We’re calling for SEC action over McDonald’s deception as the company confirms cruel crate confinement
Today, the Humane Society of the United States is calling on the U.S. Securities and Exchange Commission to investigate and hold McDonald’s accountable for deceiving shareholders and the public about its animal confinement policies. We confronted McDonald’s with a shareholder proposal after suspecting that the company was omitting critical information from its statements about gestation crates. In a few sentences found within a 136-page proxy statement, McDonald’s proved that the HSUS’s suspicions were right, and that’s why we are withdrawing the proposal.
Simultaneously, in a complaint filed today, we are asking the SEC’s Division of Enforcement to investigate McDonald’s earlier statements about the pigs it uses. The company’s admission about the actual treatment of the pigs raises serious concerns about its shareholder communications over the last 10 years, including very recent statements to national media outlets. That’s why we’re asking the SEC to investigate, pursuant to the securities anti-deception laws, in a complaint filed today.
Just last month, I suggested that McDonald’s upcoming shareholder meeting was shaping up as a reckoning on animal welfare. In November, we filed a shareholder proposal asking if McDonald’s has been misleading its investors about its pledge to eliminate cruel gestation crates from its U.S. pork supply. (We own McDonald’s stock to help hold the company accountable.) The central question we posed was a straightforward one: Despite its claims to be “ending” the use of gestation crates in the United States, is McDonald’s merely reducing the amount of time it lets its suppliers lock pigs inside them?
In response to our shareholder proposal, McDonald’s has admitted—albeit very briefly in a few lines of a lengthy SEC filing—that indeed, it is not eliminating gestation crates for pregnant sows. The company’s proxy statement issued this month states that McDonald’s continues to let its U.S. pork suppliers confine pigs in gestation crates for as many as six weeks out of each 16-week pregnancy cycle.
That very brief statement in a long and complex document not only confirms the suspicions that motivated our shareholder proposal, but it also validates our ongoing efforts to hold McDonald’s accountable, not only for the pigs in its supply chain but for the truth concerning its business practices.
Our shareholder proposal having accomplished its chief aim, we’ve withdrawn it. But that’s not the end of our efforts. After all, McDonald’s brief admission in one document does nothing to change the plight of pigs. The real problem remains. These animals continue languishing in gestation crates for substantial portions of their lives—10 years after the company promised better conditions for them by 2022.
It’s illegal for publicly owned companies to misrepresent important “material” issues in communications to their investors. To put it another way, they can’t tell shareholders they’re doing one thing while they’re really doing another.
As we’ve documented, over the last 10 years, McDonald’s has repeatedly assured shareholders that it’s “ending” the use of cruel gestation crates for pregnant sows—without (until just recently) specifying that the company really means it won’t use gestation crates after the first six weeks of pregnancy.
Just in February,in response to our proposal and other shareholder scrutiny, McDonald’s issued a statement saying it expects 85% to 90% of its U.S. pork to come from sows “not housed in gestation crates during pregnancy” by year’s end. In fact, by the company’s own words, we now know this is not true: Those sows will be housed in crates for large portions of each pregnancy, as evidenced by McDonald’s proxy statement.
Moreover, McDonald’s public language elsewhere continues to mislead, again making claims that the company is sourcing pork from “producers that do not house pregnant sows” in gestation crates … even though it isn’t.
We believe that McDonald’s must answer for these statements, but it is even more important that the company stop making them. Its short proxy statement admission that it continues to let U.S. suppliers lock pigs in crates has finally provided some clarity. However, as we have argued in our new complaint, this acknowledgment only emphasizes the need for an investigation under federal securities law of all the company’s much more widely circulated deceptive statements to the contrary. We are determined to hold McDonald’s to a standard of truth about the animal misery and suffering for which the company is ultimately responsible.
To read a copy of the full SEC complaint the Humane Society of the United States filed, click here.