“McDonald’s is paying a premium today to purchase group-housed pork consistent with our 2012 commitment,” the company said, noting that moving to a system that meets the standards Icahn described Thursday “would significantly increase those costs, which that would impose a burden on all aspects of our business, our supply chain and McDonald’s customers.”
From the company’s point of view, “what Mr. Icahn is asking … is totally unachievable,” he said.
McDonald’s added that it “cares about the health and welfare of animals in our supply chain and has long led the industry with its animal welfare commitments.”
“Hypocrisy” on Wall Street
For Icahn, it’s not just about pigs. His fight is also on Wall Street’s overall commitment to sustainable practices.
“I want to shine a light on what may be the greatest hypocrisy of our time,” Icahn wrote. “A lot of companies on Wall Street and their bankers and lawyers seem to be capitalizing on ESG to generate profits without doing enough to support tangible societal progress…clearly, the ESG status quo on Wall Street needs to change. ”
He added that “if the ESG movement is to be more than a marketing concept and a fundraising tool, the huge asset managers who are among the biggest owners of McDonald’s must back their words with actions.”
McDonald’s annual meeting of shareholders is scheduled for May 26. It will release its results next week, April 28.
— Julia Horowitz and Alicia Wallace of CNN Business contributed to this report.