Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water Stewardship
• Animal Welfare
• Circular Economy
• Workforce Diversity & Inclusion
• Safety
• Community Engagement
• Supply Chain Sustainability
• Transparency & Reporting

Environmental Achievements

• Commissioned a large-scale electrode boiler reducing carbon emissions by 13,714 tCO₂e per annum.
• Reduced on-farm GHG emissions per tonne MS by 2%.
• 43 additional farmers became certified to Lead With Pride, our on-farm sustainability standard.

Social Achievements

• Launched a new diversity and inclusion programme.
• Launched a new wellness programme focusing on employee wellbeing.
• Introduced Mātua parental leave policy and Tāwariwari flexible working policy.
• Reduced Total Recordable Injury Frequency Rate (TRIFR) by 28%.

Governance Achievements

• Negotiated New Zealand’s first “ESG-linked loan”, rewarding improvements in sustainability performance.
• Committed to setting Science Based Targets.
• Actively pursuing B Corp certification.

Climate Goals & Targets

Environmental Challenges

• On-farm emissions (81% of total emissions), primarily methane and nitrous oxide.
• Off-farm emissions (19% of total emissions), largely from coal use in manufacturing.
• Water usage and nitrogen loss from on-farm practices.
• Waste management, particularly single-use packaging.
• Improving data accuracy for water usage and nitrogen loss.

Mitigation Strategies

• Tailored farm support and GHG-reduction incentive payments for farmers.
• Transitioning to renewable energy sources (electrode boiler, solar PV feasibility study, forklift electrification).
• Improved environmental advice and water management plans for farmers.
• Water recovery systems at Pōkeno site.
• Waste minimisation initiatives in the Dunsandel café.
• Implementing new water meters for precise monitoring at Dunsandel.

Supply Chain Management

Supplier Audits: 29 audits completed in FY19 out of 80 active suppliers (36.2%)

Responsible Procurement

• Prioritizing New Zealand-based suppliers.
• Integrating sustainability criteria into tenders.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products and processes.

Reporting Standards

Frameworks Used: ISO 14064-1:2006, Greenhouse Gas Protocol, CDP Climate Change Questionnaire, B Corp, Science Based Targets initiative (SBTi)

Certifications: Lead With Pride™ (ISO/IEC 17065), FSSC 22000, ISO 17025, IANZ accredited

Third-party Assurance: Independent third-party review of key elements

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water Quality
• Animal Welfare
• Food Safety
• Employee Safety and Wellbeing
• Diversity and Inclusion
• Sustainable Supply Chain
• Circular Economy

Environmental Achievements

• Reduced on-farm GHG emissions per kgMS by 7% vs FY18
• Reduced off-farm GHG emissions per tonne of product by 16% vs FY18
• Reduced coal consumption per tonne of product by 23% vs FY18
• Achieved 99.30% reusable, recyclable or compostable packaging sold by weight

Social Achievements

• Increased women in leadership positions
• Narrowed gender pay gap
• Initiated projects to tackle discrimination and unconscious bias
• Improved employee engagement ratio
• Lead With PrideTM certified 57% of milk-supplying farms

Governance Achievements

• Achieved B CorpTM certification
• Secured two ESG-linked loans

Climate Goals & Targets

Environmental Challenges

• Water, wastewater, and solid waste indicators worsened
• Supply chain disruptions due to COVID-19
• Need to reduce global greenhouse gas emissions by 6% annually to meet Paris Agreement targets

Mitigation Strategies

• Developed alternative sourcing strategies
• Implemented COVID-19 safety protocols
• Initiated projects to reduce water consumption and improve wastewater treatment
• Exploring use of wood pellets in boilers
• Implementing GHG mitigation plan with new tool

Supply Chain Management

Supplier Audits: 36.2% of critical and high-risk suppliers audited in FY20

Responsible Procurement

• New Procurement Policy with guidelines on environmental and social considerations
• Encouragement of local sourcing

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI, B CorpTM

Certifications: FSSC 22000, ISO 17025, IANZ accredited

Third-party Assurance: Independent third-party review of key elements

UN Sustainable Development Goals

• Goal 2
• Goal 3
• Goal 5
• Goal 7
• Goal 12
• Goal 13
• Goal 15
• Goal 17

Initiatives contribute to these goals through sustainable farming practices, employee wellbeing programs, renewable energy use, waste reduction, climate action, biodiversity conservation, and partnerships

