Fonterra has set a target for its farmer suppliers to cut greenhouse gas emissions by 30 per cent by 2030.
The giant New Zealand dairy co-operative says 86pc of its emissions come from on farm.
The new target was announced alongside the co-op's release of a climate roadmap and voluntary climate-related disclosure report.
It seeks to reduce emissions intensity by tonne of fat and protein corrected milk collected by Fonterra from a 2018 baseline.
The move comes as more companies target so-called Scope 3 emissions.
The GHG Protocol Corporate Standard classifies a company's GHG emissions into three 'scopes'.
Scope 1 emissions are those generated within the business, while Scope 2 emissions are those associated with the energy used.
Scope 3 emissions are those within the company's supply chain.
One of Fonterra's largest customers Nestlé welcomed Fonterra's announcement, saying it supported its plans to reduce its greenhouse gas emissions.
Nestlé New Zealand CEO Jennifer Chappell said the move sent a positive signal to NZ's dairy industry.
As a major buyer of New Zealand dairy ingredients, Nestlé continued to work with processors such as Fonterra to support farmers in adopting regenerative agriculture practices that helped reduce emissions.
Emissions reduction target to hit each farm differently
The move will put further pressure on Fonterra's suppliers at a time when they are struggling with lower farmgate milk prices.
Fonterra chairman Peter McBride said the co-op had "deep empathy" for its farmers and the challenges they were already facing.
"The co-op's approach will be to work alongside farmers, not against them, as we collectively make progress towards our target, including investing in methane reduction technologies," he said.
The overall on-farm emissions reduction target would affect each farm differently.
"There is significant variation within and across farming systems when it comes to emissions intensity," he said.
Fonterra chief executive officer Miles Hurrell pointed to the pressure from the co-op's customers in prompting the move.
"As a dairy partner to many of the world's leading food companies, we're responding to growing sustainability ambitions from our customers and financial institutions, along with increasing market access, legal and reporting obligations," he said.
"There is a lot of activity to reduce emissions across other markets, and the co-op needs to keep making progress to make sure it doesn't fall behind."
Fonterra expects this new target will be achieved through a number of ways:
- 7pc reduction through farming best practice such as feed quality and improving herd performance.
- 7pc reduction through novel technologies being developed through AgriZeroNZ,
- 8pc reduction through carbon removals from existing and new vegetation.
- 8pc from historical land-use change conversions to dairy.
Climate-related disclosure report released
Fonterra also voluntarily released its first climate-related disclosure report.
This report identifies risks and opportunities related to climate.
New Zealand is the first country in the world to pass a law introducing mandatory climate-related risk reporting, with it becoming mandatory next year for about 200 New Zealand companies, including Fonterra.
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Carlene Dowie
Carlene Dowie is the editor of the Australian Dairyfarmer magazine and has more than 30 years' experience as a rural journalist.
Carlene Dowie is the editor of the Australian Dairyfarmer magazine and has more than 30 years' experience as a rural journalist.
