Climate Change Data

Fonterra Co-operative Group Limited

Climate Impact & Sustainability Data (2017 (FY17), 1 August 2016 – 31 July 2017; On-farm GHG emissions: 2015-16 milking season, 1 June 2015 – 31 May 2016, 2020, 2021, 2022)

Reporting Period: 2017 (FY17), 1 August 2016 – 31 July 2017; On-farm GHG emissions: 2015-16 milking season, 1 June 2015 – 31 May 2016

Environmental Metrics

Total Carbon Emissions:22,248,000 tCO2e
Scope 1 Emissions:1,689,000 tCO2e
Scope 2 Emissions:683,000 tCO2e
Scope 3 Emissions:19,876,000 tCO2e
Renewable Energy Share:Not disclosed
Total Energy Consumption:29.4 PJ
Water Consumption:Not disclosed
Waste Generated:Not disclosed
Carbon Intensity:Not disclosed

ESG Focus Areas

  • Environmental
  • Social
  • Governance

Environmental Achievements

  • Not disclosed

Social Achievements

  • Not disclosed

Governance Achievements

  • Not disclosed

Climate Goals & Targets

Long-term Goals:
  • Not disclosed
Medium-term Goals:
  • Not disclosed
Short-term Goals:
  • Not disclosed

Environmental Challenges

  • Not disclosed
Mitigation Strategies
  • Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement
  • Not disclosed

Climate-Related Risks & Opportunities

Physical Risks
  • Not disclosed
Transition Risks
  • Not disclosed
Opportunities
  • Not disclosed

Reporting Standards

Frameworks Used: Greenhouse Gas (GHG) Protocol, Carbon Disclosure Project (CDP)

Certifications: Null

Third-party Assurance: Bureau Veritas

UN Sustainable Development Goals

  • Not disclosed

Not disclosed

Sustainable Products & Innovation

  • Not disclosed

Awards & Recognition

  • Not disclosed

Reporting Period: 2020

Environmental Metrics

Total Carbon Emissions:22,422,000 tCO2e (Scope 1,2 & 3)
Total Energy Consumption:28.5 PJ
Water Consumption:50,000,000 m3 withdrawn, 59,436,000 m3 discharged
Waste Generated:13,100 tons to landfill
Carbon Intensity:0.78 kg CO2-e/kg FPCM (NZ on-farm milk supply, excluding land use change)

ESG Focus Areas

  • Healthy People
  • Healthy Environment
  • Healthy Business

Environmental Achievements

  • 20% reduction in energy intensity at NZ manufacturing sites since 2003 (exceeded 2020 target)
  • 6.4% reduction in water use at manufacturing sites in water-constrained regions compared to last year
  • 1.9% reduction in GHG emissions from global manufacturing operations compared to last year
  • 34% of supplying farms in New Zealand now have a Farm Environment Plan (up from 23% at the start of the year)
  • Conversion of Te Awamutu manufacturing site boiler from coal to wood pellets (reducing national coal usage by almost 10%)

Social Achievements

  • 73% of everyday and advanced nutrition products meet endorsed nutritional guidelines (up from 70%)
  • Launched Simply Milk, New Zealand's first carbonzero™ milk
  • Continued implementation of new customer-led operating model
  • Launched a new global standard for respectful and appropriate use of Te Reo Māori
  • Accelerated payment terms for small and medium-sized vendors in New Zealand

Governance Achievements

  • Achieved Rainbow Tick certification
  • Reduced economic net interest-bearing debt by $1.1 billion
  • Improved Debt to EBITDA ratio from 4.4 to 3.4
  • Recommenced dividend payments (5 cents per share)

Climate Goals & Targets

Long-term Goals:
  • Net zero emissions at manufacturing sites by 2050
  • Neutral net GHG emissions from dairy farming in NZ by 2030
Medium-term Goals:
  • Achieve 100% reusable, recyclable or compostable packaging by 2025
  • Achieve 100% of farms in NZ with Farm Environment Plans by 2025
Short-term Goals:
  • Reduce water consumption by 30% by 2030 at manufacturing sites in water-constrained regions
  • Reduce absolute GHG emissions from manufacturing by 30% by 2030

