5.02.2003 ET

(CSRwire) OAK BROOK, IL - On the one-year anniversary of McDonald's first global Social Responsibility Report, the company is reporting continued progress around the world in its social responsibility efforts. In an update that details advances globally during the past year, highlights include environmental and sustainability initiatives, non-governmental organization partnerships, animal welfare audits, support of children's causes and healthy lifestyles activities.

"Social responsibility is not a program that begins and ends. Acting responsibly has always been a part of who we are and will continue to be the way McDonald's does business. It's an ongoing commitment," said McDonald's CEO, Jim Cantalupo. "I'm proud of what our company has accomplished, and we'll continue to do more."

The progress outlined in the Global Social Responsibility Progress Update report includes:

- Approximately 35 million pounds of reductions in packaging materials

- Millions of dollars donated through Ronald McDonald House Charities for children's health initiatives such as tetanus immunizations and preventing childhood blindness

- Millions of dollars raised through World Children's Day that will support the distribution of 150,000 dictionaries, 1,300 hearing aids and other health care initiatives for children

- On-site animal welfare audits of supplier facilities around the world

- New menu offerings that give customers additional choices with Happy Meals

"Our customers and other key stakeholders continue to tell us they care about what McDonald's is doing on important issues for our communities, workplace, supply chain and the environment," stated Bob Langert, Senior Director of Social Responsibility. "Since last year, we've made considerable progress on issues our customers care about. Some examples include the launch of McDonald's Healthy Lifestyles initiative and the partnership established with Conservation International to integrate sustainable agriculture practices throughout our food production system."


FOR MORE SOCIAL RESPONSIBILITY INFORMATION:
-- Attached are more details about McDonald's Global Social Responsibility Progress Update.
-- The Social Responsibility Update is also available at: www.mcdonalds.com/corporate/social


McDonald's Global Social Responsibility Progress Update: 2002

On April 15, 2002, McDonald's issued its inaugural Social Responsibility Report. We sought and received extensive feedback from a wide range of our stakeholders. Generally, they acknowledged the Report as a good first effort, with room to improve in several major areas. Recommendations for the future included:

-- More specific performance data.
-- More commitments to specific goals, with timelines.
-- Greater focus on food and nutrition issues.

Stakeholder feedback also helped us identify priority areas for future initiatives:

-- Sustainable agriculture.
-- Nutrition and health.
-- Employment policies and practices.

We heard this feedback and proceeded to develop a significant number of new initiatives to address key priorities and improve our planning and performance measurement processes. Our goal is to issue our next full Social Responsibility Report, reflecting this progress, in 2004.

In the interim, we want to provide our stakeholders with a brief update on some of the most important social responsibility developments at McDonald's in a broad range of areas. We also reaffirm our commitment to thorough performance reporting and ongoing dialogue with all our stakeholders.

ENVIRONMENT

-- In 2002, McDonald's global supply chains purchased more than $460 million in recycled packaging materials. Products with recycled content vary by market and may include carryout bags, napkins, drink carriers, trayliners, shipping containers, and some types of folding cartons. In all, they involve a mixture of post-consumer and pre-consumer materials, with a strong preference for post-consumer.

-- Globally, packaging materials were reduced by approximately 35 million pounds.

-- McDonald's Europe joined the EU's Greenlights Programme, under which private companies voluntarily agree to install energy-efficient lighting in their facilities. The company will phase in the conversion in the process of building and renovating restaurants. Electrical energy savings will average an estimated 6,670 kWh per restaurant per year. McDonald's USA has been a member of the U.S. Environmental Protection Agency's similar Green Lights program since 1992.

-- McDonald's Brazil joined the São Paulo State sanitation department's water conservation program.

-- McDonald's Austria closed the recycling loop by fueling the trucks that supply its restaurants with low-emission biodiesel made from the restaurants' used cooking oil.

-- With guidance from The Natural Step, a leading non-profit sustainability organization, we completed a comprehensive analysis of the impacts of all our major business activities on the environment and the community. This study will provide the foundation for a long-range global program to implement our commitment to leadership in sustainability so that resources and the products and services they provide will be available for current and future generations.

