Stakeholders
Stakeholder
advocacy

Maintain constructive relationships with our stakeholders so we understand the issues that are important to them and using transparent processes to make evidence-based decisions.

FY19 target

AGL will publish social media posts in relevant social networks with an average target audience engagement of 1% per post 1.

We engage in constructive dialogue with our stakeholders to understand and respond to issues that are important to our people, customers, investors, suppliers and partners, regulators, landowners and the wider community. It is our aim to have strong and productive relationships with our stakeholders such that they know that we listen to them, pay authentic consideration to any concerns raised, and use transparent processes to make evidence-based decisions. We like to see our stakeholders choosing to work productively with us, and we treat our stakeholders with respect so that they choose to advocate for AGL where appropriate.

A summary of the key issues for each of our stakeholder groups is provided below, along with an outline of how we engaged with each group during FY18, and the planned outcomes of that engagement.

AGL’s Stakeholder Advisory Council which was established in FY17 and chaired by our CEO and Managing Director, Andy Vesey, continued to meet throughout FY18. The primary function of the Council is to engage with and, where relevant, challenge the thinking of, our senior management on effective strategies to manage our business in a responsible, ethical and sustainable manner. External members of the Council were selected to provide expertise across the investment, customer, social services, civil society, government and environmental fields. Council meetings are also attended by a representative from Deloitte, AGL’s current financial and non-financial auditor.

The Council met twice during FY18, and provided constructive input on several matters, including:

  • AGL’s approach to rehabilitation and transition following our staged closure of coal-fired power stations, and to our decision about the planned closure of the Liddell Power Station more specifically. Refer to our Power station transition and closure section for further information.
  • AGL’s approach to conducting its materiality review. This was taken into consideration in the course of the independently-facilitated materiality review that was conducted in FY18. See the Materiality section for more information.
  • AGL’s performance against the sustainability targets set for FY17, with particular emphasis on areas where AGL did not meet its targets, including the rationale for AGL’s targets and how some were reframed in FY18 as a result.
  • How AGL addresses energy affordability issues being faced by our customers.
People

Key issues

How we engage

To remain competitive, we need a high performance and anticipatory culture where people demonstrate our core values of safe, sustainable, inclusive and focused, and are engaged, accountable, empowered, recognised and rewarded.

The key issues for our people include: workplace safety; career development and training; appropriate remuneration and recognition (including enterprise bargaining agreements); personal wellbeing; and a fair, equitable and inclusive workplace.

AGL Enterprise Leadership Team (consisting of Executive Team members and their direct reports) forums are conducted throughout the year to discuss key priorities, projects and goals of each business group. Twice-yearly Town Halls are also held to enable AGL’s Executive Team to share information with AGL people and invite conversation.

Networks such as AGL Equality and AGL Shine provide opportunities for our people to support the development of a diverse and supportive workplace culture, and Let's Talk lunchtime sessions held at our major offices provide opportunities to explore business priorities and community issues at a more in-depth level.

We also prioritise engagement with our people about their safety and wellbeing. Refer to the Health and safety section for information about HSE Walks and Technical Interactions.

The key purpose of these engagement activities is to ensure that our people understand our strategic direction and are engaged and safe in the workplace.

Investment community

Key issues

How we engage

In addition to our periodic and continuous disclosure obligations, we engage with the investment community about the financial and non-financial risks and opportunities that may influence the company’s performance and growth in the longer term.

Investors are increasingly interested in our response to environmental, social and governance risks, and this often influences their investment decisions.

The two main environmental, social and governance issues that investors raised in FY18 related to managing the political and regulatory landscape of the energy industry, including the impact of changes in regulatory policy; and how AGL is transitioning to a lower carbon emissions future via our long-term commitments to exit coal-fired generation and the increasing development of renewables.

We regularly engage with both retail and institutional investors. The Annual General Meeting provides all shareholders with the opportunity to raise questions concerning business performance, strategy and conduct, as well as vote on executive and Board remuneration and other matters affecting shareholders.

We hold investor briefings each year, which are broadcast live and archived on the AGL website. These include AGL’s half-year and full-year results as well as detailed strategy briefings and site visits. In addition, we participate in broker-hosted conferences and undertake regular road-shows to engage with institutional investors in Australia and overseas, which in FY18 included Asia, the United Kingdom and United States.

