When it comes to human rights, actions speak louder than words…

Students at a Wendy’s protest in 2016 in Mississippi.

Next week at Wendy’s annual meeting, shareholders will vote on a resolution demanding transparency into Wendy’s social responsibility efforts — and a true accounting of the the impact of those efforts on workers’ lives in the company’s supply chain. 

Today, to help shareholders cast an informed vote, we take measure of Wendy’s claims of social responsibility leadership against a decade-long backdrop of dodging the gold standard for social responsibility in the food industry, the Fair Food Program. 

In the run-up to next week’s annual shareholder meeting, Wendy’s released its official “2020 Corporate Responsibility Achievements & Goals” report late last month, cataloging a wide range of corporate social responsibility efforts over the past year, from the company’s animal care standards and climate change policy to its COVID-19 response.  As part of the media strategy around the report’s launch, Wendy’s Chief Corporate Affairs and Sustainability Officer, Liliana Esposito, was interviewed by the hamburger giant’s own public relations blog, The Square Deal, and asked to explain the meaning of the report’s title, “Good Done Right”:

What is Good Done Right and what does it mean in the context of Wendy’s 2020 corporate responsibility report?

Good Done Right reflects our values, goals and approach across critical areas of our business: Food, People and Footprint.

What’s most energizing about the corporate responsibility space today is the recognition that making a positive impact in this area is vital for a business to succeed. Topics like environmental sustainability; responsible sourcing; and diversity, equity and inclusion (DE&I) are now as intrinsically connected to performance as traditional financial and operational metrics. This prioritization is true across the board with our key stakeholders. For example, we see many of our investors today identifying corporate responsibility and social impact as essential, raising the profile of our efforts and the broader focus on environmental, social and governance (ESG) topics. For us, Good Done Right is how we organize and express the important work we are doing.  

Tucked beneath a thick layer of corporate communications verbiage, this is, in fact, quite a revealing statement.  At its core, the company’s message is remarkably honest: We have come to realize that in today’s world, people — including really important people, like investors — actually expect corporations to act responsibly and be able to show a meaningful impact.  And if it’s important to our investors, it’s important to us.  

Indeed, Wendy’s 2020 CSR report, and Ms. Esposito’s comments, would seem to indicate that maybe, just maybe, Wendy’s has begun to accept the idea that the company does, in fact, have a role to play in protecting workers’ fundamental human rights in its supply chain.  But not so fast, because the very same company said this just a few months ago:

We believe that the Company’s day-to-day operations of running a quick-service hamburger concept are far removed from any underlying policy consideration of the protection of human rights and worker safety of the country’s meat and produce Suppliers.

In other words, human rights in our supplier’s operations are none of our business.  Wendy’s included that chilling sentiment in a submission to the Securities and Exchange Commission in an effort to block a shareholder resolution calling for transparency and an accounting of the real world impact of Wendy’s social responsibility efforts (the exact thing Ms. Esposito says is “most energizing about the corporate responsibility space today”) from being included on the ballot at this year’s annual meeting.

The two statements are nearly perfect opposites, yet, clearly, Wendy’s can’t have it both ways.  So which is the real Wendy’s?  Is it the company that, though it may have arrived late to the station, is now all aboard the social responsibility train, as Wendy’s 2020 CSR report — and its surprising 180 of recommending to shareholders that they vote in favor of the proposal — would have its shareholders believe?  Or is the real Wendy’s the company that shuns transparency and rejects the very notion that, as a fast-food chain, it bears any responsibility whatsoever for conditions in its suppliers’ operations?

If Wendy’s is suddenly serious about social responsibility, then surely its next move will be to join the gold standard, award-winning the FFP.  Only time will tell, but for now, Wendy’s shareholders looking to cast an informed vote on the resolution next week need to know Wendy’s real social responsibility history to understand why this vote is so important.  So, for those shareholders who may not be familiar with Wendy’s true track record on social responsibility — and in particular the company’s history vis a vis the Fair Food Program —  we are providing today a brief timeline, a quick look back at the highlights of Wendy’s decade-long effort to dodge the Presidential Medal-winning Fair Food Program, so that inquiring shareholders can cut through all the words and take the real measure of Wendy’s by the only criterion that really counts — the company’s actions.

Running from responsibility…

Many observers point to a report issued by the United Nations Environmental Program (UNEP) in 2005 as the birth of the modern ESG investment movement (where investors consider a company’s environmental, social, and governance record when deciding where to invest), but the practice only became mainstream in the past decade, and truly picked up steam as a result of the tumultuous events of 2020.  Wendy’s was late to the party, of course, but once it became clear that ESG investing was here to stay, Wendy’s has sought to position itself as a leader at every opportunity. 

But, under further review, Wendy’s actions over the past decade belied its words, time and time again.  Here are a few highlights:

  • 2011The Fair Food Program is launched in 90% of the Florida tomato industry, backed by the market power of nearly every fast-food industry leader, including McDonald’s, Burger King, Subway, and Taco Bell and its parent company Yum Brands (including Pizza Hut and KFC).  Wendy’s and Chipotle remain opposed to joining the program at the time of launch.