-- McDonald's entered into a new collaboration with the Center for Environmental Leadership in Business, a division of Conservation International. The project is focused on integrating conservation and sustainable agriculture into our global food supply chain and on issues related to sustainability in the fishing industry. Conservation International is a long-time expert advisor to McDonald's, and we have worked together on other projects to raise environmental awareness, promote sustainable agricultural systems, and conserve biodiversity.

-- McDonald's Denmark opened the world's first HFC (hydrofluorocarbon)/HCFC/CFC-free restaurant. The company is testing the viability of refrigeration and ventilation equipment that uses environmentally-friendly natural refrigerants. This is an important step toward establishing a commercial market for refrigeration and ventilation equipment and natural refrigerants that will help protect the environment from global warming.

-- McDonald's Sweden continued operations of a restaurant testing a wide range of cutting-edge sustainability solutions. The restaurant is part of the pioneering GreenZone project, which demonstrates how to build and operate businesses in a sustainable way while also reducing costs.

COMMUNITY

-- On November 20, 2002, McDonald's restaurants around the world hosted an unprecedented simultaneous fundraiser for children in their communities--World Children's Day. Restaurants in more than 100 countries participated and raised more than $12 million (US$) for Ronald McDonald House Charities and other children's causes. Proceeds from the event will mean:

-- Support for approximately 200 children's health organizations around the world.

-- Aid for orphanages throughout eastern Europe.

-- Assistance for close to 70 children's hospitals worldwide.

-- Distribution of nearly 150,000 dictionaries to children in rural areas of China.

-- Support for 16 new Ronald McDonald Houses around the world.

-- 1,300 hearing aids for children in Mexico.

-- Additional support for the 134 Ronald McDonald House Charities Chapters across the United States and thus for the ongoing operations of Ronald McDonald Houses, the Ronald McDonald Care Mobile program, RMHC scholarship programs, and grants to local organizations.

-- Eleven Ronald McDonald Houses opened last year, including first Houses in Denmark, Spain, and the Honduras. There are now 228 Ronald McDonald Houses in 23 countries. On any given night, more than 5,000 rooms are available in Ronald McDonald Houses to provide families with hospitalized children a home away from home.

-- Two Ronald McDonald Care Mobile programs were launched in 2002, bringing the total number in operation to thirteen. Care Mobiles are state-of-the-art pediatric healthcare units, which RMHC provides to qualifying local clinical service providers so that they can bring cost-effective medical and dental services and health education to children in underserved communities.

-- In 2002, global Ronald McDonald House Charities and its affiliated local Chapters provided nearly $19 million in grants and program support to children's organizations. To date, RMHC and its worldwide network of local Chapters have provided more than $380 million in grants and support. Significant 2002 grants include:

-- $1 million to the United States Fund for UNICEF. This is part of a $5 million commitment to UNICEF for immunizations to help eliminate maternal and neonatal tetanus.

-- Approximately $707,000 to Project ORBIS, part of a $1.3 million grant for education and treatment programs to prevent avoidable childhood blindness in India and South America.

-- $300,000 to Prevent Child Abuse America to fund expansion of prenatal support services. This is part of a $1.2 million project. Since 1992, RMHC has provided more than $3 million to Prevent Child Abuse America's Healthy Families America program.

-- Partnering with local RMHC Chapters in the U.S., RMHC provided more than $3.9 million in college scholarships, making higher education accessible to young people most in need.

-- McDonald's Brazil distributed 8 million public information pamphlets about dengue fever in support of a national Ministry of Health campaign against the disease.

HEALTHY LIFESTYLES

-- McDonald's recently announced a set of healthy lifestyle initiatives, including enhanced menu choices, promotion of active lifestyles, and work with experts to provide additional consumer nutrition information and education. We have worked intensively to develop strategies that will address the local needs and preferences of our customers around the world and, at the same time, have global impact. Early results include:

-- A commitment to develop additional choices for Happy Meals. Consistent with this commitment, Happy Meal options now include:

- Fresh fruit packs in the UK.

