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Sustainability score card shows good progress for Fonterra

Fonterra has released its sustainability score card summarising progress towards its people and environmental targets.

Fonterra COO Fraser Whineray says “transparently reporting across a range of sustainability metrics is very important for our Co-operative. At the time of our annual results release next week we will also publish our fifth Sustainability Report. This covers in detail our activities across business, people and environment, three vital ingredients for a sustainable Co-operative. In advance of that, we are sharing a summarised scorecard covering the people and environmental aspects.”

One of the biggest ones is the 11% reduction in GHG emissions from coal in a single year, primarily through the conversion to renewable wood pellets at our Te Awamutu site. This is a great step towards delivering our 2030 target and our goal of getting out of coal by 2037.

This was the major contributor to a global reduction of 6.5% in scope one and two GHG emissions. We were also very pleased to see that project winning the Low Carbon Future category at the New Zealand Energy Excellence Awards.

Whineray says this was a big milestone for Fonterra, “Having committed to get out of coal by 2037 from the nine remaining sites, Te Awamutu provided material GHG reductions and further confidence to undertake our next project at our Stirling cheese site in the South Island. Stirling will become our first 100% renewable thermal energy site.

“We are already one of the most carbon efficient producers of dairy nutrition in the world, and there is more to be done.

“It is important we continue to make progress in our operations to complement the significant innovation and change by our farmer owners. One of the ways we’re supporting their on-farm activity is through The Co-operative Difference.”

This season The Co-operative Difference payment for milk comes into effect. In addition to valuing milk quality, it rewards farmers for on-farm demonstration of care for the environment, animals, people and community.

For the 20/21 season there was a 25 percent increase in farms achieving Te Tihi (the top) and Te Puku (the midpoint), with around a third of our farmer owners recognised in the overall programme.

53% of farmers in New Zealand also have tailored Farm Environment Plans, up from 34% last year. We are on track to meet our target of 100% by 2025 and these are provided free of charge to all Fonterra farmers.

“Considering our people goals, whilst there has been improvement towards our diversity targets there is room for improvement when it comes to women and ethnic minorities in senior leadership positions. Our gender pay gap has narrowed across all job categories. In New Zealand the Co-op is now down to 3.8% on a median basis, compared to the national average of 9.5%.

“We have also recently extended our parental leave in New Zealand so employees will now have their government parental leave cover topped up to 100% of base salary or wages for 26 weeks.

“We are pleased to see employee engagement increasing with more teams in the top quartile and the Co-op was just shy of being in the top quartile overall,” says Mr Whineray.

Other progress includes

Environment

  • We are finalists in this year’s Sustainable Network Awards, for a project at Maungaturoto where, for the first time, we are using a natural wetland process to help us recycle water for reuse at the site.
  • Awarded the Low Carbon Future Award at the New Zealand Energy Excellence Awards for the Te Awamutu conversion
  • New Zealand on-farm GHG footprint increased slightly partly due to the increased proportion of PKE in supplementary feed.
  • 94% of packaging on products sold in Australia are now made from recycle-ready[1] materials
  • Continued to invest in R&D to find on-farm methane mitigation solutions, including a seaweed trial, the Kowbucha™ project and our partnership with DSM which look to limit methane production from cows.
  • Since the Living Water partnership with the Department of Conservation began, we have carried out 36 trials for tools and solutions, with nine of these being further developed for wider use.
  • Delivered 48% of the 128 partnership actions in the first three years of our sustainable catchments programme.

People

  • 13 new apprentices joined in January as part of our commitment to recruit an extra 44 apprentices by the end of 2022.
  • In the past year, our New Zealand employees increased their on-the-job training and reskilling hours by 28.1%, well on the way to doubling by 2025 in support of the Aotearoa New Zealand Skill Pledge
  • Served more than 180,000 breakfasts a week through The KickStart Breakfast programme, a partnership with Sanitarium and the Government to provide milk and Weet-Bix, which is now in 1,300 schools.
  • 84% of our everyday and advanced nutrition products now meet our independently endorsed nutrition guidelines
  • Improved our injury rate but not as much as we would like it to have – we’re never done when it comes to workplace safety.

Progress against our targets

Category Target Performance 
Nutrition 100% of everyday and advanced nutrition products meet independently endorsed nutrition guidelines by 2025 84% 
Work related fatalities Zero Harm 0 
Serious harm injuries Zero Harm 9 
Total recordable injury frequency rate (TRIFR per million work hours) Less than 5 5.7 
Employee Engagement World-class (top quartile) 4.09 (2nd highest quartile) 
Female representation in senior leadership 50% by 2022 32.4% 
Ethnic representation in senior leadership 20% by 2022 9% 
Training skills hours (NZ) Double by 2025 from a FY20 baseline 28% increase to 346,417 hours 
Farms with Farm Environment Plans (NZ) 100% by 2025 53% 
Water reduction at manufacturing sites in water constrained regions 30% reduction by 2030 from FY18 baseline 2.6% 
Reduction in absolute scope 1&2 emissions (Global) 30% reduction by 2030 from FY18 baseline 6.5% on FY18 
Net change in GHG emissions from dairy farming since 14/15 (NZ) Neutral to 2030 3.1% reduction from a 2014/15 baseline 
Solid waste sent to landfill (tonnes) Zero by 2025 4,000 tonnes (24.6% reduction) 
100% reusable, recyclable or compostable packaging 100% by 2025 58% 

[1] The exact level of recyclability achieved will vary depending on the scope and availability of collection, sorting and recycling in the given market.

For more about Fonterra’s sustainability achievements check out our website here: https://www.fonterra.com/nz/en/embracing-sustainability/our-progress.html

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