Fonterra has taken a significant step towards achieving its climate ambitions by announcing an on-farm emissions reduction target and releasing a Climate Roadmap and voluntary Climate-related Disclosure report.
The Co-operative is targeting a 30 percent intensity reduction in on-farm emissions by 2030 (from a 2018 baseline), which will see it further reduce the emissions profile of its products.
Eighty-six percent of Fonterra's emissions come from on-farm, and the new target is to reduce emissions intensity by a tonne of FPCM (fat and protein corrected milk) collected by Fonterra.
In announcing the Co-operative's Annual Meeting, Fonterra CEO Miles Hurrell said New Zealand farmers are some of the most emissions-efficient dairy suppliers at scale, and 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 ensure it doesn't fall behind," said Hurrell.
"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 and increasing market access, legal and reporting obligations."
Fonterra's collective efforts to reduce emissions, from on the farm, across its operations and by its research and development teams, will help future-proof Fonterra, supporting its 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 announcement demonstrates 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 in several ways:
- Seven percent reduction through farming best practices such as feed quality and improving herd performance
- Seven percent reduction through novel technologies that we're developing through AgriZeroNZ, the joint venture between agribusiness and Government working to find a solution to methane, and other partnerships
- Eight percent reduction through carbon removals from existing and new vegetation
- Eight percent of historical land-use change conversions to dairy.
Fonterra Chairman Peter McBride said the Co-op's overall on-farm emissions reduction target would affect each farm differently.
"There is significant variation within and across farming systems regarding emissions intensity. 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 combining best farming practices and technology to reduce emissions – our biggest opportunity and challenge," said McBride.
Peter McBride
"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 progress towards our target, including investing in methane reduction technologies."
Fonterra said the target comes after a year of discussions with farmers about why it is needed and how the Co-op will work with them to achieve it. It says the methodology will continue to evolve alongside the science that supports the changes.
Fonterra also launched its Climate Roadmap. The roadmap is a plan that outlines the actions the Co-op 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 and protect its reputation as being one of the most emissions-efficient dairy suppliers at scale.
In addition to this, the Co-operative has voluntarily released its first Climate-related Disclosure report. This report identifies risks and opportunities related to climate and helps the co-operative plan for the future.
New Zealand is the first country to pass a law introducing mandatory climate-related risk reporting. It will become mandatory next year for around 200 New Zealand companies, including Fonterra.
Hurrell said he was proud of the steps the Co-op is taking to address the challenges it faces regarding climate.
"Today's announcements are not just important for Fonterra. 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," concluded Hurrell.
