Nestlé and Fonterra Collaborate on Sustainability Incentives

Nestlé, under a newly finalized agreement, will fund additional financial payouts to Fonterra suppliers who meet specific sustainability criteria. This bonus applies to farms achieving any of the three performance benchmarks within Fonterra's 'The Co-operative Difference' framework during the current production cycle. The estimated payout is approximately 1 to 2 New Zealand cents per kilogram of milk solids (kgMS), depending on the number of suppliers meeting these benchmarks.

This initiative is part of a broader global sustainability investment by Nestlé, which plans to invest 1.2 billion Swiss Francs (approximately NZD 2.25 billion) by 2025. The investment aims to expand regenerative agriculture systems, reduce processing emissions, and secure raw material supply chains. Nestlé has mandated that, by 2030, at least 50 percent of its core food and dairy ingredients are sourced through verified regenerative agriculture methods.

Nestlé's funding supports Fonterra's environmental strategy, which aims for absolute carbon neutrality across its processing footprint by 2050. Fonterra targets a 30 percent reduction in absolute on-farm greenhouse gas emissions intensity by 2030. Nestlé has incorporated these targets into its corporate purchasing guidelines, with Fonterra's CEO Miles Hurrell noting the importance of partnerships with international buyers to drive sustainable growth and reduce carbon intensity in exported milk solids.

The New Zealand milkshed is considered a critical test case in this sustainability effort, aligning Nestlé's corporate goals with Fonterra's environmental targets. This collaboration exemplifies how corporate partnerships can drive significant advances in agricultural sustainability and carbon footprint reduction.