New Zealand dairy co-operative and processor Fonterra will invest NZ$1 billion (€582 million at the current exchange rate) by 2030 to reduce its emissions and improve water efficiency.
The business said that its new Sustainable Finance Framework will align its funding strategy with its sustainability ambitions and reflects “the evolving preferences of lenders and debt investors in this area”.
The framework outlines how the co-operative intends to issue and manage any sustainable debt, which could include green bonds and sustainability-linked bonds and loans.
Simon Till, Fonterra’s director of capital markets, said: “This new framework is a step on our sustainable financing journey, aligning with our co-operative’s broader sustainability ambitions.
“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,” Till added.
Fonterra intends to invest $1 billion by financial year 2030 in reducing carbon emissions and improving water efficiency and treatment at its manufacturing sites.
“In doing so, we will be taking significant steps towards our aspiration to be net zero by 2030 and we plan to align our funding with this approach,” Till commented.
Fonterra chief operating officer Fraser Whineray said that the co-operative is “making solid progress” towards its sustainability targets.
“Fonterra’s GHG [greenhouse gas] emissions are 11.2% lower than financial year 2018 and well on their way to our goal of 30% by 2030. With our supplier owners, we are ahead of target for delivery of farm environment plans (FEP), with 71% of farmers now having plans, against a target of 67% for financial year 2022 and on track for 100% by 2025,” Whineray remarked.
The co-op is also working with other stakeholders on a wide-range of potential solutions to help reduce biological emissions, including methane.
Fonterra and other players in the New Zealand agriculture sector recently entered into a joint venture with the government there as part of a new Centre for Climate Action on Agricultural Emissions.
“Over the next four years we’re looking to scale-up an investment in methane reduction of around €50 million through this joint venture,” Whineray said.
