2017

GLOBAL FOOD
CITIZENSHIP &
SUSTAINABILITY
REPORT

PLANET

PEOPLE
 2017 G LO B A L C ITIZEN SHIP & SU STA IN A B IL ITY REPORT

TABLE OF CONTENTS

CITIZENSHIP

Corporate Profile.............................................3 Stakeholder Engagement............................ 10

CEO Message...................................................5 Materiality.................................................... 12
Performance Summary....................................6 About This Report......................................... 14
Corporate Governance.....................................8 Policies & Positions....................................... 14
Global Citizenship & Sustainability Strategy...9

FOOD PLANET PEOPLE

Food Dashboard........................................... 16 Planet Dashboard......................................... 28 People Dashboard........................................ 44

Food Safety Green Buildings........................................... 30 Culture & Talent............................................ 45
Culture...................................................... 17 Energy Efficiency....................................... 31 Talent Development..................................... 47
Governance............................................... 19 Water Conservation.................................. 33 Opportunities for
Audits........................................................ 20 Waste Reduction....................................... 36 Restaurant Employees.............................. 48
Training..................................................... 21 Supply Chain................................................ 38 Scholarships & Academic Support............ 49
Choice & Nutrition Animal Protein.......................................... 39 Opportunities for
Strategy..................................................... 22 Forest Stewardship.................................... 41 Corporate Employees................................ 50
Dietary & Lifestyle Needs.......................... 23 Diversity & Inclusion..................................... 51
Nutrients We Encourage........................... 24 Employee Resource Groups...................... 52
Nutrients We Limit.................................... 25 Partnerships & Recognition...................... 52
Responsible Marketing................................ 26 Franchise Diversity.................................... 53
Supplier Diversity...................................... 53
Community & Philanthropy......................... 54
Hunger Relief............................................ 55
Literacy...................................................... 56

REPORTING Youth Education........................................ 57

Employee Giving....................................... 59
Forward-Looking Statements....................... 63 Employee Benefits....................................... 60
GRI Index...................................................... 64 Ethics & Human Rights................................. 61
 Ingredients for Creating

Yum! Brands is building

the world’s most loved,
trusted and fastest
growing restaurant
brands with a carefully
crafted recipe.

Recip
e...

We start with a
commitment to socially
responsible growth,
mixed with people who
lead with heart.

We act responsibly and

courageously when it comes
to the food we serve, our
impact on the planet and
the way we treat our We put it all together to
customers, our people and make the world better and
our communities. create a world with:
More choices.
More transparency.
More innovation.

A World With More Yum!

That’s
 IN THIS SECTION
Corporate Profile.................................... 3
CEO Message.......................................... 5
Performance Summary........................... 6
Corporate Governance............................ 8
Global Citizenship &

CITIZENSHIP Sustainability Strategy........................ 9

Stakeholder Engagement.................... 10
Materiality............................................ 12
About This Report................................. 14
Policies & Positions............................... 14
 CITIZENSHIP > CORPORATE PROFILE

CORPORATE PROFILE
Yum! Brands is focused on building KFC, Pizza Hut and Taco Bell to be the world’s most loved, trusted
and fastest growing restaurant brands. As a global company, we aim to make the world better by acting
responsibly with respect to food, planet and people. Yum! is headquartered in Louisville, Ky., and trades
on the New York Stock Exchange under the ticker symbol YUM.

OUR BRANDS These values are:

§ Champion the customer experience
§ Serve up trust in every bite
§ Adopt and share the best ideas
§ Deliver results, overnight and over time
§ Be focused and stay hungry
§ Recognize wins, big and small
In 2017, Yum! Brands marked the first year of our multi-year transformation § Lead with smart, heart and courage
journey that began with the spinoff of our China business in October § Believe in all people
2016 and continues as we execute our growth strategy of becoming a § Make the world better
company that is more focused, franchised and efficient. As of the end of
The next component of our Recipe for Growth is a set of four key growth
2017, 97 percent of our restaurants were franchise owned and at least
drivers that serve as the foundation upon which our sustainable, long-
98 percent will be franchised by the end of 2018.
term results are being built.
To unlock our potential, we have developed a strategic Recipe for Growth.
These drivers will allow us to keep our promises to serve delicious food,
This recipe begins with a set of shared values. Our values challenge and
make our food accessible to customers, give employees a place to grow
inspire us to elevate our brands, culture, performance and impact on
and make a difference, offer profitable partnership opportunities for
customers and the communities that we serve.
franchisees and deliver strong returns and long-term value.

OUR GROWTH DRIVERS

Distinctive, Relevant Bold Restaurant Unmatched Franchise Unrivaled Culture

& Easy Brands Development Operating Capability & Talent
Innovate and elevate iconic Drive market and franchise Recruit and equip the best Leverage culture and
restaurant brands people trust unit expansion with strong restaurant operators in the people capability to fuel
and champion economics and value world to deliver great brand performance and
customer experiences franchise success

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 CITIZENSHIP > CORPORATE PROFILE

135 +TERRITORIES
COUNTRIES &
RECOGNITION

BARRON’S 100 MOST

SUSTAINABLE COMPANIES

48+37+15
RESTAURANTS BLOOMBERG
BY BRAND*
GENDER-EQUALITY INDEX

• KFC 21,487
• Pizza Hut 16,748
CDP CLIMATE, FORESTS
AND WATER
• Taco Bell 6,849
*As of year-end 2017
CR 100 BEST CORPORATE

45,000+
CITIZENS LIST

RESTAURANTS DOW JONES SUSTAINABILITY

NORTH AMERICA INDEX

97%
FRANCHISED FORBES AMERICA'S BEST
EMPLOYERS FOR DIVERSITY

18,000+
RESTAURANTS FORTUNE MAGAZINE WORLD’S
MOST ADMIRED COMPANIES®
IN EMERGING
MARKETS
HEALTHIEST 100™
WORKPLACES IN AMERICA

1.5+
MILLION
FRANCHISE
SYSTEM
EMPLOYEES
$5.88 ISS ENVIRONMENTAL &
SOCIAL QUALITY SCORE

BILLION
60,000 2017 TOTAL
NEWSWEEK GREEN RANKINGS

YUM! BRANDS
EMPLOYEES REVENUE

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 CITIZENSHIP > CEO MESSAGE

MESSAGE FROM
GREG CREED
Our Recipe for Good

As Yum! Brands grows KFC, Pizza Hut and Taco Bell around the world, People: We continue to believe in ALL people, from investing in programs
we take our role as a global citizen and our impact on society and the that develop employee leaders to fostering a workplace that is inclusive.
environment seriously. That’s why I’m pleased to share Yum! Brands’ In our communities, strategic partnerships help us advance our priorities
2017 Global Citizenship & Sustainability Report, which highlights our of hunger relief, literacy and youth education.
progress fueling results and making the world better over the last two
years. This period has been a transformative time for our company.
“Our Recipe for Good unites our
In 2016, we spun off our China business into an independent, publicly
employees, franchisees and suppliers
traded company and announced our Recipe for Growth, our multi-year
growth strategy to become more focused, more franchised and more on the priorities that matter and will
efficient. In doing so, we reset our mission to build the world’s most loved, keep us focused on socially responsible
trusted and fastest-growing restaurant brands, redefined our global growth
growth, managing risks and serving more
priorities and sharpened a shared set of values that inspire us to elevate our
brands and business practices around the world. goodness to our customers, shareholders,
communities and the planet.”
In line with our Recipe for Growth, we created Yum! Brands’ Recipe for
Good — our updated Global Citizenship & Sustainability Strategy and
public commitments concerning our food, planet and people. I’m proud Yum!’s Recipe for Growth will deliver business results as our evolution
of the progress we’re making, as well as our growing efforts to listen and continues. But a growing company is only part of who we aspire to be.
engage more intently with our stakeholders on priority issues, such as: Our Recipe for Good unites our employees, franchisees and suppliers on
the priorities that matter and will keep us focused on socially responsible
Food: We're simplifying our ingredients in different ways, for example, growth, managing risks and serving more goodness to our customers,
by removing artificial flavors, colors and trans fat. We are also providing shareholders, communities and the planet.
more balanced options on our brands’ menus, including meal items
with less sodium and calories. Thank you for your support.

Planet: We’re making strides in our sustainable sourcing practices and

in our restaurant operations, including food donation, recycling and
energy and water conservation.
GREG CREED
Chief Executive Officer
Yum! Brands, Inc.

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 CITIZENSHIP > PERFORMANCE SUMMARY

PERFORMANCE SUMMARY
An important way we fulfill our Global Citizenship & Sustainability Strategy is by sharing progress against
our goals. Below is a summary of Yum!’s performance in 2016 and 2017 with respect to our overall
strategy and governance, as well as our three focus areas of food, planet and people. These goals and
progress are discussed in greater detail throughout our 2017 Global Citizenship & Sustainability Report.

COMMITMENTS 2016-2017 PERFORMANCE HIGHLIGHTS

GOVERNANCE & STRATEGY

Governance & Strategy § Established Yum! Brands’ multi-year global growth and transformation strategy (Recipe for Growth)
Build three iconic brands that people trust and champion § Refreshed our Global Citizenship & Sustainability Strategy to reflect our food, planet and people priorities
by being open and transparent about our progress, § Conducted our first formal materiality assessment to identify our most important CSR issues
challenges and outcomes § Updated division enterprise risk management process to inform global growth strategy

FOOD

Food Safety § Provided restaurant team member training on employee health, product handling, ingredient and product
management, and prevention of cross-contamination
Maintain the safest, highest-quality food supply and
preparation in the industry § Conducted more than 230,000 restaurant food safety audits between 2015 and 2017
§ Conducted approximately 3,000 food safety supplier audits in 2017

Choice & Nutrition §§ Removed artificial flavors from 70 percent of food ingredients, with a goal of removing 100 percent by 2020*
Be the preferred restaurant for consumers seeking §§ Removed artificial colors from 78 percent of food ingredients, with a goal of removing 100 percent by 2020*
delicious, balanced options by offering more choice, §§ Removed partially hydrogenated oil from 97 percent of food ingredients, with a goal of removing 100 percent
more transparency and nutritional improvements to
our ingredients § Pursuing a goal of offering balanced meals by having 20 percent of meal options consistent with one-third
of the Recommended Daily Allowance (RDA) or foreign equivalents by 2020; currently, nearly 50 percent
of restaurants have met this goal
§ Provided consumers with convenient access to allergen and nutrition information

Responsible Marketing § Published online nutrition calculators for all three brands’ U.S. menus
Promote transparency about our food through § Followed U.S. and international guidelines to avoid marketing to children
responsible labeling and advertising practices in
our restaurants and beyond

*In key markets, excluding co-branded ingredients and beverages

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 CITIZENSHIP > PERFORMANCE SUMMARY

COMMITMENTS 2016-2017 PERFORMANCE HIGHLIGHTS

PLANET

Green Buildings § Built 38 percent of new company-owned and franchise restaurants to green building standards
Design, build and operate restaurants to be measurably § Reduced energy consumption in our restaurants by 22 percent compared to a 2005 baseline
more sustainable using green building standards to § Saved 4.3 million megawatt-hours (MWh) of electricity due to energy efficiency improvements between
drive reductions in energy consumption, water use, 2005 and 2017
greenhouse gas (GHG) emissions and waste
§ Reduced water consumption by 10 percent compared to a 2015 baseline
§ Diverted 25 percent of restaurant waste from landfills in 2017, including cardboard, cooking oil, donated
food and mixed recyclables

Supply Chain § Published Sustainable Animal Protein Principles and Good Antimicrobial Stewardship policy
Engage in building a responsible supply chain that § Began developing unified auditing systems and policies for poultry, beef and pork
protects forests, respects human rights, supports animal § Required our suppliers to minimize use of antimicrobials important to human medicine
welfare and enables good antimicrobial stewardship
§ Having a goal of sourcing 100 percent sustainable palm oil by 2018; currently sourcing 87 percent of
cooking oil from sustainable palm oil or non-palm sources
§ Sourced 69 percent of global paper-based packaging and service products from either certified virgin
or recycled sources in 2017, with goal of 100 percent by 2020

PEOPLE

Culture & Talent § Delivered our Leading Culture to Fuel Results course to all leaders globally, with 95 percent participation
for directors and above
Create a culture of engagement that attracts,
retains and grows the best people and creates high §§ Launched Grow Yourself Week in 2017 to educate corporate employees on personal and professional wellness
performance in our restaurants §§ Launched brand-specific culture and leadership initiatives, including KFC’s Leading With Heart program,
Pizza Hut’s Life Unboxed campaign and the Start With Us, Stay With Us platform at Taco Bell

Diversity & Inclusion § Updated global strategy for diversity and inclusion, leading to a new diversity council and public diversity
commitments
Build an inclusive culture among our
employees, franchisees and suppliers to § Aligned with the Paradigm for Parity®, a coalition of companies working to increase the number of women
reflect the diversity of our customers in senior operating roles
§ Achieved 41 percent representation of women in global management positions
§ Conducted statistical analysis to confirm that we deliver pay parity across genders and ethnicities
§ Signed on to CEO Action for Diversity & Inclusion™, a national coalition for workplace diversity

Ethics & Human Rights § Updated our Code of Conduct to reflect Yum! Brands’ transformation
Hold our employees, franchisees and suppliers to the § Required our 2,000 most senior employees to complete a conflicts of interest questionnaire and certify
highest standards of professional and ethical conduct that they have read our Code of Conduct
§ Delivered annual compliance training to all company-owned restaurant employees
§ Remained committed to our Supplier Code of Conduct, which addresses guidelines for working conditions
consistent with international frameworks

Community & Philanthropy § Donated 6.9 million pounds of food through our Harvest program in 2017
Support global initiatives related to hunger relief, § Provided financial support, time and materials valued at $70 million in 2017
literacy and youth education, and nonprofits near our
hometown headquarters

Unless otherwise noted, "KFC" and "Pizza Hut" refer to all global restaurants and "Taco Bell" refers to all U.S.-based restaurants

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 CITIZENSHIP > CORPORATE GOVERNANCE

CORPORATE GOVERNANCE
Yum! Brands believes that good corporate governance is a critical factor in achieving business
success and embraces practices that align with management and shareholder interests.

As of April 2018, the Yum! Board of Directors consisted of 11 directors, BOARD DIVERSITY
10 of whom were independent based on New York Stock Exchange rules
for director independence. In 2017, the Board was led by an independent A diverse range of experiences and perspectives among our directors
non-executive Chairman and had four independent committees. Our supports the success of the Board in overseeing our complex, varied
Board believes that its independence and oversight of management are global businesses. When recruiting new directors, we look for leaders
effectively maintained through a strong independent Chairman or Lead from different backgrounds that combine a broad spectrum of experience
Director and through the Board’s composition, committee system and and expertise with a reputation for integrity. For complete selection
policy of having regular executive sessions of nonemployee directors. criteria and policies, please see our Corporate Governance Principles.
The Board has four committees: Currently, three of our 11 directors are women and two are minorities.

§ Audit Committee GOVERNANCE

§ Management Planning and Development Committee
Oversight for environmental, social and governance (ESG) issues
§ Nominating and Governance Committee ultimately resides with the Yum! Brands Board of Directors, briefed
§ Executive/Finance Committee through its Audit Committee on an annual basis. At the operational
level, the Chief Communications and Public Affairs Officer oversees the
Only independent directors serve on the Audit, Management Planning global reputation of Yum! and is responsible for shaping the
and Development, and Nominating and Governance Committees in Citizenship and Sustainability Strategy with the Vice President,
accordance with our Corporate Governance Principles. Government Relations and Citizenship & Sustainability and the senior
leaders who comprise our ESG Council (noted below) and through
cross-functional and expert working groups at the corporate and brand
A complete overview of corporate division levels:

governance at Yum! Brands is provided § Chief Communications and Public Affairs Officer
on our investor website and 2017 Proxy. § Vice President, Government Relations and
Citizenship & Sustainability
§ Vice President, Supply Chain
The Board has instituted an annual self-evaluation process led by the
Nominating and Governance Committee. This assessment focuses on the § Chief Food Safety Officer
Board’s contribution to the company and emphasizes those areas in which § Chief Food Innovation Officer
a better contribution could be made. In addition, our Audit, Management § Chief Transformation and People Officer
Planning and Development, and Nominating and Governance Committees
§ General Counsel/Associate General Counsel
conduct similar self-evaluations on an annual basis.
We also regularly convene an ESG Working Group that helps manage
ongoing efforts such as our materiality assessment, disclosures to
sustainability ratings and rankings agencies and our Global Citizenship
& Sustainability Report.

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 CITIZENSHIP > GLOBAL CITIZENSHIP & SUSTAINABILITY STRATEGY

GLOBAL CITIZENSHIP &

SUSTAINABILITY STRATEGY
Our Global Citizenship & Sustainability Strategy reflects Yum! Brands’ priorities for socially responsible
growth, risk management and sustainable stewardship of our food, planet and people.

Yum! Brands is committed to delivering on our promises to our most

important stakeholders — enhancing the customer experience, improving
restaurant and franchise profitability, increasing employee engagement As a globally franchised business, Yum!
and rewarding investors and shareholders. views franchisees as essential partners
Our Citizenship & Sustainability priorities will concentrate on advancing in the execution of our Citizenship &
progress and results in the most critical parts of our business: feeding
people and being transparent about what’s in our food, choosing Sustainability priorities concerning our
responsible suppliers, operating our restaurants efficiently, hiring and food, planet and people.
developing the best talent in an inclusive workplace and giving back to
our communities.

As a global restaurant company, we are well-positioned to address

numerous United Nations Sustainable Development Goals, such as Zero
Hunger, Decent Work and Economic Growth, Responsible Consumption
and Production, and Climate Action.

Food Planet People

We serve food people trust We grow sustainably We unlock potential

Food Safety Green Buildings Culture & Talent

Culture Energy Efficiency
Governance Water Conservation Diversity & Inclusion
Audits Waste Reduction
Training Community & Philanthropy
Supply Chain
Choice & Nutrition Animal Protein Ethics & Human Rights
Simple Ingredients Forest Stewardship
Meal & Beverage Options
Nutrients We Encourage
Nutrients We Limit

Responsible Marketing

Governance | Ethics | Transparency

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 CITIZENSHIP > STAKEHOLDER ENGAGEMENT

STAKEHOLDER ENGAGEMENT
Consistent, honest and transparent engagement with stakeholders is
foundational to our Global Citizenship & Sustainability Strategy.

