Despite environmental progress, report finds Fonterra still lacking in terms of gender, ethnic diversity

The dairy co-op's annual Sustainability Report has been released.
The dairy co-op's annual Sustainability Report has been released. Photo credit: Newshub.

Fonterra could do better in gender and ethnic diversity at its leadership level, but is improving in three key environmental metrics, according to a new report.

The co-op's annual Sustainability Report was released on Tuesday, providing an insight into how the company is tracking in terms of its goals of having healthy people, a healthy environment and a healthy business.

For the first time since the report was launched in 2017, the co-op improved all three of its core environmental metrics around greenhouse gas emissions, water use and solid waste to landfill.

Earlier this year, Fonterra posted a profit of $659 million to the end of July, a significant turnaround after its $605 million loss for the previous financial year. The recovery came on the back of restructuring, and improved sales and margins.

As well as showing the company had lifted its financial performance, the report gave an indication of how the co-op was tracking with its goal of being net-zero in terms of carbon emissions by 2050.

According to the report, the co-op is the first dairy company in New Zealand to have its emissions targets endorsed by the UN-backed Science Based Target initiative. That means the company's 2030 target of a 30 percent reduction in Scope 1 and 2 greenhouse gas emissions - the emissions it directly creates and those from the energy it uses - have been approved as being in line with what the latest climate science say is needed to limit global warming to below 2C.

"Our farmer-owners have a carbon footprint of about one-third of the world average, and we're continuing to support them to adapt to change," said Fonterra's chief executive Miles Hurrell. 

"Setting science-based targets is important and so is the concrete action we're taking today – like providing farmers with farm-specific emissions profiles, which will help them identify opportunities for improvements, and switching our Te Awamutu site to wood pellets, which will reduce our coal use by almost 10 percent."

Although the report found areas of improvement, particularly around environmental issues, it also highlighted where the company was falling short.

One of those areas was gender and ethnic diversity at its leadership level. The co-op has a goal of having 50 percent female representation in senior leadership positions by 2022, but in 2020 it remained at just 29 percent, the same as it was in 2018.

Ethnic senior representation in leadership roles was just 8 percent, down from 9 percent last year.

The report also found the company needed to do more if it wanted to achieve its 2025 goal of having 100 percent reusable, recyclable or compostable packaging.