AGL (Corporate Social Responsibility)

This article discusses the corporate social responsibility initiatives taken by AGL Energy Limited, an Australian company that primarily caters to consumers in the commercial and residential purposes of gas and electricity generation as well as retailing. It covers key stakeholders, environment, human rights, corporate governance, and philanthropy.

Running head: AGL (CORPORATE SOCIAL RESPONSIBILITY)
AGL (Corporate Social Responsibility)
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1AGL (CORPORATE SOCIAL RESPONSIBILITY
Table of contents
Introduction......................................................................................................................................2
Corporate Social Responsibility......................................................................................................2
Key stakeholders..............................................................................................................................4
Environment....................................................................................................................................4
Human rights...................................................................................................................................5
Corporate Governance.....................................................................................................................7
Philanthropy.....................................................................................................................................8
Reference.......................................................................................................................................10

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Introduction
AGL Energy Limited is a company in Australia belonging to the list of public companies.
The firm primarily caters to consumers in the commercial and residential purposes of gas and
electricity generation as well as retailing (Agl.com.au. 2018). This firm has managed to provide
its services to its customers for a period of over 180 years. The company has always made sure
that it cares about the community and the people that they serve. The firm uses a lot of renewable
methods of production of electricity which makes it the best fit for this essay and analysis. The
firm is one of the top investors also in the field of renewable energy. The firm also implements a
lot of flexible business plans which can be used and applied according to the need and scale of
the businesses. The firm in fact has formulated different plans at different rates so that
conservation is performed both at the environmental and the business levels.
Corporate Social Responsibility
Corporate Social Responsibilities are a set of responsibilities followed by firms to cater to
the environmental and social needs of the consumers and the community where they operate as a
whole. These are additional measures and initiatives taken up by firms to hold a market rank or
even maintain a holistic image and impression in the target market. It is also a process of self
evaluation for the firms and also a process of maintaining a balance between methods of
accruing more profitability along with sustainability (Schwartz 2017). The corporate social
responsibilities encompass various aspects of outside of profit and revenue generation including
environmental responsibilities, philanthropic responsibilities and ethical responsibilities.

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The most recent and updated version of corporate social responsibility definition is based
on the one proposed by Archie Caroll in 1996 which ranks the various corporate social
responsibilities of a firm in the form of pyramid. This is represented with the help of the figure
provided below.
Figure 1: Caroll’s Pyramid of Corporate Social Responsibility
Source: Carroll, Primo and Richter (2016)
According to this theory the first and the most crucial base of responsibilities for any firm
should be to focus on profit and revenue generation maximization (Carroll, Primo and Richter
2016). The next base of responsibilities is formed by the laws, rules and regulations prevalent in
the society that are to be followed by the firm for smooth functioning in a legal manner. The
third set or base of responsibilities that a firm needs to fulfill consists of the ethical

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responsibilities which are very important in the context of corporate social responsibility
(Brammer and Pavelin 2016). This is so because this set of responsibilities are usually dependent
and left to the discretion of the firm. The last set of responsibilities lies in the area of
philanthropy in the sense that these responsibilities are added and might not be fulfilled by firms
but should be as they consist of extending help to the community through better education and
recreational activities. It is a way in which the firm tries to cater to giving back to the community
in which it operates and helps in raising the level of living standard and offers an improved
quality of lifestyle to these people.
Key stakeholders
Being a firm that most importantly fulfils its corporate social responsibility and caters to
a wide range of customer demands, the firm has a wide variety of stakeholders. The stakeholders
of the firm essentially include the investors, the consumers, the government, and the non profit
organisations that the firm is associate with, the local communities that the firm serves, the other
firms operating in the energy industry, that is, the energy industry as a whole and the joint
venturers and the suppliers. The interests of these stakeholders are very crucial and important as
these relations depict the priorities of the firm in terms of the ethical and sustainable
responsibilities.
Environment
AGL works closely with the government as the government is itself involved in
regulating the amounts of energy production and making the same accessible for the target
market and the consumers that the firm provides its services to. AGL regularly consults with the

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government on matters of the environment, prices and the reliability of the methods of
production or generation. Meeting and policy submissions and the revision and implication of
these policies are regularly coordinated between the firm and the government which in turn
makes sure that the sustainability of both the business and the environment in which it operates is
maintained.
AGL also tries and makes attempts rigorously to coordinate and get engaged with non-
governmental organisations so that the firm is able to understand ; the motives and causes that
these organisations are trying to work for and hence help them out in their own way to reach out
to greater section of the community in which they function and operate. The AGL is currently
associated with dealing with issues related to carbon emissions and climate change. The firm has
set up a council under the name of Climate Change Council to cater to the areas and matter of
concern of the general public. The firm helps the governments in setting policies and programs to
reach out to the citizens and other firms operating in the same industry. Further, the firm also has
set up a Customer Council that that caters to the social welfare and environmental conservation
responsibilities by meeting every month. The sustainability reports published by the firm every
year help in keeping a check on the amount of measures that have been effective and what more
it can do to reach its corporate governance and sustainability objectives.
Human rights
In the realm of poverty, the company operating in the renewable energy sector of
Australia, generates huge amount of production and along with that a large number of jobs thus
causing the total poverty index of Australia to reduce. The energy sector as per the reports
published by the Climate Council of Australia suggests that this sector is annually responsible for

