Sustainability at Darden

May 2010

Sustainabilityat DardenCOMPLETE GRI CONTENT

Contents

Executive Message..........................................................................................................................2

Our Philosophy and Strategy .........................................................................................................5

Governance Approach ....................................................................................................................9

Sustainability Reporting ...............................................................................................................12

The Sustainability of Our Restaurants .........................................................................................14

The Sustainability Features of Our New HQ...............................................................................20

Case Study: A New Era for Darden .................................................................................................25

Engaging with Our Employees ....................................................................................................27

Food Safety, Health and Wellness, and Animal Welfare ..............................................................35

Promoting Sustainability in Our Supply Chain ...........................................................................45

Case Study: Growing Safe and Sustainable Produce in Mexico..........................................................48

Our Approach to Seafood Sustainability......................................................................................52

Case Study: Sustaining the North Atlantic Lobster Fishery ................................................................60

Case Study: Our Work in Two Lobster Fisheries ................................................................................62

Reducing Our Energy Use ...........................................................................................................64

Reducing Our Water Use .............................................................................................................72

Reducing Our Waste ....................................................................................................................77

Case Study: Our Restaurant Green Teams.........................................................................................82

Managing for Long-Term Success ...............................................................................................84

Our Collaborative Partnerships ....................................................................................................87

Our Communities ........................................................................................................................91

Case Study: Food Donations .............................................................................................................92

GRI Index ....................................................................................................................................94

SUSTAINABILITY AT DARDEN: COMPLETE GRI CONTENT 1

Executive Message

At Darden, strong values are just as important as business acumen and operations skills, and wehave a strong track record of doing what’s right. We are focused on creating a great company –one that makes a positive difference in people’s lives.

For our employees, doing what’s right means building talent and providing opportunities that willallow them to achieve their personal and professional dreams. And outside the walls of our restaurants,it means serving our communities and doing our part to sustain the Earth’s natural resources.

Sustainability plays a big part in our overall business strategy as we strive to make a difference on issuesranging from seafood sustainability to energy efficiency, from water use to how we treat our employees.

Our company has identified a wide range of sustainability opportunities and challenges, and we’recommitted to addressing them responsibly and with an appropriate sense of urgency. Our scale –and our relationships with our employees and business partners, governments andnongovernmental organizations – gives us many points of leverage to make improvements.

Our approach to sustainability is built on four principles:

Focus on Resources: We see energy, climate change and water resources as interlinked issues.The basic ingredients for our business come from healthy oceans and healthy agriculturalecosystems. Climate change is expected to affect oceans and land-based agriculture in part byinfluencing weather patterns and the availability of water, which raises the risk of supplydisruptions. These changes – along with the increased discussion of greenhouse gas regulations –have the potential to increase the costs of food and energy required for our business. So it makesgood business sense – and it’s the right thing to do – to take a resource-focused approach to oursustainability strategy. We work hard to use energy and water efficiently in our restaurants andsupport operations. This reduces our climate and water footprints, saves money and enhances ourcompetitiveness.

Engage our Employees: Each of our restaurant brands offers guests a distinct combination offood, service and atmosphere. The secret that drives our growth – and potential – is our insightinto what guests expect from our brands; indeed, brand-building is a key differentiator forDarden. But it’s our employees who deliver the experience to our guests. Their commitment andpassion are the foundation of our success. So it’s important to engage them in our sustainabilityapproach. Already, about 10,000 of our employees serve on the Green Teams we’ve formed ateach restaurant. They’re helping us save energy and water and manage waste better. Since they’reon the front lines, they’re in the best position to see where we can improve. For example, anemployee’s suggestion for a process improvement in our Olive Garden restaurants is expected tosave 400,000 rolls of register paper, worth $400,000 each year.


Leverage our Scale: We own and operate 1,800 restaurants in the United States and Canada.We have nearly 180,000 employees, and we’re the 29th largest private-sector employer in theUnited States. We purchase from 1,500 suppliers in 35 countries, and we served more than 400million meals in 2009. One of the key strengths of our business is our ability to develop innovativesolutions and then bring those solutions to scale across our operations. In this way, even smallchanges can add up to big impacts. We’ve applied this thinking to environmental and socialchallenges as well as financial ones. A suite of water-saving measures we rolled out in 2009, forexample, will save an estimated 700,000 gallons of water per year in each of the restaurants thatimplement them.

Collaborate: Our most important challenges range from ensuring the safety of food in ourglobal supply chain to supporting sustainable agriculture and fisheries. What these disparateissues have in common is that no one company can tackle them alone. Collaboration throughoutthe value chain and between government and business organizations is needed. And we often findthat research and advocacy organizations bring important information and insights to the table.We’re working collaboratively on many issues. For example, Darden played a key role inestablishing the Global Aquaculture Alliance, which provides a forum for experts from multiplesectors to develop standards for environmentally and socially responsible aquaculture practices.

The following are additional examples of what we’ve accomplished through this four-prongedapproach:

1On our partners’ produce farms in Mexico, our relentless drive to ensure a safe supply offood for our restaurants has transformed the lives of migrant workers, built successfulbusinesses and improved environmental conditions.

1 In our restaurants throughout the United States, we donate rather than discard surplusfood, when our food safety standards permit it. In fiscal year 2009, Darden restaurantscontributed 8.7 million pounds of cooked food to food banks and other charities that servehot meals. In addition to helping those in need, the food donations save our restaurants thecost of disposal and earn tax benefits.

1 From New Brunswick to Nicaragua, we’re working with diverse organizations to supportsustainable lobster fisheries. And we’re partnering with the New England Aquarium topromote sustainable fisheries and provide our seafood buyers with tools to analyze thecomplex choices involved in buying seafood.

1 At our new LEED Gold-certified headquarters building in Orlando, Florida, we’veincorporated a wide range of features that save energy and water, use recycled materials andtreat storm water naturally. The building also provides a healthy, collaborative environmentfor our employees.

Though touching on many distinct issues, these examples demonstrate that a collaborative,resource-focused approach can lead to environmental, social and economic benefits. Sustainabilityissues are complex and multi-faceted, and so are the solutions.


Executive Message

To drive continued sustainability progress, we have established a governance structure thatincludes a Sustainability Leadership Council composed of our brand presidents and other seniorexecutives. Cross-functional sustainability teams focus on key areas, including our supply chain,energy and water, and our people. The Public Responsibility Committee of our Board ofDirectors helps establish direction and oversees our progress and performance.

We have also developed an initial set of goals for improved environmental performance, based inpart on a comprehensive carbon footprint study of our operations. We are calling these goals“15x15 over 0.” That is, we aim to reduce our per-restaurant energy and water use by 15 percentby 2015, using 2006 as a baseline. And, we have an aspirational goal of sending zero waste tolandfill that we are using to guide our waste-reduction efforts.

It’s early in our sustainability journey, but we believe our approach will have lasting value because itbuilds on our heritage, values and way of doing business. We have ambitious plans, and we’re confidentthat even better days lie ahead for Darden. For the future of our company as well as the future of theplanet, our vision is to create a more secure and healthy food supply – now and for generations.

Clarence Otis, Jr.Chairman and Chief Executive Officer

Andrew H. MadsenPresident and Chief Operating Officer


Executive Message

Our Philosophy and Strategy

At Darden, our sustainability vision can be summed up like this: We want to create value whilebalancing the well-being of our society, our environment and our business – now and forgenerations.

It’s relatively easy to come up with a vision. The hard part is turning a vision into a reality.

We know that one company can’t do everything, and we know our own limits. So we’re focusedon four primary areas that are within our sphere of influence – energy, water and waste; seafoodsustainability; food safety; and our own workforce. For example, as a company that serves 400million meals annually, food safety has to be the ultimate filter for all that we do. As a result,much of our work revolves around making the ingredients in our food supply chain even safer andmore sustainable. Similarly, as one of the largest buyers of seafood in the world, we can use ourinfluence to promote, preserve and protect the ocean’s resources.

FIGURE 1

Our Sustainability Framework

Darden’score values

Darden’ssustainability

vision

Darden’skey areas

of focus


strategy

“Partnering with our key stakeholders, to generate ecosystem conservation and enhancement solutions to continually create long-term collective value

and resource availability.”

“creating value while balancing the well-being of our society, our environment and our business now and for generations.”

integrity& fairness

respect &caring

diversity alwayslearning & teaching

being “of service”

teamwork excellence

energy, water and wasteseafood sustainability

food safetypeople


Sustainability StrategyDarden had been doing sustainability work for years, particularly around issues in our supplychain, such as seafood sustainability and the welfare of farm animals. But we decided to take amore strategic and focused approach. In early 2008, we did a materiality analysis of our key issues,developed a sustainability vision and mapped out a strategy, as shown in Figure 1. To guide ourwork, we established a Sustainability Leadership Council of senior executives from across ourenterprise. We have developed teams focused on key topics made up of experts from throughoutthe company. We believe in building sustainability knowledge and skills throughout theorganization rather than building a stand-alone sustainability function.

To reach our vision, we are partnering with key stakeholders, particularly those who will not onlychallenge us but who will also work to find common ground. We seek to engage with stakeholderswho are respected by their peers and other industry groups. We look for partners who are expertsin their chosen fields, but who also understand that we must take multiple perspectives intoaccount when making sustainability choices. By working with other businesses and organizations,we can help to drive broader societal changes that go far beyond our own company.

Throughout our sustainability efforts, we’re taking a resource-focused approach (see Figure 2). Inother words, we want to use our resources wisely – from the ingredients we serve, to the energyand water we need to cook the meals, to the waste we generate.

FIGURE 2



We know that sustainability can’t be a series of one-off programs or events. It has to take alonger-term, strategic approach. We believe in taking a holistic view that considers sustainabilitythrough multiple lenses. For example, changing to fluorescent light bulbs saves energy. But thetoxic mercury contained within them creates a waste disposal issue. Therefore, when we switchedto energy-efficient fluorescents in our restaurants, we also instituted an easy-to-use recyclingsystem so that all spent bulbs will be properly disposed.

We want our sustainability strategy to resonate with our employees – nearly 180,000 of them.They are the ones who help us implement many of our key sustainability programs. And they arethe ones who make our business as successful as it is.

Business StrategyOur sustainability strategy is very muchintertwined with the overall approach we take toour business: that of accelerated growth. Werecognize that in order to grow, we must conductour operations sustainably – environmentally,socially and economically. Vibrant growth is vitalfor our company to make an even more significantimpact on all those we touch – well beyond now,and, indeed, for generations. We’ve been laying adynamic growth path for our brands. We want,and expect, to play a larger role and to matter evenmore in the $388 billion restaurant industry. Wesee an opportunity not just to lead our category,but to re-imagine and transform it.

Darden seeks to be more influential in the publicpolicy arena. For example, we have assumed aleadership position on such global issues as thesustainability of our vital resources, particularlyseafood.


Our Formula for Growth

We’re optimistic about the future, and wehave forged a competitive businessstrategy that will help us achieve ourgoals. We are focused on four key areas(detailed below) that we call our Formulafor Growth. This is a framework and guideto align our strategic and day-to-dayefforts.

• Great brand-building is about creating,delivering and evolving compellingbrand promises that make each brandindispensible to its key constituentgroup and that build loyalty over time.

• Great brand support means providinga platform of services that is effective,efficient, expandable and enabling toleaders of our brands.

• A vibrant business model will ensurewe achieve financial success while webuild great brands.

• A vibrant organization, culture andleadership team will make sure we areoperating and collaborating in a nimble,decisive and disciplined way, whileinspiring our people and providing newopportunities for growth.


Looking AheadUltimately, our business depends on consistency and scale. Our scale allows us to have the bestsystems in the industry. It’s what gives us a competitive edge – on delivering our brand promise,providing cost efficiencies that enable future growth, recruiting best-in-class talent, building state-of-the-art systems and investing in society.

Our scale is also what allows us to take smaller, incremental steps toward change in thesustainability realm. When multiplied across 1,800 restaurants, seemingly small improvements canhave a big impact on our company, our environment and the communities in which we are located.

We appreciate the opportunity to share with the public how our sustainability vision and strategy arebeginning to bear fruit. And we look forward to reporting on our continued progress in the future.



Governance Approach

Accountability is the foundation of good governance and trust between our company and itsstakeholders. At Darden, we have established accountability at the Board of Directors and seniorexecutive levels for our sustainability strategy and performance. Cross-functional teams overseeour key sustainability issues, while our sustainability office coordinates the company’s approachand engages with external stakeholders. Our codes of conduct hold Darden employees andmembers of the Board of Directors accountable for acting ethically at all times.

Board of DirectorsOur Board of Directors is composed of 12 members, 10 of whom are independent directors, asdefined by the rules of the New York Stock Exchange. Clarence Otis Jr., Chief Executive Officerof Darden Restaurants, Inc., serves as Chairman of the Board of Directors. Andrew H. Madsen,President and Chief Operating Officer, also serves on the Board of Directors. Three Boardmembers are African-American and two are female (one of whom is Hispanic).

The Board supports a committee structure in which the committees study and consider key issuesin depth, bringing recommendations to the full Board. These Board committees are: Audit,Compensation, Nominating and Governance, Finance, and Public Responsibility. (See Figure 1.)

FIGURE 1

Implementation Team Structure

sustainability leadership councilmembers of the e-team,

o-team and brand presidents

communications sustainability teamhuman resources

internal communicationsenterprise communications

brand communicationscreative services

supply chainsustainability team

purchasingtotal qualitysupply chain

energy, water and waste teamoperations

facilitiesdesign and development

purchasinggreen teams

ceo/coo

board of directorscommittees

nominating and governanceaudit

compensationfinance

public responsibility

Sustainabilty office role: facilitator/coordinator, strategic counselor & external outreach. Coordination between groups is essential for consistency and to leverage opportunities.


The Public Responsibility Committee, which was formed in 1995, has at least three members, allof whom are independent directors. The committee has oversight of the company’s public policypositions and corporate social responsibility (including the physical and social environment anddiversity); it also reviews the corporation’s and the Darden Restaurants Foundation’s support ofcharitable, educational and business organizations. These areas of focus cover the company’s carbonfootprint, greenhouse gas reduction projects, sustainability goal-setting and conservation programs.

Darden believes that communication between the Board, stockholders and other interested partiesis an important part of the company’s corporate governance process. To this end, the Boardprovides a process for shareholders to send communications to the Board, any individual directoror the non-management directors as a group, through the Lead Director. In addition, theCorporate Governance Guidelines and committee charters are available on our website and inprint, free of charge, to any shareholder who requests them. Please seewww.dardenrestaurants.com/corp_gov.asp for more information.

Sustainability Management

Our Sustainability Leadership Council is a 10-member, cross-functional group composed ofsenior executives from operations (including brand presidents), purchasing, government affairs,legal, human resources, business development and our Office of Sustainability. The Council meetsquarterly and maintains oversight of all sustainability-related activities, including trackingemerging issues and developing the company’s sustainability strategy.

Three teams are responsible for coordinating, developing and implementing Darden’ssustainability programs: the Supply Chain Sustainability team, the Energy, Water and Wasteteam, and the Communications Sustainability team. Each of these teams draws on the expertiseof Darden employees across functions and restaurant brands. The Energy, Water and Waste teammeets every few weeks; the Supply Chain and Communications teams meet at least quarterly.

Our Office of Sustainability facilitates and coordinates the implementation of our sustainabilitystrategy, including oversight of our carbon footprint work, the development of sustainability goalsand our external reporting. The office also serves as our liaison with a wide array externalorganizations and partners.

We have standards for all of our restaurants that relate to topics such as food safety, quality, customerservice, training, appearance and condition of the restaurant, and so forth. These standards areenforced by our restaurant management teams, and ultimately by the senior vice presidents ofoperations for each restaurant brand. Our sustainability measures are now among those standards,and they are enforced in the same way. For example, once our Energy, Water and Waste teamdecided in early 2010 to switch to a new water-efficient product for cleaning our kitchen floors, allof our 1,800 restaurants implemented that change within the designated timeframe.


Governance Approach

Ethical ConductAll of our employees are subject to our Code of Business Conduct and Ethics. Appendix A to theCode provides a special Code of Ethics with additional provisions that apply to our principalexecutive officer, principal financial officer, principal accounting officer or controller and personsperforming similar functions (the “Senior Financial Officers”). Appendix B to the Code providesa Code of Business Conduct and Ethics for members of our Board of Directors. These documentsare posted on our website at www.darden.com and are available in print, free of charge, to anyshareholder who requests them. We will disclose any amendments to or waivers of these Codesfor directors, executive officers or Senior Financial Officers on our website.

To encourage our employees to report any illegal or unethical behavior, confidential, toll-freehotline phone numbers for each restaurant brand and the Restaurant Support Center (ourheadquarters in Orlando) are communicated through posters located in all restaurants andthrough other means, including on our website.

Our Supplier Code of Conduct, which covers a full range of ethics issues, is being communicatedto our suppliers.


Governance Approach

Sustainability Reporting

Welcome to Darden Restaurants’ first sustainability report. This report is in the form of a website.Key content for the purposes of the Global Reporting Initiative is also captured in this full PDFdocument. Launched in May 2010, it provides information on our sustainability strategy, how weare implementing that strategy and our progress to date. We’re not following a typical reportingformat, but have developed this website to be useful and engaging to a variety of audiences: firstand foremost, our employees, whose enthusiastic participation is critical to the success of oursustainability strategy. Other important audiences include the organizations with which wecollaborate on sustainability initiatives, our business partners, investors, governmental and non-governmental organizations and the guests at our restaurants.

This report covers our wholly ownedoperations. We also offer information aboutkey issues in our supply chain. The subjectscovered were identified through amateriality analysis and internal discussions.

Since this is our first report, we haveincluded information on the development ofour sustainability approach over severalyears. Some data is presented by fiscal yearand some by calendar year. We have includedthree years of time-series data wherepossible. We plan to take advantage of theflexibility of a web-based report by updatingqualitative and quantitative information asnew information becomes available, ratherthan on an annual cycle. Our energy andgreenhouse gas emissions data was compiledby a third party, but the data in this report(other than financial data prepared for theannual report) has not been subject to formalexternal third-party assurance. Notes on datamethodologies and assumptions are includedwith the data charts.

We used the Global Reporting InitiativeGuidelines to help shape the content of thereport. We are self-declaring the report tobe at a “C” application level. (More


Darden at a Glance

Headquartered in Orlando, Florida, DardenRestaurants, Inc. (NYSE:DRI) is the world’slargest company-owned and -operatedrestaurant company, employingapproximately 180,000 people. Our businessoperates in the full-service dining segment ofthe restaurant industry, primarily in theUnited States. At May 31, 2009 (the end offiscal year 2009), we operated nearly 1,800Red Lobster®, Olive Garden®, LongHornSteakhouse®, The Capital Grille®, BahamaBreeze®, Seasons 52®, Hemenway’s SeafoodGrille & Oyster Bar® and The Old Grist MillTavern® restaurants in the United States andCanada. Through subsidiaries, we own andoperate all of our restaurants in the UnitedStates and Canada, except three. Thosethree restaurants are located in CentralFlorida and are owned by joint venturesmanaged by us. None of our restaurants inthe United States or Canada is franchised. Asof May 31, 2009, we franchised fiveLongHorn Steakhouse restaurants in PuertoRico to an unaffiliated franchisee, and 25 RedLobster restaurants in Japan to anunaffiliated Japanese corporation, under areadevelopment and franchise agreements. Oursales from continuing operations were $7.22billion in fiscal 2009 compared to $6.63billion in fiscal 2008.

information about the Global Reporting Initiative and application levels can be found atwww.globalreporting.org.) We will review and update the GRI index (found at the end of thisdocument) quarterly and will also indicate when information on the website has been updated.

We welcome your feedback on this report. Please provide comments [email protected].


Sustainability Reporting

The Sustainability of Our Restaurants

Why It Matters: Our Restaurants Are the Heart of Our BusinessDarden is the world’s largest full-service restaurantcompany. We operate 1,800 restaurants across sixbrands: Red Lobster, Olive Garden, LongHornSteakhouse, The Capital Grille, Bahama Breezeand Seasons 52. (See map.) And we’re still growing;we have been opening about 60 new restaurantseach year. We employ some 180,000 people in theUnited States and Canada, approximately 99% ofwhom (177,771, at this writing) work directly forone of our restaurant brands.

Most aspects of our sustainability strategy focussquarely on the day-to-day operations of ourrestaurants. That’s where we can have the mostpositive effect on the environment, ourcommunities and our bottom line. And with somany restaurants, even small changes implemented in each one add up to a big impact overall.

The impact can go beyond our business as well. As we educate employees about measures toreduce water use or waste, for instance, they can take what they learn into their homes andcommunities, thereby multiplying our influence even further.


Darden Restaurant Facts

We operate 1,800 restaurants in theUnited States and Canada, including(as of April 2010):

• Olive Garden (722)• Red Lobster (695)• LongHorn Steakhouse (335)• The Capital Grille (41)• Bahama Breeze (25)• Seasons 52 (11)

We have approximately 180,000employees, 99% of whom work directlyfor one of our restaurant brands.

What We’re Doing: Driving Sustainability ImprovementsWe’re focusing closely on resource use in our restaurants – that is, the energy and water we useand the waste we produce in the course of our operations. Using resources wisely and minimizingour waste makes sense for the environment and for our balance sheet. We are also building ournew restaurants to be more sustainable from the start, making our “products” (our meals and guestexperience) more sustainable and staying financially strong.

