November 16, 2023
Fonterra announces climate plans for future
Fonterra has taken a significant step towards achieving its climate ambitions on November 9 with the announcement of an on-farm emissions reduction target and release of a Climate Roadmap and voluntary Climate-related Disclosure report.
The cooperative is targeting a 30% intensity reduction in on-farm emissions by 2030 (from a 2018 baseline) which will see it further reduce the emissions profile of its products.
86% of Fonterra's emissions come from on-farm, and the new target is seeking to reduce emissions intensity by tonne of fat and protein corrected milk (FPCM) collected by Fonterra.
In making the announcement at the cooperative's annual meeting, Fonterra chief executive officer Miles Hurrell said New Zealand farmers are some of the most emissions-efficient suppliers of dairy at scale, but work needs to continue to maintain this position.
"There is a lot of activity to reduce emissions across other markets, and the Co-op needs to keep making progress to make sure it doesn't fall behind," Hurrell said. "As a dairy partner to many of the world's leading food companies, we're responding to growing sustainability ambitions from our customers and financial institutions, along with increasing market access, legal and reporting obligations.
"Our collective efforts to reduce emissions – from on farm, across our operations and by our R&D teams – will help future proof Fonterra, supporting our ambition to be a long-term sustainable Co-op for generations to come.
"At the other end of the supply chain, as a large part of our customers' Scope 3 emissions, today's (November 9) announcement further demonstrates to them that we are committed to being their sustainable dairy partner of choice both now, and into the future."
Fonterra expects this new target will be achieved through a number of ways:
- 7% reduction through farming best practice such as feed quality and improving herd performance;
- 7% reduction through novel technologies that Fonterra is developing through AgriZeroNZ, the joint venture between agribusinesses and the New Zealand government working to find a solution to methane, and other partnerships;
- 8% reduction through carbon removals from existing and new vegetation;
- 8% from historical land-use change conversions to dairy.
Fonterra chairman Peter McBride said that the cooperative's overall on-farm emissions reduction target would affect each farm differently.
"There is significant variation within and across farming systems when it comes to emissions intensity," McBride said. "We are confident that we can make solid progress towards our target by working together and sharing information farmer-to-farmer.
"There's no one solution to reducing on-farm emissions. It will require a combination of sharing best farming practices and technology to reduce emissions – it's both our biggest opportunity and our biggest challenge.
"We have deep empathy for the challenges our farmers are already dealing with. The Co-op's approach will be to work alongside farmers, not against them, as we collectively make progress towards our target, including investing in methane reduction technologies."
Fonterra said the target comes after close to a year of discussions with farmers about why it is needed and how the cooperative will work with them to achieve it. It added that the methodology will continue to evolve alongside science that supports the changes.
Fonterra also launched its Climate Roadmap. The roadmap is a plan that outlines the actions the cooperative will take towards its 2030 targets and ambition to be net zero by 2050.
Earlier this year, Fonterra lifted its emissions reduction targets for its manufacturing and operations. This new target completes the package.
Hurrell said having a full suite of targets and a plan to achieve them will provide high-value customers with the confidence to continue buying dairy from Fonterra, as well as protect its reputation as being one of the most emissions-efficient suppliers of dairy at scale.
In addition to this, the cooperative has voluntarily released its first Climate-related Disclosure report. This report identifies risks and opportunities related to climate and helps Fonterra plan for the future.
New Zealand is the first country in the world to pass a law introducing mandatory climate-related risk reporting, with it becoming mandatory next year for around 200 New Zealand companies, including Fonterra.
Hurrell said he's proud of the steps the cooperative is taking to address the challenges it faces when it comes to climate.
"Today's announcements are not just important for Fonterra," he said "They will also help the country achieve its 2030 targets set under the Zero Carbon Act. We know we play a significant part in New Zealand's emissions profile, and it's up to all of us to work towards helping New Zealand achieve its climate targets."