Sustainable procurement

• We are proud of the strong relationships we have with the people and organisations that supply us with valuable products and services to help us achieve our strategic goals. Our Supplier Sustainability Code of Practice sets out our expectations for suppliers to align with our values and policies, including our commitments to social and environmental responsibility.

• We are committed to upholding human rights, fair working conditions and to respecting and protecting the environment in which we live and work.
  
  
• We are committed to working collaboratively with our suppliers to help improve their sustainability practices and support them to meet our expectations.
  
  

• Protection of forests and other natural ecosystems is critical for maintaining biodiversity, mitigating, and adapting to the impacts of climate change, and sustaining livelihoods.
  
  
• Fonterra is committed to the elimination of deforestation and the conversion of all other natural ecosystems as they apply to our operations and supply chains.

• We commit to no deforestation across our primary deforestation-linked commodities, with a target date of no later than 31 December 2025. While we have not achieved full compliance with our 31 December 2025 target, we have made substantial progress since implementation in FY24. Progress toward our no deforestation target is supported by processes which identify and manage risk in relation to the primary deforestation-linked commodities that we directly procure. We are continuing these processes as we work toward achieving the target. 
  
  
• We expect suppliers to take steps to prevent deforestation and conversion of natural ecosystems in their own operations and supply chains. This includes implementing action plans towards no deforestation and providing us with reliable procurement information which includes transparency and traceability of commodities to the point of harvest.
  
  
• We have been a member of the Roundtable on Sustainable Palm Oil since 2009, and our manufacturing sites in New Zealand that manufacture products using palm oil are RSPO supply chain certified.  

• Climate change is one of the biggest challenges facing the planet. Further, we believe that all businesses have a responsibility to be part of the solution and take action because our future depends on it. Fonterra's Sustainability Roadmap details Fonterra's near-term climate targets. Our near-term targets have been validated by the Science Based Target Initiative (SBTi), which means they’re aligned to limiting global warming to 1.5˚C. 

• We are committed that 78.2% of our suppliers and customers by emissions, covering purchased goods and services, capital goods, upstream and downstream transportation and distribution, business travel and processing of sold products will have science-based targets by FY28. 

Fonterra completed the sale of its consumer and associated businesses to Lactalis on 31 March 2026. The scale of the divestment requires us to re-assess our near-term emissions targets for our post-divestment business, which we are in the process of doing. In the meantime, our existing targets remain in place.

• This engagement target relates to energy and industrial emissions outside our direct control, but within our indirect value chain (upstream and downstream). To try and accelerate progress towards our target, we have launched a project that incorporates science-based target questions in our Third-Party Risk Management questionnaire to suppliers. We also assess supplier progress through desktop research and direct engagement, helping us understand their science-based target status and supporting conversations on target setting.

• We are focused on building and maintaining an effective human rights and environmental due diligence programme that helps us proactively manage risks such as modern slavery in line with global best practice. 

• Preventing and addressing modern slavery risk is part of an ongoing journey. As such, we are committed to developing and enhancing our approach to modern slavery, human rights and environmental due diligence. This includes seeking to identify, prevent, mitigate, remedy and minimise actual or potential human rights or environmental impacts across our chain of activities.