We participate in investor surveys focused on ESG performance, including the CDP Climate Change Program, MSCI and Sustainalytics, which the investment community uses to facilitate informed investment decisions.

We undertake a semi-annual qualitative and quantitative survey of the perceptions of equity institutional investors and analysts conducted by an independent third party, which enables these stakeholders to provide unattributed feedback on AGL’s Board, management, strategy, financial performance, disclosure and communication. Feedback from these surveys is used to guide AGL’s strategy.

The key purpose of AGL’s engagement with the investment community is to support AGL's compliance with its continuous disclosure obligations as an ASX-listed business, facilitate investor understanding of our strategic direction and understand and respond to investor concerns about our business or our industry more generally.

Government

Key issues

How we engage

Our business is affected by the policy decisions and commitments of governments at all levels. Governments have a responsibility to ensure the accessibility of essential services, such as energy, along with the development of energy infrastructure in accordance with accepted policy principles. These principles include consideration of climate change impacts and sustainability.

Federal, state and local governments are concerned with a wide range of issues including the development of energy infrastructure; climate change and renewable energy policies; energy prices; and reliability of energy supply.

We engage in regular dialogue with relevant federal, state and local governments in relation to a range of project-specific and policy issues – including meetings, policy submissions (both directly and via industry associations), attendance at events and the provision of briefings. Further information is available in the Public policy engagement section.

Where possible, we use peer-reviewed research published by AGL economists and other academics to engage with governments around issues related to the energy industry and public policy. This research can be found on the AGL blog, The Hub.

During the year, we also engaged the following firms for strategic, communications and policy-related advice:

  • Newgate Communications
  • Hawker Britton
  • FutureEye
  • Cato Counsel
  • Bespoke Approach
  • Professor Graeme Samuel AC
  • Barton Deakin, and
  • Utting Research.

Consistent with our Political Donations Policy, we do not use third parties to make direct or indirect political donations. Refer to the Public policy engagement section for more information.

The key purpose of our engagement with governments is to inform public policy development with a view to maximising the benefits to our customers, shareholders, and the communities in which we operate.

Regulators

Key issues

How we engage

Regulators are responsible for economic regulation and monitoring compliance against jurisdictional and national energy regulations, as well as environmental regulations. Regulatory decisions can have a significant impact on our business.

The key issues for regulators include reliability and affordability of energy supply; efficient investment in utility infrastructure; compliance with consumer protections and other parts of the regulatory framework; and compliance with environmental licencing and other requirements.

We engage with regulatory bodies in New South Wales, Victoria, Queensland, South Australia, Western Australia and the Australian Capital Territory, and national bodies such as the Australian Competition and Consumer Commission, the Australian Energy Regulator, the Australian Energy Market Operator and the Australian Energy Market Commission, including through direct engagement and activities undertaken as part of industry associations.

The key purpose of our engagement with regulators is to inform regulatory developments with a view to balancing the needs of our shareholders, customers and the communities in which we operate. Engaging with regulators also provides us with valuable feedback on our performance, and we benefit from the expertise of regulators in understanding emerging issues.

Investment partners, joint ventures and suppliers

Key issues

How we engage

We have a range of investments in electricity generation and retail operations.

We have business relationships with investment partners and suppliers, including, significantly, through the Powering Australian Renewables Fund (PARF).

The mechanisms for engagement with investment partners, joint ventures and suppliers vary, but can include meetings and correspondence, as well as more formal arrangements such as Board representation on PARF, ActewAGL and other relevant industry bodies.

During FY18, we continued to utilise our Lender Code of Conduct questionnaire, which is issued to banks for optional completion alongside a debt facility invitation. The questionnaire covers issues such as corporate governance, ethical behaviour, risk management, labour practices, human rights, non-discrimination, health and safety, environmental management, community and supply chain. The questionnaire was broadly well received particularly by those banks that have a strong commitment to their own ESG policies. All lenders completed the questionnaire with varying degrees of robustness in reporting. AGL subsequently followed up with those identified as having a lesser focus on ESG, to enquire about steps being taken to address this. Some banks that had completed the questionnaire in previous years, were able to report on their progress and improvements implemented in the interim. AGL has plans to incorporate a similar process for future capital markets transactions where appropriate.

