LIC 2025/26 Sustainability Report

Building stronger herds,
smarter tools and a
more resilient future
Livestock Improvement
Corporation Limited (LIC)
Sustainability
Report
For the year ended 31 May 2026

This report presents information on LIC’s
environmental, social and economic
performance for the year ended 31 May 2026
and has been reviewed by LIC’s Board of
Directors. LIC has reported in accordance with
the Global Reporting Initiative (GRI) Standards
for the period 1 June 2025 to 31 May 2026.
About this report
The report meets our commitment to report on LIC’s
environmental, social and economic performance. It also
provides an opportunity to show how we are responding
to sustainability challenges facing our farmers and
the New Zealand dairy sector. It outlines how we are
helping farmers understand and improve their emissions
and demonstrates that, with a sharper focus on herd
improvement, New Zealand farmers can produce
high-quality milk products from sustainable, high-
performing cows.
Our external auditors, KPMG, have performed procedures
to confirm that the financial data included in this
Sustainability Report is consistent with LIC’s Annual Report.
We are committed to open and transparent reporting
on sustainability and will continue to further develop our
reporting over time.
LIC Sustainability Report

Contents
Who we are 4
Why sustainability matters to LIC 5
Key highlights 6
Letter from the Chair & Chief Executive 7
Our strategy 9
Environmental sustainability 10
R
educing the emissions footprint of our national herd 12
R
educing the environmental footprint of our business
2
0
-Science-aligned emissions targets 20
-Our emissions 22
-F
inancial implications, risks and opportunities
25
-Improving business sustainability 28

Social sustainability – caring for our people 32
Governance Structure 33
Caring for our people 36
Emp
loyee Data 40
Economic sustainability 42
O
ur business
47
H
ow we work 49
How we create value 52
Engaging with our stakeholders
54
Materiality assessment
56
G
RI content index
57
For the year ended 31 May 2026

Who we are
We exist to help farmers breed
for the future herd now –
using the best tools, insights
and genetics.
LIC’s head office is at Newstead in the Waikato, with more
than 25 sites across New Zealand, Australia, the United
Kingdom and Ireland. With origins dating back to 1909, LIC
has a long history of delivering world-leading innovations
for the dairy sector. That role is even more relevant to
farmers today as the sector responds to rapid change
and growing climate challenges. What we do has never
been more important for Kiwi farmers, our sector and
New Zealand.
As a farmer-owned generational co-operative, all of
our profit is returned to our farmer shareholders through
dividends or reinvested into new solutions and research
and development (R&D).
LIC shares are listed on the NZX. To be a shareholder in
LIC, you have to farm dairy cows in New Zealand, supply a
New Zealand milk processor and buy a minimum amount
of qualifying products and services from LIC every season.
LIC is a New Zealand dairy
farmer-owned co-operative
focused on pasture-based dairy
genetics and herd management.
LIC Sustainability Report
4

Why sustainability
matters to LIC
Our strategy focuses on building stronger herds, smarter tools and a more
resilient future for our shareholders and the sector. As a generational co-
operative, we understand the role we play in driving positive change through
collective action on climate change in New Zealand and supporting our farmer
shareholders on that journey. We are committed to driving sustainability
improvements and helping reduce on-farm emissions, with projects and
initiatives underway in both areas.
At LIC, we support farmers and their herds to reduce biogenic methane
emissions intensity. Genetic improvement of the national herd is estimated to
reduce methane intensity by 0.66%
1
per annum. LIC has been investigating
ways to reduce gross methane emissions, which has required a higher number
of trial animals in recent years to support R&D in this area, as well as work to
improve heat tolerance on behalf of the sector. This R&D has identified that
further research will be needed on lactating cows over the coming years,
which may lead to lower methane-emitting bulls in our bull team in the future.
We support our 8,500 shareholder farmers through genetics, genomics, milk
testing and diagnostics, together with leading research and innovation, to
produce the most sustainable and profitable animals.
New Zealand farmers, our sector
and the New Zealand Government
are focused on a sustainable
approach to farming, so we
must continue to improve our
environmental credentials.
Sustainability matters to us as a business and because
of the critical role we play in helping dairy farmers
meet their own sustainability goals.
1
Source: Abacusbio ‘Breeding worth and Emissions Intensity’ (prepared for Dairy NZ and NZAEL)
For the year ended 31 May 2026
5

Key highlights
Environment
Supporting shareholders to produce the
most sustainable and lower emitting
animals and reducing LIC’s emissions.
‘BeHerd’
Engagement
survey result
Five-year rolling
average increase
in genetic gain
Five-year rolling average increase
in genetic gain (genomically
informed Breeding Worth) for
long-term users of LIC genetics
(across 2021 – 2025 cohorts)
2025/26 change
compared to 2018/19
(base year)
2025/26 change
compared to 2018/19
(base year)
Up 2.4% from 395.6
kgMS prior rolling
3-year average
0.51% decrease
on previous year
Total
revenue
Lost time injury
frequency rate
Final dividend
declared
Full time
equivalent
employees
R&D and
investment
in business
Investment & capital
spend $24.7m down 11.1%
from last year.
R&D investment $26.6m
up 17.8% from last year
2
Source: New Zealand Dairy Statistics 2024-25
77
$
314.8
m
$
51.3
m

Reduction in
LIC’s Scope 1
& 2 CO
2

emissions
Rolling 3 year
average milk
production
Cows in
national
herd
25.6
%

Reduction in
LIC’s Scope
1 biogenic
CO
2
emissions
4.8
%

4.30900
+

Social
Caring for our employees and our farmer shareholders
Economic
Delivering value to our farmer shareholders by investing in initiatives to help
them breed the most profitable and sustainable animal
$
17.5
m
24 .7gBW
405.0kgMS
2
4.68million
2
Up 6.7% from $295.1
million last year
12.26 cents per shareUsing Microsoft’s Viva Glint
software in May 2026 - the
result puts us in the top quartile
of global organisations using the
same tool. There was an 86%
employee response rate.
(Per 200,000 hours worked)
Down from 4.33 last year
As well as 1,650+
seasonal workers
If we’re milking fewer cows, we need to milk better ones.
LIC Sustainability Report
6

Letter from the Chair
& Chief Executive
For more than a century, herd improvement has been at the heart of LIC’s
contribution to New Zealand dairy farming. It remains the single biggest way
we, as a generational co-operative, can support the long-term sustainability of
our sector.
By supporting farmers to breed cows that are more productive, efficient and
better suited to New Zealand’s pasture-based farming systems, our Co-
operative is improving the genetic gain of our national herd, strengthening
on farm profitability and supporting the reduction of emissions-intensity. As
farmers respond to changing environmental expectations, market demands
and climate challenges, this focus has never been more important.
Our focus remains on investing in the science that underpins this long-term
progress. Genomics accelerates the rate of genetic gain, giving farmers greater
confidence to identify better animals earlier and make breeding decisions
that deliver lasting value. Alongside this, our research programmes continue to
explore the opportunities genetics can provide to address the wider challenges
facing the dairy sector.
This year, our methane research reached an important milestone. While the
latest findings showed the original breeding pathway investigated is unlikely
to deliver the outcome we had originally hoped for, the research has provided
valuable new knowledge that is shaping the next phase of work. It reinforces
the importance of robust science and long-term investment as we seek
practical, evidence-based solutions to help farmers reduce emissions over time.
For the year ended 31 May 2026
7

Our commitment to future-proofing the national herd extends beyond emissions. We
continue to invest in heat tolerance research, recognising that cows able to better
cope with rising temperatures will become increasingly important for maintaining
productivity, fertility and animal wellbeing as our climate changes.
Sustainability of our sector is not just evident on farm but also in the work we do to
support the people who make our industry strong. Building a resilient dairy sector
means investing in the next generation of farmers, leaders and rural communities.
We’re proud to support initiatives that help develop capability and create
opportunities across the sector, including the New Zealand Dairy Industry Awards,
Dairy Women’s Network and the South Island Dairy Event. Just as importantly, we’re
helping foster a lifelong connection to farming through our nationwide support of Calf
Club, encouraging thousands of young New Zealanders to develop an appreciation for
animals, agriculture and the role farming plays in our communities.
This report reflects our commitment to transparency and continuous improvement.
Sustainability is not achieved through a single initiative, but through steady progress
built over time. By continuing to invest in herd improvement, scientific research and
skilled resilient people, our co-operative will help New Zealand dairy farmers build
resilient businesses that are productive, sustainable and well positioned for the future.
Corrigan Sowman David Chin
Chair
C
hief Executive
17 September 2026
LIC Sustainability Report
8

Creating value for our farmer shareholders is at the heart of everything we do. As a generational co-operative we remain focused on delivering long-term productivity gains
for farmers and supporting sustainable genetic progress for the New Zealand dairy herd. The herd of the future will be highly efficient, producing more from less, aligned
with the needs of processors and global markets, lower emitting and environmentally fit for purpose. Our people are helping farmers breed for the future herd now using the
best tools, insight and genetics.
Our strategy focuses on building a strong sustainable co-operative, leading the world in our field and delivering outstanding value for our customers, shareholders and
sector, next year, in five years and for another 100 years. During the prior reporting period the Board completed a check-in on LIC’s business strategy and clarified the focus
on herd improvement, enabling emissions intensity reduction in the national herd, with five priority areas being focussed on as key enablers of herd improvement: customer
experience, genetics, testing, farm software and international markets.
Our strategy
What's the
herd of the
future?
How we'll
breed it faster
The role of
our people
Working with farmers to breed for the future herd now - using the best tools,

insights and genetics we can offer
B
reeding
better cows
faster with:
Why this
matters
High-performing herds
through world-class breeding
programmes
Smarter tools that connect data,
insights and systems farmers use
A generational co-operative that's
easy to work with
Our Strategy
Customer
experience
that makes LIC
easy to deal with
Genetics
that continue
to deliver value
on farm
Testing
to predict
performance and
health issues
Farm software
to make herd
and breeding
decisions easier
International
markets
to strengthen our
breeding scheme
With world leading herd improvement
Highly efficient,
producing more
from less
Aligned with the
needs of processors
and global markets
Lower-emitting and
environmentally fit-
for-purpose
For the year ended 31 May 2026
9

The most significant impact we can make is through
helping to reduce the environmental footprint of the
national dairy herd.
Working with dairy farmers, including via milk
processors, to help farmers accelerate their
herd improvement to breed better cows faster is
important to help the sector to reduce its overall
emissions intensity. This can include using LIC
services to identify the best cows to breed from
(eg herd testing and DNA testing), using sexed
semen to produce more replacement cows from
the best cows and, in the future, may lead to lower
methane-emitting bulls.
Herd improvement is what we do. We provide
farmers with the precision genetics and technology
tools they need to help improve their herds and
become more sustainable, while remaining profitable
and productive. We are amplifying this through
genomic science to deliver results for farmers faster.
Eighty years ago, at the end of World War II,
New Zealand dairy cows produced around 150kg
milksolids (MS) a season. Last year, that average
was 414kg MS, an increase of 176%. While better
feed and herd management have contributed,
much of this improvement reflects genetic gain.
These gains are cumulative and permanent,
delivering long-term benefits into the future.

The rate of genetic
progress in the New
Zealand dairy sector has accelerated significantly
over the past decade. Tools such as our GeneMark®
Genomics service, improved data collection, and
more sophisticated evaluation systems mean we can
identify an animal’s genetic merit earlier and with
greater accuracy than ever before.
The results some farmers are achieving show that, if
we sharpen our focus on herd improvement, we can
reduce emissions intensity and continue to have the
world’s most efficient dairy herd. High-producing,
climate-friendly cows are not just a hope for the
future; they exist in the national herd today and are
within reach for every dairy farmer. We simply need
more of them, and our products and services give
farmers the opportunity to do just that.


By assessing genetic data, our models estimate that
over the past 30 years the genetic improvement in our
Premier Sires® semen delivered on-farm has resulted
in an 11.8% reduction in enteric methane and 14.4% less
urinary nitrogen emission intensity per kilogram of
milksolids produced, noting that the size of the dairy
herd increased 71% during that period (1994 to 2025
increase - New Zealand Dairy 2024/25 Statistics

report), which increased absolute methane emissions
of the national herd.
The increased rate of genetic improvement in
production and fertility traits without any increase
in animal liveweight, and the shorter generation
interval that genomic selection enables, has created
a consistent trend of New Zealand farmers breeding
more emissions efficient cows and, year-on-year,
they’re doing it faster.
New Zealand dairy farmers continue to embrace
a range of tools to improve herd sustainability and
productivity. The New Zealand Dairy Statistics report
2024/25, produced by LIC and DairyNZ, shows that
over 82% of cows were herd tested and this is one of a
number of tools that farmers are using to help improve
milk quality and production. The percentage of cows
artificially inseminated increased slightly to 81.5% from
81.1% in the previous season. This reflects a continued
trend of New Zealand farmers remaining focused
on improving the production efficiency of their herds
and utilising data and insights to support on-farm
decisions.
Cow numbers slightly decreased in 2024/25 by
0.5% and there was a 2.92% increase in kilograms of
milksolids processed compared to the previous season.
Environmental sustainability
The dairy sector needs to continue
evolving, both for climate change and
because of it. At LIC, we are committed
to reducing the environmental footprint
of our business.
Key Metrics
LIC Sustainability Report
10

Enteric methane
Enteric methane from ruminant livestock is the main greenhouse gas emission
produced in pastoral dairy farming. Using our genetic data, LIC has modelled
predicted enteric methane emissions relative to milksolids production for the lifetime
of the female progeny of the Premier Sires teams.
The weighted average of the Premier Sires team for the 2024/25 season showed
a decrease in both urinary nitrogen and methane per kg of milksolids below the
30-year trend. This is a result of genomic selection and the use of the Forward
Pack product by farmers which continues to drive the rate of genetic gain and
subsequently methane and nitrogen efficiency.

