Nestlé and Mars are collaborating with Fonterra to support the dairy giant’s farmer members in reducing emissions.
The New Zealand-based cooperative announced that these food-manufacturing giants—two significant customers—will fund “new incentives” for farmers to adopt more sustainable practices.
Additionally, Fonterra plans to introduce a payment structure for farms that meet specific “emissions-related criteria.”
Miles Hurrell, Fonterra’s CEO, stated: “We’re growing relationships with customers who value the hard work farmers put into producing sustainable, high-quality milk, along with the co-op’s quality of on-farm data and ongoing commitment to improvement. This helps us make progress towards achieving our on-farm emissions target and deliver the highest returns for our farmer shareholders’ milk.”
Under the agreements, farmers who meet targets established through Fonterra’s “Co-operative Difference” initiative will have access to on-farm tools or services aimed at further enhancing emissions efficiency. According to Fonterra, nearly 90% of farmers would have qualified based on data from the last farming season.
Farmers who successfully reduce their “emissions footprint” by approximately 30% below the average will qualify for an “emissions incentive” payment ranging from NZ$0.10 to NZ$0.25 per kgMS, funded by these two companies. Based on last season’s data, Fonterra anticipates that between 300 and 350 farms will qualify for this payment in the upcoming season.
The 2025/26 season will commence on June 1. During this period, Fonterra plans to implement a payment of NZ$0.01 to NZ$0.05 per kgMS for farms that meet specific emissions thresholds. According to Fonterra, emissions from farming activities, minus carbon removals—which are classified as emissions reductions derived from trees and vegetation on farms—must be lower than the co-op’s 2017/18 baseline year.
Fonterra aims to achieve a 30% reduction in “on-farm emissions intensity” by 2030, using 2018 as the baseline.
“As we strive towards achieving net zero emissions by 2050, we are committed to reducing our Scope 3 emissions,” Jennifer Chappell, the CEO of Nestlé’s operations in New Zealand, emphasized. “We will continue to support farmers in partnership with Fonterra, fostering new economic opportunities while helping them lower their greenhouse gas emissions.”
Nestlé revealed its net-zero plans in 2020, following a commitment made the previous year to eliminate greenhouse gas emissions by 2050.
The company has set its sights on a 20% emissions reduction by 2025 based on its 2018 baseline, followed by a 50% reduction by 2030 (Nestlé reports emitting 113 million tonnes of CO2e in 2018, which serves as its progress measurement baseline).
On the other hand, Mars has ambitious plans to halve its “full value chain emissions” by 2030, relative to its 2015 baseline. The company noted a 16% reduction in GHG emissions by 2023 compared to its 2015 figures.
Amanda Davies, chief R&D, procurement, and sustainability officer at Mars’ Snacking division, commented on the financial implications for farmers: “That’s why we’re working with partners like Fonterra to help remove this barrier—providing cash, tools, and technology to support farmers in making meaningful, long-term changes.”