Fonterra Sustainability Report shows slow progress towards targets

‘We don’t shy away from the fact that we need to do more against some of our ambitious targets’

NZ dairy giant Fonterra published its latest Sustainability Report, which highlights some of its achievements against the targets set by the board.

Fonterra created a Sustainability Advisory Panel in 2018 to provide feedback to the board on the strategy and targets relating to economic, social and environmental sustainability.

Last year was a difficult one for the co-op. The farmer-owned business, which employs 20,685 people, made a NZ$605m (£303m) net loss after tax in 2019, compared with $196m (£98m) in 2018.

Farmgate milk price paid to farmers was $6.35 (£3.18) in 2019, a decrease from $6.69 (£3.35) in the year 2018.

This is Fonterra’s third annual Sustainability Report, but the first to feature three overarching goals: healthy people, healthy environment and healthy business.

Key achievements in 2019 include health star ratings on 92% of applicable products in New Zealand, reducing injury rate to what it describes as a ‘world class level’, ensuring that 23% of its farms in New Zealand have a Farm Environment Planand launching a site in Brightwater which burns wood biomass to reduce emissions. The co-op has launched a goal to have farm emission profiles for every farm by October 2020.

Fonterra widened its gender pay ratio in 2019 by 1%, although it said this remained above the national average.

CEO Miles Hurrell said there was still a lot of work ahead. “Our 2019 Sustainability Report is an important step towards sustainability being at the heart of our business,” he said.

“Given the tough year we had, it would’ve been easy to push sustainability to one side, whereas we have in fact continued to make progress. We’ve underlined our commitment to the importance of sustainability and firmed up plans to do more on climate change, coal, waste and sustainable packaging.

“The report is a discussion with New Zealanders around the kind of world we want to leave for future generations and how we’re measuring ourselves against that ambition.

“I’m focused on being a part of a New Zealand dairy co-op that’s producing nutrition in a way that cares for people, animals and our environment, and brings value to our communities.”

Global sustainability director Carolyn Mortland also said: “Establishing our inaugural Sustainability Advisory Panel is a critical move to helping guide us as we continue to strive to be a world leader in sustainably-produced dairy nutrition.”

She added: “But there’s still a lot more work to do, such as supporting our farmers in their response to climate change and doing more to bring greater gender and ethnic diversity into our business. We don’t shy away from the fact that we need to do more against some of our ambitious targets,” Ms Mortland added.

“What is clear is that we made some good progress in a tough year and have set ourselves up for the years ahead.”