Urinary nitrogen
Urinary nitrogen from cattle is a major contributor to surplus nitrogen, which can be
lost to the environment as nitrate or nitrous oxide. Nitrate can leach from soil into
waterways as a pollutant, while nitrous oxide is a potent greenhouse gas with a
large warming potential.
The weighted average of the Premier Sires team for the 2024/25 season showed
a decrease in both urinary nitrogen and methane per kg of milksolids below the
30-year trend. This is a result of genomic selection and the use of the Forward
Pack product by farmers which continues to drive the rate of genetic gain and
subsequently methane and nitrogen efficiency.
BW compared to methane per milksolids (kg CH₄/kgMS)
Breeding Worth - BW (LIC GE 14 May 2026)
Urinary nitrogen per milksolids (kg UN/kgMS)
Mehtane per milksolids (kg CH₄/kgMS)
BW compared to urinary Nitrogen per milksolids (kg UN/kgMS)
Breeding Worth - BW (LIC GE 14 May 2026)
For the year ended 31 May 2026
11

Reducing the emissions footprint of our national herd
We’re helping farmers breed better cows and get the best
from them.
As part of our commitment to faster genetic gain, our team of scientists has
investigated the full spectrum of MINDA® herds in search of the ‘best cows’ and
whether a clear correlation existed between genomic Breeding Worth (gBW) and
milk production efficiency.
All cows aren’t created equal.
The research reaffirms that the best cows, those with high gBW, are more
efficient at turning feed into milk. They produce more, have a fertility advantage
and are more emissions efficient. High BW (Breeding Worth) animals are more
environmentally efficient than lower genetic merit animals because they partition
more of the feed they eat into milksolids production and less into waste. This
means more nitrogen is converted into milk protein rather than excreted as urine
or faeces.
For each additional $10 BW advantage an animal has, ~2.0g less enteric methane
is produced per kilogram of milk solid production. Similarly, for each additional
$10 BW advantage there is also about 1.7g less urinary nitrogen per kilogram of
milk solid.
New Zealand farmers must breed more of those highly efficient cows that sit at
the top, and fewer of those who sit at the bottom.
We don’t need more cows – we need better cows.
At an individual farm level there can be many variables, but it is conceivable
that by 2030 a farmer’s whole herd could be performing at the level of their top
25% cows today. The goal is to maintain total milk production from fewer cows,
therefore reducing on-farm emissions intensity.
Breeding better cows, faster, is the key to helping farmers solve the challenge of
being profitable and sustainable. We’ve made good progress over the years but,
to continue on this trajectory, we need to sharpen our focus.
Efficient cows are what the dairy sector needs -
genetic gains underpin phenotypic gains
LIC Sustainability Report
12

Long term users of LIC genetics are already doing this – they’ve
doubled the speed of improvement in their herds over the last
decade. They’re breeding better cows faster, and genomics is the
key contributor.
Over more than 30 years we have invested significantly in genomics and, alongside
farmers’ herd management decisions, it has played a key role in the faster rates of
genetic improvement we’ve seen.
The increased utilisation of genomics in our breeding programme and increased
farmer uptake of young genomically selected sires has gone hand-in-hand with
higher rates of increased genetic gain in farmers’ herds.
Genomic records, ancestry information and technology allow us to accurately
identify elite bulls at a young age so we can start using those animals to breed the
next generation of cows sooner. The use of genomics in our breeding programme
means we can reduce the generation interval from five years to two.
Farmers are making the switch to high gBW genomic bulls for the value that they
deliver on farm. Genomic sires feature in our premium artificial breeding offerings,
including the Premier Sires® Forward Pack, A2/A2, Alpha® and liquid sexed
semen. During the 2025/26 year, 94.7% of fresh semen straws used for breeding
replacements were from our premium bull teams, up from 89.5% the year prior.
Long-term users of LIC genetics are ahead of the pack and moving at pace to
increase the speed of improvement in their herds.
gBW
Genetic Gain in LIC Herds
Rate of genetic gains (gBW)
For the year ended 31 May 2026
13

Key updates and refinements to our herd improvement toolbox
1. Enhancing our GeneMark
®

DNA testing service
GeneMark
®
Genomics
LIC has combined its DNA parentage testing and
genomic evaluation services into one integrated service
to help farmers identify their highest genetic merit
cows to improve their herds. Every eligible sample for
female animals sent to LIC’s GeneMark® lab receives
parent verification as well as a confirmed genomic
evaluation (GEv). By offering parentage verification and
genomic evaluation in one service, farmers can take the
guesswork out of matching calves to their parents for
added precision in their breeding programme, while also
receiving data to assist in selecting the highest genetic
merit animals to join their milking herd.
The significant number of genotypes that will be
collected through this product will also enable the
selection of the best genomic heifers as bull dams,
to drive an estimated 9% improvement in the rate of
genetic gain, equivalent to a 1.4-year reduction in the
cow-to-bull pathway. In the last reporting period, we
reached the significant milestone of genotyping our
one millionth dairy animal. This has accelerated rapidly
since then, and we have now genotyped more than two
million animals.
In May 2026, we marked the start of construction of
our new diagnostics laboratory with a blessing by
Ngāti Hauā at Newstead. This new facility will support
growing demand for GeneMark® Genomics and animal
health testing, increase testing capacity over time and
support new technologies in the future. The new build
provides a practical opportunity to invest in a fit-for-
purpose laboratory on land already owned by LIC. The
new facility is expected to open by August 2027.
Identify calves with genetic variants
During the course of a five-year research programme,
LIC scientists discovered multiple genetic variants
that affect animal health and contribute to up to $10
million in lost production each year across the national
dairy herd. Animals tested through GeneMark® are
automatically screened, free of charge, for the variants
with the greatest impact and farmers are informed
of any affected animals in their herd. Our research
scientists are continuing with a programme of work
focussed on identifying further variants to continue
to improve the information available to farmers,
so that they are able to rear the healthiest, higher-
performing animals.
2. Animal health testing
Johne’s Disease
Johne’s disease is a contagious infection estimated
by DairyNZ to cost New Zealand approximately $40
- $88 million in lost production each year. It is caused
by a bacterium that infects the gut of dairy cows and
other ruminant animals. Common side effects include
lower milk production, difficulty reproducing and rapid
weight loss.
This disease is common in dairy cows, but it can be
difficult to detect – bacteria can remain dormant in the
intestines for many years. Johne’s disease is contagious
and there is no cure.
LIC provides individual animal testing for Johne’s
disease. In the year ended 31 May 2026, testing
increased by a further 20% to a record level of nearly
2 million tests. We are also investigating whether a
prediction model can be developed to identify at-risk
herds using the mid-infrared spectra data collected
through herd testing.
LIC Sustainability Report
14

77
8
9
BEEFPRINT
®
Mastitis
Mastitis is a common disease that affects a cow’s udder
health and milk quality. According to DairyNZ, the cost
of mastitis across the New Zealand dairy sector has
been estimated at approximately $180 million per year.
In August 2025, we introduced a new and improved
test to help farmers better detect mastitis in their
herds. The Mastitis Multiplex test uses herd test milk
samples to detect the three most common mastitis-
causing bacteria and provides an indication of potential
resistance to penicillin antibiotics. This information
is critical in helping farmers make more informed
decisions and to improve the productivity of their herd.
The new test provides farmers with more information
and greater accuracy at a lower cost and has proved
popular, with a 51.5% increase in testing.
3. Sexed semen
We have a state-of-the-art laboratory dedicated solely
to producing sexed semen. It sits alongside our bull farm
and semen processing laboratory.
Our fresh sexed semen is accelerating genetic gain in
dairy herds by enabling farmers to produce more high-
quality replacement heifer calves from top-performing
cows. We are the only provider of fresh sexed semen in
New Zealand, which delivers a higher conception rate
than frozen sexed semen options. A resulting pregnancy
has approximately a 90% chance of producing a heifer,
providing more high genetic merit heifer calves and
enabling the best animals to be selected to be part of
the next generation of the national dairy herd.
The expected range of non-return rate performance
for sexed semen is less than 5% below conventional
fresh semen non-return rate performance. The actual
result for this season was only 2.5% below conventional
fresh semen.
4. HoofPrint
®
and BeefPrint
®

Our HoofPrint® and BeefPrint® indexes rank our artificial
breeding bulls on environmental efficiency. The 10-point
ranking systems enable farmers to select bulls based on
their predicted ability to generate offspring with a lower
environmental impact. The higher the score, the more
environmentally efficient the bull.
HoofPrint® ranks and compares enteric methane and
urinary nitrogen per kilogram of milksolids produced.
BeefPrint® is based on the same methodology
principles, although it ranks beef bulls for their lifetime
enteric methane and urinary nitrogen per kilogram of
meat produced.
For the year ended 31 May 2026
15

Our R&D investment and focus on
innovation is helping Kiwi dairy farmers
retain their position as the most efficient
milk producers in the world, playing a
critical role in helping the sector meet its
climate targets. We are one of the largest
investors in R&D in the primary sector. In the
reporting period, R&D-related costs were
$26.6 million, equivalent to 8.4% of revenue.
Looking to the future
We invest in areas where we have unique capability to maximise
the value our farmer shareholders generate from their livestock
and products, taking innovation from the lab to the paddock.
LIC Sustainability Report
16

Our methane research programme confirmed that
bulls’ genetics play a role in how much methane they
emit, which highlighted the potential for farmers to
breed low methane-emitting cows in the future.
In its first year the programme, backed by the New
Zealand Agricultural Greenhouse Gas Research Centre
and partnering with CRV, measured feed intake and
methane emissions from 281 young bulls set to father
the next generation of New Zealand’s dairy cows.
We found there is genetic variation in the amount of
methane emitted after accounting for feed eaten by
the bulls, with the lowest-emitting bulls producing
around 15-20% less methane than the average. The
second year of the research measured methane
emissions from approximately 300 young bulls from
LIC’s 2022 Sire Proving Scheme and CRV’s 2022
Progeny Scheme.
In collaboration with Pāmu, we are breeding from bulls
that we have identified to be high or low methane
emitters. In 2024, we measured the emissions of 398
daughters at our methane measurement facilities on
our Tauwhare farm. The results confirmed that the
daughters’ methane emissions were representative
of their fathers. The next step was to measure the
daughters’ emissions again during their first milking
season to confirm whether the variation remained
during lactation. The methane daughters calved for
the first time in July 2025, and we measured their
methane emissions and feed intake during lactation
to identify whether emissions measured from a
growing bull and/or heifer accurately predicted the
methane breeding value of a lactating cow. We also
captured standard measurements such as growth
rates, reproductive performance and milk production.
To enable the research to be completed, we invested
in a new purpose-built barn at LIC’s dairy farm. In
addition, we evaluated alternative measurement
methods such as the use of a Portable Accumulation
Chamber to allow screening of large numbers of
heifers and/or cows in future, and whether proxy
measurements could be used to identify low methane
dairy cattle.
Methane research programme
Inseminations with
bulls that are either
high or low for
methane production.
2022
400 heifer
calves born
2023
Methane
measurements
from daughters
2024
Continue research
2026
First daughter lactations:
For herd testing
and analysis of milk
composition
2025
Estimated
timeline to offer
low-methane
genetics
Evaluate
commercial options
2029
Unfortunately, the results of the latest research found
that this trait is not passed through to lactating
cows. While this is a disappointing outcome for the
programme, the research has taught us some critical
things. First, we have learned that methane traits in
bulls are heritable, and this knowledge is already being
applied within our dairy-beef breeding programmes.
Second, it shows genetics can still play a meaningful
role in reducing gross methane emissions. Any future
research would likely focus on measuring methane
production in a much larger number of lactating cows
to develop DNA-based selection criteria.
While these results were not what we had hoped for,
this type of research is essential to ensure that the
solutions we do deliver for farmers have real value.
This work will help guide both LIC’s future direction
and wider sector thinking.
CH
4
For the year ended 31 May 2026
17

LIC is conducting a seven-year breeding programme
to assess the impact of the ‘slick’ gene in cattle,
which produces a short hair coat and improves
heat tolerance. Heat stress has significant welfare
implications for animals. Dairy cows are especially
susceptible to heat stress because of the high
metabolic heat load associated with the demands of
lactation. For dairy cows, heat stress also impacts feed
intake, milk production, fertility and calf birthweight.
The pilot trial found cows with the ‘slick’ gene had
lower rumen temperatures (0.5-1.0°C) compared to
their non-slick counterparts when the Temperature
Humidity Index exceeded 73 (around an ambient
temperature of 26°C and humidity of 60%). No
significant differences in rumen temperatures have
been observed between the two groups during the
New Zealand winter months.
The aim of the breeding programme is to give New
Zealand farmers the opportunity to breed high genetic
merit dairy cows with improved heat tolerance
by 2029. Before offering heat tolerant genetics to
farmers, we want to ensure cows with the ‘slick’ coat
also have the high genetic merit and milk production
expected of New Zealand dairy cows. We are using
genomic technology to accelerate the breeding
programme by screening an animal’s DNA at birth to
determine whether it has the slick gene.
The current step in the breeding programme is
to mate slick genetics with elite cows on selected
commercial farms in New Zealand. This step will
significantly increase the rate of genetic improvement
of animals with slick genetics, while increasing the
number of slick animals on the ground and the
diversity in LIC’s breeding programme. The trial work
remains ongoing to ensure that, when these genetics
are released to New Zealand farmers, LIC has a robust
understanding of the performance of the slick gene
and its potential to improve the welfare of dairy cows
in the future. If progress continues as expected, in
2029 farmers will be able to breed from high genetic
merit slick KiwiCross® sires, with resulting offspring
having a significant improvement in animal welfare
and milk production under heat stress.
Increasing heat tolerance in cows
In December 2024, LIC announced an innovative
collaboration with Pāmu Farms aimed at transforming
the Beef on Dairy sector. Both organisations, together
with Pāmu subsidiary Focus Genetics, have worked
together on a new beef breeding programme that
resulted in the Synergiser brand, bringing together the
very best of Stabilizer and Charolais genetics.
With a shared commitment to enhancing sustainability
and profitability across the dairy sector, the partnership
leverages decades of genetics research and practical
experience to meet the evolving challenges faced by
dairy farmers, calf rearers, beef finishers and processors.
The breeding programme focuses on key traits including
short gestation, ease of calving and rearing, strong growth
and meat quality. The first bull calves from this programme
were born last year and have been closely monitored
since then. They have grown well and completed a feed
efficiency trial, with some very encouraging results.
By combining Pāmu’s expertise in farming innovation
with LIC’s leadership in genetics, the collaboration aims
to support a commercially viable and environmentally
sustainable Beef on Dairy sector. The first frozen semen
inseminations will be available in limited quantities from
spring 2026, enabling us to collect data on calving
difficulty and non-return rates before liquid
insemination becomes available from spring 2027.
LIC has also invested over several years in the KiwiPrime
breeding programme to develop an Angus-Hereford
cross Beef on Dairy option that is comparable with
other sire breeds for growth and carcass quality, while
consistently delivering clean, white face markings at
the same level as a Hereford. This product is expected
to be available from 2027.