We pride ourselves on being good listeners of both positive and critical After identifying representative individuals and organizations within
voices and consider engagement a key tool to keep abreast of food and each of these stakeholder groups, we worked with a third-party
restaurant industry trends and concerns. This helps us monitor risks, consultant to develop an engagement process that included surveys
especially in the areas of food safety, global nutrition, supply chain and interviews with both internal and external stakeholders. In total,
management and challenges to our franchise business model. As an 75 survey responses were gathered from Yum! and brand leaders and
example, we are currently focused on projects in the areas of animal conducted 31 interviews. These interviews gave us detailed insights
welfare, antibiotic use, deforestation (including palm oil), plastics use into the opportunities each group sees for Yum! Brands, as well as
and supply chain risks. risks we may face in key areas.

As a first step in revising our Global Citizenship & Sustainability Strategy, Our ongoing engagement focuses on working with stakeholders on
we went through a rigorous process in 2017 that resulted in identifying priorities, identified through our materiality assessment, that address
and prioritizing the following as key stakeholders: employees, customers, our three pillars of food, planet and people. There are many voices and
franchisees, shareholders and communities. We considered this process points of view relative to these issues and our goal is to always be as
to be foundational to assessing those issues most material to our business inclusive as possible. This engagement varies from one-time discussions
and then shaping our strategy and subsequent initiatives, including our to regular interaction while working on joint projects. The table on page
reporting processes. 11 provides examples of ongoing interactions with each of these groups
and issues that are most relevant to them.

In addition to ongoing dialogue with key stakeholders, we participate

in a wide range of trade associations. These relationships enable us to
work across our industry to address common challenges, opportunities
and public policy issues. Significant memberships include:

§ 100,000 Opportunities Initiative § Food Waste Reduction Alliance § National Restaurant Association®
§ Academy of Nutrition and Dietetics § International Food Information § National Retail Federation®
§ American Potato Trade Alliance Council Foundation § Paradigm for Parity
§ CEO Action for Diversity & Inclusion § International Franchise Association § Roundtable for Sustainable Palm Oil™
§ Conference for Food Protection § International Poultry Council § Serving Europe
§ Consortium for Graduate Studies § Institute for Food Technologists § USA Poultry and Egg Export Council
in Management § Louisville Sustainability Council § U.S. Chamber Business Councils
§ Corporate Responsibility Association § Multicultural Foodservice & § U.S. Green Buildings Council
§ Dairy Management Incorporated™ Hospitality Alliance™ § U.S. Roundtable for Sustainable Beef
§ Feast on Equality § National Chicken Council § Women's Foodservice Forum
§ Food Industry Asia § National Pork Board

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 CITIZENSHIP > STAKEHOLDER ENGAGEMENT

STAKEHOLDER TYPES OF ENGAGEMENT MOST IMPORTANT ISSUES

§ Direct Engagement § Choice & Nutrition

Advocacy Groups/NGOs § Organizational Membership § Energy, Emissions & Climate Change
§ Roundtable Events § Ethics & Compliance
§ Shareholder Meetings § Food Safety
§ Strategic Issue Partnership § Human Rights & Labor Practices
§ Sustainable Sourcing

§ Corporate & Employee Giving § Choice & Nutrition

Communities § Employee Volunteerism § Community & Philanthropy
§ Local Nonprofit Partnerships

§ Social Media § Choice & Nutrition

Consumers § Community & Philanthropy

§ Anonymous Hotline § Community & Philanthropy

Employees § Development & Training Programs § Culture & Talent
§ Employee Engagement Survey § Food Safety
§ Quarterly Global Employee Webcasts
§ Town Hall Meetings

§ Annual Franchise Conventions § Community & Philanthropy

Franchisees § Direct Engagement § Culture & Talent
§ Food Safety

§ Direct Engagement § Choice & Nutrition

Government Agencies § Yum! Political Action Committee § Ethics & Compliance
§ Food Safety
§ Human Rights & Labor Practices

§ Annual Conferences § Choice & Nutrition

Industry Associations § Industry Memberships § Culture & Talent
§ Energy, Emissions & Climate Change
§ Food Safety

§ Annual Report § Culture & Talent

Investors § Brand/Yum! Investor Days § Energy, Emissions & Climate Change
§ Direct Engagement § Ethics & Compliance
§ Earnings/Investor Calls
§ Ratings/Rankings & Indices

§ Annual Supplier Awards § Energy, Emissions & Climate Change

Suppliers § Restaurant Supply Chain Solutions™ § Food Safety
§ Supplier Audits § Waste & Recycling
§ Water

§ Leverage Experts on Councils § Ethics & Compliance

Thought Leaders § Participate in Research & Studies § Human Rights & Labor Practices

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 CITIZENSHIP > MATERIALITY

MATERIALITY

We recognize that our actions take place in 1. Identification of topics and stakeholders to consider in the assessment.
a global context that includes key stakeholders — We reviewed publicly reported materials of stakeholders and peers
regarding our industry and business, and as discussed issues with
employees, customers, franchisees, shareholders employees, investors and NGOs.
and communities.
2. Prioritization of stakeholder groups based on weighting relative
For this reason, our material issues ­— or the topics that comprise our to their importance to Yum! Brands and evidence gathering of
Global Citizenship & Sustainability Strategy and reporting — depend on internal and external documents to understand priority topics for
stakeholder input. Focusing on materiality allows us to make decisions Yum! and our stakeholders.
and set goals based on what matters to our stakeholders, which helps 3. Engagement through in-depth interviews and surveys with internal
build trust. Materiality also allows us to respond to global trends, such as and external stakeholders to gather information, including
changing consumer behaviors and increased investor interest in ESG opportunities and risks.
topics. In fact, nearly all of Yum! Brands’ top 10 shareholders were 4. Synthesis and Analysis of findings to aggregate and score
signatories to the UN Principles for Responsible Investment, a clear evidence so that a materiality matrix could be created to
sign that performance on ESG factors is driving investor decisions to document findings.
an increasing degree.
5. Validation of findings with key Yum! leaders.
In 2017, we enlisted a third party to conduct our first formal materiality 6. Stakeholder Engagement through interviews with internal and
assessment based on guidance provided by the Global Reporting Initiative external stakeholders to gather additional direct input to further
(GRI). This materiality assessment process determined our Global Citizenship prioritize key topics and develop final materiality matrix.
& Sustainability Report content through the following six steps:

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 CITIZENSHIP > MATERIALITY

The result of this process was a focused set of 10 topics, pictured in the diagram below. As the matrix shows, these topics —
led by Food Safety, Nutrition, and Energy, Emissions & Climate Change — are rated most important to Yum! Brands and most
important to our stakeholders. These material topics helped inform our Global Citizenship & Sustainability Strategy for 2017
and are prominently featured in this report. In line with best citizenship reporting practices, we plan on repeating our
materiality assessment every two to three years.

Yum! Brands
RELATIVE IMPORTANCE OF TOPICS
TOP 10 IN BOLD

Energy, Emissions & Climate Change

Human Rights & Labor Practices

Sustainable Sourcing Food Safety

Nutrition

Water Waste & Recycling

Importance to External Stakeholders

Animal Welfare

Ethics & Compliance

Information Security
& Data Privacy

Financial Performance
Menu Labeling
Packaging Community Investment
Talent Attraction,
Food Technology
Engagement & Retention

Responsible Marketing
Tax Strategy Lobbying & Public Policy

Importance to Yum! Brands

FOOD PLANET PEOPLE GOVERNANCE

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 CITIZENSHIP > ABOUT THIS REPORT

ABOUT THIS REPORT

This is Yum! Brands’ seventh Global Citizenship & Sustainability Report. We are committed
to disclosing our sustainability strategies and performance on an annual basis.

This report captures full-year sustainability results and progress primarily POLICIES & POSITIONS
from Jan. 1 — Dec. 31, 2017, with some data dating back to 2016. Our
previous report was released in 2016, covering our results and progress Transparency is foundational to the execution of our Global Citizenship &
for calendar year 2015. Sustainability Strategy. Following are policies, public positions and other
resources that are of interest to our stakeholders. Requests for additional
On Oct. 31, 2016, we completed the spinoff of our China business. Today, information can be made to [email protected].
Yum China is an independent, publicly traded company on the New York
Stock Exchange under the ticker symbol YUMC. Yum China’s commitment § Corporate Governance Principles
to sustainability continues and their 2017 report can be found on their § Genetically Modified Foods Statement
company website.
§ Global Code of Conduct
We also announced our strategic multi-year transformation plans to § Global Position on Good Antimicrobial Stewardship
strengthen and grow our brands around the world. At the same time, we
embarked on a journey to develop a Global Citizenship & Sustainability § Human Rights and Key Supply Chain Commitments
Strategy aligned with our transformation plans, which included a § Human Rights and Labor Practices Policy
formal materiality assessment, stakeholder engagement and the
§ Palm Oil Policy
collection of progress to date against existing goals and programs,
culminating in the identification of new priority areas of food, planet § Paper-based Packaging Sourcing Policy
and people.
§ Political Contributions and U.S. Government Advocacy Policy

We value and welcome feedback from all interested stakeholders. Please § Sustainable Animal Protein Principles
send comments or questions about this report to [email protected]. § Tax & Trade Policy

This report has been prepared in accordance with the GRI Standards: § U.S. Supplier Code of Conduct
Core option. We recognize GRI as the most credible standard for reporting § Conflict Minerals Policy
on environmental, social and governance issues reflecting the results of
a materiality assessment. The GRI Content Index outlines the indicators
included in this report and a link to their location in the report. Our GRI
Content Index can be found here. All restatements are noted where
they appear throughout the report. We do not currently seek external
assurance for our report.

We gather data directly for our corporate operations and company-owned

restaurants. Data for the majority of our operations is supplied voluntarily
by our franchisees through an annual global survey process. As a result,
the scope for data presented in this report varies and is noted accordingly.

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 IN THIS SECTION
Food Dashboard................................... 16
Food Safety
Culture..............................................17
Governance.......................................19
Audits................................................20

FOOD Training.............................................21
Choice & Nutrition................................ 22
Strategy.............................................22
Dietary & Lifestyle Needs..................23
Nutrients We Encourage...................24
Nutrients We Limit............................25
Responsible Marketing........................ 26
 FOOD > DASHBOARD

FOOD
We Serve Food People Trust

GOALS OPPORTUNITIES & CHALLENGES

FOOD SAFETY § Ensuring that food safety processes are aligned with an evolving,
Maintain an industry-leading, safe, high-quality food franchise-focused business model
supply and customer experience. § Providing consumers with more access to balanced food choices that
are less processed or modified
CHOICE & NUTRITION § Labeling menu offerings clearly and marketing responsibly to meet
§ Remove artificial colors and flavors from core food consumers’ desire for increased transparency
ingredients by 2020*
§ Remove all artificial trans fat from food ingredients KEY TAKEAWAYS
by 2020*
§ Food safety is our number one priority. A culture of food safety resonates
§ Offer 20 percent of meals consistent with one-third from the top down into our restaurants and among our franchise
Recommended Daily Allowance (RDA) or foreign partners and employees. Audits of our suppliers, distributors and
equivalents by 2020 restaurants are conducted regularly.
§ Seek continuous improvements in the nutrition of our § Yum! Brands deployed a new global nutrition strategy that emphasizes
food that are aligned with the World Health Organization transparency of ingredients, sodium reduction, simplified ingredients
(WHO) to improve health and reduce chronic disease with increased vegetarian, high-protein, lower-calorie, and other
§ Provide consumers with convenient access to food offerings that promote a balanced diet.
information regarding menu labeling and allergens § Choice is important at Yum! Brands. We offer millions of menu items
every day and make it easy for consumers to customize orders to fit
RESPONSIBLE MARKETING their dietary and lifestyle needs.
Limit marketing communications to children under 12 § We are committed to transparency and responsible labeling. Each of our
brands publicly shares its nutritional profile, allergens and ingredients of
its core menu items, which consumers can easily access online.

MATERIAL ISSUES KEY STAKEHOLDERS

§ Food Safety § Consumers
§ Nutrition § Employees
§ Responsible Marketing § Franchisees
§ NGOs
§ Suppliers

*In key markets, excluding co-branded ingredients and beverages

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 FOOD > SAFETY

FOOD SAFETY CULTURE

Trust in Every Bite

Our first priority — confirmed by stakeholders as part of the materiality assessment process —
is to maintain an industry-leading, safe, high-quality food supply from farm to fork.
Serving food that is prepared in a clean and sanitary environment, and Food safety starts with our leadership team and cascades to our franchise
honestly presented, is a responsibility that we take seriously. To deliver on partners and restaurant employees. Our approach is a holistic one, ensuring
our vision of “Trust in Every Bite,” Yum! upholds an industry-leading food that food safety is considered at every step along the supply chain.
safety program and stringent food safety standards that mitigate food
safety risks for consumers who visit our more than 45,000 restaurants Our Food Safety Standards cover areas where key risk factors exist, such as
across more than 135 countries and territories. employee health and hygiene, product handling, product temperature
management, cross-contamination and more. While these standards do
not differ among brands, food safety risks do differ from brand to brand
and across global markets.

FARM TO FORK

1 FARM 2 PROCESSING
§§ Produce Standards §§ Supplier Audit Standards
§§ Wholesome Food §§ Auditor Certification & Approval
Animal Program §§ Premiums
§§ Regulatory Affairs
§§ Crisis Management

3 DISTRIBUTION 4 DELIVERY 5 RESTAURANTS

§§ Supplier Audit Standards §§ Supplier Audit Standards §§ Food Safety Facilities &
§§ Auditor Certification & Approval Equipment Standard
§§ Food Standards Compliance
Check (FSCC)
§§ Restaurant Food Safety Standards
§§ Restaurant Pest Standard

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 FOOD > SAFETY

STAYING CURRENT ON EMERGING REGULATIONS

Yum! does not produce or manufacture ingredients in our food. Therefore,

regulations that affect agricultural commodities and food products apply
more directly to our local franchise partners, distributors or suppliers than
they do to Yum!. We invest significant time and resources to validate that
our distributors and suppliers meet and comply with applicable regulations
and stringent food safety requirements set forth by Yum! and the industry.

For example, the U.S. Food Safety Modernization Act (FSMA) impacts our
business in several ways that have resulted in suppliers making significant
food safety changes, as well as countries revising their food codes. We
work closely with distributors, importers and suppliers in these locations
to make sure they will be compliant by FSMA enforcement dates.
departments to adopt the model U.S. FDA Food Code. This enables
We believe that proactive food safety and quality assurance requires consistent execution of science-based food safety practices to protect
maintaining a constant cycle of reviewing and modifying standards, consumer health and mitigate risks. Outside the U.S., Yum! and our
introducing and deploying new systems, improving upon existing systems, franchisees also engage with regulators and policymakers in their
coaching and compliance monitoring, and staying current on emerging respective markets.
food safety risks. As part of this commitment to continuous improvement,
we conduct regular risk analyses and benchmark against other organizations
within the restaurant industry to advance our food safety standards in
“Effective management of food safety
a controlled, data-driven, proactive and scientific way. We closely track
current and emerging food safety issues that affect our business. If changes risk starts with a tremendous culture
occur in food safety regulation, science or technology, we immediately of awareness about the primacy of food
assess issues and adjust our strategy accordingly.
safety and expectations for high personal
ENGAGING GLOBAL STAKEHOLDERS behavioral standards — all supported by
strong restaurant surveillance routines
In the U.S., we engage with stakeholders, such as the Food and Drug and appropriate levels of training on a
Administration (FDA), Centers for Disease Control and Prevention (CDC)
and state health departments, to verify our food safety management
constantly refreshed basis.”
approach is aligned with their expectations and to build their knowledge CLIVE NEWTON — Yum! Chief Food Safety Officer
of Yum!’s food safety programs. In addition, Yum! influences state health

We intentionally engage other companies and suppliers in our industry

to help build a collective culture of food safety and share best practices.
As an example, for the past seven years Taco Bell has hosted a meeting
of industry peers on emerging issues in food safety. The meeting is
held during the Produce Marketing Association’s annual gathering,
making it easy for companies to attend. Among the invited speakers
have been experts on foodborne illness law and representatives from
the United States Department of Agriculture (USDA) and CDC. By sharing
knowledge with others, we position ourselves as a leader and elevate
food safety practices industrywide.

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 FOOD > SAFETY

Food Safety Governance

Creating Broad Accountability

As we have transformed our business to a predominantly franchised partners with clear metrics, goals and resources to successfully integrate
model — operating fewer company-owned restaurants in fewer markets our food safety policies and standards and deliver on our compliance
— we have also adapted our food safety governance processes. We focus programs. This transition means that our franchise partners have more
on putting the right people with the right capabilities in place at the global responsibility to communicate our brands’ food safety requirements
brand level so that individual business units can empower franchise to their organizations as they make sense for their situation.

FOOD SAFETY
GOVERNING BODIES
Our food safety governing bodies certify that regulatory compliance, legal requirements and Yum!’s policies and
standards for food safety are met and maintained by franchise partners, suppliers and local business unit teams.

BOARD OF SENIOR
DIRECTORS MANAGEMENT OPERATIONS COMPLIANCE

Audit Committee Compliance Global Food Safety Council Internal Audit Team
Responsible for: Oversight Committee A group of senior food safety, Responsible for independently
§§ Risk Management The Yum! executive group operations and supply chain evaluating the adequacy and
responsible for: leaders led by our Chief effectiveness of:
§§ Annual Performance
§§ Maintaining oversight of Food Safety Officer. Their §§ Yum!’s Internal Control
Assessments
risks including food safety responsibilities include: Processes
and other enterprise risks §§ Food Safety Policies §§ Compliance with Yum!
§§ Food Safety Standards Policies & Procedures
§§ Quality Assurance §§ Compliance with Food Safety
Laws & Regulations
§§ Processes & Measurement
Systems
§§ Awareness Initiatives
Around New Food Safety
Science
§§ Emerging Best Practices in
Risk Mitigation

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 FOOD > SAFETY

RESPONDING EFFECTIVELY TO CRISIS

The Yum! Brands Crisis Management Program is dedicated to anticipating, Most of our franchise partners have defined crisis management teams,
identifying and managing potential emerging food safety issues at the crisis response procedures and crisis communication plans that clearly
local, regional and global levels to protect the health and safety of our outline how to communicate with their business unit and brand and
employees and consumers. In the event of a crisis, such as foodborne what actions to take to mitigate a food safety issue.
illness or product contamination, Crisis Core Teams (CCTs) are immediately
activated to support the restaurant, franchisee or business unit. CCTs are When it comes to communicating about a crisis with the public, we
identified proactively before a crisis event occurs and each member knows maintain a Global Crisis Communications Repeatable Model that serves
their role and responsibility during an active crisis. as a playbook for responding swiftly and with care. An important aspect
of our approach is listening for and responding to crises on social media.
Key leadership and decision-makers receive training to become CCT Our global social media monitoring system — the Social Hive, along with
members as part of Yum! Brands Crisis Management Program. Our a community outbreak detection program — is active 24-hours-a-day,
online crisis training course and web application tools allow CCT members seven-days-a-week and serves as an early warning system. The Social
to quickly identify and successfully manage crises within the Yum! Brands Hive tracks all mentions of Yum!, KFC, Pizza Hut and Taco Bell in more
system. This crisis training is regularly reviewed and updated by internal than 45 languages. This system also alerts the appropriate contacts
and external stakeholders, including medical and epidemiology experts, if potential issues surface and assists in intelligence-gathering and
based on new and emerging food safety science and best practices. communications planning.