Decreasing Our Energy Use and Greenhouse Gas EmissionsIn 2010, we committed to reducing our energy use by 15% per restaurant by 2015, using fiscalyear (FY) 2006 as a baseline. Between FY2006 and FY2008 (the latest year we’ve reported), ourper-restaurant energy use stayed essentially flat, dropping by less than 1%, while our carbondioxide (CO2) emissions dropped about 2%.

Many of our energy-efficiency efforts have taken place since FY2008, so we expect to show moreprogress going forward. In 2009, for example, we switched more than 25,000 incandescent bulbsin our restaurant kitchens to more-efficient fluorescent bulbs. We have also adjusted thermostatsettings in our restaurants and altered our cooking equipment power-up schedules, all in an effortto reduce our energy use and energy costs. For more, see p. 64.



Decreasing Our Water UseTo drive water conservation, we’ve also set a goal for water use. We’re aiming for a 15% reductionin our use of water by 2015, using FY2006 as a baseline. We have assessed water use at a numberof our restaurants, but are still working to compile and calculate company-wide water use data.

To reach our goal, we’ve implemented alternatives to “dipper wells” (i.e., utensil holders throughwhich a continuous stream of water runs) in about 600 of our restaurant kitchens. And we’veinstalled 1,751 low-flow aerators on hand-washing sinks and dishwashing stations. These andother solutions are estimated to save more than 700,000 gallons of water per year at each of therestaurants that implement all of them. For more, see p. 72.

Decreasing Our WasteWe’ve set an ultimate goal of “zero waste” – that is, sending no trash to landfills from ourrestaurants or our headquarters. We are committed to identifying opportunities to reduce theamount of waste we generate and then recycle, donate or compost the rest. We believe thatdiscarded food is the biggest component of our waste stream, making up about 70%.

We’ve launched a number of initiatives to drive progress toward our goal. For example, in FY2009we donated nearly 9 million pounds of leftover food to Feeding America, a hunger-relieforganization, instead of throwing it away. All of our restaurants recycle fluorescent light bulbs.Most of our restaurants recycle cardboard (an average of 38,000 lbs. per year) and used fry oil (anaverage of 2,400 lbs. per year). And, thanks to a smart idea from one of our employee GreenTeams, we have reduced our use of computer register paper at Olive Garden by about 400,000 rollsper year, which saves us $400,000 annually. For additional information, see p. 77.

Engaging Employees in These EffortsTo help us implement all of these resource-focused efforts, we’ve established employee GreenTeams. These teams – now active at nearly all of our restaurants and consisting of five to sevenemployees each – have been instrumental in overseeing initiatives like our equipment power-upschedules, thermostat settings and the switch to fluorescent bulbs in our kitchens. They alsoregularly conduct comprehensive leak inspections to be sure we aren’t wasting water. For more ontheir activities, see p. 82.

In 2009, we reached out to all Darden restaurant employees by presenting a poster onsustainability in every restaurant kitchen. (See below.) The poster outlines our restaurantsustainability initiatives and explains why they are important; it also describes steps employees cantake to conserve resources at home. The design of the poster is edgy and eye-catching, and ismeant to engage and educate employees who might not otherwise take an interest in these issues.



Building New Restaurants BetterOne of the challenges we face in our sustainability efforts is that all of our restaurant buildings aredifferent. Some buildings were purpose-built for us; others were retrofitted and redesigned tomeet our needs. Implementing consistent changes across such a wide array of building types canbe difficult, but we are working to do it wherever possible.

Going forward, we’re working to build our restaurants with sustainability in mind from the start.Our first restaurant expected to achieve LEED “green building” certification – an Olive Gardenin Jonesboro, Arkansas – opened its doors in January 2010. (LEED stands for Leadership inEnergy and Environmental Design; it’s the certification system of the U.S. Green BuildingCouncil.) Seven additional restaurants seeking LEED certification will open in 2010 and 2011.Under the latest LEED guidelines, these buildings must use 14% less energy than the previousprototypical building design; they also must meet stringent water conservation standards and userecycled materials in their construction.



While we may not seek LEED certification for every restaurant we build or remodel, we plan to makea positive impact by learning from the eight restaurants where we are seeking LEED certification andapplying best practices across our portfolio. In fact, we have committed to incorporating sustainabilityfeatures in all of our new buildings. This will ensure superior performance in energy efficiency, waterconservation and the use of green materials.

Making Our “Products” More SustainableMany forward-thinking companies focus on making their products more sustainable. Our“products” are the meals our restaurants serve every day. Two key aspects of our restaurants’ mealsare vital to our sustainability strategy – food safety and seafood sustainability.

Food safety has been our number-one priority since our first Red Lobster restaurant was foundedin 1968 – long before “sustainability” became a household term. Today, it falls within oursustainability work because it is so important to our continued success as a company.

Darden has rigorous, state-of-the-art food safety systems that reach from our restaurants all the wayback into our supply chain. Training our restaurant employees is an important foundation for foodsafety. Thousands of our managers have been certified in food safety processes through a program ofthe National Restaurant Association. In addition, restaurant employees receive extensive food safety,personal hygiene and sanitary practices training. At the corporate level, we have a team of 20 fieldtotal quality managers who review and certify the food safety processes in our restaurants.

For more on our food safety systems, including information on product traceability, see p. 35.

Seafood sustainability is also important to Darden, because we are one of the largest buyers ofseafood of any full-service restaurant company in the world. We are committed to helping ensuresustainable stocks of seafood – for the sake of our business and for the sake of preserving oceanecosystems for generations to come.

We currently do not serve species that are considered at risk, such as Chilean sea bass and orangeroughy, as these species are overfished at present. We are committed to purchasing species fromsustainable sources. We have worked with governments to strengthen policies regarding wild-caught species such as North Atlantic lobsters and Caribbean rock lobsters. And we havepartnered with conservation groups, such as the New England Aquarium, to learn more aboutthe science behind the fisheries and to help ensure that the species we serve are sustainable,based on the best science of the day.

We are also committed to responsible aquaculture – so we can supplement the supply of seafoodwhile avoiding the depletion of species. Our goal is to have all of our aquaculture productscertified to the standards of the Global Aquaculture Alliance (a multi-stakeholder nonprofitorganization we co-founded in 1997) as they become available. Already, 100 percent of theaquacultured shrimp processors that supply Darden are certified. For more information, see p. 52.



Staying Financially StrongAt Darden, our approach to sustainability helps our restaurants succeed financially. At the sametime, our restaurants’ financial success strengthens our sustainability efforts.

The resource conservation efforts described above directly benefit our restaurants’ bottom lines.For example, the switch to fluorescent light bulbs in our restaurant kitchens is expected to save usup to $400 per restaurant per year. The water-saving efforts we’ve implemented will save eachrestaurant up to $5,000 per year.

Each of our restaurants is an important contributor to the community in which it is located –through employment opportunities as well as taxes paid. In fiscal year 2009, our restaurants paidgovernments a total of $568.8 million in sales and use taxes and more than $65 million inproperty taxes. And each time we open a new restaurant – which we do an average of 60 times ayear – we create more than 150 jobs.

Over the last decade, casual dining companies like ours have had strong shareholder returns, withDarden leading the way with a solidly top quartile S&P 500 result. Our performance in 2009, forexample, confirms that our company is well positioned to succeed in difficult times. We were ableto deliver strong financial results while continuing to invest in our long-term future. We expectcasual dining sales growth to continue to be relatively strong.

By remaining financially strong, our restaurants can continue to contribute to their communities,be good corporate citizens and strengthen their sustainability efforts. For more, see p. 84.

Where We’re Going: Toward a Sustainable FutureAt Darden, we intend to keep growing and opening new restaurants, and we want that growth tobe sustainable, in all senses of that term. By making our restaurants more sustainable, we’remaking our whole business more sustainable. We look forward to operating restaurants that havebeen built for us from the ground up according to “green building” principles, and to upgradingour existing restaurants as needed to help us meet our sustainability goals. We will also continueto work to make our food more sustainable and to engage employees in helping us meet oursustainability goals.

Some of our sustainability initiatives are quite new, and we’re still learning the best ways to driveimprovements in our day-to-day operations. But we feel confident we are on the right track, andwe look forward to reporting on our progress in the years to come.



The Sustainability Features of Our New HQ

Why It Matters: Buildings Have an ImpactEveryone knows that cars and trucks have a big impact on the environment – they require fossilfuels to run and they emit greenhouse gases and other pollutants into the atmosphere. That’s whyhybrid vehicles, which use less gasoline and emit fewer pollutants, have become popular. But itturns out that transportation is only part of the story. Buildings also have big impacts on theenvironment.

In fact, the U.S. Green Building Council estimates that buildings are responsible for 39% of allcarbon dioxide (CO2) emissions, 40% of all energy consumption and 13% of all waterconsumption in the United States. (CO2 is said to be the primary greenhouse gas behind human-caused climate change.) So, if we want to be good environmental stewards and create a moresustainable future, it’s important that we pay attention to buildings too.

What We’re Doing: Achieving the Gold Standard Darden’s leaders were thinking along these lines when they decided in 2005 that it was time toconstruct a new headquarters site. At that point, the 1,250 employees in Darden’s RestaurantSupport Center (RSC) – which is what we call our HQ – were housed in 13 separate olderbuildings in south Orlando, Florida.

The leadership decided that Darden’s new headquarters would be a “green” building,demonstrating Darden’s commitment to sustainability and reaping the benefits of cost-savingefficiencies. That decision was just the latest among a number of environmental improvementsDarden had been making at the headquarters level. In 2008, for example, RSC employees reducedtheir paper consumption by 33% and decreased their overall energy use by 10%. We alsoeliminated the use of 250,000 bottles of water annually by giving all RSC employees a reusabletravel cup and discontinuing the free bottled water in our break rooms.

Completed and opened in September 2009, the new RSC site is a great example of the latest ingreen building design and technologies. In fact, the new facility has received a LEED Goldcertification. “LEED” stands for Leadership in Environmental and Energy Design. Developed bythe U.S. Green Building Council, LEED standards include four levels of certification – Certified,Silver, Gold and Platinum. As of this writing, the new RSC was one of only nine Fortune 500headquarters buildings to receive any of these LEED designations.


The new site includes a 469,000-square-foot main building, a 19,000-square-foot data center anda four-story parking garage, all situated on 42 acres in south Orlando. The site boasts numerousenvironmental, economic and social benefits. The primary ones are listed below.

Environmental FeaturesThe main RSC building has these cutting-edge energy-efficiency features:

1 a building orientation and U-shaped floor plan that limits western exposures, to reduce theabsorption of heat from the afternoon sun

1 a floor-to-ceiling glass exterior, to maximize natural light, save energy on lighting and helpkeep employees connected to the natural surroundings

1 high-performance windows that let in daylight but not heat

1 a high-efficiency heating and cooling system, including a chilled water plant, energyrecovery units, variable speed motors, and a computerized building management systemthat monitors and controls the mechanical and electrical equipment

1 a highly reflective, insulated roof, to reduce heat absorption and thus cooling costs

1motion sensors that turn off lights when rooms are unoccupied

1 a “daylight harvesting” system that monitors natural light levels and automatically dimsartificial lighting as appropriate, to reduce electricity needs

The design of the building is also meant toencourage efficient transportation. For example,the building has:

1 a 450-seat cafeteria, to minimize employeecar trips (and thus gasoline consumption)offsite for lunch

1 extensive on-site training facilities (includingfor restaurant managers in training), whichminimizes RSC staff travel to offsitelocations

1 bicycle racks and changing rooms for bicyclecommuters

1 designated close-in parking spaces for hybridand carpool/vanpool vehicles

1 a bus stop in front of the campus



Key Definitions

Reclaimed water is wastewater thathas been minimally treated such thatit is useful for some purposes butnot safe for drinking. Darden’swastewater is treated and thenreused in the RSC’s toilets andlandscape irrigation system.

Single-stream recycling is a systemwhereby all recyclable materials arecollected together in one bin, andthe sorting is done at the recyclingfacility. Such systems are known forincreasing participation andrecycling rates. Darden hascontracted with a wastemanagement company to handle ourrecyclables at the RSC in this way.

The site was also designed to conserve water. It has these water conservation features:

1 toilets and an irrigation system that use reclaimed water

1 restroom sinks with auto on/off sensors

1 “bioswales,” or specially constructed drainage areas in the landscape that slow the runoff ofrainwater, filter out contaminants and recharge the groundwater, instead of havingstormwater drain directly into nearby ponds

1 water-efficient landscaping consisting of native Florida plants and trees

Recycling and reducing waste have also been a big focus. The waste-reduction features of thebuilding are as follows:

1 diversion of more than 90% of construction debris (2,060 tons) from landfill via reuse orrecycling

1more than 10% of building materials manufactured from recycled material

1 office furniture containing 100% recycled particleboard, up to 25% recycled aluminum andup to 30% recycled steel

1 a single-stream recycling collection system that diverts nearly 12 tons of trash from landfillmonthly

1 composting of food waste from the cafeteria

1 double-sided printers and copiers, to reduce paper use

1 centrally located printing/faxing/copying stations, which eliminate the need for numerousindividual desk-side machines

Air-quality was also taken into account in designing and building the new site. The new RSC hasthe following air-quality features:

1 low- or no-VOC paint, carpet, furniture, moveable walls, sealants and other buildingmaterials (VOC = volatile organic compounds, i.e., harmful fumes)

1 a system that circulates fresh outside air into the building every hour

1 carbon dioxide monitors throughout the building, to provide information for use inregulating air quality

1 high-efficiency particulate air (HEPA) filters in the air ducts, to minimize airborneallergens

1 a cleaning company that uses only environmentally friendly cleaning products andtechniques



Economic FeaturesThe new RSC had an investment of $140 million. Building it according to LEED principlesincreased our costs by about 3%. However, we expect to earn back that amount in energy andwater savings within 6-7 years.

After the initial investment is recouped, the new building will save us money each year. As acertified green building, we will have approximately 16% lower operating costs than a comparablenew building built only to code requirements. The new RSC is also estimated to have 30% loweroperating costs than the buildings in our old headquarters campus.

Our new headquarters has positive economic impacts on our local community as well. Forexample, about 900 workers were hired to build the RSC (in addition to about 100 design andconsulting professionals).

Social and Workplace FeaturesThe new RSC was designed to promote employee health and well-being, as well as effectiveteamwork and collaboration. Specifically, the site has the following workplace-relatedfeatures:

1 an on-site wellness center and doctors’ offices staffed by Florida Hospital personnel

1 an on-site 5,000-square-foot fitness center with locker and shower facilities, available toRSC employees for $10 per month

1 a half-mile walking/nature trail around the campus

1 prominent, open staircases, to encourage walking instead of riding elevators

1 natural daylight in more than 75% of the workspaces

1 a dining facility operated by Guckenheimer (the industry leader in corporate food service)with a good mix of indulgent and healthful options, including an outstanding salad bar

1 a three-story building design and numerous break room areas, to promote interactionamong employees

1 an open office floor plan with consistent workspace standards



Where We’re Going: Putting Sustainability into PracticeWe are thrilled with our new RSC facility, and with how tangibly it demonstrates ourcommitment to sustainability. We look forward to seeing how all of the cutting-edge efficiencytechnologies translate into actual energy, water and waste savings. And, we will continue toexplore additional technologies and perhaps even alternative energy sources down the road.

At present, we are looking into partnering with a hotel company to build a hotel on the remainingnine acres of our site. This would ensure that our managers in training and other visitors to the RSCcould stay right next door, thus minimizing travel to and from their overnight accommodations.

We are putting sustainability into practice at the RSC, and we look forward to documenting andreporting our progress in the future.



A New Era for Darden

Most of our guests know Darden through our restaurants. They’ve enjoyed the soup, salad andbreadsticks at Olive Garden, perhaps, or the grilled seafood at Red Lobster. Few know muchabout our corporate headquarters in Orlando, Florida, where 1,250 employees work behind thescenes on everything from menu development to marketing to the mind-spinning logisticsinvolved in getting fresh fruits and vegetables delivered regularly to every one of our 1,800restaurants. We call our corporate headquarters the Restaurant Support Center, or RSC.

The “Before”For nearly two decades, all RSC employees – including top company executives – were spreadout among 13 office buildings in south Orlando. This inefficient setup could be frustrating foremployees, who often found themselves driving from one building to another for meetings.

“The primary old building worked fine at first,” said Kim Eifler, Darden’s Director of SupplyOptimization. “But we outgrew it sometime in the early 1990s, and from there expanded moreand more each year into nearby office park buildings. It was hard to feel like one cohesive unitwhen we were split up like that.”

The DecisionEverything changed in 2005, when Darden’s leaders decided the time was right to build a newcorporate headquarters.

Our leaders wanted a building that would finally bring RSC employees together under one roof.At the same time, they agreed that the new facility should be a model of environmental andworkplace efficiency, in order to showcase Darden’s commitment to sustainability. In fact, theydecided it should be built according to nationally recognized Leadership in Environmental andEnergy Design (LEED) “green building” standards.

Construction workers broke ground in October 2007, and employees began moving inSeptember 2009.

The MoveWe didn’t want employees to move 18 years of accumulated clutter to the new location, but wealso didn’t want to send useable items to landfill. Kim Eifler thus oversaw a “clutter removal”project that ended up benefiting a variety of local charities.

Ultimately, we donated nearly 25,000 lbs. worth of office supplies, knick-knacks, clothing, lightbulbs, holiday decorations, serving dishes, utensils and a whole host of other miscellaneousitems to organizations such as the Coalition for the Homeless, Second Harvest, A Gift forTeaching and other Central Florida charities.


CASE STUDY

“We got pretty creative in finding homes for these items,” said Eifler. “For instance, 1,800 vaseswere given to a local retiree who makes silk flower arrangements for nursing home residents.”We also recycled 10 tons of paper at the old site, and held public “garage sales” to sell off theoffice furniture.

The “After” The move marked the beginning of a new era for Darden. Darden’s HQ went from older andout-of-date to cutting-edge modern, from disconnected and detached to one cohesive whole.While the work employees do remains the same, the atmosphere and setting in which they do ithave changed considerably for the better.

The first thing you notice about the new RSC is its low visual profile, which fits well into the flatFlorida landscape. The three structures – the main building, the smaller data center and theparking garage – are surrounded by ponds and open spaces (including 3.5 acres of preservedwetlands) that host an array of wildlife, including sandhill cranes, other wading birds, ducks, deerand at least one very large alligator.

As you walk into the new building, you’re struck by the open, light-filled atrium, the prominentcentral staircase and the restaurant test kitchens located along the main corridor. You might alsonotice the prominent recycling bins in the employee cafeteria.

Many of the building’s environmental features may not be obvious at first, but they all add up toone very green building. In fact, the new RSC is certified LEED Gold. (For more information, seep. 20.)

The New BeginningDarden’s restaurants will always be the most public “face” of our business. But our RSCemployees are excited to work in a beautiful new space they can be proud of, and that soprominently communicates our commitment to sustainability.


Case Study: A New Era for Darden

Engaging with Our Employees

Why It Matters: Engaged Employees = Happy GuestsOur founder, Bill Darden, often said: “Thegreatest competitive edge our company has isthe quality of our employees, evidenced by theexcellent job they do every day.”

That sentiment is as true today as it was whenhe opened his first Red Lobster restaurantmore than 40 years ago. We depend on ouremployees to create great dining experiences for our guests. For that to happen, we must creategreat working environments for our employees.

We employ nearly180,000 people, whichgives us 180,000 reasonsto create a great place towork and teach enduringlife skills.

It’s all about people andtalent at Darden. Ourpeople deliver our brands,which means we dependon their engagement andefforts. When employeesare engaged, they aremotivated and inspired togo beyond their writtenjob descriptions. Ourcompany’s culture is ahuge part of that – howwe treat our employees,what we value, and howwe recognize and rewarda job well done.

We know that restaurantwork isn’t easy. It’s fast-


Darden Restaurants, Inc.

Total Employees: Approximately 180,000Total in the U.S.: 175,000Total in Canada: 5,000 Hourly Employees: 95%Salaried Employees: 5%

Our Values

• Integrity and Fairness: It all begins with integrity andfairness. We trust in the integrity and fairness of each other toalways do the right thing, to be honest with ourselves andothers, to solve without blame and genuinely care foreveryone’s interest.

• Respect and Caring: We reach out with respect and caring.We have a genuine interest in the well being of others. Weknow the importance of listening, the power of understandingand the immeasurable value of support.

• Diversity: The power of diversity makes a world of difference.We are strengthened by a diversity of cultures, perspectives,attitudes and ideas. We honor each other’s heritage anduniqueness. Together, we make a world of difference.

• Always Learning – Always Teaching: We learn from others asthey learn from us. We learn. We teach. We grow.

• Being “of Service”: Being of service is our pleasure. We treatpeople as special and appreciated by giving of ourselves,doing more than expected, anticipating needs and making adifference.

• Teamwork: Teamwork works. By trusting one another, webring together the best in all of us and go beyond theboundaries of ordinary success.

• Excellence:We have a passion to set and pursue, withinnovation, courage and humility, ever-higher standards.

paced, high-energy and often stressful during busy periods. We believe that our strong corporatevalues and culture help our employees learn, thrive and cope effectively with the pressures of the job.

We see a critical link between ouremployees and our sustainability strategy.We want our employees to be proud ofwho Darden is and what we do. We alsowant them to know that they are essentialto our success in this effort. Ouremployees are on the front lines for us,helping us implement many of our keysustainability programs, such as ourcharitable food donation program to feedthe hungry and resource conservationefforts. Nearly all of our 1,800 restaurantshave employee “Green Teams” to assistwith our sustainability efforts and comeup with new ideas, too. (For more onthose, see pp. 82 and 92.)

