Wednesday, April 24, 2024

Fonterra defers revealing Scope 3 emissions goal 

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The target, once it is revealed, will be based around emissions intensity and efficiencies.
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Fonterra has delayed revealing its Scope 3 emissions target until the end of this year.

The co-operative made the announcement in its Sustainability Report when it released its annual results on September 21.

“We initially indicated that we would announce the target in the middle of 2023. However, timing is important, and we acknowledge that farmers have been under a lot of pressure … With this in mind, we decided to delay introducing a Scope 3 target by a few months. We now expect to announce our target before the end of the calendar year,” it said.

Fonterra director global sustainability, stakeholder affairs and trade Simon Tucker said there have been good conversations with farmers so far and the co-operative remains committed to announcing the target before the end of the year.

“This engagement took a little longer than we initially planned, but it was important we took this extra time. 

“Our customers are setting their own emissions reduction targets and wanting us to partner with them so they can achieve them. 

“The date we choose is important in terms of farmers having the time to understand what it means for them and for the co-op, so this will also be part of our thinking.”

Tucker said the target will not be built into criteria around Fonterra’s Co-operative Difference framework.

The target, once it is revealed, will be based around emissions intensity and efficiencies. It will be a long-term target out to 2030 from a 2018 baseline, in line with Fonterra’s Scope 1 and 2 targets, he said.

This means any on-farm change now, in the future, or since 2018, will contribute to the co-operative’s overall target.

Asked if the delay means a reputational risk, he said: “Right now, our products are lower carbon than competitors, however there is a lot of activity across other markets to reduce emissions to meet their targets. 

“While Fonterra’s reputation is not at risk today in delaying the target, we need to set the target in the near term to demonstrate our commitment to emissions reduction and maintain our lower carbon position.”

The report also updated Fonterra’s progress on its farm environment plan uptake, revealing that 85% now have these plans with the goal of getting to 100% in 2025.

Tucker said the majority of detail and actions are required to make these plans compliant with the criteria in the government’s Freshwater Farm Plan that started rolling out in Southland and Waikato in August.

“We are working on solutions that streamline the alignment of a Fonterra farm environmental plan to a freshwater farm environmental plan and talking to government and councils about this.

“We are also in discussions with the Ministry for the Environment and regional councils to ensure that certification of the plans is as efficient as possible and does not include a significant amount of re-work.”

Its sustainable dairy advisers (SDA) will also be helping farmers in those two regions on making any changes.

“We are working through what this looks like for our farmer shareholders, we have SDAs that have completed the national training to be registered as certifiers and piloting the process with farmers.”

Tucker said Fonterra’s Farm Insights Report – which gives farmers an estimated breakdown of their on-farm emissions – will remain separate from farm environment plans for now. 

“In the longer term we are looking to integrate resources and tools where this improves the farmer experience and creating more farmer-friendly, easy-to-access documentation of plans and insights is a priority.”

Looking ahead, Tucker said Fonterra has begun commissioning a new boiler at its Waitoa site and has begun converting its boiler to wood pellets at its Hautapu site.

“We are currently assessing biomass, electrification, and heat pump technology at our Clandeboye and Edendale sites.”

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