FrieslandCampina makes progress in improving sustainability in own value chain

Royal FrieslandCampina N.V. publishes CSR Report 2014

19 May 2015

In 2014 FrieslandCampina achieved tangible results with respect to the implementation of its CSR goals. In addition to bring about specific energy savings and using renewable energy generated by member dairy farmers by means of wind turbines, solar panels and bio-mass, FrieslandCampina also took significant steps at the base of the chain. Together with the member dairy farmers, FrieslandCampina developed indicators within the Foqus planet programme that are used to determine a performance-related premium. The aim is to safeguard ongoing improvements in performance in the area of sustainability by member dairy farmers in relation to the themes of meadow grazing, biodiversity, animal welfare and the environmental impact of the dairy industry. At the end of 2014 it was also decided to increase the meadow milk premium from 0.50 euro to 1.00 euro per 100 kilograms of milk to encourage meadow grazing.

In addition, all purchased raw materials such as palm oil, soy oil, cocoa and cardboard for the European market were sustainably produced. Moreover, preparations were made for purchasing sustainable tropical fruit and sugar. FrieslandCampina has also set itself the goal of using 100 percent sustainable soy scrap for feed for the cows of member dairy farmers. Progress was also made in relation to other CSR themes. Millions of children around the world were educated about a healthy diet and lifestyle. Through the Dairy Development Programme, member dairy farmers and FrieslandCampina employees provided training to 5,440 African and Asian dairy farmers and employees of milk collection centres and cooperatives.

Cees ’t Hart,
who will step down as Royal FrieslandCampina’s CEO on 1 June 2015:
“In 2014 our CSR programme became broader and deeper. Our mission, ‘Nourishing by nature’, is clearly increasing the rate at which FrieslandCampina is safeguarding sustainability and creating added social value. It reflects both the ambition of making a meaningful contribution that is widely shared by our people, for example by supporting and training small farmers in Asia and Africa, and our goal of safeguarding food and nutrient security for a rapidly growing global population. We supply products that contain essential nutrients, such as protein, vitamins and minerals, to millions of people all over the world. Furthermore, the way in which our dairy products are produced is becoming more and more sustainable. Millions of people around the world enjoy our dairy products every day. This notion, and our mission, provide motivation for many people and give them wings.”

Selected achievements in 2014

Sustainability-based performance-related premium for member dairy farmers

In 2014 FrieslandCampina developed an updated Foqus planet programme in collaboration with the member dairy farmers. This programme came into effect on 1 January 2015 and will apply for the next three years. Starting in 2015, the member dairy farmers will receive a premium that is dependent on their scores for sustainability in the areas of animal health, animal welfare, biodiversity, the environment, climate and energy. The premium is funded by a deduction from the milk money of the member dairy farmers amounting to 0.25 euro per 100 kilograms of milk supplied.

Meadow grazing down 1.9 percent; meadow milk premium increased with effect from 2015

Over three quarters (77.2 percent) of the member dairy farmers offered their cows meadow grazing or partial meadow grazing in 2014. This represents a decline of 1.9 percent compared with 2013 (79.1 percent). In order to return to the previous level of 81 percent, FrieslandCampina has raised the meadow milk premium from 0.50 euro to 1.00 euro per 100 kilograms of milk with effect from 1 January 2015 to encourage dairy farmers to put their cows and young animals out to graze. In addition, the partial meadow milk premium is also being increased, from 0.125 euros to 0.46 euros per 100 kilograms of milk. The meadow milk premium is funded by means of a deduction of 0.35 euros per 100 kilograms of milk that applies to all dairy farmers and a contribution of 0.50 euros per 100 kilograms of milk from FrieslandCampina. This means that member dairy farmers who do not put their cows and young animals out to graze still contribute to the retention of meadow grazing.

100 percent sustainable soy oil, palm oil, cocoa and cardboard

FrieslandCampina is focusing on purchasing raw materials from fully sustainably managed sources. Alongside palm oil and soy oil, in 2014 all cocoa purchased was 100 percent sustainable. Sustainable cardboard based on FSC and PEFC criteria is purchased for the West European market. FrieslandCampina’s goal is that all soy scrap used for cattle feed by member dairy farmers will be sustainable with effect from 2015 (2014: 83 percent). Agreements on this have been reached with the cattle feed companies.