In short, engaged employees equal happyguests. And happy guests equal a thriving and financially secure company.

What We’re Doing: Nurturing EmployeesAt Darden, developing our people is a cornerstone of our business model. We aim to build ateam of exceptional leaders at all levels of our company so we can create a positive workplace forall of our employees.

We offer more than just jobs for nearly 180,000 individuals; we also offer opportunities to buildrewarding careers. We teach thousands of people a lifelong skill: how to succeed in the workplace.

According to the National Restaurant Association, employment in a restaurant is the first job forone-third of all Americans. And nearly half of all adults have worked in a restaurant at somepoint in their lives.

In our communities, just one of our restaurants creates about 100 jobs.

Any one of those jobs can lead to a career with Darden. Dave Pickens, the president of OliveGarden, is a good example. He started as a line cook at Red Lobster and rose to the top over 30years. And that’s not unusual at Darden. In fact, we hire 99 percent of our restaurant generalmanagers from within our own ranks, and we can point to any number of leaders within ourcompany who started out just like Dave.



Employee Facts

Fact: Almost half of our 6,000-plus restaurantmanagers, and 99% of our general managers,come from team member ranks.

Fact: Many Darden executives worked their wayup through our organization.

Fact: 45% of the graduates of our Manager inTraining programs started as hourly employees.

Fact: Darden enjoys one of the lowestemployee turnover rates in our industry.

Fact: All employees are eligible for healthinsurance access from day one of employment.

Fact: More than 125,000 employees respondedto our annual 2009 workplace survey, and wereviewed more than 300,000 written comments.

Training EmployeesWe invest in the training of ouremployees to ensure that they cansucceed in what they do. We aim toprovide a supportive work environmentthat is focused on integrity, excellenceand exceptional service.

We also recognize that nurturing ouremployees ultimately benefits ourcompany. Our team members are ourfuture leaders, so it is vital that we havethe right people in the right positions.We work hard to ensure we have apipeline of individuals so we can meetour business needs while improvingemployee engagement and fosteringcareer development.

New employees participate in astructured trainingprogram to help themlearn more about thecompany, our brands andour expectations. On-the-job training isprovided by CertifiedTrainers – team memberswho have completedcertification to trainothers – who teach thenew employees the insand outs of the job. Onaverage, new teammembers receive 40 to 80hours of training (depending on the job) through video and hands-on instruction. Companyvalues and expected behaviors are woven throughout the training to reinforce that how we treatour guests – and how we treat each other – is as important as the specifics of the job itself.

Our restaurant managers spend a minimum of 600 hours as “managers in training” in their first year.One measure of our success: 45% of the graduates of our Manager in Training programs started ashourly employees in our restaurants.



Training Programs

We offer programs at all levels to encourageand develop our employees. Among them:

• Development activities designed to developthe leadership skills of front-line employeesto allow them to take on greater futureresponsibility.

• The Manager in Training (MIT) program,which focuses on the development of skillsneeded to manage a Darden restaurant.

• A variety of ongoing leadership programs todevelop high-potential restaurant managersfor general manager positions.

• The Leadership Assessment andDevelopment at Darden Restaurants (LADDR)program, an assessment center for restaurantmanagers aspiring to be general managersand for general managers preparing to takeon director of operations roles.

Culinary Institute of Tuscany

Many guests can quote the tagline we use for our Italian-themedOlive Garden restaurants: “When you’re here, you’re family.”

So we decided to give our employees an international taste ofItaly, family style. In 1999, we began Olive Garden’s CulinaryInstitute of Tuscany. Eleven times a year, we send 14 topemployees for a week-long stay at an 11th-century villa inTuscany where they study Italian cooking with a husband-and-wife team who run a restaurant, winery and inn.

Over the last decade, about 850 of our employees have learnedhow to create Italian dishes from these Italian chefs. About 80%of those employees are still with our company.

In 2009, we reached out to all Darden restaurant employees by presenting a poster onsustainability in every restaurant kitchen. (See below.) The poster outlines our sustainabilityinitiatives and explains why they are important; it also describes steps employees can take toconserve resources at home. The design of the poster is edgy and eye-catching and is meantto engage and educate employees who might not otherwise take an interest in these issues.



At the corporate level, new company executives in any role spend up to three months training inactual restaurants. These high-level company directors and officers are asked to work asdishwashers, prep cooks, bussers, hosts and servers, to help them truly understand the operationsand culture of each brand.

Many of our innovative talent development programs began with our Olive Garden restaurants,which needed to quickly develop managers at all levels to keep pace with extraordinary growth – a

4.9% compound annual growth rate from fiscal year (FY) 2005 through FY2009. Olive Gardenhas been named for six consecutive years to Training magazine’s list of “Training Top 125” – theonly casual dining restaurant company included on the list.

In our business, high job turnover is the norm. We’re proud to say that we have one of thelowest turnover rates among hourly restaurant workers – typically about 10 points better thanour competitors.

Listening to Employees

At Darden, we believe it’s important tolisten to our employees, especially thoseclosest to our guests. Directors and seniorvice presidents regularly visit ourrestaurants and meet with team membersand managers to hear their concerns andideas. Also, our senior leaders conductannual visits to restaurants all over the U.S.and Canada, holding listening sessionswith restaurant employees.

We have an open-door policy that encourages employees to talk to their managers or direct supervisorsto discuss any issue they have, without fear of retaliation. Team members can also call our employeerelations hotline to raise any issues, including concerns about their managers.

In another example of listening, we administer an employee engagement survey to all of our employeeseach year. By doing so, we hope to understand what we are doing well as an employer, and where weneed to improve. More than 125,000 employees – or 74% of our workforce, up from 62% the previousyear – responded to our October 2009 survey; we reviewed more than 300,000 written comments.

According to the results, our employees are very proud of Darden and our brands, and of the rolethey play in the company. The number-one driver of engagement for every Darden employee –from restaurant workers through corporate officers was: “My work gives me a strong sense ofpersonal accomplishment.”

Our employees’ responses ranked significantly higher than a restaurant industry sampling onevery single item in the survey. We also scored higher than the U.S. workforce norm on 21 itemsthat could be compared within industries. For example, 46% strongly agreed that they would“strongly recommend” Darden to family and friends as a great place to work, compared to just 9%of the general U.S. workforce sample.

Thanking EmployeesWe believe it is critical to recognize employees for a job well done. We expect all our managers to



Employee Engagement Results

82% agreed or strongly agreed that they wereproud to work for Darden.

84% agreed or strongly agreed that Darden isa great place to work.

84% agreed or strongly agreed that they likethe work they do.

81% agreed or strongly agreed they wouldstrongly recommend Darden to family andfriends as a great place to work.

be on the lookout for performance that they can praise and encourage. We know that positivereinforcement leads us to success.

We have both informal and formal recognition programs that reward individual and teamperformance. Our “Diamond Club,” for example, recognizes nearly 100 general managers andmanaging partners per year.

Diversity and InclusionDarden is committed to creating anenvironment where everyone is welcome.Our founder embraced diversity as abusiness imperative, recognizing that adiverse workforce would help to draw abroad range of guests.

We have a zero-tolerance policy for anytype of discriminatory behavior.

We are committed to attracting, retaining,engaging and developing a workforce thatmirrors the diversity of our guests. Today,42.5% of our employees are minorities,and 52% are women. Both percentagesrank above average in our industry.

Diversity training is woven throughout ourorientation and management trainingprograms. We believe that our leaders needa clear understanding of the importance ofdiversity to the business. Darden officers,directors, general managers and managingpartners attend our Diversity Learning Experience, a multi-day training session geared towardmanaging the similarities and differences that exist among a diverse workforce.

We encourage and promote Employee Network Groups that support our diversity efforts inrecruiting, retaining and engaging talent while enhancing opportunities for employees to learn andgrow. Each network is supported by an executive advisory committee made up of three cross-culturalindividuals at the vice president level or above. Participation is voluntary. We have six networks: theAfrican American Network; Asian Network; Women’s Network; Hispanic Network; FamilyNetwork; and the Pride Alliance Network (for our lesbian, gay, bisexual and transgender employees).

(For more on our diversity-related work within our communities and our supply chain, please seethe Communities section of our corporate website.)



Diversity Awards

We’re proud of the work we do to ensure thatour workforce comprises employees of manycultural and ethnic backgrounds. Severalpublications and external organizations haverecognized our efforts, including:

• Top 50 Companies for Hispanics, Hispanic Business, September 2009

• Top 50 Employers in the United States forHispanic Women, Latina Style, August 2009

• 40 Best Companies for Diversity, Black Enterprise, July 2009

• CEO Clarence Otis named one of the 100most powerful executives in corporateAmerica, Black Enterprise, February 2009

• Noteworthy Company, DiversityInc.,2008 and 2009

• Top 50 Companies for Diversity,DiversityInc., 2007

• Faces of Diversity Inspiration Award,National Restaurant Association, 2007

http://www.darden.com/commitment/community.asp

Compensation and BenefitsDarden offers competitive compensation, flexible work schedules and industry-leading benefits.Scheduling flexibility is the number-one reason why many people choose to work in therestaurant business.

As a national chain, we can offer our employeesjobs across the United States and parts of Canada,allowing employees to stay with us when personalcircumstances require relocation. We offer manytypes of careers, both inside and between brandsand at our corporate headquarters.

All employees are eligible for health insuranceaccess and disability coverage from the first dayof employment, which is highly unusual in therestaurant business. Approximately 15% ofemployees take advantage of the healthinsurance benefit. Also unique in the industry isour vacation pay benefit. Hourly team membersare awarded vacation pay, whether or not theychoose to take time off. They receive one weekof pay after their one-year anniversary, twoweeks after three years and three weeks after seven years.

In addition, we pay our employees on a weekly basis, rather than bi-weekly – even though it costsus more to do so – because we recognize the economic needs of our workers. Employees enjoy a35% percent discount (up recently from 25%) for themselves and up to seven family members orfriends when dining at our restaurants. Team members receive a 50% discount on meals duringtheir work hours.

Our headquarters building boasts on-site Wellness and Fitness Centers for the 1,250 employeesin our Restaurant Support Center, or RSC. The Wellness Center, which we first opened in 1996,provides on-site medical exams, flu shots, evaluations and other services by doctors and nursesfrom Florida Hospital. Employees pay nothing to use the center, other than a co-pay for anymedications. We also have a Fitness Center, staffed by a team from Florida Hospital and openseven days a week.

We’re also proud to offer every employee in our Orlando headquarters 16 hours each year of paidtime for community service during regular work hours.



Helping Employees in Need

We recognize that employeessometimes need a little extra financialhelp. That’s why we established DardenDimes, a source of support foremployees facing a personal financialcrisis. Participating employees donate atleast 10 cents from each paycheck to thefund, raising more than $500,000annually to help hundreds of employeesaffected by hardships, such as homefires, flooding, emergency travel due toillness or funeral expenses. Employeecontributions to the program arematched by the Darden Foundation. Infiscal 2009, we paid out 2,163 grantstotaling more than $1.25 million.

Employee Health and SafetyThe health and safety of our employees is one of our highest priorities, and we incorporate safetytraining into all of our training programs. In fact, we typically do not offer stand-alone health andsafety training because we believe that safety should be integrated into everything that we do.Safety is not something that gets turned on and off; it’s how we run our business every day.

Darden continuously evaluates the risks present in our facilities, tracks any resulting claims, andworks with operations management to provide the cleanest and safest restaurants in the casualdining industry.

We have reduced employee workplace injuries by 48% over the past seven years through a varietyof initiatives including:

1 Analyzing systems to identify inherent risks within the restaurant setting

1 Engaging operations managers to incorporate safety into the daily work environment

1 Focusing on appropriate training to clearly communicate safe working procedures

1 Incorporating slip-resistant footwear into dress code standards

1 Introducing improved tools to perform essential functions

1Motivating and incentivizing safety through management performance reviews.

Where We’re Going: Forward, TogetherAs one of the largest private employers in America, virtually any employment issue affects us. Wehave been working and will continue to work to make our voice heard on important topics, such ashealth care.

These days, consumers have a dizzying number of choices when it comes to restaurant dining. Weknow that if we want to treat our guests like family, we must treat our employees like family, too.Our employees are our greatest asset, and we will continue to look for ways to develop and engagewith them so we can move forward as a company, together.



Food Safety, Health andWellness, and Animal Welfare

Why It Matters: Guests Are Our PriorityWe know that consumers have scores of choices when they dine out. Part of the reason guestschoose us is because they know we offer meals that are safe and enjoyable to eat.

This section addresses separate topics that are critical to our business and relate directly to themeals we serve: food safety and animal welfare. Below we detail what we are doing as a companyin each of these areas.

FOOD SAFETYWhat We’re Doing: Leading the IndustryOur number-one priority is the quality and safety of our food. From the earliest days of our firstRed Lobster restaurants, we have set the highest standards for food safety. And we are constantlychallenging ourselves to raise the bar even higher.

As the largest full-service restaurant operating company in the world, we play an influential rolein setting standards across our industry. We’re one of the world’s largest buyers of seafood and amajor consumer of other foods. As a result, Darden doesn’t just buy; we analyze and inspect whatwe buy from our sources worldwide.

When it comes to protecting the public’s health, nothing is proprietary at Darden. We believe it isimportant to share food safety knowledge broadly, even with our competitors. Our experts havedeveloped cutting-edge food safety technologies and practices, and we have openly shared whatwe have learned with other restaurant companies.

Darden has had a Food Safety/Total Quality Department for more than 30 years – longer thanmost other restaurants. In 1979, we implemented a rigorous food safety program based on aprotocol known as Hazard Analysis of Critical Control Points (HACCP). Today, HACCPprograms are standard practice for restaurants and food companies. But back then, only a handfulof businesses were implementing systematic, preventive approaches to food safety.

These days, our Total Quality Department includes a team of more than 50 biologists, foodscientists and public health professionals located around the world. We have 17 field plantinspectors in the United States and elsewhere – including Chile, China, Costa Rica, Ecuador,Honduras, India, Peru, Mexico and Thailand – who inspect food plants, products and safetyprocesses. And we have another team of 20 field total quality managers who review and certify thefood safety processes in our restaurants.


TraceabilityDarden buys raw ingredients and food products from approximately 1,000 food suppliers in 35countries around the world. More than a decade ago, we recognized that an increasingly globalfood market required us to take quality and food safety to the next level. And that meant takingour food safety programs all the way back to the source.

Today, our food safety practices are integrated atevery level of the supply chain. We like to saywe have traceability from pond to plate (forseafood), from farm to fork (for land-basedproteins) and from dirt to door (for freshproduce). All of our suppliers provide us withtraceability of all raw products, as far back ascan be taken. (For more on the traceability ofour fresh produce, see p. 48.)

We have established a series of critical controlsin our supply chain. By having control pointswhere products are produced, we can verify theingredients are safe and meet our specificationsbefore they are shipped. This benefits Darden, ofcourse, but it clearly benefits our suppliers, too.In fact, many of our suppliers tell us that wehave helped improve their processes so much that it has helped them win business from othercompanies as well.

We view our Darden quality specialists as teachers and consultants at our vendor sites who helpmake our suppliers even more successful by helping to conduct plant inspections and verificationsand identifying key risks.

Several years ago, for example, we found we were rejecting about 12% of shipments of farmedshrimp from Asia, due to Salmonella contamination. The Salmonella, it turned out, came fromtainted waters where the shrimp were farmed. By working with the suppliers to change theirfarming practices and to improve their safety controls within the processing facilities, we wereable to bring the Salmonella incidence rate to zero.

As this example shows, we pay particular attention to the safety and quality of the seafood wepurchase, especially from Southeast Asia. We have a team of quality specialists dispersedthroughout China, Thailand and India. Each of these specialists has earned a minimum of abachelor’s degree and many have either a master’s or a doctorate degree in a scientific discipline.These team members inspect and approve for production more than 50 million pounds of seafoodthroughout the Eastern Hemisphere each year for use in our restaurants.


Food Safety, Health and Wellness, and Animal Welfare

What’s Next

Many critical food safety practices arefairly low-tech – like washing hands.Ensuring correct hand-washingprocedures by our restaurant employeesis one of the most essential elements ofour food safety program.

But we also continue to push thefrontiers of food safety management andinnovation. For example, we’re testingnew technologies for remotetemperature monitoring of our coolersand exploring new sanitizers for ourrestaurants that offer additionalprotections against new and emergingviruses, such as norovirus.

For seafood products from the Western Hemisphere, we have a team of highly trained quality andsafety specialists based in four inspection labs in the United States. Each year, these global teamsinspect millions of pounds of seafood, rejecting nearly 10% of shipments that do not meet ourstringent food safety specifications.

Darden’s seafood inspection program has been at the forefront of our industry for decades. Forexample, we were the first in the casual dining industry to establish a Quality AssuranceMicrobiology and Analytical Laboratory in 1976. In the 1980s, Darden was an industry leader inthe development of an Integrated Lot Inspection Program with the U.S. Department ofCommerce. This system of inspection uses a statistical model to provide us with a high level ofconfidence in the results. Our Seafood Inspection Team also developed an integrated system thattracks our seafood from its origin by lot identification.

Today, we have control points as early in theprocess as possible. We focus on building qualityinto the products and testing prior to the productsbeing shipped. Every consumable product used byany of our restaurants – nearly 2,000 ingredients inall – are tested to ensure compliance with U.S.Food and Drug Administration (FDA) regulations.

Among some of our other food safety efforts, we:

1 Provide regular HACCP audits and “miniaudits” of our vendors to analyze root causesof problems and provide corrective actionsas needed.

1 Arrange for external lab analyses and workwith suppliers to correct any issues.

1 Expect seafood vendors to pass a rigorousset of tests to ensure their ability to produceseafood that is of the highest quality.

1 Require shrimp processing facilities to becertified in compliance with best practicestandards developed by the Global

Aquaculture Alliance, or GAA. (See p. 52 for more on this topic.)

1 Require prospective suppliers to sign a letter of guarantee indicating their ongoingcommitment to food safety and their intent to supply products that comply with U.S. laws.

1 In Mexico, where about half of our produce is grown, we inspect farms at least every threeweeks, with additional third-party inspections at least once or twice a year.



The Six Most Critical FoodSafety Components:

• Safe water supply

• Personal hygiene

• Prevention of cross-contamination(bacterial, physical or chemical)

• Temperature control

• Metal detection

• Traceability

Other Food Safety Worries:

• Pollution

• Bioterrorism

• Salmonella

• Shigella

• E. coli

• Norovirus

• Water-borne diseases

• New viruses

TrainingThe key to our success in providing top-quality food safety and sanitation lies with our people. Sotraining our people in food safety processes is an important focus for us.

Back in the mid-1970s, we worked with what is now the Educational Foundation of the NationalRestaurant Association to pioneer manager certification in food safety training. Thousands of ourmanagers have been certified through this program, and our restaurant employees receiveextensive food safety, personal hygiene and sanitary practices training.

To guide our seafood purchases, we have developed training and education programs for ourinspection staff, our seafood buyers, our vendor partners and many other seafood quality andsafety interest groups. At least every two years, we hold Fresh Fish Seafood Summits for our freshfish vendors from around the world to ensure the safety and quality of the fish that we serve.

Darden Food Safety and Quality StandardsFood Safety Is Our #1 Priority

The best way to ensure quality is to go to the source.Utilizing a risk-based, Hazard Analysis of Critical Control Points (HACCP) approach, ensure:• Food safety practices are integrated at all levels of the supply chain• Highest level of security to the Darden supply chain (domestic & international), with traceability from pond to plate / farm to fork

Food protection – DardenVerification at the Source

Data into informationContinuous system improvement

Timely problem identification,resolution & communication

Raw MaterialSuppliers

Manufacturers Distributors Restaurants

Guests

i



RecallsFood-borne illnesses are a constant risk for a company like ours. In recent years, the U.S. haswitnessed major national recalls for items including peanut products, spinach, tomatoes andpeppers. In addition to serious impacts on human health, food-borne illnesses can have asignificant economic impact on restaurants like ours – even when we are not directly affected by atainted product.

At Darden, we try to stay ahead of the curvethrough vigilant assessment of our supply chain.We are able to minimize the risks because we canquickly identify the sources and origins of all ofour foods. When government regulatorsannounce the recall of a product, we candetermine almost immediately if we are impacted.

We require our suppliers to readily identify:

1 The number of cases produced, accordingto date,

1 Where the products were shipped andwhen, and

1 How much of the product they still haveon hand.

And the suppliers must be able to do the same with their own raw material suppliers, too.

Our food safety/recall processes, which exceed government standards, have largely protected usfrom direct contamination to our supply chain. For example, none of our restaurants was impactedby the huge 2008 recall of 143 million pounds of tainted beef.

Any time the FDA issues an advisory about a tainted product, our restaurants are affected. Take,for example, the recall of fresh spinach after a deadly E. coli outbreak in 2006. Although we werecertain that our spinach was safe, we nonetheless chose to remove it from our menus.

Public PolicyAt Darden, we welcome global food safety standards that help protect consumers.

We support science-based federal legislation that would truly improve food safety in the UnitedStates, and we have been closely following recent legislative proposals in Washington that wouldoverhaul the nation’s food safety systems.



Beef Recall

Darden was one of several restaurantchains affected by a December 24, 2009,recall of 124 tons of beef.

We immediately pulled the beef fromour restaurants after receiving a noticefrom one of our suppliers about therecall of marinated beef medallions usedin Olive Gardens in the Texas region.

Although the medallions had beentested and found to be free of E. coli,they were included in the recall becausethey were processed in the same plant,and in the same timeframe, as otherproducts that had been tainted.

