2011 Sustainability Report
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Aspiring always to lead strategy performance growth Sustainability Report 2011 Scope of report Employees completing Origin’s defensive driver training course CONTENTS Welcome to Origin’s 10th Sustainability Report. Since 2001, we 1 Our Compass have been reporting voluntarily on our success in meeting the 2 Managing Director’s Message 4 Company Profile commitments we make to our key stakeholders. 7 Our 5-Year Sustainability Objectives In this year’s Sustainability Report we once Our online Sustainability Report discloses our 8 Our Customers again report on how we are tracking against performance consistent with previous years 12 Our Communities the 5-Year Strategies we set out in our 2007 and is compiled using the Global Reporting 18 Our Employees report. A small number of case studies bring Initiative’s (GRI) G3 guidelines. It can be 23 Our Investors to life some of what we do each day. viewed at http://reports.originenergy.com.au 26 Origin Foundation and Community We have not set forward targets in this Unless otherwise stated, this document reports Investment year’s report as 2012 will be the final year on the sustainability performance of the 28 About this Report of reporting against our current 5-Year activities and assets operated by Origin for 29 Glossary of Terms Strategies. In the 2012 report we will the 12 months to 30 June 2011 and monetary communicate the next phase of Origin’s amounts are in Australian dollars. sustainability journey. ORIGIN ENERGY LIMITED Cover: Ronald Thompson, Origin Land Management Supervisor at his property in the ABN 30 000 051 696 Queensland gasfields b Our Compass What sets us apart at Origin is not what we do but how we do it. The Purpose, Principles, Values and Commitments contained in our Compass guide our actions and help us make better choices that appropriately balance the interests of all of our stakeholders. OUR PURPOSE We aspire always to lead. We deliver today’s energy needs; and we search and innovate to create tomorrow’s energy solutions. We honour our principles and values, and they are evident in all we do. We live our commitments to our shareholders, to our customers, to our people, to our communities and to our business partners. OUR PRINCIPLES OUR VALUES OUR COMMITMENTS Origin’s Principles provide guidance for making Origin’s Values describe good behaviour: Origin’s Commitments define the outcomes the right decisions: Caring. We care about our impact on that we strive to achieve for key stakeholders. – We conduct ourselves and our business customers, colleagues, the community, We commit to: with due care and in accordance with environment and shareholders. – Deliver market leading performance for relevant laws and regulations. We have an Listening. We listen to the needs of others, shareholders by identifying, developing overriding duty to ensure the health and knowing that an unfulfilled need creates operating and growing value-creating safety of our employees, and to minimise the best opportunities. businesses. the health, safety and environmental Learning. We constantly learn and implement – Create value for our customers, by impacts on our customers and the new and better ways, sharing information understanding their needs and delivering communities in which we operate. and ideas effectively. relevant and competitive energy solutions –We will add value to the resources that to meet those needs both today and into Delivering. We deliver on the commitments come under our control. the future. made in all areas of performance. – The value we create will be distributed to – Create a rewarding workplace for our stakeholders recognising the need to ensure people by valuing everyone’s contribution, the sustainability of our business, and its encouraging personal development, impact on the environment and the recognising good performance and communities in which we operate. fostering equality of opportunity. – We encourage diversity and expression of – Respect the rights and interests of the ideas and opinions but require alignment communities in which we operate, by with the Company’s Principles, Values and listening to them, understanding and Commitments and the policies established managing the environmental, economic to implement them. and social impacts of our activities. – When faced with choices, we make decisions – Respect the rights and interests of our knowing they will be subject to scrutiny. business partners, by working We should be able to demonstrate the collaboratively to create valued and soundness of our decisions to all rewarding partnerships. stakeholders. Origin Energy sustainability report 2011 1 managing director’s Message After a decade of continuous growth, major investment decisions in the 2011 financial year led to Origin’s emergence as a leader in both the Australian energy market and the fast-growing coal seam gas industry. With this greater prominence will come greater interest and closer We also made progress on a range of longer-term renewable and gas scrutiny from many in