Dairy co-op Fonterra has released Sustainable Finance Framework, which aims to align its funding strategy with its sustainability ambitions.
The New Zealand co-op has been working with Joint Sustainability Co-ordinators HSBC and Westpac NZ to develop the framework, which has been independently verified by ISS Corporate Solutions to confirm alignment with globally agreed sustainable finance principles.
“This new framework is a step on our sustainable financing journey – aligning with our co-operative’s broader sustainability ambitions,” said Simon Till, Fonterra’s director of capital markets.
“Over the next decade we intend to significantly increase our investment in sustainability-related activities and assets throughout our supply chain to both mitigate environmental risks and continue to differentiate our New Zealand milk. By FY30 we intend to invest around NZ$1bn in reducing carbon emissions and improving water efficiency and treatment at our manufacturing sites. In doing so, we will be taking significant steps towards our aspiration to be Net Zero by 2050 and we plan to align our funding with this approach.”
The framework outlines how the co-operative intends to issue and manage any sustainable debt, including via green bonds and sustainability-linked bonds and loans.
Chief operating officer Fraser Whineray said the co-op is making progress towards its sustainability targets.
“In our sixth year of independently assured reporting, we are pleased with progress. Fonterra’s GHG emissions (Scope 1&2) are 11.2% lower than FY18 and well on their way to our goal of 30% by 2030. With our supplier owners, we are ahead of target for delivery of Farm Environment Plans (FEP), with 71% of farmers now having plans, against a target of 67% for FY22 and on track for 100% by 2025.”
Other initiatives to promote sustainability undertaken by the dairy giant include a joint venture with the New Zealand government, as part of the new Centre for Climate Action on Agricultural Emissions. Last year the co-op also changed the way farmers are paid for their milk through the introduction of a new milk payment parameter covering milk quality and an on-farm demonstration of care for the environment, animals, people and community.
