About this report
We publish an annual sustainability report to provide a transparent account of our performance in relation to the social, environmental and economic challenges facing our business, our industry and our community.
Key elements of our report comprise:
- our Energy landscape section, exploring the implications of an energy market in transition, as well as AGL’s leadership on issues that are important to our stakeholders
- our material issues, presented in a matrix form showing their relative importance as judged by internal and external stakeholders
- a summary of our performance against FY18 sustainability targets and new targets for FY19, where our commitments to drive performance are established, tracked and measured
- an outline of how we engage with our stakeholders, including the community and policy makers
- performance information about our key sustainability issues, divided into the subject areas of customers, our people, the environment and economic performance, and
- a centralised data centre, where comprehensive performance data is available to view and download.
We want this report to be the starting point for many conversations about our performance, policies, and approach to issues that are important to our stakeholders. Options for engaging with us via social media are available at the end of each page.
GRI Sustainability Reporting Standards (GRI Standards)
This report has been prepared in accordance with the GRI Standards: Core option.
The GRI Standards are designed to be used by organisations to report about their impacts on the economy, the environment and/or society. Further information about the GRI Standards is available at the GRI website.
For the purposes of applying the GRI Standards, the material issues we identified have been mapped back to the available topic-specific GRI Standards. The following table outlines which topic-specific GRI Standards (and associated Disclosures) have been used to compile this report, and the topic boundaries for each material issue.
Material issue1 | GRI Standard | Chosen disclosure(s) | Boundary |
|---|---|---|---|
– | 101 Foundation | – | – |
– | 102 General Disclosures | All required for Core option | – |
– | 103 Management Approach | Applied to each material issue | – |
Financial management | 201 Economic Performance | 201-1 | Impacts related to AGL's financial management are experienced within and outside the organisation, by AGL's workers, shareholders, customers, local communities, and the broader society and economy. We contribute to our organisation's financial management directly but are conscious of the range of other external factors that contribute to our profitability. |
Transition to low carbon energy | 305 Emissions | 305-1, 305-2, 305-3, 305-4 | The impacts of climate change are experienced within and outside our organisation. Impacts of climate change are also experienced outside the organisation, by customers, communities, and the environment in Australia and globally. We engage directly with the issue of climate change. One of our strategic imperatives is to prosper in a carbon constrained economy. This is reflected in our Greenhouse Gas Policy, which sets out clear commitments for our operations and future investments. |
Workplace culture and talent | 401 Employment | 401-1 | Impacts of workplace culture and talent are experienced mainly within the organisation. We engage directly with the issue of workplace culture and talent with our people, investors, customers and the broader community. |
Public policy engagement | 415 Public Policy | 415-1 | The impacts of public policy engagement are experienced internally and outside the organisation. We engage directly with governments and other stakeholders to facilitate the development of sensible public policy. |
Customer-led approach and delivery | NA | NA | Customer advocacy is relevant to our external stakeholders, including our customers and shareholders. We directly impact our customers' experience through our products and services. |
Renewable energy | NA | NA | Renewable energy is an important issue within and outside our organisation, to our people, customers, communities and broader Australian society. As with the issue of transition to low carbon energy, we engage directly on the issue of renewable energy. One of our strategic imperatives is to prosper in a carbon constrained economy. This is reflected in our Greenhouse Gas Policy, which sets out clear commitments for continued investment in renewable energy sources. |
Capital investment for growth | NA | NA | As with the topic of financial management, impacts related to AGL's deployment of capital are experienced within and outside the organisation, by AGL's workers, shareholders, customers, local communities, and the broader society and economy. We contribute to our organisation's deployment of capital directly; however, we are conscious of the multitude of other external factors that contribute to how our capital is obtained and deployed. |
Reliable energy | NA | NA | Reliability of energy is experienced externally by our customers in the states in which we operate. We have some direct control on reliability, such as maintaining our existing generation assets and investing in new, reliable forms of generation. Other contributing impacts include energy policy; regulation; and availability and reliability of generation provided by other players in the energy market. |
Energy prices and affordability | NA | NA | Energy prices and affordability are experienced externally by our customers in the states in which we operate. We have some direct control on energy prices and affordability. Other contributing impacts include energy policy, regulation, wholesale energy costs, and transmission costs. |
Energy market evolution | NA | NA | Energy market evolution is experienced internally and outside the organisation. We engage with governments and public authorities regarding policies that affect customers, communities and the environment in Australia (and globally with respect to climate change policies). We engage directly with governments and other stakeholders to facilitate the development of sensible energy market policy. |
Power station transition and closure | NA | NA | Power station transition and closure are experienced within and outside the organisation. We engage with investors, governments, communities and non-governmental organisations regarding our plans to close ageing power stations. |
Business and investment leadership | NA | NA | Business and investment leadership is experienced internally and outside the organisation. We engage with governments and public authorities regarding policies that affect the energy market, customers, communities, the environment in Australia (and globally with respect to climate change policies), and broader society on issues that affect them. We engage directly with governments, customers, industry groups and other stakeholders on issues that are important for AGL to take a leading stance on. |
- 1 While the GRI refers to 'material topics', for the purpose of this report, we refer to the term 'material issues'
We engaged Deloitte to provide assurance over our self-declaration that the report was prepared in accordance with the GRI Standards: Core option. Details are provided in the Assurance statement.
We have also taken other guidelines into consideration when developing this report, including the Australian Council of Superannuation Investors (ACSI) and the Financial Services Council (FSC) ESG Reporting Guidelines for Australian Companies 2015, published in March 2016.