The U.S. food supply chain is recognized as the safest in the world. Yet, recent disease outbreaksmake it apparent that the U.S. food inspection system is not perfect. We believe there areopportunities to enhance existing measures to further protect consumers. The key to minimizingthe risk of food-borne disease is to ensure that systems are in place that: focus on the proactiveprevention of food safety issues; strengthen surveillance and enforcement; and improve theresponse and recovery in the event of a crisis. Only through effective collaboration andharmonization of standards among industry, government and academia can we ensure the safetyof all food products in a global market.

We lend our expertise to federal regulators onissues that affect our industry. Recently, forexample, we collaborated with the FDA to helpdevelop draft guidance for safety practices relatedto the growing of tomatoes and leafy greens. TheFDA plans to move toward greater regulation ofthose products within the next two years.

RecognitionIn 2002, the International Association for FoodProtection awarded us its prestigious BlackPearl Award in recognition of our food safetyand quality programs.



Industry Memberships

Darden is a member of a number ofindustry associations dedicated to foodsafety, including:

• Global Aquaculture Alliance

• National Fisheries Institute

• National Restaurant AssociationQuality Assurance Study Group

• United Fresh Produce Association

• Produce Marketing Association

• Food Safety Leadership Council

• International Association for FoodProtection

• Conference of Food Protection

• National Environmental HealthAssociation

http://www.foodprotection.org/about-us/awards/



HEALTH AND WELLNESS

Our Commitment to Transparency, Choice and InnovationDarden is committed to the health and well-being of our guests, and we are taking a holisticapproach to improving the nutritional content of our menu offerings. Our efforts are guided bythree pillars: transparency, choice and innovation.

Transparency means we are committed to arming our guests with the information they need tomake informed decisions in our restaurants. Darden was one of the first restaurant companies toprovide guests with calorie and other key nutritional information online more than a year ago andwas a leader in the effort to pass federal legislation to require nutrition disclosure in restaurants.Our nutritional information is available upon request in all of our restaurants.

Choice means we offer our guests a range of menu items that appeal to a variety of tastepreferences and dietary needs, and guests are free to decide how they want to apply their ownpersonal beliefs about what healthy eating means to them. Guests are able to apply this choice invarious ways in our restaurants. For instance, guests at Olive Garden can substitute 100 percentwhole grain pasta in any dish. At Red Lobster, they can enjoy their favorite seafood prepared overa wood-fire grill or broiled. And at Seasons 52, which is undergoing rapid expansion, all items onthe seasonally inspired menu have fewer than 475 calories. In response to our guests’ desire forbetter-for-you entrees, we have already introduced some innovations to match our offerings to ourguests’ wishes. The fresh fish at Red Lobster is a great example of that.

Innovation means we are working to improve our menu offerings over time to provide evengreater nutritional value, while still meeting our guests’ high expectations for taste and quality.We’re taking a holistic approach that will include examining portion size and kids’ menus, as wellas specific nutrients such as sodium and fat and the inclusion of positive nutrients like leanproteins, fruits and vegetables and whole grains.

Our nutrition information can be found by visiting our websites below:

http://www.redlobster.com/health/nutrition/dinner.asp

http://www.olivegarden.com/menus/garden_fare/nutrition_information.asp

http://longhornsteakhouse.com/nutrition/

http://www.thecapitalgrille.com/Locations/Manhattan/nutrition.asp

http://www.bahamabreeze.com/menus/nutrition/nutrition_dinner.asp

http://www.seasons52.com/menu/nutrition.asp

ANIMAL WELFARE

What We’re Doing: Taking a Holistic and Science-BasedApproachDarden is strongly committed to thewelfare and well-being of farm animals.It’s critical to our business, and it’s inkeeping with two of our company’s corevalues – respect and caring.

We also view animal welfare issues as acrucial component of our industry-leading food safety program. Animalssubject to poor housing and handlingconditions are more susceptible todeveloping poor health, which can affectthe quality of the food product. (Formore on food safety, see above.)

When it comes to animal welfare, we takea holistic approach. That is, when weconsider issues of animal welfare, we mustalso consider the related economic,environmental, social and food safetyaspects of protein production. Ourpolicies are based on the best-availablescience of the day.

We have been and will continue to listento a wide range of stakeholders in orderto better understand animal welfare issuesbefore making decisions that impact ourpurchase of animal products. We believecollaboration within the restaurant andfood service industry and across thesupply chain will lead to improvementsthat enhance the welfare of farm animals.

Principles and PoliciesSince 2005, our Animal Welfare Working Group (AWWG) has been monitoring animal welfareissues to help ensure that we apply the most up-to-date scientific standards to the well-being ofanimals in our supply chain.



Food Animal Welfare Principles and Policies (FAWPP)

Food Safety• The health and safety of our guests is ournumber-one priority. Darden will continue toprovide the safest and highest-qualityproducts for our guests.

Respect and Caring• At Darden, we live by our core values, whichinclude Respect and Caring. This core valueextends to the respect and caring of animals.

Best Science• Darden’s principles and policies will be basedon the best-available science in the contextof good judgment and ethical behavior.

• As the best-available science and ourincreased understanding of the broad set ofanimal welfare issues evolve, we will updateour operating practices accordingly.

Stakeholders• Darden will work with its suppliers to improvefarm and processing plant animal welfare.

• Darden will collaborate with those in theindustry (suppliers, food service companies,retailers and others) to understand evolvingbest science and continuously improveanimal welfare.

• Darden will continue to listen to, and takeinto consideration, various points of viewfrom our stakeholders (government,academia, communities where we operate,shareholders, suppliers, interest groups andothers) to inform our efforts going forward.

The AWWG, which meets quarterly, includes representatives from several Darden departments –including supply chain, total quality assurance, legal, and government/community affairs – as wellas outside experts and scientists who specialize in animal welfare.

For example, we brought in a scientific advisor who is internationally recognized for her workrelated to agricultural animals. Dr. Janice Swanson, a professor and director of animal behaviorand welfare at Michigan State University, worked with us as a technical advisor to finalize a set ofFood Animal Welfare Principles and Polices (FAWPP) for our suppliers based on current soundscience. We believe these principles and policies, which were reviewed by several external animalwelfare experts, are grounded in good judgment and ethical behavior.

As a condition of doing business with Darden, our suppliers must affirm their commitment toanimal welfare. Each supplier must comply with all legal and regulatory requirements, such as theFederal Humane Slaughter of Livestock Act, and must abide by recognized science-basedguidelines established by industry groups such as the American Meat Institute, the NationalChicken Council and others.

We also require our suppliers and producers to certify the welfare of animals by providing internaldata records and through third-party verification audits of their processing facilities. In addition,annual on-site assessments of processing facilities are performed by Darden employees who havebeen trained through the Professional Animal Auditor Certification Organization, or PAACO,program. (For more on PAACO and its mission see www.animalauditor.org/paaco.)

If we discover any problems during an audit, we work with the supplier to resolve the concerns.Suppliers then must go through another auditing process within 30 days to ensure all issues aresatisfactorily resolved.

As a large purchaser of beef, pork and poultry within the full-service restaurant industry, webelieve we have an opportunity to work with our suppliers toward enhancing animal welfarethrough science-based improvements.

Darden actively supports programs that enhance the welfare of farm animals, providing up to$100,000 annually in grants. We sponsor reviews of scientific literature on selected topics ofimportance to animal welfare and fund farm animal welfare science research that relates to animalproducts purchased by Darden. We have identified a number of academic institutions with robustanimal welfare science programs as possible future recipients of Darden funding. Our AWWGworks with our scientific advisor to review and evaluate grant proposals that meet our guidelinesfor submittal to the Darden Restaurants Foundation.

Our FAWPPs are intended to be living principles and policies that change as new science andinformation becomes available. With guidance from our scientific advisor, the AWWG formallyreviews these principles every year to evaluate our progress on animal welfare issues to date andassess where Darden might go in the future.



Purchasing DecisionsDarden follows the best-availablescience when making purchasingdecisions that are based on howanimals are raised or slaughtered.

For example, scientific studies haveshown that “open pen housing”systems that provide the pregnant sowwith greater freedom of movementcan be as effective and productive as the individual gestation crates that have been the industrystandard for years. So we are now giving purchasing preference to pork producers who havecommitted to move to open pen housing or who are in the process of phasing out the use ofgestation crates. By giving purchasing preference, Darden can help to change industry practices toenhance animal welfare.

However, we have not chosen to give purchasing preference to poultry suppliers that use a systemknown as Controlled Atmosphere Stunning, or CAS, for slaughtering chickens. Currently in theU.S., most poultry processors use electrical stunning prior to slaughter. The CAS system uses acombination of gases that cause the animals to lose consciousness before slaughter.

While current science indicates CAS may improve someanimal welfare issues – for example, the chickens don’thave to be shackled – questions remain about whetherthe process creates new animal welfare and food safetyconcerns. For example, in some birds, CAS causesrespiratory distress and can lead to violent wing flappingthat may cause wing breakage. In CAS systems, the rateof not detecting a dead bird before slaughter has beenfound to be higher than in electrical stun systems.

In the United States, CAS systems for poultry, especiallychickens, requires more refinement to enable processorsto maximize animal welfare benefits and ensure foodsafety; only a limited supply of poultry slaughtered in thismanner is on the market today. Given the currenteconomic environment, we believe it’s unrealistic toexpect the poultry industry to invest the capital and resources that would be required to makemajor modifications to their processing systems.

Darden will continue to collaborate with the industry to conduct research and build scientificconsensus on CAS and other existing – or potential – technologies that may improve thewelfare of poultry.



“Darden has a well-defined animal welfareprogram. Not only have they laid out basicprinciples, but they have sets of policies tomeasure the outcomes. I think they have taken avery measured and thoughtful approach to theseissues – they don’t make snap decisions.”

- Dr. Janice Swanson, Professor, Animal Behaviorand Welfare, Dept. of Animal Science, MichiganState University

Veal at Our Restaurants

Only one of our restaurantbrands – The Capital Grille –serves veal. The veal we offerwas raised in sustainable,healthy and humaneconditions. The animals arenever tethered and are able toroam free in pastures. Dardenuses third-party auditors toverify that the veal is raisedand handled in a humane way.

For more information on ourveal supplier, visitwww.freeraised.com.

Promoting Sustainability in Our Supply Chain

Why It Matters: Global Reach, Global ImpactsEach year, Darden buys about $3 billion worth of food, equipment, energy and services from 1,500supplier companies in 35 countries. These companies, which make up our “supply chain,” help tosustain communities around the world. The impacts of many of our key issues – seafood sustainability,energy and water use, greenhouse gas emissions and animal welfare – are most significant in our supplychain. For example, we estimate that the amount of greenhouse gas emissions from our supply chain is10 to 100 times that of our own operations. And our most important issue of all – food safety –depends on actions at every step of the supply chain, “from farm to fork.”

To deliver on our commitment to sustainability, we need to be confident that the food we buy isgrown, processed and shipped in hygienic conditions; that the seafood we serve comes fromsustainable sources; that the welfare and well-being of animals raised for food in our restaurants isbased on the best-available science of the day, in the context of good judgment and ethicalbehavior; and that our suppliers share our commitment to reducing their environmental footprintsand ensuring sound working conditions for their employees.

If it sounds like we demand a lot of our suppliers, we do. But we also try to offer a lot of value inreturn. We’re dedicated to building long-term, mutually beneficial relationships. We share ourknowledge and look to our suppliers for their expertise. If we encounter issues, we workcooperatively to resolve them. If we identify more efficient ways to do business, we share thebenefits. We want our supply chain partners to be ever more competitive, which helps both thesupplier and Darden in the long run.

We believe our supply chain relationships provide us with a competitive advantage. By workingclosely with suppliers and leveraging our scale, we can innovate to develop a better, moresustainable supply chain while also improving efficiency and reducing our operating costs.

What We’re Doing: Focusing on Key IssuesTo manage and coordinate our approach to sustainability issues in the supply chain, we haveestablished the Darden Supply Chain Sustainability team. The team is composed of senior leadersfrom the purchasing, supply chain management, total quality and logistics functions. Formed inearly 2009, the team has established a supply chain sustainability vision, principles and objectives(see Figure 1).


FIGURE 1

The work of the team builds on ongoing efforts in several key areas:

1 Animal welfare: More than seven years ago, we began discussions with our suppliers abouttheir animal welfare practices. Drawing on the expertise of the suppliers, Darden staff andindependent experts, we developed and adopted a set of animal welfare principles. Suppliersare required to certify that they adhere to the principles, and Darden’s quality teamsconduct spot audits to verify adherence. Please see p. 35 for details.

1 Seafood sustainability: For more than 13 years, our supply chain experts have worked tobuild the capacity of our seafood suppliers and Darden’s seafood buyers to improve thesustainability of our seafood supply. Darden has played an important role in forming theGlobal Aquaculture Alliance and facilitating its development of social and environmentalstandards. We’ve also worked with the New England Aquarium to equip our seafood buyerswith a “sustainability dashboard” to inform purchases of wild-caught fish species. These andother initiatives are discussed beginning on p. 52.

1Working conditions: We see sound conditions for workers as an integral part of safe, high-quality operations. We’ve collaborated for several years with produce supplies in Mexcio(see p. 48) to build high-quality operations there that also raise the standard of living formigrant workers. In addition, we have a Supplier Code of Conduct (see box), which isbeing communicated to all suppliers. The Code is also part of the certification requirementsof the Global Aquaculture Alliance.

What is Our Vision?

Darden’score values


vision

overall Dardensupply chain

objectives


vision

“Partnering with our key stakeholders, to generate ecosystem conservation and enhancement solutions to continually create long-term collective value

and resource availability.”

“creating value while balancing the well-being of our society, our environment and our business now and for generations.”

integrity& fairness

respect &caring

diversity alwayslearning & teaching

being “of service”

teamwork excellence

To deliver total value to the enterprise by enhancing:Economics EnvironmentFood Safety DeliveryQuality CommunitySupplier Diversity Resource Availability



http://www.gaalliance.org/

Where We’re Going: Deeper EngagementOur current supply chain priorities, as identified by the Supply Chain Sustainability team, includefurther work in seafood sustainability, supplier packaging, logistics and distribution.

We are launching a project to reduce thepackaging that suppliers use for items theyship to us, without sacrificing food safety,quality or other important attributes. The typeof packaging used varies widely, so there is nosingle solution. But we will be collaboratingwith our suppliers to help identify ways to cutpackaging waste at our restaurants anddistribution centers and to improve theenvironmental profile of those materials.

We will continue to work on these and otherpriorities as we build a more sustainable supplychain. In the long run, this will make ourcompany and our suppliers stronger, smarter,more resilient and better able to adapt toglobal challenges.



Darden’s Supplier Code of Conduct

Darden’s Supplier Code of Conductprohibits the use of child or forced laboror abusive physical discipline by Dardensuppliers. It also:

• Advises suppliers to contract only withsuppliers that will adhere to the Codeand to monitor the subcontractor’scompliance with the Code.

• Encourages suppliers to adopt andenforce similar codes and to encouragetheir suppliers, in turn, to take similaraction.

• Provides for audits of adherence to theCode by Darden, the supplier, or a thirdparty, at Darden’s discretion.

CASE STUDY

Growing Safe and SustainableProduce in Mexico

About a decade ago, all of the fresh fruits and vegetables used in our restaurants came fromfarms in the United States. We began to realize, however, that we were relying too heavily onfarmers in only two U.S. states – Florida and California.

This dependence grew especially evident in 2004 after a series of hurricanes in Florida, coupledwith unfavorable weather in California, wiped out tomato crops and drove up prices. What weneeded was geographic diversity. And the solution was found south of the border in Mexico.

We knew, however, that sourcing produce from Mexico wouldn’t be easy. Contracting withMexican farms would require us to take a much more active management role than we had withour U.S.-based produce suppliers. At that time, Mexican farms were reputed to have poorworking conditions for employees and lax oversight in the fields.

In Mexico, we saw several opportunities to not only improve our business operations but also tosignificantly improve the lives of hundreds of Mexican farm workers and their families. Foodsafety was our biggest driver. But we knew that operating farms to the highest standards alsoimproves conditions for workers.

The challenges in Mexico were many and varied. They included:

1 Inferior worker hygiene and sanitary standards

1 Underage workers and children accompanying parents to work

1 Livestock wandering in the growing fields

1 Substandard water quality and irrigation

1 Lack of trust in U.S. buyers

Finding PartnersWe began our Mexican sourcing program by meeting with growers to demonstrate that Dardenwas interested in long-term purchasing relationships. (Historically, U.S. purchasers had primarilymade one-off buys from Mexican farms, with no future commitments.)

We chose as partners those growers with a reputation for quality and innovation. But even thosegrowers had a lot of catching up to do to meet our comprehensive and demanding food safetystandards. At Darden, food safety is our top priority, and we will not contract with any farmunless we are assured that the products will meet our stringent criteria.


The Risks of Fresh ProduceFresh produce is inherently risky for many reasons. For one thing, lots of people touch andhandle the crops, providing opportunities for disease transmittal if proper safety regimens (likehand washing) aren’t followed. Moreover, many fresh produce items – such as tomatoes,cucumbers, peppers and lettuce, which our restaurants serve in our salads – aren’t cookedbefore reaching the end consumer. (Cooking would help to kill harmful bacteria that could resultin illness.)

According to the Centers for Disease Control and Prevention, produce caused more reportedillnesses than seafood, dairy and processed foods combined between 1996 and 2007 in theUnited States. (See Figure 1 below.1)

FIGURE 1

We saw that shifting produce purchases to Mexico would require Darden employees and ourconsultants to work with and train the growers’ managers and employees. It also would meanpushing for substantial changes in the working conditions of local and migrant farm employees,as well as the living conditions of migrant workers.

“The plight of the migrant worker in Mexico warranted our involvement,” says Pat Hynes,Darden’s senior director of produce purchasing who helped to spearhead the Mexican programs.

1 The pie chart does not include animal protein products, which are monitored by the U.S. Department of Agriculture, not the Foodand Drug Administration. Data through FY07 is the most recent available.

The Risks of Fresh Produce

Dairy1.5%

Produce43.6%

Seafood11.8%

Eggs27.7%

ProcessedFoods15.4%

FDA-regulated foods linked to reported illness, 1996-2007. (There were 23,885 reported illnesses from 1996-2007; the CDC estimates a total of 717,000 illnesses from 96-07.)


Case Study: Growing Safe and Sustainable Produce in Mexico

Hynes and other Darden employees who visited several Mexican farms were dismayed by whatthey saw. Workers living in villages constructed out of cardboard boxes. Extended familiescrowded into small rooms of abandoned buildings. Meals cooked outside near the fields onopen fires. Insufficient bathroom facilities. Young children following their parents in the fields.

Our RequirementsWe recognized that we could improve food safety by improving working and living conditions foremployees. In areas where migrant workers are employed, one key element of our program wasto encourage our growers to develop better housing for employees and their families. At someof the farms, many families now stay in the housing year-round – even during the off-season –creating permanent worker communities.

We also insisted that the growers put a stop to the traditional practice of allowing employees totake their pre-school age children with them into the fields. We required our growers to opendaycare facilities and schools so the children would have safe places to play and learn while theirparents worked.

When told they could not bring their children with them to the fields, many parents initiallyresisted the idea. Some workers even quit, choosing instead to work for growers who wouldallow them to continue the custom. But those workers who did remain grew to recognize thevalue of the daycare and school programs. Many children of these workers are the first in theirfamilies to go to school and learn to read.

We also required our growers to:

1 Build shaded eating facilities for workers,

1 Establish bathroom facilities in and near the fields, complete with monitors to ensure handwashing, and

1 Erect fencing around the fields to keep livestock away from the crops.

Some of the growers added on other beneficial programs for their employees, including:

1 On-site medical clinics, with full-time nurse practitioners on site, weekly doctor visits andweekly dental clinics.

1 Worker-owned and managed cooperative stores, where the workers share in any profits.



A Mutually Beneficial ProgramWe helped the growers develop extensive safety protocols and procedures, as well asmechanisms to ensure they were followed and enforced. We sent in Darden Total Qualityemployees and our consultants to inspect farms with unannounced visits. And we beganrequiring third-party annual inspections.

“We thought we had high standards for our Mexican operations – that’s why Darden wanted towork with us,” says Mark Munger, vice president of marketing for Andrew & Williamson FreshProduce (A&W), whose Mexican operations now supply tomatoes and cucumbers for Dardenrestaurants west of the Mississippi. “But Darden really helped open our eyes to improved foodsafety. What was nice was they didn’t come in like it was a police state. They worked with us sideby side and helped us through the entire process.”

Munger says A&W spent several hundred thousand dollars to improve its facilities in order tomeet Darden’s expectations. “Darden was the catalyst that helped us improve our operations,”Munger says. “We were ready to change and put in infrastructure, like housing and daycare. ButDarden came in and really acted as a guide to help us put things in place.”

Our successes in Mexico have prompted us to work with a number of growers in CentralAmerica, including Guatemala, where the infant mortality rate on our farms is significantly lowerthan the national average, thanks to improvements our growers have implemented.

Our approach in Mexico took several years to develop, but it has been well worth the effort – forall parties involved. The growers recruit and retain loyal and capable workers and have been ableto increase their business with other U.S.-based companies who were willing to contract inMexico once Darden paved the way. The workers – and their families – have a significantly betterquality of life. And Darden has a steady supply of top-quality produce grown on farms with foodsafety standards that are better than those on many U.S. farms.