Environmental Challenges

  • Covid-19 pandemic impacting operations and markets
  • Weather challenges for farmers (droughts and flooding)
  • Difficulty improving data quality and representation for diversity targets
  • Increasing number of fatalities associated with working on dairy farms in New Zealand
  • Challenges in achieving further reductions in GHG emissions at the rate required to meet long-term targets
Mitigation Strategies
  • Implemented Covid-19 response measures to protect employees and communities
  • Supported farmers through weather challenges and provided assistance to local communities
  • Increased awareness of bias and implemented improvement actions to address diversity challenges
  • Active participation in Agricultural Leaders Health and Safety Action Group to reduce farm injury risk
  • Continued investment in energy efficiency improvements and transition to low-carbon energy sources, and research into breakthrough technologies for animal emissions reduction

Supply Chain Management

Supplier Audits: Independent farm assessments in NZ and Australia; audits of top 26 non-milk suppliers

Responsible Procurement
  • Fonterra Supplier Sustainability Code of Practice; Palm Product Standard; RSPO certification for palm oil

Climate-Related Risks & Opportunities

Physical Risks
  • Droughts, flooding
Transition Risks
  • Regulatory changes, market shifts
Opportunities
  • Development of energy-efficient products and processes; low-carbon dairy products

Reporting Standards

Frameworks Used: GRI Standards: Core option

Certifications: Gender Tick (FY19), Rainbow Tick (FY20)

Third-party Assurance: Bureau Veritas

UN Sustainable Development Goals

  • Goal 1 (No Poverty)
  • Goal 2 (Zero Hunger)
  • Goal 3 (Good Health and Well-being)
  • Goal 5 (Gender Equality)
  • Goal 6 (Clean Water and Sanitation)
  • Goal 8 (Decent Work and Economic Growth)
  • Goal 12 (Responsible Consumption and Production)
  • Goal 13 (Climate Action)
  • Goal 15 (Life on Land)

Fonterra's initiatives contribute to these goals through various programs and practices detailed in the report.

Sustainable Products & Innovation

  • Simply Milk; plant-based milk bottle; Proliq; range of dairy nutrition solutions for medical use

Reporting Period: 2021

Environmental Metrics

Total Carbon Emissions:24,058,000 tCO2e/year
Scope 1 Emissions:1,534,000 tCO2e/year
Scope 2 Emissions:652,000 tCO2e/year
Scope 3 Emissions:21,872,000 tCO2e/year
Renewable Energy Share:14% of total energy use

ESG Focus Areas

  • Healthy People
  • Healthy Environment
  • Healthy Business

Environmental Achievements

  • 11% reduction in carbon emissions from coal use with Te Awamutu moving to renewable wood pellets
  • 53% of farms supplying milk in New Zealand now have detailed farm-specific Farm Environment Plans
  • 24.6% reduction in solid waste to landfill this year

Social Achievements

  • KickStart Breakfast grew to over 1,300 schools across New Zealand, serving more than 180,000 breakfasts per week
  • 28.1% increase in on-the-job training and reskilling hours, ahead of plan to deliver our Aotearoa New Zealand Skills Pledge
  • 32.4% female representation in senior leadership

Governance Achievements

  • Independent assurance of the report has been completed by Bureau Veritas

Climate Goals & Targets

Long-term Goals:
  • Net zero emissions by 2050
Medium-term Goals:
  • 30% reduction in water use across manufacturing sites in water-constrained regions by 2030
  • 30% reduction in Scope 1 and 2 GHG emissions by 2030 from FY18 baseline
Short-term Goals:
  • 100% of everyday and advanced nutrition products to meet endorsed nutritional guidelines by 2025
  • 100% of supplying farms in New Zealand to have Farm Environment Plans by 2025

Environmental Challenges

  • 0.6% increase in total reported overall (Scope 1, 2 and 3) emissions
  • Increased water use at manufacturing sites in water-constrained regions (0.3% increase)
  • Challenges in commissioning a new reverse osmosis plant at Darfield site
Mitigation Strategies
  • Transitioning to renewable energy sources (wood pellets)
  • Improving wastewater treatment (biological digestor at Darfield)
  • Working with farmers to establish Farm Environment Plans (FEPs)

