Meet the Partner: Fonterra - Pathways to Dairy Net Zero

Fonterra’s Sustainability Journey

Excited about what Fonterra has done and continues to do within the dairy sector, we sat down with Simon Tucker — director of global sustainability, stakeholder affairs and trade at Fonterra — to learn more about the organization’s dairy sustainability journey.

Q: Tell us more about your organization. Who are you, and what do you do?

A: Fonterra is a dairy cooperative based in New Zealand, owned by about 8,500 dairy farming families here in New Zealand. We manufacture a range of dairy products, and we sell them pretty much to every corner of the world. We do business in about 120 markets around the world.

Q: What’s a fun fact about Fonterra that most people don’t know?

A: Fonterra and its legacy companies recently celebrated 150 years of cooperative dairy in New Zealand, which is quite a long intergenerational history that we have.

Q: What does sustainability mean to Fonterra?

A: I think for Fonterra, sustainability is really around how we can create long-term resilience for the co-op, for New Zealand [and] for the world. In the long term, we are an intergenerational business, so we do have [the] generations to come [in mind]. So we’re particularly focused on some of the environmental sustainability issues — climate change, water and nature, animal well-being — and creating sustainable value for our farmers, for our stakeholders, for our customers, and for those we do business with.

Q: When did Fonterra start pursuing sustainability, and why?

A: I think it’s always been a priority. I think like most larger companies, we’ve been on a journey with sustainability. We farm on pasture, so our animals live outside and eat grass, and we’ve always had quite a nature-oriented production system here. Going back 20 years, we focused on ensuring our impact on water quality, and water use efficiency was improving. And from there, as the world has focused more and more on climate change, we’ve really looked at our carbon footprint and where we are today and how we can improve our carbon footprint over time. I think that’s been really ramping up over the past decade or so.

We’ve also always been proud of our world-class animal welfare. But as in most things in sustainability, it’s a continual journey of improvement, making sure we’re keeping pace with what science can deliver, what our customers and shareholders expect, and what’s happening in the broader country and the broader world.

Q: Is that why Fonterra partnered with Pathways to Dairy Net Zero?

A: Well, I think there [are] a couple of things that dairy companies around the world recognize. One is that consumers, our customers, are very focused on reducing their emissions, whether it be in their value chains or in their daily lives. And so providing low-carbon dairy is a really important thing that the dairy industry needs to do to make sure that we’re playing our part to reduce global warming and make sure we hit those Paris targets.

Dairy is such a wonderful source of nutrition for humanity. [So] I think the second thing here is [how] we need to make sure that, as [global] nutrition needs continue to increase, the dairy industry is ready with [the] low-carbon, fantastic superfood that dairy is to help feed that population. I think Pathways to Dairy Net Zero is a great way in which companies can share best practice, work together, compare and contrast, and really have a sort of global dairy industry view on how we’re going to play our part in solving the challenges of climate change.

Q: What sustainability progress has Fonterra made to date?

A: We have recently restated our scope 1 and 2 target — to reduce our scope 1 and 2 emissions by 50% by 2030 en route to a net zero outcome in 2050. We’ve been really focused on getting fossil fuels out of our manufacturing and transportation process. So we’re busy shifting use of coal into wood biomass and electricity where possible. And in our manufacturing, we’re also experimenting with battery-powered milk tankers to transport our milk. So across all of our manufacturing and supply chain, we’re really looking at how we can drive decarbonization.

We’ve been making really good progress on-farm and recently Fonterra announced a target of a 30% intensity reduction in on-farm emissions by 2030 from a 2018 baseline. Our farmers continue to improve their efficiency, so the emissions intensity of our dairy is dropping, which is important. It’s already among the lowest-carbon dairy in the world, and our objective is to make sure we accelerate that and continue to make progress in lowering that carbon footprint as we aspire to be net zero by 2050.

Q: What are the next challenges Fonterra is looking to overcome with sustainable solutions?

A: Probably the biggest challenge we face is finding ways to reduce the emissions from cows themselves, particularly methane emissions. This is one of the global imperatives for the dairy industry: How can we reduce the methane emissions from our animals? Without getting too biological about it, it’s the methane burps that cows make as part of their digestive process. We’ve got to find ways to reduce that methane. We’re putting a lot of money, in partnership with others, into the science to try to develop tools and techniques for reducing methane. I’m confident we’ll get there, but that is certainly the biggest challenge, I think, in the global industry.

[Beyond methane], I think the really exciting area is in the field of finding nature-based solutions that work in terms of being part of the solution for reducing carbon but also addressing things like water preservation [and] biodiversity. And I think there’s some really exciting work underway as to how we can continue to make sure we’re farming very much in partnership with nature, and using all the tools that nature gives us to improve water quality, to make sure we’re protecting and enhancing biodiversity and really working toward that sort of nature positive [output]. That’s very much where we’re focused and that works nicely with the work around making sure we’re also addressing our carbon footprint.

Q: What would Fonterra say to dairy organizations that aren’t sure if they should sign the P2DNZ declaration?

A: I think it’s something that all dairy companies, wherever they are with their sustainability progress, should take really, really seriously. Customers and consumers are putting value on low-carbon dairy. Clearly, governments around the world are grappling with how we can seek to keep global warming, you know, below 1.5 degrees. So I don’t think this is something that is going to go away. In fact, it’s going to get more and more important.

I think the opportunity with Pathways to Dairy Net Zero is the sense of partnership and collaboration that it brings. Everyone’s path to net zero is slightly different, but by working together as a global dairy industry, we’ve got the best opportunity and I think there’s a lot of resources and help that can go with those companies that haven’t yet decided to sign up.

Join Fonterra in Partnering with P2DNZ

Ready to take the next step in your sustainability journey? Join Fonterra and hundreds of other organizations in partnering with P2DNZ as we continue working to create a more sustainable future for us all. Simply sign the Pathways to Dairy Net Zero Declaration and we’ll be in touch.