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Finalist in 2020 Diversity Works Awards

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water Quality
• Animal Welfare
• Biodiversity
• Circular Economy
• Employee Wellbeing
• Diversity and Inclusion
• Food Safety
• Sustainable Supply Chain

Environmental Achievements

• On-farm emissions intensity (per kg of milk solids) reduced by 5% year-over-year and 10% compared to FY18.
• Off-farm (Scope 1 and 2) emissions intensity (per kg of product) reduced by 24% compared to FY18.
• Saved at least 680 tonnes of CO2 gas by optimizing gas mix ratios in bulk bag packaging.
• Replaced 50% of LPG-fueled forklifts with electric versions by August 2021.

Social Achievements

• Launched Made With Better Milk, a premium ingredients offering emphasizing sustainable practices.
• Increased employee engagement ratio from 5.20 to 5.30.
• Implemented a unique parental leave policy (Matuā) including full pay for 26 weeks for primary carers and childcare subsidies.
• Improved health and wellbeing initiatives including a wellbeing bowtie, partnership with Southern Cross Healthcare, and engagement of an occupational health nurse.

Governance Achievements

• Maintained FSSC 22000 certification for Synlait Dunsandel.
• Reset Scope 1 and 2 emissions reduction targets aligned with the Science Based Targets initiative (SBTi) and the New Zealand Government's 1.5°C warming commitment.
• Improved CDP climate change score to B from D in 2020.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to global shipping container shortages.
• Need to further strengthen safety culture.
• Challenges in accurately measuring on-farm water consumption due to data limitations.
• Need to improve uptake of unconscious bias training.

Mitigation Strategies

• Optimized rail siding and Dry Store 4 at Synlait Dunsandel to reduce truck journeys and emissions.
• Conducted a safety culture review and developed a comprehensive improvement plan.
• Improved data collection processes for on-farm water consumption.
• Integrating unconscious bias training into face-to-face leadership training.

Supply Chain Management

Responsible Procurement

• Sustainability criteria included in procurement tenders (ranging from 5% to 30% weight).
• Sustainability screening process for procurement adopted.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI

Certifications: B Corp™, FSSC 22000

Third-party Assurance: Deloitte Limited

UN Sustainable Development Goals

• Goal 2 (Zero Hunger)
• Goal 3 (Good Health and Well-being)
• Goal 5 (Gender Equality)
• Goal 7 (Affordable and Clean Energy)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)
• Goal 15 (Life on Land)
• Goal 17 (Partnerships for the Goals)

Initiatives described throughout the report contribute to these SDGs.

Sustainable Products & Innovation

• Synlait Swappa Bottle
• Made With Better Milk products

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water Quality
• Animal Welfare
• Biodiversity
• Circular Economy
• Health, Safety and Wellbeing of Employees
• Employee Engagement
• Food Safety and Quality
• Sustainable Supply Chain
• Transparency

Environmental Achievements

• Conversion of one boiler from coal to biomass
• Upgrade of electrode boiler at Synlait Dunsandel
• 9% reduction in on-farm GHG emission intensity between FY18 and FY22
• 55% of mobile plant fleet electrified by July 2022
• Transition to a 25kg milk powder bag with 8% less paper and 20% more recycled content
• 30% packaging material reduction for 5kg foodservice cheese products
• 23% reduction in packaging material across all block cheese products

Social Achievements

• Launch of Synlait Safe, a new internal health and safety campaign
• Introduction of additional animal health and wellbeing assessments for key customer suppliers
• Implementation of a new wellbeing programme
• Rollout of a new leadership development programme
• Introduction of Creating a Respectful Workplace module in leadership training
• 41 primary carers benefited from full pay for 26 weeks of maternity leave, and over 30 families benefited from the childcare subsidy

Governance Achievements

• Maintained FSSC 22000 certification for Synlait Dunsandel
• Dairyworks achieved FSSC 22000 certification
• Improved ESG rating from 24.5 to 25.4 by Sustainalytics

Climate Goals & Targets

Environmental Challenges

• Labour shortages
• Inflation
• Geopolitical dynamics
• Operational and supply chain stability
• Worldwide shipping shortages
• COVID-19 pandemic

