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AGL believes that engaging with our stakeholders about reducing greenhouse gas emissions is critical in addressing climate change and air quality. In the last year, AGL has engaged with: investors; policy-makers and the community; our industry; and customers about ways in which emissions can be reduced both within and outside the energy sector.
During 2008/09, AGL made numerous submissions to, and appeared before, a number of Senate Committees in relation to the proposed Carbon Pollution Reduction Scheme and expanded Renewable Energy Target policies (visit the Governance and management section for more information). AGL stated consistently that the implementation of the Carbon Pollution Reduction Scheme and Renewable Energy Target legislation is critical for ensuring optimal low emission investment in the energy sector.
“AGL is a strong supporter of the Carbon Pollution Reduction Scheme legislation. We believe it is critical that the scheme be implemented on time to provide investment certainty.” Tim Nelson, Head of Carbon and Sustainability, Senate Standing Committee on Economics, 27 March 2009
AGL has continued to disclose to investors the effects of greenhouse gas mitigation policies on our assets, through investor presentations, our annual sustainability report, and by participating in the Carbon Disclosure Project. AGL’s leadership in this context was recognised in 2008/09 by being ranked third in the world out of 110 of the largest publicly listed electric utilities globally through the Carbon Disclosure Project. AGL has also earned a place in the ASX100/NZ50 2008 Climate Leadership Index, and a leading ranking in the Australian and New Zealand utilities sector in the Carbon Disclosure Project.
AGL has publicly detailed the positive and negative effects on our business associated with the development of the Carbon Pollution Reduction Scheme and the Expanded Renewable Energy Target. While other businesses have not yet adopted these disclosure practices, we believe that incorporating this analysis into our sustainability reports and other stakeholder communications will lead the industry to develop similar analysis and disclosure.
This analysis shows the additional value attributable to AGL’s generation portfolio as a result of the introduction of an emissions trading scheme between now and 2020. It provides analysis of two scenarios where carbon prices increase from $10 to $20 by 2020 and from $20 to $40 by 2020. As outlined in the chart, the additional value to AGL is likely to be up to $220 million. The additional value is created through the low emissions intensity of existing AGL assets. It is largely a result of AGL’s investment in renewable and low emission assets.
During 2008/09, AGL has continued to support renewable and greenhouse gas reduction initiatives through our involvement in the Business Council of Australia, the National Generators Forum, the Australian Financial Markets Association, the Energy Retailers Association of Australia and the Clean Energy Council. These organisations support the introduction of a Carbon Pollution Reduction Scheme to provide emission reductions and investor certainty. Unfortunately some of the detailed views of these industry associations differ from AGL views and AGL will continue to promote its views about the need for swift implementation of climate change policies to provide business certainty and emission reductions.
In 2008/09, we formed a new AGL Climate Change Council, comprising representatives of The Climate Institute, the Australian Conservation Foundation and WWF-Australia. The Council meets quarterly and provides AGL with an opportunity to engage with stakeholders. At each meeting, AGL receives feedback on performance and on positions adopted. This feedback is considered internally and then papers are prepared for subsequent meetings on potential amendments to AGL positions and strategies. For example, AGL used the Climate Change Council to receive feedback on the AGL Biomass Policy, which states that AGL will not source fuel for generation from native forest or from crops located in areas cleared of native forest after 1990. Visit the Stakeholder Engagement section for more information.
