Sustainability Report 2019

Our 2019 Sustainability Report is a discussion around the kind of world we want to leave for future generations and how we’re measuring ourselves against that ambition.

Co-firing biomass to reduce coal, lifting the number of NZ products with Health Star ratings and launching an emissions profile for every farm headline our 2019 Sustainability Report.

While these and other gains are pleasing and have laid some good foundations for the future, there is still a lot of work ahead. This is our third report but the first to reflect our new triple bottom line goals of Healthy People, Healthy Environment and Healthy Business.

Our new strategy

A sustainable future for our Co-operative is core to our new strategy – it’s how we create long-term value for future generations.

Our new strategy integrates sustainability into our thinking and takes a triple-bottom-line approach to our Co-operative way of doing things.

FY19 was a tough year and required tough decisions. Despite this, we have continued to recognise the importance of sustainability.

How we're tracking

  • Healthy people

  • Healthy environment

  • Healthy business

Healthy people

We are working together to care for people and make a positive impact on society.

Our products help people eat balanced diets and we’re using our scale and know-how to respond to people’s changing needs, attitudes and lifestyles.

Caring for people is at the core of our Co-operative

We’re mindful of the impact our scale and reach can have on people’s diets, their livelihoods and society as a whole.

From providing safe and healthy nutrition, through the way we care for our farmers and employees throughout our value chain, to the way we support our local communities at homeand abroad.

Caring for farmers

We support farmers by providing sustainable incomes and standing shoulder-to-shoulder with them to support them through changes – offering tools, services, and help to run sustainable farming businesses.

Caring for employees

We care for our employees by focusing on their health, safety and wellbeing, respecting the strength their diversity brings, and giving them opportunities to develop and progress at work.

Caring for consumers

We provide consumers with safe and nutritious food – whether that’s through our own consumer products, or in partnership with our customers through the ingredients we provide. We support them and their families to have healthy, enjoyable, and sustainable diets now and into the future.

Caring for communities

We care for our communities through our everyday business activities – doing what’s right in the way we operate and providing employment and livelihoods. We also demonstrate this by investing resources and time into activities that make a difference for our local communities, including community and in-school nutrition programmes.

How Fonterra is making this happen

  • Address public health challenges by improving the nutritional profile of our products and promoting healthy diets.
  • Provide positive employment for our people by promoting a healthy and safe working environment and developing a diverse, skilled and agile workforce.
  • Improve the health of our communities by doing business in the right way, sharing what we do best and playing our part to build resilient, sustainable communities.


Key items from FY19

Health and safety

Injury rate for staff, contractors and visitors to our sites reduced to world-class level (4.9 per million hours worked)

Gender pay

Gender pay ratio (F/M)
New Zealand 0.97 / Australia 0.92 (mean)
New Zealand 0.95 / Australia 0.95 (median)

Healthier nutrition

We’ve rolled out Health Star Ratings on 92% of our applicable products in New Zealand

Leading food safety management

92% of our manufacturing sites are
independently certified to a leading food safety management system

Addressing family violence

Our support package for employees impacted by family violence is already making a difference

Sustainable procurement

98. 7% of our PKE purchases are traceable to mill and we are continuing to transition to certified supply of segregated palm oil products

Healthy environment

We are working together to achieve a healthy environment for farming and society.

By looking after land, water and animals, and using resources wisely, we are finding a path to regenerate the environment.

We need to protect, enhance and regenerate our environment to safeguard opportunities for future generations

A strong healthy environment supports healthy and enjoyable lives, and improves the resilience of the planet. It is also the foundation for sustainable, proftable dairy businesses.

Dairying is a big part of New Zealand and has been for almost 150 years. Farming families have made the most of being able to grow grass all year-round, producing delicious, fresh milk. Globally, food production systems are facing a transformational challenge to meet the demands of a growing population within environmental limits.

New Zealand farmers lead the world in many aspects of sustainable dairying, with high productivity, year-round pasture grazing and lower use of supplementary feeds. 

However, the scale of the industry in New Zealand means that our environmental footprint is of national signifcance.

To achieve positive environmental outcomes requires working together to deliver improvements at scale. Working collaboratively on our environmental challenges will help build social cohesion and accelerate progress on environmental outcomes.

The challenges faced are signifcant and the changes required will take time, but we want to play our part. We are working in our sites, with our farmers and with our communities to face those challenges and improve our environmental performance, so our farmers will be able to farm for generations to come. 

How Fonterra is making this happen?

  • Improve the health and biodiversity of our land and waters by having a regenerative mindset, reducing the impacts of farming and manufacturing and working in partnership with others
  • Lead the transition to a low-carbon future by investing in innovation and infrastructure to remove greenhouse gas (GHG) emissions from our supply chain
  • Meet the growing nutritional demand through improvements in productivity and minimising waste from farm to consumer.


Key items from FY19

Farm Environment Plans

23% of our farms in New Zealand have Farm Environment Plans tailored to their specific farm

Transitioning from coal

Our Brightwater site went live co-firing biomass and we trialed wood pellets  at Te Awamutu

New targets set

We have set new global targets  for recyclable packaging and solid waste to landfill

GHG emissions

Our global GHG emissions from manufacturing were reduced by 26,345 tCO2-e from FY18 but estimated global GHG emissions from farming were up 758,856 tCO2-e

Healthy business

We are working together to deliver a sustainable business. It’s all part of ensuring our Co-operative is here for generations to come.

As a co-operative, our business is about supporting our shareholder farmers’ businesses

That includes paying them the best price for their milk, providing them with a sustainable income, supporting the health of their businesses and the wellbeing of their families and employees.

The past few years have presented some challenges in our performance, which has led to us resetting our strategy and direction. This has refocused on our core role as a co-operative. 

For Fonterra and our farmer shareholders a healthy business means a strong, sustainable co-operative that creates goodness for current generations and for generations to come. That means Healthy People and a Healthy Environment too.  But we cannot make a difference to people and the environment if we don’t have a strong, healthy business to provide a sustainable income and provide a stable platform for investment in the future.

We believe we have some unique strengths as a large-scale New Zealand co-operative that means we can lead the way in sustainable dairy products making a positive difference to the health of people and the environment. Making the most of this opportunity is the key to the long-term health of our business.

How Fonterra is making this happen

  • Support healthy, sustainable livelihoods for our farmers by returning the most value from every drop of milk
  • Build a strong co-operative by ensuring our business, including investments, delivers long-term value
  • Meet the changing needs of customers and consumers by leveraging our unique strengths and innovating to create sustainable value for them and us.


Key items from FY19

Farmer payments

$10 billion paid to New Zealand farmers for 2018/19 season and $1 billion paid farmers for milk sourced in other countries

Return on capital

Our return on capital is 5.8%, down from 6.3% but we reduced capital spending by 30% to $600 million

Fixed milk price

We introduced our 8th financial tool for farmers. The fixed milk price tool helps farmers reduce some of the risk arising from global milk price volatility

Reduced electricity bills

Working with Genesis Energy in New Zealand we launched a new electricity plan which can save farmers up to 25% off their milk shed electricity bill

Sustainability Report 2019

A discussion around the kind of world we want to leave for future generations and how we’re measuring ourselves against that ambition.