Our Approach to SeafoodSustainability

Why It Matters: Wild Fish Stocks Are Under PressureSeafood is the main source of protein for more than 1 billion people worldwide; another 3 billioncount on seafood for up to 20%2 of the protein in their diets. And in the United States inparticular, demand continues to skyrocket as consumers heed nutritionists’ advice to eat seafoodfor better health.

Scores of studies point to seafood as one of thehealthiest foods one can eat. The fatty acids infish have been shown to reduce the risk of heartdisease, stroke, dementia and autoimmunediseases such as Crohn’s and rheumatoidarthritis.

Global demand for seafood is rising so fast thatwild-caught species simply cannot keep pace.According to the United Nations’ Food andAgriculture Organization (FAO), most of thestocks of the top 10 fish species (representingabout 30 percent of world marine captures) wereeither fully exploited or overexploited in 2007.3

A depleted fishery has huge environmental,economic and social ramifications. When one fishspecies struggles, an entire marine ecosystem cansuffer. Fishermen, and fishing communities,struggle financially, as do the businesses that sellthe seafood to consumers. And for manyimpoverished individuals around the world, theremay not be alternative sources of protein thatthey can easily access and afford.

2 Food and Agriculture Organization (FAO) – The State of World Fisheries & Aquaculture (SOFIA, 2008).3 The FAO defines these terms as follows. “Fully exploited” means the fishery is operating at or close to an optimal yield level, with no expected room forfurther expansion. “Overexploited” means the fishery is being exploited at or above a level which is believed to be sustainable in the long term, with nopotential room for further expansion and a higher risk of stock depletion/collapse. “Depleted” means catches are well below historical levels, irrespectiveof the amount of fishing effort exerted.


Global Fish Trade

Total Global Seafood Purchases: $60billion a year

Seafood Marketplace: Nearly 200countries that supply the globalseafood marketplace

Commercial Products*: More than 800species of fish, shellfish, mollusks

World Population:** 2010 Population: 6.8 billion2050 Projected Population: 9+ billion

* Source: www.fishbase.org **Source: United Nations and U.S. Bureau of theCensus estimates

Global Fish Stocks Of the 600 marine stocks monitored bythe FAO:

17% of species are overexploited7% are depleted1% are recovering from depletion52% are fully exploited 20% are moderately exploited orunderexploited3% are underexploited

Source: FAO

Global seafood demand is expected to jump to 144 million tons per year by 2025 – a hugeincrease from the 94 million tons in 2007. Yet, the amount of seafood harvested from the oceanshas remained flat since the late 1980s, at about 85 million to 90 million tons a year. Figure 1illustrates expected trends in future world seafood supply in relation to projected per capitademand. (We derived these figures from FAO fish capture data and U.S. Census Bureau statisticson the increasing world population.)

FIGURE 1

Certainly the overfishing of desirable species is a major contributor to the problem. So is illegal,unreported and unregulated fishing. But these are not the only causes of fish population declines.Historically, in many parts of the world, human impacts such as coastline development haveseverely affected coral reef ecosystems4 and other sensitive habitats, such as mangroves, whereyoung fish live before they venture out into the open ocean.5 In addition, pollution runoff hasharmed fish populations and even created large “dead zones” in some bodies of water.6

4 Christopher Delgado, et al., Fish to 2020: Supply and Demand in Changing Global Markets (Washington, DC: International FoodPolicy Research Institute, 2003).

5 Ibid. 6 Ibid.

Future World Seafood DemandTo maintain per capita status quo (5.49 kg [12.1 lbs.]) will require approximately 8.0 million metric tons (edible wt.) by 2025.

46.00

44.00

42.00

40.00

38.00

36.00

34.00

32.00

30.00

2007

Current Production

Required Production

■ Current Production ■ Required Production

2009 2011 2013 2015 2017 2019 2021 2023 2025

Data from U.S. Census and FAQAssumes constant seafood consumption of 5.49 kg/capita and population growth of roughly 0.9% per annum (US Census)

8.0 MT deficitrequires a 21%increase in supply


Our Approach to Seafood Sustainability

What We’re Doing: Strengthening Policies, SeekingAlternativesSeafood sustainability isn’t new for Darden. We’ve been passionate about this issue for 40 years –well before “sustainability” was a household term.

When Red Lobster was founded in 1968, high-quality seafood was available only to the wealthy,or to diners lucky enough to live along thecoasts. Red Lobster Founder Bill Dardenfigured out how to make seafood available andaffordable for all, no matter where they lived. Asour company grew, we increasingly recognizedthe importance of sustainable fisheries not onlyto our business and our company’s bottom line,but also to our global community.

In the 1970s and early 1980s, for example, ourthen-president, Joe Lee, helped coordinate ateam that collaborated with the United Nationsto help draft the Law of the Seas Treaty, whichwas designed to protect the world’s oceans andmarine life from overfishing.

But early conservation efforts went only so far.So we took action, strengthening our policies and changing our purchasing practices regardingwild-caught and aquacultured fish. For example:

1We currently do not serve certain species such as Chilean sea bass, orange roughy or anytype of shark, as these species are overfished at present. We are constantly monitoringscientific information on the changing conditions of fish stocks to evaluate whether weshould remove other species from our menus, too.

1We are committed to purchasing wild harvested and aquacultured species from sustainablesources. Darden utilizes the input and expertise of the New England Aquarium to guideour sustainable choices. For aquaculture, we also rely on the best practice standards of theGlobal Aquaculture Alliance. (See below for more information.)

1We established the Darden Environmental Trust (as part of the Darden RestaurantsFoundation) to fund projects that protect marine life. To date, the trust has donated morethan $5 million to various marine preservation projects, including one that was instrumentalin conservation efforts to protect the Kemp’s ridley sea turtle, one of the most criticallyendangered sea turtle species in the world.



Our Seafood SustainabilityPromise

At Darden, we are committed to doingthe right thing when it comes to seafoodsustainability. For example:

• We are committed to purchasing wild-harvested and aquaculturedspecies from sustainable sources.

• We consult regularly with respectedscientists to ensure we stay abreast ofchanges to ocean ecosystems and tostay current with best sustainabilitypractices.

• We use our influence to encourage theindustry to follow more sustainablepractices.

To make a sustainable seafood purchase, a buyer must consider multiple factors for a given species,including where and how it was caught and how it was transported. For example, some species offish, like swordfish, live all over the world; the species may be overfished in one ocean but not inanother. For farmed species, a buyer must also consider what the fish were fed and where thatfood came from, as well as the impacts of the aquaculture practices on land and water.

We have been working with the New EnglandAquarium – a global leader in marineconservation and one of the premieraquariums in the United States – to developwhat we call a “Sustainable SeafoodDashboard.” (See below for a screenshot of theopening page.) The Dashboard is designed toprovide the most current and detailedenvironmental, conservation and scientific dataabout wild-capture and aquacultured species,highlighting how a species is caught, where itis captured and whether it is in jeopardy,among other issues. The Dashboard isintended to inform Darden’s seafood buyersregarding sustainability issues and toencourage a two-way dialogue betweenDarden and the Aquarium, in order to moveforward on matters of seafood sustainability.

In developing the tool, members of our seafood purchasing department have been meeting withAquarium scientists to discuss the environmental, economic and commercial implications of ourwild-capture purchases. The Dashboard will not provide a simple “yes” or “no” approach topurchasing a particular species; rather, it aims to further educate our buyers about the factors thatshould be considered to make a responsible purchase.

Lydia Bergen, the Aquarium’s Director of Conservation, said the Dashboard has also beeneducational for the Aquarium, as it provides a deeper awareness of the business considerations,including quality, cost and availability of supply, that impact purchasing decisions at a largecompany like Darden.



Seafood Safety

At Darden, food safety is our highestpriority.

We have a team of highly trained seafoodquality and safety specialists who inspectmillions of pounds of fish and shellfisheach year.

Our seafood evaluations consist ofphysical, organoleptic (i.e., do they lookand smell fresh?), chemical andmicrobiological tests, and we go aboveand beyond standard testing for industrialpollutants such as mercury andpolychlorinated biphenyls (PCBs).

For a detailed look at our food safetypractices and procedures, see p. 35.

“We understand the biology of the fish and the rules and regulations of fisheries management, sowe have certain insights into how things work,” Bergen says. “But Darden has the relationshipswith the vendors, so they have different insights. Our hope is that we can work together to shareinformation so we can develop some workable solutions.”

(See more on our partnership with the New England Aquarium below.)

We have also placed particular emphasis on protecting lobster fisheries; after all, it’s the iconicnamesake of one of our most popular restaurants. Among our initiatives:

1We’re leading efforts to stop the import of tails from undersize lobsters from Central andSouth America, and we’ve been working in Canada to increase minimum allowable lobstersize for harvest in order to sustain the resource. (Increasing the limits allows lobsters toreach sizes more optimal for breeding.)

1We also choose not to sell lobsters that are over 4 pounds in weight, because these lobsterstend to be better breeders, producing dramatically more eggs than smaller lobsters.

1We’re partnering with the government of New Brunswick, Canada, on an innovative lobsterstock enhancement project that increases the survival rate of juvenile lobsters by up to 30-fold.



The Advantages of Responsible Aquaculture The world’s population is growing, but the ocean’s ability to feed it is not. Demand is rapidlyoutpacing supply, and we must develop and encourage ways to fill the gap. We believe thatresponsible aquaculture (fish farming) can positively contribute to help fill that gap.

Darden has been an active proponent of responsible aquaculture for more than a decade. In 1997,we co-founded the Global Aquaculture Alliance to create a uniform set of standards, systems andbest practices for the cultivation of fish and seafood.

This organization, which began as an alliance among a handful of restaurant companies andretailers, has grown into an impressive international coalition of more than 70 members, includingbuyers, growers, scientists and environmental groups. Darden thought it was important to bringmany parties to the table, and we encouraged those with differing points of view to join us in ourgoal: furthering environmentally responsible aquaculture to meet world food needs. Dardencontinues to play a leadership role in the organization.

As part of our work, the GAA created anonprofit, public-benefit organization calledthe Aquaculture Certification Council, Inc.(ACC), to inspect and certify companies thatapply the GAA’s “best aquaculture practices”(BAPs). Red Lobster was the first restaurantcompany in the world to require all of ouraquaculture shrimp suppliers to be ACC-certified. Today, 100 percent of theaquacultured shrimp processors that supplyDarden are certified.

The ACC certification covers a range of issuesrelating to the health and welfare of the fish, aswell as water quality and other environmentalissues, food safety protocols, traceability and workforce standards.

In addition to standards for shrimp, BAP standards have also been completed for tilapia andcatfish – two species we source primarily from aquaculture – and we are working with oursuppliers to implement these standards. Standards are currently being developed for other species,too. Our goal is to have all of our aquaculture products certified to GAA standards as theybecome available.

Years ago, aquaculture faced challenges when some fish farms were built on environmentallysensitive lands. The resulting negative reputation grew after some farmers began using harmfulchemicals in a misguided attempt to minimize disease and maximize growth. The aquacultureindustry has been working hard to demonstrate that it is a viable, reliable – and sustainable –



Top U.S. Aquaculture Species

• Shrimp• Salmon• Tilapia• Trout• Catfish• Cobia• Corvina• Barramundi

About 60% of all Darden seafoodpurchases (in pounds) are fromaquaculture sources; the remaining 40%are wild-caught.

http://www.gaalliance.org/

method to complement wild-caught fisheries. The BAP standards do not allow the degradation ofsensitive land.

The fact is, when grown responsibly and according to ACC standards, aquaculture seafood hasmany advantages over wild-caught. Aquaculture growers have influence over so many factors,from the cleanliness of the water to the population density of the fish to the harvesting practicesused. For example, in many cases, the water pumped out of our suppliers’ aquaculture ponds iscleaner than what is put in.

Our suppliers’ aquaculture facilities are also optimally positioned near transportation hubs. Forinstance, tilapia reared in aquaculture facilities in Ecuador are en route to North America withinfour hours of harvesting. That means they’re fresher than wild species that are caught by fishingboats in the middle of the Pacific.

Today, our restaurants source most of their shrimp and salmon and all of their tilapia, trout andcatfish from aquaculture suppliers. We have very high standards, inspecting each aquaculturesupplier to ensure they are following our prescribed food safety practices. (For more on foodsafety, see p. 35.)

We firmly believe that responsible aquaculture is one of the best ways to help meet the world’sgrowing demand for seafood. Without it, wild fish stocks will continue their downward trend,making seafood so costly that it will be unaffordable for many people, not only in the U.S., butalso the world.

The Importance of PartnershipsAt Darden, we don’t make decisions aboutseafood in isolation; we look to the best scienceof the day for guidance. That’s why we partnerand engage with a broad array of experts.

Notable among them is our relationship withthe New England Aquarium. In 2005, weasked this Boston-based aquarium to beginadvising us on ways we might improve existingpurchasing strategies related to seafoodsustainability. We also look to the Aquarium tohelp us collaborate on multi-stakeholderinitiatives on seafood. The Aquarium’s sustainable seafood program provides advice on how todevelop and implement visionary and realistic sourcing polices and practices that protect thefisheries. Darden is one of several companies that participate.



“Darden is definitely playing a leadershiprole. The entire industry faces a supplychallenge – there’s just not enoughseafood out there to sell. I think Darden istaking on that challenge and doing whatthey need to do, working with theirsuppliers and within their industry to findinnovative solutions that will create amore sustainable supply of seafood.”

-Lydia Bergen, Director of Conservation,New England Aquarium.

www.neaq.org

Bergen, the Aquarium’s director of conservation, says the program is mutually beneficial. A largebuyer like Darden, she explains, can have a big impact on the supply chain by making informedseafood purchases that are environmentally responsible.

For example, Darden asked the Aquarium to evaluate whether we should consider adding theLake Victoria Nile Perch to our list of approved species. The Aquarium’s scientists evaluated thefisheries in Kenya, Tanzania and Uganda and determined that this species was not a good choicebecause of potential environmental and social concerns. We listened, and decided not to purchasethe fish.

We want to use our influence to enhance fisheries – both the seafood stocks themselves and thelives of those who make their living from catching them. The more we engage with scientists,governments, environmental groups, fishermen and other stakeholders, the more we learn abouthow we can best make a difference. We believe we can obtain the best results when we considerdifferent viewpoints; that’s why we work to bring together a variety of stakeholders – includingthose who normally differ in their views or opinions – to help us move forward.

It’s all about doing the right thing and making a positive impact.

Where We’re Going: Continuing to Meet DemandSustainablySeafood sustainability is an incredibly complex issue framed by what are often competingenvironmental, economic and political interests. We are pleased with the progress we have madein our commitments toward sustainable sourcing, particularly the advancements in aquaculture.Yet we don’t pretend to have all of the answers. We do know this: if current trends continue,seafood supply and demand will be on a collision course.

One of the reasons our guests come to our restaurants is because they know they will be servedsafe seafood that comes from only reliable sources. It’s in our best interest as a company to makesure we have an adequate and consistent supply of seafood to meet our guests’ demands. Ofcourse, it is also in the best interest of our planet to ensure a healthy ocean ecosystem.

Consumers hear many conflicting messages about “sustainable” seafood. Should they choose wildversus farmed? Organic versus non-organic? Should it come from a “local” source? Unfortunately,there are no simple answers when it comes to seafood sustainability.

We will continue to work with partners such as government bodies, nongovernmentalorganizations, fishery stakeholders, suppliers, and industry trade groups, like the NationalFisheries Institute, to inform our thinking. And we will rely on the best science of the day toguide us in our decisions about which seafood we should or should not serve.



CASE STUDY

Sustaining the North AtlanticLobster Fishery

Diane Cowan is one of the world’s foremost experts on lobsters. But she doesn’t hesitate to dineon them. “I feel better about eating lobster than about most things I eat,” she says.

Cowan has devoted her life to studying the crustaceans. She founded The Lobster Conservancy inMaine in 1996 with an eye toward building, and maintaining, a strong and healthy lobster resource.She also wanted to bring together two groups that were often at odds: fishermen and scientists.

In 2002, The Lobster Conservancy sought out an obvious partner – Darden and our Red Lobsterbrand. It was a logical fit. Darden, after all, is the world’s largest purchaser of North American lobster.

Over the years, Darden has become increasingly involved in Cowan’s group, activelyparticipating in multi-stakeholder meetings and discussions on the future of the lobster fishery.

Says Cowan: “We sought out Darden because we recognized that they were a companyinterested in sustainability. And, of course, they were interested in having a sustainable productso they could continue to serve lobsters to their customers.”

To date, Darden has contributed more than $60,000 to a variety of The Lobster Conservancy’sprograms. One of them is the Juvenile Lobster Monitoring Program, a unique scientific researcheffort that investigates lobsters at their earliest stages of development, when lobsters the size ofa fingernail spend time on and near the shore. A team of 120 trained volunteers monitors thejuvenile lobsters and collects data that is helping Cowan and other researchers understand moreabout the creatures and the critical lobster nursery habitats that dot the New England coastline.

Yet, as Cowan puts it, she can’t study the babies without wondering about the mothers. So, withfinancial support from Darden, Lobster Conservancy scientists also tag and track reproductivefemale lobsters in their deep-water habitat to better understand the relationship between eggproduction and harvest. Among the learnings: the bigger the female, the further she traveledwith her eggs. Smaller egg-bearing females stayed close to home in Maine; larger females wentas far as Cape Cod.

Why is this relevant? By traveling, lobsters strengthen the genetic diversity of the population,helping to maintain a much healthier gene pool.

Scientific evidence plays an important role in fisheries management and, in fact, helped convincelawmakers throughout the lobsters’ range to adopt a new maximum legal catch size to protectthe largest females because of their ability to reproduce millions of eggs. Darden executives, she


www.lobsters.org

said, helped to spread the word among legislators and the public about the importance ofprotecting egg-bearing females. Maine had protected these reproductive lobsters since the1930s; now all of the New England states are on board.

“You can’t manage a fishery according to fiction,” says Cowan. “You need to understand thescience of why issues are important.”

Unlike other fisheries with decreasing stocks, the North Atlantic lobster catch is at record highs –about 70 million pounds a year in Maine, up from 30 million in the early 1980s. Cowan attributesthe boom to several factors, including good management that bumped up the minimum legalcatch size and warmer water temperatures (both surface and bottom), which increase thechances of survival among juveniles.


Case Study: Sustaining the North Atlantic Lobster Fishery

CASE STUDY

Our Work in Two Lobster Fisheries

Lobster is an essential product for Darden Restaurants, especially for our Red Lobster brand. As theworld’s biggest purchaser of North American lobsters, and one of the biggest purchasers ofCaribbean spiny lobsters, we must take some responsibility for ensuring sustainable lobster fisheriesfor future generations, particularly in areas where the resource is under pressure. We have beenactively participating in two programs in Canada and the greater Caribbean that focus on not onlythe sustainability of the lobsters, but also the economic impact of the fisheries on their communities.

Canadian LobstersIn the province of New Brunswick, we support the recently launched Lobster Sustainability Foundation,a multi-stakeholder group that is working with, among others, harvesters, processors, customers,scientists and governments to preserve and improve the lobster industry. The goal of the foundation isto sustain and enrich Canadian fishing communities through shared research and resources.

In 2008, landings for North Atlantic lobsters in Canadianwaters were the highest they have been since the early 1980s.“To ensure stable year-over-year landings, we need to focuson strategic rationalization of our fleet,” said Rick Doucet,Minister of Fisheries for New Brunswick. “We want to ease thenumber of lobster fishermen vying for a quality product.”

Along the Canadian coast, thousands of people make theirliving from the sea. The goal of restructuring the fishery is toensure a stable and sustainable living for those in theindustry. “We need to sustain this fishery for the long-termand protect generations of lobsters and generations offishermen,” Doucet said.

Doucet said the Lobster Sustainability Foundation is breaking new ground in the region bybringing all of those involved in the industry together. “Darden’s involvement shows thecompany’s commitment to the future of the Canadian lobster fishery,” he said.

“It’s not just about the sustainability of the resource,” Doucet said. “It’s about the sustainability ofthe harvesters, the processors and the marketplace. Each one plays a major role in the value chain.”

At Darden, we hope our efforts will enhance lobster stocks and ensure a sustainable livelihoodfor those across the industry.


Our work with the lobsterfisheries was one of thereasons Fast Companymagazine ranked usNumber 3 on its 2010 list ofthe 10 most innovative foodcompanies. The publicationhighlighted our research onnew ways to ensure thesustainability of seafood,and lobsters in particular.

Caribbean LobstersDarden has also been working to enhance sustainable practices in lobster fisheries in theCaribbean. Several years ago, Darden funded a World Wildlife Fund (WWF) program to improvethe Caribbean Spiny Lobster stock in Honduras. The lobster fishery had been declining in partdue to the harvest of juvenile lobsters that had not had the chance to reproduce. Over the lastfew years, lobster stocks are reported to be down by about a third.

With fewer lobsters in shallow waters, fishermen have been increasingly turning to scuba divingin much deeper waters, threatening both the divers and the lobster stocks. Scuba diving can bedangerous for lobster fishers who are not properly trained, and several thousand men havesuffered permanent injury due to unsafe scuba diving practices. Moreover, the process divers useto catch lobsters – hooking them and pulling them out of their holes – kills the crustaceans.

Darden and the WWF held meetings with the country’s fishing industry to introduce a possibleremedy to the problem: a modified trap that allows smaller lobsters to escape while allowingthose large enough for legal harvest to remain. The new traps, which were put into use by manyfishermen in 2007, not only help the lobsters, but also benefit the fishermen, boat owners andothers who depend on the sustainability of the species.

