Fonterra is a world-leading dairy producer and exporter that is behind much loved brands such as Anlene®, Anchor®, Perfect Italiano®, Tip Top® and more. It is not only a cornerstone of the New Zealand economy, owned by 10 500 farmer shareholders and contributing 25 % of the country’s exports, it is also a global company employing 22 000 people and operating in more than a hundred countries around the world.
Dairy consumption is expected to increase around the world, and thirst for milk is forecast to be particularly strong in emerging markets such as China, where dairy demand is projected to double in the next ten years. Maintaining environmental sustainability while satisfying growing global demand for dairy can be challenging.
ISOfocus sat down with Carolyn Mortland, Director, Social Responsibility, at Fonterra to find out more about how standards help Fonterra manage its business in a socially responsible way, including managing its environmental footprint, so that consumers worldwide can continue to enjoy the goodness of New Zealand milk.
ISOfocus: How do ISO standards ensure that Fonterra, one of the world’s largest dairy companies with operations in more than a hundred countries, maintains social responsibility and minimizes its environmental footprint by reducing greenhouse gas emissions in its operations?
Carolyn Mortland: Several years ago, Fonterra adopted ISO 26000, which has helped us further embed social responsibility into the cooperative’s business functions throughout the world. Developing sustainable food production systems that improve health and generate rural livelihoods while operating within environmental limits is critical to achieving the United Nations Sustainable Development Goals for a fairer, more prosperous world.
Almost half of the greenhouse gas emissions in New Zealand are due to agriculture. For this reason, Fonterra regularly undertakes life-cycle analyses of its carbon footprint, including on its main on-farm supply in New Zealand, in China and through Dairy Australia for Australia. This allows the cooperative to investigate trends and focus on areas for improvement. What’s more, milk processing facilities run on vast amounts of energy and Fonterra is using ISO 50001 to help reduce its power consumption.
Guided by its use of the aforementioned ISO standards, Fonterra is committed to limiting its impacts on the environment and finding ways to reduce greenhouse gas emissions through investing in clean technologies and resource-efficient upgrades at our production sites, as well as assessing renewable energy resources such as biomass, solar, geothermal and wind power with the aim of reducing our reliance on fossil fuels.
Fonterra aims to reduce energy intensity by 20 % by 2020 in order to cut down emissions in its global dairy supply chain and fight climate change. How does the company plan to boost its energy efficiency? How can standards help?
Fonterra’s energy strategy is in line with the World Energy Council’s well-recognized “Energy Trilemma” that looks at the security of supply, cost and environmental sustainability. Fonterra’s energy efficiency programme, which is shaped by the use of ISO 50001, aims to reduce energy consumption per tonne of production within our New Zealand operations by 20 % by 2020. Since it began in 2003, we have achieved a more than 16 % reduction in manufacturing energy intensity – this is equal to saving enough energy in 2015 to power 190 000 average homes in New Zealand each year.
Standards provide Fonterra with information on industry best practice and a goal to work towards at the highest level. Internal audits are aligned to the ISO 50001 standard and include blitzes across its operations, where they have identified nearly 900 initiatives to improve energy use since 2003.
Fonterra’s Edendale plant is the most energy-efficient dairy manufacturing site in New Zealand, according to the national Energy Efficient and Conservation Authority (EECA). Since 2003, it has reduced its energy intensity by 48 % per tonne of product. In a recent expansion, four new processing sites were built without the need for a new coal boiler. This was achieved by implementing numerous energy recovery projects within our existing plants and designing highly efficient new installations.
The cooperative is also working to make its distribution network even more energy-efficient in accordance with the requirements of ISO 50001. Last year, it increased the proportion of freight by rail by more than 10 % compared to the previous year. This meant the total volume moved by rail was equal to 184 730 truck movements on road, saving an estimated 25 000 tonnes of carbon dioxide equivalent compared to road transport.
Moreover, Fonterra’s shipping partner, Kotahi, has recently started using larger, more sustainable and efficient ships to help transport Fonterra’s product to more than 140 countries worldwide.
As a company with a global presence, how does Fonterra use standards such as ISO 26000 and ISO 14001 to maintain its commitment to sustainability in its international operations?
We have an annual process that considers stakeholder perspective and current performance to plan areas for improvement. ISO 26000 has been really useful to ensure that we are proactively taking into account the full range of topics relevant to our global business. Supporting our use of ISO 26000, we have also been long-term users of ISO 14001 to ensure our manufacturing facilities can be independently certified against internationally recognized standards for environmental management and sustainability. This not only drives continuous improvement at our sites but also helps us keep a focus on influencing our supply chains and their environmental performance. By adopting standards like ISO 26000 and ISO 14001, we can concentrate on material issues, prioritizing our improvements so we can plan more robustly.
Through its dairy development programme, Fonterra is furthermore working to help grow dairying industries in developing countries, including Indonesia and Sri Lanka, to ensure they have a safe, sustainable supply of dairy nutrition while also creating thriving communities. This is in line with Fonterra’s commitment to social responsibility that is supported by the use of ISO 26000.
Fonterra boasts of the distinctive qualities of milk based on New Zealand’s verdant pastures. How is Fonterra working alongside Standards New Zealand and other partners to protect its national jewel and ensure the world can continue to enjoy its milk?
Fonterra and its farmers are proud of New Zealand’s traditional grass-fed farming model where animals are free to graze on pasture. It is this pasture-based and highly efficient farming, coupled with New Zealand’s high proportion of renewable energy, which makes our country’s dairy industry one of the most emissions-efficient in the world.
Fonterra is continually working and partnering with other industry bodies and agencies to ensure dairying has a sustainable future. For example, we have worked with the Ministry for Primary Industries and the EECA to identify ways for dairy farmers to save electricity on farm. Audits of 150 farms were taken in accordance with NZS 3598:2000 at Level 2, which provides a reasonably detailed investigation of energy supply and use that identifies areas where savings may be made. This standard was developed jointly by Standards New Zealand and Standards Australia.
A post-audit survey estimated that a total of 161 000 kWh per year of savings were accruing from recommendations already acted upon and another 297 000 kWh would result from the implementation of further recommendations.
Mitigating methane emissions on farm is currently achieved through the adoption of good management practices on the farmstead, including improved animal health and pasture management. By adopting such practices, New Zealand has seen the total emissions efficiency on farm increase by over 20 % from 1990 to 2014.
Moreover, Fonterra continues to invest in the Pastoral Greenhouse Gas Research Consortium with the New Zealand government and other industry partners to find ways to mitigate biological emissions from livestock. As a global company, we are incredibly proud of what we have achieved so far and excited about taking the best of New Zealand out to the world.