Food Safety Audits

Creating Safety through Oversight

Our food safety auditing program is designed to promote effective control and risk
mitigation throughout our global supply chain.
Supplier and distributor audits are conducted by certified auditors who quality assurance team manages food safety and quality monitoring
undergo training and calibration. Auditors must be able to accurately and of suppliers in both our processing facilities and our restaurants.
competently conduct food safety audits to minimize scoring variability
and instill trust within the audit process. The auditing plan and audit visit frequency for each supplier depends on the
results of our supplier risk assessment, performance level and perceived
We select our suppliers based on audit performance, risk assessments, risk factors, including people and food safety capabilities. Suppliers that
people capability and key performance indicators for food safety preventive are audited receive feedback on their performance to drive continuous
controls, including Good Manufacturing Practices (GMPs), Hazard Analysis improvement and mitigate risk from defined food safety hazards. Each
Critical Control Point (HACCP), pest control, sanitation, operations and facility year, Yum! conducts approximately 3,000 food safety supplier audits.
management, recall/withdraw plans and protection from contamination.
Suppliers are also subject to quality systems audits that verify their
Our Supplier Tracking Assessment and Recognition (STAR) quality systems and processes meet Yum! or legal standards for food safety
system facilitates a collaborative exchange of food safety information and/or quality. Our distributors are subject to the same standards and
among suppliers, distributors and the franchisee community to expectations of food safety as our suppliers and receive distribution
provide compliance and performance visibility. Each Yum! division audits that cover transportation and warehouses.

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 FOOD > SAFETY

Third-party food safety professionals conduct Food Standards Compliance hygienic and food-safe restaurant design. In 2017, more than 80,000
Check audits at our restaurants twice per year at a minimum to promote restaurant food safety audits were completed across more than 45,000
compliance with our food safety standards and local regulatory requirements. restaurants, bringing the total number since 2015 to over 230,000 audits.
In addition, restaurants must meet facility and equipment standards for

Food Safety Training

Engaging Every Employee on Food Safety

Employees are integral in maintaining the highest food safety standards in our restaurants.

Every Yum! division has technical and leadership capabilities in food

safety to actively manage and effectively execute Yum! Food Safety
Policies and Standards, and all Yum! restaurant employees are trained
in food safety. Our Food Safety Standards set minimum requirements
on the safe production of food using science-based data and regulatory
requirements as a foundation. These standards guide employee training
and are prepared in collaboration with food safety and quality assurance
experts from across our organization so that food safety is consistently
executed across our brands.

All restaurant employees worldwide receive food safety training as part

of the onboarding process, as well as regular, recurring food safety training.
This instruction focuses on illness prevention, personal hygiene, hand
washing, temperature management and more.
YUM! PRODUCE SAFETY
ADVISORY COUNCIL
The Yum! Produce Safety Advisory Council, an internal
advisory group led by Taco Bell which continues to
be an industry leader in produce safety, is made up
of independent academics, competitors, suppliers,
microbiologists, entomologists and other industry
experts to share best practices and the latest science
and technology in food safety in produce. The council
brings these stakeholders together and asks, “What
are we doing now, how can we do it better and what
can we do collectively in the future to keep the produce
in our supply chain safe?”

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 FOOD > CHOICE & NUTRITION

CHOICE & NUTRITION

Making Progress on Nutrition

Yum! Brands listens to our consumers, so we know they want options that can help them
create balanced meals when visiting our restaurants. We’re sharing more information than
ever before about where our food comes from, what goes into it and how it’s made.
One of the most material aspects of our business is to provide options § Plant-Forward and Simple: Consumers are looking for ways to
that fit a diverse range of lifestyles, eating habits and preferences across incorporate more plants (fruits, vegetables, whole grains) into their
the more than 135 countries and territories that we serve, all while diets as well as options that are less processed. We are dedicated to
keeping in mind a balanced diet. Yum! defines a balanced diet as that incorporating fresh produce into our menus wherever possible and
which contains a wide variety of foods, including grains, rice and simplifying ingredients across all our brands.
cereals, vegetables, dairy, meat and beans, fats, fruits and optional § Gen Z: When it comes to the now-adolescent generation — “Gen Z”
calories from sweets. — and food, they aren’t just simply thinking about healthy diets and
simpler, fresher ingredients. They are also considering what food
Our team of expert nutritionists and food innovation professionals drive means to them personally, for society and for the planet. Gen Z is
the strategy for nutritious choices and ingredient improvements across asking the tough questions such as, “How will the food choices I make
KFC, Pizza Hut and Taco Bell. This strategy focuses on making our products impact me and others? Where do the ingredients in my meal come
more balanced, giving customers choices and being transparent about from and how are they grown?” Gen Z is focused on the experience of
what’s in our food. While each brand has its own nutrition standards and what they eat and making sure that it not only tastes good, but that it
accountability plans, we are working toward consistency in the nutritional translates to positive impact.
quality of our food with new Global Nutrition Standards and Guidelines.
§ Flexitarian Lifestyles: Consumers are trying to eat better, but
LISTENING TO CONSUMERS’ CHANGING NEEDS AND HABITS they also want choices that leave room for indulgence. One day,
for example, a consumer might be in the mood for a vegetarian
Food- and diet-related illnesses are on the rise, resulting in growing choice, and the next, his or her main priority may be getting a
consumer awareness and concern about what they eat. This and other high-protein meal. We make sure to provide a range of nutritious
factors are changing consumers’ eating habits, needs and desires at options that accommodate the increasingly flexible eating habits
a rapid pace. We conduct regular market research to ensure that our of our consumers.
business is aligned with these shifts in preference and lifestyle. As a
baseline, we know our consumers want safe, quality food that doesn’t
compromise on flavor. Current trends and considerations that we are “The theme we’re seeing with consumers is
tracking closely include: that they want to eat better — but they also
§ Value: Our consumers seek delicious food that is affordable. While want choices. It’s all about finding a balance
they want nutritious options on our menus, they expect those options
between healthy options and indulgence.
to be offered at a value.
We want to offer menu items that provide
§ Snacking: People are snacking more often and eating smaller portions
throughout the day. Our brands are actively working to make our menus choices for everyone and every mood.”
more customizable, so if a consumer wants a convenient snack instead LIZ MATTHEWS — Taco Bell Global Chief Food Innovation Officer
of a full meal, they have plenty of options from which to choose.

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 FOOD > CHOICE & NUTRITION

Dietary & Lifestyle Needs

We help consumers “hack” our menus to customize their order to fit their dietary and lifestyle needs.
For instance, Pizza Hut allows every customer to customize their pizza with a variety of crusts and toppings. With Taco Bell’s Fresco Menu, consumers can easily
replace standard ingredients with lower-calorie options and at participating KFC restaurants consumers have the choice of grilled chicken over fried chicken.

High-Protein §§ Protein-centric menu with chicken § Provides high-protein offerings across 40 percent § Power Menu includes high-protein bowls
breasts, drumsticks, whole wings, thighs, of its permanent core pizza and wings menu and burritos under 510 calories and over
strips and other options, including grilled domestically and internationally 20 grams of lean protein
chicken, at participating restaurants
Vegetarian § Vegetarian meals can be made out § With a range of four to eight vegetables as § First quick-service restaurant to be
of out of a number of delicious sides, toppings, Pizza Hut offers a variety of certified by the American Vegetarian
while vegans can choose from corn, vegetarian options that can account for more Association ™ (AVA)
potato wedges or, in the U.S., than 30 percent of its permanent core offerings. § 13 AVA-certified vegetarian menu items
green beans In certain countries like India, vegetarian
options account for more than 50 percent of § 38 vegetarian ingredients (28 of which
the menu. Examples of vegetarian core pizzas are vegan)
are Cheese Lovers, Veggie Lovers and Create § Over 8 million vegetarian customizable
Your Own combinations, where consumers can combinations
choose a wide variety of fresh vegetables for
pizza toppings or at our salad bar.
Made Without § Sides and dressings, including green § Gluten-free pizza made with Udi’s Certified § 36 ingredients made without gluten
Gluten* beans, mashed potatoes, corn and cole Gluten-Free crust and select gluten-free Learn more
slaw made without gluten toppings
Learn more § Cheese-only and cheese-and-pepperoni gluten-
free pizzas are prepared using procedures
certified by the Gluten Intolerance Group
§ Markets that have launched gluten-free pizzas
include Australia, Canada, the U.K. and the U.S.
Customizable §§ Kentucky Grilled Chicken at § “Create Your Own” menu has nearly endless § Almost any item can be customized to
participating restaurants as an different topping combinations, including a “Fresco Style”
alternative to the traditional fried variety of crusts, cheeses, sauces, vegetables, § Power Menu allows for customizing
options (and many international fruits and proteins to incorporate lean proteins and
markets offer salads) § WingStreet Wings can be customized with nutrient-rich produce
§ Meals can be tailored with a variety of eight different flavors § All menu items can be customized to fit
tasty sides § Pizza Hut U.S. developed a Restaurant Quality within someone’s lifestyle
Food Microsite at restaurantquality.pizzahut.com § Make it Meatless by replacing meat with
to promote increased transparency and choice beans on almost any menu item
*Yum! Brands foods are not certified “gluten-free,” nor do we claim to be gluten-free across our brands. Special menu items made without gluten are available in the U.S. only.

TACO BELL’S “FOOD FOR ALL” JOURNEY

Taco Bell’s “Food for All” journey aims to create a menu that offers the choices
its consumers are asking for — from low-calorie and vegetarian to high-protein.
Learn more about the Food for All journey in this video.

Watch video

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 FOOD > CHOICE & NUTRITION

Nutrients We Encourage
Promoting Nutrition While Delivering on Taste

We encourage balanced options, while still offering food that delivers on flavor and craveability.
Our product development teams and suppliers follow nutrition and ingredient guidelines when beginning new product development.
These guiding principles help to ensure that new menu items meet our nutrition targets and standards where possible. We also continue to
expand menu offerings with more gluten-free, fruit- and vegetable-forward, lower-calorie and high-protein menu items and ingredients.

§ A variety of vegetable sides are offered, including green beans, mashed potatoes, corn and
cole slaw, each containing 10 grams of fat or less per serving.
§ In the U.S., KFC continues to explore opportunities for improving the nutritional makeup of
kids’ meals. The brand now offers a variety of kids’ meals under 300 calories.
§ KFC in the U.K. and Ireland has a suite of lighter menu options, including its Rice Box menu
line that replaces fries with rice.
Kentucky Grilled Chicken and green beans § Participating KFC restaurants offer Kentucky Grilled Chicken (KGC) for consumers looking for
products that are lower in calories, depending on the size of the piece. More specific nutritional
information can be found here about KGC in the U.S. and here about KGC in the South Pacific
and Africa regions.
§ KFC Australia has developed a Honey Mustard Baked Tender Twister that is lower in calories, fat
and sodium to meet specific nutrition criteria.

§ Select international markets will launch a new “artisan” crust and new topping combinations
that offer more vegetables and fresh ingredients by 2019.
§ In 2017, Pizza Hut U.K. launched vegan cheese options as well as gluten-free pizzas — options
which were already offered in Australia, Canada and the U.S.
§ The brand offers a salad bar and delivery salads packed with fresh produce in almost every
country around the world.
Udi's® Gluten-free Pizza at Pizza Hut

§ Nearly three-quarters of menu items are less than 500 calories, and over half of Taco Bell’s
breakfast menu is less than 400 calories.
§ Ordering “Fresco style” replaces cheeses, mayo-based sauces, reduced-fat sour cream and
guacamole with freshly prepared pico de gallo, at no additional cost. This switch can provide
about a 25 percent reduction in fat. The signature Fresco Menu offers seven items with less
than 350 calories and 10 grams of fat.
§ The Power Menu includes high-protein burritos and bowls, all under 510 calories.
Taco Bell’s 7-Layer burrito
§ Taco Bell is the first quick-service restaurant to offer menu items certified by the American
Vegetarian Association.

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 FOOD > CHOICE & NUTRITION

Nutrients We Limit
Simplifying Our Ingredients
Our nutrition strategy focuses on simplifying ingredients by removing artificial flavors, colors,
preservatives and additives such as trans fats, reducing sodium and lowering calories and fats.
We’ve made measurable progress toward our goals to eliminate 100 percent well as lowering the sodium content in its cheeses globally by between
of partially hydrogenated oil, artificial flavors and artificial coloring by 2020. 25 and 35 percent. Pizza Hut has provided country business units the
In 2017, based on data representing 75 percent of our global restaurant option to choose between standard and low-sodium options, and
count, an estimated 97 percent of food items were free of partially markets in Asia, Australia, Canada, Europe and Korea have opted in.
hydrogenated oil, an estimated 70 percent were free of artificial flavors,
and an estimated 78 percent had removed artificial coloring. Since 2008, Taco Bell has reduced sodium by 15 percent on average
across the menu, the equivalent of 1.5 million pounds of salt removed
A major focus area has been reduction of sodium across our brands. each year from consumers’ diets. By 2025, Taco Bell will expand that
Currently, 15 percent of Pizza Hut pizzas have just one-third of the daily commitment to an additional 10 percent, for a total of 25 percent
recommended dietary allowance for sodium, and 20 percent of its sodium reduction across the menu and is well on its way to achieving
pizzas will meet that criteria by 2020. Over the last five years, Pizza Hut this goal. Meanwhile, KFC works with suppliers and nutrition experts to
has lowered the sodium content in all its core dough crusts globally by find opportunities to reduce sodium in its menu items where feasible.
25 percent, the lowest point possible without affecting functionality, as

NO
ARTIFICIAL § In the U.S., all KFC menu items are free of food dyes (with the exception of beverages and third-party products). In addition,
TRANS FATS artificial colors and flavors will be removed from our core products by the end of 2018.
(KFC U.K.) § KFC U.K. products are free of artificial trans fats. The brand in the UK met its goal of removing artificial colors and flavors from
its own brand ingredients by 2017.
§ KFC China launched a new mayonnaise recipe for burgers that reduced fat content from 70 to 35 percent.
§ Since 2010, KFC Australia has worked across its core menu offerings to reduce sodium, and in 2012 changed its cooking oil
from sustainably sourced palm oil to locally sourced high-oleic canola oil, and also introduced side salads options as well as
permanent grilled/baked menu choices. KFC Australia continues to look for ways in which it can make further improvements.
§ KFC Australia products are free from artificial trans fats and is working to remove all artificial colors and flavors by the end of 2018.

NO
MSG, BHA/ § In 2015, Pizza Hut U.S. became the first national pizza company to remove artificial flavors and colors from its core pizzas
BHT OR HIGH and WingStreet products, and is committed to the same goal internationally by 2018. As of 2017, Pizza Hut had removed
FRUCTOSE approximately 72 percent and 78 percent of artificial flavors and coloring, respectively, from all food ingredients.
CORN SYRUP § Pizza Hut domestically and internationally has eliminated partially hydrogenated oils (PHOs) from its entire menu. Pizza Hut
U.S. has eliminated MSG from its core menu and BHA/BHT from pepperoni.
§ Pizza Hut U.S. adds no sugar or oil to its pizza marinara sauce, and its cheese is made from 100 percent whole milk mozzarella.

NO
ARTIFICIAL § In 2015, Taco Bell removed all artificial flavors and colors, replacing them with natural alternatives. The brand also removed
FLAVORS & high-fructose corn syrup and partially hydrogenated oils (also known as artificial trans fats) from its food. These simplifications
COLORS impact more than 95 percent of the Taco Bell menu, not including beverages and co-branded items.
§ In 2017, Taco Bell eliminated the XL 40 oz. soda cup size, helping consumers remove 800 million grams of sugar and
approximately 3.2 billion calories from their diets each year. It also replaced three full-calorie beverages with three
zero-to-mid-calorie options, equivalent to a 15 percent reduction in added sugar across the beverage portfolio.
§ By the end of 2018, Taco Bell will remove preservatives and other additives from its food, where possible.
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 FOOD > RESPONSIBLE MARKETING

RESPONSIBLE MARKETING
A Commitment to Transparency

We are committed to responsible labeling and advertising practices across our brands. We work closely
with franchisees worldwide to promote transparency about our food, both in our restaurants and online.
Yum! Brands believes in responsible labeling and stays abreast of labeling

NUTRITION
regulations affecting our brands across the globe. In many countries,
government guidelines inform our labeling and nutrition requirements
per individual portion. Guidelines are already in place in Australia, Canada,
Korea and the U.K., and appear to be on the horizon in Peru and Saudi AT YOUR FINGERTIPS
Arabia. All of these countries have implemented labeling guidelines for
(U.S. only)
sodium, fat and calories per portion specific to local regulations.

In the U.S., we comply with all federal regulations and guidelines Nutrition Calculator
for nutrition and menu labeling, such as the U.S. Nutrition Labeling Interactive Nutrition Menu
Requirements set forth by the Food and Drug Administration, New York
City’s sodium labeling requirements and the Safe Drinking Water and
Toxic Enforcement Act (California Proposition 65).

Our brands’ websites and social media channels are an important way in Nutrition Calculator
which we educate consumers and other stakeholders about our progress Interactive Nutrition Menu
against nutrition goals and the nutritional profile of our products.
Taco Bell is a leader in this area as one of the first quick-service restaurants
to voluntarily post its full nutrition information online in 2005. Today,
all three of Yum!'s brands publicize nutrition information for their full
U.S. menus and have nutrition calculators available online or through Nutrition Calculator
mobile apps. Pizza Hut and Taco Bell also list nutrition information for
regional and limited-time-offer menu items. These tools list all ingredients,
Interactive Nutrition Menu
food allergens and nutrition for each permanent menu item, making it
simple for consumers to understand what’s in their food, customize
their orders and make conscious choices about what to eat.