Beef on Dairy genetics
LIC Sustainability Report
18

We continued to lead the Resilient Dairy research
programme, with investment and support from
MPI and DairyNZ. The seven-year Sustainable Food
and Fibre Futures programme was launched in June
2019 and concluded this year. When the programme
began, the sector was facing simultaneous financial,
biosecurity and regulatory pressures and needed
new tools to do more with less. It was recognised
that resilience requires both management tools, such
as diagnostics and insights, and genetic solutions,
including breeding values and improved genetic
prediction, to make progress permanent and
cumulative.
The programme involved investing in new disease
management technologies and advances in genomic
science to produce better cows with improved health,
wellbeing and environmental resilience. The research
has included developing new tests to detect micro-
organisms affecting cow health, developing a range
of new health and welfare-related genomic breeding
values, and improving the genomic evaluation models
for New Zealand’s pastoral dairy herds. We continue
to use our genomic sequencing technology to identify
genetic strands and discover which cows have
particular viruses or bacteria.
Milkomics
™

The Milkomics
TM
workstream has identified and
quantified a significant number of species in milk,
including bacteria, viruses, protozoans and fungi. Our
research team has produced a prototype reporting
format that allows us to report on twelve mastitis-
causing organisms and their presence, absence and
quantity (cells/ml) in bulk milk. We also produced
graphs and reports showing how individual farms
compare at both the individual farm level and at a
regional scale. We now have enough baseline data to
establish national baselines for the species present.
Knowing which microbes and viruses are present
within a herd, and at what level, means pathogens
can be managed in a timely and appropriate way.
By comparing the qualitative and quantitative profile
of targeted pathogens with profiles obtained from
a national, regional and/or farm level, it should be
possible to identify potentially problematic microbes
and viruses and establish an eradication plan where
appropriate.
Facial eczema
Facial eczema is a disease caused by the ingestion
of toxic spores from a fungus that grows on pastures
in New Zealand. The fungus prefers warm, moist
conditions and is seen mostly in the North Island,
typically over summer and autumn. The disease
causes liver damage and, in the worst cases, affected
animals die. The challenge in collecting facial eczema
phenotypes is that incidence varies from season to
season. Herds can be affected one year and not
affected again for several years. However, climate
change is likely to increase the presence of the fungus.
A milk biomarker test has been a breakthrough in
collecting phenotypes. The test has been validated
and used to investigate genetic susceptibility to facial
eczema, and the biomarker has been used to identify
herds with liver damage through blood sampling. More
than 10,000 individual cows have been blood sampled
over the past 3 years, and testing has confirmed that
we can measure genetic variation in facial eczema,
with around 23% estimated to be due to genetics.
LIC has developed the facial eczema breeding value
(FE) to enable farmers to breed cows that are more
resistant to the disease.
Resilient Dairy: Innovative breeding for a sustainable future
For the year ended 31 May 2026
19

Reducing the environmental footprint of our business
GHG emissions reduction targets

LIC previously set GHG emissions reduction targets based on
methodologies using SBTi (Science Based Targets initiative) tools and
guided by the biogenic methane emissions reduction target in the
Climate Change Response Act 2002. The intention was to reduce our
greenhouse gas (GHG) emissions and contribute proportionately to
efforts to limit the global average temperature increase to 1.5°C above
pre-industrial levels.
During the prior reporting period, management reviewed LIC’s absolute
GHG emissions reduction targets and the Board approved them.
While we have worked hard to reduce emissions, targets set based on
methodologies using SBTi tools are not considered to be achievable
given challenges with sufficient novel technology not being available
within the necessary timeframe, or at an uncertain cost, to achieve the
targeted emissions reductions.
LIC also has the unique opportunity to help the New Zealand dairy
sector to reduce methane emissions intensity through genetic
improvement R&D. This opportunity has led LIC to increase trial animal
numbers, and therefore our Scope 1 biogenic emissions, to conduct R&D
that can help drive long-term reductions in methane emissions intensity
for the New Zealand dairy sector. LIC may also potentially need to
hold a higher level of bulls over time if there is a significant reduction in
natural mating bulls across the dairy sector. This could result in higher
emissions for LIC, but a lower level of methane emissions across the
dairy sector through breeding for lower-emitting cows.
LIC operates as a farmer-owned co-operative focused on dairy genetics, herd
improvement and on-farm services. Our strategy is increasingly aligned with
addressing climate change by supporting the development of a more efficient,
lower-emissions dairy herd. We recognise risks such as regulatory pressure,
reduced herd size and climate impacts on farming, as well as opportunities
including breeding lower-emitting and more productive cows. LIC’s long-term
strategic direction emphasises innovation, particularly through genetics and
R&D, to help farmers maintain productivity while reducing emissions intensity
across the dairy sector.
LIC publishes GHG emissions reduction targets, embeds sustainability into
purchasing and investment decisions, and works with suppliers to reduce their
emissions.
In the previous two years, LIC was a Climate Reporting Entity. During the
reporting period, the Government announced significant changes to the
climate-related disclosures regime. Although LIC is technically still a Climate
Reporting Entity, as defined under the Financial Sector (Climate-related
Disclosures and Other Matters) Amendment Act 2021, this will no longer be the
case under changes proposed in the Financial Markets Conduct Amendment
Bill. In October 2025, the Financial Markets Authority confirmed “no action”
relief for climate reporting entities due to be relieved of mandatory reporting.
Accordingly, LIC will not prepare or publish Climate Statements for the year
ended 31 May 2026. Climate Statements for previous periods can be accessed
on LIC’s website at: lic.co.nz/about/environment-and-sustainability/climate-
disclosure-reporting/
While recent physical impacts, such as droughts and extreme weather, have not
had material financial effects, they are increasing in frequency and influencing
planning. LIC has used scenario analysis, including “Sharp Corrections”, “Slow
Followers” and “Hothouse” scenarios, to assess potential future outcomes,
including reductions in dairy herd size and varying levels of physical and
transition risk. These scenarios highlight that LIC’s resilience depends on
adapting to uncertainty, investing in innovation and supporting farmers to
improve efficiency as the sector transitions to a lower-emissions future.
LIC Sustainability Report
20

The below targets apply for the entire current reporting period and do not include any assumption for offsetting emissions.
Although SBTi methodology has been considered, the targets have not been accredited by SBTi.
LIC considers that we will contribute proportionately to efforts to limit the global
average temperature increase to 1.5°C above pre-industrial levels through:
• LIC’s own GHG emissions absolute reduction targets, which have been calculated
to the extent currently achievable based on adjustments to SBTi methodology for
Scope 1 and 2; and

•
LIC’s c
ontribution to reducing methane emissions intensity in the national dairy
herd through assisting dairy farmers and supporting milk processors to breed
for the future herd now, using the best tools, insights and genetics. This includes
breeding for lower methane-emitting bulls and cows and reducing demand for
natural mating bulls.
LIC has not sought third-party verification or opinion in relation to the above
statement and is not relying on carbon offsets to contribute proportionately.
GHG emissions –
absolute reduction targets
Updated target to 2035
(% below 2018/19
base year)
Basis for determination of target contribution
to limiting global warming to 1.5°C
Scope 1 – Direct emissions, excluding
biogenic emissions and emissions related
to animals
36.8%
The target was calculated to 2035 using SBTi methodology* (resulting in 67.2%), then adjusted to
exclude reductions that are unlikely to be achievable based on the development of novel technology,
because it is too uncertain as to whether such technology will be feasible or cost-effective (e.g.
hydrogen fuel in rural areas) to enable LIC to achieve.
Scope 2 - Indirect emissions46.2%
The target was calculated to 2035 using SBTi methodology* (resulting in 67.2%), then adjusted
to exclude reductions that are unlikely to be achievable through installing solar panels on leased
properties, because it is too uncertain whether lease-owners will do this. Although not factored into
the target, we also note that year-to-year LIC’s Scope 2 emissions could be subject to volatility
related to the energy emissions factor.
Scope 1 – Direct biogenic emissionsNo target
No target has been set as LIC may need to hold additional animals to support reduction of emissions
across the NZ dairy herd.
Scope 3 – Indirect emissions No target
No target has been set as LIC has limited ability to influence or reduce material aspects of these
emission sources.
*SBTi methodology has been used as a key input to the basis for our determination of targets contributing to limiting global warming to 1.5°C as it provides a framework for setting emissions reduction targets aligned with climate
science and the aim of limiting warming to 1.5°C above industrial levels.
For the year ended 31 May 2026
21

Our emissions
2018/19
Base year
2024/25
*
2025/26
*
2025/26 Change
from base year
2025/26 Change
from prior year
Scope 1 – Direct emissions tCO
2
-e**3,811.83,096.42,878.0
-24.5%

-7.1%

Scope 2 – Indirect emissions tCO
2
-e377.1295.0237.2
-37.1%

-19.6%

Scope 1 – Direct Biogenic emissions CH
4
(tCO
2
-e)***3,921.73,691.43,688.7
-5.9%

-0.1%

Total Scope 1 & 2 emissions8,110.57,082.76,803.9
-16.1%
-3.9%
Scope 3 – Indirect emissions tCO
2
-e8,305.65,631.76,062.7
-27.0%
7.7%
Scope 3 – Indirect Biogenic emissions CH
4
(tCO
2
-e)200.5208.444.9
-77.6%

-78.4%

* Scope 1 & 2 data for 2024/25 was within the scope of limited assurance by KPMG, 2025/26 data has been subject to verification procedures by Toitū
** Excluding biogenic emissions and other agricultural emissions relating to animals, includes emissions relating to crops, fertiliser use, and indirect N
2
O emissions
*** Emissions relating to effluent, excreta, enteric fermentation and wastewater treatment
LIC’s top five emissions sources were:
ScopeEmission source2018/192024/25 2025/26
2025/26 change
from base year
2025/26 change
from prior year
Scope 1 – Direct emissions
Diesel2,756.02,208.6
2081.9
-24.5%

-5.7%

Petrol regular568.1380.4
316.9
-44.2%

-16.7%

Scope 1 – Direct
biogenic emissions
Enteric fermentation
methane
3,193.52,957.8
2,817.0
-11.8%

-4.8%

Excreta N
2
O631.6647.4
528.4
-16.3%

-18.4%

Effluent methane59.354.2
276.6
366.4%
410.3%
Scope 2 – Indirect emissionsElectricity377.1295.0
237.2
-37.1%

-19.6%

Scope 3 – Indirect emissions
Employee commuting4,835.22,848.8
2,993.7
-38.1%

5.1%
Business travel
mileage claimed
1,310.41,467.1
1,578.5
20.5%
7.6%
Liquid nitrogen390.9517.7
571.0
46.1%
10.3%
Air travel long haul
(business)
791.8170.6
212.7
-73.1%

24.7%
The 2018/19 Scope 3 emissions base year has been restated to include additional emissions data that has become
available since it was last disclosed in the 2023 Sustainability Report. This includes emissions relating to LIC’s use of
liquid nitrogen and improved data on employee commuting and business travel mileage claimed. Otherwise, there are
only minor adjustments for improved data quality in the prior period.
We first measured our emissions
in the 2018/19 financial year (1
June 2018 to 31 May 2019). These
measurements currently serve as
our base year for comparing all
future emissions.
From our 2018/19 base year to
2025/26, we have reduced our
total Scope 1 & 2 CO
2
emissions,
excluding biogenic emissions, by
25.6%, equivalent to 1,074 tCO
2
.
Our 2025/26 Scope 1 biogenic
emissions decreased by 5.9%
from our base year, equivalent
to 233 tCO
2
.
2025/26 Scope 3 emissions,
excluding biogenic emissions,
decreased by 27% from our base
year, equivalent to 2,243 tCO
2
.
The following table shows our
emissions profile and how we are
tracking against the base year.
LIC Sustainability Report
22