  • 2012Chipotle joins the Fair Food Program, leaving Wendy’s as the last major fast-food holdout.

  • 2013 – Wendy’s issues a statement, titled “A Conversation about Florida Tomatoes,” in response to growing consumer calls for the company to join the FFP, taking the position that, since its Florida tomato suppliers already participate in the Fair Food Program, there is no need for Wendy’s itself to join; Wendy’s is instead content to free-ride on the social responsibility efforts of all its peers in the industry.  The statement, which is downright radical in its insinuation that the CIW is somehow un-American, has since been taken down from the company’s website. 

  • 2015 – The Fair Food Program receives a Presidential Medal from the Obama/Biden Administration for its “extraordinary efforts to combat human trafficking.”
  • 2015 – Wendy’s abandons its longtime Florida growers and shifts its purchases to Mexico.  Under increasing pressure to join the Fair Food Program from consumers unswayed by the “free rider” argument laid out in its “Conversation” statement, Wendy’s shifts its entire tomato supply chain to Mexico, just months after a 2014 series in the Los Angeles Times documented widespread human trafficking, child labor, sexual harassment, and other abuses on Mexican farms.  This time Wendy’s made no formal  statement, as news of the move was only made public when consumers, during a call-in action to Wendy’s corporate headquarters, were told that the company no longer purchases tomatoes from Florida, “so the Fair Food Program does not apply to Wendy’s.”

  • 2016 – Wendy’s publishes its first public Supplier Code of Conduct, writing in its introduction, “The code was developed by Wendy’s and was created with the valued input of our Supplier community,” delineating right from the start the stark contrast between the Fair Food Program’s worker-driven approach and the new code’s top-down philosophy.  At the time, the CIW analyzed the new code’s lack of enforcement mechanisms and reliance on vague and voluntary “expectations” for Wendy’s suppliers, concluding that:

… When you compare Wendy’s vague “expectations” for ethical behavior from its suppliers and equivocal approach to consequences for suppliers who fail to meet those expectations, Wendy’s new code — announced with much fanfare last month in obvious response to the escalation of the Campaign for Fair Food — simply doesn’t measure up to the Fair Food Program.  In fact, it’s not even close.

Let us be very clear.  Wendy’s move to leave Mexico’s produce industry and its culture of violence and corruption was the right one, but it merely remedied its earlier indefensible decision to go to Mexico in the first place.  The CIW’s position today is the same as it always has been: Wendy’s must join the Fair Food Program.  The farmworkers in Wendy’s tomato supply chain deserve to enjoy the same, best-in-class human rights protections as workers in the supply chains of Wendy’s competitors Taco Bell, McDonald’s, Burger King, and Subway.  Nothing about Wendy’s return to purchasing from US producers changes that.  

Whereas… Wendy’s claims to address human rights risks through a Supplier Code of Conduct, Quality Assurance audits, and third-party reviews of human rights and labor practices for certain produce suppliers…  Meanwhile studies show that conventional social auditing fails to detect workplace abuses, demonstrating the importance of worker-driven mechanisms with enforcement. Yet Wendy’s is the only major fast food chain that has not joined the Fair Food Program—the recognized “gold standard” for supply chain monitoring, and the only social responsibility certification known to have mandatory, enforceable COVID-19 safety protocols for farmworkers.

In response, Wendy’s refuses to even recognize its responsibility to protect workers’ human rights in its suppliers operations, writing to the Securities and Exchange Commission in an attempt to block the resolution from the ballot (later rejected by the SEC):

We believe that the Company’s day-to-day operations of running a quick-service hamburger concept are far removed from any underlying policy consideration of the protection of human rights and worker safety of the country’s meat and produce Suppliers.

… In closing, given the FFP’s unparalleled success, its adoption by Wendy’s main competitors, and the seriousness of the human rights risks in U.S. agriculture – especially in light of COVID-19, and at a time of global reckoning over racial justice – we believe it is incumbent upon the company to join the FFP.

The investors’ letter is echoed by a public letter signed by six state Treasurers that reads, in part:

With the dire consequences of COVID-19 and of systemic racism on our minds, we the undersigned State Treasurers urge Wendy’s to join the Fair Food Program (FFP), and thus meet the standard set by all of Wendy’s major peers.

The record is clear.  In short, Wendy’s has spent the past decade denying, evading, and refusing to recognize its responsibility as a corporation to ensure that the fundamental human rights of workers are respected and protected in its supply chain.  Meanwhile, over that same period, the chorus calling on Wendy’s to meet the standard set by all of its major competitors in the fast-food industry and join the Fair Food Program — a chorus that rose up from the fields of Immokalee, was joined by consumers across the country, and has grown even stronger in the last years of the decade with the voices of Wendy’s shareholders and institutional investors alike — has swelled to a crescendo.

Wendy’s is not wrong when it says, “we see many of our investors today identifying corporate responsibility and social impact as essential.”  And next week, when the results of the shareholder resolution vote are announced, it will hear once again from investors — investors it can no longer afford to ignore — that time has come for Wendy’s to embrace real social responsibility, and to join the Fair Food Program.