ADV ERT ISING TO CH ILDR EN

We understand that parents of young children have evolving preferences § Taco Bell was the first national quick-service restaurant chain to
about the food they feed their families. While kids’ meals are not a focus discontinue kids’ meals and toys in 2013.
area for Yum! Brands and represent a very small percentage of our business, § KFC Australia has been engaged with the Australian Quick Service
we are mindful of how we market to children and work to increase Restaurant Industry Initiative for Responsible Advertising and
transparency around the ingredients we serve to our younger consumers. Marketing to Children as a founding member since 2009 and
In the U.S., we do not advertise on television programs specifically no longer targets advertising campaigns directly at children.
aimed at children under 12 years old and encourage markets outside
the U.S. to refrain from it as well. § KFC Australia and Africa have removed toys from kids’ meals.

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 IN THIS SECTION

Planet Dashboard................................. 28
Green Buildings................................... 30
Energy Efficiency...............................31
Water Conservation..........................33
Waste Reduction...............................36

PLANET Supply Chain........................................ 38

Animal Protein..................................39
Forest Stewardship............................41
 PLANET > DASHBOARD

PLANET
We Grow Sustainably

GOALS
SUPPLY CHAIN
GREEN BUILDINGS Engage in building a responsible supply chain that
Design, build and operate green buildings to be protects forests, respects human rights, supports animal
measurably more sustainable using green building welfare and enables good antimicrobial stewardship.
standards to drive reductions in energy consumption, § Source 100 percent of palm oil used for cooking from
water use, GHG emissions and waste, all while reporting responsible and sustainable sources by the end of 2018
annual progress. § Purchase 100 percent of our paper-based packaging with
§ Reduce average restaurant energy and GHG emissions fiber from responsibly managed forests and recycled
by an additional 10 percent by the end of 2025 sources by the end of 2020
§ Reduce average restaurant water consumption by an § Continue our commitments in the U.S. to source chicken
additional 10 percent by the end of 2025 with a focus raised without antibiotics important to human medicine
on high water-stress areas § Seek continuous improvement and establish a reporting
§ Divert 50 percent of back-of-house operational waste, mechanism to demonstrate our ongoing commitment
measured by weight, generated in our U.S. restaurants to sustainable production systems that protect human,
by the end of 2020 animal and environmental health as stated in our
holistic Sustainable Animal Protein Principles & Good
Antimicrobial Stewardship Program

MATERIAL ISSUES KEY STAKEHOLDERS

§ Animal Welfare § Community Members
§ Energy, Emissions § Employees
& Climate Change § Franchisees
§ Sustainable Sourcing § Franchisee Employees
§ Waste & Recycling § Investors
§ Water § NGOs
§ Suppliers

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 PLANET > DASHBOARD

OPPORTUNITIES & CHALLENGES

§ Responding to changes in regulation and operational costs related to the challenges of industry waste, including lack of infrastructure, lack of
GHG emissions and energy consumption throughout our value chain influence over consumer behavior and challenges with industry regulation
§ Evaluating and implementing new technologies and energy sourcing § Identifying regions of operation in which water scarcity issues are
solutions that can reduce energy use and emissions high and addressing water use
§ Further understanding and addressing increasing levels of concern about § Understanding and addressing the environmental and social risks
associated with our key supply chains including palm oil, beef,
chicken and paper

KEY TAKEAWAYS
§ All of our environmental initiatives — from building improvements § Yum! restaurants work to recycle used cooking oil, cardboard and
to efforts to source responsibly sourced timber and palm oil — are plastic waste, and we are an industry leader in donation of wholesome,
examined through the lens of reducing GHG emissions and addressing surplus food from our restaurants, with 6.9 million pounds of food
climate change. donated in 2017.
§ More than one-third of new restaurants are meeting the requirements § Yum! Brands works to minimize risk throughout our supply chain by
of our green building efforts that provide guidelines for reducing energy requiring that suppliers follow our Supplier Code of Conduct and by
and water consumption and constructing buildings to leave a smaller engaging in periodic risk assessments and audits.
footprint on the planet. § Our Sustainable Animal Protein Principles guide our decisions regarding
§ At restaurants worldwide, more efficient equipment — as well as tools that food safety and quality, animal health, environmental stewardship, food
allow restaurants to monitor and manage their consumption — are leading security and supplier relationships related to animal protein sourcing.
to lower energy use and, therefore, lower emissions. Since 2005, these § We are aware of the rising global threat of antimicrobial resistance and
improvements have saved an estimated 4.3 billion MWh of electricity. support the One Health approach by working closely with suppliers
§ Taking into account the needs of our diverse global markets, Yum! on responsible, judicious use and reducing the use of antimicrobials
restaurants reduce water through smart building practices — such important to human medicine where possible.
as high-efficiency irrigation and low-flow fixtures — that will save an § By committing to source 100 percent of palm oil and paper-based
estimated 1.3 billion gallons of water from 2017 initiatives alone. packaging from sustainable sources by the end of 2018 and 2020,
respectively, Yum! Brands is helping protect forests and the ecosystems
and communities they support.

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 PLANET > GREEN BUILDINGS

GREEN BUILDINGS
Smarter & More Sustainable Restaurants

Every day across the world, seven new Yum! Brands restaurants open for the first time.
That’s seven opportunities a day to think smart about building construction.
Yum!’s green building strategy is influenced by our belief that we have a A FLEXIBLE APPROACH
responsibility to reduce our environmental impact and the resulting GHG
emissions that contribute to climate change. Approximately 38 percent Our standards are designed to recognize franchisees for what they can
of new company- and franchisee-owned restaurants follow Yum!’s green do, not what they can’t. We recognize that policies, utility pricing, approach
building standards. As a result of green building activities in 2017, we feasibility and consumer preferences may differ greatly among our
expect to save an estimated 124,000 MWh of electricity and $18.3 million various markets, making various building standards more or less
across the Yum! system in 2018. difficult to achieve. For this reason, brands and markets may adapt our
recommendations to fit their unique workflows. KFC has done exactly
We believe in building restaurants that not only allow us to serve this, creating a program using its own brand development standards
great-tasting food, but also are employee- and customer-friendly, produce referred to as KFC — Building Green. Building Green uses its own credit
fewer emissions and waste and complement the natural environments system to help KFC markets select credits that will make the greatest
in which they operate. These goals are frequently aligned. For example, impact for the brand.
better cooking equipment prepares food for customers faster. It also uses
less power and generates less heat, which means less air conditioning is Our green building strategy focuses on new buildings, which allows
required. This reduces GHG emissions and saves franchisees money at the us to build green from the start. We aim to make adoption easy by
same time. incorporating efficient operational features into restaurant templates
and hosting workshops to explain the financial and environmental
Yum! Brands has long maintained rigorous standards for the design and paybacks that are within franchisees’ reach. Over time, lessons learned
construction of green buildings that aim to reduce energy consumption are incorporated into remodels and existing restaurants. In 2017, Yum!
and GHGs. Our standards, which guide restaurant development and and our franchisees invested $25 million in innovative technologies
renovation, incorporate relevant aspects of the U.S. Green Building for new building construction to reduce energy usage and associated
Council’s globally recognized green building program, Leadership in GHG emissions.
Energy and Environmental Design (LEED) certification. We've tailored this
globally recognized green building standard to the unique demands of
our restaurants. We take into consideration green building methods,
including energy-efficient equipment and practices, as well as guidance
38%
on minimizing urban heat islands, placing new restaurants near public
Estimated new restaurants
transit services, using sustainable construction materials and educating built using certified green
both employees and consumers on green features. building practices

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 PLANET > ENERGY EFFICIENCY

Energy Efficiency
Great Taste with Less Impact
Yum! recognizes the global threat of climate change and supports the goals of the Paris Agreement.
We also acknowledge our own responsibility to reduce our environmental impact and resulting
GHG emissions that contribute to a changing climate.
This is why Energy, Emissions & Climate Change is among our most These system-level efficiencies have occurred even as our restaurant count
material issues. Our company is working to reduce our energy consumption has grown. We have also made steady improvements in GHG emissions
in order to build and maintain trust with our stakeholders, realize cost intensity per restaurant. By the end of 2025, we hope to reduce our average
savings and, most importantly, be part of the global community committed restaurant emissions by an additional 10 percent and will continue to
to reducing its GHG footprint. report our progress through CDP-Climate and other reporting frameworks.

A meaningful way we can accomplish these goals is by improving the Our current best practices are included in our green building standards.
efficiency of our restaurants. Restaurants are energy-intensive and open Although we have ample experience and well-documented strategies,
long hours, which makes energy efficiency a key part of our to sustainable innovations in lighting, air-conditioning, ventilation and cooking equipment
restaurant design. To minimize the impact of our restaurants on the are always evolving. We carefully evaluate and apply new technologies when
environment, we employ a combination of new technologies and they provide the right balance of environmental and economic benefits.
smart operating practices that allow us to use less energy. Decreasing
energy use, in turn, lowers our GHG emissions, allowing us to address Yum!’s three brands offer very different menu options — and the opportunities
U.N. Sustainable Development Goal No. 13: Climate Action. and challenges they face regarding energy efficiency differ as well. On the
following page, see how Yum! restaurants worldwide are finding ways to
Since 2005, we have demonstrated a steady track record of reducing lower their emissions.
energy consumption. Through 2017, we were pleased to achieve a
targeted 22 percent reduction in energy use compared to our 2005
base year for company-owned and participating franchise restaurants. “As Yum! grows as a business, we aim to do
Energy initiatives have resulted in saving an estimated 4.3 billion MWh
of electricity. so in a way that respects the planet. With
our system quickly expanding, it’s more
Similarly, transitioning to better technology to reduce building energy
usage also provides focus to reduce energy to an entire site. Over important than ever for us to minimize
75 percent energy reduction has been achieved while maintaining each restaurant’s environmental impact.”
high security standards for the parking lot, drive-thru and entire site.
Greater reduction of light pollution after sunset contributes to the JON HIXSON — Yum! Vice President, Government Relations and Global
overall sustainability goal. Citizenship & Sustainability

GHG EMISSIONS
MT CO2e per restaurant
40,000
Energy- and water-saving technologies
397 implemented in 2017
22%
368
333

243 236*
Energy reduction compared to
2005 baseline
*Per-restaurant GHG emissions can be impacted by factors such as conservation measures, weather conditions
and changes in store locations. Numbers are representative of reporting markets. This currently includes our
China franchise market. For more information, see our CDP-Climate response.

2013 2014 2015 2016 2017

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 PLANET > ENERGY EFFICIENCY

Energy Efficiency Inside Yum! Buildings

Exhaust Hoods Lighting Pizza Ovens

Exhaust hoods capture heat and steam produced From kitchens to dining areas, parking lots to As with all types of equipment, the design and
by our cooking equipment and are essential for signage, lighting is an important part of all our performance of the ovens that Pizza Hut uses to
the safe operation of our kitchens. They are also restaurants. Transitioning to LED lights in both bake its pizzas has improved greatly over the
the primary driver of heating, ventilation and air new and existing restaurants makes for a double years. Newer ovens offer benefits in insulation
conditioning (HVAC) energy use because they win: The lights use less energy and last longer and energy efficiency. Upgrading equipment
remove large quantities of air during operating than traditional bulbs, so less material is wasted. brings not only cost- and energy-saving benefits,
hours. This air needs to be replaced, which uses When combined with daylight and motion but it also ensures consistency, allowing Pizza
energy. Restaurants can reduce the volume of air sensors in strategic areas, we can further reduce Hut to deliver quality pizzas everywhere they
that passes through their hoods by using efficient our electricity use. Installing LED lights at all operate. New high-efficiency ovens, as well as
equipment that generates less heat and by KFC restaurants in Australia led to a 50 percent new HVAC and controls installed in 2017, are
orienting hoods to decrease exhaust rates. At decrease in lighting power consumption. Taco expected to save a total of roughly 832.4 MT
Pizza Hut restaurants in France and Germany, Bell is retrofitting its existing restaurants with CO2e at Pizza Hut restaurants in the U.S.
improved hood design reduced exhaust by LED light fixtures.
more than 50 percent, with a payback of less
than two years. Taco Bell has implemented
higher efficiency HVAC systems in more than
1,000 restaurants from 2012–2017, reducing
energy usage by approximately 25 percent.

Solar Energy Smart Devices Smaller Footprints

Frying KFC chicken uses significant amounts of Operating more efficiently means not only What’s left to do once equipment is fully optimized?
energy, which is why KFC restaurants worldwide upgrading individual pieces of equipment, but Pizza Hut and Taco Bell have discovered that
have begun to explore the use of solar energy to also improving the way that equipment and decreasing a restaurant’s physical footprint is an
help power its restaurants. In Australia, more than people work together. For example, motion sensors effective way to lower its emissions. Pizza Hut’s
50 KFC restaurants, both franchisee- and company- and set points for air conditioners reduce the delivery-carryout (Delco) restaurants and Taco Bell’s
owned, are joining together to get preferred possibility of using more energy than necessary. urban in-line locations are our smallest restaurants,
rates on a solar rollout. Meanwhile, four KFC At KFC restaurants in Australia, extractor hoods which means there’s less space to cool, heat and
restaurants in South Africa recently installed and cookers are linked: The hood dynamically illuminate. Delco and in-line restaurants also share
solar panels, which will deliver a combined adjusts its extraction rate depending on how walls with existing buildings, which leads to greater
savings of more than 130 MT of CO2 per year. many cookers are venting. In certain geographies, energy efficiency and fewer construction materials
At a Taco Bell restaurant in El Paso, Texas, a both KFC and Pizza Hut restaurants can use smart needed. These new restaurant types have become
3-kilowatt solar photovoltaic system produces energy monitoring tools that make them aware of popular both for their cost and energy benefits.
7 MWh of renewable energy per year. Taco Bell peaks in energy usage and alert them to possible More than five years ago, Pizza Hut introduced
is testing self-contained parking lot lighting, site malfunctions. KFC Australia restaurants can monitor the “Delco Lite” restaurant concept, shaving
signage and building signage using off-the-grid power use online in 15-minute intervals and receive several hundred square feet off its traditional
solar harvesting methods. a warning if usage spikes by more than 10 percent. Delco restaurants. Taco Bell’s in-line restaurants
are a newer introduction, and the brand plans to
open up approximately 275 of these restaurant
types annually around the world by 2022.

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 PLANET > WATER CONSERVATION

Water Conservation
Making a Difference Drop by Drop

As a global company, some of our restaurants operate in water-stressed areas and are
committed to pursuing investments that allow us to continually improve water efficiency.
Good water stewardship matters to employees, customers and shareholders,
as underscored by the results of our materiality assessment. It also matters TOTAL FRESHWATER
to Yum!. We have been addressing water use in our restaurants since 2005,
when we set a goal to reduce water consumption in company-owned
CONSUMPTION IN
U.S. COMPANY-OWNED 10%
restaurants by 10 percent by 2015. Yum! reached our goal in 2017 and RESTAURANTS Reduction
avoided using roughly 2.2 billion gallons of water during that time period. ML
These savings have come through implementation of water conservation 3.17 3.06
in water
measures such as low-flow fixtures and improved irrigation techniques.
2.51 consumption
At Yum! corporate headquarters in Louisville, Ky., we have upgraded
2015 – 2017*
our irrigation system to reduce water use by 40 percent, saving about *Company-owned and
reporting franchise groups
1.1 million gallons of water annually. In 2018, we expect to save 1.3 billion
gallons of water system-wide, resulting in roughly $2.3 million in savings.
Through these efforts, we are helping to address UN Sustainable
Development Goal No. 6, which calls for ensuring access to water. 2015 2016 2017

Yum!'s operations and supply chain are dependent on water for many
important functions, so we continually monitor and looks for ways to
optimize its use. In 2017, we conducted a water risk assessment using While our existing sustainable paper-based
the World Resources Institute (WRI) Aqueduct tool, which considers
restaurants’ water risk by location, brand and withdrawal volume. Due packaging and palm oil commitments are
to the number of new restaurants opened by Yum! Brands and our not directly related to our restaurant water
franchisees each year, we plan to update this water stress review and
risk scores every two years to maintain an adequate picture of our risk reduction efforts, we are committed to procuring
exposure. In 2017, restaurants in Cape Town, South Africa saw these risks both from responsible and sustainable sources,
come to life when drought conditions severely restricted water availability.
which results in improved global forest health
Yum! shares its water risks and conservation efforts with Carbon Disclosure and watersheds.
Project (CDP) and received a Water Score of A minus for 2017. We have
partnered with CDP since 2011 to report data for U.S. restaurants.
International locations may be included in future reporting efforts as
we improve our data collection methods.

CONSERVING WATER AT TACO BELL

Irrigation can account for up to 45 percent of a restaurant’s water use. With water costs and awareness
of water scarcity issues increasing, Taco Bell decided to take action to reduce its impact. After a
conservation pilot program in 2012 successfully demonstrated a 40 percent reduction in irrigation
water, Taco Bell overhauled the irrigation systems in over 900 of its company-owned restaurants and
updated its specification for new construction to a new, less water-intensive standard. The brand’s
new 2017 landscape designs, being adopted by both company and franchise restaurants, focus on
drought-resistant planting such as zero-scaping and reducing water use through irrigation controls
and bioretention design, as well as consideration of regional precipitation and hardiness zones and
providing local support as needs differ.

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 PLANET > WATER CONSERVATION

Reducing Water
in Yum! Restaurants

WHAT AFFECTS WATER USAGE?

Restaurant Type
Our brands are very different. This is reflected in
their water use. In 2017, the average Pizza Hut
restaurant in the U.S. used about 3.5 times
less water than a KFC restaurant.
HOW ARE WE USING LESS?

Water Stress Irrigation

Using the WRI Aqueduct tool, we evaluate global Irrigation system improvements, such as sensors
shed conditions for the 45,000 restaurants in our that prevent irrigation when it is raining, and the
system. Approximately 20 percent depend on addition of local and drought-tolerant plant species,
water supplies located in watersheds facing decrease our need for irrigation water.
high levels of stress. In these areas, we
implement measures to ensure we don’t
Equipment
use more water than necessary.
From dishwashers in the kitchen to ice machines in
the dining area, high-efficiency equipment helps us
Local Regulations save money and minimize our water use.
Local regulations, such as those put in place
during severe droughts, affect which practices
Restrooms
we employ. Jurisdictions with higher prices
for water tend to encourage greater Low-flow fixtures like toilets and faucet taps are
conservation by all users. inexpensive upgrades that make it easy to use less.
Another option is to add sensors or time-limited
metering devices to hand wash sinks.
Green Building Features
Company-owned restaurants and franchisees who
choose to participate in our green building efforts
have access to market-based tools and best
practices for improving water conservation.