Supply Chain Management

Responsible Procurement
  • Fonterra Supplier Sustainability Code of Practice
  • Palm Product Standard

Climate-Related Risks & Opportunities

Physical Risks
  • Increased variability in weather patterns
Transition Risks
  • Regulatory changes

Reporting Standards

Frameworks Used: GRI Standards: Core option

Third-party Assurance: Bureau Veritas

UN Sustainable Development Goals

  • Goal 1
  • Goal 2
  • Goal 3
  • Goal 5
  • Goal 6
  • Goal 8
  • Goal 12
  • Goal 13
  • Goal 15

Fonterra's initiatives contribute to these goals through employment opportunities, nutrition provision, water efficiency, emission reduction, and biodiversity protection.

Sustainable Products & Innovation

  • 360 REPREVE® Farm SourceTM workwear made from recycled plastic bottles

Awards & Recognition

  • Low Carbon Future Award (NZ Energy Excellence Awards)

Reporting Period: 2022

Environmental Metrics

Total Carbon Emissions:24,480,000 tCO2e/year
Scope 1 Emissions:1,366,000 tCO2e/year
Scope 2 Emissions:565,000 tCO2e/year
Scope 3 Emissions:22,549,000 tCO2e/year
Renewable Energy Share:15% of total energy use in manufacturing
Waste Generated:11,994 tons/year
Carbon Intensity:6.3 tCO2e/t finished goods in FY22

ESG Focus Areas

  • People and Culture
  • Nature
  • Working Together
  • Financial
  • Intellectual Capital
  • Assets and Infrastructure

Environmental Achievements

  • 11.2% reduction in scope 1 & 2 GHG emissions since FY18
  • 6.6% reduction in water use at manufacturing sites in water-constrained regions since FY18
  • 71% of supplying farms in New Zealand have a Farm Environment Plan

Social Achievements

  • 34.8% female representation in senior leadership
  • 85.6% increase in on-the-job training and reskilling hours since FY20
  • Launched Anchor™ Family Pro+ in Sri Lanka to support immunity

Governance Achievements

  • No fines for non-compliance with environmental laws or regulations in FY22
  • No consumer recalls of product for safety reasons and no legal or regulatory non-compliances related to FSQ in FY22
  • No health and safety prosecutions in connection with Fonterra’s operations since 2014

Climate Goals & Targets

Long-term Goals:
  • Net zero GHG emissions future for dairy nutrition
Medium-term Goals:
  • 30% reduction in absolute Scope 1 & 2 GHG emissions by 2030 (from FY18 baseline)
  • Transition the nine sites that still use coal to renewable energy by 2037, with the majority transitioned by 2030
  • At least 80% of manufacturing sites treating wastewater to leading standards by 2030
Short-term Goals:
  • Reduce water consumption by 15% by 2030 (from 2018 baseline)
  • Achieve 100% Farm Environment Plans on NZ farms by 2025
  • Achieve greater than 95% recycle-ready packaging by the end of 2025

Environmental Challenges

  • Total recordable injury rate increased
  • EBIT from New Zealand value-add business did not meet original timeline
  • Global context of widespread inflation, supply chain disruptions, geopolitical and economic challenges in Sri Lanka, and the war in Ukraine
Mitigation Strategies
  • Focus on improving total recordable injury rate and EBIT in the next 12 months
  • Investing in safety improvements and risk assessment tools
  • Implementing a new integrated Global Audit Assurance programme

Supply Chain Management

Supplier Audits: Regular assessments of farms and third-party manufacturers

Responsible Procurement
  • Fonterra Supplier Sustainability Code of Practice
  • RSPO certification for palm oil

Climate-Related Risks & Opportunities

Physical Risks
  • Increased variability in weather patterns
Transition Risks
  • Regulatory changes
Opportunities
  • Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards: Core option

Third-party Assurance: Bureau Veritas

UN Sustainable Development Goals

  • Goal 1
  • Goal 2
  • Goal 3
  • Goal 5
  • Goal 6
  • Goal 8
  • Goal 12
  • Goal 13
  • Goal 14
  • Goal 15

Initiatives contribute to these goals through various programs and practices

Sustainable Products & Innovation

  • Anchor Probiotic+ yoghurts
  • Anchor Family Pro+
  • Anchor Life™