Fuel emissions continue to decline, with petrol emissions
reducing by 44.2% from the base year and diesel emissions
reducing by 24.5%. LIC diesel emissions decreased by 5.7%
from the previous reporting year as LIC transitions to hybrid
utes. However, the diesel reduction is likely to plateau until
viable vehicle alternatives are available to reduce light truck
diesel emissions. Overall, fuel emissions have continued to
decrease year on year.
Total Scope 1 agricultural biogenic emissions decreased
by 5.9% from the base year in the 2025/26 reporting year
due to lower stock numbers, primarily related to fewer
animals in LIC trials across New Zealand that are not on LIC
farms. Effluent methane, a component of these emissions,
increased significantly during the period due to additional
cows temporarily based at LIC’s dairy farm during the
methane trial.
Employee commuting emissions source data is based on a staff survey that captures travel distance,
fuel type, vehicle size and vehicle age. The data is based on 328 individual responses, together with an
estimated 25.95 km round trip for all other commuting staff members using an average fuel emission
factor. The data excludes employees commuting in LIC fleet vehicles and can fluctuate significantly
each year because of the estimated nature of the source data.
Initiatives underway or planned for 2026/27 to help reduce our emissions are outlined in the table below:
ObjectiveActions
Reduce fuel emissions –
Scope 1 emissions
• Continue replacing fuel-based vehicles with EVs/Hybrids
where practical
• Install further EV charging stations at LIC locations and in employee
homes for LIC EV vehicles
Reduce use of artificial
fertilisers – Scope 1 emissions
•
Whole farm soil testing every 3 years to enable targeted fertiliser
applications on paddock basis
Energy reduction plan –
Scope 2 emissions
•

Imp
lement initiatives from the LIC Energy Strategy 2024–2030:
continue to analyse data from IoT system trial, continue data analysis
from solar systems, Solar Phase 2 business case, Building Management
System investigation and business case
Reduce biogenic
methane emissions
•
M
ethane reduction research programme to breed for lower methane
emitting bulls in future
• Optimising feed growing on farm and conversion to milk, reduce
bought-in feed
•
Reduce stocking rate while keeping production level
Improve Scope 3
data capture
• Continue annual survey of employees on transport information to
and from work
•
Full value chain materiality assessment
Staff engagement
•
O
rganise events to engage with staff in reducing their carbon footprint
including guest speakers
Waste
standardisation – Scope 3
•
Continue to monitor effectiveness of the new recycling services at
all LIC sites in New Zealand with the aim to reduce waste to landfill,
increase recycling rates
Scope 1 - Transport fuel emissions t-CO
2
-e
For the year ended 31 May 2026
23

To assist in compiling GHG data, we use Toitū Envirocare’s external carbon
calculator. Our full GHG Inventory Report is reviewed by members of LIC’s Senior
Leadership Team, and we engaged Toitū to verify LIC’s 2025/26 GHG emissions
data. This is not considered to be independent assurance.
We do not use carbon credit offsetting. LIC’s farms would likely be impacted if an
agriculture farm-level emissions pricing scheme is introduced in future.
Emission ScopesLIC GHG inventory inclusions
Scope 1 – Direct GHG
emission sources
Diesel, petrol, reticulated natural gas and
LPG, and agricultural emissions relating to
crops, fertiliser use, and indirect N2O from
our farms (excluding biogenic emissions)
Scope 2 – Indirect GHG
emission sources
Purchased electricity
Scope 3 Other GHG indirect
emission sources
Liquid nitrogen, air travel – international
and domestic, freight, electricity and
natural gas distribution losses, staff
commuting, business travel not in LIC
owned vehicles, rental cars, water
supply, waste and recycling of paper,
card and glass
Scope 1 – Direct biogenic emissionsEmissions relating to effluent, excreta, and
enteric fermentation and the impact of
waste added to soil from our livestock and
the onsite wastewater treatment plant
at Newstead
Scope 3 Indirect biogenic methane
emission sources
Wastewater treatment,
composting, and waste
LIC’s GHG emission scopes
LIC Sustainability Report
24

Financial implications and other
risks and opportunities due to
climate change
Climate-related risks fall into two main categories: physical risks and transition
risks. These risks have the potential to affect LIC’s entire business, including
through their impact on our dairy farmer customers. Climate-related risks and
opportunities are considered as inputs into LIC’s internal capital deployment
and funding decision-making processes.
Physical risk
Physical risk factors relate to the impacts of a changing climate and
environment, and can be categorised as acute or chronic:
•

A
cute risk factors relate to more frequent and intense extreme climate
events such as heatwaves, droughts, bushfires, floods and storms; and
• Chronic risk factors relate to gradual changes in climate conditions such as
increasing temperatures, changing rainfall patterns and sea-level rise.
While the effects of climate change are expected to intensify over coming
decades, a number of impacts are already being observed. Impacts over and
above historical seasonal weather variations are becoming more frequent,
although not every climate event or impact experienced results in a material
financial impact for LIC.
ImpactDescription of impactCurrent financial impacts
Drought or
dry summer
conditions
Early dry-off of cows
has been assessed as
likely to be partly due
to dry conditions in
some areas. Early dry-
off affects LIC’s activity
levels, for example
through re-booking
pressure or cancelled
herd testing of milk.
Cannot be quantified / no material
financial impact.
It is not possible to identify lost revenue
in the reporting period that is specifically
attributable to drought or summer
conditions exacerbated by climate change.
Farmers may have had multiple reasons for
cancelling a product or service, including
the stock of additional feed or the cost of
feed outweighing the benefits of additional
days in milk. Overall, there has not been
a material financial impact, as herd test
revenue is higher than budget for the year.
Weather
events
Extreme weather
events caused minor
disruption to LIC
production and services
due to disrupted
farmer operations
from flooding at times,
which required some
reorganisation of
LIC services.
No material financial impact.
Weather events during the period were
sufficiently temporary to not materially
impact LIC services provided on farm or
result in a material financial impact for LIC.
However, they are nevertheless material
impacts because they indicate a trend of
increasing weather volatility and therefore
have an influence on LIC’s planning for
exposure to this risk on an ongoing basis.

LIC has not made any material weather-
related insurance claims during the
reporting period.
For the year ended 31 May 2026
25

Transition risk
Transition risk factors relate to the process of
transitioning towards a climate-resilient, lower-
emissions society where transition pathways may
vary and can be further categorised as arising from
changes in:
•
Political changes, including policies and regulations,
access to land, geopolitics and food security
changes affecting both the wider economy as well
as those impacting the dairy sector
•

E
conomic changes, including access to banking
and insurance services, customer demand, energy
security and carbon pricing
•
Social changes, including labour force dynamics
and consumer behaviour and preferences
•

T
echnological changes, including developments
in farming practices, food production and energy
distribution; and
•

L
egal changes, including sustainability litigation.
ImpactDescription of impactCurrent financial impacts
Legislation and
regulation
• LIC is impacted by regulatory change and
uncertainty in NZ relating to climate policy, as well
as general emissions reduction policies
• Resources allocated to collate data, perform
analysis, prepare and review GHG emissions,
associated reports and the Sustainability Report
No material
financial impact
Efforts to reduce
LIC’s emissions
or reduce
environmental
impact risk
• Ongoing transition of vehicles to electric vehicles
(EVs) and hybrids to further reduce LIC’s fuel
emissions.
• Further additions to LIC EV charging
station network.
• Ongoing discussions with suppliers to reduce
waste, increase recycling, improve efficiency and
access to emissions data.
• Other asset replacements to reduce
climate impacts.
No material
financial impact.
Not all costs are able to
be separately identified,
such as electricity supply
for EV charging stations,
change in costs solely due
to increased electrification
of vehicle fleet, employee
time, which have been
partially offset by lower
fuel costs and power costs.
Investments
in climate-
related research
• Continued investment in climate-related
opportunity research projects to assist farmers
to reduce emissions or adapt to climate change
through improved genetics in future, including
methane validation trials, a new barn and
associated equipment for measuring methane
from lactating cows, and a heat tolerance
breeding program.
$1.6 million cost (only
includes cost capitalised
in the period in relation to
the methane barn).
LIC Sustainability Report
26

The number of cows in the national herd is a key
assumption considered as part of LIC’s strategic
planning process and underpins our expected five-
year activity levels in relation to product sales. In
addition, the biggest asset on LIC’s balance sheet is
our bull team. There is a complex and interrelated
mix of factors impacting cow numbers, including
climate-related risks and opportunities, such as
milk price volatility, farmers seeking to diversify
their operations, changing land use, the high cost
of capital for new entrants and succession planning
challenges on farm. Seasonal milk prices are also a
key assumption. A low milk price can generally result
in lower levels of activity as farmers seek to reduce
costs. The risk of low milk prices could be increased
by climate-related factors, such as market or
reputation transition risk, but can also have an inverse
relationship. Where weather conditions contribute to
global supply being lower than demand, milk prices
could be stronger.
Climate-related opportunities
Climate-related opportunities arising from the dairy sector’s need to reduce emissions
intensity have been identified by the Board, SLT and other senior leaders through
discussions with farmer shareholders and milk processors, strategic analysis and R&D.
Opportunities identified include:
• Increased farmer use of premium genetics, DNA, animal health and milk testing to
identify and maximise productive and healthy animals and reduce emissions intensity
in the national dairy herd.
• Potential regulatory change relating to gene editing, which could create further
R&D opportunities.
• Where dairy farmers increasingly rely solely on artificial breeding, there is an opportunity
to reduce the number of natural mating bulls in New Zealand.
•
H
eat stress has significant welfare implications for animals. For dairy cows, it can also
affect feed intake, milk production, fertility and calf birthweight. Introducing the ‘slick’
heat-tolerant gene into the country’s dairy herd could significantly improve dairy cow
heat tolerance in hotter temperatures over the long term.
•
W
here pasture-based systems become more cost effective in other countries, New
Zealand genetics may become more attractive.
For the year ended 31 May 2026
27

What we’re doing to improve
business sustainability
Environmental Management System
We have an Environmental Management System that provides a framework
for managing our environmental impacts. This includes an Environmental and
Sustainability Management Committee with representatives from each business
unit. The committee reviews the environmental aspects, inherent risks and residual
risks of our activities, products and services, including those involving suppliers and
contractors. It also evaluates current and proposed controls to avoid, mitigate or
remedy adverse effects. Committee members maintain LIC’s Environmental Aspects
Register for their respective areas of the business.
Strategy Documents
LIC has an Environment and Sustainability Strategy in place covering the period
2024-2027. The strategy covers waste reduction, greenhouse gas inventory
improvements, transition planning, energy initiatives, integration of Te Ao Māori
principles for environmental sustainability, biodiversity work and sustainable transport
solutions.
The Energy Strategy for 2024-2030 is a detailed companion to the Environment and
Sustainability Strategy. It is based on a ‘record, replace, reduce’ framework to help LIC
transition to cleaner energy sources.
LIC has also put a Transition Plan in place to help us adapt, mitigate and prioritise
actions in the short, medium and long term to reduce GHG emissions, respond to risks
and opportunities, and contribute to a thriving sector-wide transition.
LIC Sustainability Report
28

Energy audit
Following an independent energy audit of the
Newstead site in 2024, LIC continued to implement
priority recommendations aimed at improving
energy efficiency and site energy performance.
Progress during the reporting period included energy
efficiency upgrades and ongoing monitoring of
energy use to inform future investment decisions and
support reductions in energy-related emissions.
Solar panels
LIC has a target to reduce its Scope 2 GHG emissions
from electrical power usage by 46.2% by 2035.
Rooftop solar panels are in place at Innovation Farm
and the Mystery Creek Warehouse, and Newstead
has more than 480 solar panels.
Since installation, the Newstead solar system has
continued to perform strongly, generating renewable
electricity that reduces reliance on grid-supplied
power and lowers operational emissions (refer
graph). During periods of high generation, excess
electricity has been exported to the grid, contributing
renewable energy to the wider electricity network.
The system has performed consistently in line with
seasonal expectations and continues to support
LIC’s emissions reduction goals, improve energy
resilience and reduce exposure to future electricity
cost increases. Following the success of the initial
installation, opportunities to further expand on-site
solar generation are being assessed.
Through a renewable energy supply arrangement at Innovation Farm, LIC continues to use electricity
generated from an on-site solar system. While the system is not owned by LIC, it provides access to
lower-cost renewable electricity, reduces reliance on grid electricity and supports LIC’s transition to
lower-emissions operations.
Energy use (kWh)
For the year ended 31 May 2026
29

Vehicles

To contribute to reaching our Scope 1 target, we are transitioning our fossil fuel
company cars within the fleet to EV and hybrid models where practical. The current
fleet includes 15% EVs and 35% hybrid vehicles. Vehicle tracking is also in place to
support vehicle efficiency.
We have 65 EV chargers installed, including 30 home chargers for employees with
company vehicles and one super-fast 60kw/hour charger at Newstead in the
Waikato. Staff with personal EVs can charge their vehicles on site at no cost, with
the aim of encouraging staff to consider choosing an EV when purchasing a new
car. We have upgraded the power infrastructure at Newstead, which will allow
additional chargers to be installed as demand increases.
Travel
Employees have flexible working options, with the benefit of reduced emissions
from commuting.
Farms
We have an ongoing programme of investment to upgrade waste management
infrastructure across our farms, as well as shade planting for animal welfare and
riparian planting to reduce the environmental impact of our farming activities.
Each LIC farm has its own environmental management plan, and employees
are trained to ensure compliance. Farm Environment Plans cover areas such as
soil type, stocking rates and policy, riparian planting, waterways, flood risks,
effluent, pasture renewal and cropping, fertiliser use and GHG emissions. These
comprehensive documents review the whole farm system and identify opportunities
to improve environmental performance. We have set timelines for implementing the
improvements identified.