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 PLANET > GREEN BUILDINGS

Engagement and Education

at KFC Australia
KFC restaurants in Australia have long been leaders in building efficiency.
The restaurants go well beyond efficient equipment and sustainable
building design — they also offer an opportunity to engage employees
about the importance of sustainability. Each time a new KFC opens in
Australia, employees receive a welcome letter describing the restaurant’s
sustainable features, plus a reusable coffee mug to encourage them
to cut down on waste.

Efficient operation goes beyond simply installing efficient equipment.

LEED-certified KFC in Lidcombe, New South Wales
Restaurant general managers (RGMs) undergo training about the
importance of reducing energy use, including instruction to switch on Restaurant owners also embrace initiatives that go beyond financial
machinery only when it is needed, rather than upon arrival in the morning. payback, such as tanks to collect rainwater for irrigation and bike racks
RGMs also have access to online tools that track energy usage in 30-minute to encourage environmentally friendly transportation. Low-VOC paints,
intervals, allowing them to make adjustments in real time. This system adhesives and sealants create a healthier indoor environment, and
has been deployed across the majority of franchise restaurants. windows installed in the cooking area help bring the outdoors into the
kitchen. Franchisees are eager for more buildings like these: In 2018, KFC
Australia hopes to achieve Building Green certification for 75 percent of
its new restaurants.

KFC Malaysia LEEDs in

Building Efficiency
When Malaysia’s government announced a nationwide commitment to
sustainable growth, KFC wanted to be part of the solution. The construction
of a new restaurant in Nilai Square began with the ambitious goal of
incorporating as many green elements as possible into one building.
The result was KFC Malaysia’s first green building, which opened in 2015.
The restaurant uses solar energy to generate hot water for the kitchen.
Natural sunlight, LED lighting and an integrated control system result
in 35 percent less energy use than conventional lighting. Irrigation
utilizes rainwater that is captured and reused. KFC is also working with
upstream operators to convert used cooking oil into biodiesel and with
local authorities on waste segregation.
Eco-friendly KFC in Nilai, Malaysia

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 PLANET > WASTE REDUCTION

Waste Reduction
Making the Most of Our Resources

Yum! Brands is committed to first reducing, and then mindfully reusing or

recycling, the waste generated at our restaurants.
With Waste & Recycling identified as a material issue, we have set an At KFC restaurants in the U.K. and Ireland, nearly all of our cooking
aspirational goal to divert from landfills 50 percent of operational waste, oil is recycled into biodiesel or energy. In Australia, we partner with
as measured by weight, in our U.S. restaurants by 2020. To achieve this a third-party supplier who repurposes our used oil for biodiesel and
goal, we are focused on four main waste categories: used cooking oil, animal feed. U.S. waste oil is also commonly reused. In 2017, it's
cardboard, food and packaging. In 2017, it is estimated that we generated estimated that over 9,000 tons of used cooking oil was converted to
885,000 tons of operational waste in the U.S. and diverted approximately biodiesel or animal feed.
25 percent of that quantity. We will continue to work to improve our
diversion rate primarily through recycling used cooking oil, packaging and Packaging is both an opportunity and a challenge. It plays a vital role in
donating surplus food. reducing food waste by keeping food fresh, but excessive packaging
contributes to nonfood and energy waste. We work continuously with
our suppliers to remove, reuse or reduce packaging while maintaining
products at the highest levels of quality. KFC Australia became the first
Approximate KFC quick-service restaurant to participate in a nationwide recycling initiative

Restaurant Waste by Type

funded by the Australian Packaging Covenant. The market also recycles
98 percent of cardboard generated back-of-house in company-owned
restaurants and the majority of cardboard from franchise restaurants.
Food 40%
Corrugated Cardboard 15% Reducing wasted food is where Yum! Brands has made the most
Paper 15% significant strides. We adhere to the U.S. Environmental Protection
Mixed Plastics 15% Agency's Food Recovery Hierarchy, which shows that there are much
Used Cooking Oil 10% better places for leftover food than the landfill or even the compost
Other 5% bin. According to this hierarchy, reducing food waste begins at the
*As of year-end 2017 source. We work with suppliers to purchase only as much fresh food as
we expect to sell to customers based on our projections.

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 PLANET > WASTE REDUCTION

The next best use for surplus food is to feed hungry people. That’s exactly

The Yum! Brands

what Yum! has been doing for more than 25 years with our Harvest
program in partnership with Food Donation Connection. Through
Harvest, KFC and Pizza Hut restaurants donate surplus food from our
restaurants to food banks, soup kitchens and other nonprofits. KFC and HARVEST PROGRAM
Pizza Hut’s surplus foods are well-suited for donations since most are
in meal-sized portions, like chicken drumsticks and whole pizzas.

Programs like Harvest are known to reduce GHG emissions from 6.9 million
landfills and waste combustion. In 2017, the Yum! system avoided Pounds donated in 2017
an estimated 14,500 MT of GHG emissions through food donation
and recycling programs globally. KFC
As our company transforms to comprise a greater proportion of franchise 80 Million
restaurants, we are sharing with franchisees the environmental, social Pounds donated since 1999
and financial benefits of participating in this program. Learn about the
Harvest program’s community benefits.
Pizza Hut
The Harvest program is the longest-running food donation program in our
industry and has made Yum! a leader among our peers. We participate in and
100 Million
co-chair the Food Waste Reduction Alliance (FWRA), a partnership between
Pounds donated since 1992
the Food Marketing Institute®, the Grocery Manufacturers Association
and the National Restaurant Association. Yum! representatives recently
joined the FWRA in briefing the U.S. Congress on the Alliance’s mission
17
to reduce food waste in the U.S. In the U.K., we are a member of the
Countries
Waste & Resources Action Programme (WRAP).

We're also a member of the ReFED advisory council, a multi-stakeholder

$1 Billion
nonprofit organization committed to reducing the $218 billion worth of
Total value of donated
food that is wasted each year in the U.S. ReFED works with businesses, food since 1992
investors, innovators and policymakers throughout the food system to According to Restaurant Food Waste Action Guide
implement solutions, envisioning a future where combatting food
waste is a core driver of business profits, job creation, hunger relief and
environmental protection. With Yum! Brands’ input, ReFED published
the Restaurant Food Waste Action Guide in 2018.

Yum! is the only quick-service restaurant that was invited to join the
U.S. Food Loss and Waste Champions Group, committed to achieving
the U.S. national goal of reducing food waste by 50 percent by 2030.
This goal aligns with UN Sustainable Development Goal No. 12.3.

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 PLANET > SUPPLY CHAIN

SUPPLY CHAIN
A Recipe for Sustainable Value

We work with thousands of suppliers across the globe. These suppliers are an extension of our brands and
true partners in ensuring the availability and safety of the food we serve to millions of customers every
day. Most of our U.S. purchases of food, packaging, equipment and other items are managed by Restaurant
Supply Chain Solutions, our exclusive supply chain management partner for almost 20 years.
Because of this relationship, as well as our stakeholders’ identifying Our current supply chain strategy focuses on four main pillars: food
Sustainable Sourcing as a material issue, an inherent part of our vision safety, supply continuity, cost-effective innovation and sustainability. We
to serve “Trust in Every Bite” is a commitment to sustainable sourcing rely on third-party audits to monitor our supply chain. As Yum! becomes
practices that are mindful of our suppliers’ use of energy, water and more franchised, third-party audits help to ensure consistent analyses
waste and their impact on animal welfare and sourcing communities. across markets.

Yum! suppliers must adhere to our Supplier Code of Conduct, which sets We also are conducting a supply chain sustainability assessment, which
basic requirements for all of our suppliers whether they provide us with will identify, evaluate and prioritize the risk profile of key commodities
food or beverages, packaging or equipment. We support suppliers in and countries of origin. Following the assessment’s findings, we will
their efforts to conduct business in an environmentally and socially develop enterprise-wide recommendations for our supply chain
responsible way, in accordance with our sustainability policies and practices. sustainability strategy.

As one of the largest restaurant companies in the world, we are a

large purchaser of animal protein and produce. We seek continuous
Learn more about improvement in our food sourcing and production systems across our

our management of agricultural supply chain, with a particular focus on animal welfare
and forest stewardship.
Ethics & Human Rights

SUSTAINABLE SOURCING FOCUS AREAS

KFC has a supply chain

council in each of its
markets and is currently
ANIMAL FOREST creating a global supply
PROTEIN STEWARDSHIP chain council to oversee
the brand’s sustainable
Good Antimicrobial Stewardship Paper-Based Packaging
supply chain strategy.
Cage-Free Eggs Palm Oil
Sustainable Beef

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 PLANET > SUPPLY CHAIN

Sustainable Animal Protein

Supporting Responsibly Produced Animal Protein

As a global food company that serves millions of meals containing poultry, beef, dairy, pork and
egg products every day, Animal Welfare is among our most material issues. We have a responsibility
to be good stewards of the animals raised for food throughout our supply chain.

Our commitment to animal health and well-being is unwavering and improvement in the farm animal health and well-being practices of
guided by our holistic, science-based Sustainable Animal Protein Principles. our suppliers and engagement with key animal welfare stakeholders.
These principles consider the interrelated, complex issues involved in Ensuring animal health and well-being requires comprehensive,
maintaining sustainable food production systems. carefully considered health management programs that may at times
use antimicrobials judiciously to maintain or restore good animal health.
We support the Five Freedoms for all animals used for food in our supply
chain, which include: 3. Environmental Stewardship: In collaboration with our suppliers,
we are invested in implementing and maintaining sustainable,
FREEDOM FROM
integrated livestock production systems that are mindful of air
HUNGER & and water quality, land use and GHG emissions. We seek good
THIRST livestock stewardship and continuous improvement to conserving
environmental resources within our supply chain.

5
FREEDOM FROM
FREEDOM FROM 4. Food Security: Global food security is a key part of the UN Sustainable
FEAR & Development Goals and remains at threat. Our sustainable sourcing
DISTRESS DISCOMFORT
FREEDOMS practices help support the growing global need for more accessible
OF ANIMAL sources of animal proteins like poultry. The safe and consistent production
WELFARE and availability of poultry is a major priority for Yum!, as consumer
demand is expected to rise with population and economic growth.
FREEDOM TO
EXPRESS FREEDOM FROM 5. Responsible Suppliers: We partner with suppliers that are dedicated
NORMAL PAIN, INJURY to producing safe and more animal proteins over the long term. Our
BEHAVIOR OR DISEASE suppliers must follow our Supplier Code of Conduct, which requires
them to comply with our food safety and quality standards, maintain
fair employment practices, and provide a safe, healthy and productive
Our animal protein sourcing is guided by a set of sustainable work environment. We offer third-party independent consultation and
sourcing principles: science-based education programs focused directly on strengthening
their capability.
1. Food Safety & Quality: Food safety and quality is our priority. That’s
why we regularly audit suppliers to ensure compliance with our All chicken, eggs and dairy served domestically by Yum! Brands are
standards for animal welfare. Learn more about our food safety and USDA-inspected and supplied by domestic farms that operate according
quality governance and practices. to industry-standard animal welfare guidelines. We are now in the process
of synchronizing our animal welfare programs globally with the aim of
2. Animal Health & Well-Being: We believe in the ethical and humane adopting a foundational animal welfare auditing system and policies
treatment of animals raised for food. Our Animal Welfare Advisory for poultry, eggs, beef, pork and dairy.
Council, along with our sustainability team, advocates continuous

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 PLANET > SUPPLY CHAIN

We have been working with our suppliers in recent years to minimize,

where possible, the use of antimicrobials (including antibiotics) important
to human medicine as defined by WHO. Each of our brands has made
significant strides toward eliminating human crossover antibiotics in
our poultry supply chain:

§§ KFC: By the end of 2018, all chicken purchased by KFC U.S. will be
raised without antibiotics important to human medicine, as part of the
brand’s return to its roots, a journey called Re-Colonelization. This
effort aims to return KFC to Colonel Sanders’ standards and includes
KFC chicken tenders and popcorn chicken. The commitment will also
make KFC the first major chicken chain to extend this commitment to
its bone-in chicken, which includes the signature Original Recipe,
Extra Crispy and Kentucky Grilled Chicken, as well as KFC wings.
§§ Pizza Hut: In 2017, Pizza Hut U.S. removed antibiotics important to
human medicine from chicken served as pizza toppings. By 2022, the
brand plans to remove antibiotics important to human medicine from
its WingStreet wings. This makes Pizza Hut U.S. the first national pizza
company to commit to removing medically important antibiotics from
all the chicken it serves.
§§ Taco Bell: In 2016, Taco Bell committed to serving chickens raised
without the use of antibiotics important to human medicine in all U.S.
restaurants. The brand achieved this goal in 2017.
Learn more about our Good Antimicrobial Stewardship efforts.

SUSTAINABLE BEEF

We are currently exploring long- and short-term goals related to the

sustainable sourcing of each of our key animal protein commodities.
ANTIBIOTIC USE Taco Bell is one of the largest beef purchasers in the U.S., serving
290 million pounds of 100 percent USDA premium ground beef each
Our dedication to animal health and well-being requires thoughtful, year. Given the importance of beef on Taco Bell’s menu, creating a more
comprehensive health management programs that may necessitate the sustainable beef supply chain in the U.S. is a priority. To that end, Taco Bell
use of antibiotics to maintain or restore good animal health. We are aware is a member of the U.S. Roundtable for Sustainable Beef (USRSB), a
of the rising threat of antimicrobial resistance (AMR) and support One network of beef experts from the supply chain, academia and research,
Health, a holistic and multi-sectoral long-term effort to combat AMR by environmental and animal welfare organizations and veterinarians. This
the United Nations World Health Organization (WHO), the Food and stakeholder engagement will help Taco Bell ensure that the U.S.-grown
Agriculture Organization, the World Organisation for Animal Health beef it sources meets Yum!’s standards for sustainable sourcing.
and other key stakeholders. We believe AMR jeopardizes several UN
Sustainable Development Goals and that responsible and judicious CAGE-FREE EGGS
use of antimicrobials in agriculture is critical to world food security and
beneficial to human, animal and environmental health. All of Yum!'s Taco Bell met its 2016 goal to exclusively serve 100 percent cage-free eggs
brands comply with the USDA guidelines that went into effect in 2017, in all U.S. Taco Bell corporate and franchise-owned restaurants, making the
to minimize antimicrobial resistance requiring that our U.S. suppliers transition faster than any other national quick-service restaurant brand.
remove medically important antimicrobials used for production purposes Since then, the brand expanded and achieved its secondary goal to source
and ensuring that the use of such drugs for therapeutic treatment is 100 percent cage-free egg ingredients, meaning ingredients in all of its
overseen by a licensed veterinarian. mayo-based sauces and desserts are now made using cage-free eggs.

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 PLANET > FOREST STEWARDSHIP

Forest Stewardship
Minimizing Deforestation Risk

Yum! Brands is committed to preventing deforestation through our sustainable,

paper-based packaging and palm oil sourcing strategies and policies.
Yum! sources a large volume of paper-based packaging, and we are
committed to using environmentally preferable packaging that reduces
our impact on the environment and the communities where we More Sustainable Packaging at Taco Bell
operate. We engage with stakeholders, including suppliers, Taco Bell replaced its plastic bags with paper
manufacturers, converters, distributors and retailers to support our
bags made from 100 percent recyclable and
enterprisewide goal to purchase 100 percent of paper-based packaging
with fiber from responsibly managed forests and recycled sources by
renewable raw materials, 100 percent sourced in
the end of 2020. the U.S. Other sustainable packaging measures
include a switch to polypropylene (plastic) side
We are making progress. In 2017, markets reported that an estimated item containers from polystyrene foam and
69 percent of our global paper-based packaging and service products
packaging the Mini Skillet Bowl in a reusable
came from either certified virgin or recycled sources. Our Paper-Based
Packaging Sourcing Policy establishes sustainable sourcing principles to and dishwasher-safe container.
guide our packaging procurement decisions and is based on four principles:

§§ We do not purchase products made with fiber from illegal or

unwanted sources.
§§ We give preference to third-party-certified suppliers.
§§ We increase the amount of recycled content used in the
paper-based packaging.
§§ We work to ensure compliance with our policies.

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 PLANET > FOREST STEWARDSHIP

SOURCING PALM OIL RESPONSIBLY

Yum!’s second important commodity that can impact deforestation Yum! sustainable sourcing policies and principles are intended to mitigate
is palm oil. Our policy for sustainably sourcing our palm oil used for our impact on climate change by reducing deforestation related to the
cooking is guided by six principles: timber and palm oil that we source. To track our progress, we survey
business units worldwide regarding their accomplishments against our
§§ No development on High Conservation Value or High Carbon Stock forests sustainable fiber and palm oil sourcing goals. The results of the survey
§§ No development on peatlands and use of best management practices are used to report on our commitments to sustainable sourcing in our
where production already exists on peatlands CDP responses on Climate Change and Forests.

§§ Compliance with local laws and regulations

§§ Prevention and resolution of social and/or land conflicts in accordance
with the principle of free, prior and informed consent Since 2016, Pizza Hut and Taco Bell have
§§ Traceability to the extraction mill and validation of fresh fruit bunches also used certified sustainable palm
§§ Respect and protection of human rights, including not employing oil as an ingredient in U.S. menu items
underage children or forced laborers and prohibiting physical
punishment or abuse
such as in the Hershey’s® Ultimate
Chocolate Chip Cookie and the caramel
Since 2015, Yum! has sought to reduce palm oil used for cooking oil.
apple empanada, respectively.
Certain brands and markets have already achieved this milestone: For
example, KFC restaurants in the U.K. fully eliminated palm oil from their
food production in 2015. As result of global partnerships among brands,
franchisees and suppliers, approximately 80 percent of the palm oil
volume purchased in 2017 was reported to be from sustainable sources —
an improvement from the estimated 63 percent achieved in 2016. Many
of our markets contributed to this progress, including China which moved
to sustainable palm oil during the year. By the end of 2018, we will source
100 percent of our palm oil from responsible and sustainable sources.

Markets that continue to use palm oil purchase only from suppliers who
meet our sourcing principles and give preference to those who are certified
by the Roundtable on Sustainable Palm Oil (RSPO). RSPO works along the
full palm oil supply chain to develop and implement global standards that
minimize the negative impact of palm oil production on the environment
and the communities from which it’s sourced.

