Divestment means Fonterra can focus on its strengths
OPINION: Fonterra's board has certainly presented us, as shareholders, with a major issue to consider.
Andrew Fletcher is Fonterra's programme leader, Sustainable Food Systems. Over the course of more than 20 years he has seen NZ primary industry go from talking mainly about "food miles" to now trying to assess the nutritional value of different types of dairy products.
When all the talk was about food miles, there was a strongly-held view among some of New Zealand's competitors that the further product travelled, the worse it must be for the environment.
The New Zealand Government supported a study into the carbon footprint of selected New Zealand dairy products. Using Life Cycle Assessments (LCAs) initiated by Fonterra in 2008, New Zealand agriculture used to examine individual value chains, like the cost to the environment of New Zealand shipping goods to the other side of the world.
"And when we started doing LCAs, we could see that's not actually true," Fletcher told the International Dairy Federation (IDF) conference.
New Zealand dairy was now comfortable doing LCAs in a variety of areas - and offering them to international regulators and customers as a form of assurance. The standard methodology was now embedded into systems like the European Union's product and environmental footprint approach, for example.
The dairy industry recognised the value of LCAs for maintaining consistent, credible standards for showing the environmental impact of products.
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Fletcher said 46 members of the IDF, representing more than 75% of world milk production, had created a guide to LCAs "because it has become evident that the wide range of figures resulting from differing methodologies and data is leading to inconsistencies".
The guide says this uncertainty "poses a danger of confusion and contradiction, which in turn could create a false impression that the industry is failing to engage with the issue of climate change".
Creating consistency and a clear message was important for the reputation of the industry globally "to highlight the high level of engagement is already taking place in relation to climate change, and to identify practices that will further reduce GHG emissions," the guide says.
Fletcher said in the course of his career, the conversation about LCA had moved on from once only comparing the carbon footprint and GGG emissions of certain dairy-producing countries. Now the comparisons were also between different types of dairy foods, for instance.
There were growing calls for LCAs researchers to compare foods that might be nutritionally quite different. "They might have quite different health benefits - and that's a challenge."
There was an international body of work on the concept of 'nutritional LCA'. The conclusion, Fletcher told the IDF conference "is that, if you'll pardon my use of colloquial English, 'it is bloody difficult'".
It wasn't easy to go from comparing single supply chains, to now "looking at two supply chains essentially producing the same thing - what's the difference between them and what one is better? And how might the one that is not so good improve?"
There were growing calls for LCA researchers to compare foods that might be nutritionally quite different. "They might have quite different health benefits, and that's a challenge."
Fletcher said when it comes to nutritional benefit, it might be worth considering the basis for a comparison of different types of food. "Are they similar enough that it is a fair comparison to compare the footprints of those foods?" he asked.
*Tim received support for his travel from the NZ Guild of Agricultural Journalists and Communicators.
