Despite the uncertainty and distraction caused by COVID-19, Fonterra says it has made good progress with its sustainability initiatives.
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.
The company achieved its 2020 target to reduce energy intensity at all manufacturing sites by 20 per cent from a 2003 baseline - enough energy to power all households in New Zealand for 1.5 years.
Its coal usage has dropped by 10 per cent, having switched from coal to wood pellets at its Te Awamutu manufacturing site.
CEO Miles Hurrell said its farmer owners have a carbon footprint of about one third the world average. For all its farm owners, Fonterra is completing farm-specific greenhouse gas emission reports and putting in place farm environment plans (FEPS). That has resulted in 34 per cent of supplying farms in New Zealand having a FEP, up from 23 per cent at the beginning of the year.
“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,” Hurrell said.
In water constrained regions it has reduced water use by 6.4 per cent compared to last year.
Hurrell said: “The progress we’ve made this year towards our three interconnected goals of healthy people, a healthy environment and a healthy business show that our strategy and customer-led operating model are delivering.
“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.”
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 per cent 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.
As part of the plan to reach a 30 per cent 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 leadership level and accelerate progress towards key 2025 targets such as having 100 per cent 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,” says Mortland.