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 IN THIS SECTION

People Dashboard................................ 44
Culture & Talent.................................... 45
Talent Development............................. 47
Opportunities for
Restaurant Employees......................48

PEOPLE Scholarships & Academic Support....49

Opportunities for
Corporate Employees........................50
Diversity & Inclusion............................. 51
Employee Resource Groups..............52
Partnerships & Recognition..............52
Franchise Diversity............................53
Supplier Diversity..............................53
Community & Philanthropy................. 54
Hunger Relief....................................55
Literacy..............................................56
Youth Education................................57
Employee Giving...............................59
Employee Benefits............................... 60
Ethics & Human Rights......................... 61
 PEOPLE > DASHBOARD

PEOPLE
We Unlock Potential

GOALS OPPORTUNITIES & CHALLENGES

LEADERSHIP, EMPLOYEE DEVELOPMENT, §§ Attracting and retaining talent in the quick-service restaurant sector
LABOR PRACTICES, CULTURE & TALENT §§ Monitoring and adhering to laws that pertain to employee wages,
§§ Measure Yum! Brands’ employee engagement immigration status and other employment issues
§§ Provide Yum! Brands’ employees with training and §§ Ensuring ethical practices across the entire business in more than
development that builds world-class leaders and 135 countries and territories
business results
DIVERSITY & INCLUSION
KEY TAKEAWAYS
§§ Minimize or eliminate unconscious bias through §§ Yum!’s two biggest assets are our brands and our people. As we build
employee education the world’s most loved, trusted and fastest growing restaurant brands,
an essential driver of growth is our unrivaled culture and talent, which
§§ Significantly increase the number of women in senior
enables us to fuel brand performance and franchisee success.
leadership globally
§§ We encourage corporate and franchise team members around the
§§ Significantly increase diverse representation of
world to grow professionally, personally and academically, believing
underrepresented minorities in U.S. brands
that the strongest employees are those who can be themselves and
§§ Share successes and challenges with other companies are challenged to do their best.
§§ Ensure our workplaces are places where employees can §§ We aim to create an inclusive and ethical workforce in order to be
have complex conversations about diversity and inclusion a workplace of choice and to drive business results by connecting
HUMAN RIGHTS & LABOR meaningfully with diverse employees, customers, franchisees and
suppliers worldwide.
§§ Remain committed to our Global Code of Conduct and
Supplier Code of Conduct, which addresses guidelines §§ We cultivate a workplace where diversity is welcomed, sought out
for working conditions consistent with frameworks such and developed at all levels of the company and franchise leadership.
as those of the International Labour Organization (ILO) §§ As a global restaurant company whose franchisees are a major
employer of young people, our giving priorities — hunger relief,
literacy, and youth empowerment and education — are areas in which
we have the greatest potential to make an impact.
§§ Yum! seeks to unlock the potential of the communities where we
work and live. We ensure employees have the time and resources to
give back to organizations that are meaningful to them and support
nonprofits near our hometown corporate offices.

MATERIAL ISSUES KEY STAKEHOLDERS

§§ Talent Attraction, Engagement §§ Employees
& Retention §§ Franchisees
§§ Human Rights & Labor Practices §§ Franchisee Employees
§§ Ethics & Compliance §§ Local Communities

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 PEOPLE > CULTURE & TALENT

CULTURE & TALENT

Building a Workplace of Choice

Yum! Brands’ culture of recognition, as well as opportunities to grow and to make a

meaningful difference, are the primary reasons many employees at all levels of the
company say that they choose to stay at Yum!, KFC, Pizza Hut and Taco Bell.
Likewise, talent attraction, engagement and retention are strategic to
our business success and among our most material corporate social
responsibility issues. YUM! BRANDS' VALUES
We have a values-driven culture. Our values challenge
We have a values-driven culture. In the way we recognize wins and believe in and inspire us to elevate our brands, culture, performance
all people, we’ve made sure Yum! remains a company that feels like a and impact on customers and the communities that
community. Our culture emphasizes fun, recognition for wins big and small, we serve. These values are:
and a focus on breakthrough results. We take a tremendous amount of pride §§ Champion the customer experience
in every individual, which we demonstrate by encouraging all employees
to master their skill sets and constantly expand their expertise. This mindset
§§ Serve up trust in every bite
makes every day dynamic, which leads to long and rewarding careers. §§ Adopt and share the best ideas
§§ Deliver results, overnight and over time
We firmly believe that our culture gives us a competitive advantage and §§ Be focused and stay hungry
are committed to maintaining it going forward. To help, Yum! CEO Greg
Creed created and teaches a leadership development course for corporate
§§ Recognize wins, big and small
employees and franchisees worldwide called Leading Culture to Fuel §§ Lead with smart, heart and courage
Results. Creed created the course to inspire employees and franchisees §§ Believe in all people
to become leaders who lead and prioritize our values-driven culture. The §§ Make the world better
course centers around the idea that, by using culture as a foundation
for establishing strategy and structure, we can create an atmosphere for
successful business results. Since the program launched in 2016, more

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 PEOPLE > CULTURE & TALENT

than 95 percent of senior corporate leaders have taken part. Over the past
two years, more than 15 courses have been conducted with employees “Our people-first culture and investment
and franchisees across more than 10 countries. In 2017 alone, courses
were held in Hong Kong, India, Poland, the United Arab Emirates and in our employees is a top priority for us as
the U.S. We plan to take Leading Culture to Fuel Results deeper into our we build the world’s most loved, trusted
organization over the coming years, including training more corporate
and fastest growing restaurant brands.”
employees and franchisees at various levels around the world.
TRACY SKEANS — Yum! Chief Transformation & People Officer
At Pizza Hut, employees are encouraged to live “Life Unboxed,”
fostering a culture where people can be their best, make friends
and have fun. As part of this movement, the brand announced Life
Unboxed EDU, an educational partnership that helps team members Since 2013, Taco Bell has consistently measured culture and engagement
earn college degrees. Pizza Hut also updated its staff uniforms and in restaurants with The Pulse. Nearly 35,000 team members take The Pulse
launched the Heartstyles training program for its leaders. survey three times a year, which helps restaurant leaders understand how
they’re doing and provides tools to measure progress against goals.
It continues to award the Lou Folino Life Unboxed Award annually to a
RGM who champions culture-driving initiatives in the restaurant and in A strong culture keeps high-performing employees at Yum! and our
the communities they serve. The campaign was recently awarded the restaurants. Our retention rates are equal to or higher than those of our
Gold Award for Brandon Hall Group’s Excellence in Talent Management industry peers and results on our employee engagement survey show
Awards and the WorkHappier Trailblazer Award from BI Worldwide. high levels of engagement among corporate employees. Sustained high
scores on this survey were especially encouraging in 2017, given Yum!'s
Taco Bell’s leadership programs for RGMs, shift leads and area coaches — 2016 spinoff of the China business and announcement of our multi-year
called theMark, theSpark and theQuest, respectively — are offered to transformation plan to become a more focused, franchised and efficient
all its restaurants in the U.S. These unique programs help individuals company to drive future growth. This continued engagement during a
discover their leadership vision and how to lead at every level. More than time of great change is a testament to the power of our brands, strong
3,000 RGMs have flown to Taco Bell headquarters to attend theMark, culture and employees’ dedication to our mission.
where they also participate in community service projects and share
ideas about how to create the best restaurant culture.

LEADING WITH HEART AT KFC

KFC believes that for leaders to be successful, they must be “smart with heart,” meaning that when
they are themselves with their teams, they build a more authentic, open and honest culture that
delivers greater results. Leading With Heart was designed to enable leaders from CEO to RGM to gain
insights into their own behavior and identify why they do the things they do through the use of the
Heartstyles Indicator, a character development tool. The transformational, two-day workshop provides
participants with the opportunity to gain insight about their own behaviors, develop strength of
character through self-awareness activities and become more effective in both their personal and
professional lives. The program is currently available in more than 25 countries and by the end of
2018 will be translated into 24 languages.

LEADING WITH HEART has the potential to reach 20,000 KFC RGMs
800,000 team members who, in turn, impact
who influence

2 BILLION customers every year.

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 PEOPLE > TALENT DEVELOPMENT

TALENT DEVELOPMENT
Helping Our People Grow

We sustain our winning culture by recruiting the best people and developing their potential. No matter where
employees are within our organization or in their careers, continuing development is an important focus.

Today, 97 percent of Yum! restaurants are owned by

franchisees. This diversified, decentralized structure demands
an approach to building people's capability that is customized
and highly interactive. Yum! and our brands aim to create
programs across the world that unlock individual talent,
inspire growth and foster both business and personal
development. Because we know that employees learn
in different ways, we offer a variety of experiences from
self-study to online classes to classroom training.

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 PEOPLE > TALENT DEVELOPMENT

Opportunities for
Restaurant Employees

Working at one of our restaurants is a first job for many of our team members.
Whether our employees choose to pursue a career at Yum! or use our educational
resources as a launchpad for other goals, we are proud to help them develop skills
and capabilities on the job, further their education and build successful careers.

No matter an individual’s aspirations, earning a high school diploma

or GED is a critical step in the right direction. In the U.S., KFC, Pizza Hut
and Taco Bell all offer free programs to help employees earn their
GEDs. For example, the KFC Foundation’s Rise with GEDWorks™, in
40 Million
partnership with the GED Testing Service, matches employees with a
Working U.S. adults lack a
personal adviser to answer questions and help them prepare for the high school diploma
exam. All employees at participating KFC restaurants in the U.S. are
eligible to enroll in the program.
94%
KFC U.K. and Ireland creates career paths for restaurant teams and of KFC U.S. restaurants participate
offers a range of training and accredited qualifications, including in the KFC Foundation’s
apprenticeships in hospitality management and a three-year bachelor's education programs
degree for employees. These programs are fully paid for, with no cost to
the employee. To date, nearly 900 employees have participated in the
hospitality management programs, and more than 100 employees 650
have participated in the Business Management Degree Program, with KFC U.S. restaurant
27 graduating in the first two cohorts.
employees enrolled

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 PEOPLE > TALENT DEVELOPMENT

Scholarships & members. It allows participants to apply their team member training
courses as credits toward their chosen degree program at Excelsior
Academic Support College®, a fully accredited, private, nonprofit college with more than
40 degrees at the graduate and undergraduate levels. Undergraduate
students can save more than 50 percent on tuition, while master’s
When restaurant employees are ready to pursue degree earners can save 15 percent.
higher education, Yum! Brands is there to help.
Through Taco Bell’s partnership with Guild Education, all Taco Bell
Team members in the U.S. can receive scholarships through a variety corporate and franchise employees have access to coaches, discounts to
of sources, such as Taco Bell Foundation’s Live Más Scholarship, created Guild's education partners, as well as academic and financial aid. This
for innovators, creators and dreamers — students whose passions lie includes a network of 80 online nonprofit universities and learning
outside the conventional academic or athletic categories. The Taco providers, offering bachelor’s and master’s degrees, high school completion
Bell Foundation set a bold goal of donating $10 million in Live Más and English-as-a-second-language programs, as well as a wide selection
Scholarships by 2022. of certificates. Taco Bell corporate employees, along with employees
of participating franchisees, also have access to up to $5,250 per
The REACH Educational Grant Program helps KFC employees pursue calendar year in tuition assistance. All employees can receive credit for
their dreams of going to college. Employees can receive up to $3,000 their restaurant training, which could add up to an additional $5,000
to help them attend a two-year or four-year college, trade or vocational in savings. Evidence suggests that these programs not only strengthen
school, or graduate degree program. Beginning in 2016, all employees resumes, they also make for satisfied employees who want to stay at
at participating KFC U.S. restaurants were eligible to apply. Yum! restaurants.

Another signature educational investment is the Andy Pearson

Scholarship, established in honor of Yum!'s founding chairman. Since the
inception of the scholarship in 2003, more than $6.7 million has been TACO BELL REINFORCES LEADERSHIP IN
awarded to more than 3,000 scholarship recipients across the U.S. In
2017, 96 employees or their eligible family members received a total
EMPLOYEE EDUCATION
of $212,000 in scholarships, with 90 percent being awarded to field
In 2016, Taco Bell officially launched Start with Us,
and restaurant employees.
Stay with Us, a platform and mentality to set Taco Bell

A number of new education programs allow team members to turn their apart as a category of one through its education and
on-the-job restaurant training into college credit, giving employees even career-building programs. Whether employees stay for
more opportunities to succeed. Pizza Hut’s Life Unboxed EDU is offered a year or stay for life, Taco Bell has made it a priority to
to all U.S. corporate and franchisee employees and immediate family offer benefits and programs that create innovators and
leaders for our communities inside and outside of its
restaurants. The platform includes the full spectrum

98% of employees enrolled in

of opportunities that Taco Bell offers, including Live
Más Scholarships for employees and customers, GED
Guild stayed at Taco Bell certification program and partnership programs with
more than six months Guild Education. The platform supports Taco Bell’s

34%
goal of attracting and retaining top talent as it creates
increase over employees thousands of new jobs across the U.S.
not enrolled

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 PEOPLE > TALENT DEVELOPMENT

Opportunities for
Corporate Employees
Yum! takes a personalized approach to developing people and growing their careers. In addition
to providing robust development plans, programs and learning platforms, we invest in corporate
employees around the world by giving them meaningful roles and challenging opportunities.

We encourage people to move through the organization to different brands Another program, Leadership Accel, focuses on developing mid-level
and geographies and provide responsibilities that broaden employees' talent for future leadership roles. Lessons include how to align and
leadership capabilities. Experience has shown us that this approach is engage others around a clear agenda, build other leaders, strategically
the fastest and most effective way to help our people develop. influence the broader business and enhance critical thinking and
decision-making skills.
Our performance management process, the Building People Capability
(BPC) cycle, is designed to grow, develop and reward employees for their In 2017, we launched Grow Yourself Week, a personal and professional
contributions. It has a strong focus on mentorship, including year-round development program for corporate employees based in Louisville, Ky.
coaching through one-on-one discussions between coaches and employees, The spring and fall bi-annual programs offered nearly 70 interactive
plus specific times of the year when employees and coaches work courses to hundreds of employees. During the programs, employees
together to set short- and long-term goals, create individual development took advantage of development resources, networked with organizational
plans and discuss performance results. Beyond guidance from their leaders and connected to colleagues with similar interests and goals.
coaches, employees receive feedback from peers, direct reports and Session topics ranged from personal branding and information security
even customers through surveys and other methods. to strategies for limiting unconscious bias. A number of courses explored
aspects of personal wellbeing including fitness, CPR, financial wellness,
There are also core educational programs and development opportunities cultivating confidence and volunteering and serving on non-profit boards.
in which employees are encouraged to participate. Companywide The sessions were such successes that our office in Plano, Texas, followed
programs include Achieving Breakthrough Results, a course taught suit. Several international markets are launching similar programs.
globally since 2008. The experience provides employees with tools and
concepts aimed at high performance. It incorporates personal stories
from senior leaders and is designed to help learners be intentional
about their actions, use breakthrough thinking tools to take bold action
to achieve results.

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 PEOPLE > DIVERSITY & INCLUSION

DIVERSITY & INCLUSION

Living Our Values

Having an inclusive and diverse culture is imperative in today’s world. We are a global company with
diverse employees, customers and franchisees and maintain an unwavering commitment to promoting
a company culture where all people are valued and respected.

One of our core values is to believe in all people, understanding that LEADING INCLUSION FOR TODAY & TOMORROW (LIFT2)
for our brands to remain relevant, we need everyone at the table in all
aspects of our organization. That’s why we’re working to reflect the diversity Oversight for diversity and inclusion at Yum! is managed at the highest
of the communities in which employees live and work, embracing diversity’s levels with Leading Inclusion for Today & Tomorrow (LIFT2), a corporate
potential to help us build brands that people trust and champion. diversity council led by CEO Greg Creed. The council meets twice a
year and includes senior leaders from across Yum!, our brands, key
Yum! Brands is on a journey to ensure that inclusion and diversity, franchisees and suppliers. LIFT2’s key objectives include:
including gender equity, are integrated into all aspects of our business.
Our goal is to build a culture that attracts, develops and retains diverse §§ Demonstrating high-level commitment to diversity and inclusion
employees, franchisees and suppliers to drive global growth. Specifically, §§ Sharing diversity and inclusion best practices inside and outside
we aim to increase the number of women who hold senior leadership our industry
roles globally and increase representation of underrepresented minorities
in our U.S. brands. We are also working to increase the multicultural §§ Identifying issues and opportunities through honest and robust dialogue
competency of our existing corporate workforce through activities such §§ Assisting with stakeholder engagement
as unconscious bias training and employee engagement through §§ Promoting, protecting and supporting our people and brands
Employee Resource Groups (ERGs).

“At Yum!, diversity and inclusion are part of living and leading our culture, as well as
key enablers to our success. We apply this cultural mindset to our people, our franchisees
and our suppliers as we continuously work to reflect our ever-changing communities,
customers and investors.”
JAMES FRIPP — Yum! Chief Diversity & Inclusion Officer

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 PEOPLE > DIVERSITY & INCLUSION

Employee Partnerships &

Resource Groups Recognition
Yum!’s ERGs play a key role in driving a culture of diversity by providing Yum! Brands is committed to greater inclusion and diversity for all people
networking, mentoring, educational workshops and leadership development and is a place where differences are sought out and celebrated. That’s why
opportunities across our system and the communities in which we do CEO Greg Creed signed onto the CEO Action for Diversity & Inclusion, a
business. While each ERG has a specific focus area, all groups are open coalition of company CEOs committed to creating workplaces that not only
to all employees. ERGs vary by location, but examples include: have diverse representation, but are also places where employees are
comfortable sharing their experiences and perspectives with one another.
§§ Yum! Era: Yum!’s multi-cultural ERG advocates for inclusion in the
workplace by providing cultural awareness education, connecting
We also established a target to advance more women into leadership and
members with leadership, sharing customer insights and growing
achieve gender parity in senior roles globally by 2030. Today, females
talent and leaders within the company.
account for 52 percent of our full-time and 58 percent of our part-time
§§ g2: g2 develops and connects young professionals throughout the employees out of our approximately 60,000-member global workforce.
Yum! family and the community. This commitment aligns with the Paradigm for Parity coalition, a
§§ Women in Networking (WIN): WIN members build community, movement of Fortune 500 CEOs, senior business leaders and academics
leverage cross-functional knowledge, and identify and address who are committed to achieving a new norm in corporate leadership: one
barriers to growth. Quarterly events provide opportunities for in which women and men have equal power, status and opportunity.
development and learning. Additionally, we're proud to lead our industry in creating opportunities
§§ Yum! Pride Network (YPN): YPN serves to engage and support lesbian, for women at all levels of our business.
gay, bisexual, transgender and queer or questioning employees by
communicating with employees, organizing events for members and More than 20 years ago, Yum! became a founding member of the
attracting LGBTQ talent. Women’s Foodservice Forum® (WFF), the industry’s leading organization
to advance female talent. Yum! Chief Transformation & People Officer
We engage with these groups in innovative ways. For example, Era Tracy Skeans serves on WFF’s Board of Directors, and Yum! team members
members form focus groups to provide feedback on brands’ marketing attend WFF’s Annual Leadership Development Conference. Other
materials. Their wide-ranging perspectives allow us to better connect organizations in which Yum! has taken an active role include:
with our customer base and avoid potential insensitivities. G2 has §§ 100,000 Opportunities Initiative
participated in think tanks for KFC U.S, dividing into teams and pitching
§§ Bloomberg Gender Equality Index
potential new products to KFC U.S. senior leadership, who then explored
opportunities to bring the concepts to life. §§ The Consortium for Graduate Study in Management
§§ Human Rights Campaign® Corporate Equality Index
§§ International Franchise Association
§§ Multicultural Foodservice & Hospitality Alliance
§§ National Black MBA Association®
§§ Prospanica®

Based on our current employment statistics, policies, external

community support and engagement and product offerings,
Yum! was named to the 2018 Bloomberg Gender Equality Index.