We have policies relating to animal welfare, and all animals entrusted to our care
are treated with respect in accordance with the Dairy Cattle Code of Welfare
31/10/2019, a Code of Welfare issued under the Animal Welfare Act 1999.
We use fencing to keep our animals away from waterways and sensitive areas on
our farms, our effluent pond at Innovation Farm is being monitored as part of a
methane reduction trial and on LIC farms we also generate and recycle waste oil
from our equipment.
Water management
We have consents to discharge trade waste from operations at Riverlea in
the Waikato and in Christchurch, and a consent to discharge to land from the
wastewater treatment plant (WWTP) at Newstead. The WWTP uses anaerobic
reticulation to treat waste before it is fed through a wetland filtration system and
discharged to land. The WWTP field was upgraded this year after plant roots
disrupted the pipework, and the discharge field has been relocated in preparation
for the new laboratory building project. We also have several bore water
wells on farm.
In June 2024, we completed an upgrade of the trade-waste treatment facilities in
Christchurch, replacing the single grease trap with two traps in series. The council
has recognised that, despite our efforts, we have been unable to meet the existing
target and has increased our limit.
The Riverlea trade waste system is not capable of meeting consent requirements
and has been non-compliant for some time. As directed, a report will be submitted
to CoLabs in June outlining the proposed remediation approach.
LIC Sustainability Report
30

Waste stream proportion (% of total weight)
Waste management
During FY2025/26, LIC completed the rollout of a national
waste standardisation programme, transitioning sites to a
single waste management provider and implementing a
consistent waste and recycling system across the country.
The initiative was designed to improve data quality, increase
visibility of waste streams and provide staff with consistent
recycling and disposal options regardless of location.
Moving to a single provider has improved the completeness
and consistency of waste reporting, providing greater
confidence in the data and enabling more meaningful analysis
of waste generation and disposal trends across LIC. As a result,
additional waste streams that were previously less visible are
now easier to quantify and track, supporting more informed
decision-making and targeted waste reduction efforts.
Early results indicate improved separation of recyclable
materials, with increased capture of co-mingled recycling
and other diverted waste streams. While general waste
remains the largest waste stream across the organisation, the
improved reporting framework provides a stronger baseline
for identifying reduction opportunities and tracking future
performance.
Standardising waste management also supports LIC’s broader
environmental objectives by encouraging consistent waste
behaviours across sites, improving recycling outcomes and
strengthening the data available to support ongoing waste
minimisation initiatives. LIC will continue to monitor waste
performance and work with sites and suppliers to identify
opportunities to further reduce waste sent to landfill and
increase resource recovery.
For the year ended 31 May 2026
31

Social sustainability –
caring for our people
Key Metrics
More than 900
full-time equivalent
employees,
of which
587 are women
Farmer
shareholders
Lost Time Injury
Frequency Rate
(per 200,000
hours worked)
down slightly from
4.33 last year
9008,5004.30
Waste left on farm
When AB services are performed on farm, our technicians
generally leave materials used during the process on farm, such
as gloves and wipes. Many of these products are difficult to
recycle because of factors such as contamination with biological
material. However, we can recycle some single-use plastics
that are not in direct contact with contaminants. We recycle the
single-use soft plastic sheath bags used on farm to carry loaded
inseminators to prevent cross-contamination and clearly identify
breeds. Since 2024, we have diverted 2.3 tonne of soft plastics
that would otherwise have been left on farm to Future Post, where
they contribute to the manufacture of fence posts.
Where we perform on-farm services that collect biological
material, such as herd testing, strict processes are followed to
minimise the risk of disease transfer between farms.
To minimise the risk of disease transferral:
•

O
ur AB technicians clean and disinfect boots when entering a
farm, use single-use gloves that cover the shoulder and chest
area, use single-use disposable sheaths, and use isopropyl
wipes to clean equipment between farms.
•
New young bulls are quarantined from existing bulls for
a period of time. Bulls used for international markets are
quarantined and tested as required under regulations, and
double fencing is used to separate individual bulls in the
core bull team. Daily monitoring is also undertaken for any
health concerns.
For LIC, social sustainability means caring for our people and ensuring they
have the tools and support they need to continue delivering value to our farmer
shareholders.
We are focused on fostering a culture that embraces change, builds capability,
encourages our people and drives results that deliver greater customer value.
We invest in our people to develop their talent and provide a positive, safe
working environment.
Alongside our full-time employees, we also employ close to 1,350 seasonal
employees in the Artificial Breeding (AB) area during peak season, and
around 300 other seasonal or casual workers throughout the year to support
other areas of the business, such as herd testing. Each year, our qualified AB
technicians visit farms in their local area, artificially inseminating millions of
cows, with peak season running from September to December.
LIC Sustainability Report
32

Governance structure
Our governance structure includes a Board of Directors,
Shareholder Reference Group and Senior Leadership
Team. Each group contributes to driving value for our
farmer shareholders.
Board of Directors
Our Board is responsible for the overall governance of LIC on behalf of our
farmer shareholders, with a focus on improving the prosperity and productivity
of our customers. LIC Directors set the vision and long-term goals of the co-
operative. This includes the strategy to achieve that vision, as well as monitoring
its implementation. Information on Board sub-committees is available in the
governance section of LIC’s annual report.
The Board must comprise at least six elected farmer directors, balanced between
the North and South Islands, and up to four independent directors to allow
specialist expertise to be added when needed.
In July 2025, LIC announced Blair O’Keeffe as a new Appointed Director. At the
annual meeting in September 2025, Elected Director Ben Dickie stepped down
and Nicola Shadbolt was elected as Elected Director for the North Island.
From left to right (as at 31 May 2026): Mike O’Connor, Blair O’Keeffe, Nicola
Shadbolt, Sophie Haslem, Corrigan Sowman (Chair), Tony Coltman, Victoria
Trayner, Hamish Rumbold, Duncan Coull
For the year ended 31 May 2026
33

Shareholder
Reference Group
Our Shareholder Reference Group is an independent
body of shareholders that works collaboratively with
our Board and management. The group promotes the
interests of shareholders and helps us deliver on our
purpose and vision.
The Shareholder Reference Group is made up solely
of farmer shareholders. It has twelve members
across four territories. Eight members are elected by
shareholders and four are appointed by the existing
Shareholder Reference Group members to ensure
diversity and a broad range of skills.
From left to right: Back row: Linda Rollinson, Michelle
Oldham-Smith (Deputy Chair), Ben Smith (Chair), Phil
Lowe, Kirsten Watson, Nikki Cameron
Front row: Hadlee Cade, Clarence Stolte, Frances
Beeston, Aleisha Broomfield, Dan Jono
LIC Sustainability Report
34

Senior Leadership Team
Our SLT works alongside the Board to develop and implement our short and long-term
strategy and establish the key metrics we measure ourselves against, so we know we
are delivering on the commitments made to shareholders. In 2025, Roz Urbahn, Chief
People Officer, left the business and was replaced by Jacquie Shuker, who commenced
the role in January 2026.
From left to right: Brent Mealings
(Chief Financial Officer), Mark Julian
(GM Operations & Service), Geoff
Corbett (GM NZ Markets), Dhaya
Sivakumar (Chief Information Officer),
David Chin (Chief Executive), Jacquie
Shuker (Chief People Officer), Richard
Spelman (Chief Scientist), Paul Dunbar
(GM International)
For the year ended 31 May 2026
35

Wellness
Through our Well Aware programme, we continue to
prioritise holistic wellbeing by providing meaningful
support and resources across the key pillars of well
body, well mind and well life. The Well Aware Hub on
LIC’s intranet continues to serve as a central access
point for staff seeking wellbeing tools, information
and support.
A Mental Wellbeing at Work workshop continues to
run quarterly for new employees and is facilitated
internally by the Wellbeing and Recovery Advisor.
This is a short introductory session on supporting both
personal wellbeing and the mental wellbeing of others
at work. It introduces employees to a holistic wellbeing
approach and connects them with available support
services. The Te Whare Tapa Whā model and the Five
Ways to Wellbeing are used as guiding frameworks.
A Supporting Employee Mental Health workshop also
runs quarterly and covers a range of employee mental
health scenarios and best-practice approaches for
responding. All new people leaders are expected
to complete this workshop within their first few
months at LIC.
The Building Resilience workshop is available to
all staff. It introduces the concept of resilience and
provides practical tools, strategies and resources to
help staff navigate challenges.
Throughout the year, Well Aware has hosted guest
speakers to engage, educate and inspire staff. Topics
delivered this year include:
•
Keeping our kids safe online
• Gut health, delivered as a three-part series
These recorded sessions provided valuable insights
and practical takeaways for staff at all stages of
life and work.
Well Aware prioritises three key national wellbeing
events to provide balanced coverage across mental
and physical wellbeing and encourage individuals to
take personal responsibility for their wellbeing.
•

M
ental Health Awareness Week (October) – this
year’s theme, Top Up Together, was promoted
using resources from the Mental Health Foundation
to encourage social connection
•
Women’s Health Week (August) – for the first
time, this event provided an opportunity to unite
Aotearoa’s wāhine, (all women, includinggender-
diverse individuals), fostering community and
sharing knowledge that supports physical, mental
and emotional flourishing. Links to local events and
webinars were highlighted.
•
Men’s Health Week (June) – employees were
encouraged to assess their health using the online
“What’s Your Score?” test. We also encouraged
partners, wives, family members and friends
to support the men in their lives to take part,
helping spark conversations about men’s health
and highlighting its importance within families,
workplaces and the wider community.
We continue to partner with EAP services, who
provide free, confidential counselling support to all
LIC staff and their immediate families. In addition
to counselling, EAP has expanded its services to
include coaching and support in key lifestyle areas,
including pain management, headache management,
menopause support, men’s hormonal support,
fitness and exercise, nutrition, sleep and fatigue
management, smoking and vaping cessation, and
cardiovascular and heart health.
Organisational Health
In partnership with Microsoft, our BeHerd platform
hosts a range of employee journey surveys, including
onboarding, engagement, pulse and exit surveys.
BeHerd helps us understand employee experiences,
sentiment and needs. Our vision is to provide a
meaningful and inclusive way to hear from our people,
empower our leaders and drive change. Our aim is to
gain deeper insights into employee experiences and
further enhance the workplace environment at LIC.
Caring for our people
LIC Sustainability Report
36

All employees are surveyed at least once, and in some
cases twice, each year. Business areas can compare
their results against the company benchmark or a
global benchmark, including top quartile performance.
The main LIC survey includes 47 questions, with
responses and accompanying comments providing
valuable insights. For each survey across LIC, we
acknowledge the results, collaborate and take action.
We have high employee response rates of more
than 80%, with over 700 individuals participating in
the May 2026 survey of permanent employees. The
engagement result was 77 out of 100, up from 75 in
May 2025. This result is based on two key questions:
“How happy are you working at LIC?” and “I would
recommend LIC as a great place to work.”
For employees working in seasonal, casual or fixed-
term roles, the December 2025 survey had a 54%
response rate and an engagement score of 84,
up from 83 in December 2024. We also surveyed
our AB Technicians, with a 50% response rate
and an engagement score of 90, down from 91 in
December 2024.
Diversity, Equity & Inclusion
Given the size and nature of our business, we have a
diverse workforce. To continue recognising diversity in
the workplace and creating an inclusive environment,
we have a staff-led Diversity, Equity and Inclusion
(DEI) Committee to champion these concepts. The
DEI Committee is committed to fostering a workplace
culture that embraces and champions diversity, equity
and inclusion. A regular DEI newsletter highlights
cultural and international events and celebrations, and
provides information on topics relating to diversity,
equity and inclusion.
In 2025, the committee progressed several initiatives:
•
W
omen in Leadership: The group focuses on
networking and connection opportunities, as
well as re-communicating existing development
opportunities offered by People & Performance,
such as mentoring. We also hosted two knowledge-
sharing sessions reflecting on the leadership
journeys of two prominent women: Sophie Haslem,
LIC Appointed Director, and Barbara Kuriger, former
Deputy Speaker of the House of Representatives.
• Intersectionality: Dr Alida Shanks from the Gender
at Work community joined us for a Knowledge
Share session, where she shared insights on
intersectionality and symbolic equality and
introduced Te Poukapa: The Belonging and Equity
Matrix, a tool to help organisations foster genuine
equity and belonging.
The Committee will continue to investigate further
options for how our culture can enable staff to
perform at their fullest potential and how People
Leaders can help create inclusive team environments.
Engagement with Te Uru Tāngata, previously
Diversity Works NZ, is ongoing. Our membership of
this organisation allows access to a wide range of
resources.
Ethnic Diversity %
Based on responses to the 2026 BeHerd survey
Asian British E uropean Indian
Mā ori NZ E uropean Other (includes Pacifika)
Prefer not to disclose
54
4
6
13
5
2
13
3
For the year ended 31 May 2026
37

Health & Safety (H&S)
The health and safety of our staff, customers,
contractors and anyone else we come into
contact with remains our highest priority.
Our health and safety system provides the
framework to keep workers healthy and safe,
regardless of their location.
Our Health, Safety and Wellbeing policy sets out our
commitments and reflects our intent to continue developing
our health and safety culture. The focus is on becoming more
proactive, continuing to take personal ownership, learning from
safety events and anticipating future safety risks and needs.
During the reporting period, the Board reviewed and updated
the Critical Risk list, and a new method for determining critical
risk control effectiveness is being developed. A new two-year
Health & Safety strategy was also introduced. The key strategic
focus areas included in this policy are:
1. The Work – Managing our Highest Risks
SLT members and Board Directors spend time with workers to understand our
critical risk profiles and gain assurance that controls are effective. During the year,
sixteen SLT and eight Director site visits were carried out, reviewing all critical risks
across a range of locations. Combined with the HSE team’s audits, site visits by
Directors and SLT members provide a ‘fresh pair of safe eyes’ and an additional
layer of confirmation that critical risk controls are in place and effective. These
visits also provide a first-hand view of the work environment, helping close the
gap between ‘work as imagined’ and ‘work as done’ and supporting better safety
management and governance.
Key focus areas for the next period will be bull drafting, LIC farm facilities, fatigue
exposure in high-risk roles, driving-related risk and overlapping duties with farmer
customers and other businesses.
2. The People – Leadership and Change
The focus is on ensuring health and safety considerations are integrated into
business change, particularly where capital investment, operational redesign or
multiple business units are involved.
We have formalised the training process for Health and Safety Representatives.
This is now a three-year programme that includes an initial course in the first
year, hazard and risk management in the second year, and a number of optional
courses in the third year. Formal safety-related training is also provided to other
staff and includes First Aid, both initial and refresher, Fire Warden and Hazardous
Substances training. More than 400 staff members received Health and Safety
training during the reporting period.
LIC Sustainability Report
38

