THE DAIRY INDUSTRY SUSTAINABILITY FRAMEWORK REPORT

  1. The Australian Dairy Industry Sustainability Framework is helping us to deliver on our promise to create rewarding livelihoods for our people, nourish consumers with nutritious food, provide best-care for all our animals and leave the environment in better shape for the future.

The Framework was developed in response to increasing expectations from the community and our customers that we are doing the right thing by people, animals and the planet. And we wanted a cohesive blueprint to guide continuous improvement in priority areas.

Keeping Australian dairy in business for the long term is the fundamental principle which underpins the Framework. It sets measurable goals for economic prosperity, nutrition, animal welfare and natural resource management. The Framework was launched in 2012 following extensive consultation with dairy farmers and manufacturers as well as with our stakeholders including government, retailers, customers, NGOs and interest groups. In 2013, 11 goals and 41 measures were agreed to provide guidance to farmers, manufacturers and industry bodies on our shared priorities and commitments to reach our goals by 2020. It reflects the dairy industry value chain from farm inputs such as feed, through farm production, manufacturing, retail and packaging, export and consumption.

Development was guided by a set of agreed principles to help identify and prioritise issues and guide ongoing action and decision-making including ethical behaviour, transparency and accountability, appreciation of stakeholder interests, competitive neutrality, collective action to deliver mutual benefit and inclusivity.

The Framework seeks to consider all issues along the value chain that have the potential to affect the sustainability of the dairy industry. Inputs through the value chain include water, hay, grain and fertiliser on farm, and logistics, ingredients, packaging, energy and water in the manufacturing sector. While many issues go beyond the immediate control of the dairy industry, we nonetheless seek to factor them into our planning and use our influence where we can to improve sustainability practices.

ADI Value chain

Through the Framework the Australian dairy monitors and reports performance in our priority areas of economic prosperity, health and nutrition, animal welfare and natural resource stewardship. This allows us to track progress towards our 2020 goals, and identify areas where improvement is required. We have developed a ‘scorecard’ which provides a summary of our progress. We are also moving towards reporting in line with the Global Reporting Initiative (GRI) Sustainability Reporting Standards




Governance

The ADIC, the dairy industry’s peak policy body, has overall responsibility for the Framework — setting and reporting progress against the Framework targets and performance measures.

Dairy Australia, the industry-owned national service body, facilitates and supports the ADIC in developing and implementing the Framework.

A Steering Committee was established in 2012 to drive the ongoing development and implementation of the Framework. The Steering Committee meets monthly and includes representatives from farmer organisations as well as manufacturing companies. The Steering Committee seeks endorsement from the ADIC on any major recommendations.

ADI DSCF

The Dairy Manufacturers Sustainability Council

The Dairy Manufacturers Sustainability Council (DMSC) brings together the largest Australian dairy manufacturers to improve sustainability practices and spearhead collaborative action across the industry. The eight-member companies are responsible for processing over 85% of the national milk supply (see www.dmsc.com.au).

Reporting by the DMSC contributes to tracking industry progress against the Australian Dairy Industry Sustainability Framework under 'Reducing our environmental impact' – targets 9, 10 and 11.

The DMSC’s Environmental Sustainability Scorecard 2016 shows manufacturers’ progress in water use, greenhouse gas emissions and waste reduction against targets set in the Australian Dairy Industry Sustainability Framework. Performance in all three areas is moving towards achieving the 2020 targets. This report highlights that over the last five years, through concerted industry effort, DMSC member companies have achieved significant reductions in greenhouse gas (GHG) emissions intensity, water consumption intensity and waste sent to landfill. The 2015/16 DMSC scorecard also includes performance data on wastewater, waste diversion and energy intensity for the first time.

Click here to download the 2016 Dairy Manufacturers Sustainability Council Environmental Sustainability Scorecard


Engagement

Engagement with our stakeholders within and beyond the dairy industry has been a cornerstone of the development and implementation of the Framework, and is critical to ensure it remains robust and relevant.

