Encouraging Progress From Fonterra’s Latest Sustainability Report

Fonterra has achieved its most encouraging sustainability results since starting its annual reporting four years ago, but the Co-op is staying focused on what still needs to be done to reach its long-term targets.

“The progress we’ve made this year towards our three interconnected goals of healthy people, a healthy environment and a healthy business shows that our strategy and customer-led operating model are delivering,” said CEO Miles Hurrell, following the release of Fonterra’s 2020 Sustainability Report.

“We’re proud of what our people have achieved, especially in the face of COVID-19, and want to thank farmers and employees for their support and hard work.”

The report shows that Fonterra improved all three of its core environmental metrics around greenhouse gas (GHG) emissions, water use and solid waste to landfill for the first time since launching its first stand-alone Sustainability Report in 2017, as well as lifting its financial performance and continuing to support communities.

Among other highlights in the report, Fonterra has become the first dairy company in New Zealand to have its emission reduction targets endorsed by the UN-backed Science Based Target initiative. This means that the Co-op’s 2030 target of 30% reduction in Scope 1 and 2 GHG emissions, which are the emissions it directly creates and those from the energy it uses, has been approved as being in line with what the latest climate science says is needed to limit global warming to well below 2°C.

“We take the best of what New Zealand has to offer to consumers around the world through the unique quality of our milk, so of course we want to play our part in helping the country meet its climate commitments,” said Hurrell.

“Our farmer-owners have a carbon footprint of about one-third of the world average, and we’re continuing to support them to adapt to change. Setting science-based targets is important and so is the concrete action we’re taking today – like providing farmers with farm-specific emissions profiles, which will help them identify opportunities for improvements, and switching our Te Awamutu site to wood pellets, which will reduce our coal use by almost 10%.”

Increasing the energy efficiency of existing assets is also key. This year, the Co-op hit its longest-running target of 20% reduction in energy intensity across its New Zealand manufacturing sites between 2003 and 2020, which is enough energy saved to power all the households in Aotearoa for 1.5 years. As part of the plan to reach a 30% reduction in emissions by 2030, and ultimately net zero emissions by 2050, Fonterra is developing site-specific ‘Greenprints’ that outline the roadmap to decarbonisation.

The report also highlights areas for improvement including the need to achieve better gender and ethnic diversity at the leadership level and accelerate progress towards key 2025 targets such as having 100% reusable, recyclable or compostable packaging.

Global Sustainability Director Carolyn Mortland says the Sustainability Advisory Panel provides a valuable external lens as Fonterra works towards these goals.

“Our Co-op’s focus is on adopting regenerative principles across the business so that we’re restoring and replenishing rather than just protecting and conserving. This will take time, and we can’t do it alone, but we need to get it right to ensure a better future for our business, people, animals, natural resources and taonga,” said Mortland.

You can read the full 2020 Sustainability Report at fonterra.com/sustainability