Energy industry and industry associations

Key issues

How we engage

We play an active role in leading industry support for renewable energy and climate change initiatives, as well as the need to ensure reliable and efficient energy infrastructure and markets.

The business impacts of energy policy are a primary concern for the Australian energy industry.

During FY18, AGL participated in several industry associations. Where AGL has paid fees to these organisations, the amount paid is indicated in parentheses.

  • Business Council of Australia ($75,000)
  • Australian Industry Group ($27,000)
  • Clean Energy Council ($55,500)
  • Australian Energy Council ($363,000)
  • The Carbon Market Institute ($8,000)
  • Sustainable Business Australia ($15,000)
  • Committee for Economic Development of Australia ($38,431)
  • Australian Financial Market Association ($3,550)
  • Australasian Investor Relations Association ($9,220)
  • Group of 100 ($7,500)
  • Financial Executives Institute of Australia ($5,700)
  • Alliance to Save Energy ($15,000)
  • Green Building Council ($23,500)
  • Committee for Gippsland
  • Gippsland Regional Executive Forum
  • Corporate Tax Association ($14,000)
  • Diversity Council Australia ($5,881)
  • Energy Efficiency Council ($8,120)
  • IAP2 Australia
  • Global Compact Network Australia ($10,417)
  • Australian Direct Marketing Association ($10,127)
  • Business SA ($6,063)

We do not make separate payments to these associations for specific projects related to influencing political campaigns. Membership and participation in these bodies is undertaken for the interests of AGL and does not reflect the private interests or preferences of AGL Directors and officers.

Importantly, we do not always agree with the policy positions these associations take, and we aim to clarify this with other stakeholders where appropriate. Areas where our position differs from associations that we are a member of is outlined in the Public policy engagement section.

The key purpose of our engagement with associations and think-tanks is to develop mutually beneficial agreed positions on relevant issues, with a view to maximising the benefits to our shareholders, customers and the communities in which we operate. Such engagement also allows us to receive feedback on our performance and to benefit from the expertise of these organisations in understanding emerging issues.

Customers

Key issues

How we engage

To maintain and improve market share within Australia’s highly competitive energy market, it is essential that we listen and respond to customer feedback and constantly seek to improve the level of customer service that we provide. We aim to work collaboratively with governments and the community sector to support customers who are having trouble accessing affordable energy.

Customers are concerned with the cost of energy and deriving value for the money they spend on energy products; being rewarded for their loyalty to AGL; understanding their energy bills; and the ease of accessibility of energy products and services and of interacting with AGL.

The AGL Customer Council meets on a quarterly basis to discuss a wide range of matters that affect our customers and the communities in which we operate.

An important event in FY18 was AGL’s first Customer Appreciation Day, where people from various parts of AGL’s business took the opportunity to call over 1400 of AGL’s customers to thank them for being with AGL. The Customer Markets Leadership team also took the opportunity to visit some of AGL’s important business customers in Victoria, which was a valuable way for AGL to connect with our customers, become familiar with our business customers’ business operations, and better understand our customers’ energy usage.

The AGL Community allows the community to connect with us and contribute and collaborate on any matter relating to energy. Other feedback mechanisms available to customers include an online information request facility and social media such as Twitter and Facebook.

We have a team dedicated to engaging with customers over social media platforms. We have seen an increase in the average engagement rate of all AGL on-page social content in Facebook and Twitter from 1.6% in FY17 to 2.1% in FY18. There was a large increase in the number of our responses to social media comments and online feedback, from over 16,000 comments in FY17 to over 35,000 in FY18. Satisfaction1 from customers communicating via these channels is still high (albeit slightly reduced from FY17 at 79%), and as at June 2018 was 67%.

