We're Shaping a Sustainable Energy Future for Australia, by Taking Action

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We're Shaping a Sustainable Energy Future for Australia, by Taking Action AGL SUSTAINABILITY REPORT 2017 | SUSTAINABLE BUSINESS STRATEGY SUSTAINABLE BUSINESS STRATEGY We’re shaping a sustainable energy future for Australia, by taking action to prosper in a carbon-constrained world and becoming a more customer-centric business. As the largest private coal fired energy generator in Australia, the largest private operator of renewable energy generation assets in Australia and as one of Australia’s largest energy retailers, we’re uniquely placed to shape a sustainable energy future for Australia. • We are moving from being a mass retailer to a personalised retailer – using smarter solutions, technology and service to empower our customers. • We are transitioning from being an owner and operator of large generation assets to an orchestrator of large and small assets, allowing energy to be generated, stored and shared by individuals. • And we are moving to lower-emissions technology. We’ve set a deadline to close our coal plants and are investing heavily in renewable energy. We’ve been committed to sustainability for a long time. In fact, we’ve been reporting on our sustainability journey since 2004. To us, ‘sustainability’ simply means thinking about the long-term responsibilities we have to all our stakeholders (our employees, our customers, our investors, and the community) and to the environment in which we all work and live. We think this way because we recognise that our future success and reputational standing is shaped and measured by more than just our economic performance; it is also influenced by the social and environmental consequences of our decisions and actions for all our stakeholders. This report provides our stakeholders with an account of our sustainability performance over the last year, and sets goals for the following years. It focuses on the things that matter most to us, and to our stakeholders - our ‘material issues’ - and aims to provide thought leadership on important and emerging issues for our business, our industry, and the broader community. This section focuses on: Strategy and material issues Sustainability targets & performance summary Material issues About this report Energy market evolution AGL SUSTAINABILITY REPORT 2017 | SUSTAINABLE BUSINESS STRATEGY | STRATEGY AND MATERIAL ISSUES Sustainable business strategy Strategy and material issues AGL’s Strategic Imperatives Prosper in a carbon constrained future Build customer advocacy From To From To From To From To Mass Personal Operator of Orchestrator High Lower Leveraging Leveraging retailing retailing large assets of large and emissions emissions business platforms in small assets technology technology platforms in existing and existing markets new markets $300 million Virtual Power Powering WA expansion Customer Plant in SA Australian and review of Experience connecting 1,000 Renewables energy retail Transformation home batteries Fund, driving opportunities in program investment select offshore in large scale developed renewables markets FY17 material issues Customer experience Distributed energy services Climate change (greenhouse and energy) Energy market evolution Energy prices and affordability and energy efficiency Renewable energy Ethical conduct Public policy engagement Profitability Health and safety Community engagement How we’ll deliver Embrace transformation Drive productivity Unlock growth In this section Strategy and material issues Sustainability targets & performance summary Material issues About this report Energy market evolution This information is included in an interactive online report at http://agl2017.reportonline.com.au/sustainabilityreport. Visit this website to access the full FY17 Sustainability Report, sustainability data centre and other online features. This report is subject to the important information statement which is also available on this website. AGL SUSTAINABILITY REPORT 2017 | SUSTAINABLE BUSINESS STRATEGY | SUSTAINABILITY TARGETS & PERFORMANCE SUMMARY Sustainable business strategy Sustainability targets & performance summary We have established targets and commitments to drive performance, behaviours and transparency across a range of sustainability topics. Our scorecard shows how we have performed against the targets we set for FY17, and shows the new targets that have been set to guide our performance in FY18 and beyond. Further details about how we have performed are available in each section of the report. While we try to keep as much consistency between target metrics year on year, some targets have changed to reflect key metrics used by the business to evaluate performance, or where existing metrics aren’t measuring or driving performance as expected. Met Not Met In Progress Sustainable