1). Current performance of sustainability reporting for AGL Energy
The measurement of performance criteria for AGL Energy Ltd is based on segregating the performance metrices as per “customers, community, people, environment and economic performance”. The company’s goal of providing affordable energy solutions was duly met with an annual mean customer satisfaction score of -18.7 in 2017 was higher than the previously observed net promoter score of -19.8 in 2016. The company was able to provide better market leading range for energy products and services which made the best use of the customer value from the distributed energy technologies. The financial commitment in this section for 2020 is depicted with increasing the number of smart connections by 1 million (Agl.com.au 2018).
The company set its target of community engagement for engaging with at least of four community events which would allow them to be “raised and discussed in public”. However, based on the performance analysis of 2016 which showed that the target was exceeded at 15 operational sites but the company did not meet its target for four community events. Despite of the several downfalls, in 2017 AGL was able to host four community events at its sites (Agl2016.sustainability-report.com.au. 2018).
The employee engagement target of the company was met with maintaining workforce for optimizing overall business results. Based on the target set for talent, it aimed at attracting and “retaining the right people for adhering to the strategic objectives”. The talent retention target of 80% was surpassed with a retention score of 93% in 2017. The diversion and inclusion policies has been still identified under progress. The different types of health and safety measures were set with reducing the injury frequency rate by less than 3.94 for AGL employees and 5.5 for the contractors. Based on the people performance evaluation in the sustainability report, the total injury frequency rate for AGL employees was reduced to 2.0 and total injury frequency rate for contractors to 5.4 (Energy 2014).
In addition to this, the company met all the relevant performance targets under the environment performance measures. Furthermore, the iconic performances were duly made by the company in terms of achieving the profitability target and supply chain target.
2). Present issues in sustainability reporting of Nestlé and practices by AGL Energy
The recognition of the material issues by the company has been identified with public policy engagement, community engagement, health and safety, climate change, profitability, customer experience, renewable energy, energy prices and affordability and ethical conduct. During the financial year 2016 the company conducted an independent review for measuring the issues which mattered the most of the stakeholder. The main output from the materiality metrics was able to reveal that the total of 12 material issues were used to shape the sustainability reporting framework (Heenetigala et al. 2016). In order to maintain the consistency, internal focus and comparability of the sustainability priorities, the material in the issues of the company were identified with “interest of streamlining the material issues, ‘energy efficiency’ which was further merged under the broader issue of ‘distributed energy services’ for reporting purposes, due to the high degree of congruence between the two issues”. Based on this feedback, from the “AGL Stakeholder Advisory Council” on reviewing the materiality issues, the company has more explanations which were undertaken in 2016. The main intention for this was to reflect the various views of the stakeholders both outside and inside the business. In addition to this, the company has been able to explore the materiality review based on the materiality matrix (Klettner, Clarke and Boersma 2014).
Figure: Materiality metrics of the company based on materiality issue and other issues
(Source: Agl2017.reportonline.com.au. 2018)
The review process of the sustainability issue where identified by the company in terms of reviewing the stakeholder concerns, businesses and megatrends. AGL Energy engaged with its stakeholders on a regular basis for discussing the issues of greatest concern. In order to mitigate the materiality issues the company had included 11 internal stakeholders and 11 external stakeholders for ensuring balance of coverage between themes and issues. It was further observed that the stakeholders participated in detailed “one-to-one interview” with the independent facilitator. Moreover, the purpose of the interview was to make sure that stakeholder was able to have a compatible understanding for the ranking criteria and interpretation of the issues which were related to ranking and concerns which were missed in the list of challenges (Popovic et al. 2017).
Additionally, the proposal to retain the various nature of material issues for FY 2017 was duly discussed with the stakeholder member of “AGL’s Stakeholder Advisory Council, and subsequently with members of the Executive Team”. The interest of streamlining of material issues and energy efficiency was merged with a broader concept of “distributed energy services “due to the existing high degree of congruence between these issues (Foerster et al. 2017).
3). Community investment and commitment to the society
The mitigation of various types of material issued by the company is done based on the public policy engagement, community engagement, health and safety engagement. The strategic partnership of the company is discerned with “Cancer Council Australia”, “The Smith family”, “St Vincent de Paul Society” and “Julian Burton’s Burns trust”. The company believes in the notion of education has the power to transform lives and henceforth it supported education of 340 school aged children who were disadvantaged due to their backgrounds through “The Smith Family under this partnership agreement”. As per the latest reports, the company has formed more than 189 child sponsorship relationships which are established with the AGL employees (Popovic et al. 2018).
