Dairy industry leader Fonterra has reported an 11 per cent reduction in greenhouse gas emissions from coal in the 2021 financial year, mainly due to an energy conversion at a single manufacturing site.
Chief operating officer Fraser Whineray said the reduction was achieved primarily through the switch from coal to renewable wood pellets at Fonterra's Te Awamutu site in Waikato, and was a great step towards delivering the big cooperative's 2030 target, and goal of getting out of coal by 2037.
It was a major contributor to a global reduction of 6.5 per cent in scope one and two GHG emissions, said Whineray in a snapshot of sustainability progress ahead of the publication of Fonterra's fifth full sustainability report next week, along with FY21 annual results.
The conversion project won the low carbon future category at the NZ Energy Excellence Awards.
However, New Zealand's on-farm GHG footprint rose slightly partly due to the increased proportion of palm kernel extract in supplementary feed.
"Having committed to get out of coal by 2037 from the nine remaining sites, Te Awamutu provided material GHG reductions and further confidence to undertake our next project at our Stirling cheese site in the South Island. Stirling will become our first 100 per cent renewable thermal energy site," said Whineray.
"We are already one of the most carbon efficient producers of dairy nutrition in the world, and there is more to be done.
"It is important we continue to make progress in our operations to complement the significant innovation and change by our farmer-owners. One of the ways we're supporting their on-farm activity is through The Co-operative Difference."
Whineray said this programme's payment for milk came into effect this season.
In addition to valuing milk quality, it rewards farmers for on-farm demonstration of care for the environment, animals, people and community.
For the 2020-2021 season there was a 25 per cent increase in farms achieving the top point and the mid-point, with around a third of farmer-owners recognised in the overall programme.
Whineray said 53 per cent of farmers in New Zealand also have tailored farm environment plans, up from 34 per cent last year.
"We are on track to meet our target of 100 per cent by 2025 and these are provided free of charge to all Fonterra farmers."
On people goals, there had been an improvement towards meeting diversity targets but there was room for improvement when it comes to women and ethnic minorities in senior leadership positions, he said.
"Our gender pay gap has narrowed across all job categories. In New Zealand, the co-op is now down to 3.8 per cent on a median basis, compared to the national average of 9.5 per cent.
"We have also recently extended our parental leave in New Zealand so employees will now have their government parental leave cover topped up to 100 per cent of base salary or wages for 26 weeks."
Employee engagement had increased with more teams in the top quartile and the cooperative was just shy of being in the top quartile overall, he said.
In other areas, Fonterra was a finalist in this year's Sustainable Network Awards, for a project at Maungaturoto where, for the first time, it was using a natural wetland process to help recycle water for reuse at the site.
Of packaging on products sold in Australia, 94 per cent was now made from recycle-ready materials.
The company had continued to invest in R&D to find on-farm methane mitigation solutions, including a seaweed trial, the Kowbucha™ project and our partnership with DSM which look to limit methane production from cows.
Since the Living Water partnership with the Department of Conservation began, Fonterra had carried out 36 trials for tools and solutions, with nine of these being further developed for wider use.
It had delivered 48 per cent of the 128 partnership actions in the first three years of its sustainable catchments programme.
On the people sustainability front, 13 new apprentices joined in January as part of a commitment to recruit an extra 44 apprentices by the end of 2022.
In the past year, New Zealand employees increased their on-the-job training and reskilling hours by 28.1 per cent, well on the way to doubling by 2025 in support of the Aotearoa New Zealand Skill Pledge.
More than 180,000 breakfasts a week had been delivered through The KickStart Breakfast programme, a partnership with Sanitarium and the Government to provide milk and Weet-Bix, now in 1300 schools.
Eighty-four per cent of Fonterra's everyday and advanced nutrition products now met its independently endorsed nutrition guidelines.