3. The System – Consistency and
Effectiveness
Key focus areas will be critical risk control effectiveness and standardisation of
systems and processes.
In addition to the strategy, we have set specific H&S objectives designed to
focus attention on improving our systems and practices. Progress against these
objectives is reviewed quarterly by the H&S Governance Forum. The objectives
for 2026/27 have been refreshed, and H&S reporting to senior leaders and Board
members continues to be reviewed and improved.
Supporting our injured and ill workers
As a member of the ACC Accredited Employers Programme, we are responsible
for the vocational, medical and social rehabilitation of our workers. LIC
successfully passed the ACC audit in February 2026 with no nonconformances
against the new ACC standards. In the last year, the number of claims increased,
but associated rehabilitation costs decreased. For the last three years, we have
attained secondary level accreditation against ACC audit standards.
Sharing Duties of Care with Farmers
This initiative is establishing a unified, standardised approach to consulting,
coordinating and cooperating with farmers to manage shared health and
safety risks effectively. Minimum safe standards for Artificial Breeding, Herd
Testing Field Technicians and Field Assist services have been developed and are
available. Phase 2 is now underway, with assessors being trained.
LIC is committed to the Farm Without Harm pledge by Safer Farms, reinforcing
our dedication to creating safer conditions across our farms and protecting our
people from preventable harm.
For the year ended 31 May 2026
39

Employee data
PermanentFixed term/CasualTotal
FY25FY26FY25FY26FY25FY26
Female521.3530.669.356.7590.6587.3
Male300.6292.216.022.7316.6314.9
Total821.9 822.885.379.4907.2 902.2
FTEs by employment contract by gender
Full-timePart-timeTotal
FY25FY26FY25FY26FY25FY26
Female559.0557.031.630.3590.6587.3
Male305.8304.310.810.6316.6314.9
Total869.6 861.345.240.9907.2 902.2
FTEs by employment type by gender
Number of FTEs (Permanent and fixed-term/casual)
FY25FY26
New Zealand880.2874.2
Australia20.020.0
UK & Ireland7.08.0
Total907.2902.2
FTEs by employment contract by region
This employee data relates to
the total LIC group and is sourced
from our Human Resource (HR)
system. The data for permanent
and fixed-term employees is
reported on a full-time equivalent
(FTE) basis.
We employed a total of 1,656 seasonal workers
throughout the year ended 31 May 2026 (1,701
for prior year), particularly during peak season
for a relatively short period of time, primarily
as artificial insemination technicians with 1,351
technicians and assists in this area, and 305
other seasonal or casual workers throughout the
year to help in other areas of the business, such
as herd testing.
The reporting period is for the financial
year ended 31 May 2026 (FY26), with final
permanent and fixed-term employees reported
as at 31 May and comparatives for the prior
period (FY25). Our only significant location is
New Zealand, with less than 5% of employees
employed in any other individual country.
LIC Sustainability Report
40

Our HR system does not currently capture gender
options alternative to male/female. Some age
data is not available as employees are not obliged
to disclose date of birth.
There were 42 permanent employees (5%)
covered by a collective bargaining agreement at
31 May 2026. At peak (1 October 2025) we had a
further 89 (36%) seasonal workers covered by a
collective bargaining agreement. For employees
not covered by collective bargaining agreements,
individual contracts are entered into at the time of
employment.
During the year, there were 34 females (no males)
on parental leave and 18 females returned from
parental leave.
If significant operational changes are proposed
within the organisation, LIC will consult with
potentially impacted employees for a two-week
period on the proposed changes, with a minimum
<30 yrs age 30-50 yrs age>50 yrs ageAge not disclosedNZ region FY26%
Female2834947575.8
Male315602424.2
Total314915499100
%31.349.515.24
<30 yrs age 30-50 yrs age>50 yrs ageAge not disclosedNZ region FY25%
Female24511208767.4
Male5162014232.6
Total2967321129
%22.552.024.80.7100
New permanent employee headcount hires, by gender and age group for primary region
Employee headcount turnover, by gender and age group for primary region
of six weeks in total from notice of proposed change
until implementation of any final changes. For
any employees covered by collective bargaining
agreements, notice period and provisions for
consultation and negotiation are specified in those
agreements.
LIC engages with suppliers to provide workers, such
as IT contractors, recruitment firms and directly with
independent contractors. This number is not material
compared to the number of LIC employees.
The ratio of the annual total compensation for
the organisation’s highest-paid individual to the
median annual total compensation for all permanent
employees (excluding the highest-paid individual)
for the year ended 31 May 2026 was 7.85: 1 and 4.08:1
for the annual relative % increase, noting that total
compensation includes bonus payments.
For the year ended 31 May 2026
41

Delivering value for our farmer
shareholders is at the centre of
everything we do, and strong financial
performance enables us to do just
that – through our herd improvement
products and services, a solid dividend
and the right R&D investment to keep
herds profitable and sustainable into
the future.
Economic sustainability
On 16 July 2026 the LIC Board announced a
positive year-end financial result for the 2025/26
year with a dividend of 12.26 cents per share for
shareholders.
The Board noted that Net Profit After Tax (NPAT)
was down this financial year predominately due to
an increased investment in upgrading technology
and security platforms and that this investment
is key to supporting the long-term operations
of the co-operative and ensuring farmers have
confidence their information remains secure.
Protecting farmer data is fundamental to the trust
they place in us as their co-operative. The digital
security environment is changing very quickly and
investing now is paramount to safeguarding the
information farmers rely on every day. This is an
investment in the future of their farm businesses
and our cooperative’s ability to meet their needs
More farmers are choosing to share their farm data with LIC because they see the value it
creates for herd improvement. Maintaining trust means continuing to invest in the technology and
security that protects information and supports the growing use of connected farming tools. This
investment is about giving farmers confidence to keep sharing their data, while ensuring we can
continue delivering the insights and services that help improve the long-term performance of both
farm businesses and the wider sector.
LIC Sustainability Report
42

Key Metrics from 2025/26 full year results
Summary of financials*
Underlying
Earnings**
Dividend
declared
at year-end
Total assets,
strong balance
sheet with no debt
at year-end
Total
Revenue
Up 0.4% from $21.7
million last year
12.26 cents per share
Up 4.2% from $392.0
million last year
Up 6.7% from $295.1
million last year
$
21.8
m
$
17.5
m
$
408.5
m
$
314.8
m
Net Profit
After Tax (NPAT)
Down 30.4% from $30.6
million last year
$
21.3
m
*For notes to the financial information please reference our FY26 Annual Report.
During the period, LIC embarked on a significant multi-year
investment into replacing and improving aged enterprise and
customer facing systems. The investment is predominantly into
Software as a Service tools, the costs of which are generally
expensed as incurred rather than amortised over future financial
periods. As a result, Net profit after tax has been negatively
impacted by $6.5 million implementation costs in 2026 (May 2025:
nil). This expenditure has been excluded from LIC’s Underlying
Earnings, which is a supplementary non-GAAP measurement
considered useful to investors as it is the basis on which LIC has
historically reported and used to determine dividends. Non-GAAP
financial information does not have a standardised meaning
prescribed by GAAP and therefore may not be comparable to
similar financial information presented by other entities.
Tax
LIC’s Audit, Finance and Risk board sub-committee oversees
tax compliance, including LIC’s Tax Policy and annual Tax
Management Plan, which identifies areas of tax change. LIC
seeks to comply with all aspects of the New Zealand and
international tax acts for jurisdictions that our subsidiaries reside
in. Management has responsibility to ensure that it has a broad
understanding of all major tax issues that arise from the ordinary
business, major transactions, business structures or strategies
undertaken by LIC. LIC uses external tax experts and software
tools to ensure appropriate tax compliance governance and
controls are in place.
For the year ended 31 May 2026
43

These charts represent our key financial metrics to provide a historical summary of our performance.
Financial trends
* Excludes discontinued operations - the Automation business was divested in June 2021
** Non-GAAP financial information: excludes bull team and nil paid share revaluations, significant enterprise system implementation costs and discontinued operations
*** The full year dividend declared is paid in the subsequent year, while special dividends are paid within the year
LIC Sustainability Report
44

* Excludes discontinued operations - the Automation business was divested in June 2021
** Non-GAAP financial information: excludes bull team and nil paid share revaluations,
significant enterprise system implementation costs and discontinued operations
*** The full year dividend declared is paid in the subsequent year, while special dividends
are paid within the year
For the year ended 31 May 2026
45

20222023202420252026
Revenue *NZ$000263,182276,506267,288295,107314,802
R&D expenseNZ$000
(18,184)(18,577)(21,215)(22,549)(26,567)
Net profit after taxNZ$00026,72327,3527,73430,64321,315
EBIT **NZ$00033,37230,95521,71227,01419,488
Underlying EarningsNZ$00025,67723,73213,85621,74621,822
Total dividends***
NZ$m
40.423.326.817.417.5
Cents per share28.43 16.3818.8412.2212.26
Gross yield %26.422.823.417.014.9
Operating cashflowNZ$00057,13036,79140,05256,38750,116
Net capital & investment spend****NZ$000(17,889)(20,581)(27,600)(27,809)(24,715)
Total AssetsNZ$000385,610382,291358,608392,034408,477
Total Equity/Net AssetsNZ$000293,057297,494274,913298,372304,377
For our full financial results please refer to our FY26 Annual Report
* Excludes Discontinued Business operations – the Automation business was divested in June 2021
** Non-GAAP information: excludes bull team & nil paid share revaluations, significant enterprise system implementation and discontinued operations
*** Includes an additional payment to return cash retained from dividends paid in 2022 & 2021 to repay nil paid shares
and includes special dividends paid in relation to sale of the Automation business and National Milk Record shares
Financial trends
LIC Sustainability Report
46

Our business
LIC exists to deliver superior genetics
and technological innovation to help
our shareholders sustainably farm
profitable animals.

We are the DNA of the New Zealand dairy sector,
providing approximately 80%
3
of the genetics to
inseminate cows in the national dairy herd. We take
our role seriously as an important player in the team
supporting farmers with the right herd improvement
tools to breed more efficient and climate
resilient cows.
Our primary sector is the New Zealand dairy sector.
Our core customers are New Zealand dairy farmers.
Other customers include veterinarians who support
farmers, international semen distributors, overseas
dairy farmers, users of dairy herd data and beef
producers.
Keeping New Zealand farmers profitable and
sustainable is critical. We are owned by New Zealand
dairy farmers and therefore invest to fund research
and technology which will benefit not only this
generation of farmer shareholders and their herds,
but successive generations and their herds. This
long-term improvement and sustained return on
investment is the pure essence of what it means to be
a co-operative.
Herd testing of milk samples,
including EZ Link
®
scanning
DNA parentage testing and genomic
evaluation service, A2/A2 testing
Tags
Range of NAIT approved electronic (EID) tags and
management tags from Allflex, Z Tags and Flexa
MINDA
®
herd
management software
Farm accessories
Electronic plate meters,
EID readers and wands
Our products
and brands
include:
3
Report of the Industry Working Group – Dairy NZ
For the year ended 31 May 2026
47

Artificial Breeding (AB)
AB dairy and beef genetics and technician services,
with products such as Premier Sires®, Sexed Semen,
Short Gestation Length, Alpha®, Customate, training of
AB and DIY technicians, deep freeze storage
Animal health testing
Bovine Viral Diarrhoea (BVD), Johne’s disease, milk
pregnancy and Mastitis Multiplex testing
Heat detection products
LIC heat patch, LIC Bulls-i®,
Kamar® detectors
On Farm Support
Increase efficiency of farm
operations, including assisting with
herd records, herd testing, weighing
and DNA sampling
LIC Sustainability Report
48

Sales operations,
contact centre,
customer experience,
marketing,
communications;
genetics, diagnostics
and farm software
product development
Genetic, genomic,
reproduction and
animal health research
and development and
analytics - both inhouse
and in collaboration
with university and
sector partners; animal
evaluation, bull selection
International genetics
sales, business
development, Beacon
heat detection
manufacturer,
international investments
and partnerships
Development and
support of customer
facing systems such
as MINDA® and LIC
internal systems and
IT infrastructure
Artificial breeding
collection &
insemination, herd
milk testing, genetic
diagnostics, animal
health testing, LIC bull
and dairy farms, on-
farm support
Payroll, finance &
accounting, procurement,
legal, intellectual
property, governance,
shareholder services, risk
management, property
management, Business
Information Unit, NAIT,
strategic delivery, new
ventures, investments
and partnerships
People & performance
partners, employee
experience,
organisational
development, health,
safety and environment
Operations &
Service
Support ServicesPeople &
Performance
NZ Markets
Research &
Development
InternationalTechnology
LIC is structured to best support farmers and
our operational teams to effectively supply
products and services to customers, as well
as to leverage opportunities to deliver genetic
improvements to farmers and better returns
to shareholders.
How we work
49

The Procurement Policy requires that all procurement
decisions should also take into consideration the
potential impact to the environment, sustainability,
Health and Safety and compliance with any other
relevant legislative obligations and we continue
to work with suppliers in relation to sustainability
measures.
Partnerships
Partnerships are critical to our work and are a
strategic priority to develop. We work with others to
deliver to farmer needs, collaborating or partnering
with other organisations to deliver a seamless service
to farmers. We already work closely with other sector
participants, including:
•
D
airyNZ and NZ Animal Evaluation Ltd (subsidiary
of DairyNZ)
•
G
overnment ministries and agencies on joint
funding of R&D, such as MPI and MBIE
•
M
ilk processors
• Specialist beef operations
•

