Fonterra Rolls Out New Sustainable Finance Framework
Fonterra has announced its Sustainable Finance Framework as part of its commitment to sustainability and the implementation of its strategy.
The Framework shows how Fonterra plans to issue and manage Green Bonds, Sustainability-Linked Bonds and Loans, and any other kind of sustainable debt. It was made with the help of HSBC and Westpac NZ, and ISS Corporate Solutions checked it to make sure it follows the rules for sustainable finance that people all over the world have agreed on.
Simon Till, Fonterra Director Capital Markets, said:
"This new Framework is a step on our sustainable financing journey. Over the next 10 years, we plan to put a lot more money into sustainability-related activities and assets all along our supply chain. This will help reduce environmental risks and keep New Zealand milk standing out.
"By FY30, we intend to invest around NZ$1 billion 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, the ISS Corporate Solutions opinion, and a presentation to update debt investors are available on the company's website. This news comes after a strong annual report on sustainability performance in September 2022.
Fonterra Chief Operating Officer, Fraser Whineray, said:
"In our sixth year of independently assured reporting, we are pleased with the 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 the 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.”
This year, almost twice as many farmers as last year achieved the Co-operative Difference, and more than 70% of farmers achieved it at some level. From the 2021/22 season on, farms could get up to 10 cents per kg of milk solids from The Co-operative Difference if they met certain criteria. These criteria included the quality of the milk and how the farm cared for the environment, animals, people, and community.
The Co-operative is also working with partners and other interested parties on a wide range of possible solutions to help reduce biological emissions. As part of the new Centre for Climate Action on Agricultural Emissions, Fonterra and other leaders in the agricultural business have joined forces with the government.
Under the MOU, business partners have already said that they are willing to spend up to $35 million. This could mean that over the next four years, about $172 million will be spent to create and sell useful tools and technologies for farmers.
“Over the next four years, we’re looking to scale up investment in methane reduction of around $50 million through this Joint Venture.
“We know we can, with the government, achieve more by partnering with others and are looking forward to working together to find solutions that will benefit our farmer-owners, along with the rest of New Zealand,” says Whineray.
People are the most important part of our co-op. Whether it's on the farm, at one of our sites, or with our customers, everyone can do something to improve health and food security. We want to help everyone in the Co-op reach their fullest potential.
New Zealand workers have spent more than 500,000 hours improving their skills, which is about 45 hours per learner on average. More than 1,000 employees have taken part in the Leadership Essentials Programme, which trains and develops frontline leaders now and in the future.
The number of women in top positions around the world has gone from 32.4% to 34.8% in FY22, which is a good sign. At the start of Fonterra's new financial year, two more women were given important positions on the Fonterra Management Team.
Komal Mistry-Mehta was named Chief Innovation and Brand Officer, and Emma Parsons was given the role of Managing Director of Strategy and Optimisation. This year we have set a new goal of 40:40:20 (40% female, 40% male, 20% any gender) which sends a positive signal on direction. The 20% provides the flexibility of female, male, or non-binary gender.
Source: Fonterra
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