Fonterra has released a new ‘sustainable finance framework’ that aims to align the company’s funding strategy with its environmental ambitions.

The framework has been developed with joint sustainability coordinators, HSBC and Westpac NZ, and has been independently verified to confirm its alignment with globally agreed sustainable finance principles.

The document outlines how the cooperative intends to issue and manage any sustainable debt, such as green bonds and sustainability linked bonds and loans.

Simon Till, director of capital markets at Fonterra, said: “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 NZD 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 cooperative says that it is making solid progress on its sustainability targets. “Fonterra’s greenhouse gas emissions are 11.2% lower than FY18 and well on their way to our goal of 30% by 2030,” said Fonterra COO, Fraser Whineray. “With our supplier owners, we are ahead of target for delivery of farm environment plans (FEPs), with 71% of farmers now having plans, on track for 100% by 2025.” 

Fonterra is also working with partners and stakeholders to reduce biological emissions, and the company, along with other agribusiness players, recently entered into a joint venture with the New Zealand government to take action on agricultural emissions.

As part of the understanding, industry partners have made an indicative commitment of up to NZD 35 million. This could result in NZD 172 million being invested over the next four years to develop practical tools and technologies for farmers.

“Over the next four years, we’re looking to scale up investment in methane reduction of around NZD 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,” added Whineray.