Mitigation Strategies

• Implementation of a two-year recovery plan
• Realignment of organisational structure
• Implementation of SAP
• Problem-solving by logistics and export teams to ensure shipping timeframes are met
• COVID-19 Response Management team conducted regular risk assessments
• Implementation of a COVID-19 Workplace policy, including Rapid Antigen Testing and Vaccination Policy

Supply Chain Management

Responsible Procurement

• Integration of social and environmental criteria into procurement tenders

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events, drought

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products and processes

Reporting Standards

Frameworks Used: B Corp™

Certifications: FSSC 22000

Third-party Assurance: Independent third party review of key elements

UN Sustainable Development Goals

• 2
• 3
• 5
• 6
• 7
• 12
• 13
• 15
• 17

Initiatives contributing to various UN Sustainable Development Goals

Environmental Metrics

ESG Focus Areas

• Sustainability

Environmental Achievements

• Reduced Synlait Dunsandel site emissions by approximately 40% by transitioning Boiler Two to biomass (wood pellets) as a fuel source
• Planted 60,000 trees in the 2023 calendar year

Social Achievements

• Established a Synlait Farmer Leadership Team of eight farmer suppliers to provide feedback and direction on Synlait’s strategic choices
• Launched functional foodservice cream (Joyhana) in China, winning a ‘New Product Innovation Award’
• Increased employee engagement ratio to 5.7:1 (FY 22: 5.67:1), with engagement score consistently between 4.03 to 4.05 (FY 22: 4.05)

Governance Achievements

• Achieved SAMR re-registration, securing China market infant formula access until September 2027
• Refreshed strategy with increased focus on Advanced Nutrition and Foodservice businesses

Climate Goals & Targets

Environmental Challenges

• Material reductions in customer demand
• CO2 shortages
• Extreme weather events
• Tight labour market
• Inflationary pressures
• Stabilisation of the Enterprise Resource Planning (ERP) system
• Difficult market dynamics in China
• Softening global economies
• Operational stability issues

Mitigation Strategies

• Divestment of Dairyworks and its Temuka assets to focus on higher-margin segments
• Cost reduction initiatives
• Increased plant utilisation
• Focus on operational stability
• Successful bank refinancing
• Renewal of SAMR license

Supply Chain Management

Responsible Procurement

• Lead With Pride™ program

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Changes to government regulations or customer and supplier needs and demands

Reporting Standards

Frameworks Used: B Corp™

Certifications: B Corp™

Sustainable Products & Innovation

• Joyhana UHT Whipping Cream

Awards & Recognition

• Joyhana UHT Whipping Cream - New Product Innovation Award

Environmental Metrics

ESG Focus Areas

• Sustainability
• Biodiversity
• Emissions Reduction
• Farmer Relations
• Diversity & Inclusion

Environmental Achievements

• 80,000 native seedlings planted as part of the Whakapuāwai biodiversity programme.
• 85% of Dairyworks’ packaging is now recyclable (remaining 15% to transition in FY25).

Social Achievements

• Recertification as a B Corp™ with a 21.5% score increase.
• Lead With Pride™ certification for two Synlait-owned farms.
• Over 75% of farmer suppliers have Lead with Pride™ certification.
• Three-way partnership with farmer suppliers and Nestlé to fund on-farm emissions reduction tools.
• New partnership with Farmlands saved farmers over $1.5 million.

Governance Achievements

• Improved score in B Corp™ recertification reflecting changes to governance.

Climate Goals & Targets

Environmental Challenges

• High debt levels and interest rates.
• Declining demand for infant formula.
• Underutilisation of North Island assets.
• Disputes with The a2 Milk Company.
• Significant number of milk supplier cessation notices from farmers.
• Supply chain disruptions.
• High inventory write-downs and provisions for manufacturing and quality issues.

Mitigation Strategies

• Successful equity raise of $217.8 million.
• Refreshed banking syndicate.
• Settlement of disputes with The a2 Milk Company.
• Cost reduction initiatives, including headcount reduction.
• Increased productivity and efficiency.
• North Island strategic review leading to refocusing on advanced nutrition products.
• Additional payments for farmer suppliers.
• Improved inventory management systems.

Supply Chain Management

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Severe or unusual weather patterns

Transition Risks

• Changes to government regulations or customer needs

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: B Corp™

Certifications: B Corp™

Sustainable Products & Innovation

• Nutrabase™ nutritional base powders
• New generation whipping cream

Awards & Recognition

• New Product Innovation Award (Joyhana UHT whipping cream)