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 PEOPLE > DIVERSITY & INCLUSION

400th restaurant opening in Indonesia

Franchise Diversity Supplier Diversity

Yum! is dedicated to recruiting minority franchisees and is actively In partnership with our exclusive supply chain management organization,
engaged in programs that support minority franchisee development, Restaurant Supply Chain Solutions, Yum! Brands has built a leading
like the Latino Franchisee Symposium, a cross-industry franchisee corporate supplier diversity program. We actively seek qualified diverse
recruiting event that we've hosted since 2015, bringing together more suppliers for all possible product and service needs and encourage our
than 20 organizations. Since we began sponsoring the event three years majority-owned suppliers to use diverse suppliers, subcontractors and
ago, we’ve added nearly 50 Hispanic-owned restaurants to our system. distribution services.

We helped develop and launch the International Franchise Association’s Yum! welcomes certified diverse suppliers of the following designations:
MinorityFran Program, an initiative that provides a one-stop point of
access for minority prospects who are exploring franchise opportunities. §§ Minority-Owned Business Enterprise
The program is a partnership with the National Urban League, UnidosUS, §§ Woman-Owned Business Enterprise
the Association of Small Business Development Centers and the U.S.
Pan Asian American Chamber of Commerce. §§ Lesbian-, Gay-, Bisexual-, Transgender- and/or Queer-Owned
Business Enterprise
Yum! has also established a minority lending assistance program focused §§ Business Enterprise Owned by People with Disabilities
on aiding qualified prospective ethnic minority franchisees, with a §§ Veteran-Owned Business Enterprise
particular emphasis on African American and Latino individuals, in their
§§ Disabled Veteran-Owned Business Enterprise
efforts to enter the KFC, Pizza Hut and Taco Bell systems.
§§ Small Business Administration [8(a), SDB, HUBZone]

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 PEOPLE > COMMUNITY & PHILANTHROPY

COMMUNITY & PHILANTHROPY

Making the World Better

Yum!, KFC, Pizza Hut and Taco Bell partner with employees and franchisees to unlock the potential of communities
where employees work and live. We believe in giving back by sharing our time, talents and money.

Yum!’s major philanthropic focus areas — hunger relief,

literacy and youth education — are united by a common
thread of unlocking potential in all people. We recognize
that when individuals’ basic needs are met, they can
better achieve their goals and contribute to their
communities — creating a continuous cycle of good.

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 PEOPLE > COMMUNITY & PHILANTHROPY

Hunger Relief
Feeding People, Not Landfills

Yum!’s in the business of feeding people, so it makes sense that hunger relief is one of our key focus
areas when it comes to supporting communities. The most visible way we do this is through the
Harvest program, the world's first prepared food donation program.

Since 1992, the Yum! system contributed more than 180 million pounds Franchisee participation in Harvest is optional, and many have embraced
of food to more than 3,000 nonprofit organizations — a fair market value the chance to limit waste and help their neighbors. Yum! encourages
of more than $1 billion. participation by sharing informational materials about Harvest and
making it easy for franchisees to request additional support from our
Instead of throwing away surplus food that is safe to eat, the Harvest partners. One KFC franchisee who began participating in the Harvest
program allows us to donate it to local hunger relief organizations in program found that it not only strengthened their connections with the
countries around the world. This delivers a triple benefit: Food stays out local community, but also simplified end-of-night operational routines.
of landfills and prevents environmental impacts, thus reducing wasted In three years across 29 participating restaurants, the franchisee provided
resources, nonprofits benefit from the donations and our restaurants more than 83,000 meals to people who would have otherwise gone
give back to local communities. In addition to our work with the Harvest hungry. The need to provide hunger relief is universal and the Harvest
program, and as part of our larger efforts to reduce food waste, Yum! program is growing.
also partners with FWRA and the ReFed advisory council.
Business units in other parts of the world are finding other ways to make a
difference. For example, KFC South Africa restaurants have a unique menu
Learn how Harvest benefits the item: Add Hope. For just 2 South African Rand (approximately $.17 USD),
environment. customers can “add hope” to their orders. This contribution, along with
donations from the KFC Foundation, goes to feed a child through one of
138 charities, feeding 120,000 children every day. Add Hope has raised
Pizza Hut has partnered with the Harvest program continuously since 1992 387 million Rand ($32 million USD) since 2009. In 2017, the program
and KFC began participating in 1999. In 2017, Pizza Hut reached a milestone received a record high of 1.2 million Rand (nearly $90,000 USD) in
of 100 million pounds of food donated to nonprofits in the communities it donations in a single week. The milestone came after a month-long
served. Harvest continues to add participating KFC and Pizza Hut restaurants campaign to raise awareness about International World Hunger Day.
and expand to new geographies, now in 17 countries and growing. As Add Hope has spread to other countries where KFC operates. KFC India,
Harvest grows, we work with countries to ensure Good Samaritan laws which began taking part in the program in 2016, feeds more than 10,000
are in place that provide basic legal protection for people and organizations children daily and has pledged to provide 20 million meals by 2020.
to assist others. These laws help maximize the number of restaurants
that can participate, ensuring more food is available to those in need.

HARVEST ADD HOPE

KFC franchisee Jason Zakaras For Sinanziwe Ndlovu, losing
recently began participating in her mother almost meant losing
the Harvest program. See how the chance to earn an education.
the program is transforming his Then, KFC added hope.
restaurants’ relationships with the
community — and his employees.

Watch video Watch video

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 PEOPLE > COMMUNITY & PHILANTHROPY

Literacy
The Power of a Book

Yum! believes that education is the key to unlocking a person's full potential and
recognizes that educational success is rooted in childhood reading skills.

Pizza Hut U.S. has been fostering a love of reading for more than 30 years BOOK IT! reached 14 million kids in 620,000 classrooms in 2017, with
through the BOOK IT! program. Since 1984, one in five Americans has plans to expand to 1 million classrooms by 2020. It’s a program with
participated in the free literacy program for schools. BOOK IT!, which proven results: According to a recent study, former BOOK IT! participants
runs from October through March of each school year, allows teachers to are more likely to hold advanced degrees and earn higher wages than
set monthly reading goals for their students. Students who meet their the general population. Most importantly, adults who went through the
monthly goal are rewarded with a certificate for a free, one-topping program as children are more likely to establish regular reading routines
Personal Pan Pizza and reading journal from Pizza Hut. with their own kids.

The basics of the program have stayed consistent for more than a While BOOK IT! has had widespread success, there are more opportunities
generation, but BOOK IT! is getting an upgrade with innovative digital to promote literacy in the U.S. and around the world. In 2016, Pizza Hut
features that will be available to teachers and parents beginning in the announced a commitment to expand on BOOK IT! with a new social
2018 – 2019 school year. A streamlined enrollment process and interactive impact campaign known as Pizza Hut: The Literacy Project. Through this
dashboard will make it easier for teachers and parents to monitor children’s effort, Pizza Hut has partnered with First Book to empower teachers with
reading progress and celebrate their success with digital award certificates. greater resources.

Pizza Hut restaurants now fundraise to support this effort. Money raised
Customer Donations Make a Difference provides teachers with credits to the First Book Marketplace, which they

$3 Buys a new book

can use to purchase books and other educational resources at deeply
discounted rates. In the first year of the campaign, The Literacy Project

$5 Provides school supplies

reached 15.9 million people and distributed more than 275,000 books
and educational resources in the U.S., Brazil, Canada, Costa Rica and

$10 Purchases a backpack of books

South Africa. Additional countries and locations will be added throughout
the campaign, with the goal of reaching 100 million people over 10 years.

THE LITERACY PROJECT

Learn more about how Pizza Hut:
The Literacy Project is unlocking
potential through a love of reading.

Watch video

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 PEOPLE > COMMUNITY & PHILANTHROPY

Youth Education
Helping Young People Achieve More

Today’s youth are tomorrow’s business, political and community leaders —

and the future leaders of our company.

Yum! Brands employs large numbers of teens and young adults in our working behind the scenes with Taco Bell’s renowned social media and
restaurants, giving us both a unique understanding of and opportunity marketing teams at the MTV Video Music Awards, NBA All-Star Skills
to address the needs of young people. Through our youth education efforts, Challenge and Feed the Beat™ showcase in Austin, Texas.
we aim to equip youth with the resources to pursue their educational and
professional aspirations. In 2017, Taco Bell enlisted the first class of Live Más Scholarship
recipients to help engage and support the next. Through the Feed a
Youth education is the Taco Bell Foundation’s singular focus. Its hallmark Dream promotion, for a limited time, every Doritos® Locos Taco sold
program is the Live Más Scholarship, established in 2015. The program in Taco Bell restaurants raised 10 cents for the Live Más Scholarship.
is designed to support young innovators, creators and dreamers — To develop the campaign, scholarship recipients took part in a creative
students with passion and drive who may not qualify for conventional workshop in Chicago, where they worked side-by-side with veteran
academic or athletic scholarships. Students apply for the scholarship by advertising and marketing creatives to formulate the campaign’s ad
submitting short videos telling the story of their life’s passions and concept and script. Students were involved in the filming of the
chosen applicants receive funding ranging from $5,000 to $25,000 commercial in California, performing key jobs ranging from behind-
to pursue their education. the-scenes strategizing and set development to starring roles. They also
created three taco packaging designs for use during the promotion.

The Live Más Scholarship This was more than a fundraiser, just as the Live Más Scholarship is
more than financial support. By connecting recipients to a community

$10 Million of like-minded peers and professionals and providing real-world

opportunities to practice their craft, Taco Bell and the Taco Bell Foundation
in Live Más Scholarship funding are giving students and employees the chance to turn their dream
jobs into reality.
by 2022

$1-2 Million
per year

440 Recipients
2016-2017

Both Taco Bell restaurant employees and customers are eligible to apply,
LIVE MÁS SCHOLARSHIP
and the Taco Bell Foundation recently added a renewal program to allow See how the commercial was
students to reapply for funding to further their education. The Live Más developed, directed and acted
Scholarship not only helps fund educational dreams, but also creates by recipients of Taco Bell’s
practical mentoring opportunities outside the classroom. Scholarship Live Más Scholarship.
recipients have learned from some of the best in their aspired industries, Watch video

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 PEOPLE > COMMUNITY & PHILANTHROPY

Taco Bell Foundation’s other activities have a similar focus of helping

young people to pursue career and educational pathways through
financial literacy resources, mentorship and job skill experiences, college
readiness programming, creative and social innovation experiences and
direct financial assistance. Grantees may apply for funding by invitation
only. The Foundation’s current partners include Boys & Girls Clubs of
America, City Year AmeriCorps, Junior Achievement® and Moneythink.

The Taco Bell Foundation

$5 Million
grants to youth-serving
organizations in 2017

200,000 JUMP-STARTING CAREERS AT PIZZA HUT

young people impacted
Pizza Hut, along with Taco Bell, is a member of the
100,000 Opportunities Initiative, which engages young
people ages 16 to 24 who face systemic barriers to jobs
and education in apprenticeships, internships, training
programs and employment. Employers in the coalition
agree to share best practices with others and learn
from leading experts and research how to connect
with this untapped population.

In line with this commitment, Pizza Hut recently hosted

a group of high school juniors from Uplift Education for
a career immersion day at its corporate headquarters.
Employees across Pizza Hut guided scholars through
various parts of the business, where they learned
firsthand about the wide array of careers within the
company. The students took part in career panels, an
office tour, a pizza lunch and hands-on sessions with
Pizza Hut employees.

Taco Bell team member Maurico Bejar wins a $10,000 Live Mas Scholarship from the
Taco Bell Foundation.

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 PEOPLE > COMMUNITY & PHILANTHROPY

Employee Giving
Supporting Our Local Communities

Our employees are as diverse as our businesses and have their own
causes and projects that matter to them.

In line with the transformation of our company, we have refreshed the

Yum! Brands Foundation’s strategy to support what matters to employees.
All Yum! Brands corporate employees in the U.S. can now help their
favorite causes through:

§§ Matching Gifts: Yum! matches employee gifts, dollar-for-dollar, to

approved nonprofit organizations up to $1,000.
§§ Paid-time-off (PTO): Employees may take up to two days of PTO
to volunteer for the cause of their choosing. This does not include
group volunteer activities organized by Yum! Brands, which do not
require PTO.
§§ Support for Board Participation: Employees who give their time,
talent and money to serve on nonprofit boards can have their financial
contributions matched depending on a number of criteria. THE KFC FAMILY FUND HELPS
IN TIMES OF NEED

The Yum! Foundation The KFC Family Fund is a source of support for employees
at participating KFC U.S. restaurants who have been

$350,000 directly impacted by a natural disaster, serious illness or

in employee gifts matched other hardship. While money can’t eliminate the sorrow,
it can hopefully lessen some of the added stress that often

Nearly $300,000 accompanies a crisis. For example, when torrential rains

provided for U.S. hurricane led to major flooding in West Virginia in 2016, KFC team
relief in 2017 member Donald Blake received funding to help repair
his home. Since the KFC Family Fund’s launch in 2015,
more than 350 KFC employees and their families have
The Yum! Foundation also prioritizes support for the community
received more than $272,000 in temporary financial relief.
surrounding our global headquarters in Louisville, Ky. Yum! has
allocated $600,000 in grant donations for each of three community
partners: Dare to Care, Metro United Way™ and Fund for the Arts.
national and global disaster relief efforts, providing hot meals, financial
An important giving priority — which by its nature must be flexible and assistance, in-kind donations and time as needed. As disasters increase
scalable — is expanding our capacity to support communities affected by in frequency and severity worldwide, we are working with our brands to
natural disasters. In the spirit of giving back, Yum! Brands, our employees, develop an improved response framework to allow for quick mobilization
franchisees and external partners have a tradition of assisting with when tragedy strikes.

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 PEOPLE > EMPLOYEE BENEFITS

EMPLOYEE BENEFITS
Championing Wellness in Every Form

Yum! appreciates the work our employees do every day and is

committed to building a workplace where our people can thrive.

We understand that our people will be at their best only when they and their families are healthy
and secure, and when they have the freedom to enjoy all of the roles that they play, whether they
are parents, caregivers or community volunteers.

Yum! and our franchisees offer restaurant employees a range of medical benefits, child care
discounts, educational scholarships and tuition reimbursement, and gym discounts, as well as
training and development opportunities.

Our corporate above-restaurant employees benefit from a total rewards package that includes
wellness programs, flexible working hours, a generous 401(k) match and more. Highlights include:

Health Care & Insurance Wellness Work/Life Benefits

§§ Medical, dental and vision insurance §§ On-site health and fitness center §§ Bonus and incentive programs
§§ Prescription drug coverage §§ Fitness classes §§ 401(k) with a 6 percent matching
§§ Life insurance §§ Dedicated personal trainers contribution from Yum! Brands
§§ Accident and disability insurance §§ Weight management and §§ Paid vacation
§§ Flexible spending accounts nutrition programs §§ Flexible hours
§§ On-demand remote medical care §§ Health assessments and screenings §§ Parental time-off
§§ Autism support services as part of §§ Company-sponsored recreational sports §§ Onsite child care
the medical plan §§ On-campus walking trail and basketball, §§ Legal services
volleyball and tennis courts §§ Adoption assistance program
§§ On-site massage therapy §§ Onsite concierge
§§ Walking challenges §§ Identity fraud protection

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 PEOPLE > ETHICS & HUMAN RIGHTS

ETHICS & HUMAN RIGHTS

Doing What’s Right

Yum! Brands’ success is built on the integrity and high ethical standards of our employees, a fact confirmed
by our stakeholders in our materiality assessment. Our ethics and compliance program, based on our
Global Code of Conduct, demands the highest ethical standards in all of our operations around the globe.

Our Global Code of Conduct is more than a document — it is the foundation When it comes to interacting with one another, employees are expected to
for the way we conduct ourselves and do business throughout the world. demonstrate mutual respect in all professional relationships. Sexual, racial,
It calls for the highest standards of ethical behavior from our Board ethnic and religious or any other type of harassment, has no place in the
members and all employees of Yum! Brands and its subsidiaries. Every Yum! Brands work environment. Harassment includes conduct such as
year, our Board of Directors and Yum!’s 4,000 most senior employees slurs, jokes, intimidation or any other verbal or physical attack upon a
must certify in writing that they have read and understand the Code person because of gender, sexual orientation, race, religion, national
and complete a conflicts of interest questionnaire. The Code is available origin or other legally protected status of a person.
online in seven languages and was most recently updated in 2018 to
reflect our company’s transformation. Included as a supplement to our It is Yum!’s policy to deal fairly with employees; provide equal opportunity
Global Code of Conduct is our International Anti-Corruption Policy. This for all in recruiting, hiring, developing, promoting and compensating
policy applies to all directors, officers and employees of Yum!, as well as without regard to race, religion, color, age, gender, disability, genetic
to our international agents, consultants, joint venture partners and any information, military or veteran status, sexual orientation, gender
other third-party representatives acting on our behalf. identity and/or expression, citizenship, national origin or other legally
protected status; maintain a professional, safe and discrimination-free
Beyond regularly reviewing the Global Code of Conduct, all company- work environment; recognize and compensate employees based on
owned restaurant employees are required to participate in annual their performance; and provide a competitive array of benefits.
compliance training. Different topics are covered each year, ranging
from anticorruption to data security. Specific training areas and Yum! maintains a work environment that respects and supports human
formats vary by brand and market. rights for all of our employees around the world. This issue, along with
Labor Practices, was identified as among our most material issues in our
We encourage employees to raise ethical concerns and provide multiple survey of stakeholders. Basic tenets of our human rights policy include:
channels for them to do so safely and anonymously. An independent
third party operates an ethics hotline, known as The Network, on our §§ We do not employ underage children or forced laborers.
behalf. The Network is available 24/7 in more than 120 countries and §§ We prohibit physical punishment and abuse.
territories. Once a call is received, the third party relays the information
to Yum! management, who review every claim and investigate when §§ We respect the right of all employees to associate or not to associate
necessary. The Audit Committee of our Board has established additional with any group as permitted by applicable laws and regulations.
procedures for complaints and concerns of employees regarding §§ We require compliance with all local labor laws in every market
accounting and auditing matters, including the confidential or anonymous where we operate.
submission of such complaints or concerns. More details on these §§ We promote, protect and help to ensure the equal rights of all persons,
procedures can be found here. Yum! has a strict policy against retaliation including minorities, women and those with disabilities.
for good-faith reports, regardless of their ultimate veracity.
§§ We partner with stakeholders to collect input and help guide our
human rights efforts.