S
Tgenetics NZ, providing the critical technology for
our sexed semen product
•

R
ural professionals, such as vets
•

C
onnecting organisations to enable farmer
data sharing
•

R
esearch specialists, such as at Auckland University
and Massey University
We are focused on building relationships with other
sector companies such as processors, fertiliser
companies and agritech device companies.
Initiatives with partners of note include:
To the Core – Leadership and
Governance Development training
We partner with Farmlands and Silver Fern Farms
to offer shareholders of all three companies the
opportunity to learn more about governance in
co-operatives and develop skills needed to operate
at board level through a unique leadership and
governance development programme called “To
the Core”.
Fonterra’s Governance
Development Programme
We also partner with Fonterra who offer one LIC
shareholder a place in its Governance Development
Programme to build their governance capabilities
and leadership skills. Running for approximately
one year, the content is provided by Fonterra and
Massey University’s College of Business.
Rural Support Trust
We have partnered with Rural Support Trust to
provide farmer facing staff with a resource that
offers guidance on providing mental health support
to farmers.
Key categories of
goods and services
we procure
Labour hire
Professional consulting services
IT software and hardware
Laboratory supplies
Building materials and products
F arm supplies
Recruitment services
The most critical component of LIC’s supply chain
is our permanent and seasonal employees, as
well as our bull team. For our external suppliers
our Strategic Procurement team has policies
and processes in place to identify and manage
critical risks that could impact our supply chain.
An example is our New Zealand and international
air freight and technology services. Where there
is a higher risk to our products and services,
particularly during peak season or where
components are sourced internationally, at least
one year of input components are held in advance
of need, such as consumables used for artificial
insemination and diagnostics testing.
Our Supply Chain
LIC Sustainability Report
50

House of Science Central Waikato
The House of Science Central Waikato (HSCW) is
committed to bringing scientific literacy tools to
schools across the Waikato region. Their vison is to
raise science literacy which will have huge economic
and social benefits to New Zealand. We are proud to
continue our collaboration that started in 2021 with
HSCW and support them in a variety of ways. This
includes providing HSCW with a LIC vehicle to deliver
science kits to rural schools in the Waikato. Some of
our fantastic R&D staff also volunteer their time each
week to put together the science kits.
Scholarships
LIC offers three scholarship programmes to students
studying agriculture science and have an interest in
genetics or machine learning:
•
The Brian Aspin Scholarship – LIC matches funding
donated by the Aspin family to provide two
scholarships per year for post-graduate students
to undertake either Honours or Masters for up to
two years of study at either Massey or Lincoln
Universities.
•
Th
e Patrick Shannon Scholarship - this scholarship
is named after one of the most innovative bovine
geneticists and reproductive biologists in the world.
Dr Shannon joined us in the mid-1950s and made
many world-breaking discoveries of great value to
the New Zealand dairy industry.
•

Th
e Livestock Improvement Doctoral Studentship
Programme - seeks top PhD (and possibly Masters)
students who potentially could fulfil key science
roles within our organisation. Successful candidates
are offered an internship with us for up to a year
then begin postgraduate studies – with our full
support (financial, academic, mentoring).
LIC supports the dairy sector, rural communities and
our farmers by sponsoring a variety of initiatives,
events, programmes and organisations. This provides
opportunities and promotes excellence within the
sector. Examples include:
• New Zealand Dairy Industry Awards
• Ministry for Primary Industries ‘Science for Farmers’
•
Lincoln University Dairy Farm
• Southern Dairy Hub
• South Island Dairying Development Centre
•
South Island Dairy Event
•
P
asture Summit
• Owl Farm at St Peter’s School, Waikato
• Dairy Women’s Network
•
Kellogg Rural Leadership Programme
•
M
assey University Dairy #1 Farm
• Ayrshire NZ conference
•

Je
rsey NZ conference
•
Holstein-Friesian NZ conference
• Smaller Milk and Supply Herds conference
•
S
afer Farms
•
Meet the Need
• Distributing computer equipment no longer needed
to schools
• Support of calf club and pet days in schools
Our employees are able to apply for a day off per
annum for volunteer activities in the community.
We are also a member of Cooperative New Zealand.
Refer to our website for further details
For the year ended 31 May 2026
51

Value created for our stakeholders
How we create value
Delivering quality
products and services,
advancing genetic
improvement of herds,
re-investing profits in
further R&D or returning
to shareholders
through dividends
Collaborating on R&D,
providing quality
data inputs
Providing a safe
workplace with
development
opportunities and strong
engagement
Complying with
regulatory and
financial reporting
requirements, reducing
our own environmental
footprint and that
of the national herd,
responsible taxpayer
Providing employment,
lowering our
environmental footprint,
support through
sponsorship and
scholarships
Shareholders /
Customers
Sector
Partners
EmployeesGovernment &
Regulators
Community
LIC Sustainability Report
52

The resources we rely on
Positive relationships
with shareholders,
farmers, vets,
government and
regulators, sector and
research partners,
employees and the
farming community
Our farmers and
shareholders create a
strong financial base to
operate and invest for
the future, as well as our
banking partner debt
facilities
Our collective know-
how, systems and
intellectual property
that more than 50 years
of R&D has generated
Our property,
equipment and
animals allow us to
run our business and
distribute products and
provide services
We rely on our talented
employees, sector
partners and suppliers
to help deliver our
products and services
New Zealand’s natural
environment is a key
factor, particularly rain,
sun and quality soil
supporting grass growth
for animals
RelationshipsFinancial
capital
Intellectual
capital
Assets &
infrastructure
PeopleNatural
environment
For the year ended 31 May 2025
53

The Board and Senior Leadership
Team regularly consider different
stakeholders and mechanisms to
engage with them, as well as making
decisions on when not to engage.
This is commonly discussed at regular
management and Board meetings,
with recommendations made to
Board, or requests from the Board.
Engaging with our stakeholders
Our latest Net Promoter Score (NPS) for the March
2026 quarter was a positive result of 5 based on
226 farmer shareholder responses, consistent
with the result from the March 2025 quarter (454
responses). The NPS results have trended upwards
over time and the 12 month rolling average has
been consistently positive for the last two years.
Results vary quarter-by-quarter. NPS is a measure
of customer experience that ranges between -100
and +100.
54
LIC Sustainability Report

Our farmer
shareholders & customers
Our
People
Suppliers
& Partners
Regulators &
other agencies
Communities
Goal
Deepen our understanding of the
current and future needs of all
our farmers
Develop talent and foster a culture that
embraces change, builds capability
and drives better results
Work with others to deliver farmers'
needs, including partnering to deliver a
seamless service
Ensure long-term sustainability of our co-operative, farmers, environment and
the NZ dairy sector
How we engage
• In person with tailored advice
• Customer call centre
•
Net Promoter Score and
other surveys
• Fieldays
®
, events and training
• Feedback groups
•
Annual meeting, Shareholder
Reference Group, Roadshows
• Publications (such as The Bulletin)
•
Digital channels
•
BeHerd annual engagement survey
•
Employee events and in-person/
online business updates
• Wide range of training
and development
•
Internal communication, including
Chief Executive email updates
•
Strategic procurement team
• Supplier evaluations
• Partnership relationships
•
Collaboration with innovators
and researchers
• R&D investment
• Direct engagement with
government and agencies by CE and
relevant employees
•
Submissions on proposed law
and regulation
• Support of sector groups
• Scholarships and internships
•
Social media channels
Needs & expectations
• Deep customer relationships
• Quality products and services, on
time consistently
•
Reliable MINDA
®
software that is
easy to use
• O
ngoing genetic improvement
• Innovation
• Prompt issue resolution
•

P
ositive culture
• Safe, diverse and inclusive
environment, where wellbeing
is important
•

In
vestment through training and
development
•

M
arket-comparable remuneration
and benefits
• Innovative working tools
• Reliable and sustainable supply
chain, providing quality inputs
•

S
trong, productive partnership
relationships
• Robust science-based R&D projects
• Strong governance and
management of legal requirements
•
Insightful input on issues and
proposed change
•

A
ppropriate and prompt response
to incidents
• Positive, proactive relationships
•

Hi
gh quality external reporting
•
P
ositive employment and growth
opportunities
• Responsible organisation
(e.g. as a taxpayer, purchaser)
• R
espond appropriately to
issues raised
•

T
ransparent reporting
• Key partner to farming community
• Respect for diversity
Response
Our primary focus is delivering herd
improvement value for our farmer
shareholders
We live our corporate values: "Integrity,
Innovation, Spirit of Co-operation,
In tune and Passion"; we work
on providing a safe and positive
environment where our people
can thrive
We work with others to build long-term
trusted relationships, including with
other organisations in the agri sector
Collaborative interactions with
Government and agencies, respect for
our licence to operate, strong focus on
compliance
We help farmers to meet the current
and future challenges, particularly
in helping to drive down methane
emissions-intensity through research,
investment and tools
For the year ended 31 May 2026
55

TopicImpactReport referenceGRI Standard
Climate change
Supporting shareholders to produce the most
sustainable and efficient animals. Reducing
our emissions at LIC.
Reduce negative impacts
from direct and indirect
GHG emissions
Reducing the environmental
impact of our national herd
Reducing the environmental
footprint of our business
302-1,
302-3, 302-4,
305-1 to 6
Animal health & biosecurity
Providing animal health products and
information services to identify diseases and
health conditions. Working with farmers to
minimise risk on farm of disease spread.
Increase/continue positive
impact on animal welfare
Reducing the environmental
impact of our national herd
13-11
Employment and sustainable income creation
Caring for our staff and our farmer
shareholders through meaningful employment
and sustainable income creation.
Increase/continue positive
impact on staff and
farmer shareholders
Social sustainability – caring
for our people
Delivering a strong result for
our farmers
201-1
Health, safety & wellbeing
Protecting the health and safety of people at
work, including their wellbeing.
Increase/continue positive
impact on staff
Social sustainability – caring
for our people
403-2
Human rights
Protecting the employment rights and working
conditions of our people, including diversity
and inclusion.
Increase/continue positive
impact on staff
Social sustainability – caring
for our people
406-1
Wa t e r
Using water responsibly, including water
quality, availability and disposal.
Reduce negative impacts
on environment
Reducing the environmental
footprint of our business
303-2
Waste
Improvement of waste management and
disposal practices.
Reduce negative impacts
on environment
Reducing the environmental
footprint of our business
306-3
Responsible procurement
Influence our key suppliers in relation to
sustainable business practices.
Reduce negative impacts
on environment and
increase/continue positive
social impacts
Our business – our
supply chain
204
Materiality assessment
During the previous reporting period the Board and
management completed a strategy check-in, which
was informed by feedback from farmer shareholders,
other stakeholders and local and global trends. The
focus on herd improvement was clarified in relation to
enabling emissions intensity reduction in the national
herd, with five priority areas identified as key enablers
of herd improvement.
Management and the Board have worked together
to carry out a materiality assessment on topics
where the company may have significant economic,
environmental and social impacts. We identified
potential topics of importance based on our strategy,
reports and guidance from the dairy sector, farmer
feedback and issues identified by risk assessments.
Materiality was determined by considering the
significance of our impact, the importance of the
issue to stakeholders and our ability to control and/
or influence the issue. Farmer-elected directors
provided key input in relation to importance of
issues for stakeholders and LIC regularly holds
farmer engagement meetings in different regions, or
brings groups of farmers to the Waikato, to continue
to gather feedback that is used in reviewing the
material topics. The business has also run a series
of workshops with farmers over the past year or
so on key drivers for ‘breeding the herd for your
farming future’.
LIC Sustainability Report
56

GRI content index
The report has been prepared in accordance with the
Global Reporting Initiative (GRI) Standards.
GRIDisclosure title
GRI1GRI 1: Foundation 2021
General Disclosures
The organisation and its reporting practices
2-1Organisational detailsWho we are - pg 4
2-2Entities included in the organisation’s
sustainability reporting
The report includes the full LIC
consolidated group of entities. A list is
available in the Annual report, corporate
governance report
2-3Reporting period, frequency and
contact point
About this report – pg 2, for enquiries
contact Communications@lic.co.nz
2-4Restatements of information Scope 1 direct GHG emissions for the prior
period and base line data was restated to
re-categorise effluent and excreta N2O to
Scope 1 direct biogenic emissions
2-5External assuranceOur external auditors KPMG have
performed procedures to ensure that
financial emissions data included in this
report is consistent with LIC’s Annual
Report. Toitū has performed verification
of GHG emissions data for the year ended
31 May 2026.
Activities and workers
2-6Activities, value chain and other business
relationships
Our Business – pg 47
2-7Employees
Employee data – pg 40
2-8Workers who are not employees
Information unavailable/incomplete:
description included in Employee
data – pg 40. Data currently gathered
has insufficient detail to correctly
identify workers
GRIDisclosure title
Governance
2-9Governance structure and compositionGovernance structure – pg 33. There is
limited disclosure on under-represented
social groups (due to the nature of our
business farmer representation is the most
critical representation) and only general
information provided on competencies.
2-10Nomination and selection of the highest
governance body
Annual report, corporate
governance report
2-11Chair of the highest governance bodyAnnual report, corporate
governance report
2-12Role of the highest governance body in
overseeing the management of impacts
Annual report, corporate governance
report, Governance structure - pg 33
2-13Delegation of responsibility for
managing impacts
Annual report, corporate
governance report
2-14Role of the highest governance body in
sustainability reporting
Governance structure – pg 33. Annual
report, corporate governance report
2-15Conflicts of interestAnnual report, corporate
governance report
2-16Communication of critical concernsAnnual report, corporate governance
report, there is no specific disclosure on
the number and nature of critical concerns
communicated due to confidentiality
constraints – material matters related to
this report are disclosed
2-17Collective knowledge of the highest
governance body
Annual report, corporate
governance report
For the year ended 31 May 2026
57