the community about who we are, what we do opportunities, including exploration and development of geothermal and how we do it. We expect this, and we are confident in our ability resources in Chile and Indonesia, assessment and development of to respond. hydro resources such as the potential Purari Hydro Project in Papua It has always been important to us, but never more so than now, that New Guinea and exploration for gas in the Canterbury Basin in New we honour our principles and values and that we meet the commitments Zealand, South East Asia and Kenya. we make to our customers, our people, our communities, our business As well as leading in a commercial and development sense, Origin partners and our investors. takes great pride in how we go about our business – being particularly In this, our 10th Sustainability Report, we report our progress, and try focused on our customers and the communities in which we operate. to give a flavour of how we go about our business. More detail and a richer representation is available in our online Customer focus report. Underpinning our long-term success is the ability to foresee, understand and meet the changing needs of our customers, large and small. Taking a leadership position Our multi-year Retail Transformation program will deliver simpler In December 2010, Origin announced the acquisition of a portfolio of processes and an integrated billing and customer management energy businesses from the NSW government. Those acquisitions system, facilitating better customer service in the years ahead. were completed on 1 March 2011. Combining the acquired businesses Excellent progress through 2011 meant that at publication of this with our existing business, we have become Australia’s leading energy report all 2.6 million Queensland, Victorian, South Australian and retailer (33 per cent of customer accounts in the National Electricity directly-acquired NSW electricity and gas customers have been Market) and the owner of one of Australia’s largest and most flexible migrated to the new system. Acquired NSW customers of Country portfolios of electricity generation (12 per cent of available capacity). Energy and Integral Energy will be migrated to the new system over the next two years. In July 2011(1), Australia Pacific LNG, Origin’s incorporated joint venture with ConocoPhillips and Sinopec, made a Final Investment Decision Origin remains a leader in product innovation, servicing more than (FID) to proceed with a one-train, 4.5 million tonnes per annum Coal 370,000 GreenPower customer accounts and providing the only green Seam Gas (CSG) to Liquefied Natural Gas (LNG) project with gas product in the Australian market to more than 130,000 infrastructure to support a second LNG train. Origin is the operator of households. Revenue from Origin’s Retail Solutions business, which the gasfields and pipeline for Australia Pacific LNG. includes sales of solar photovoltaic (PV) panels, more than doubled to $445 million. Our tri-generation business won a number of major Since the close of the 2011 reporting period, binding agreements have contracts for energy-efficient power, heat and cooling services to large been signed with The Kansai Electric Power Company and Sinopec to buildings and was named lead partner in a project to deliver against complete the marketing of the second train. Sinopec also subscribed the City of Sydney’s Sustainability 2030 vision. Additionally, Origin has for additional equity in Australia Pacific LNG, which on completion will continued to invest in electric vehicle charging capability, business reduce Origin’s share to 37.5 per cent. Australia Pacific LNG possesses metering and energy efficiency solutions. Australia’s largest Proved plus Probable (2P) CSG reserves, which are reserves likely to be recoverable using standard technical and operating As these product areas mature, the system provided by Retail methods, making Origin a leading player in developing natural gas Transformation will help us provide next generation products and resources in Australia. services. As an example, in May 2011, US Vice President Joe Biden announced a partnership between Origin and Colorado technology Our leading retail and CSG positions are supported by a strong balance company Tendril to launch Australia’s first large-scale pilot of sheet and a range of longer-term growth options. world-class customer engagement technology for the energy sector. Statutory Profit for the 2011 financial year was $186 million, down from Origin will adapt and connect the technology into our new billing $612 million in the prior year. Underlying Profit increased by 15 per cent platform and provide the opportunity for customers to see their and Underlying EBITDA by 32 per cent, with Underlying Earnings Per consumption in real time, and therefore better manage their quarterly Share up 10 per cent(2) to 71 cents. Shareholders received 50 cents per power bills. Origin is committed to being the leading innovator in share in fully franked dividends and for the full year dividend were able providing this revolutionary capability.