Treasury Wine Estates (TWE) has released its 2024 Sustainability Report, detailing its strategies to address climate change, environmental hazards, and social issues.
TWE’s sustainability goals are grouped into three areas of focus, comprising building a resilient business, fostering healthy and inclusive communities, and producing sustainable wine. The business undertook an updated materiality review in 2023, and identified the particular importance of climate risk and greenhouse gas (GHG) emissions reduction, water stewardship, sustainable growing and production, and sustainable packaging.
TWE Chairman, John Mullen, said that sustainability has become increasingly important to the business in recent years.
“Since we launched our enhanced sustainability strategy three years ago, it’s been particularly pleasing to see sustainability become ingrained in the way we do business. Our teams across the globe are embracing initiatives that mitigate the impact we have on the natural environment and make a positive contribution to the communities we operate in. They’re working to adapt our operations so our business continues to thrive,” he said.
Building a resilient business
Ensuring the continued future of TWE involves careful consideration of the key resources. CEO Tim Ford explained that water is of particular significance to the company.
“Since the release of our inaugural global water strategy in 2023, Treasuring Water, we’ve continued to focus on being responsible stewards for one of the most critical inputs to our vineyards and wineries. As well as making our growing regions warmer and drier in general, the changing climate also creates more variability within seasons, impacting operations in our vineyards. This year’s response has involved dedicated investments in improving our data by installing smart water meters, together with a series of projects to reduce water loss by lining and covering a selection of dams in high-risk catchments. These investments help ensure we treasure every drop,” he said.
Across the global business, 97 per cent of TWE’s total water use is in vineyards, and 69 per cent is used in Australia, with California representing the majority of the remaining useage. This year’s overall water usage in Australia represented an increase from FY23, despite a reduced operating footprint in the country. This was due to the unusually wet conditions of FY23, which resulted in reduced need for water overall. However, the water usage of the FY24 period is still an improvement on FY22, indicating TWE’s progress towards water stewardship goals.
To ensure effective water usage, TWE has committed to 100 per cent smart meter coverage across its medium- and high-risk sites by the end of FY25, and has currently covered 94 per cent of high-risk sites. Smart meters support regulatory compliance, detect leakages, and help determine a vine’s water requirements,. They are already showing benefits in vineyard yield and quality, as well as in water conservation.
Also part of TWE’s focus on water stewardship is the Australian dam covering project, a complex and wide-reaching engineering project, the importance of which is evidenced by dam leakage and subsequent water waste experienced in the Zilms Vineyard. Additionally, water recycling is taking place in McLaren Vale and Great Western wineries, and vineyards in the Barossa are capturing and utilising stormwater and wastewater.
Recognsing the negative impact of GHG emissions, TWE has committed to reaching net zero scope one and two GHG emissions by 2024. Energy use is the key source of emissions for the business, and TWE aims to transition to 100 per cent renewable energy by the end of the year. Currently, 80 per cent of the business’s energy usage is from renewable sources, and 24 solar projects have been completed across TWE’s global footprint throughout FY24.
“Complementing the rollout of our solar systems, detailed analysis from our climate risk assessments across our Australian and US sites have already resulted in a number of pilots, initiatives and trials to adapt to changes in growing conditions. Our iconic Koonunga Hill vineyard in South Australia’s Barossa Balley is home to one of our climate adaption responses, with an enclosed vineyard canopy protecting the 14-hectare planting of luxury grapes. This adaptation of our viticulture practices to suite changing environmental conditions is designed to mitigate the predicted temperature increases and extreme weather conditions in the Barossa Valley by the middle of this century,” Ford said.
A healthy and inclusive community
Sustainability extends beyond managing environmental impact, and includes elements of social responsibility.
In this vein, TWE has committed to reaching a 50:50 gender balance in its senior leadership. As of the end of FY24, 47.2 per cent of senior leadership roles are held by women, representing a 2.7 per cent increase from the previous reporting period. Additionally, the company has surpassed its goals of have 42 per cent women across the workforce and 30 per cent women on the board, now reporting 43.7 per cent and 42.9 per cent representation of women respectively.
TWE is also taking the safety of its employees seriously and has exceeded its goal of reducing the three year average serious safety incident frequency rate by 20 per cent, with a 39 per cent reduction as of the end of FY24. This was supported by the company’s Inaugural Global Safety Month, which promoted key safety initiatives such as double checking, taking breaks, mental health awareness, and the Build Safe Together campaign.
The company’s commitment to safety was recognised at the South Australian Wine Industry Awards this year, when Barossa Valley team member Jordan Roesler received the Safety Champion Award for his efforts in reducing risk and promoting safe work practices in the vineyard and winery.
Looking beyond the TWE business, the company has also partnered with other communities to promote safety across the industry. For the third year, Matua Winery in New Zealand partnered with the Graeme Dingle Foundation to introduce a group of students to careers in the wine industry, with a focus on health and safety culture. Students were exposed to the industry through onboarding videos and a vineyard tour.
TWE is also supporting sustainable projects from other groups through its Penfolds Evermore grant program. Committing $1m of funding across a five year period, the first round of funding went to projects such as regenerative seed planting on the B&B highway, and research into the impacts of insect frass (castings) on vineyard soil and plant health.
In addition, TWE has promoted responsible consumption by investing in its no- and low- alcohol (NOLO) products, and promoting the sector through partnering with DrinkWise on a campaign to provide NOLO options at Parliament House, and Australian Grape and Wine’s budget submission to allocate funding to NOLO wine production. Furthermore, TWE has engaged Charles Sturt University to undertake an independent review of its responsible marketing strategies, which is expected to be completed during the current financial year.
Producing sustainable wine
With more than 10,000 ha of vineyard space over the company’s global footprint, TWE is aware of the impact of its vineyard and winery practices, and sustainability in these areas is a key focus of the 2024 report.
One way to ensure sustainable practices is through certification with industry bodies such as Sustainable Winegrowing Australia.
“We’ve made a concerted effort to bolster sustainability certification in recent years, with 99.2 per cent of our owned and leased vineyard now holding regionally-relevant certification. The benefits of certification are twofold: sustainable agricultural practices have a positive impact on biodiversity and soil health, and standardised certification increases traceability and transparency for consumers, informing their purchase decisions,” Ford said.
Sustainable initiatives in TWE’s Australian vineyards include planting native trees and grasses at vineyards in Coonawarra, and contributing to the regeneration of Murray River wetlands and floodplains in South Australia, through 15 years of Markaranka Vineyard water donations. TWE is also investing in sustainability innovation, with its Barossa Valley pilot plant, Cellar 0. This project will pioneer new products to adapt viticultural practices to the changing climate.
Additionally, TWE is addressing sustainability throughout the supply chain, and has recently undertaken a risk assessment of the suppliers it works with. Progress has been made towards its goal of using 100 per cent recyclable, reusable, or compostable packaging, and 50 per cent recycle material in its packaging by FY25. The focus is currently on data collection to determine the recyclability of the packaging current in use. Progress is being made on both fronts, but TWE has encountered issues with certain packaging products that are an industry-wide concern.
Mullen said that a collaborative approach has been key to TWE’s progress towards its sustainability goals throughout FY24.
“A cornerstone of our approach is engagement and collaboration. This year, we’ve continued to work with industry partners and associations, the government, our grower network, and the regional communities we operate in to share our insights and amplify the impact of our sustainability initiatives. In this decade – one where action to address the impact of a changing climate is critical – we acknowledge that true progress will continue to depend on the private and public sectors collaborating to protect our planet and people,” he said.
“Our sustainability aspiration is to boldly cultivate a brighter future for everyone who touches our business and our products.”