business strategy FY17 target FY17 performance Status FY18 target Energy Contribute to the development of Publish two thought More than two thought Publish two thought market an electricity market design and leadership papers which leadership papers were leadership papers which evolution regulatory framework that facilitates contribute to sustainable published in FY17. See the contribute to a market design safe, reliable, affordable and market design energy market evolution that facilitates sustainable, decarbonised electricity supply from section for details secure, reliable, affordable and centralised and distributed sources decarbonised electricity supply How we operate FY17 target FY17 performance Status FY18 target Ethical Act ethically in all activities in Number of substantiated Number of substantiated Number of substantiated conduct accordance with the AGL Code of issues relating to issues relating to issues relating to unacceptable Conduct unacceptable behaviour in unacceptable behaviour behaviour in the workplace the workplace: 0 in the workplace: 8 ranked as high or greater according to AGL’s FIRM risk management process: 0 FY17 target FY17 performance Status FY18 target Public policy Engage transparently with AGL will publish all material All material submissions AGL will publish all material engagement governments to facilitate the submissions in relation to in relation to public policy submissions in relation to development of sensible public policy public policy matters on the matters are published on public policy matters on the AGL Blog the AGL Blog AGL Blog AGL will annually disclose all Memberships of industry AGL will annually disclose all groups which it is a member associations are included groups which it is a member of that may influence public in the stakeholder of that may influence public policy engagement section of policy this report FY17 target FY17 performance Status FY18 target Corporate Adopt best practice corporate AGL will continue to publish AGL’s FY17 Corporate AGL will continue to publish governance governance its approach to corporate Governance Statement its approach to corporate governance through is available on the AGL governance through the annual Corporate website the annual Corporate Governance Statement Governance Statement FY17 target FY17 performance Status FY18 target Legislative Comply with legislative requirements Number of adverse Number of adverse court Number of legislative compliance across the organisation court findings in relation findings in relation to non-compliances that to Australian Consumer Australian Consumer result in adverse court Law1: 0 Law1: 0 findings2: 0 Number of fines or penalties Number of fines or Number of fines or penalties in relation to environmental penalties in relation to in relation to environmental licences3: 0 environmental licences3: 0 licences4: 0 Environmental Regulatory Environmental Regulatory Environmental Reportable Frequency Rate Reportable Frequency Regulatory Reportable (ERRFR)5: <1.5 Rate (ERRFR)5: 1.0 Incidents: ≤12 This information is included in an interactive online report at http://agl2017.reportonline.com.au/sustainabilityreport. Visit this website to access the full FY17 Sustainability Report, sustainability data centre and other online features. This report is subject to the important information statement which is also available on this website. AGL SUSTAINABILITY REPORT 2017 | SUSTAINABLE BUSINESS STRATEGY | SUSTAINABILITY TARGETS & PERFORMANCE SUMMARY Customers FY17 target FY17 performance Status FY18 target Customer Provide a superior experience that Net Promoter Score6: Net Promoter Score6: Net promoter score6: experience meets the needs of our customers Improvement in average -18.7, higher than the Improvement in average annual NPS score FY16 score of -19.8 annual NPS score compared compared to FY167 to FY20178 RepTrak reputation ranking: Within the top 30 companies in Australia9 FY17 target FY17 performance Status FY18 target Distributed Provide a market-leading range of Proportion of AGL fleet We have committed to Leading by example by energy energy products and services that comprising electric vehicles: purchasing 36 electric increasing the proportion of services maximises customer value from 10% (by 2018) vehicles (equivalent to electric vehicles in our fleet to and energy distributed energy technologies 10% of current fleet) by at least 10% efficiency the end of 2018 Number of smart Due to changes in AGL’s connections10: 1 million (by strategic direction, 2020) this target will not be continued FY17 target FY17 performance Status FY18 target Energy Provide affordable energy solutions Delivery of commitments Delivery of commitments Develop a Social and Economic prices and for our vulnerable customers under the Affordability under the Affordability Inclusion Policy
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