No improvement in water and energy efficiency; ways of reducing consumption investigated

Energy and water consumption increased in 2014, and for the first time since 2010 FrieslandCampina failed to achieve a 2 percent improvement in water and energy efficiency for the year. This increase was attributable in part to relatively more energy-intensive products being produced in 2014 compared to 2013, and to the installation, testing and start-up of new installations and innovations. Despite this, significant, specific energy savings were made, and the use of renewable energy generated by member dairy farmers from wind turbines, solar panels and bio-mass went some way towards achieving the targets for climate-neutral growth. Levels of water and energy consumption and ways of reducing consumption were examined at 80 percent of the locations.

In 2015, the focus will be on making further savings. In addition, FrieslandCampina will concentrate on revising the targets so that the ambitions for 2020 can be achieved. The proportion of electricity purchased that was supplied under green energy tariffs or contracts amounted to 91 percent for the Dutch production locations and 45 percent overall for all production locations situated in other countries.

Information on a healthy diet and lifestyle provided to more than 10 million children

In 2014 FrieslandCampina reached over 10 million children with information about a healthy diet and lifestyle. Through initiatives such as World Milk Day, school milk programmes, the Goodness of Dairy campaigns, and in the Netherlands the Young People at a Healthy Weight (Jongeren op Gezond Gewicht (JOGG)) programme, the National School Breakfast and the B.Slim programme, parents and children were educated about a healthy diet and active lifestyle. In 2014 FrieslandCampina and the National Basketball Association (NBA) launched the Drink.Move.BeStrong campaign in Indonesia, Malaysia, the Philippines, Thailand and Vietnam. In this campaign, sport and nutrition are used as a way of encouraging children to lead an active, healthy lifestyle.

Training for 5,440 dairy farmers and employees of milk collection centres and cooperatives

Through the Dairy Development Programme, FrieslandCampina has helped more than 40,000 dairy farmers in Indonesia, Malaysia, Nigeria, Vietnam and other countries to improve the quality and safety of their milk. In 2014 5,440 dairy farmers and employees of milk collection centres were given training by member dairy farmers and FrieslandCampina employees.

Safety

The number of accidents at FrieslandCampina sites that resulted in sick leave fell from 140 to 94, a decline of 33 percent. This decline is ahead of schedule compared to the original target, which was for the rate of accidents resulting in sick leave for every 200,000 hours worked to be reduced by 80 percent compared with 2011 levels by 2020. The revised target is to reduce the rate of accidents resulting in sick leave per 200,000 hours worked to less than 0.05. This corresponds to just one accident resulting in sick leave each month anywhere in the world. This is still one accident a month too many, as the goal is for there to be no accidents at all.

In 2015 focus on climate-neutral growth and implementation of robust system for gathering CSR data

In 2015 the innovative steps taken by FrieslandCampina in order to achieve climate-neutral growth will start to become visible. The milestone of 100 percent use of green electricity will be achieved for all the FrieslandCampina production sites and offices located in the Netherlands. Half of this green electricity will come from its own dairy farms (from the sun, wind and bio-mass). In addition, sustainable, climate-friendly alternatives to natural gas, such as pyrolysis oil (bio-oil) and biogas (from manure, sewage and biodegradable waste), will be used at two dairy factories in the Netherlands. At the dairy farms, too, FrieslandCampina is introducing a number of measures to reduce greenhouse gas emissions, including the roll out of the ‘KringloopWijzer’ (Dairy Sustainability Loop), to test various techniques for the mono-fermentation of manure on the farm, and to extend the lifespan of cows. In addition, specific attention is now also being paid to biodiversity. The active involvement and commitment of members is safeguarded by the Foqus planet programme and the rewards system for results achieved by member dairy farmers in the area of sustainability. The task we now face is to raise the commitment of FrieslandCampina’s 22,000 employees to the CSR programme. To this end, a plan, ‘Nourishing by nature; Making it happen’, was developed in conjunction with the global HR network. This plan provides for the establishment of Green Teams at all sites around the world. The Green Teams draw attention to CSR at a local level.

Volunteers and CSR data

FrieslandCampina also seeks to deploy employees as volunteers for the partners of our CSR programme, such as the Dutch Red Cross, Agriterra and food banks. Following a slow start, a great deal of headway will be made in 2015 when a robust system for gathering, checking and verifying CSR data throughout FrieslandCampina’s entire dairy chain is implemented. The implementation of this system is in line with the integration of CSR in every part of the organisation.