Contemporary Issues in Accounting: AGL Energy Sustainability Report

This report provides an analysis of contemporary accounting issues, with a specific focus on the sustainability practices of AGL Energy. The report examines AGL Energy's performance in areas such as customer satisfaction, community engagement, and employee retention, highlighting the company's goals and achievements. It also delves into the company's sustainability reporting framework, including the identification of material issues and stakeholder engagement. The report discusses the company's community investment and commitment to society, including partnerships with organizations like Cancer Council Australia and The Smith Family. The report concludes with an overview of the key findings and recommendations related to AGL Energy's sustainability efforts, emphasizing the importance of addressing social and accounting issues for stakeholder impact. The report also examines the company's efforts to streamline material issues, merging energy efficiency under distributed energy services, and its financial commitment to smart connections and various employee volunteering programs.

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary Issues in Accounting
Name of the Student
Name of the University
Author’s Note

1CONTEMPORARY ISSUES IN ACCOUNTING
Executive Summary
The study intends to recognize the various types of social issues and accounting issues along
with their consequences on the stakeholders. Some of the main interpretations of the study has
emphasized on the sustainability practices adopted by AGL Energy. The primary areas of the
study have been considered with the present performance of the company in terms of
sustainability reporting and associated to 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 findings showed that 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. In addition to this,
the employee engagement target of the company was made with maintaining workforce for
optimizing overall business results. During the financial year 2016 the company conducted an
independent review for measuring the issues which mattered the most of the stakeholder. 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”.

2CONTEMPORARY ISSUES IN ACCOUNTING
Table of Contents
Introduction......................................................................................................................................3
Current performance of sustainability reporting for AGL Energy..................................................3
Present issues in sustainability reporting of Nestlé and practices by AGL Energy.........................7
Community investment and commitment to the society.................................................................9
Conclusion and recommendation..................................................................................................11
References......................................................................................................................................12

3CONTEMPORARY ISSUES IN ACCOUNTING
Introduction
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).
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

4CONTEMPORARY ISSUES IN ACCOUNTING
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).

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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).

6CONTEMPORARY ISSUES IN ACCOUNTING
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.

7CONTEMPORARY ISSUES IN ACCOUNTING
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).

8CONTEMPORARY ISSUES IN ACCOUNTING
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

9CONTEMPORARY ISSUES IN ACCOUNTING
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).
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).

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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 and recommendation
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

11CONTEMPORARY ISSUES IN ACCOUNTING
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”.