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Nestle and Mars have partnered with Fonterra, a New Zealand-based dairy cooperative, to reduce the climate footprint of dairy farming. The partnership aims to cut emissions by 150,000 metric tons by 2030. Mars will invest $27 million over five years to support farmers in reducing their emissions. Fonterra will provide payments to farmers who achieve lower emissions, with funds also supporting tools, technology, and direct financial incentives.
The partnership aims to help achieve Nestle and Mars’ net-zero emissions goals by 2050. Dairy is a significant contributor to greenhouse gas emissions in their value chains. Jennifer Chappell, CEO of Nestle New Zealand, emphasized the company’s commitment to reducing Scope 3 emissions, saying, “As we strive towards achieving net zero emissions by 2050, we are committed to reducing our Scope 3 emissions.”
The partnership will involve financial support for farmers, with Mars investing $27 million in Fonterra farming families over five years. Farmers who lower their emissions by at least 30% compared to the industry average will receive incentive payments of NZ$0.10-0.25 per kgMS. A portion of the funding will also go towards emissions-reducing tools and technology for eligible farmers.
Fonterra has a target of cutting on-farm emissions intensity by 30% by 2030 from a 2018 baseline. The co-op will introduce additional payments for farms meeting specific emissions thresholds. Miles Hurrell, CEO of Fonterra, highlighted the importance of customer partnerships in sustainability efforts, saying, “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.”
The partnership is a significant step in the food industry’s transition to lower-emission dairy supply chains. The companies aim to reduce their emissions, with Nestle aiming for a 20% reduction by 2025 and 50% by 2030, and Mars aiming for a 50% reduction by 2030.