Treasury Wine Estates has cut its operational emissions by 65 per cent since 2021, but its 2026 sustainability report shows the shift to smaller-batch luxury wine is eroding efficiency, and its $100 million climate adaptation target is now under review.
Treasury Wine Estates (TWE) emitted 16.5 kilotonnes of CO2-e from its own operations (scope 1 and 2, market-based) in FY26, down from 47.6 kilotonnes in its FY21 baseline year, according to its Cultivating a Brighter Future Report, lodged with the ASX on 2 October.
Most of that reduction came from switching to 100 per cent renewable electricity, which TWE reached at the end of calendar 2024 and maintained through FY26, along with site divestments. Market-based scope 2 emissions were zero for a second year. Scope 1 emissions fell from 21.5 kilotonnes in FY25 to 16.5 kilotonnes.
But the company has also shrunk with production volumes down about 45 per cent since FY21. Electricity consumption fell 23.2 per cent and total energy use 30.1 per cent over the same period, with energy use down 13.8 per cent on FY25 alone.
Smaller batches, higher intensity
The report is candid about what TWE’s move into luxury wine is costing it on efficiency. Smaller parcels of fruit and wine mean more tanks, barrels and filtration equipment to clean after each use, and storage and maturation loads that do not fall with volume.
Water efficiency in wineries, packaging centres and warehouses went from 26.8 litres per nine-litre equivalent (L/9LE) in FY25 to 32.2 L/9LE in FY26. Energy efficiency went from 10.0 to 10.7 megajoules per 9LE, and TWE says energy efficiency has declined about 26.9 per cent since FY21.
Total water use fell from 21.0 gigalitres to 18.7 gigalitres, largely on the back of seasonal conditions. Vineyards account for 97 per cent of TWE’s water use, and 68.5 per cent of its global water use is in Australia, where consumption fell 20.5 per cent. Poor flowering and reduced fruit set lowered crop loads and vine water needs, and rain at key points in the season cut irrigation demand.
TWE has installed more than 380 smart water meters at high- and medium-risk sites. A trial at its Padthaway vineyard, using midday stem water potential readings to decide when to irrigate, cut water use by 0.5 megalitres per hectare without affecting fruit quality.
Barossa decarbonisation with ARENA
To get to net zero scope 1 and 2 emissions by 2030, TWE now has to tackle on-site fuel use. Around 40 per cent of baseline emissions came from scope 1, and TWE expects to sequester the 15 to 20 per cent of its footprint it considers too difficult or uneconomical to abate. Diesel and propane frost fans in vineyards are singled out as having no commercially viable alternative.
In FY26 it signed an agreement with the Australian Renewable Energy Agency (ARENA), which will fund 50 per cent of a project to decarbonise its Barossa Valley winery and packaging centre, its largest production site. The project covers biogas from wastewater treatment to offset LPG, electrification of hot water and thermal loads, battery storage, demand management, and hybrid solar-diesel vineyard pumps. It runs in two phases, design then implementation, with completion due in FY29. TWE has a target to cut scope 1 and 2 emissions at the site by more than 80 per cent on FY21 levels by then.
The site now has more than 3.1MW of on-site solar and two 535kWh battery systems, installed in FY26. Across the group, TWE has 43 on-site solar installations, representing about $28.4 million in investment, which generated more than 7,600MWh in FY26.
The Barossa site also houses the dealcoholisation facility that won Best Technology at the 2026 Food & Drink Business Hive Awards.
Scope 3 the bulk of the problem
Value chain emissions remain about 95 per cent of TWE’s footprint. FY25 scope 3 emissions, reported a year in arrears, were 320.7 kilotonnes, down from 351.0 kilotonnes in FY24 and about 20 times its operational emissions. Purchased goods and services account for 62 per cent and upstream transport 23 per cent. By activity, bottling and packaging (108.0 kilotonnes) and logistics, warehousing and distribution (72.7 kilotonnes) are the largest contributors.
Most scope 3 data is still spend-based. TWE incorporated primary emissions data from 18 suppliers in its FY25 inventory.
Targets met, missed and under review
TWE met its target to remove 5000 tonnes of glass from its products by the end of FY26, through lightweighting across brands including 19 Crimes, Squealing Pig and Penfolds. Consolidating four Penfolds Claret bottle formats into one design cut between 53g and 153g per bottle and saved about 1200 tonnes of glass. TWE has not set a glass reduction target for FY27, citing portfolio changes under its Ascent transformation program, and will revisit it for FY28.
Recycled content reached more than 53 per cent of primary and secondary packaging by weight in calendar 2025, ahead of its 50 per cent target. But its ambition of 100 per cent recyclable, reusable or compostable packaging by the end of calendar 2025 was not achieved, with screw cap liners, capsules and pouches still lacking recovery pathways. The commitment carries into FY27 without a date.
TWE invested $12.8 million in climate adaptation in FY26, mainly vineyard irrigation capacity and rootstocks, against a commitment to spend $100 million by the end of 2030. A footnote states the target “will undergo review in light of changed business circumstances in F27”.
No- and low-alcohol wine represented about 2.5 per cent of the premium Treasury Collective portfolio at the end of FY26, against a target of more than five per cent of TWE’s premium portfolio by 2030.
Other numbers
97.3 per cent of grape intake (excluding China) came from certified vineyards, and 100 per cent of eligible owned and leased sites were certified. US grower fruit certification sat at 83 per cent, and TWE says grower retention in certification schemes is a focus “given current industry conditions”.
Solid waste fell from 33.3 kilotonnes to 26.2 kilotonnes, with 92.1 per cent diverted from landfill, down from 93.9 per cent.
Employee engagement fell from 71 per cent to 65 per cent, which the report attributes to organisational change. The three-year serious safety incident frequency rate improved to 0.32.
TWE paid about $178.2 million in tax in Australia for the 2026 income year, including WET, excise and company tax.
TWE chair, John Mullen, and CEO, Sam Fischer, said in the report that the business was operating “against a backdrop of declining consumption and shifting consumer preferences”, with wine consumption at its lowest level in more than 50 years.
The report is the company’s voluntary sustainability disclosure and sits alongside its first mandatory Sustainability Report under AASB S2, published with its annual report in August. The two use different emissions bases: the mandatory report presents gross scope 1 and 2 emissions including biogenic emissions, which are excluded here.