In addition to this, the company is also engaged in different types of employee volunteering programs which has given the people the opportunity to take voluntary leave every year for supporting community causes and charitable organizations. In addition to this, this has a social outcome for the community, volunteering services which has directly benefited to AGL in terms of better morale, promoting teamwork and better engagement of employees. The people of AGL has also supported the mid-family by volunteering of major students in following mentoring program. The company has further provided several financial assistance to the “St Vincent de Paul Society” by developing “Energy Advice Packs” which consisted of information and advice about the households and simple tips to save energy around the home. Furthermore, in response to the unforeseen conditions like cancer diagnosis the company has considered the fact that financial position to households can improve the current state with a considerable degree. Due to this, AGL Energy provided sufficient funding for “Cancer Council Australia’s Financial Assistance Program” and provided grants to those families who were severely affected by cancer due to living costs. In financial year 2017, the company was seen to contribute $ 33,000 to the “Cancer Council Australia under this partnership agreement” (Kumarasiri 2015).
Conclusion:
The main discourse of the report on the Current performance of sustainability reporting for AGL Energy have shown the company’s goal of providing affordable energy solutions was duly met with an annual mean customer satisfaction score of -18.7 in 2017 was higher than the previously observed net promoter score of -19.8 in 2016. The company was able to provide better market leading range for energy products and services which was able to make best use of the customer value from the distributed energy technologies. AGL energy set its target of community engagement for engaging with at least of four community events which would allow them to be “raised and discussed in public”. However, the company did not meet its target for four of the facilities. Despite of the several downfalls, in 2017 AGL was able to host four events at its sites. The different types of health and safety measures were set with reducing the injury frequency rate by less than 3.94 AGL employees and 5.5 for the contractors. Based on the people performance evaluation in the sustainability report, the total injury frequency rate for AGL employees was reduced to 2.0 and total injury frequency rate for contractors to 5.4.In order to maintain the consistency, internal focus and comparability of the sustainability priorities, the material in the issues of the company were identified with “interest of streamlining the material issues, ‘energy efficiency’ which was further merged under the broader issue of ‘distributed energy services’ for reporting purposes, due to the high degree of congruence between the two issues”.
The present discussions of the report have been able to identify the various types of social issues and accounting issues along with their implications on the stakeholders. Some of the main interpretations of the study has emphasized on the sustainability practices adopted by AGL Energy. The key areas of the report have been considered with the present performance of the company in terms of sustainability reporting. These sections are also followed by the various practices adopted by AGL Energy in communicating the various measures taken for the stakeholders to improve the issues identified. Some of the other discussions have included partnerships and collaborations to improve the overall performance of sustainability reporting.
The sustainability performance assessment by the company has been done in five main areas including “customer, community, environment, economic and people”. In addition to this the sustainability report prepared by the company is in accordance with GRI guidelines and assured by Deloitte (ASAE 3000). As per the latest sustainability report company’s “Stakeholder advisory Council” has been able to provide relevant guidance on material issues and enhanced disclosure for better public policy discussion and stakeholder engagement (Agl2017.reportonline.com.au. 2018).
References:
Agl.com.au. (2018). AGL issues 2016 Sustainability Report | AGL. [online] Available at: https://www.agl.com.au/about-agl/media-centre/asx-and-media-releases/2016/august/agl-issues-2016-sustainability-report [Accessed 21 May 2018].
Agl2016.sustainability-report.com.au. (2018). Sustainability Report 2016 | Sustainability framework. [online] Available at: https://agl2016.sustainability-report.com.au/sustainable-business-strategy/sustainability-framework [Accessed 21 May 2018].
Agl2017.reportonline.com.au. (2018). [online] Available at: https://agl2017.reportonline.com.au/sites/agl2017.reportonline.com.au/files/sustainability_report_full_report_0.pdf [Accessed 21 May 2018].
Energy, A.G.L., 2014. Sustainability Report 2015.
Foerster, A.C., Peel, J., Osofsky, H.M. and McDonnell, B., 2017. Keeping Good Company in the Transition to a Low Carbon Economy? An Evaluation of Climate Risk Disclosure Practices in Australia.
Heenetigala, K., De Silva, C., Armstrong, A. and Ediriweera, A., 2016. Investigation of criteria used for assurance practices of sustainability reporting in Australian listed companies. Victoria University.
Klettner, A., Clarke, T. and Boersma, M., 2014. The governance of corporate sustainability: Empirical insights into the development, leadership and implementation of responsible business strategy. Journal of Business Ethics, 122(1), pp.145-165.
Kumarasiri, J., 2015. Use of management accounting practices in carbon emission management: Evidence from Australian companies. Journal of Contemporary Issues in Business and Government, The, 21(1), p.5.
Popovic, T., Barbosa-Póvoa, A., Kraslawski, A. and Carvalho, A., 2018. Quantitative indicators for social sustainability assessment of supply chains. Journal of Cleaner Production.
Popovic, T., Kraslawski, A., Barbosa-Póvoa, A. and Carvalho, A., 2017. Quantitative indicators of social sustainability assessment and product responsibility aspects of supply chains. Journal of International Studies Vol, 10(4).
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