We prioritise engaging directly with our customers at various stages of their interactions with us through face-to-face interviews and meetings with our customers. Over FY18 this included:

  • customer feedback sessions prior to the launch of certain products, to allow AGL to take these views into account in launching the particular products
  • design sprints in which customers’ feedback was used to inform the design of particular products and services, and
  • a dedicated series of interviews that AGL conducted with select customers on such issues as their perceptions of the energy industry more generally, their perspectives on the way the energy industry is presented in the media, their views on the level of service they were getting from AGL and whether that represented good value for money, and their views on how the energy sector was likely to evolve in the future. Through these conversations we gained valuable insight to our customers’ experiences, and provided an important opportunity for AGL people to develop a sense of empathy for and identification with our customers.

As part of our Voice of the Customer satisfaction program, we also undertook nearly 1,500,000 retail customer surveys during FY18. Surveys were conducted by email, phone and automated after-call survey methods, and covered our key customer facing areas, such as inbound Customer Services, our digital channels, and Solar teams. Feedback received from our customers in FY18 was used to inform and improve the customer experience, and to create products and services that are better aligned to our customers’ needs. For example, customer feedback highlighted the need for products and services that enabled customers to independently manage their energy accounts to a greater extent.

The AGL Customer Charter outlines our commitment and timeframes for responding promptly to phone and written enquiries. Our Customer Advocacy team also deals directly with customer concerns.

Account management and engagement with our major commercial and industrial customers is approached on a customer-preferred basis; however mechanisms include face-to-face meetings, executive engagement, dedicated communications, general correspondence and energy briefings.

1. Measured as the average score provided by customers, when asked to rank their level of satisfaction using a set 1-5 scale against Facebook and Twitter.

Local communities

Key issues

How we engage

Effective engagement with the community on development projects is vital to our long-term success. We can only deliver and operate projects with the respect and support of the community by transparently engaging with the community at every stage of the development process.

The key issues for local communities include the local environmental, and social and economic impacts of developments and infrastructure. See the Community engagement section for further detail on the most significant issues that we engaged with local communities about over FY18.

We engage with local communities as part of the development approval and construction processes for each major project. Detailed information on individual energy projects is provided on our website.

Community Dialogue Groups (CDG), sometimes operating as Community Consultative Committees, are in place for a number of projects, including the Coopers Gap Wind Farm, the Silverton Wind Farm, the Macarthur Wind Farm, the Camden Gas Project, the Newcastle Gas Storage Facility, AGL Macquarie and AGL Loy Yang. A CDG for AGL Torrens is in the process of being established. Each CDG is chaired by a chairperson (who is remunerated by AGL) and includes local council or government-appointed representatives, local residents, local indigenous community members, local environment groups and AGL representatives.

We also use social media to communicate and engage with the community. The AGL Blog (which, in June 2018 was refreshed and re-launched as The Hub) has been a forum for providing timely and accessible information to interested stakeholders on a broad range of issues, such as AGL’s customer-focused initiatives, key external presentations by our people, published research, and evolving energy policies. The Hub is updated frequently, with 191 posts by AGL contributors in FY18. The Hub had over 26,400 users and over 62,800 page views during FY18. This represented a 17.5% increase in users and a 20.14% increase in page views over the past year.

The key purpose of our engagement with communities is to listen and engage on relevant issues, with a view to maximising the benefits to our shareholders, customers and to the communities in which we operate. Such engagement also allows us to receive feedback on our performance and benefit from the expertise of communities in contemplating major project decisions and in understanding emerging issues.

Non-government organisations (NGOs)

Key issues

How we engage

We engage with NGOs to understand the causes that they represent and to find constructive ways to work together to deliver mutually beneficial outcomes.

NGOs represent a range of community interests, including social welfare and environmental conservation.

AGL engages with a number of environmental NGOs to enable discussion and constructive dialogue on a range of issues relating to climate change and carbon policy. Areas of interest over FY18 have included AGL’s plans for a staged exit from coal-fired power generation, particularly our plans relating to the Liddell Power Station; the Victorian EPA brown coal-fired power station licence review; government policy and program implementation; public areas of concern; and international policy processes.

  1. 1. Social engagement rate is measured by the sum of interactions (likes/comments/shares/clicks) on a social 'post', divided into the number of times that post was displayed to an audience (impressions). The relevant social networks are Twitter, Facebook, LinkedIn and Instagram.