December 13, 2017

Fonterra releases first Sustainability Report on environmental and social performance

Fonterra is proud to publish its first Sustainability Report, detailing its environmental, social and economic performance.

The Sustainability Report follows Fonterra’s recent announcements on emissions and clean water in New Zealand, and highlights the Co-operative’s commitment to an open discussion on how it is taking its responsibilities seriously and where it is making real progress. The report was compiled using the internationally recognised Global Reporting Initiative (GRI) framework and independently assured. This follows global best practice and underlines the integrity of the report.

The dairy industry is a cornerstone of the New Zealand economy but its environmental footprint is of national significance. The report gives an objective view of Fonterra’s environmental footprint and our contribution to the United Nations Sustainability Development Goals.

The report also considers Fonterra’s global operating context within the rapidly evolving food sector. The global food production system is transforming, driven by the challenges of a growing population and stretched environmental limits. Land degradation is affecting 20 percent of the planet’s arable land and by 2030, 40 percent of the world’s demand for water is unlikely to be met.

Fonterra’s Director of Sustainability, Carolyn Mortland, said the Co-operative shares the same long-term aspirations for the land and water as local communities and understands the evolving expectations of customers and consumers.

“The report offers a new level of openness. More and more customers and consumers want to know where their food is from, how it got to them and the impact all of that had on the environment,” Ms Mortland said.

 “Our continued success on the world stage is reliant on a clean, sustainable environment and continuous improvement in the production and transportation of our products. All that type of information is laid out in the report.”

“There is, and has been, a lot of work going on by our farmers and right across the industry looking at how to best manage the impacts of dairy.The level of research, investment and collaboration underlines the commitment and determination to find workable and scalable solutions to improve the world around us. That too is covered.”

The report also covers Fonterra’s progress in maximising the nutritional benefits of products by significantly reducing refined carbohydrates, sodium and sugar. This year, a new specialised milk product was launched in Malaysia to help combat high cholesterol and diabetes.

 

Highlights in the report include:

  • New Zealand has among the lowest greenhouse gas emissions per litre of milk collected in the world (0.85 per kgCO2/kgFPCM)
  • Fonterra’s global Food and Nutrition Guidelines were endorsed by the New Zealand Nutrition Foundation.
  • More than 140,000 Kiwi kids get a free 200ml serving of milk each school day. One university study published in 2017 showed significantly improved bone health in children who were part of the Milk for Schools programme compared to students who were not.
  • Fonterra’s sustainability report is split into four parts, reflecting the way the business operates. Some of the findings under each category are outlined below. 

 

Sustainable Dairying

We directly source milk from 7 countries around the world, but the milk from our New Zealand shareholder farmers accounts for the majority of our supply.

  • 95% of supplying farms in NZ are participating in nutrient management reporting and benchmarking.
  • 98.4% of waterways on supplying farms in NZ are fenced to keep cows out of waterways.
  • Collection of milk was suspended at 78 farms in the past season due to non-completion of fencing to keep stock from waterways.
  • Every supplying farm in New Zealand is independently assessed each year. This year 3.2% of farms were referred to a sustainable dairying advisor with major or critical non-compliances.
  • A new target of climate neutral growth for pre-farmgate emissions by 2030 has been set against a 2015 baseline. 

 

Sustainable Operations

Fonterra operates 51 sites in 11 countries. More than 95% of raw milk processing happens in New Zealand and Australia.

  • Since FY15, there has been a 5% reduction in manufacturing emissions
  • We aim to reduce manufacturing emissions by 30% by 2030 and achieve net zero manufacturing emissions by 2050.
  • Our water efficiency has declined 5.1% over the last 2 years and we have set a new target to reduce water use by 20% per cubic metre of milk at all NZ sites by 2020 (against a 2015 baseline)
  • To invest in wastewater treatment to bring all our manufacturing sites to leading industry standards.

 

Sustainable Consumption

An on-going focus is on continuing to improve the nutritional benefits of our products, minimising non-dairy ingredients such as added sugars and investing in innovation to deliver advanced nutritional products to address specific health needs.

  • This year we launched Anlene Heart-Plus in Malaysia to help combat high cholesterol and diabetes
  • More than 140,000 New Zealand school kids (5 – 11yos) get a free 200ml serving of lite milk every day through the Fonterra Milk for Schools programme, funded by our farmers
  • Around 125,000 breakfasts are served each school week in over 900 schools through the Kickstart Breakfast programme

Our People

Fonterra employs more than 22,000 people across the world with just over half of these in New Zealand.  For FY17:

  • The gender ratio was 73% male and 27% female.
  • Globally females earn more on average across the business. Our gender pay ratio is 1.09 (females earn more on average across the group than males) and in New Zealand it is 0.96.
  • Women fill 25% of positions on Board and Senior Management team
  • Workplace safety has a strong focus across the group, and the total injury rate is down 19 per cent on FY16 to 5.2 per million work hours.

 

Fact Box: Fonterra by the Numbers

  • Products are exported to over 100 countries
  • There are 200 million serves a day of Fonterra made dairy provided 
  • Employs 22,000 staff globally, more than 12,000 in New Zealand
  • 51 manufacturing sites in 11 countries

 

The full report can be found here www.fonterra.com/sustainabilityreport


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