GRIDisclosure title
2-18Evaluation of the performance of the
highest governance body
Annual report, corporate
governance report
2-19Remuneration policiesAnnual report, corporate
governance report
2-20Process to determine remuneration
Annual report, corporate governance
report, Annual Meeting
2-21Annual total compensation ratio
Employee data – pg 41
Strategy, policies and practices
2-22Statement on sustainable
development strategy
Letter from the Chair and Chief
Executive – pg 7
2-23Policy commitments
Annual report, corporate governance
report; Code of conduct & ethics
2-24Embedding policy commitments
2-25Processes to remediate negative impacts
2-26Mechanisms for seeking advice and
raising concerns
2-27Compliance with laws and regulationsNot applicable: there have been
no significant instances of
non-compliance, fines or non-
monetary sanctions
2-28Membership associations
Partnerships - pg 50
Stakeholder engagement
2-29Approach to stakeholder engagementMateriality assessment – pg 56
2-30Collective bargaining agreements
Employee data – pg 40
Sector Standard
13Agriculture Aquaculture and Fishing Sectors 2022
13.1EmissionsReferences included under topic
disclosures below as appropriate
13.2Climate adaption and resilienceReferences included under topic
disclosures below as appropriate
13.3BiodiversityReferences included under topic
disclosures below as appropriate
13.4Natural ecosystem conversionNot considered applicable to LIC as we do
not undertake ecosystem conversion
13.5Soil healthNot considered material – soil
management included as part of Farm
Environment Plans which are referenced
in the report
13.6PesticidesNot considered material as we do not use
significant amounts of pesticide
13.7Water and effluentsReferences included under topic
disclosures below as appropriate
13.8WasteReferences included under topic
disclosures below as appropriate
13.9Food securityNot considered applicable to LIC as no
food loss incurred by our operations
13.10Food safetyReferences included under topic
disclosures below as appropriate
13.11Animal health and welfareNot considered a material issue. Some
information included in Reducing the
environmental footprint of our business
13.12Local communitiesReferences included under topic
disclosures below as appropriate
13.13Land and resource rightsNot applicable – no locations of
operations where land and natural
resource rights (including customary,
collective, and informal tenure rights) are
impacted by operations
13.14Rights of indigenous peoplesReferences included under topic
disclosures below as appropriate. Te Ao
Māori strategy referenced in the report
13.15Non-discrimination and equal opportunityReferences included under topic
disclosures below as appropriate
13.16Forced or compulsory labourReferences included under topic
disclosures below as appropriate
13.17Child labourReferences included under topic
disclosures below as appropriate
GRIDisclosure title
LIC Sustainability Report
58

GRIDisclosure title
GRIDisclosure title
Environmental topic disclosures
302-1Energy consumption within
the organisation
(All 302) Reducing the environmental
footprint of our business – pg 20
Additional sector recommendation not
included as we do not have land use
change emissions
302-2Energy consumption outside of
the organisation
302-3Energy intensity
302-4Reduction of energy consumption
305-1
13.1.2
Direct (Scope 1) GHG emissions
305-2/
13.1.3
Energy indirect (Scope 2) GHG emissions
305-3/
13.1.4
Other indirect (Scope 3) GHG emissions
305-4/
13.1.5
GHG emissions intensity
305-5/
13.1.6
Reduction of GHG emissions
305-6/
13.1.7
Emissions of ozone-depleting
substances (ODS)
306-3/
13.8.4
Waste generated
Social topic disclosuresExplanation
401-1New employee hires and
employee turnover
Employee data –pg 40
401-3Parental leaveInformation unavailable/incomplete: not
all data tracked currently
402-1Minimum notice periods regarding
operational changes
Employee data –pg 40
403-2/
13.19.3
Hazard identification, risk assessment, and
incident investigation
Critical Risks management- pg 38
415-1/
13.24.2
Political contributionsAnnual Report, corporate governance
report – donations
13.18Freedom of association and collective
bargaining
References included under topic
disclosures below as appropriate
13.19Occupational health and safetyReferences included under topic
disclosures below as appropriate
13.20Employment practicesNot considered a material issue
13.21Living income and living wageNot considered a material issue
13.22Economic inclusionReferences included under topic
disclosures below as appropriate
13.23Supply chain traceabilityNot considered a material issue
13.24Public policyReferences included under topic
disclosures below as appropriate
13.25Anti-competitive behaviourReferences included under topic
disclosures below as appropriate
13.26Anti-corruptionReferences included under topic
disclosures below as appropriate
Material topics
Economic topic disclosures
201-1/
13.22.2
Direct economic value generated
and distributed
Trend data, pgs 44, Annual Report,
Financial statements
201-2/
13.2.2
Financial implications and other risks and
opportunities due to climate change
Reducing the environmental footprint of
our business – pg 25
201-4Financial assistance received
from government
Annual Report discloses R&D grants
and tax incentives received from
NZ Government in Note 1 to the
financial statements, no government
ownership of LIC
207-1Approach to tax
Economic Sustainability – Tax pg 43
207-2Tax governance, control;
and risk management
Economic Sustainability – Tax pg 43,
Annual Report external audit report
includes audit of tax disclosures
For the year ended 31 May 2026
59

Topics determined to be not material
Biodiversity topic disclosureExplanation
101-1Policies to halt and reverse biodiversity lossNot applicable – LIC does not cause
biodiversity loss so no policies needed
101-2 Management of biodiversity impactsNot applicable – no significant impacts
101-3 Access and benefit sharingNot applicable – no access or benefit
sharing regulations or measures in NZ
101-4 Identification of biodiversity impactsNot applicable – no significant impacts
101-5 Locations with biodiversity impactsNot applicable – no locations with
significant impacts
101-6
Direct drivers of biodiversity lossNot applicable – no locations with
significant impacts
101-7 Changes to the state of biodiversityNot applicable – no locations with
significant impacts
101-8 Ecosystem servicesNot applicable – no locations with
significant impacts
Economic topic disclosuresExplanation
201-3Defined benefit plan obligations and other
retirement plans
Not applicable: LIC does not operate a
defined benefit or retirement plan
Market PresenceExplanation
202-1 Ratios of standard entry level wage by
gender compared to local minimum wage
Information unavailable/incomplete: NZ is
only material market – not considered a
material issue
202-2Proportion of senior management hired
from the local community
Not applicable: all senior management
employed in NZ (most significant
market) are local
Indirect Economic ImpactsExplanation
203-1/
13.22.3
Infrastructure investments and
services supported
Not applicable: no significant
infrastructure investments, no impact on
communities and local economies
203-2/
13.22.4
Significant indirect economic impactsNot applicable: no significant indirect
economic impacts identified
Procurement practicesExplanation
204-1 Proportion of spending on local suppliersNot applicable: majority of spending is
with local suppliers
Anti-corruptionExplanation
205-1/
13.26.2
Operations assessed for risks related to
corruption
Not applicable: corruption not
considered an issue in NZ, which is only
material market
205-2/
13.26.3
Communication and training about anti-
corruption policies and procedures
Not applicable: corruption not considered
an issue in NZ
205-3/
13.26.4
Confirmed incidents of corruption and
actions taken
Not applicable: no incidents
Anti-competitive behaviourExplanation
206-1/
13.25.2
Legal actions for anti–competitive
behaviour, anti-trust and
monopoly practices
Not applicable: no legal actions
TaxExplanation
207-3Stakeholder engagement and
management of concerns related to tax
Not applicable – NZ is only
material market
207-4Country-by-country reportingNot applicable: NZ is only material market
MaterialsExplanation
301-1Materials used by weight or volume
(All 301) Not applicable: as mostly services
provided (i.e. not manufacturing goods)
301-2Recycled input materials used
301-3Reclaimed products and their
packaging materials
EnergyExplanation
302-5Reductions in energy requirements of
products and services
Not applicable: GHG reporting is not
considered material by product/service
GRIDisclosure titleGRIDisclosure title
LIC Sustainability Report
60

Water and effluentsExplanation
303-1/
13.7.2
Interactions with water as a
shared resource
Information unavailable/incomplete:
not considered to have material water-
related impact. This report does note
consents to discharge tradewaste
303-2/
13.7.3
Management of water discharge-
related impacts
Information unavailable/incomplete:
not considered to have material water-
related impact. This report does note
any breaches
303-3/
13.7.4
Water withdrawalInformation unavailable/incomplete:
not considered to have material water-
related impact
303-4/
13.3.5
Water dischargeInformation unavailable/incomplete: not
considered to have significant water-
related impact
303-5/
13.3.56
Water consumptionInformation unavailable/incomplete: not
considered to have significant water-
related impact
EmissionsExplanation
305-7/
13.1.8
Nitrogen oxides (NOx), sulphur oxides
(SOx), and other significant air emissions
Not applicable: LIC does not have material
air emissions
WasteExplanation
306-1/
13.8.2
Waste generation and significant
waste-related impacts
(All 306) Information unavailable/
incomplete: data is included in GHG
emission calculations to the extent
available and the report notes action
being taken to reduce waste
306-2/
13.8.3
Management of significant
waste-related impacts
306-4/
13.8.5
Waste diverted from disposal
306-5/
13.8.6
Waste directed to disposal
Supplier Environmental AssessmentExplanation
308-1New suppliers that were screened using
environmental criteria
Information unavailable/incomplete:
the report notes that consideration
of sustainability factors is part of the
Procurement policy and practices for
strategic procurement processes
308-2Negative environmental impacts in the
supply chain and action taken
Information unavailable/incomplete:
no material impacts identified
EmploymentExplanation
401-2Benefits provided to full-time employees
that are not provided to temporary or
part-time employees
Not applicable: not considered to be
material differences
Occupational Health and SafetyExplanation
403-1/
13.19.2
Occupational health and safety
management system
(All 403) Information unavailable/
incomplete: key information considered
material is provided in Health and Safety
section of the report, but not to the detail
specified by these disclosures
403-3/
13.19.4
Occupational health services
403-4/
13.19.5
Worker participation, consultation and
communication on occupational health
and safety
403-5/
13.19.6
Worker training on occupational health
and safety
403-6/
13.19.7
Promotion of worker health
403-7/
13.19.8
Prevention and mitigation of occupational
health and safety impacts directly linked
by business relationships
403-8/
13.19.9
Workers covered by an occupational health
and safety management system
403-9/
13.19.10
Work-related injuries
403-10/
13.19.11
Work-related ill health
Training and EducationExplanation
404-1Average hours of training per year
per employee
Information unavailable/incomplete:
not considered a material issue
404-2Programmes for upgrading employee skills
and transition assistance programmes
404-3Percentage of employees receiving
regular performance and career
development reviews
Information unavailable/incomplete:
not considered a material issue – LIC
has a specific tool for completing
and overseeing reviews and
development plans
GRIDisclosure titleGRIDisclosure title
For the year ended 31 May 2026
61

Diversity and Equal OpportunityExplanation
405-1/
13.15.2
Diversity of governance bodies
and employees
Information unavailable/incomplete:
gender information is provided in report
(annual report for governance body) but
other diversity factors are not considered
a material disclosure
405-2/
13.15.3
Ratio of basic salary and remuneration of
women to men
Information unavailable/incomplete:
not considered a material issue
Non-discrimination
406-1/
13.15.4
Incidents of discrimination and corrective
actions taken
Not applicable: none identified
Freedom of Association and Collective BargainingExplanation
407-1/
13.18.2
Operations and suppliers in which the right
to freedom of association and collective
bargaining may be at risk
Not applicable: none identified
Child LabourExplanation
408-1/
13.17.2
Operations and suppliers at significant risk
for incidents of child labour
Not applicable: primary market in NZ,
none identified
Forced or Compulsory LabourExplanation
409-1/
13.16.2
Operations and suppliers at significant
risk for incidents of forced or
compulsory labour
Not applicable: primary market in NZ,
none identified
Security PracticesExplanation
410-1
Security personnel trained in human
rights policies or procedures
Not applicable: LIC does not employ
security personnel.
Rights of Indigenous PeoplesExplanation
411-1/
13.16.2
Incidents of violations involving rights
of indigenous peoples
Not applicable: No incidents reported
Local CommunitiesExplanation
413-1/
13.12.2
Operations with local community
engagement, impact assessments
and development programmes
(All 413) Not applicable: no such operations
413-2/
13.12.3
Operations with significant actual
and potential negative impacts on
local communities
Supplier Social AssessmentExplanation
414-1New suppliers that were screened using
social criteria
(All 414) Information unavailable/
incomplete: due to the sources of
supplies, not considered a material issue.
This report includes general content
on suppliers
414-2Negative social impacts in the supply chain
and actions taken
Customer Health and SafetyExplanation
416-1/
13.10.2
Assessment of the health and safety
impacts of product and service categories
Not applicable: not considered
material issue.
416-2/
13.10.3
Incidents of non-compliance concerning
the health and safety impacts of products
and services
Not applicable: no incidents reported
Marketing and LabellingExplanation
417-1Requirements for product and service
information and labelling
Not applicable: products and services
relate to animals so not considered
material issue
417-2Incidents of non-compliance concerning
product and service information
and labelling
Not applicable: no incidents reported
417-3Incidents of non-compliance concerning
marketing communications
Customer PrivacyExplanation
418-1Substantiated complaints concerning
breaches of customer privacy and losses
of customer data
Not applicable: no complaints received
GRIDisclosure titleGRIDisclosure title
LIC Sustainability Report
62

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New Zealand
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