2019 Sustainability Report

sustainability matters. sustainability report. 2019 Ba dgin garra Wind Farm ( Western Australia) Cover image: Graduate Engineer, Tayah Gallacher. APA GROUP — SUSTAINABILITY REPORT 2019 contents. 02 message from the chairman and CEO 05 about APA Group 08 climate change and renewable investments 14 renewables and future energy mix 19 customers 25 people and culture 33 health and safety 40 environment 49 community 57 procurement 59 business continuity, emergency response and crisis management 60 glossary This report provides an overview of APA Group’s (APA) performance on sustainability topics for the period 1 July 2018 to 30 June 2019, with case studies to demonstrate performance in more detail. It also sets out our key risks and opportunities and high level plans for FY2020 in key areas. renewables growth 50% of APA's electricity climate generation capacity is now sourced from action renewables Climate risk has been aligned with the recommendations of the Task Force on Climate Related Financial Disclosures and a climate driven scenario analysis has 2019 been undertaken. highlights. energy charter APA is a foundation signatory in a whole of industry - . disclosure and accountability 331% regime designed to improve Total Reportable Injury customer outcomes and trust Frequency Rate decreased performance & improvement In diversity and inclusion, training, health, safety and environment APA GROUP — SUSTAINABILITY REPORT 2019 — 1 Sustainability Matters. I Message from the Chairman and CEO I About APA Group I Climate Change and Renewable Investments I Renewables and Future Energy Mix Customers I People and Culture I Health and Safety I Environment I Community I Procurement I Business Continuity, Emergency Response and Crisis Management I Glossary message from the chairman and CEO. natural gas and our diversified energy asset portfolio will play an important role in the shift to a sustainable lower carbon future Michael Fraser Chairman Rob Wheals CEO & Managing Director Welcome to the APA Sustainability Report for FY2019. As a key player in the Australian energy industry, APA will We are pleased to provide you with an update on key work to address the challenges in this industry to restore trust, initiatives we have undertaken to continue to build ensure reliability of energy supply whilst also driving improved our maturity with environmental, social, governance affordability and reduced emissions. (ESG) and sustainability performance and disclosure. Our approach to sustainability is based on these beliefs and While FY2019 was a year of challenge and transition challenges, recognising that we need to continue to grow in for APA, we have continued to successfully execute our our maturity and capability. For APA sustainability means: business strategy as well as key corporate initiatives — We are active in helping to displace more carbon‑intensive in areas such as customer focus, community relations energy options – like coal or oil – both in Australia and safety, producing strong improvements whilst and overseas; also identifying areas for further development. — We are proactive in continuing to grow and build our portfolio of renewable energy assets such as wind and solar; Following on from steps taken in FY2018, we have — We will explore, collaborate and actively support the design, continued with our ESG initiatives/improvement testing and commercialisation of cleaner energy sources program with a special emphasis on aligning our climate (such as hydrogen and renewable methane) where it risk management with the recommendations of the makes sense to do so; Taskforce on Climate‑related Financial Disclosures — We put our customers at the centre of what we do (TCFD). We accept the Intergovernmental Panel on Climate Change’s (IPCC) assessment of climate change That in the operation of our assets we seek to: science that the climate is changing due to human — Optimise the operational efficiency and maintenance of our influence. We believe that climate change is one of the assets such that safety and environmental performance is most significant issues facing the energy industry and assured and asset performance meets customer requirements; the Australian community in general. We also believe that natural gas and our diversified energy asset — Understand and measure our impact on the environment, portfolio will play an important role in the shift to and in particular our greenhouse emissions, water usage a lower carbon, sustainable future. and land management; and — Progress opportunities to improve and manage our assets responsibly through the identification, measurement and assessment of impact to the environment (e.g. emissions, water utilisation). 2 — APA GROUP — SUSTAINABILITY REPORT 2019 Sustainability Matters. I Message from the Chairman and CEO I About APA Group I Climate Change and Renewable Investments I Renewables and Future Energy Mix Customers I People and Culture I Health and Safety I Environment I Community I Procurement I Business Continuity, Emergency Response and Crisis Management I Glossary Our business success will be largely dependent on our We are pleased with the progress made against the plans ability to fully, honestly and regularly engage with all of our and commitments made in last year’s report. It is reflective stakeholders – customers and consumers, our employees of the hard work and drive for excellence that APA’s employees and contractors, landowners and communities, regulators regularly exhibit in delivering our strategy and living our values. and policy makers as well as the investment community. However we know we need to do more. We are currently Accordingly we are committed to: transitioning our operating model to provide increased — Listening to understand, and being responsive leadership, capability and where necessary capacity to and accountable to our various stakeholders; step up improvements in areas such as (but not limited to): — Applying a risk based approach to our processes — Further maturity and development using the TCFD and decisions; framework including developing a corporate climate change policy; — Setting goals and targets for improvement and transparently reporting against those on a regular basis; — Improved breadth and integrity of environmental data collection, validation and measurement, that will in time — Working to leave a lasting positive impact, be include target setting; that with our projects or ongoing operations and business interactions. — Establishing a plan for carbon and water management; and In this report we have endeavoured to increase the level — Developing and implementing a more comprehensive of disclosure in both our commentary and metrics, from and integrated approach to social performance previous years by discussing both the positives and those across APA’s activities, from supporting local regional areas where we have not performed to the standard we communities to industry initiatives. would wish. Progressing these initiatives will be a key focus for APA Sustainability highlights for APA in FY2019 were: in FY2020, as well as maintaining and improving current — The launch of APA’s Customer Promise, underlining performance areas. our commitment and accountability to deliver services Building a sustainable, low carbon future is not only our for our customers in ways of value to them; goal for APA but for Australia. We understand our role — APA’s foundational involvement and drive in the as a leading energy infrastructure company to mitigate development and launch of the industry‑wide Energy and adapt to climate related risks and opportunities. We Charter, which has a vision of “Together, deliver energy are committed to acting responsibly for our customers, for a better Australia”; employees, securityholders and the community. — Identification of material financial and non‑financial In addition to continuing to displace more carbon intensive risks using the Taskforce on Climate‑Related Financial fossil fuels, natural gas and gas peaking plants serve a critical Disclosures (TCFD) framework, including completion role in supporting the integration of renewable energy sources of scenario analysis; in Australia’s National Electricity Market, where natural gas — The commissioning of new renewable assets in both is the partner or enabler of renewable energy, providing the Queensland and Western Australia, such that over flexibility required to ensure a reliable electricity system. 50% of APA’s electricity generation capacity is now In the future, APA will also investigate the role for Australia’s from renewables; extensive gas distribution system in decarbonising heating — Development of a robust process safety framework and industrial energy use with renewable methane and rolled out to key assets and formalised within the potentially hydrogen. We believe Australia should leverage APA safety management system; its current and future investments in the gas and gas related infrastructure to deliver long term, reliable, secure and — Roll out of APA’s new Code of Conduct, now called cost‑effective carbon reductions. Our Code, which was fundamentally reviewed at the end of FY2018; — Steady progress with our diversity and inclusion strategy and the Gender Targets Action Plan in particular, both in actions taken to improve the diversity and inclusiveness at APA as well as specific increases in each of the targeted employee categories; and — Significant improvements in the processes and systems Michael Fraser Rob Wheals to gather and verify data for greenhouse gas reporting.

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