- Baby carrots, vegetable nuggets, milk, juice, and a low-calorie soft drink in Sweden.

- Creamy yogurt-style cheese in Brazil.

- A toasted cheese and tomato sandwich, raisins and orange juice in Australia.

- A "create your own" Happy Meal, which allow customers to choose from a variety of entrées and accompaniments, in Spain.

-- Additional new menu offerings, including:

- A Lighter Choices menu, including three salad offerings, sandwiches on whole wheat buns, and a fruit and yogurt parfait in Canada. The parfait is also available in our U.S. restaurants.

- A "Best of Crudités" menu, including a sandwich, a salad with vegetables, and a choice of bottled water, orange juice, or a soft drink in France.

- New main course salads in the U.K. and the U.S. France also has main course salad offerings.

-- Creation of McDonald's Advisory Council on Healthy Lives--a panel of independent experts--to help guide our strategic focus on healthy lifestyles.

-- The assignment of a senior-level corporate executive, Ken Barun, to lead our healthy lifestyles activities and coordinate the work of the Council.

-- New collaborations with the World Health Organization and the U.S. Department of Health and Human Services to help educate consumers about the role of nutrition and fitness in maintaining good health.

-- Expanded online nutrition information in a number of our markets, including the UK, Sweden, and the U.S. New nutrition information and education brochures have also been produced.

-- McDonald's continued its longstanding significant support for amateur athletics and local sports programs.

- The corporation served as a principal sponsor for the Winter Olympic Games in Salt Lake City and the FIFA World Cup tournament in Seoul, Korea.

- McDonald's Europe announced it would again sponsor the Union of European Football Association's soccer championship games. The company also launched a "Grassroots to Glory" initiative aimed at encouraging physical activity, particularly among youth, by supporting community-level soccer programs.

- McDonald's UK initiated collaborations with the Football Associations in England, Scotland, Wales, and North Ireland to develop community-based coaches for youth soccer. The projects represent a commitment of approximately $31.5 million (US$) and are projected to recruit, train, and certify approximately 10,000 new volunteer coaches, drawn from local primary schools and McDonald's own employees.

- McDonald's Sweden announced its sponsorship of the 2003 Gothia World Cup Soccer Tournament--the world's largest soccer tournament for youth. The company will also sponsor a nationwide Happy Mile event for children and families, with the proceeds going to increase local sports opportunities for children with disabilities.

- McDonald's USA, in collaboration with POWERade, inaugurated the POWERade/McDonald's All-American High School Soccer Games--a tournament for the nation's best high school senior boy and girl soccer players.

- McDonald's USA also again sponsored the McDonald's All-American Boys and Girls Basketball Games. The All-American Boys Basketball Games are now in their 27th year and the All-American Girls Basketball Games are in their third year.

- McDonald's Poland continued its long-time support for "Light Athletics Thursdays," weekly sports events for school children that are intended to promote a healthy way of life and provide a means for identifying promising athletes. In 2002, approximately 100,000 young people from several dozen Polish towns participated.

- McDonald's Brazil entered into a collaboration with the São Paulo Secretary of Health in a program to encourage the population to exercise. The company also continued its sponsorships of an inter-school sports competition, a program to promote the socialization of underprivileged youth through sports, and Saber em Movimento (Learning in Motion) a program that integrates multidisciplinary activities with physical education. More than 14,000 students have benefited from Saber em Movimento.

- McDonald's Australia awarded more than $26,500 (US$) in grants to support restaurant employees' participation in sports and sports-related activities. Total grants awarded now exceed $240,000 (US$).

- McDonald's Australia/Queensland completed its twenty-second year as sponsor of Little Athletics--a program to develop positive attitudes and healthy lifestyles in children through family and community involvement in athletic activities. Over 12,000 children and families participate in Little Athletics.

