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McDonald's to boost diversity among suppliers to 25%

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By Hilary Russ

NEW YORK, July 22 (Reuters) - McDonald's Corp and more than 20 of its largest U.S. suppliers - including beef producer Cargill and chicken processor Tyson Foods - on Thursday said they will increase diversity among their providers.

The burger chain, which reports second quarter earnings on Wednesday, vowed to boost U.S. spending with diverse suppliers and service providers to 25% by 2025, from about 23% currently.

The increase will add at least another $200 million annually to the $3.3 billion that McDonald's spent with diverse suppliers in 2020, out of the $14 billion it spends on suppliers altogether.

McDonald's and other companies launched broad new diversity goals amid a national reckoning with race prompted by the murder of George Floyd, an unarmed Black man, in police custody.

In February, McDonald's tied executive bonuses to its diversity goals and released details of its workforce demographics for the first time.

Because McDonald's has more than 39,000 restaurants globally, small changes in its supply chain can ripple into other industries.

"Our size and scale is an asset in driving societal change and bringing others along," it said in an internal message on Thursday seen by Reuters.

In May, the chain said it would more than double the money it spends with diverse advertising firms. The same day, companies owned by media entrepreneur Byron Allen sued McDonald's for allegedly not advertising enough with Black-owned media outlets.

Black franchisees have also claimed in discrimination lawsuits that they were steered towards underperforming stores and denied equal financial support.

"We're trying to be different, to make sure we're really trying to build an inclusive workplace moving forward," Reggie Miller, global diversity equity and inclusion officer, said in an interview. He joined McDonald's in November.

Some suppliers - including law firm Baker McKenzie and professional services firm Accenture PLC - signed a new pledge to increase representation of underrepresented groups and create ways to track their progress.

McDonald's said in its internal memo that it will provide annual progress reports. (Reporting by Hilary Russ; Editing by Aurora Ellis)