Boundary and scope
This report covers the performance of the AGL group of companies (AGL Energy Limited and its wholly-owned Australian subsidiaries) (AGL) and the activities and facilities in Australia over which AGL had operational control for all, or part, of the financial year ended 30 June 2018 (FY18). All data in this report relates to FY18 unless otherwise stated.
Where information regarding partially-owned and non-operated investments is material, available and relevant, it is included and clearly referenced. The performance of joint ventures which we do not operate is excluded.
We have been publishing an annual sustainability report since FY04, and historical reports are available on our website. Our most recent sustainability report was released on 25 August 2017, covering the financial year ended 30 June 2017 (FY17).
Investments and divestments since previous report
No material acquisitions were made during FY18.
During FY18, we completed or announced a number of divestments:
- In FY16, AGL announced its intention to divest the majority of its upstream gas interests (with Camden Gas Project to be exited by 2023). As of 30 June 2018, the Moranbah, Silver Springs and Spring Gully assets have not been divested. PEL 285 (Gloucester Gas Project) will be relinquished following confirmation from the New South Wales Government that AGL has satisfactorily fulfilled its rehabilitation requirements.
- On 17 August 2017, AGL reached financial close on the sale to the Powering Australian Renewables Fund (PARF) of the 453 MW Coopers Gap Wind Farm project. AGL is managing the construction of the project on behalf of PARF, will operate the wind farm once complete, and will retain the rights to all Renewable Energy Certificates and electricity output until 2024 with both AGL and PARF having an option to extend the offtake for a further five years. For more information about PARF, refer to the Renewable energy section.
- On 30 November 2017, AGL completed the sale of its Active Stream metering business. AGL started the Active Stream business in May 2015 as part of its New Energy strategy. Since that time, Active Stream installed more than 230,000 digital meters across New South Wales, Queensland and South Australia. AGL’s decision to divest Active Stream reflects the evolution of AGL’s strategy to become technology agnostic in the development of innovative, data-enabled energy products and services that are accessible to all customers, regardless of meter provider. Post the sale, Active Stream has continued to provide digital metering services to AGL on a non-exclusive basis.
- On 23 April 2018, AGL announced its agreement to sell a sell a portfolio of small generation and compressed natural gas refuelling assets, known to AGL as the National Assets, to Sustainable Energy Infrastructure, a consortium led by Whitehelm Capital. The National Assets were recorded in AGL’s accounts for the year ended 30 June 2018 with a carrying value of $74 million.
Projects under development and construction
We have a range of projects in different stages of development to provide strategic depth and flexibility to our electricity generation portfolio and gas customers, alongside delivering reliable and affordable energy to our customers.
During FY18, we prioritised planning and development activities to progress the following projects:
- Liquified natural gas import facility: We continue to progress the development of the proposed gas import jetty project at Crib Point in Victoria. On 12 June 2018, we announced two agreements advancing the project: the first enables berth upgrades at the Port of Hastings as well as a leasing agreement that would be required, should the AGL project go ahead; the second, with APA Group, is for the Crib Point to Pakenham pipeline to transport imported gas to homes and businesses. Importantly, the project itself remains subject to approvals, community consultation and a final investment decision by AGL, which we anticipate making in FY19.
- Newcastle gas-fired peaking plant: On 26 April 2018, we announced a commitment to build a 252 MW gas-fired electricity generation plant near Newcastle in New South Wales. The commitment represents an estimated investment of up to $400 million and would comprise flexible, fast-start generation capable of delivering rapidly dispatchable peaking and firming capacity into the National Electricity Market. This power station is planned to consist of 14 reciprocating engine units capable of generating 18 MW of capacity each. Construction on this project is targeted to complete during the 2022 calendar year.
- Barker Inlet Power Station: On 5 February 2018, we commenced construction of the $295 million Barker Inlet Power Station in South Australia. The power station will develop a 210 MW reciprocating engine, gas-fired power station to be built alongside our Torrens Island Power Station in South Australia.
- Bayswater Power Station efficiency upgrade: On 9 December 2017, we announced an upgrade valued at more than $200 million to our existing Bayswater Power Station in New South Wales, which is intended to provide the power station with 100 MW additional capacity without using additional fuel. Subject to approvals, the upgrade works are expected to commence by February 2019 and span four years.
Assurance
We engaged Deloitte to undertake limited assurance of the FY18 sustainability performance data in this report in accordance with the Australian Standard on assurance engagements ASAE 3000 Assurance Engagements other than Audits or Reviews of Historical Financial Information (ASAE 3000).
The assurance comprised:
- Assurance over the application of AA1000 principles in managing and reporting sustainability performance.
- Assurance over selected sustainability indicators, namely the performance against the FY17 sustainability targets, as well as selected greenhouse gas emission data and data relating to our material issues.
- Assurance over our self-declaration that the report has been prepared in accordance with the GRI Standards: Core option.
Full details of the assurance process and outcome are included in the Assurance statement.
Consultation about this report
We incorporate the AA1000 principles of inclusivity, materiality and responsiveness into our stakeholder consultation processes, and engage with different stakeholder groups on a regular basis, as outlined in the Stakeholder advocacy section of this report.
Regular interaction with stakeholders, whether through formal or informal channels, as well as the specific consultation undertaken through the materiality review, ensures that the focus and content of our annual sustainability reports remain relevant to our overall business strategy and the needs of our stakeholders.