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creating of an average of 28,000 new jobs (Climatecouncil.org.au. 2018). Further, the impact of
increased growth in this sector has expanded and spilled over on to many other sectors including
the construction, operation and also the maintenance of renewable goods for the country. This
has had its direct impact on poverty alleviation and caused substantial reduction in the levels of
poverty all over Australia. This in turn has caused the factor of climate change to come under
control. Being a very crucial contributor in the energy sector, the company has helped in
increasing the number of jobs in the area of New South Wales and Queensland in Australia by a
number of around 11,000 and 6,000 respectively (Climatecouncil.org.au. 2018). These two states
are being projected to have an increase in the number of jobs by a maximum exceeding all other
areas of Australia by the year 2030.
According to the Sustainability Reports published by the firm, the firm carries out an
assessment called the “Fraud Risk Assessment” which helps the firm to analyse the risks related
to corruption occurring within the firm or the industry and how it affects both the firm and the
consumers and the community in which they operate as a whole. The percentage of the
employees trained on the anti-corruption policies of the firm is also monitored and worked on by
the firm. According to the report published by the firm around 878 employees were trained and
provided extensive courses in the form of workshops and trainings about the repercussions and
the policies of adherence to the anti-corruption rules of the firm in place. If any case or instance
of corruption is reported or analysed, then the firm takes up initiatives and activities to reduce the
same through internal measures and the Codes of Conduct of the firm in place.
Besides the above initiatives and activities monitored and evaluated by the firm, it is
important to mention in this context that AGL is a member of the Global Compact and represents
Australia and has also extended its support towards many social causes and activities related to

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the human rights realm of corporate social responsibility by voting for the same. AGL is one of
the few corporate honchos whose votes were considered important in deciding of social rights
and laws and the company has rightfully extended its support for all these issues (Business-
humanrights.org. 2018).
All of the above mentioned facts sum up to provide evidence supporting the fact the firm
has a very good and commendable record of supporting and expanding its help in the horizon of
human rights and also evaluates and monitors exploitation or corruption through calculated and
proven methods. Further the company has expanded its services and also used disruptive
business models to continuously provide increased variety and quality of services to the
customers and consumers all over the country. This has in turn provided its contribution
enormously to the energy sector which has propelled the growth of the number of jobs in this
sector and the other sectors associated with this sector. This whole scenario has imposed its
effect on poverty and reduced it to a commendable level.
Corporate Governance
The Corporate Governance structure of AGL as a company is present in fragments in the
corporate summary published by the company in the sustainability report
(Agl2017.reportonline.com.au, 2018). The company consists of a total number of nine directors,
out of whom eight are non-executive directors and one managing director and the Chief
Executive Officer, Andy Vesey. The entire Board of Directors are chosen independently and all
the decisions taken by the directors are in alliance and aligned to the major objectives and the
strategies of the firm. They are also held responsible and accountable for adhering to the codes of
conduct and the laws in place by the government. After a few changes incorporated in the

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structure in 2017, the board now consists of eight directors. The new Board of Directors has now
adopted another strategy for smooth functioning of the corporate social responsibilities of the
firm in the form of a skill matrix that lays down the requirements of skills and experiences for
the directors present in the board in order for the firm to cater to the needs of the firm in a
smooth and efficient manner.
Further, the firm has also set up new committees and additional boards in order to ensure
that corporate governance is carried out by the firm in such a way that the resources of the firm
including profits accrued are utilized and channelized in such a way that there are enough
resources left for the future employees after catering to the needs of the present employees of the
firm. Some of these committees and additional structures incorporated in the overall corporate
structure of the firm include Sustainability & Corporate Responsibility Committee, People &
Performance Committee and Safety, Audit & Risk Management Committee and People &
Performance Committee and Safety.
Philanthropy
The firm strongly believes that the employees working under the firm constitute the most
important part of the community in which they operate and so it is very important to first ensure
their wellbeing and then the rest of the community through its services
(Agl2017.reportonline.com.au. 2018). The firm follows the policy of inclusion and does away
with all forms of discrimination for the employees working. Further the firm also encourages
increased engagement and participation of the shareholders, investors and other stakeholders of
the firm including the customers in improving its services and diversifying the variety of services
it offers to the target market.

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Through the various renewable energy services and customisation of schemes the firm
tends to reduce the amount of pollution and has played a very important role in reducing the
impact of energy production methods on the climate change in Australia. As mentioned earlier
the firm has also contributed to decrease the levels of poverty through increased employment
generation.

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Reference
Agl.com.au. 2018. AGL Energy an Electricity Provider & Gas Supplier | AGL. [online]
Available at: https://www.agl.com.au/ [Accessed 17 Jun. 2018].
Agl2017.reportonline.com.au. 2018. [online] Available at:
http://agl2017.reportonline.com.au/sites/agl2017.reportonline.com.au/files/
corporate_governance_statement_2017_0.pdf [Accessed 17 Jun. 2018].
Agl2017.reportonline.com.au. 2018. AGL | Sustainability Report 2017. [online] Available at:
http://agl2017.reportonline.com.au/sustainabilityreport#1 [Accessed 17 Jun. 2018].
Brammer, S.J. and Pavelin, S., 2016. Corporate Reputation and Corporate Social
Responsibility. A Handbook of Corporate Governance and Social Responsibility, 437.
Business-humanrights.org. 2018. Australia: Marriage equality 'Yes' vote wins; corporate
supporters vocal, despite criticism | Business & Human Rights Resource Centre. [online]
Available at: https://www.business-humanrights.org/en/australia-marriage-equality-yes-vote-
wins-corporate-supporters-vocal-despite-criticism [Accessed 17 Jun. 2018].
Carroll, R.J., Primo, D.M. and Richter, B.K., 2016. Using item response theory to improve
measurement in strategic management research: An application to corporate social
responsibility. Strategic Management Journal, 37(1), pp.66-85.
Climatecouncil.org.au. 2018. [online] Available at:
https://www.climatecouncil.org.au/uploads/9bbeec4336c0f87f7e04205516b3cfa7.pdf [Accessed
15 Jun. 2018].

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Schwartz, M.S., 2017. Corporate social responsibility. Routledge.