How sustainability is shaping our future

Work towards our ambition to be net zero by 2050 is underway. FY25 saw us continue our long-standing focus on sustainability – encompassing climate change, water stewardship, animal wellbeing and long-term value creation – while progressing our energy transition through reduced fossil fuel use and investment in renewables.

Farmer support

Our farmers are at the heart of our sustainability story. That’s why we are supporting them with tools, insights and funding to help reduce emissions intensity and improve efficiency. The Farm Insights Report, now in its fifth year, gives farmers a personalised snapshot of their performance, drawing on milk quality, production data and industry benchmarks to guide smarter decisions.

Fonterra’s Farm Source team continue to provide hands-on support, helping farmers navigate everything from herd health and compliance to environmental planning. Every Fonterra New Zealand farm now has a Farm Environment Plan in place, and uptake of Animal Wellbeing Plans continues to grow.

Our customers are also providing support for farmers. This year we announced an emissions incentive payment from Mars and Nestlé to the most emissions efficient farmers along with additional funding for tools and services to those who achieve the Co-operative Difference. Based on last year’s achievements, it’s estimated that around 90% of farmers will be eligible for some or all of these tools and services.

Energy transition 

Our transition away from fossil fuels is gaining pace across our manufacturing sites. In November 2024, we switched off the final coal boiler in the North Island, a major milestone in our energy journey. 

Earlier this year, we celebrated the opening of our first electrode boiler at our Edendale site and announced a $70 million investment in two more. These three boilers, co-funded through our partnership with EECA, are expected to reduce site greenhouse gas emissions by more than 100,000 tonnes of CO2e annually.

Meanwhile, Clandeboye recently completed one of our largest decarbonisation projects to date, converting two coal boilers to wood pellets. This shift is expected to cut emissions by approximately 150,000 tonnes of CO₂e each year and help build a reliable supply chain for renewable energy across New Zealand.

Other sites are also making progress. Waitoa installed two resistive element boilers to support increased UHT production, while Whareroa and Edgecumbe are preparing to transition away from natural gas with new electrode and resistive element boilers. 

Water stewardship

Protecting New Zealand’s natural resources is a long-term commitment, and FY25 saw us draw close to achieving our 2030 water target. At Edendale, we introduced a project to recover evaporator condensate, saving about 643,000m³ of fresh water annually. Te Rapa reduced water demand by 1.3 million m³ in FY25, due in part to some older processing systems ceasing operations. 

We also began commissioning Hautapu’s new $120 million wastewater treatment plant, which is expected to be fully operational by July 2026. The plant uses microorganisms to break down organic matter, reducing nitrogen and phosphorus levels. 

Together, these initiatives have helped us draw close to acheiving our goal of a 15% reduction in water take by 2030 (based on a FY18 baseline).

As we look ahead, sustainability will continue to be an important part of what we do. Every step we take to lower emissions across our value chain helps strengthen the sustainability story behind our NZMP™ ingredients. See our latest Climate Roadmap for the path that helps us towards our near-term emissions targets out to 2030 and our ambition to be net zero by 2050.