Materiality

We recognize that our actions take place in a global context that includes key stakeholders — employees, customers, franchisees, shareholders and communities.

For this reason, our material issues — or the topics that comprise our Global Citizenship & Sustainability Strategy and reporting — depend on stakeholder input. Focusing on materiality allows us to make decisions and set goals based on what matters to our stakeholders, which helps build trust. Materiality also allows us to respond to global trends, such as changing consumer behaviors and increased investor interest in ESG topics. In fact, nearly all of Yum! Brands’ top 10 shareholders were signatories to the UN Principles for Responsible Investment, a clear sign that performance on ESG factors is driving investor decisions to an increasing degree.

In 2017, we enlisted a third party to conduct our first formal materiality assessment based on guidance provided by the Global Reporting Initiative (GRI). This materiality assessment process determined our Global Citizenship & Sustainability Report content through the following six steps:

1. Identification of topics and stakeholders to consider in the assessment. We reviewed publically reported materials of stakeholders and peers regarding our industry and business, as well as discussedissues with employees, investors and NGOs.
2. Prioritization of stakeholder groups based on weighting relative to their importance to Yum! Brands and evidence gathering of internal and external documents to understand priority topics for Yum! and our stakeholders.
3. Engagement through in-depth interviews and surveys with internal and external stakeholders to gather information, including opportunities and risks.
4. Synthesis and Analysis of findings to aggregate and score evidence so that a materiality matrix could be created to document findings.
5. Validation of findings with key Yum! leaders.
6. Stakeholder Engagement through interviews with internal and external stakeholders to gather additional direct input to further prior-itize key topics and develop final materiality matrix.

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.