Dive Brief:

• McDonald's has committed to allocate 25% of its annual supply chain spending in the U.S., or roughly $3.5 billion, for suppliers owned by women and minorities by 2025, the company announced Thursday. The burger giant used 23% of its 2020 supply chain spending of about $14 billion toward these businesses.
• McDonald's and more than 20 of its largest suppliers have also pledged to deploy annual equity and inclusion training for all employees, to increase minority representation in leadership and to monitor and share the company's initiatives to better equality.​
• The quick service restaurant is teaming with Supply Hive, a Chicago-based technology firm and certified minority-owned business, to provide resources to its suppliers and help track these suppliers' annual progress on the company's DEI goals.

Dive Insight:

By extending its diversity goals outward to its supply chain partner strategy and inviting suppliers to join in its commitments, McDonald's is broadening its commitment to uphold diversity within its business.

"The company and its MCDEI signatories will work toward the shared goals of supporting and empowering diverse-owned businesses, creating new pipelines of diverse talent, driving greater innovation and competition, and building economic growth in diverse communities," the company said in a press release.

McDonald's launched global diversity, equity and inclusion benchmarks last summer and hired Reggie Miller as global DEI officer in November. However, accusations of institutional racism and discrimination at the chain persist.

For the past few years, McDonald's has steadily increased its efforts to promote diversity in its restaurants, corporate offices and across its massive global network. Last summer's benchmarks included targets for corporate employee diversity and increasing marketing spend to diverse-owned media, content and production partners. Many of these moves have been in step with initiatives rolled out by rival quick service restaurants and fast casuals, such as Starbucks and Shake Shack. But these investments are also being made in the shadow of frequent allegations of inequity and prejudice at the chain.

Even though not all of these claims have been supported by the courts — a judge dismissed a lawsuit last month put forth by Black franchisees last month that claimed corporate intentionally steered Black operators toward underperforming restaurants — McDonald's has paid enough settlements for critics to speculate it has deeply entrenched culture problems.

Still, the company is making progress. In February, McDonald's announced plans to grow representation of underrepresented demographics at the senior director level and above from 29% as of 2020 to 35% by 2025. It is also aiming for women to make up 45% of its leadership in 2025, compared to 37% in 2020. To achieve these goals, McDonald's is tying 15% of executives' yearly incentive bonuses to "human capital metrics."