The program with the WWF evolved into a partnership with the U.S. Agency for InternationalDevelopment and multiple nongovernmental organizations to create the Global FISH Alliance’sSpiny Lobster Initiative in Honduras and Nicaragua. This program, managed by the nonprofitAED, is working to increase the number of lobsters off the coasts of these two Caribbeancountries while simultaneously improving the lives of lobster fishermen. (Seehttp://www.globalfishalliance.org/.) To date, we have provided $100,000 for the program.

In early 2009, the Spiny Lobster Initiative began bringing together representatives from acrossthe lobster fishery – fishers of all types (including scuba divers and trappers), seafood processors,exporters, buyers, government inspectors and environmental groups – to develop strategies forsystem-wide change that will improve the situation for the lobsters and those who catch them.

“In order to bring about the change needed to achieve a sustainable fishery, all of thosestakeholders are essential to the process,” said Gabriela Pineda de Arias, Fisheries ExecutiveDirector for Honduras’ Ministry of Agriculture and Livestock (DIGEPESCA). “They are an integralpart of the production and supply chain. Also integral is the Honduran government, which, asadministrator of the fishery resource, will not sidestep the complex economic issues associatedwith the sustainability process.”

Darden has a policy against purchasing lobsters caught by scuba diving. Our contracts arespecific and explicit: We will not accept scuba dive-caught product, and we monitor oursuppliers closely to ensure compliance.

At Darden, we are committed to sustainable sourcing. We believe our alliance with the SpinyLobster Initiative helps to focus attention on the need to protect the stability of the fishery and away of life for the coastal communities of Nicaragua and Honduras.

“Having Darden involved gives credibility to the program because the people in the lobsterfishing industry in Honduras and Nicaragua know that Darden buys a lot of their lobster,” saidChanya Charles, director of the Global Fish Alliance. “They recognize that if Darden is an activeparticipant in the initiative, it must be a legitimate effort.”


Case Study: Our Work in Two Lobster Fisheries

www.aed.org

Reducing Our Energy Use

Why It Matters: It’s the Smart Thing to DoDarden’s restaurants – like allrestaurants – require a lot of energyto operate every day. We useelectricity, natural gas and/orpropane to power our lighting,refrigerators, freezers, water heaters,dishwashers, heating and airconditioning units, and all mannerof cooking equipment. In addition,the food and goods delivered to ourrestaurants by truck also requireenergy to run.

Because energy is an expensiveresource, it makes sense to look forways to save money by using less.After all, energy prices are volatileand, over time, seem destined to riseas greater demands are placed onlimited supplies of fossil fuels. ForDarden, therefore, reducing energyuse contributes to our long-termeconomic sustainability andcompetitiveness.

Also, energy use is affecting theclimate. (The relationship betweenenergy and climate are described inthe sidebar.) We know it’s importantfor us to do our part to reduce ourenergy use and our greenhouse gasemissions. And the fact is, this issuecould end up affecting our companyin some fairly tangible ways.

In the next few years, the U.S.Congress may pass climate change legislation regulating greenhouse gas emissions, which couldhave the effect of raising energy costs. This in turn would increase the costs of key business inputs


Climate Change 101Greenhouse gases in the Earth’s atmosphere trapheat, which makes the planet warm enough tosustain life. If the concentration of these gases in theatmosphere gets too high, however, too much heatis trapped, causing an overall warming effect. In thelonger term, this has the potential to alter everythingfrom ocean currents to rainfall patterns.

The most common greenhouse gas is carbon dioxide(CO2), which is emitted into the air during thecombustion of fossil fuels – e.g., gasoline in cars andcoal for electricity. Among the other greenhousegases are hydrofluorocarbons (HFCs), which arewidely used as refrigerants.

According to the National Oceanic and AtmosphericAdministration (a U.S. government agency), theconcentration of CO2 in the atmosphere during pre-industrial times was about 280 parts per million(ppm). By 2006, it had increased to 382 ppm. Thenatural range of CO2 in the atmosphere over the last650,000 years has been 180 to 300 ppm, so we arenow well above the high end of that range.

Over the past century, the Earth’s averagetemperature has risen about 0.74° Celsius (1.33°Fahrenheit). That’s according to theIntergovernmental Panel on Climate Change (IPCC),the international body of climate scientists. While0.74° Celsius may not sound like much, it issignificant. The IPCC has documented numerouschanges in natural ecosystems (i.e., in forests, oceans,the Arctic tundra, etc.) as a result of this warming.

Many factors can affect the Earth’s climate, but theIPPC is convinced that the increase in global averagetemperatures has been caused by the burning offossil fuels and the associated buildup of CO2 andother greenhouse gases in the atmosphere. Andunfortunately, the buildup of CO2 appears to beaccelerating, not slowing.

for us such as electricity in our restaurants and gasoline for transporting our products. It wouldalso likely affect the cost of the food ingredients that go into our menu items. To the extent thatthe emission of greenhouse gases into the atmosphere increases the frequency and severity ofdrought, causes the loss of crops or livestock, changes ocean currents or acidifies the oceans, it willaffect our agricultural supply chain in ways that are very difficult to predict. For all of thesereasons, it’s in our best interest to ensure that we decrease our energy use now and help to stemgreenhouse gas emissions.

By taking steps to improve our energy efficiency now, we will be well-prepared to operate in aneconomy in which greenhouse gases are regulated and energy costs are higher. This issue has alsospurred us to have important conversations with some of our agricultural suppliers about how toadapt in the long term. And, we hope and expect that our sustainability efforts will help uscommunicate to our stakeholders – including our employees and our guests – that we are doingour part to cut energy use and reduce greenhouse gas emissions.

What We’re Doing: Working to Decrease Our Energy UseAt Darden, we are committed to reducing our energy use. We have begun to institutionalizeenergy conservation practices in our restaurants and install energy-efficient technologiesthroughout our operations. We also have been developing, evaluating and refining an overallsustainability strategy for our company that includes energy-reduction initiatives.

In 2008, we conducted our first greenhouse gas inventory. That is, we calculated the greenhousegas emissions that result from electricity use, on-site fuel use and refrigerants at all of our 1,800restaurants. We also included emissions from our headquarters (which we call our RestaurantSupport Center, or RSC), as well as mobile emissions from our small fleet of company cars andthree corporate aircraft.7 We submitted all of this emissions data to the Carbon Disclosure Project(CDP), an independent nonprofit organization that maintains a public database of corporategreenhouse gas emissions information. We were the first full-service restaurant company in theUnited States to submit data to the CDP. The CDP rates submissions according to quality anddepth of detail; Darden received a rating of 69 (out of 100), which is very high for a first-timeresponder. You can see our full CDP submission online.

In 2009, we hired a consulting firm to conduct energy audits of 12 of our restaurants, to assess ourenergy practices and determine areas for improvement. The firm also benchmarked industrytrends and best practices, and identified short-, mid- and long-term energy-efficiency strategiesfor Darden. We have implemented a number of their recommendations (many of which aredescribed in this section) and are currently working to prioritize the rest.

Our GoalIn 2010, Darden set a corporate-wide goal for energy use. We are seeking to reduce our per-restaurant energy use by 15% by 2015, using our 2006 emissions data as a baseline.

7 Note that we subsequently sold one aircraft and now operate only two. Also, our greenhouse gas inventory did not include emissionsfrom the distribution of food and goods to our restaurants, which is done via truck and rail, because we do not own these distributionlines. We carefully oversee how distribution is conducted, but we hire third-party transportation companies to do the actual shipping.



www.cdproject.net

Our Performance Thus FarWe have begun to make progress toward our goal, but much work remains to be done. Figures 1 and2 show Darden’s overall and per-restaurant energy use from FY2006 to FY2008.8 The approximately7% increase in our overall energy use is due to business growth – that is, we operated more restaurantsin 2008 than in 2006, therefore we used more energy in total. At the same time, our per-restaurantenergy use stayed essentially flat during this time (dropping by less than 1%). Many of our energy-efficiency efforts have taken place since FY2008, so we expect to show progress going forward.

FIGURE 1

FIGURE 2

Figures 3 and 4 show Darden’soverall and per-restaurantgreenhouse gas emissions fromFY2006 to FY2008.9 Naturally,these emissions follow a similarpattern as our energy use: overallemissions are up (by 6%) due tobusiness growth, while per–restaurant emissions havedropped slightly (by 2%). Thepie chart in Figure 5 shows thebreakdown of total emissions bysource.

8 Darden’s fiscal year (FY) runs from June 1 to May 31.9 Darden’s GHG inventory was prepared in accordance with the principles and guidance of the World Resources Institute and theWorld Business Council for Sustainable Development’s Greenhouse Gas Protocol Initiative. Emissions factors were taken fromgovernment and international organizational sources, such as the U.S. Environmental Protection Agency, the IntergovernmentalPanel on Climate Change and the World Resources Institute.

Overall Energy Use

3,500,000

3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000

-FY2006 FY2007 FY2008

■ LPG/Liquid Propane■ Natural Gas■ Electricity

Meg

awat

t H

our

s

9,035

1,598,225

1,130,630

9,866

1,658,061

1,157,355

10,662

1,711,483

1,206,937

2,737,890 2,825,282 2,929,082

Average Energy Use per Restaurant

1,746

1,744

1,742

1,740

1,738

1,736

1,734

1,732

1,730FY2006 FY2007 FY2008

Meg

awat

t H

our

s

1,744

1,735 1,735



Figure 6 shows greenhouse gas emissions per restaurant, by restaurant brand.10We are still evaluatingthe factors that might help explain the differences between our brands, such as average square footage,guest count, location, age of the buildings, age of the equipment, type of food served and so forth.

Darden’s greenhouse gas emissions of about 1 million metric tons of “CO2 equivalents” (or CO2e)in FY2008 is about the same as is emitted by 90,000 homes each year, or 190,000 cars. Forperspective, this “carbon footprint” is more than three times the size of Starbucks’, but only 1/5the size of Coca Cola’s and 1/20 the size of Walmart’s.

FIGURE 3 FIGURE 4

FIGURE 5

10 In this chart, SRG stands for Specialty Restaurant Group, which is composed of Seasons 52, Bahama Breeze and The Capital Grille.

Average C02e Emissions per Restaurant

616

615

612

610

608

606

604

602

600

598

596FY2006 FY2007 FY2008

Met

ric

Tons

615

607

603

Overall C02e Emissions

1,080000

1,070,000

1,060,000

1,050,000

1,040,000

1,030,000

1,020,000

1,010,000

1,000,000

990,000

980,000FY2006 FY2007 FY2008

Met

ric

Tons

1,015,547

1,040,498

1,075,233

FY2008 C02 Emissions by SourceBusiness Air Travel 1%

On-Site Liquid Propane 0%

Refrigerants 2%Transport Fuel 1%

On-Site Natural Gas29%

Electricity67%



FIGURE 6

Progress at Our HeadquartersWe’re proud that our new Restaurant Support Center, which opened in September 2009 inOrlando, Florida, is a model of energy efficiency. The RSC is a “green building,” built accordingto Leadership in Energy and Environmental Design (LEED) standards and certified LEEDGold. It will use 16% less energy than if we had not built it according to LEED standards.Among its many energy-efficiency features are:

1 window glazing that lets in daylight while keeping out heat,

1 a white roof that reflects the sun and prevents heat build-up and

1 fluorescent lighting that dims automatically when there’s enough natural light.

Even before we made the move to the new facility, our RSC staff had been working hard toconserve energy. In 2008, after the implementation of an energy-awareness campaign, RSC staffreduced their energy usage by 10% compared to the previous year.

You can read all about the sustainability aspects of our new RSC beginning on p. 20.

Progress in Our RestaurantsDarden has been opening an average of 60 new restaurants each year. And, we’re working to buildour restaurants with sustainability in mind from the start. Our first restaurant expected to achieveLEED certification – an Olive Garden in Jonesboro, Arkansas – opened its doors in January2010. Seven additional restaurants seeking LEED certification will open in 2010 and 2011.Under the latest LEED guidelines, these buildings must use 14% less energy than the previousprototypical building design; they also must meet stringent water conservation standards and userecycled materials in their construction.

C02e Emissions per Restaurant, by Concept

800

700

600

500

400

300

200

100

0SRG LongHorn Olive Garden Red Lobster

Met

ric

Tons

■ FY2006■ FY2007■ FY2008



While we support the continued development of LEED, we recognize it may not be realistic tohave every new restaurant we build LEED certified, in large part because the certification processtoday can be time-consuming and costly. However, we plan to make a positive impact by learningfrom the eight restaurants where we are seeking LEED certification and applying best practicesacross our portfolio. In fact, we have committed to incorporating sustainability features in all ofour new buildings and, where feasible, restaurant remodels. This will ensure superior performancein energy efficiency, water conservation and the use of green materials.

At our 1,800 existing restaurant locations, we have initiated a number of energy-efficiencyprograms, including the following.

1 Equipment “Power-Up” Schedule: Cooking equipment (e.g., ovens, griddles, grills) istypically the biggest consumer of energy in a restaurant, so ensuring that equipment isturned on and off at the proper times is essential to energy conservation. Beginning inNovember 2008, each Darden restaurant implemented a new equipment power-upschedule, using stickers for each piece of equipment that list proper “on” and “off” times.

1 Restaurant Thermostat-Setting Standards: Each additional degree of heating orcooling in our restaurants results in at least 2% more energy consumed. While we want toensure the comfort of our guests and employees, we also want to conserve energy. InNovember 2008, we implemented standards for thermostat settings in our dining rooms,with different settings for operating hours and non-operating hours. For many of ourrestaurants, these changes could be easily done via programmable thermostats; in theremainder, the settings are changed manually each day.

1 Fluorescent Light Bulbs in Kitchen Areas: In early 2009, we replaced more than25,000 incandescent light bulbs in our restaurant kitchen areas with energy-efficientfluorescent bulbs. Not only do fluorescent bulbs use less electricity, they save money. Eachbulb delivers $30 to $35 in net savings over the life of the bulb, which adds up to annualcost savings of about $800,000 for all Darden restaurants. We are currently investigatinglight sources that are even more energy efficient, such as LED and cold-cathode lighting.

We have involved our restaurant employees in these and other efforts through the establishmentof employee Green Teams. For more, see p. 82.

We are in the process of initiating additional energy-saving measures in our restaurants, such ashigh-efficiency lighting in the dining room areas. This has proven to be more difficult, as thecircuitry and dimming systems in many of our older restaurants do not support many of the newerenergy-efficient light bulbs.

Indeed, one of the challenges we face in our sustainability efforts is that all of our restaurantbuildings are different. Some buildings were purpose-built for us; others were retrofitted andredesigned to meet our needs. Our oldest restaurants are now more than 40 years old.Implementing consistent changes across such a wide array of building types can be difficult, but



we are working to do it wherever possible. For example, when it comes time to replace equipmentin our older restaurants – items such as heating and cooling units, water heaters and dishwashers –we purchase models with the Environmental Protection Agency’s Energy Star label. Also, wehave been actively remodeling many of our older restaurant buildings. In 2009 we remodelednearly 50; in 2010 we expect to remodel more than 100. Each of these remodels involves a varietyof energy-saving upgrades.

Progress in Our Distribution SystemDarden oversees a complex logistics and distribution system– that is, the system by which we keep our 1,800 restaurantssupplied with everything from fresh produce to dishware toservers’ uniforms. Though we do not own any trucks orwarehouses (we lease them), we do manage and control thewhole system. Over the past several years, we’ve instituted avariety of efficiency improvements that have saved moneywhile reducing energy use and greenhouse gas emissions.

1 About five years ago we developed and beganimplementing a best-in-class food distribution systemcalled Darden Direct. This system has involved(among other things) increasing our use of railshipments, routing our trucks more efficiently andutilizing “redistribution” warehouses in severallocations. The system is currently used by 25% of our warehouses; by 2012, it should beimplemented at 90%. Already, we have saved about 30 million miles of driving per year, or4.8 million gallons of gas, with this system.

1 In nearly all of our distribution warehouses around the country, we have switched fromincandescent lights to high-efficiency T5 fluorescent lighting. And these new lights are onmotion sensors, so they turn off when not needed. This change is expected to save a total of4.5 million kilowatt-hours per year, or $300,000 in energy costs.

1 The cold-storage facility we lease in Chicago is the first such facility ever to be builtaccording to “green building” standards. The developer has applied for a LEED rating ofGold. This means it uses less energy than a facility built to typical standards and it employsthe latest refrigerant technologies.

We also maintain a “smallwares” warehouse in Orlando, Florida; this is where we store all non-food items, such as dishes, linens and decorations, for shipment to our restaurants. We haveinstalled 10 huge energy-efficient fans to keep this 100,000-square-foot facility cool in thesummer, without the use of air conditioning. In the winter, we reverse the direction of the fans topush warm air downward, thus eliminating the need for heating as well. Each of the fans is either24 feet or 16 feet in diameter.



Recognition of OurProgress

In 2009, Climate Counts (anonprofit advocacyorganization) includedDarden among its rankingsof companies’ efforts tocombat climate change.Darden received thesecond-highest ranking outof six companies in theFood Service sector, andwas the only full-servicerestaurant company amongthose ranked.

We’ve also decreased the number of times per month that our restaurants can order smallwares, inorder to eliminate the continual shipment of multiple small loads. This has reduced our number ofshipments per month by 40% and saved us $1 million per year in transportation costs.

Progress in Our Supply ChainWe have not attempted to quantify all of the CO2 emissions in our supply chain (i.e., our share ofthe emissions of all of the companies that supply us with food ingredients, smallwares andservices.) This would be an enormous and complex task. We estimate, however, that emissionswithin our supply chain are between 10 and 100 times greater than our own emissions.

Darden is also taking part in Field to Market: The Keystone Alliance for Sustainable Agriculture.This multi-stakeholder, collaborative process has brought together growers, agribusiness, food andrestaurant companies and conservation organizations to discuss and promote sustainableagricultural methods. It is convened and facilitated by the nonprofit Keystone Center. Among theoutcomes thus far is a Fieldprint Calculator – an online tool that helps growers evaluate their ownsustainability practices, including on-farm energy use.

Where We’re Going: To Achieve Our GoalsGoing forward, we will continue working to reduce energy use and CO2 emissions throughoutour company in order to meet our goal of a 15% reduction in energy consumption per restaurantby 2015. To do this, we will continue to prioritize and implement key energy-efficiency activitiesin our restaurants, with the help of our Green Teams and restaurant managers.

We also intend to work through our purchasing group to better understand the lifecycle CO2

emissions for a number of key product lines, such as livestock, wild-harvest fish, additionalaquaculture fisheries, produce and pasta. And, we hope to identify collaborations with otherbusinesses (non-competitors and suppliers) as well as universities and scientists, in order todevelop standardized approaches for these types of analyses. This will ensure that we do not haveduplicative work streams and multiple efforts, and it will help to minimize complexity and driveactual change. We look forward to reporting on our progress in the future.



Reducing Our Water Use

Why It Matters: Water Is a Vital Natural ResourceFresh water is a critical natural resource, and it makes up less than 3% of all water on Earth. Mostfresh water is locked up in polar ice and glaciers. What remains is under pressure – pressure fromthe Earth’s growing population, pressure from pollution and pressure from the changing climate.

In the past 50 years, global demand for fresh water has tripled as population has grown. As theworld’s population continues to grow – from 6.8 billion today to an expected 9+ billion by 2050 –demand for clean, fresh water will likely also rise.11

The United States is fortunate to have relatively greater quantities of fresh water than some of thedrier regions of the planet. And according to the U.S. government, Americans have actuallydecreased their water consumption in the past 30 years, due largely to efficiencies in industrial andagricultural use.12 But according to the United Nations, Americans still use more water per capitathan any other country.13 The Water Footprint Network, an international nonprofit organization,estimates that Americans’ “water footprint” is twice the global average.14 Clearly, we must makeour water consumption more sustainable over the long term.

Water quality is also an issue in many regions of the world. Pollutants like phosphorus andnitrogen (typically from sewage effluent and chemical fertilizers), as well as chemicals, trash andother byproducts of civilization, make their way into waterways, where they degrade water neededby humans and ecosystems alike. While water quality has improved in some locales, pollution isstill a major global problem.

Water availability and quality are also linked to climate change. Climate change has the potentialto affect rainfall patterns in unpredictable ways – making both droughts and flooding more severeand more frequent, in addition to affecting glacial ice and snow melt, soil moisture, groundwaterand river flows. The United Nations says that adapting to climate change will require, first andforemost, better water management.15

As these pressures increase, the cost of fresh water will continue to rise. Already, the price of freshwater is rising faster than the inflation rate, according to the National Restaurant Association.

11 http://www.unesco.org/water/wwap/wwdr/wwdr3/pdf/WWDR3_Facts_and_Figures.pdf.12 http://pubs.usgs.gov/circ/1344/pdf/c1344.pdf. 13 http://hdr.undp.org/en/media/HDR06-complete.pdf. 14 The organization defines a nation’s water footprint as “the volume of water that is used to produce the goods and services consumedby the inhabitants of the nation.” http://www.waterfootprint.org/?page=cal/waterfootprintcalculator_national.

15 http://www.unwater.org/downloads/UNWclimatechange_EN.pdf.


That presents a big opportunity for a restaurant company to improve, because restaurants use a lotof water. At Darden, our greatest direct water use occurs in our kitchens, where we use water forwashing fresh fruits and vegetables; for cooking (e.g., boiling pasta); for scrubbing equipment andfloors; for cleaning dishes, utensils and pots and pans; and for hand washing (15-25 times a dayper person!). These uses of water are essential for proper food handling and food safety. We alsouse water in employee and guest restrooms and for landscape irrigation.

