Hiding from shareholders: McDonald's and UPS
By Esther Bouquet
web posted February 9, 2026
The SEC's new shareholder proposal regime, implemented in November 2025, permits companies to exclude shareholder proposals from proxy materials based on nothing more than a "reasonable basis." In practice, this encourages companies to silence shareholders who are asking an uncomfortable but fundamental question about diversity, equity, and inclusion (DEI) and environmental, social, and governance (ESG) policies: How do these initiatives materially benefit shareholders in terms of return on investment (ROI)?
While some corporate leaders have embraced transparency and accountability by including the National Center's proposals in their proxy materials despite the SEC's easy out, others have fallen short of customary transparency standards by taking Chairman Atkins' reasonable-basis exclusionary bait. Even when these companies provide briefing setting forth their rationales, they know the SEC will issue a "no objection" letter before the proponent has time to respond and so rely on a one-sided process. UPS and McDonald's are among these companies.
UPS Rejects Sustainability Oversight Committee
The National Center proposed UPS amend its bylaws to create a Risk Committee that would assess whether UPS's costly sustainability initiatives are based on NPV and ROI calculations. UPS immediately moved to exclude the proposal, citing legal opinions that appear to elevate Board discretion above shareholders' statutory rights. UPS apparently never even attempted to engage, even though this issue is obviously one central to shareholder value.
Shareholders are lawfully empowered to amend corporate bylaws. A Risk Committee does not restrict Board discretion. As of January 28, 2026, UPS is ranked High Risk on the 1792 Exchange due to apparent corporate bias. UPS also apparently cooperates fully with the Human Rights Campaign, an inaccurately named political stakeholder group that promotes divisive corporate policies. UPS's recent decision to exclude a shareholder proposal seeking basic ESG accountability only reinforces its growing reputation for corporate bias and resistance to shareholder oversight.
UPS unilaterally excluding the National Center's proposal suggests that the Company does not value shareholder concerns surrounding costly sustainability initiatives like Net-Zero by 2050 and 100% Renewable by 2035. Apparently, UPS is more willing to spend shareholder assets on legal opinions and no-action relief from Delaware law firms than to meaningfully engage with shareholders.
UPS's decision to exclude the National Center's proposal signals a disregard for shareholders' statutory rights and legitimate concerns about whether these costly climate commitments deliver measurable economic value. As of February 1, 2026, UPS has apparently underperformed the S&P 500 past 5 years, 3 years, and 1 year – with the 5-year performance being over 100 percentage points worse.
McDonald's Doubles Down on Greenwashing Reputation
The National Center requested that McDonald's publish a report assessing whether its significant climate commitments were authorized based on net present value and return on investment. Put simply, shareholders deserve to know whether DEI and sustainability initiatives are worth their costs and associated risks.
One of those risks is greenwashing. Greenwashing occurs when companies promote environmentally friendly policies without delivering meaningful environmental impact. McDonald's has a history of alleged greenwashing. In 2019, the company admitted that its new universally-despised paper straws were not recyclable, despite replacing recyclable plastic straws to appear more eco-friendly. The move damaged consumer trust and stands as a textbook example of reputational greenwashing.
The paper straw episode was not an outlier. In 2019, McDonald's generated more than 53 million metric tons of CO₂e, largely due to beef production. While the company pledged to significantly reduce emissions by 2030 using a 2018 baseline, its most recent Purpose & Impact Report concedes that these ambitious goals remain difficult to achieve. The report repeatedly references "long-term sustainable value," yet provides no NPV- or ROI-based analysis demonstrating how these initiatives produce shareholder value:
As with all journeys to advance change and meet goals, there are challenges along the way and it's clear we cannot do this alone. McDonald's has a complex global supply chain and many stakeholders that have varied interests. Changes in circumstances, regulatory standards and methods of measuring achievement may impact progress, which may not be linear.
McDonald's audience could be forgiven for concluding that the company's sustainability initiatives are further examples of a history of risky greenwashing stunts. If the sustainability initiatives are not intended to produce shareholder value, but rather the initiatives' sole purpose is to "protect" the environment, then the company is welcome to admit they are sacrificing resources to placate environmental activists. McDonald's remains a Medium Risk according to the 1792 Exchange due to some apparently biased corporate policies, and the Company's refusal to address shareholder concerns reinforces McDonald's seemingly biased reputation. As of January 22, 2026, McDonald's has apparently underperformed the S&P 500 over the one-year, three-year, and five-year periods.
Without meaningful shareholder engagement, shareholders are forced to form their own conclusions. McDonald's exclusion of the National Center's request for a report indicates that McDonald's is unsure of its own climate goals, and publishing a report based on empirical data would confirm experts' greenwashing concerns.
Corporations Continue to Avoid Accountability
Despite claims by UPS and McDonald's, the following truths remain:
- Requesting a report does not amount to micromanagement.
- Directors are responsible for upholding their fiduciary duties, including the duty to authorize capital allocation to further shareholders' interests.
- If shareholders are unilaterally silenced, they will be incentivized to use remaining channels of communication, voting against director elections and compensation.
Ultimately, UPS and McDonald's are not defending shareholder value. These corporations are avoiding scrutiny, choosing exclusion over transparent engagement on whether DEI and sustainability initiatives deliver measurable ROI. When companies silence reasonable shareholder questions, they erode shareholder trust. These unilateral proposal exclusions invite the very accountability corporations seek to avoid. 
Esther Bouquet is Free Enterprise Project Associate at the National Center for Public Policy Research.