PEOPLE

-- McDonald's is committed to ensuring that our employees, owner/operators and suppliers reflect and represent the diverse populations we serve around the world. Like diverse menu offerings that accommodate local tastes and architectural styles that suit local environments, diversity in our people helps us do well as we do good.

-- In 2002, our restaurants around the world were, as in the past, locally owned and operated, locally staffed and, for the most part, locally or regionally supplied, making the McDonald's system as diverse as the 118 countries where we do business.

-- In the United States:

- As of December 31, 2002, 38.2 percent of McDonald's franchisees were minorities and/or women. At the end of 2001, 37.3 percent were minorities and/or women. There are more minority and women franchisees in the McDonald's system than in any other major U.S. quick service restaurant chain.

- We purchased more than $3.2 billion in food and paper products from minority and women suppliers. In dollar value, this is approximately 40 percent of our total U.S. food and paper purchases.

-- As in the past, McDonald's earned significant recognition for outstanding employment practices, including selection as:

-- Among the Top 3 Best Companies to Work For (for the third year in a row), by Exame magazine (Brazil).

-- Among the Top 10 Best Places to Work, by the Oxford Group (Denmark).

-- Investor in Human Capital by the Institute of Management and Institute of Labor and Social Affairs (Poland).

ANIMAL WELFARE

-- McDonald's issued its first global animal welfare progress report highlighting major 2002 developments in all zones. The report is available online at www.mcdonalds.com/corporate/social/welfare/update.

-- Our chief expert advisor for animal welfare, Dr. Temple Grandin, conducted onsite audits and provided training in Latin America, the Far East, and the United States. Since our audit program was initiated in 1999, Dr. Grandin has audited and worked with McDonald's suppliers in ten countries and all four of our global zones.

-- McDonald's Europe issued comprehensive standards for all the agricultural raw materials used in McDonald's food products, including a general policy and numerous specific requirements for ensuring animal welfare from farm to slaughterhouse. The company has had standards for slaughterhouses in place for several years.

PRODUCT SAFETY

-- In 2002, as in the past, McDonald's record for toy safety exceeded the record of the toy industry. This reflects the high priority placed on the safety of McDonald's toys by the corporation, our suppliers, and the independent safety laboratories that extensively review and test the toys before, during, and after production, using state-of-the art technologies.


SUPPLIER SOCIAL COMPLIANCE

-- In 2002, in keeping with our emphasis on capacity-building and continuous improvement, employees of more than 300 suppliers were trained to prepare their facilities for an assessment of their compliance with our Supplier Code of Conduct. The Code establishes standards for supplier and subcontractor employment practices and workplace conditions. Compliance is a condition for doing business with McDonald's.

-- Our independent monitoring firms conducted more than 150 onsite assessments of supplier and subcontractor facilities to ensure compliance with our Supplier Code of Conduct. Most of the assessments were of facilities in Asia, but there were also audits of facilities in Central and South America, Europe, Canada, and the U.S.

SOCIAL RESPONSIBILITY REPORTING

-- McDonald's Brazil issued its first comprehensive social responsibility report. The report and a summary, in English and Portuguese, are available on the McDonald's Brazil Web site at www.mcdonalds.com.br/mc_brasil/balanco_social_2002.shtml.

-- McDonald's Switzerland issued its third report on its environmental programs. The report includes concrete measures of progress and numerical results in ten areas. It is available, in English, French and German, on the McDonald's Switzerland Web site at www.mcdonalds.ch.

-- McDonald's adopted, as a goal, the Global Reporting Initiative guidelines, a leading framework for sustainability reporting. The guidelines will be used initially in reporting the social responsibility performance of McDonald's USA and subsequently expanded, as feasible, to other markets. Adopting the GRI guidelines will help ensure that our social responsibility measurement and reporting systems include appropriate issues and performance indicators and also facilitate comparability with our prior performance. We are currently developing additional performance metrics for use in our next full Social Responsibility Report.


McDonald's 2002 Social Responsibility Report and additional information about McDonald's social responsibility initiatives are available online at www.mcdonalds.com/corporate/social.

For more information please contact: