Sustainability at Synlait FY19 report released

Synlait Milk Ltd • 1028 Heslerton Road, Rakaia 7783, Private Bag 806, Ashburton 7740, New Zealand. +643 373 3000 • www.synlait.com
SYNLAIT MILK LIMITED ANNOUNCEMENT NZX: SML
ASX: SM1
19 November 2019
SUSTAINABILITY AT SYNLAIT
Synlait today released an update on its sustainability strategy in a report titled: Sustainability at Synlait.

Synlait’s Director of Sustainability and Brand Hamish Reid commented, “In June 2018, we announced our
refreshed commitment to sustainability. This report represents our first step in sharing our plans and
progress as we work to implement our environmental and social strategies throughout our value chain.”

“At the time of setting these targets, we were still developing our sustainability strategy, but we knew that
setting the bar high would unleash creativity and urgency amongst our people, and that is exactly what
has played out. We’re excited to share this progress with shareholders and stakeholders today.”

“Synlait is in an ideal position to shape the change needed in our industry – we collect 4 percent of New
Zealand’s milk so we’re agile and young but big enough to influence. We have a long way to go to reach
our 2028 targets, but we’re off to a great start.”

ENDS

For more information about Synlait visit www.synlait.com
or contact:
Linda Chalmers
Senior Communications Advisor – External
P: +64 21 951 347
E: linda.chalmers@synlait.com

---

1
SUSTAINABILITY
AT SYNLAIT—FY19

CONTENTS
Our Strategy 6
Net Positive for the Planet 10
Climate 12
Water 16
Welfare 20
Circular Economy 22
A Healthier Synlait 24
Safe Workplace 26
Capability 28
Culture and Community 32
World Class Value Chain 34
Safe Food 36
Healthy Farming 38
Sustainable Supply 42
Transparency 44

5
In June 2018 we announced our refreshed
commitment to sustainability. Since then we have
been mobilising our staff, farmer suppliers and
communities and have assembled our work into
eleven areas – our Sustainable Innovation Platforms
(SIPs) – across environment, people and enterprise.
It is through the many initiatives we’re rolling out
under each of these SIPs that we will transform
our business for the better.
The bold 10-year targets we announced 18 months
ago generated a great deal of interest from within
New Zealand and from abroad. Our drivers for
setting these targets were two-fold. First is that we’re
responding to the majority of New Zealanders that
are seeking an improvement from our industry - the
very community that provides us with our social
licence to operate. Secondly, our global customers
and their discerning consumers have rapidly shifting
expectations when it comes to care for planet,
people and animals. We’re responding to both
drivers and in doing so we’re confident that we
will profit from purpose, enabling us to further
invest in our sustainability strategy.
At the time of setting our targets, we were unsure if
they would be achievable but we knew that setting
the bar high would unleash creativity and urgency
amongst our people. And that is exactly what has
played out.
We’re most proud of the pathways we have mapped
toward our greenhouse gas reduction targets
for both our on-farm and off-farm systems. With
today’s technology, executed brilliantly, our targets
are achievable. In the people area, our safety
performance has dramatically improved and our
new diversity and inclusion programme has broken
new ground. We’re also proud to be underway with
Whakapuāwai - our initiative that is enabling our
people and communities to live and breathe our
purpose of "doing milk differently for a healthier
world”. On the enterprise front, we’ve negotiated
a bank loan that rewards us for improving our
sustainability performance - New Zealand’s first
“ESG-linked loan." We continue to aim for B Corp
certification and we’ve joined 500 of the world’s
leading companies in committing to setting Science
Based Targets. An additional 43 farmers became
certified to Lead With Pride, our on-farm sustainability
standard, in FY19.
We’re in an ideal position to shape the change
needed in our industry – we collect 4 percent of
New Zealand's milk so we're agile and young but
big enough to influence.
This document represents our first step in sharing
our plans and our progress. We recognise we have
a long way to go to reach our 2028 targets, but we’re
off to a great start. We very much welcome your
comments that will assist us in reaching those.
Leon Clement,
Chief Executive Officer
Hamish Reid,
Director of Sustainability and Brand

7
INTRODUCTION:
OUR PURPOSE, AMBITION
AND STRATEGY
Welcome to Synlait’s first comprehensive overview of
the environmental and social sustainability strategies
we are implementing, the actions we are taking, and
the challenges we are facing as we grow into our
second decade.
In 2018, we refined our company vision to clarify our
purpose and provide a roadmap for the way we want
to do business. The framework, which we call Heart,
Head and Hands, defines our ‘why, what and how’. It
helps provide clarity for our people on why we exist,
what we are aiming for, and where and how we will
achieve it. It communicates Our Purpose, Ambition
and Strategy, and our sustainability strategy is built
directly out of its objectives.
Heart. Our Purpose. Tō Tātou Aronga
At the heart of Synlait is this purpose: “Doing milk
differently for a healthier world”. It is why we are
here. Our purpose is driven by three elements: being
different, essential nutrition and sustainability.
We are different because we believe that to be the
best, we must think and act differently – and we’re
applying this attitude to all parts of our business,
not just our approach to milk. We are a 21st century
milk nutrition company. We believe in the nutritional
benefits of milk and we are committed to delivering
this nutrition to our customers. People and planet
underpin all that we do. Our investments, and the
choices we make, must be net positive for the planet
and help all to thrive. We continually look for ways to
improve, not just for Synlait – but all New Zealanders
and the industry as a whole.
Head. Our Ambition. Tō Tātou Hao Nui
Our ambition, or ‘head’, is the goal that connects
us to our purpose. It is a simple formula for success:
2 + Zero. This means our aspiration is to achieve $2
billion in revenue, have a net positive impact on our
planet and communities, and improve our operations
so that we reach zero injuries, zero defects and
zero losses.
Hands. Our Strategy. Tō Tātou Rautaki
Our hands are where we take action against an
aligned heart (purpose) and head (ambition). This is
our strategy. It is made up of two parts: our growth
strategy (doing milk differently) and our enabling
strategy (for a healthier world). It is our map to
achieving 2 + Zero. Our growth strategy is made up
of five key complementary opportunities designed
to build on our success, diversify our business and
optimise the milk coming into our factories. These
are Infant Nutrition, Everyday Dairy, Foodservice,
Sports Nutrition and the ‘Next Big Thing’.
DOING MILK
DIFFERENTLY FOR A
HEALTHIER WORLD
2B IN REVENUE
DOUBLING OUR BUSINESS
1B TO 2B IN 5 YEARS
ZERO INJURIES
ZERO DEFECTS
ZERO LOSSES
Infant Nutrition
A Healthier
Synlait
Everyday Dairy
Sports Nutrition
Foodservice
Next Big Thing
2
+
ZERO
World Class
Value Chain
NET +VE IMPACT ON
PLANET AND COMMUNITIES
+VE PLACE TO GROW WITH
100% ENGAGEMENT
Net Positive for
the Planet
HEART
OUR PURPOSE
HEAD
OUR AMBITION
HANDS
OUR STRATEGY

98
Our enabling strategy allows us to strengthen our
business and grow it in a coordinated way. This
is supported by three pillars: Net Positive for the
Planet, A Healthier Synlait and World
Class Value Chain.
Net Positive for the Planet
represents the stand we are taking for the planet.
We are beginning to deliver against the sustainability
targets we launched in FY18 and look to be
instrumental in agriculture’s response to climate
change, eliminate water degradation, implement the
circular economy, and lead stewardship for animals,
biodiversity and soil.
A Healthier Synlait
is about strengthening our company. It is about
building systems that support our people, making
sure that we are all safe and establishing a culture of
kotahitanga or unity, strengthening our capabilities
and continuing to manage our risks. This report
details the progress we are making in this space.
World Class Value Chain
is core to our reputation. It covers healthier
farming practices, safe food and market access,
manufacturing excellence, building a sustainable
supply chain, and transparency. Our teams are doing
great work in this space because we are constantly
asking ourselves: how can we think differently and
make things better?
Out of our business strategy, we have built a
sustainability framework based around ambitious
environment, people and enterprise targets. We
are working to these goals through 11 Sustainability
Innovation Platforms (SIPs), detailed roadmaps for
action that will both change the way we operate and
hasten the transformation of our industry. To date,
we have developed SIPs on Climate, Transparency,
Community, Circular Economy, Welfare and Water.

In 2018 we established our
10 year plan for sustainability
at Synlait, which outlines our
bold goals for the year 2028.
KEY FIGURES
Production FY19
146,322mt
+5%
Excluding fresh milk
FY19 Revenue (m)
$1,024.3
+17%
FY19 contracted milk supply (‘000)
64,189kgms
+1%
FY19 total employees
900
+218
FY19 milk suppliers
201
+5
REPORT SCOPE
Except where otherwise indicated with a footnote,
the data presented in this report covers the period
of the 2019 financial year (1 August 2018 – 31 July
2019). The scope of the report includes off-farm
data collected from our operations in Dunsandel,
Palmerston North and in Auckland. On-farm data
has been collected from our Canterbury farms only.
Our Pokeno site was commissioned in September
2019 so data from that operation and from our new
Waikato farm suppliers will be included in next year’s
report.
Data quality assessment
Synlait engaged an independent third party to
undertake a review of key elements (marked with
an asterisk *) of this report for completeness and
accuracy.
DOING MILK
DIFFERENTLY FOR A
HEALTHIER WORLD
CIRCULAR
ECONOMY
WELFARE
WATER
SUSTAINABLE
SUPPLY
TRANSPARENCY
HEALTHY
FARMING
SAFE FOOD
CLIMATE
CAPABILITY
CULTURE AND
COMMUNITY
SAFE
WORKPLACE
ENVIRONMENT
PEOPLE
ENTERPRISE
A Healthier
Synlait
Net Positive for
the Planet
OUR SUSTAINABILITY
FRAMEWORK
World Class
Value Chain

11
NET POSITIVE
FOR THE PLANET
ENVIRONMENT
Our aim is to have a net positive impact on the planet and
re-imagine all aspects of our business for a low-emissions future.
Achieving this means taking stock of our current environmental
footprint and implementing on- and off-farm initiatives that
reduce greenhouse gas emissions, eliminate water degradation,
transition from a linear to a circular economy and improve the
welfare of the animals and ecosystems we depend upon.
We have developed four Sustainable Innovation Platforms (SIPs)
that will inform our actions around environmental stewardship.
They are:
CLIMATE
The ways we will contribute to the Paris Agreement
target of staying well below 2°C of warming by 2100,
and ideally, 1.5°C.
WATER
The ways we plan to eliminate over-consumption
and degradation of water resources.
WELFARE
The ways we will care and respect for our animals
and transition to regenerative farming systems.
CIRCULAR ECONOMY
The ways we will drastically reduce our
manufacturing and packaging waste sent to landfill.

13
CLIMATE
ON-FARM
Our farmer suppliers account for around 81% of
our 883,255 tonnes of CO₂ equivalent emissions.
According to our FY19 Greenhouse Gas (GHG)
Inventory,
1
our on-farm emissions totalled 714,008
tCO₂e, which can be further broken down into a
quantum of carbon dioxide (16%), methane (63%)
and nitrous oxide (21%). Since 2017-2018, we have
been providing all our farmer suppliers with a unique
greenhouse gas emissions profile.² Cumulatively,
this information provides us with a baseline to
understand and improve our own performance.
We think that a combination of new technology
and best-practice farm management will result in
substantial reductions of on-farm emissions.
1. Synlait Milk Ltd Greenhouse Gas Inventory Report - FY19, https://www.
synlait.com/wp-content/uploads/2019/11/Synlait-FY19-GHG-Inventory-
Report_1-Nov-2019.pdf. The inventory was prepared in accordance
with the requirements of the ISO 14064-1:2006 standard as well as
the Greenhouse Gas Protocol.
2. Data is collected by Overseer, a software that models agricultural
GHG emissions in New Zealand.
ON-FARM EMISSIONS BY TYPE*
OFF-FARM
19% of our total emissions occur off-farm. The
energy-intensive nature of our manufacturing
processes and supply chain places us among a
group of large New Zealand emitters. Our GHG
Inventory highlights the use of coal, at 67%,
as the largest source of our off-farm emissions,
followed by sea freight, 21%, and electricity, 4%.
As 83% of electricity generated in New Zealand
comes from renewable sources,
1
we see the
electrification of our operations and supply chain,
along with the use of alternative renewable sources
of energy, as a solution to reducing the quantity
of our carbon emissions.
1. As of June 2019, according to the official data tables for electricity
published by the New Zealand Ministry of Business, Innovation and
Employment.
OFF-FARM EMISSIONS BY TYPE*
OUR COMMITMENT
We will not build another coal-fired
manufacturing facility.
CO₂: 16%
CH₄: 63%
N₂O: 21%
Coal: 67%
Sea freight: 21%
Electricity: 4%
Diesel trucks: 3%
Other: 5%

1514
OFF-FARM CLIMATE TARGET
50%
Reduction in total GHG per kilogram of product
by 2028, versus 2017/2018 base year.
OFF-FARM CLIMATE ROADMAP
We’ve mapped out a pathway to our off-farm GHG
reduction target out to FY28. We’re confident that
with today's best practices and emerging
technologies, we will reach it.
OFF-FARM CLIMATE
(COLOURS INDICATE SEPARATE INITIATIVES)
2018
2020
2022
2024
2026
2028
0
0.3
0.6
0.9
1.2
kgCO₂-e / kg production
FY19 INITIATIVES
New electrode boiler
In March 2019 we commissioned a large-scale
electrode boiler for our advanced dairy liquids facility
at Dunsandel. Traditionally, dairy processors have
relied on coal as a cost-effective way of creating the
large volumes of process heat (energy used in the
form of steam or hot water) required to turn fresh
milk into powder. The electrode boiler at Dunsandel
requires a significantly greater investment than
coal. However, compared to a coal alternative, the
carbon equivalent saving is 13,714 tCO₂e per annum.
We estimate that after 10 years of operation, the
electrode boiler’s emissions savings will be roughly
equivalent to the emissions produced by 9,600
houses. Beyond this achievement, we plan to work
on strategies to address the footprint of our existing
coal infrastructure at Dunsandel.
Forkhoist electrification
We are phasing out LPG-powered forklifts and
purchasing electric forklifts as replacements
(excluding the larger vehicles required for container-
handling). Our current fleet is comprised of 46
forklifts: 32 in Dunsandel, of which nine are now
electric; seven in Auckland, including three electric
forklifts; and seven electric forklifts in Pōkeno. The
replacement roll-out is expected to take five years.
FY19 RESULTS
FY18FY19% +/-
Total off-farm GHG
emissions*
157,148 tCO₂e169,247 tCO₂e+8%
Off-farm emissions
per tonne of product*
1.13 tCO₂e1.16 tCO₂e+3%
Total energy
consumption
1*
344,994 MWh374,820 MWh+9%
Energy consumption
per tonne of product*
2,473 kWh2,562 kWh+4%
Total Coal
consumption*
54,137 tonnes56,807 tonnes+5%
Coal consumption
per tonne of product*
0.39 tonnes0.39 tonnes0%
Our total production volume increased and our
manufactured mix moved to more energy-intensive
products.
1. This indicator includes energy consumption (electricity, gas, coal) for
our manufacturing operations. It excludes energy used for transportation,
such as our diesel or LPG-powered forklifts.
OFF-FARM EMISSIONS PER TONNE OF PRODUCT*
1.16tCO₂e
FY28
Target
FY19
1.13tCO₂e
FY18
0.56
ON-FARM CLIMATE TARGET
35%
Reduction in GHG per kgms (kilogram of milk solids)
by 2028, versus 2017/2018 base year
ON-FARM CLIMATE ROADMAP
We’ve mapped out a pathway to our on-farm GHG
reduction target out to FY28. We’re confident that
with today's best practices and emerging
technologies, we will reach it.
ON-FARM CLIMATE
(COLOURS INDICATE SEPARATE INITIATIVES)

2018
2020
2022
2024
2026
2028
0
3
6
9
12
kgCO₂-e / kgMS
FY19 INITIATIVES
Tailored farm support
To achieve our on-farm GHG reduction target we
are leveraging our Lead With Pride™ farm certification
programme and tailoring support to each farm.
Through Lead With Pride™ we provide farms with
access to Practical On-Farm Greenhouse Mitigation
Options, a guide to reducing emissions through
fertiliser, feed, water and stock management. We
have also introduced a GHG-reduction incentive
payment into Lead With Pride™ to reward farms that
are actively working to reduce emissions. To receive
the incentive, farmers must create comprehensive,
farm-specific GHG management plans and
demonstrate a clear knowledge of GHG sources and
mitigation strategies. GHG plans are evaluated and
ratified by independent assessors. We have also
introduced an incentive payment to reward farms that
are palm kernel expeller (PKE) free. So far, 63 farms,
or 32% of suppliers, have received this payment.
Solar PV feasibility study
On-farm carbon dioxide emissions are mainly created
during the combustion of fossil fuels. Our aim is to
promote renewable energy generation on farms to
reduce carbon emissions and operating costs. We
are soon to launch a five-farm feasibility study to
establish the cost-to-benefit ratio of photovoltaic
solar systems, with battery storage, powering the full
farm system. This study will provide an understanding
of the scale of the opportunity and case studies to
demonstrate value to other suppliers.
FY19 RESULTS
FY18FY19% +/-
Total on-farm GHG
emissions*
727,500 tCO₂e714,008 tCO₂e-2%
On-farm GHG
emissions per
tonne MS*
11.44 tCO₂e11.18 tCO₂e-2%
ON-FARM GHG EMISSIONS PER TONNE OF MILK SOLIDS*
11.18tCO₂e
FY28
Target
FY19
11.44tCO₂e
FY18
7.44

17
WATER
ON-FARM
Water is a local issue that requires different
approaches in different places depending on the
ground conditions. In June 2019, we defined a
roadmap to address on- and off-farm water quality
and consumption issues. Our goal is to work with
farmer suppliers to use less water and eliminate
any contributions to waterway degradation in the
areas where we operate. The priority is to reduce
the impact of nitrates on waterways and freshwater
catchments by focusing on best on-farm practices
and adopting new technologies.
TOTAL ON-FARM NITROGEN LOSS*
2,899,078kg
3,071,944kg
FY18
FY19
OFF-FARM
Our goals are to reduce the volume of water we
use throughout all aspects of our manufacturing
processes and improve the quality of wastewater
that leaves our factory. The maximum water use at
manufacturing facilities is determined by council
consents. At Dunsandel, despite the rise in water
usage resulting from our new fresh milk and
lactoferrin plants, we are maintaining production
levels within current consent limits. Wastewater
at Dunsandel is currently treated and used for
irrigation on neighbouring farms.
OFF-FARM WATER CONSUMPTION*
2,232,869m
1,927,484m
FY18
FY19

1918
ON-FARM WATER TARGETS
20%
Reduction in water use per kilogram
of milk solids by 2028
45%
Reduction in nitrogen loss to waterways
per kilogram of milk solids by 2028
ON-FARM WATER ROADMAP
Below is the roadmap we have defined to achieve
our 2028 nitrogen loss target. By applying today’s
technologies and best practices, we believe it is
achievable.
ON-FARM NITROGEN LOSS
(COLOURS INDICATE SEPARATE INITIATIVES)
2018
2020
2022
2024
2026
2028
0
0.02
0.04
0.06
kg N loss / kgMS
FY19 INITIATIVES
Better environmental advice
We are helping farmers gain a better understanding
of water-related issues by providing the tools
and guidance they need to make improvements.
Together, our farmer suppliers and environmental
advisers are developing specific strategies to
reduce water consumption (by changing irrigation
practices or modernising equipment, for instance)
and limiting nitrogen loss (through fertiliser and feed
management, beneficial soil strategies, irrigation and
effluent management). Lead With Pride™ certified
farms currently meet strict targets around water
use and quality. During farm audits, assessors verify
compliance with water management plans and
account for water use and nutrient management.
Defining best-practice
In the dairy industry, the main causes of excessive
on-farm water usage are over-irrigation, inefficient
irrigation infrastructure, and a lack of access to
appropriate data. Water pollution derives mostly
from cow urine and dung, the over-application of
fertilisers, over-irrigation and intensive winter grazing,
which can also have a detrimental effect on soil
and animal health. To address this, we are initiating
research to identify best-practice options. We are
also preparing to trial new technologies to reduce
nitrogen leaching from cow urine.
FY19 RESULTS
FY18FY19% +/-
Total on-farm water
consumption*
NA266,075,593 m³NA
On-farm water
consumption
per kg of MS*
NA4.17 m³NA
Total on-farm
nitrogen loss*
3,071,944 kg2,899,078 kg-6%
On-farm nitrogen
loss per kg of MS*
0.048 kg0.045 kg-6%
The FY19 ‘water year’ covers 1 July – 30 June. Several factors currently
affect the overall accuracy of this data, including: missing data from farms;
the inability to distinguish between large blocks and individual farms
in some water consents and irrigation schemes; data recording gaps
and spikes from water meters. In addition, milking shed water usage is
not recorded on most farms and water usage from year to year varies
significantly depending on the weather conditions. We’re endeavouring to
improve the accuracy of water data.
100%
Of waterways fenced to the stock-exclusion standard
of Sustainable Dairying Water Accord in FY19*
ON-FARM NITROGEN LOSS PER KG OF MS*
0.045kg
0.048kg
FY18
FY19
0.026
FY28
Target
OFF-FARM WATER TARGETS
20%
Reduction in water use per kilogram
of product by 2028
20%
Reduction in nitrogen discharge per cubic
meter of wastewater by 2028
1

20%
Reduction in SAR (Sodium Adsorption Ratio)
1

FY19 INITIATIVES
Accounting for water
At Dunsandel, water usage is measured at site
level and in some specific areas but there has
been an insufficient number of meters to monitor
the contribution of each manufacturing process or
facility. Our site services team is currently installing
new water meters in key areas to enable precise
monitoring. The aim is to attribute all treated water
usage to the correct business units, to benchmark
our performance and, ultimately, to identify ways of
reducing our consumption.
Water recovery at Pōkeno
At Pōkeno, several water recovery systems
have been installed to manage the recycling of
wastewater. These include 200m³ of Condensate
of Whey (COW) water storage, which allows
water recovered from whey, a by-product of milk
processing, to be used for cleaning procedures;
and 100m³ of recovery flushing storage, which is
expected to recycle 94% of COW water, or 800m³
per day. The milk reverse osmosis plant also has
a permeate polisher that will recover an additional
200m³ per day when the plant is manufacturing skim
powder. The recovered water will either be used to
clean the membrane plants, or it will be chlorinated
and added to our supply of process water.
1. These targets are applicable to our Dunsandel site only
FY19 RESULTS
FY18FY19% +/-
Total off-farm water
consumption*
1,927,484m³2,232,869m³+16%
Off-farm water
consumption per
tonne of product*
13.82m³15.26m³+10%
Total off-farm
wastewater discharge*
2,235,628m³2,626,787m³+17%
Nitrogen discharge
per m³ of wastewater*
0.0175kg0.0191kg+9%
95th percentile SAR*13.0911.23-14%
Our total production volume increased and our
manufactured mix moved to more water-intensive
products.
OFF-FARM NITROGEN DISCHARGE PER M³ OF WASTEWATER*
0.0191kg
FY18
FY19
FY28
Target
0.014
0.0175kg

21
WELFARE
Our Welfare Sustainability Innovation Platform
(SIP) is guiding our investigation of sustainable
and regenerative farming methods. We see animal
welfare, biodiversity and soil health as interlinked
and essential to maintaining farm productivity
and profitability in the long term. It is increasingly
important for us to illustrate to our customers and
end consumers the provenance and integrity of the
products they purchase.
FY19 INITIATIVES
Ensuring animal wellbeing
The Animal Health and Welfare pillar of Lead With
Pride™ sets targets for farmer suppliers around stock
health, good farm infrastructure, and health protocols
that meet or exceed the industry best practice
standard. Our Supplier Handbook requires that all
dairy animals are treated in a humane manner at all
times and that all suppliers adhere to the standards
outlined in the codes of welfare relevant to the dairy
industry. We also require suppliers to ensure all
milking animals are checked by a vet at least once
per season.
Although New Zealand’s animal welfare standards
are well regarded internationally, there is increasing
public concern that animals be humanely and
ethically treated. Bobby calves and animal antibiotic
resistance are among subjects that will need to be
addressed into the future. We are currently working
on strategies to further improve animal wellbeing
standards and provide more transparency on our
performance in this area.
Better soil health
Healthy soils help cleanse water, cycle nutrients,
store carbon and grow plants and animals. Soils
have a natural ability to draw carbon down from the
atmosphere, so adopting regenerative farming and
grazing practices that rebuild soil organic matter
and restore soil biodiversity can provide a defence
against climate change. We are planning a research
project to better understand and measure soil
health in the New Zealand farming context. Work
is underway to define the programme of research
and the KPIs to measure success.
Improving biodiversity
Lead With Pride™ farms currently meet biodiversity
requirements that include maintaining and enhancing
native plants, farming in ways that protect vegetation
and waterways, pest management, preservation of
wetlands and native plant areas, and incremental
enhancement of biodiversity up to five percent of
total farm area. Part of this has involved education
around mahinga kai and water quality. Mahinga kai
literally means ‘working the food’, and it involves the
protection of indigenous food sources, the practices
involved in producing, procuring and protecting
those resources, and the places where those
resources are, or were traditionally gathered. In
addition to this, we are undertaking an assessment
of biodiversity on a sample of farms during FY20.
FY19 RESULTS
PERCENTAGE OF PASTURE IN COW FEED
1
*
FY18
81%
SOMATIC CELL COUNT AVERAGE
2
*
152,700
155,000
FY18
FY19
1. Data was collected from 72 farmer suppliers only. We hope to expand
the scope of data collection next year.
2. The reporting period for this indicator is 1st of June to 31st of May.
We are conscious that this metric does not provide a comprehensive
and accurate understanding of animal wellbeing. We’re collaborating
with research institutes to better understand performance.

23
CIRCULAR
ECONOMY
While the characteristics of a linear economy
are ‘take, make, waste’, circular economies are
restorative and regenerative – they design out waste
and keep materials ‘in the loop’, so product lifecycles
no longer have a beginning, middle and end.
Transitioning to the circular economy is essential for
meeting our net positive for the planet ambition.
CIRCULAR ECONOMY TARGETS
99%
Of total non-hazardous manufacturing waste will be
diverted from landfill by 2028
100%
Of product packaging will be reusable, recyclable
or compostable by 2025
100%
Of our plastic milk bottles will be composed of 100%
recycled PET or renewable bio-based PET by 2028

FY19 INITIATIVES
Life Cycle Analysis
We have purchased a licence for EcodEx, an ISO
14040 certified Life Cycle Analysis (LCA) software
tool for evaluating environmental impacts associated
with products, processes and activities, from the
extraction of raw materials to end of life. An LCA has
five key metrics: greenhouse gas emissions, water
consumption, non-renewable energy and minerals,
land use and impacts on the ecosphere. We are
in the process of finalising our first LCA which has
been performed on a product that represents 5%*
of our sales.
Café waste minimisation
In early 2019 we became aware that 100% of waste
from our Dunsandel café was going directly to landfill
because of cross contamination in the recycling
system. After internal meetings with stakeholders,
a cafeteria survey, and 24-hour waste audit, we
established that the total waste produced was 1,480
litres per day which extrapolates out to 529,000 litres
of annual waste. Single-use packaging accounted
for 40% of this total, and many items going to
landfill could have been recycled. In response, our
café is currently moving from single-use plastics to
permanent cutlery and crockery, on-site composting,
and an optimised recycling system.
Innovation centre
The main waste challenges at our R&D facility in
Palmerston North are the disposal of biological
materials, and plastics and cardboard recycling. A
nearby pig farm has provided a very local solution
to the disposal of biological solids resulting from
testing and trials. While plastics are used in sample
generation, as packaging is a key variable in sample-
storage evaluation, near to 100% of this is recycled.
To further reduce plastic waste, disposable plastic
evaluation dishes have been replaced with reusable
stainless-steel dishes.
FY19 RESULTS
TOTAL WASTE PRODUCED*
3,744t
3,044t
FY18
FY19
TOTAL WASTE RECYCLED*
FY18
66%
FY19
63%
Note: The decline in the rate of recycling is primarily the result of
recycling facilities in New Zealand enforcing stricter rules and criteria for
the acceptance of recyclable items – a consequence of China’s National
Sword policy. To a lesser extent, the commissioning of our fresh milk
plant in Dunsandel has also had an effect on our recycling totals. An
intended outcome of our circular economy roadmap is a return to
higher recycling rates.

25
A HEALTHIER
SYNLAIT
PEOPLE
We are creating opportunities for all to thrive. By building a fan
base for our ambition, commitment and actions, together we can
transform our industry, benefit our country and leave a legacy for
future generations.
Our commitment to sustainability extends throughout our team
members and the wider community. This section of the report
focuses on the three Sustainability Innovation Platforms (SIPs)
that fall under the People pillar of our Sustainability Framework.
They are:
SAFE WORKPLACE
The ways we are achieving integrated health, safety
and wellness, with an aspiration of zero injuries.
CAPABILITY
The ways we are ensuring the wellbeing of our
people by the provision of equitable and attractive
working conditions, and the development of
leadership talent. By investing in our people and
building meaning into staff roles, we can create
a legacy of committed leaders who will help us
transform our industry for the better.
CULTURE & COMMUNITY
The ways we plan to make a tangible contribution
in the areas where we work, uniting our employees,
farmers and local communities around ecosystem
restoration projects.

27
SAFE
WORKPLACE
As a rapidly growing organisation undertaking
complex work, our team members can be exposed
to a range of risks. ‘Everyone Home Safe, Every
Day’ is our bottom line, and we have developed
health, safety and wellbeing systems and
behaviours to support the achievement of
our zero injuries ambition.
SAFE WORKPLACE TARGET
9.0
Total Recordable Injury Frequency Rate by
the end of FY20
FY19 INITIATIVES
Integrated Health, Safety and Wellness
Our five-year Health, Safety and Wellness strategy
focuses on leadership, risk management, event
response and safety culture. The launch of MySafety,
a platform to allow team members to report events
and gain visibility of corrective actions and outcomes,
has resulted in a 75% increase in reported events
and has helped us hone health and safety systems.
From FY18 to FY19 our Total Recordable Injury
Frequency Rate (TRIFR) dropped by 28%. Despite
these positive results, we are conscious that we are
still far from our zero injury ambition. We will continue
our efforts to drastically improve our safety results.
New Wellness Programme
In FY19 we made a conscious decision to place
a focus on employee wellbeing. These wellbeing
initiatives are intended to enhance mental and
emotional, social, spiritual and physical wellbeing. By
encouraging appropriate rest, physical movement
and information and guidance on the right way
to nourish our body, we are championing better
physical and mental health. This year’s ‘Eat well,
live well’ event in June saw team members come
together to cook and enjoy kai while learning about
healthy eating, nutrition and food labelling.
This year we also made available confidential
wellness assessments to all staff members. Carried
out by an occupational health nurse, the assessments
focussed on blood pressure, blood sugar levels,
cholesterol, Kessler 10 scores and cardiovascular
risk. For every 20 registrations received, we donated
$1,250 to the New Zealand Heart Foundation as part
of the Big Heart Appeal.
FY19 RESULTS
RECORDABLE INJURY FREQUENCY RATE (TRIFR)*
9
13.7
FY20
Target
FY19
18.9
FY18
EMPLOYEE FATALITY RATE*
0

29
CAPABILITY
TALENT ATTRACTION
& DEVELOPMENT
A dedicated and skillful team is critical to our
performance. We continue to build workforce
capability in several ways. In FY19, our workforce
increased by 218 employees. With such fast growth
it is important that we bring people on board
effectively. We do this through Synlait 101 – a three-
day orientation programme that all staff complete
in their first week. Synlait 101 includes information
on who we are and what we do, which is presented
by leaders from across the business, and a visit to a
Lead With Pride™ dairy farm, a first for many people.
Also, in July, more than 800 of our people attended
our staff conference at Horncastle Arena in
Christchurch, an excellent opportunity for our people
to connect with our purpose, ambition and strategy
– and with each other – en masse.
TOTAL SYNLAIT STAFF
900
FY19
682
FY18
DIVERSITY & INCLUSION
There is a pure and simple business case for
diversity: companies that are more diverse are
more successful.
We are an action-based organisation that is growing
fast. Our people make things happen, which is why
it’s important to support our team and build the right
culture to support our growth. After adopting our
first Diversity and Inclusion strategy last year, we
have begun establishing policies and measurable
objectives that help our people balance the demands
of work and home, and help us to create a positive
workplace culture that will appeal to a diverse range
of potential employees.
GENDER BREAKDOWN AT SYNLAIT

Female: 40%
Male: 60%

3130
TALENT ATTRACTION
& DEVELOPMENT

FY19 INITIATIVES
Engagement survey
Our focus on employee engagement continues
to show positive results, despite a slight decline
compared to FY18. We use Gallup’s Q12 survey
tool to measure engagement every quarter,
benchmarking our performance against Australia,
New Zealand and Oceania. Engaged teams have
lower levels of absenteeism, lower turnover, higher
productivity, and make the companies for which
they work more profitable.
ENGAGEMENT RATIO (ENGAGED STAFF: ACTIVELY
DISENGAGED STAFF) ACHIEVED IN FY19*
3.751
3.581
FY18
FY19
Perform and Grow
Perform and Grow is our performance management
process. It is how we lead and encourage leadership
and talent development within our teams. Perform
and Grow’s scheduled conversations between
team leaders and staff clarify expectations, drive
engagement, develop personal capability and deliver
performance. The programme begins with an initial
meeting in August to establish coaching objectives,
accountability and performance goals, with monthly
check-ins throughout the year.
STAFF WHO RECEIVED PERFORM AND GROW REVIEWS*
FY19
61%
We are working to raise the percentage of staff
participating in Perform and Grow reviews. We have
recently moved Perform & Grow to an online format
within our Human Capital System which is easier to
access and use. We are also providing increased
clarity for people leaders regarding what is expected
of them during these reviews. Finally, the new Human
Capital System will provide more accurate data on how
Perform and Grow is being used.
Future Leaders
As a fast-growing and ambitious company, we are
committed to attracting and retaining executives who
show a synergy with our mission and way of working.
Through our three-year Future Leaders training
programme we are also committed to training
our own executives. Future Leaders is suited to
ambitious graduates who aspire to be at the forefront
of a leading New Zealand company. Participants
rotate through key roles to gain a foundational
understanding of Synlait’s processes and workflows
and, upon completion, are assigned a first leadership
role with ongoing mentorship provided by senior
managers. The first Future Leaders cohort is now
on assignment in various business areas.
In-house recruitment
Part of our talent development strategy is enabling
staff to advance to new roles within the company.
In FY19, 182 roles were filled internally out of a total
number of 514 roles.
ROLES FILLED BY INTERNAL STAFF*
35%
FY19 RESULTS
EMPLOYEE TURNOVER RATE*
FY18
18%
FY19
10%
DIVERSITY & INCLUSION
TARGETS
5%
gender pay gap achieved by 2025
>45%
mix of women achieved in leadership positions
(team leads, supervisors and specialists, and above)
0
regretted losses of high-potential women
FY19 INITIATIVES
Diversity and Inclusion Strategy
After finalising our Diversity and Inclusion Strategy
last year – a tool to achieving sustainable commercial
success and creating a high performing, values-driven
culture – we have set ourselves three main goals.
1. Workforce Diversity: Put in place strategies to
support the employment of more women and Māori.
2. Diversity through Leadership: Empower and equip
leaders to recruit, develop and retain a diverse and
competent workforce.
3. Workforce inclusion: Foster a culture that
encourages flexibility and fairness to enable all
employees to realise their potential and increase
retention.
Workplace flexibility policies
In September 2019 we introduced Mātua, our
parental leave policy, and Tāwariwari, our flexible
working policy. These two cornerstone policies are
helping us foster a culture of workplace fairness and
flexibility.
Mātua enables parents to take the time off work
required to raise children – and encourages them
to return to work in conditions that mutually benefit
their families and the business. Benefits of Mātua
include Synlait topping up government-paid leave
to full salary for 22 weeks (extended to 26 weeks
in July 2020) for the primary caregiver, partners
being offered two weeks paid leave, and payment
of a Child Care subsidy up until the point that the
government subsidy applies – a ground-breaking
benefit in New Zealand.
Tāwariwari defines the ways that we can support
and enable formal workplace flexibility – for example
career breaks, part time work, job sharing – where
there is net neutral or net positive benefit to
both employee and business, and where we can
ensure there is no reduction to performance and
productivity.
Finally, Synlait Way of Working is our modern
way of working. It allows employees to choose
times, locations and spaces to work in that best
suit their activities.
FY19 RESULTS
GENDER PAY GAP*
13%
FY19
18%
FY18
5%
FY25
Target
WOMEN AS MANAGERS OR SENIOR SPECIALISTS*
FY18
34%
FY19
36%
WOMEN IN SENIOR LEADERSHIP TEAM*
FY18
14%
FY19
14%

33
CULTURE AND
COMMUNITY
Each year, we provide sponsorship to local sports
groups and events as a means of connecting with
the communities in which we operate. In FY19, as
we further defined our environmental and social
sustainability strategies, we also developed an
initiative called Whakapuāwai.
FY19 INITIATIVES
Whakapuāwai means “to cause to blossom, develop,
flourish, prosper, thrive”. It is our commitment to
restoring and regenerating native ecosystems,
waterways and wetlands, flora and fauna. It is
about drawing people and groups together to
improve water quality and restore biodiversity, and
re-establish mahinga kai – the places and natural
resources that are culturally important to Māori.
Synlait staff receive one paid day per year to
volunteer on a Whakapuāwai initiative. It is a way for
them to engage with their communities and make
a contribution to environmental restoration in the
places where they live and work. For Synlait, it is a
way of making tangible our purpose of ‘Doing milk
differently for a healthier world’. At this year’s staff
conference, each team member was given a native
tree to plant in the new landscape being prepared
at Dunsandel as a physical symbol of the connection
we all have with the land.
There are three aspects to Whakapuāwai:
1. Extensively landscape and plant thousands of
native trees and shrubs on the 15 hectares of grazing
land behind our Dunsandel operation. While the early
planting programme requires plants sourced from
local nurseries, within a couple of years the plants
will come from our own nursery. In time, it will contain
a wetland, along with walking tracks, exercise zones
and meeting areas.
2. Work with farmers to identify areas on farms
that would benefit from restoration of natural
ecosystems. Plants from our own nursery will be
used to regenerate these areas. Our farmer suppliers
were also given a tree during our annual supplier
conference.
3. Form partnerships to identify and restore
community areas of shared value. As an example,
Te Waihora (Lake Ellesmere) is a catchment area
that has been significantly degraded as a result
of changes in surrounding land use. That part of
Canterbury was once a large wetland, home to
thousands of species of animals and plants, and a
critical source of food for Ngāi Tahu. We are now on
a pathway to forming a partnership with our local
hapū, Ngāi Te Ruahikihiki, to work on restoration
projects, starting with extensive planting and wetland
restoration around Muriwai (Cooper’s Lagoon). We
hope the improvements to this small piece of land
will become an exemplar for restoration that land
owners all around Te Waihora will follow.
FY19 RESULTS
INVESTMENT IN COMMUNITY PROJECTS*
$371,258
FY19
$12,500
FY18
The significant increase from FY18 to FY19 is due to the launch
of the Whakapuāwai project in 2019.

35
WORLD CLASS
VALUE CHAIN
ENTERPRISE
We serve milk nutrition for modern life, worldwide. Our pioneering
mindset drives us to do bigger things, to stand for more, to play
a bigger role. As demand for our products continues to increase,
we are investing in accreditations and certifications that provide
us with competitive advantage and reputational credibility and
provide our customers with assurances that we are committed
to the highest standards of food production and delivery. The
Sustainable Innovation Platforms (SIPs) under this section are:
SAFE FOOD
The ways we are approaching nutrient production
that enable customers to confidently differentiate
their products based on quality and provenance.
Our Safe Food initiatives and accreditations ensure
our processing systems meet the highest food
quality and safety standards.
HEALTHY FARMING
The ways we are pursuing excellence across
our supply chain. This begins on farm with Lead
With Pride™, a transformational programme that
guarantees the integrity of our milk and the way
it is produced.
SUSTAINABLE SUPPLY
Our Sustainable Supply aim is to ensure that
throughout our supply chain our products will speak
of our sustainable objectives and have a positive
impact on people and the planet.
TRANSPARENCY
The ways we are seeking success beyond profit
and undertaking several processes to have
our sustainability performance measured against
global standards.

37
SAFE FOOD
As a producer of infant formula and other
differentiated products that provide genuine benefits
for human health and wellbeing, maintaining the
highest standards of quality and safety is integral
to our continued success. At Synlait, everyone
owns quality. What we achieve every day is
complete supply chain integrity – from fresh milk
on farm through to consumer-packaged products.
Throughout this unbroken chain, we take a no
compromise approach to product quality and
consumer safety with dedicated in-house laboratory
testing and international regulatory expertise.
FY19 INITIATIVES
Quality in our operations
We have invested heavily in a food-safety strategy
that mandates rigorous testing to prove the absence
of microbial and chemical contaminants. Every
can of finished infant formula is x-rayed to confirm
the absence of foreign matter. We have several
in-house labs, a dedicated chemistry laboratory, a
microbiology laboratory, and in-process laboratories
inside each dryer and in the fresh milk factory, which
are ISO 17025 certified and IANZ accredited. These
laboratories allow us to complete 70% of our product
testing requirements on-site. We perform over
500,000 tests a year, on raw materials, final products,
during processing and on the manufacturing
environment. We outsource 30% of tests to external
laboratories to mitigate risks and maximise expertise.
End-product testing is incredibly important for
compliance and customer trust, but we are equally
committed to ‘Quality by Design’; that is, you cannot
inspect quality into a product, you have to build it
into the process. ‘Right First Time’ manufacturing
is the best guarantee for satisfied customers and
shareholders. To support this, our people receive
all the relevant food safety and quality training
required for them to perform their roles with care and
confidence. Our Risk Management Programme (RMP)
spans on-farm practices, milk collection, material
sourcing and manufacturing processes through to
laboratory testing, warehousing and logistics. All are
externally audited every three months. Third-party
certificates such as China Dairy HACCP also motivate
us to maintain excellence.
We have a strong track record at navigating complex
regulatory environments and continue to meet the
strict criteria of several product quality and safety
accreditations. In July, Dunsandel received FSSC
22000 certification, our first global food safety
certificate. This important achievement is valued
by our key customers. For the full list of Synlait
accreditations, please visit our website at
www.synlait.com.
Quality throughout our supply chain
Our quality teams act as both gate-keeper and
gate-opener for our suppliers. They ensure that all
products supplied to us are safe and compliant. In
2019, we moved to a new system of assessing raw
materials, packaging and service suppliers, allocating
risk ratings of low, medium, high and critical to
each one. The criteria to determine the level of risk
includes the type and volumes of product supplied,
and the number of non-compliances previously
identified.
FY19 RESULTS
In FY19, 29 audits were completed out of a total of 80
active raw materials and packaging suppliers. From
FY20, our quality audits will prioritise high and critical
risk suppliers.
RAW MATERIALS AND PACKAGING SUPPLIERS AUDITED IN FY19*
36.2%

39
HEALTHY
FARMING
Our commitment to healthy farming is driven by
Lead With Pride™ and the work we do with New
Zealand’s best dairy farmers. We know our farmer
suppliers by name, not as a number, and take pride
in strengthening our relationships with them through
farm visits and assessments, an annual supplier
conference, and regular events that celebrate the
successes of our wider network.
ALL FARMS
In the last milk season, our Dunsandel processing
plant was supplied by 201 farms, with 80% located
within an 80 kilometres radius. All farms supplying
Synlait have had Farm Environment Plans since
2016/17. Furthermore, all our farmer suppliers
are subject to the terms and conditions of our
Supplier Handbook, which provides information
about compulsory milk quality specifications, and
requires visits by independent Farm Dairy Assessors
who audit hygiene, regulatory and sustainability
compliance, animal health and treatment,
biodiversity, water usage and other key factors that
contribute to healthy farming systems.
This attention to overall farm health helps keep
the ratio of non-compliance issues low. Last year,
there were five significant on-farm environmental
non-compliances and four minor non-compliance
equivalents. The significant non-compliances
included irrigating effluent outside of a consented
discharge area; illegal discharge of effluent to drain;
and effluent ponding to land. Synlait's Milk Supply
team undertook full farm environmental assessments
and drafted management plans jointly with the
concerned farmers to identify and set timeframes
for remediation actions. The team then carried out
regular site visits to ensure that progress was being
achieved and that compliance with all regulatory
requirements was being maintained.
FY19 RESULTS
Our average length of partnership with current
farmer suppliers is 6.8 years.*
PERCENTAGE OF FARMS WITH SIGNIFICANT
ENVIRONMENTAL NON-COMPLIANCES IN FY19*
2%
LEAD WITH PRIDE
™
Doing the right thing is rewarding – that’s one
takeaway from Lead With Pride
™
, our on-farm
certification programme that continues to go from
strength to strength in recognising and financially
rewarding suppliers who achieve dairy farming
best practice.
Several years ago, Synlait recognised the need
to ensure that farmer suppliers, who were facing
environmental and other challenges, had access to
a leadership programme which provided a pathway
to excellence. Lead With Pride
™
was the result –
an industry exemplar launched in April 2013 that
was the first programme of its kind in Australasia.
Internationally recognised with an ISO/IEC 17065
standard, Lead With Pride™ encourages and rewards
suppliers who prove excellence in dairy farming.
Lead With Pride
™
is challenging, but the response to
the commitment from farmer suppliers, customers
and investors has been extremely supportive. Today,
nearly 50% of our South Island farms are Lead With
Pride™ certified.
LEAD WITH PRIDE™ CERTIFIED FARMER SUPPLIERS¹*
FY18
28%
FY19
49%
LEAD WITH PRIDE™ CERTIFIED MILK
2
*

FY19
51%
FY18
33%
1. Reporting period from June 1 to May 31
2. This includes milk from farmer suppliers that became
Lead With Pride certified during the financial year.

4140
Lead With Pride
™
is transformational. Farmers do
more than ensure quality of milk production, they
take a holistic approach to all aspects of farming.
The integrity of production and superior quality of
milk enables our international health and nutrition
customers to differentiate themselves
with confidence.
Following the launch of our Sustainability Framework
in 2018, we have worked with farmers on strategies
to further reduce their environmental impact using
Lead With Pride™ as a tool. We have collected
information to establish and communicate to our
farmer suppliers their unique GHG emissions profile
and added a financial incentive for farmers who
understand, measure and mitigate on-farm emissions.
We have also introduced an incentive payment for
maintaining a palm kernel expeller (PKE) free farm. At
the end of last year’s season, 63 PKE-free Lead With
Pride™ farms had received the payment.
Synlait farms belong to one of three Lead With
Pride™ categories: Gold, Gold Plus or Gold Elite. Gold
represents good practice but is non-certified. Gold
Plus and Gold Elite certified suppliers meet additional
standards – they are ISO/IEC 17065 certified
and receive incentive payments for their milk to
encourage suppliers to deliver the best standards
of milk quality, animal welfare, environmental
sustainability and staff and community well-being.
As Synlait Pōkeno was commissioned early in FY20,
we have brought together a new group of milk
suppliers in the greater Waikato region. With so much
momentum building around our Lead With Pride™
programme, we actively target farmers who meet the
required standard, or who are capable of achieving
certification in the near future.
OUR FOUR PILLARS
Certified Lead With Pride™ farmers are evaluated
against pillars of Social Responsibility, Environment,
Animal Health and Welfare, and Milk Quality.
Environment – Lead with Foresight
New Zealand’s unique environment is reflected in
the quality of the milk produced here, so protecting
it is both good farming and good business. For
dairy farming to be sustainable, our industry’s
environmental practices must be sustainable too.
To become Certified Members, our suppliers must
achieve excellence in the management of water,
effluent, biodiversity, soil quality, energy and
greenhouse gas emissions.
Animal health and welfare – Lead with Care
The health and welfare of a herd impacts directly
on milk quality. The best dairy farmers know this
and work hard to ensure a happy, healthy herd.
It is the proactive steps they take today that help
improve milk production tomorrow. Certified
Members exceed New Zealand’s Animal Health
& Welfare standards. This includes accurately
monitoring and recording animal health events and
outcomes so better decisions can be made in the
future and performance improved.
Milk quality – Lead with Greatness
It takes modern, innovative farming methods to
produce the highest quality milk that our customers
want in their products. Our best suppliers are
dedicated to food safety. They do this by monitoring
milk quality daily and focus on practices that ensure
the absolute integrity of the milk they produce. Our
Certified Members are recognised for excellence
in areas that our customers consider essential,
including dairy presentation and infrastructure,
hygiene practices, milk cooling, residue management
and staff training.
Social responsibility – Lead with Integrity
The greatest potential on any farm lies in its people.
By building cohesive teams that have real drive
and passion, our suppliers are able to improve
overall farm performance. Taking a comprehensive
human resources approach, farmers create more
opportunities for success, they also attract the best
employees. Certified Members take a systems
approach to recruitment, management, training and
health and safety. They create a sense of teamwork
on farms and stand out as an employer our industry
respects.

43
SUSTAINABLE
SUPPLY
Our Sustainable Supply goals are to reduce our
supply chain’s environmental footprint and reduce
our exposure to social or environmental risks,
and also identify and collaborate with like-minded
suppliers who are willing to innovate and supply us
with more sustainable products. We are currently
refining the details of our Sustainable Supply SIP
and will provide more details in next year’s report.
FY19 INITIATIVES
Supplier assessments
We do not yet have a formal framework to assess
the sustainability performance of our key suppliers.
Nevertheless, we have begun to integrate sustainability
criteria into some tenders. In one recent tender, for
example, environmental and health and safety criteria
accounted for 8% of the total score attributed to
the respondents.
Local supply
Current actions that are reducing the environmental
impact of our supply chain include favouring suppliers
that are based in New Zealand. All our packaging
suppliers except for a small portion are located
within New Zealand. For example, the vast majority
of our paper bags are made in South Auckland. Our
continued success has also encouraged some key
suppliers to invest in production facilities closer
to our Dunsandel operation, which has the dual
advantages of benefitting the local economy and
reducing the environmental footprint involved in
transporting products.
FY19 RESULTS
PERCENTAGE OF NON-MILK SUPPLIER EXPENDITURE
SPENT WITH NEW ZEALAND REGISTERED COMPANIES*
FY18
86.3%
FY19
88.4%

45
TRANSPARENCY
Transparency is about integrity – a commitment
to clear and accurate reporting of our sustainable
performance and progress to our many
stakeholders. We are currently in the early stages
of aligning with and seeking accreditation from
leading third-party organisations committed to
effecting long-term change. These initiatives will
assure investors, customers and consumers of the
sustainable credentials of our business and frame
our performance against rigorous global standards.
There are also economic advantages to transparency
of reporting, for instance the ability to access ESG
risk-rated loans, which are granted on conditions
of information disclosed to market.
FY19 INITIATIVES
B Corp
We are actively pursuing B Corp certification. B Corp
businesses balance purpose and profit. Becoming
B Corp-certified requires a B Impact Assessment
score of 80 – this is a high bar, and we are improving
our processes and practices in order to enter the
full verification process as soon as possible. The
assessment comprehensively covers the impact of
a business on all stakeholders, including workers,
suppliers and community and, of course, the
environment.
ESG Rating
We engaged Sustainalytics, an Environment,
Social and Governance (ESG) research provider,
to undertake an assessment of our sustainability
performance, and consequently received our first
ESG risk rating score of 34.9* in February 2019. The
Sustainalytics report measures our ESG risk rating
across 11 different material issues. The results of the
report have allowed us to agree terms and conditions
for an ESG-Linked Loan with ANZ. Globally, leading
banks use ESG ratings and data to identify lower-risk
borrowers and meet sustainable financing goals
by offering loan-pricing reductions. We are the
first mover with ANZ in the New Zealand market
for such a loan.
CDP
CDP is a worldwide organisation that aims to make
environmental reporting and risk management a
business norm, and drive disclosure, insight and
action towards a sustainable economy. In July 2019,
for the first time, we completed CDP’s climate change
questionnaire. Our response has been published
on CDP's website and our CDP score should be
released by the end of the calendar year.
Science Based Targets
We also began the engagement process with
Science Based Targets Initiative (SBTi), a partnership
of climate organisations that helps companies
determine emissions reduction targets in line with
the level of decarbonisation required to keep global
temperature increase below 1.5°C. We expect
our climate change targets to be reviewed by
the end of FY20.

WANT TO PROVIDE YOUR FEEDBACK ON OUR SUSTAINABILITY STRATEGY AND REPORTING?
OR HAVE A QUESTION TO ASK OUR TEAM? CONTACT US AT: SUSTAINABILITY@SYNLAIT.COM