The fast-food exec focusing on packaging

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Wendy’s isn’t the first company that comes to mind when thinking about sustainability. Customers don’t necessarily want to pay for it, either, according to Liliana Esposito, the company’s chief corporate affairs and sustainability officer.

But that doesn’t mean the fast-food giant isn’t taking steps to incorporate greener practices. Wendy’s is working to cut its greenhouse gas emissions by almost half compared with 2019 levels and trying to make all consumer-facing packaging sustainable by 2026.

POLITICO talked with Esposito about the fast-food industry, the company’s climate goals, whether it plans to offer any meat alternatives and the issue of food waste.

This interview has been condensed and edited for clarity.

Is fast food a sustainable industry?

I think it is and I think it can be. The definition of what is sustainable has evolved over time, but I still think at the heart of it [is] feeding literally everyone in the country with something that they have that was responsibly sourced, responsibly prepared, brought to them in a really high-quality and food-safe way and then increasingly, we look at other areas like what do we do with our packaging?

You said the company has a goal to have 100% of its consumer-facing packaging be sustainable by 2026. How do you get to that? Does it lean one way, like is it mostly compostable or is it mostly recyclable?

The majority right now that is what we would consider to be sustainable is recyclable. Probably secondarily will be compostable. One of the challenges with recycling is if the product has food on it, right? If you think about a sandwich wrap, it would be difficult to make that recyclable because it’s going to have cheese and hamburger juice on it. But that may be a more fitting option for a compostable [package] as opposed to a beverage cup where we have already made that recyclable.

You guys have set out a goal of cutting your greenhouse gas emissions by 47 percent come 2030 compared with 2019 levels. How did you come to that target and how exactly do you get there?

The science-based part of it is consistent with a reduction in GHGs that would contribute to no more than 1.5 degrees Celsius warming. It’s actually three targets. On the scope 1 and 2, it’s the 400 or so restaurants that we own and operate plus our corporate office, that is 47 percent reduction on an absolute basis for comparing 2019 to 2030. And then for scope 3, it’s really got two components: one being our franchisees, so the restaurants that are operated by our franchisees, and then purchased goods and services, which is really our supply chain and predominantly agricultural.

How do you even begin to tackle scope 3?

We have said that by 2030, which aligns to our science-based target timing as well, we’ll responsibly source our top 10 food categories. It includes all of our protein as well as some other items like buns and bakery items, beverages, potatoes for French fries, fresh produce, things like that.

As part of that, we have identified the universal suppliers and they are now all being asked to participate in a technology platform started last year. We’ve got about 50 percent of those suppliers in this technology platform. We’ll aim to get the rest of them in this year. And essentially each of those categories will have environmental and social responsibility criteria.

And then what happens after you reach the 47 percent GHG reduction?

We haven’t set a target beyond the 2030 [goal]. I think that there’s some potential that we will reassess the target, just depending on progress, depending on how the company footprint might change. I think we could look beyond that, but for now, really, what the science would tell us is that if we can achieve that 47 percent reduction, we’re doing our fair share in terms of limiting the most negative impacts of climate change.

In terms of sustainable sourcing, has there ever been the question of, “Do we pass this on to the consumer and will they actually go for it?”

The purpose of our entire industry is around speed, convenience and affordability. It’s got to be accessible, and so it’s not just a matter of will the customer pay more for it. I think it’s should they have to. And we believe that giving the consumer value for their money is incredibly important. They’ll tell us how we’re doing on that front, by how much and how well they’re patronizing our business, but we do know that while sustainability is absolutely important, it’s not something that most customers believe that they should have to pay more for. And we agree with them.

Only 5 percent of your stores are company-owned. How do you get franchisees to adopt your sustainability goals?

Particularly on the supply chain side they’re shared goals, because in North America and the U.S. and Canada, all of Wendy’s restaurants’ purchasing is done through a supply chain cooperative. There might be some areas where we might move more quickly, and then demonstrate progress. What we see is that when we’re demonstrating the value of it, in many cases that then will encourage franchisees to say, ‘OK, this is actually valuable for my business and this is something that I want to get on board.’

What do you do about the issue of food waste?

At the individual restaurant level, there actually is not a lot of food waste. We, for the most part, operate [in] kind of a made-to-order fashion and really, if you just think about the size of a restaurant, they have to be very good at inventory management. The idea is that you don’t order any more than you are going to cook and you don’t cook any more than you’re going to serve. There’s always opportunities to be better.

How much of your push to be more sustainable is driven by consumers wanting it from you, as opposed to Wendy’s driving the bus for consumers?

Investors are another audience that I would include in that. I don’t have on a regular basis customers calling into our customer care center saying, ‘Please do X, Y, or Z for the environment.’ That said, what we do know is that increasingly, there are expectations that if I’m going to do business with a company, that they’re operating in a way that makes me feel good about it. I think increasingly, measures of sustainability [have] become part of that consumer expectation for quality. But again, I don’t think it’s something that they will give you extra for.

Have you looked at doing an Impossible burger or something to be more sustainable?

We have looked at a number of different plant-based options, none that have frankly kind of passed the consumer test yet to make its way onto the full time menu. But we continue to look at it.

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