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 PEOPLE > ETHICS & HUMAN RIGHTS

Yum! holds the same expectations of ethical, legal and socially responsible §§ Forced and Indentured Labor: No supplier should perform work
business practices for its suppliers. Suppliers must abide by all applicable or produce goods for Yum! Brands using labor under any form
laws, codes or regulations regarding wages and benefits, worker’s of indentured servitude, nor should threats of violence, physical
compensation, working hours, equal opportunity, worker and product safety, punishment, confinement or other form of physical, sexual,
and conflict minerals policies. Yum! Brands also expects that suppliers will psychological or verbal harassment or abuse be used as a method of
conform their practices to the published standards for their industry. discipline or control.
§§ Notification to Employees: To the extent required by law, suppliers
Beyond these minimum standards, our Supplier Code of Conduct sets forth should establish companywide policies implementing the standards
our expectations for suppliers and subcontractors. Topics covered include: outlined in the Supplier Code of Conduct and post notices of those
policies for their employees. The notices should be in all languages
§§ Working Hours & Conditions: Suppliers are expected to provide necessary to fully communicate the policy to employees.
their employees with safe and healthy working conditions and
reasonable daily and weekly work schedules. We expect suppliers to review such requirements internally to verify
§§ Nondiscrimination: Suppliers should follow all laws prohibiting compliance with the Code. In addition, we reserve the right to conduct
discrimination in hiring and employment on the grounds of race, unannounced assessments, audits and inspections of supplier facilities.
color, religion, sex, age, physical disability, national origin, creed or To manage performance, audits of key suppliers are conducted annually,
any other basis prohibited by law. which include a review of the supplier’s internal processes and site visits,
§§ Child Labor: Suppliers should not use workers under the legal as needed. Violations may lead to disciplinary action, including termination
age for employment. In no event should suppliers use employees of the supplier relationship for repeated violations or noncompliance.
younger than 14 years of age.

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 REPORTING > FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING
STATEMENTS

This report may contain “forward-looking statements” within the under the circumstances. Forward-looking statements are neither
meaning of Section 27A of the Securities Act of 1933 and Section 21E predictions nor guarantees of future events, circumstances or performance
of the Securities Exchange Act of 1934. We intend all forward-looking and are inherently subject to known and unknown risks, uncertainties
statements to be covered by the safe harbor provisions of the Private and assumptions that could cause our actual results to differ materially
Securities Litigation Reform Act of 1995. Forward-looking statements from those indicated by those statements. There can be no assurance that
generally can be identified by the fact that they do not relate strictly to our expectations, estimates, assumptions and/or projections, including
historical or current facts and by the use of forward-looking words such with respect to the future earnings and performance or capital structure
as “expect,” “expectation,” “believe,” “anticipate,” “may,” “could,” “intend,” of Yum! Brands, will prove to be correct or that any of our expectations,
“belief,” “plan,” “estimate,” “target,” “predict,” “likely,” “seek,” “project,” estimates or projections will be achieved.
“model,” “ongoing,” “will,” “should,” “forecast,” “outlook,” “new store
opening goals” or similar terminology. These statements are based on The forward-looking statements included in this report are only made
and reflect our current expectations, estimates, assumptions and/or as of the date of this report, and we disclaim any obligation to publicly
projections, our perception of historical trends and current conditions, update any forward-looking statement to reflect subsequent events
as well as other factors that we believe are appropriate and reasonable or circumstances.

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 REPORTING > GRI INDEX

GRI INDEX
The 2017 Global Citizenship & Sustainability Report is prepared according to Global Reporting Initiatives (GRI) Standards Core option. GRI is
the most widely recognized framework for sustainability reporting.

Disclosure
Number Disclosure Title 2018 Response

GENERAL DISCLOSURES
Organizational Profile
102-1 Name of the organization Corporate Profile, pg. 3

102-2 Activities, brands, products and services Corporate Profile, pg. 3

102-3 Location of headquarters Corporate Profile, pg. 3

102-4 Location of operations Corporate Profile, pg. 4

102-5 Ownership and legal form Publicly traded company

102-6 Markets served Corporate Profile, pg. 4

102-7 Scale of the organization Corporate Profile, pg. 4

102-8 Information on employees and other workers People: Diversity & Inclusion, pgs. 51-53

102-9 Supply chain Planet: Supply Chain, pgs. 38-40

Yum! Brands 2017 Annual Report, Form 10-K, pg. 4
102-10 Significant changes to the organization and its Yum! Brands 2017 Annual Report, Form 10-K, pg. 2
supply chain
102-11 Precautionary Principle or approach Yum! does not address the precautionary approach, but we do assess risks across our organization.
Yum! Brands 2017 Annual Report, Form 10-K, pgs. 5-13
102-12 External initiatives CDP, GRI, DJSI, UNSDGs, The U.S. Roundtable for Sustainable Beef (USRSB) , The Roundtable for
Sustainable Palm Oil (RSPO), Women’s Foodservice Forum (WFF), Multi-Cultural Foodservice &
Hospitality Alliance, Consortium for Graduate Studies in Management, Carbon Statement, The
Paper Cup Recovery and Recycling Group (PCRRG), U.S. Green Building Council’s Leadership in
Energy and Environmental Design (LEED), Food Waste Reduction Alliance (FWRA), World Resources
Institute (WRI) Aqueduct tool, One Health, International Labour Organization (ILO)

Stakeholder Engagement, pgs. 10-11

102-13 Membership of associations Stakeholder Engagement, pgs. 10-11

Strategy
102-14 Statement from senior decision-maker CEO Message, pg. 5

Ethics and Integrity

102-16 Values, principles, standards and norms of People: Ethics & Human Rights, pgs. 61-62
behavior Yum! Worldwide Code of Conduct
Governance
102-18 Governance structure Corporate Governance, pg. 8

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 REPORTING > GRI INDEX

Disclosure
Number Disclosure Title 2018 Response

Stakeholder Engagement
102-40 List of stakeholder groups Stakeholder Engagement, pg. 10

102-41 Collective bargaining agreements None of our employees are covered by collective bargaining agreements.

102-42 Identifying and selecting stakeholders Stakeholder Engagement, pg. 10

102-43 Approach to stakeholder engagement Stakeholder Engagement, pgs. 10-11

102-44 Key topics and concerns raised Stakeholder Engagement, pgs. 10-11

Reporting Practice
102-45 Entities included in the consolidated Yum! Brands 2017 Annual Report, Form 10-K, pg. 2
financial statements
102-46 Defining report content and topic boundaries Materiality, pgs. 12-13
About This Report, pg. 14
102-47 List of material topics Materiality, pg. 13

102-48 Restatements of information About This Report, pg. 14

102-49 Changes in reporting About This Report, pg. 14

102-50 Reporting period About This Report, pg. 14

102-51 Date of most recent report About This Report, pg. 14

102-52 Reporting cycle About This Report, pg. 14

102-53 Contact point for questions regarding the report About This Report, pg. 14

102-54 Claims of reporting in accordance with the GRI About This Report, pg. 14
Standards
102-55 GRI content index About This Report, pg. 14

102-56 External assurance About This Report, pg. 14

SPECIFIC STANDARD DISCLOSURES

GRI 201: Economic Performance

103-1 Explanation of the material topic and its Boundary Yum! Brands 2017 Annual Report, Form 10-K

103-2 The management approach and its components Yum! Brands 2017 Annual Report, Form 10-K

103-3 Evaluation of the management approach Yum! Brands 2017 Annual Report, Form 10-K

201-1 Direct economic value generated and distributed Yum! Brands 2017 Annual Report, Form 10-K, pg. 17

201-2 Financial implications and other risks and 2017 Climate Change CDP Response
opportunities due to climate change

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 REPORTING > GRI INDEX

Disclosure
Number Disclosure Title 2018 Response

GRI 205: Anti-corruption

103-1 Explanation of the material topic and its Boundary People: Ethics & Human Rights, pgs. 61-62

103-2 The management approach and its components People: Ethics & Human Rights, pgs. 61-62

103-3 Evaluation of the management approach People: Ethics & Human Rights, pgs. 61-62

205-2 Communication and training about People: Ethics & Human Rights, pgs. 61-62
anti-corruption policies and procedures
205-3 Confirmed incidents of corruption and There were no confirmed incidents of corruption during 2017.
actions taken
GRI 206: Anti-competitive Behavior
103-1 Explanation of the material topic and its Boundary People: Ethics & Human Rights, pgs. 61-62

103-2 The management approach and its components People: Ethics & Human Rights, pgs. 61-62

103-3 Evaluation of the management approach People: Ethics & Human Rights, pgs. 61-62

206-1 Legal actions for anti-competitive behavior, No legal actions were taken for anti-competitive behavior, anti-trust or monopoly practices
anti-trust and monopoly practices during 2017.
GRI 302: Energy
103-1 Explanation of the material topic and its Boundary Planet: Green Buildings, pg. 30
Planet: Energy Efficiency, pgs. 31-32
103-2 The management approach and its components Planet: Green Buildings, pg. 30
Planet: Energy Efficiency, pgs. 31-32
103-3 Evaluation of the management approach Planet: Green Buildings, pg. 30
Planet: Energy Efficiency, pgs. 31-32
302-1 Energy consumption within the organization Total Energy Consumption Within the Organization: 1,126,543 MWh
Total Fuel Consumption from Non-Renewable Sources: 435,813 MWh
Total Fuel Consumption from Renewable Sources: 32 MWh
Total Energy Consumption from Non-Renewable Sources: 611,960 MWh
Total Energy Consumption from Renewable Sources: 78,738 MWh
302-4 Reduction of energy consumption Planet: Energy Efficiency, pg. 31

GRI 303: Water

103-1 Explanation of the material topic and its Boundary Planet: Green Buildings, pg. 30
Planet: Water Conservation, pgs. 33-35
103-2 The management approach and its components Planet: Green Buildings, pg. 30
Planet: Water Conservation, pgs. 33-35
103-3 Evaluation of the management approach Planet: Green Buildings, pg. 30
Planet: Water Conservation, pgs. 33-35
303-2 Water sources significantly affected by Planet: Water Conservation, pgs. 33-34
withdrawal of water

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 REPORTING > GRI INDEX

Disclosure
Number Disclosure Title 2018 Response

GRI 305: Emissions

103-1 Explanation of the material topic and its Boundary Planet: Green Buildings, pg. 30
Planet: Energy Efficiency, pgs. 31-32
103-2 The management approach and its components Planet: Green Buildings, pg. 30
Planet: Energy Efficiency, pgs. 31-32
103-3 Evaluation of the management approach Planet: Green Buildings, pg. 30
Planet: Energy Efficiency, pgs. 31-32
305-4 GHG emissions intensity Planet: Green Buildings, pg. 30
Planet: Energy Efficiency, pg. 31
305-5 Reduction of GHG emissions Planet: Green Buildings, pg. 30
Planet: Energy Efficiency, pg. 31
GRI 306: Effluents and Waste
103-1 Explanation of the material topic and its Boundary Planet: Green Buildings, pg. 30
Planet: Waste Reduction, pgs. 36-37
Boundary for Effluents and Waste only includes US operations.
103-2 The management approach and its components Planet: Green Buildings, pg. 30
Planet: Waste Reduction, pgs. 36-37
103-3 Evaluation of the management approach Planet: Green Buildings, pg. 30
Planet: Waste Reduction, pgs. 36-37
306-2 Waste by type and disposal method Planet: Waste Reduction, pgs. 36-37

GRI 308: Supplier Environmental Assessment

103-1 Explanation of the material topic and its Boundary Planet: Supply Chain, pgs. 38-40

103-2 The management approach and its components Planet: Supply Chain, pgs. 38-40

103-3 Evaluation of the management approach Planet: Supply Chain, pgs. 38-40

308-2 Negative environmental impacts in the supply Planet: Forest Stewardship, pgs. 41-42
chain and actions taken
GRI 401: Employment
103-1 Explanation of the material topic and its Boundary People: Culture & Talent, pgs. 45-46

103-2 The management approach and its components People: Culture & Talent, pgs. 45-46

103-3 Evaluation of the management approach People: Culture & Talent, pgs. 45-46

401-2 Benefits provided to full-time employees that are People: Employee Benefits, pg. 60
not provided to temporary or part-time employees
GRI 402: Labor/ Management Relations
103-1 Explanation of the material topic and its Boundary People: Ethics & Human Rights, pgs. 61-62

103-2 The management approach and its components People: Ethics & Human Rights, pgs. 61-62

103-3 Evaluation of the management approach People: Ethics & Human Rights, pgs. 61-62

402-1 Minimum notice periods regarding We require our franchisees to fully comply with applicable national and/or local legal requirements
operational changes for minimum notice periods regarding significant operational changes.

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Disclosure
Number Disclosure Title 2018 Response

GRI 403: Occupational Health and Safety

103-1 Explanation of the material topic and its Boundary People: Ethics & Human Rights, pgs. 61-62

103-2 The management approach and its components People: Ethics & Human Rights, pgs. 61-62

103-3 Evaluation of the management approach People: Ethics & Human Rights, pgs. 61-62

403-1 Workers representation in formal joint There are no formal joint manager-worker health and safety committees in place.
management–worker health and safety committees
GRI 404: Training and Education
103-1 Explanation of the material topic and its Boundary People: Talent Development, pgs. 47-50

103-2 The management approach and its components People: Talent Development, pgs. 47-50

103-3 Evaluation of the management approach People: Talent Development, pgs. 47-50

404-2 Programs for upgrading employee skills and People: Talent Development, pgs. 47-50
transition assistance programs
GRI 405: Diversity and Equal Opportunity
103-1 Explanation of the material topic and its People: Diversity & Inclusion, pgs. 51-53
Boundary
103-2 The management approach and its components People: Diversity & Inclusion, pgs. 51-53

103-3 Evaluation of the management approach People: Diversity & Inclusion, pgs. 51-53

405-1 Diversity of governance bodies and employees Gender

Female Male
Board of Directors 27% 73%
Global Management 41% 59%

405-2 Ratio of basic salary and remuneration of We have a strong commitment to ensuring we do not have pay discrepancies based on gender
women to men and ethnicity and run statistical multi-variate regression analysis to evaluate potential gender and
ethnicity disparities each year. Below is a table that shows the 2017 average levels of compensation
between males and females in the U.S., which represents a bit less than half our global population.
According to our statistical analyses, when variables used in making pay decisions are factored, we
do not have any statistically significant variances in pay for gender or ethnicity.
Female Male
Executives 52% 48%
Management: Above-Restaurant 46% 54%
Management: Restaurant 51% 49%
Non-Management Above-Restaurant 52% 48%
Non-Management Restaurant 53% 47%

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Disclosure
Number Disclosure Title 2018 Response

GRI 407: Freedom of Association and Collective Bargaining

103-1 Explanation of the material topic and its Boundary People: Ethics & Human Rights, pgs. 61-62

103-2 The management approach and its components People: Ethics & Human Rights, pgs. 61-62

103-3 Evaluation of the management approach People: Ethics & Human Rights, pgs. 61-62

407-1 Operations and suppliers in which the right to People: Ethics & Human Rights, pg. 62
freedom of association and collective bargaining
may be at risk
GRI 408: Child Labor
103-1 Explanation of the material topic and its Boundary People: Ethics & Human Rights, pgs. 61-62

103-2 The management approach and its components People: Ethics & Human Rights, pgs. 61-62

103-3 Evaluation of the management approach People: Ethics & Human Rights, pgs. 61-62

408-1 Operations and suppliers at significant risk for People: Ethics & Human Rights, pg. 62
incidents of child labor
GRI 409: Forced or Compulsory Labor
103-1 Explanation of the material topic and its Boundary People: Ethics & Human Rights, pgs. 61-62

103-2 The management approach and its components People: Ethics & Human Rights, pgs. 61-62

103-3 Evaluation of the management approach People: Ethics & Human Rights, pgs. 61-62

409-1 Operations and suppliers at significant risk for People: Ethics & Human Rights, pg. 62
incidents of forced or compulsory labor
GRI 412: Human Rights Assessment
103-1 Explanation of the material topic and its Boundary People: Ethics & Human Rights, pgs. 61-62

103-2 The management approach and its components People: Ethics & Human Rights, pgs. 61-62

103-3 Evaluation of the management approach People: Ethics & Human Rights, pgs. 61-62

412-2 Employee training on human rights policies People: Ethics & Human Rights, pgs. 61-62
or procedures
GRI 414: Supplier Social Assessment
103-1 Explanation of the material topic and its Boundary People: Ethics & Human Rights, pgs. 61-62

103-2 The management approach and its components People: Ethics & Human Rights, pgs. 61-62

103-3 Evaluation of the management approach People: Ethics & Human Rights, pgs. 61-62

414-1 New suppliers that were screened using People: Ethics & Human Rights, pg. 62
social criteria

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Disclosure
Number Disclosure Title 2018 Response

GRI 416: Customer Health and Safety

103-1 Explanation of the material topic and its Boundary Food: Food Safety, pgs. 17-21
Food: Choice & Nutrition, pgs. 22-25
103-2 The management approach and its components Food: Food Safety, pgs. 17-21
Food: Choice & Nutrition, pgs. 22-25
103-3 Evaluation of the management approach Food: Food Safety, pgs. 17-21
Food: Choice & Nutrition, pgs. 22-25
416-1 Assessment of the health and safety impacts of Food: Choice & Nutrition, pgs. 22-25
product and service categories

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