The stakeholders engaged in the Framework include the dairy industry (farmers and manufacturers), customers, suppliers, government, primary industries, non-government groups, special interest groups and others. This takes place through the formal mechanisms of the Steering Committee and the Consultative Forum, as well as consultation with industry representative bodies and other stakeholders on specific issues facing the industry.

The Dairy Sustainability Consultative Forum was established in 2013. Consisting chiefly of non-industry stakeholders, the Forum provides feedback on our progress and facilitates two-way discussion on emerging issues both nationally and internationally. This group of over 40 individuals from across our stakeholder landscape meets twice a year to provide ongoing guidance and input into the Framework.

During 2016, consultative forums focused on identifying material issues to support the review of the Framework. During the meetings, we encouraged open and constructive discussion. Industry and individual members provided information about key sustainability issues.

Throughout the year we also continued to engage with our stakeholders via our monthly eNews which features updates on our sustainability progress, links to relevant articles and events.


Principles and guidance

International guidelines and standards inform the development of the Framework, including the United Nations Global Compact and the Global Reporting Initiative (GRI) G4.

Agreed principles also help identify and prioritise issues and guide ongoing action and decision-making. These principles include an appreciation of stakeholder interests which ensures that stakeholders from across the dairy value chain are engaged directly in the ongoing development of the Framework.

Our approach has also been influenced by the United Nations Sustainable Development Goals (UNSDGs). The UNSDGs outline 169 targets across areas including poverty reduction, food security and energy and will directly influence national policy settings.

The international dairy industry has also developed the global Dairy Sustainability Framework (DSF). Dairy Australia is a full member of the DSF and the Australian Dairy Industry Sustainability Framework aligns with this global framework.


ADI Principles



Evolution and transition

A comprehensive review of the Framework was undertaken in 2016 by the Dairy Sustainability Steering Committee to take stock of where the dairy industry was, where it needs to be, and ensure there is a clear pathway to get there.

The review process included:

  1. Technical review: Analysing key drivers and challenges (e.g. investor transparency, supply chain, farmgate prices, international trends) by STR Consulting; a material issues review by STR Consulting; and a social licence and consumer insights from survey work by Futureye
  2. Industry workshop to align with key dairy programs
  3. Expert review and contribution from the Steering Committee and third-party experts
  4. Update of the Framework to include appropriate recommendations
  5. Feedback from the Dairy Sustainability Consultative Forum
  6. Further stakeholder consultation and revision by the Steering Committee
  7. Final report to be submitted to the ADIC for review and approval in 2017.

 

During the review, the Steering Committee considered:

  • What has changed since 2012?
  • Does the Framework cover the issues of greatest importance to the industry?
  • Is the Framework generally still “fit for purpose”?
  • Are the targets and indicators both robust and meaningful? Should they be changed?
  • Is performance against the targets adequate?
  • Are we doing enough? Should targets be extended or expressed differently?
  • How does the content of the Framework connect to existing programs?
  • What are the next steps? What level of ambition should we adopt?

ADI Review process


Material issues review

Defining and prioritising the sustainability issues material to the dairy industry is critical to the ongoing strategic development of the Framework. Material issues are defined as those which reflect our significant economic, environmental and social impacts and substantively influence the assessments and decisions of our stakeholders.

A review of material issues was first undertaken in 2011 to inform the initial development of the Framework. In preparing the 2014 progress report, a limited review of material issues was repeated to test their currency and relevance. A more comprehensive refresh of the material issues was undertaken in 2016 to support the evolution of the Framework and to inform the content of the 2016 Progress Report.

The materiality review results are shown below in the matrix.

In the Framework review process, several improvements were identified and discussed in depth. We are currently revising the goals, targets, indicators and baseline data. Full details will be reported in the 2017 Australian Dairy Sustainability Report.

ADI Interest table

^ Dairy farmers care for their animals. This is implicit and considered a normal part of business, so it was not identified as a key issue for dairy farmers.