Of course, the amount of water we use directly pales in comparison to the amount we useindirectly – that is, in our supply chain, in the irrigation of crops and the production andprocessing of livestock. Irrigated agriculture is the largest use of fresh water globally, accountingfor about 70% of all water use.

It makes sense for us to reduce water use in our restaurants. It’s the smart thing to do for theenvironment and for the communities in which we operate. Reducing our water use will help toensure adequate water supplies in the long term. It will help us to maintain goodwill in thecommunities in which we are located, particularly if water is scarce. And it makes smart economicsense, since water conservation saves us money.

What We’re Doing: Working to Reduce Our Water UseAt Darden, we’ve been working hard to better understand and measure our direct water usage,and to reduce it.

Our GoalsIn 2010, we set a corporate-wide goal for water use. We are aiming to reduce our water usage by15% per restaurant by 2015, using 2006 as the baseline year.

While we assessed water use at a number of our restaurants in the course of setting the goal andplanning water-reduction initiatives, we are still compiling company-wide water data. In addition,we are still learning what the biggest drivers of water use are within our restaurants. Because eachfaucet or spigot is not individually metered and measured, it’s not a simple task to understand andidentify the most inefficient uses. We continue to work on how best to do this.

Progress in Our RestaurantsIn the past year, we have taken numerous steps to decrease water use in our restaurants.

One of our accomplishments has been to implement an alternative to “dipper wells” in most ofour Olive Garden restaurants. Dipper wells are holders for the utensils that are used to handlefood in our kitchen sauté stations. Running water flows through dipper wells continuously, inorder to prevent the buildup of bacteria. As a result, dipper wells use a lot of water.

In 2009, we switched from dipper wells to storing the utensils in a recessed hot well at the sautéstation. This change was implemented at the approximately 600 Olive Gardens (nearly 90% of



the total) that have an available recessed hot well. The change is estimated to save about 261,000gallons of water per restaurant per year.

To ensure food safety, the federal Food and Drug Administration requires water used in this way tobe maintained at a minimum temperature of 135 degrees and to be changed every four hours. Weexceed those standards by maintaining the water at 165 degrees and changing it every two hours.

Not all Darden restaurants have an extra recessed hot well that can be dedicated to storingutensils. We are thus exploring other technology solutions for the elimination of dipper wells inthese remaining restaurants.

Another recent initiative has been the installation of low-flow aerators on hand-washingsinks in our kitchen areas. A low-flow aerator reduces the flow of water coming out of a faucet(while maintaining adequate force) by mixing air into the stream. In late 2009, we installed morethan 8,500 of these aerators in 1,751 of our restaurants (i.e., an average of almost five aerators perrestaurant). (Some of our restaurants had incompatible plumbing.) Our rough estimate is that theaverage Darden restaurant will reduce water consumption by about 195,000 gallons per year bymaking this change.

We have also completed the installation of about 790 low-flow pre-rinse sprayers in thedishwashing stations of restaurants that did not already have them. The U.S. Energy Act of 2005mandated that all replacement and new restaurant pre-rinse sprayers be low-flow devices. By2009, many of our restaurants had already made the switch, but we decided last year to finish thechange-over all at once rather than wait for the remaining older ones to require replacement.While the old sprayers allowed a flow of up to 6 gallons per minute (GPM), the new onesconserve water by limiting the flow to 1.4 GPM. At Darden, this saves an estimated 225,000gallons of water per restaurant per year.

In late 2009, we charged our employee Green Teams with the task of ensuring that ourrestaurants are leak-free, using a 30-point leak-inspection guide. (A faucet that drips one dropper second can waste more than 3,000 gallons per year.) Though we don’t know how much waterthis effort has saved, we do know it was not uncommon for a restaurant to have multiple leaks.(For more, see p. 82.)

Finally, in early 2010 we implemented a new method for cleaning the floors in our restaurantkitchens – a method that uses much less water. Traditionally, we scrubbed our kitchen floors withsoap and water, and then rinsed them. Now, we are using a natural, enzymatic floor cleanerthat does not require rinsing. Once the product is sprayed on the floor, the enzymes in the cleaner“consume” the dirt and oil within a few minutes; then the cleaner and any debris are cleared awaywith a squeegee. This product change is estimated to save up to 32,670 gallons of water perrestaurant per year. The new cleaning system is also better at eliminating odors and is lessdestructive to floor grout.



These initiatives together are expected to save more than 700,000 gallons of water and close to$5,000 per year at each restaurant that implements all of them. Overall, it’s estimated Darden willsave more than 700 million gallons of water and $5 million.

To read more about the sustainability aspects of our restaurants, go to p. 14.

Progress at Our HeadquartersOur new headquarters building in Orlando, Florida – called our Restaurant Support Center, orRSC – is a model of water efficiency. Completed in 2009 and certified as a “green building” in2010, the new RSC is expected to use 1.8 million fewer gallons of drinkable water per year than acomparable building built to standard codes.

The new RSC site has toilets and an irrigation system that use “reclaimed” water (i.e., minimallytreated wastewater). The landscaping is water-efficient and consists of native Florida plants. Andthe area around the buildings contains “bioswales” – specially constructed drainage areas that slowthe runoff of rainwater, filter out contaminants and recharge the groundwater, instead of havingstormwater drain directly into nearby ponds.

The year before we moved to the new RSC, we eliminated the use of 250,000 bottles of waterannually by giving all RSC employees a reusable travel cup and discontinuing free bottled water inour break rooms.

You can read about the sustainability aspects of our new RSC beginning on p. 20.

Progress in Our Supply ChainThe amount of water used in our supply chain for growing crops and livestock far outweighs theamount we use in our restaurants and headquarters. Thus, we are actively working with oursuppliers to encourage them to use water wisely. We are also beginning to work with our peercompanies and other interested stakeholders to address water issues in the broader agriculturalsystem.

About six years ago, we began to source some of our own produce directly from farmers. Cuttingout “the middleman” was a smart financial move for us; it also gave us greater influence over howthe produce is grown. Through this system, we work closely with farmers to ensure that they meetour stringent specifications and standards for everything from food safety to working conditionsto growing practices. Among these are standards for water use and water quality.

On our suppliers’ farms in Mexico, which is where about half of all the produce we use is grown,we require farmers to use drip irrigation. Drip irrigation involves applying water directly to plants’roots, which is much more efficient than the various forms of sprinkler irrigation. We continue toencourage more of our suppliers in the United States to use drip irrigation as well.



We also have strict supplier requirements for water quality. In Mexico and Latin America, forexample, we require farmers that supply Darden to ensure that the irrigation water used is thehighest quality – that is, that it meets strict biological standards. (The U.S. government allowsirrigation water to meet lower “recreational use” standards.) Also, for the purposes of food safetyand proper hygiene, we require farmers to provide fencing to keep animals out of the fields and tohave proper latrine facilities for workers. For more on our work with farmers in Mexico, see p. 48.

In an effort to have a positive influence on agricultural sustainability beyond our own suppliers,we’ve joined Field to Market: The Keystone Alliance for Sustainable Agriculture. This multi-stakeholder, collaborative process has brought together growers, agribusiness, food and restaurantcompanies and conservation organizations to discuss and promote sustainable agriculturalmethods. It is convened and facilitated by the nonprofit Keystone Center. Among the outcomesthus far is a “Fieldprint Calculator” – an online tool that helps growers evaluate their ownsustainability practices, including on-farm water use.

Where We’re Going: Toward Better Water ConservationWe continue to gather and compile data to document our overall water use, to track progresstoward our 15% reduction goal and to better understand the drivers of water use in ouroperations. We also look forward to identifying more opportunities to reduce water use in ourrestaurants, while of course maintaining proper food handling and hand-washing practices. As wediscover new technologies and practices, we will ensure that they are implemented throughout our1,800 restaurants, where feasible. In this way, even small improvements can cumulatively yield bigsavings.

As a major buyer, we have a strong positive influence over how our suppliers produce their goods,so we will continue to work closely with our supply chain on issues relating to water conservation.We will also continue to seek out multi-stakeholder mechanisms that involve our peer companiesand other organizations, to help promote sustainable water use more broadly.



Reducing Our Waste

Why It Matters: Waste Is a WasteIn the past, Americans thought about waste mostly as a disposal problem. As in, “What shouldwe do with all this garbage?” We lamented the litterbugs who threw trash along our highways andworried that we were running out of landfill space.

Waste disposal remains an important issue, but more and more, people are coming to realize thatgarbage represents a waste of precious natural resources as well as a significant waste of money.We have limited supplies of natural resources on Earth, and they are expensive to extract andprocess. So if they are ending up in a trash heap, that means we have an opportunity to becomesmarter in our use of them.

Today, the mantra is “reduce, reuse, recycle,” and we are all doing better than we used to (see Figure1). At the same time, however, Americans are generating more waste – about 4.5 pounds perperson per day in 2008, compared to 3.66 pounds in 1980.16 So, there’s plenty of room for progress.

FIGURE 1

At Darden, we deal with several different kinds of waste in our restaurants. Food waste, naturally,is a key component of our waste stream; since this waste contains a lot of water, it is heavy andthus expensive to dispose of. (Waste haulers typically charge by a combination of weight andvolume.) Cardboard is another significant component, as our food and nonfood deliveries arrive atour restaurants in cardboard boxes. Other aspects of our waste stream include glass, paper,aluminum, plastic, used cooking oil (called “yellow grease”), grease from the grease traps in our

16 http://www.epa.gov/epawaste/nonhaz/municipal/msw99.htm.

Management of Municipal Solid Waste in the United States

Source: U.S. Environmental Protection Agency

100%

80%

60%

40%

20%

0%

Discarded Recovered Combustion with Energy Recovery

■ 1980■ 2008

89%

54%

10%

33%

1%13%


sewer lines, and miscellaneous trash. At our Restaurant Support Center, or RSC (i.e., ourcorporate headquarters in Orlando), we generate primarily office paper waste as well as foodwaste from the cafeteria and our restaurant test kitchens.

We know it makes good sense for us to reduce, reuse and recycle – in our restaurants and ourRSC. By figuring out how we generate waste and reducing it, we can lessen the amount of moneywe spend on things that would otherwise be headed for the trash. We can also trim our waste-hauling costs, which are significant. And of course, reducing costs this way helps us staycompetitive. Reducing our waste is the smart thing to do – not only for the environment, but forour company’s future.

What We’re Doing: Wasting Less, Recycling MoreAt Darden, we are working hard to reduce the amount of waste we generate, and to recycle,donate or reuse the rest, wherever feasible. The primary challenge we face in this effort is that wecan’t develop and implement a standard set of solutions, because our waste disposal and recyclingpractices differ in each locale where our restaurants are located. These practices are driven bymunicipal rules and regulations and by the availability of appropriate recycling facilities and cost-effective hauling services. We contract with a national waste management company to handlewaste at all of our 1,800 restaurants. In turn, the waste company contracts with local haulers andensures that we comply with all of the different municipal and county ordinances.

Our GoalIn 2010, we set a corporate-wide goal of “zero waste to landfill.” That is, we are aiming to send notrash to landfills at all, but to reuse, recycle, donate or compost all the waste we generate. We havenot put a timeframe on this goal, as we are still learning what it will take to achieve it. However,we are confident that putting such a challenging goal in place will help spur our efforts forward.

Performance in Our Restaurants The approximate annual weight of Darden’s solid waste from our restaurants is 537,000 tons.This includes waste sent to landfill and recycled, though not food donated.

We work to minimize our food waste by donating food to Feeding America (formerly America’sSecond Harvest), the largest U.S.-focused hunger-relief organization. At the end of each night,our cooks take food that has been prepped but not served – for example, full trays of thawedchicken – and they cook it and then store it in the freezer. (We do not donate any raw products,out of concerns for food safety.) About once a week, food bank volunteers come by to pick up thefrozen food. In the past, this leftover food would have been thrown away. In fiscal year 2009, wedonated nearly 9 million pounds of food through this program. For more, see p. 92.

At Olive Garden in 2009, our employees alerted us to an opportunity to reduce our paper waste.The customer check system in these restaurants used to print out a slip of paper every time aserver entered new items for a table of guests. Most of these slips were thrown directly in the


Reducing Our Waste

trash. We have now changed the system so that printing is optional, not automatic. We estimatethat this one fix will save about 400,000 rolls of paper and $400,000 each year.

We seek to recycle waste from our restaurants wherever feasible. The following are examples ofour recycling efforts:

1Due to a new program we implemented in 2009, all of our restaurants now recycle theirfluorescent light bulbs. (These bulbs contain small amounts of mercury, a toxic heavymetal.) Each restaurant is given a recycling box with a prepaid shipping label. Restaurantmanagers simply mail the box to the designated recycling company when full, and receive anew one in return. We expect that each restaurant will recycle 30 to 50 fluorescent tubes peryear, or an average weight of about 10 lbs. per year.

1More than 85% of our restaurants recycle all of their cardboard. Overall, we recycle morethan 65 million lbs. of cardboard annually. That saves about 553,350 trees from having to becut down and used for pulp.

1Nearly all of our restaurants recycle “yellow grease” (discarded fry oil), at a rate of about2,400 pounds per restaurant per year. This grease is reused for biodiesel, animal feed, and asan ingredient in soaps and perfumes.

1 All restaurants have “grease traps” in the sewer lines that trap fats, oils and grease. Wecapture about 6.8 million gallons of grease effluent and solids per year in these traps, and weare able to recycle about 50% of that. (The remaining 50% includes solids that have littlerecycle value and gray water, which is only beginning to become recyclable.) The recyclablematerial is handled and recycled separately from yellow grease; after the water is boiled out,it is used as a fuel in power plants.

1Nearly 80% of our restaurants recycle office paper. In a typical year, these restaurants recyclenearly 150 tons of paper, or about 200 pounds each per year.

1 At a handful of Darden restaurants in California and Minnesota, composting services pickup fruit and vegetable scraps and compost them. These services compost about 3,000 cubicyards of organic material per restaurant per year.

1 In Dade County, Florida (Miami), we put all recyclables together in one bin, and it’s sortedat a local recycling facility. This “single-stream recycling” system is mandated by law, and wemust pay extra to have the recyclables hauled away.


Reducing Our Waste

There is wide variation in the recycling services offered andrates charged by the private haulers that serve ourrestaurants. Thus, while we would like to recycle glass,plastics and aluminum everywhere we operate, it is often notcost-effective for us to do so. At present, about 200 of ourrestaurants (or 11%) recycle these materials. We also wouldlike to compost more, but composting pick-up services areeven rarer, and we cannot store discarded food scraps on-sitefor health and sanitary reasons. These are among the wasteissues for which we continue to seek solutions.

In 2009, we worked with our waste management companyto re-bid our waste hauling business and, in some cases, reduce the frequency of pickups (thoughnot the quantity picked up). This initiative will save Darden $3 million annually.

Performance at Our HeadquartersIn recent years we have taken steps to reduce waste and increase recycling at our headquarters inOrlando, Florida – our RSC. In 2008, we eliminated the use of 250,000 bottles of water annuallyby giving all 1,250 RSC employees a reusable cup and discontinuing the free bottled water in ourbreak rooms. Also that year, our employees reduced their paper consumption by 33% after wepurchased double-sided printers and conducted an awareness campaign. And, we put in place asingle-stream recycling collection system that diverts nearly 12 tons of trash from landfill monthly.

In 2009 we moved from our old headquarters site (comprised of 13 older buildings) into a state-of-the-art new “green” building in south Orlando. Before the move – in an effort to clear outclutter from the old buildings – we donated nearly 25,000 lbs. worth of office supplies, knick-knacks, clothing, and other miscellaneous items to local charities. We recycled about 10 tons ofpaper at the old site, and sold off the office furniture so it would not end up in a landfill. And, wecollected all the coffee, nonperishable food and Styrofoam containers from our break rooms anddonated it to food shelters.

During the construction of the new building, more than 90% of all construction debris was divertedfrom landfill via reuse or recycling. Our new office furniture is made from materials with recycledcontent. We have continued the single-stream recycling, and we now also compost food waste fromthe employee cafeteria. And, we no longer use any Styrofoam or plastic cutlery at our headquarters.

For more on the waste-efficiency features of our new RSC, see p. 20.


Reducing Our Waste

Each year, each of ourrestaurants recycles anaverage of:

40 fluorescent light bulbs

200 lbs. of office paper

38,000 lbs. of cardboard

2,400 lbs. of yellow grease

10,000 lbs. of fats, oils andgrease from grease traps

Performance in Our Distribution SystemIn our smallwares warehouse in Orlando – where we store and ship all non-food items used in therestaurants, such as plateware, glassware, utensils and décor – we have instituted a cardboard reuseprogram. We save the cardboard boxes in which items are shipped to us, and reuse them to packand send shipments to our restaurants. This effort saves us about $1,000 per month. Whatevercardboard we don’t reuse gets recycled; we recycle about 275 tons annually.

Where We’re Going: Toward Zero Waste to LandfillAt Darden, we know we have a long way to go to reach our ultimate goal of sending zero waste tolandfill. We must continue to reduce our generation of waste and to recycle more.

But we are proud of our efforts thus far – especially our donation of 9 million pounds of food peryear, our recycling of cardboard and yellow grease, and the single-stream recycling andcomposting systems at our corporate headquarters. We look forward to reporting on ourcontinued progress in the future.


Reducing Our Waste

CASE STUDY

Our Restaurant Green Teams

At Darden, our restaurant employees have inspired a great deal of the company’s progress andactivities relating to sustainability. Recently, we established employee Green Teams as a way tomore formally organize and involve employees in our sustainability efforts.

Our Green Teams, first established in 2009, are groups of five to seven employees in eachrestaurant – including servers, cooks, bussers, dishwashers, bartenders, etc. – who help toimplement our sustainability initiatives. And, they have come up with some pretty great “green”ideas of their own. While the activities of each team thus far may seem small in isolation, theymake a huge impact when multiplied by the 1,800 Darden restaurants in which Green Teamshave been created.

And we know that our Green Team members are taking what they learn back into their homesand neighborhoods – so that’s more than 10,000 people seeking to make a positiveenvironmental impact in our restaurants and in their communities. Our efforts may also helpmove the restaurant industry in the right direction.

“[Darden is] a leader in the industry, and among all restaurants people turn to us to look fortrends,” said Bahama Breeze employee (and Green Team member) Pam Martin. “If they see usdoing things to be responsible for the environment, then hopefully others will follow suit. Littlethings…from every restaurant will add up, and that makes a big difference.”

Green Team ResponsibilitiesOne of the first things we asked our Green Teams to do was identify any water leaks in theirrestaurant, using a 30-point leak-inspection checklist. (One leaky faucet dripping one drip persecond can waste more than 3,000 gallons per year.) The Green Teams have also been involvedin (among other projects):

1 Making sure all Darden restaurants use low-flow sprayers in the dishwashing areas,

1 Overseeing the equipment power-up program,

1 Ensuring that low-flow aerators are used on hand-washing sinks,

1 Ensuring that thermostats are properly set,

1 Making sure the kitchen areas are outfitted with compact fluorescent light bulbs and

1 Introducing and implementing a new fluorescent light bulb recycling process.


Green Team members, who are appointed by their restaurant general managers, are expectedto:

1 Attend quarterly Green Team meetings,

1 Adopt, communicate and help support Darden sustainability initiatives,

1 Complete audits as appropriate (like the leak inspections),

1 Review audit results and compare them to previous audits,

1 Decide what actions to take in the future, and

1 Adopt, communicate and help support additional, restaurant-specific sustainability efforts.

A Great Source of IdeasOur Green Teams also enable us to tap into the creative ideas of our employees, who mayidentify promising sustainability opportunities as they go about their day-to-day work. At OliveGarden, for example, Green Team members alerted us to an opportunity to reduce our waste.Olive Garden’s customer check system used to print out a slip of paper every time a serverentered new items for a table (i.e., after the guests ordered drinks, and then again after theyordered their main courses, etc.). Most of these slips of paper went directly into the trash.

We have now changed the system so that printing is optional, not automatic. We estimate thatthis one small fix will save 400,000 rolls of paper each year, for a cost savings of about $400,000per year.

A Clear Path of CommunicationWith the Green Teams in place, our corporate operations team has a clear path ofcommunication regarding sustainability measures. We have developed a simple managementstructure for the Green Teams within our business, which includes Green Team leaders in eachrestaurant, region, division, and brand – all reporting up to Darden’s Executive Vice President.Some sharing of ideas and best practices takes place among the individuals at each of theselevels; we hope to encourage more of that in the future.

An Essential ElementDarden’s Green Teams have proven to be an effective way to implement sustainability initiatives,gather good ideas from staff, communicate about and gain buy-in into our sustainability effortsand improve our performance. We view them as an essential part of our sustainability strategy,and we look forward to working closely with them going forward.

“I’m already very happy with all the changes and improvements we’ve made thus far,” saidGreen Team member Camila Zorrilla from Seasons 52. “So I’m very confident that as a teamwe’re going to be able to come up with even more ways to be environmentally sustainable.”


Case Study: Our Restaurant Green Teams

Managing for Long-TermSuccess

Why It Matters: Financial Stability EnablesSustainabilityLots of people count on our company’s long-term success. Roughly 180,000 employees depend onus, of course. So do our 1,500 suppliers in 35 different countries. So do the communities that relyon our restaurants for the tax income we generate.

Large companies like ours have indirect economic benefits, too, although these are harder toquantify. For example, our employees pay taxes and spend the money they earn within their localcommunities. And each time we build a restaurant, we spur local economic growth by hiringcrews to construct the new building.

