Yum! Brands’ ‘unstoppable growth’ strategy is hindering its climate performance

KFC and Pizza Hut owner Yum! Brands saw its overall carbon footprint increase by nearly 7% between 2022 and 2023 as its ‘unstoppable growth’ strategy led to the opening 3,300 new restaurants.

The group reported 31.57 million tonnes of CO2 equivalent in its 2023 sustainability report – up from 29.53 million tonnes the previous year. Most of the increase (about 2 million tonnes) comes from Scope 3, which makes up 99% of Yum! Brands’ emissions.

This is despite reported progress on carbon intensity: the firm says it has lowered the CO2 per tonne of beef, chicken, dairy and packaging by 6% since 2019. While it doesn’t share the exact number in this year’s report, its 2022 report stated that emissions intensity stood at 6.2 metric tonnes in 2019. This would place the 2023 carbon intensity of core protein products around 5.8 tonnes of CO2 per tonne of product.

The KFC, Pizza Hut and Taco Bell owner attributes this reduction to a menu diversification, away from beef and towards more chicken. The group aims to reduce the Scope 3 emissions intensity of the beef, poultry, dairy and packaging it purchases by 46% by 2030 through targeted pilots (including cattle feed changes), sector engagement and better data tracking.

150% rise in Scope 2 (market-based) emissions

Beyond the large increase in Scope 3 emissions, indirect emissions from energy use (Scope 2) also rose significantly between 2022 and 2023, from 37,856 tonnes to 95,241 tonnes of CO2 equivalent.

The company doesn’t explain this increase in its sustainability report, focusing instead on the 29% reduction achieved across Scope 1 and 2 since 2019 – despite the fact that in 2022, the same metric stood at 57%.

However, Yum! Brands CEO David Gibbs said in an earnings call this February that 25% of the group’s 58,000 restaurants have been built in the last three years – 3,300 in 2023 alone.

“We enter 2024 just shy of adding 10,000 net-new restaurants over the past three years and are well on our way to reaching 60,000 restaurants in 2024,” he added in the company’s 2023 financial report, suggesting an aggressive growth strategy that could be hindering the group’s climate progress.

Yum! Brands’ Scope 2 emissions only include its company-owned restaurants, with franchisees’ energy-related footprint counted as part of Scope 3. There, carbon intensity on a per-restaurant basis has decreased by 28% since 2019, but absolute emissions went up by nearly 6% between 2022 and 2023.