We view Darden’s financial viability as a critical element of our sustainability approach. Think ofit as a circle: Financial success enables sustainability progress; and sustainability progress enhancesfinancial success. In other words, sustainability makes our company smarter and more profitable.Many of our sustainability initiatives can be good for the environment or for society and saveDarden money at the same time.

That money-saving element is always important, but it’s especially critical in a tough economy.

We want to continue to be a strong company so we can contribute to the well being of ourstakeholders – now and for generations. Our growth and success as a company provides theresources that allow us to focus on other areas of corporate responsibility, like reducing our carbonfootprint or funding programs in our communities.

For more on our financial operations, please see our Annual Report.

Employees Approx. 180,000Countries of operations U.S., CanadaNumber of restaurants 1,8002009 sales $7,217.52009 net earnings $ 372.22009 diluted earnings per share $ 2.652009 net cash flow $ 783.52009 operating costs $5,636.92009 capital expenditures $535.32009 income taxes $140.92009 wages paid $2,023.92009 community investments $5,978,636


http://investor.darden.com/financials.cfm

What We’re Doing: Positioning Our Brands to SucceedDarden manages for the long-term financial sustainability of our business. We look for ways toposition our restaurants and brands to succeed even in difficult times – such as the economicdownturn of 2008 and 2009.

Indeed, fiscal 2009 was one of our most challenging years; yet it was also one of our finest. Wewere able to deliver strong financial results while continuing to invest in our future.

We adjusted to the faltering economy by carefully managing our costs and focusing on creativeways to bring guests to our restaurants. Our brands – and the people behind them – are the keysto our continued success. We’re in the quintessential people business, and we nurture ouremployees to take pride in what they’re doing so our guests enjoy their dining experiences – andvisit us again.

Managing for the long term means listening to our guests. Our guests enjoy our restaurantsbecause we understand what they want – and we know how to deliver on our promises to meettheir expectations.

Managing for the long term also means developingbetter relationships with our suppliers – because oursuccess is interdependent with theirs. For example, wehave moved to automated demand forecasting and“just-in-time” ordering so we can have a moreaccurate picture of our inventory. That translates intoless food wasted – and fewer dollars wasted, too. Wehave also developed our own line of produce so weknow exactly where our fruits and vegetables arecoming from and how they were grown. (For more on this topic, see pp. 35 and 45.)

When it comes to sustainability, we view financial success as a fundamental piece of the equation.We pursue innovative ideas that have multiple benefits, on environmental, social and financiallevels. For example, our restaurants proudly participate in a food donation program (see p. 92)that helps the hungry, reduces waste, lowers our waste disposal costs, and provides our companywith important tax benefits, too. To us, programs like these define how sustainability can lead tosmarter solutions.


Managing for Long-Term Success

Taxes Paid (FY2009)

Overall restaurant sales and usetaxes paid to local/stategovernment: $568.8 million

Overall property taxes paid for allrestaurants: $65 million

We believe companies should make it a priority to view sustainability through a financial oreconomic lens. This includes factors such as short- and long-term impacts and tangible andintangible costs and opportunities.

Where We’re Going: A Truly Great CompanyWe aspire to be a company that enriches the lives of our guests, our employees, our communitiesand our business partners. That isn’t always so easy to do, especially in difficult economic times.

As a customer-driven company, we aim to stay ahead of our guests’ expectations. We want ourguests to remain confident that we serve food that is safe and enjoyable. We also recognize thatmore and more guests will want to patronize restaurants that are also doing good things for theiremployees, for their communities and for the environment.

We know that being a good corporate citizen is the right thing for a company like ours to do. Wealso know that there are business opportunities that accompany these efforts. We want to be ableto maximize them as we seek to re-imagine and transform the full-service dining industry.


Managing for Long-Term Success

Our Collaborative Partnerships

Why It Matters: We Can’t Do It AloneThis website details many of the sustainability-related activities we at Darden are undertaking onour own, such as our energy- and water-reduction initiatives and the creation of employee GreenTeams. We are proud of these efforts, and we know they are having a positive impact on theenvironment and on the communities in which we operate.

But we also know we can’t do it all alone. Darden’s sustainability issues are complex and requireboth knowledge and innovative thinking. These issues include, for example, charting a coursetoward sustainable food supplies for a burgeoning world population; protecting the safety of theglobal food supply network; and engaging employees to help reduce the environmental footprintof our restaurants.

Collaboration helps us to learn from the experience and expertise of others, as well as teach otherswhat we have learned. It enables us to leverage our resources by combining our knowledge andinsights with organizations in other fields – effectively multiplying our impact. It allows us toalign and simplify the sustainability expectations communicated to our suppliers. It offersopportunities for leadership when we see a need for cooperative action and are able to helpconvene the relevant stakeholders. And, we know it’s important for us to hear others’ perspectives,even if we do not agree with them. For all of these reasons, collaborating with others to learn,share insights and drive larger-scale change is an important part of our sustainability strategy.

What We’re Doing: Participating in Collaborative EffortsOur sustainability approach is anchored in collaboration with partners that provide us withimportant perspectives and expertise. We are working with industry and business groups,nongovernmental organizations and multi-stakeholder alliances on an array of sustainability-related efforts. This section describes our collaborative efforts across three major issue areas:seafood, agriculture, and sustainability best practices.


Seafood We are deeply involved in partnerships relating to sustainable seafood. The section beginning onp. 52 describes these efforts in some detail. In brief, these affiliations include the following:

1 The Global Aquaculture Alliance, a multi-stakeholder partnership wecofounded, which is working to create a uniform set of standards, systems andbest practices for the cultivation of fish and seafood.

1 The New England Aquarium’s sustainable seafood program, which providesadvice on how to develop and implement visionary and realistic sourcing policiesand practices that protect fisheries.

1 The Lobster Conservancy, the Lobster Sustainability Foundation and theGlobal FISH Alliance, three nonprofit organizations focused on preservinglobster stocks in specific locales around the world. (Darden primarily helps tofund these three organizations, though we also take part in multi-stakeholderdiscussions and educational efforts involving them.)

Agriculture In early 2009, Darden joined the steering committee of Field to Market: The Keystone Alliancefor Sustainable Agriculture. This multi-stakeholder committee includes representatives fromabout 40 organizations within all parts of the agriculture and food supply chain, from farmers andgrower organizations to agribusiness companies to food and restaurant companies, along withconservation groups and academic and research organizations. Darden helps bring to the table theimportant perspective of a food purchaser and retailer.

The purpose of Field to Market is to define, support and encourage the implementation ofsustainable agriculturemethods. The effort isconvened by The KeystoneCenter, a nonprofit publicpolicy organization.

To date, Field to Market haspublished a reportdescribing how land use, soilloss, water use and energyuse have changed over timein the growing of four majorcommodity crops – corn,cotton, soybeans and wheat.The group also developed(and is pilot testing) a“Fieldprint Calculator” – an



The Clinton Global Initiative

In early 2010, Darden joined the Clinton Global Initiative(CGI), an organization founded by Former President BillClinton that brings together leaders from all sectors of society– private, nonprofit, philanthropic, political, academic, media,etc. – to discuss and make “commitments to action” onglobal issues of pressing concern. Through annual events andyear-long initiatives, CGI members form partnerships thathelp to drive social change. According to CGI, its membershave so far made nearly 1,700 specific commitments valuedat $57 billion, which have improved more than 200 millionlives in 150 countries. Darden is joining on as a partner to theprogram and is one of a few major sponsors of the 2010 CGIUniversity, which brings together college students andinspires them to make their own commitments.

www.gaalliance.org

www.neaq.org

www.lobsters.org

www.globalfishalliance.org

www.fieldtomarket.org

www.clintonglobalinitiative.org

online tool that enables farmers to determine how their management choices affect naturalresources, production levels and operational efficiency.

Sustainability Best Practices Darden is a member of several alliances that bring together corporations and others to discuss andpromote sustainability practices. These collaborative efforts help organizations to learn from eachother, understand what works and doesn’t work, and move their sustainability programs forward.

For example, Darden recently became a member of the Sustainability Consortium, anindependent organization of diverse global members that’s jointly administered by the Universityof Arkansas and Arizona State University. The Consortium brings together corporations such asWal-Mart, Unilever, Cargill, HP and others; the U.S. Environmental Protection Agency;nongovernmental organizations; and numerous university scientists and researchers. Darden isserving on the Consortium’s steering committee and will take part in the food and agriculturesector subgroup.

The organization’s mission is “to build a scientific foundation that drives innovation to improveconsumer product sustainability.” Consortium members work to research the sustainabilityimpacts of products in all phases of their lifecycle; identify opportunities for improvement; andfacilitate dialogue on how progress can be stimulated, measured and communicated.

Darden is also a member of the Business and Biodiversity Council (BBC) convened byConservation International’s Center for Environmental Leadership in Business. The BBC iscomposed of more than 25 large corporations – such as Coca-Cola, Wal-Mart, Starbucks, Shell,Goldman Sachs and Ford – who are committed to sustainability and the conservation of naturalresources. Darden joined the BBC in early 2009; our director of sustainability takes part in theirtwice-yearly meetings.

The BBC provides corporate leaders from different sectors of industry with the opportunity tointeract and learn sustainability best practices from each other. Council meetings focus on topicsof the members’ choosing and aim to address questions and issues that executives face on a dailybasis. The meetings also typically include a field trip to see sustainability activities in practice atone of the member companies. Between meetings, BBC members can consult with ConservationInternational’s staff of scientists and business experts on topics specific to their company.

Darden joined the Corporate Eco-Forum in January 2009. This invitation-only, corporate-funded membership group brings together high-level executives from about 75 companies acrossmultiple industries to share ideas and best practices relating to environmental sustainability(primarily energy use and carbon dioxide emissions). Members include, for example, AT&T,Microsoft, FedEx, General Electric, Disney, Dell and Levi Strauss.



www.sustainabilityconsortium.org

http://www.conservation.org/sites/celb/major_initiatives/bsc/Pages/main.aspx

www.corporateecoforum.com

Corporate Eco-Forum members attend a two-day annual meeting at which sustainability topicsare addressed in large plenary presentations as well as smaller, discussion-oriented breakoutsessions. Members also can take part in quarterly conference calls. The Corporate Eco-Forum’ssmall staff also conducts practical research on issues of interest to members; one of the benefits ofmembership is access to the results of that research.

Sustainable Florida is an alliance of public and private organizations committed to promotingsustainable development principles in the state of Florida, which is home to Darden’sheadquarters. In July 2009, Darden’s director of sustainability joined Sustainable Florida’s Boardof Directors. The board is multi-stakeholder in makeup, including individuals not only from otherbusinesses (e.g., Progress Energy and Publix Supermarkets) but academic institutions (e.g., theUniversity of Central Florida and Florida A&M University) and conservation organizations (e.g.,Trust for Public Land, Audubon of Florida and Environmental Defense).

Among Sustainable Florida’s major activities is a best-practice awards program, which highlightseffective sustainability practices in the private, public, nonprofit and government sectors. Theorganization also hosts a college campus conference, sustainability trainings, and environmentaleducation awards that recognize K-12 efforts. All of Sustainable Florida’s efforts aim to educateabout, promote and incentivize positive sustainability practices.

Finally, in 2009, Darden became one of the founding members of Michigan State University’sFood + Society Alliance. This collaborative effort – which is still in the organizational stages –aims to bring together 15-25 professionals from the food and restaurant industry, privatefoundations, public agencies and universities to address issues at the intersection of food andsociety – for example, ethics and governance, food safety, and finite resources. Organizers envisionthat the alliance will help members to frame complex issues and share experiences and learning,and may also spur university research on key topics.

Where We’re Going: Forward, in Partnership Sustainability is a journey, not an endpoint. All along this journey we expect to engage with avariety of stakeholders and experts to help us understand how to make our business moresustainable, and with whom we can share what we’ve learned. The collaborative partnershipsdescribed above have been helping us to do that, and to forge important relationships outside ofour own walls. In the future, we will continue in these partnerships as long as they proveproductive, and will partner with other groups and institutions as appropriate and helpful.



www.foodplussociety.org

www.sustainableflorida.org

Our Communities

We are in the service business. Yet our service philosophy extends far beyond our restaurant walls.It reaches straight into our communities.

“Being of service” is one of our core values and a cornerstone of our corporate culture. It’s aconcept that began 40 years ago with our founder, Bill Darden. And it’s a concept that continuesto thrive at our company today.

With 1,800 restaurants, we have a presence in hundreds of communities across the United States andCanada. We believe we have an obligation to serve and give back to those communities – whether weare donating meals for the hungry, helping young people pursue an education, or providing businessopportunities for suppliers of diverse backgrounds. Our corporate and employee-sponsored initiativeshelp to enhance the quality of life in the neighborhoods where we live and work.

As a restaurant company, it’s logical that we donate food to those in need. Our Darden Harvest fooddonation program supplies hunger-relief agencies with nourishing meals. In fiscal year 2009, ourrestaurants contributed 8.7 million pounds of cooked food to families in need across the United States.

Through the Darden Restaurants Foundation, we donate millions of dollars a year to worthwhilecharities. Recently, the Foundation began to take a more focused approach to corporatephilanthropy by concentrating its efforts on educational programs. The Darden EnvironmentalTrust, a key program of the Darden Restaurants Foundation, has also funded projects related tomarine life and fisheries, aquaculture and the preservation of natural resources.

At Darden, we know there’s much more to our operations than how well we run our restaurantsor how much value we return to shareholders. We believe our true worth is illustrated in how welive, work and serve our communities.

Read more about our community efforts, including supplier diversity, on our corporate website.


http://www.darden.com/commitment/community.asp

CASE STUDY

Our Food Donations

It’s the ultimate paradoxof an affluent society.Each year, some 14 billionpounds of food are sentto landfills in America.Meanwhile, nearly 37million Americans –including 14 millionchildren – are at risk ofhunger.20

Darden, like most restaurants, grappled for years with the problem of food waste. We particularlystruggled with the uncomfortable dilemma of throwing away food that was perfectly good andsafe to eat, yet, for a variety of reasons, couldn’t be sold to our guests.

That’s why we were so pleasedto partner with the FoodDonation Connection, anational network that workswith restaurants and other foodservice companies to distributehigh-quality, prepared foods tohunger-relief organizationsacross the United States. Apilot program that began in2003 grew into a company-wide effort the following year.Today, nearly all of our 1,800restaurants participate in whatis called the Darden Harvestfood donation program.

19 Total is less than sum because manyagencies pick up from more than onerestaurant brand.20 Source: Feeding America


Pounds RecipientDonated Agencies

Olive Garden 3,438,264 671Red Lobster 2,313,636 649LongHorn Steakhouse 1,463,866 333Warehouse 941,240 43The Capital Grille 546,320 34Bahama Breeze 35,322 31Seasons 52 19,853 7Total 8,758,500 1,15019

Our Food Donation Partners

Our food donation program wouldn’t be so successfulwithout the efforts of many different organizations. Theseinclude:

Food Donation Connection. This national organizationacts as the liaison between the restaurants interested indonating leftover food and the social service agenciesthat provide meals for the homeless and people at risk ofhunger.

Feeding America. As the largest hunger-relief agency inthe country, Feeding America collects the majority of ourprepared food donations and distributes the meals tocharities in the communities where our restaurants arelocated.

Social Services Agencies. In the Orlando area alone, ourfood donations help to support more than 50 localcharities, including food banks and residential treatmentcenters for adults struggling with addiction.

www.foodtodonate.com

In fiscal year 2009, Darden restaurants contributed 8.7 million pounds of cooked food to familiesin need across the United States. Our main distribution partner is Feeding America (formerlyAmerica’s Second Harvest), the nation’s largest hunger-relief organization. Representatives fromFeeding America take the food from our restaurants to the charities that directly feed the needy.More than 1,200 charities benefit from our food donation program.

How It WorksHere’s how the program works: Each night, at the end of a dinner shift, our restaurants haveleftover food that can’t be used – such as full trays of thawed chicken breasts or steak tips. (Weeven sometimes donate lobsters.) Our rigorous food safety guidelines won’t allow us to savefood items like these for use on the following day. So instead, our kitchen crew cooks them justas they would for any paying guest, then packages and freezes them for weekly collections bythe hunger-relief agencies. Our donations also often include cooked vegetables and sauces, likeOlive Garden’s popular Alfredo sauce.

Our restaurants are extremely good at forecasting what our guests will order. But we can’tpredict with 100% accuracy, and we don’t want to run out of menu items, either. This meansthere are always some leftover ingredients at the end of each day. (Other leftover food includestake-out meals that were prepared, but never picked up by the diners who had ordered them.These, too, get frozen for the charities.)

For safety reasons, we never donate any raw foods – only items that have been thoroughlycooked.

Program BenefitsThe food donation program has so many benefits – social, environmental and economic – thatit’s hard to know where to begin. First, and most important, it lets us assist Americans who are inneed of a good meal. Second, it reduces our waste stream by taking food that would otherwisehave gone to landfills and diverting it to an extremely worthy cause. Third, the program savesour company money, thanks to generous federal tax deductions and reduced disposal costs (i.e.,less food waste = less money for waste removal fees).

Our restaurant employees benefit from the program, too. Many of our team members routinelytell us that they feel good knowing that they are helping members of their communities.

We’re proud of the work our employees do to make this program so successful. In fact, it’s oneof the most valuable things we do as a company. This program gives us yet another way to fulfillour core purpose – to nourish and delight everyone we serve.


Our Food Donations

GRI Index

Darden used the 2006 G3 Sustainability Reporting Guidelines of the Global Reporting Initiative (GRI) at a GRI C level. This index covers all indicators on which we have fully orpartially reported. (Core indicators are in plain text; additional indicators are in italics.) Please visit www.globalreporting.org for the full text of the indicators and other information on the Guidelines.

Key to Indicators: Reported Partially Reported

Indicator Description Page(s)

CORPORATE PROFILE INDICATORS

Strategy and Analysis

1.1 Executive statement 2-4

1.2 Key impacts, risks and opportunities 2-4, 5-8

Organizational Profile

2.1 Name of organization 12

2.2 Primary brands, products and/or services 12

2.3 Operational structure 12

2.4 Headquarters 12

2.5 Countries with major operations 12

2.6 Nature of ownership and legal form 12

2.7 Markets served 12

2.8 Scale of reporting organization 84

2.9 Significant changes during reporting period 14

2.10 Awards received in reporting period 32

Report Parameters

3.1 Reporting period 12

3.2 Date of most recent report 12

3.3 Reporting cycle 12

3.4 Contact point 13


3

Indicator Description Page(s)

Report Scope and Boundary

3.5 Process for defining report content 12

3.6 Report boundary 12

3.7 Limitations on scope/boundary 12

3.8 Basis for reporting on joint ventures, subsidiaries, etc. 12

3.9 Data measurement techniques 12

3.10 Restatements 12

3.11 Significant changes from previous reporting periods N/A

GRI Content Index

3.12 GRI index 94

Assurance

3.13 External assurance 12

Governance

4.1 Governance structure 9-10

4.2 Board chairperson/executive officer 9

4.3 Independent and/or non-executive members 9

4.4 Shareholder recommendations http://www.darden.com/pdf/corporate/Lead_Director_and_Shareholder_Communication_Procedure.pdf

4.6 Avoiding conflicts of interest 11

4.8 Mission statement/code of conduct 5, 11

4.9 Board of Directors performance oversight 9-10

4.10 Board of Directors performance evaluation http://www.darden.com/pdf/corporate/D_Corporate_

Governance_Guidelines.pdf

Commitments to External Initiatives

4.12 External principles/initiatives 57-58

4.13 Industry memberships 40, 87-90

Stakeholder Engagement

4.14 List of stakeholders engaged 25, 27, 40, 42-43, 45, 48, 57-59, 60, 62-63, 82, 85, 88-90, 91, 92

4.15 Stakeholder identification 2, 3, 6, 27-28, 45, 57, 87, 91

4.16 Stakeholder engagement 29-31, 36-38, 40, 42-43, 45-47, 48-51, 57-59, 60-63, 82-83, 88-90, 91, 92-93

4.17 Stakeholder concerns 43-44, 46, 48-51, 55-59, 60-61, 62-63, 83, 93

Indicator Page(s)

ECONOMIC INDICATORS

Management Disclosures 2-3, 19, 84-86, 91

Economic Performance

EC1 4, 14, 19

EC2 2, 64-65, 72

ENVIRONMENTAL INDICATORS

Management Disclosures 2, 4, 6-7, 9-10, 15-18, 20, 54-56, 65-68, 70, 73, 75, 78, 80

Materials

EN2 22

Energy

EN3 66

EN4 66

EN5 66

EN7 21


GRI Index

Indicator Page(s)

Biodiversity

EN11 21, 26

EN13 26

Emissions, Effluents and Waste

EN16 66-68

EN17 67

EN18 68-71

EN22 78

Products and Services

EN26 18, 46, 54-58, 60-63, 75-76

LABOR INDICATORS

Management disclosures 27-28, 31-34

Employment

LA1 27

LA2 29, 32

Occupational Health and Safety

LA7 34

Training and Education

LA10 29-31

LA11 28-31

Diversity and Equal Opportunity

LA13 9, 32

HUMAN RIGHTS INDICATORS

Management Disclosures 46-47

Investment and Procurement Practices

HR2 46-47

SOCIETY INDICATORS

Management Disclosures 9-11, 32, 91

Community Impacts

SO1 19, 84-86

Public Policy

SO5 41

PRODUCT INDICATORS

Management Disclosures 35, 38

Customer Health and Safety

PR1 35-40

Product and Service Labeling

PR2 39


GRI Index

Documents

Sustainability at Darden