ACCT303, Semester 2: AGL Energy Sustainable Reporting Analysis Report

This report provides a comprehensive analysis of AGL Energy Limited's sustainable reporting practices, focusing on its 2017 sustainability report. It examines the integration of sustainability into AGL's overall business strategy, highlighting the company's commitment to environmental and social responsibility. The report identifies and discusses AGL's key stakeholders, including employees, customers, shareholders, and regulatory bodies, explaining their influence on the company's decision-making processes. It then assesses AGL's performance across various sustainability areas, including energy market evolution, public engagement, corporate governance, and environmental management, identifying both strengths and weaknesses. The analysis includes a commentary on areas of strong and weak sustainability performance, providing a balanced evaluation of the company's achievements and shortcomings. Finally, the report evaluates the quality of AGL's sustainability report, considering its readability, structure, use of graphical data, and adherence to GRI principles or other reporting frameworks. The analysis is based on the ACCT303 assignment brief requirements.

Running Head: Sustainable Reporting and its relevance
Sustainable Reporting Practices
AGL Energy Limited

Sustainable Reporting and its relevance 1
Introduction
This report is prepared to highlight the sustainable reporting practices of AGL Energy
Limited which is one of the leading corporations operating in the energy sector of Australia.
AGL Energy is also listed on the Australian Securities Exchange. It is operating its business
as the retailer as well as merchant dealer of energy products and services. The business of
AGL Energy is of such nature that it has to make use of various natural resources to produce
the energy related products and thus it has the responsibility to make the sustainable
deployment of such valuable and useful resources. The company is being committed to its
sustainability objectives since a long time and it is voluntarily disclosing information about
its sustainability practices which are taken up in each year. AGL Energy has been publishing
its sustainability report since 2004 for its stakeholders.
Integration of sustainability strategy in overall business strategy:
AGL Energy Limited is country’s largest privately owned and operated coal fired energy
generator and is also the largest owner of energy generation assets across Australia. Further,
AGL Energy is also one among those corporations which are undertaking their business by
retailing in the Australian market for the energy related products and services. The company
is actively involved its sustainability strategy in its overall business strategy. Through the
adoption of emerging technologies, AGL Energy is aiming at becoming personalised retailers
from mass retailers by providing better business solutions. Further, AGL Energy is also
working towards becoming orchestrator of energy related assets, whether small or large in
nature, in place of being the owner of those assets. This will not only allow the company to
produce efficiently but also to store and distribution of energy among different consumers of
the company. Moreover, AGL Energy is also moving towards the implementation of those

Sustainable Reporting and its relevance 2
technologies that reduces or prevents the emission of greenhouse gases which are found to be
toxic for the health of various constituents of environment. AGL Energy is undertaking those
sustainable business practices to best serve its responsibilities towards its stakeholders. It is
also believed that the long term success and strong reputation of business could not be
achieved by mere economic performance rather it is also important for the companies to
operate in the environmental friendly manner and to effectively carry out the corporate social
responsibilities (Morhardt, 2010). The company has the aim of achieving high growth and
success of the business by serving its customers in the best ways, acting in the most ethical
manner while operating its business, engaging the stakeholders in its decision making
processes, achieving higher economic profits, promoting the health and safety of its
employees, promptly adopting the changes in the environment and by various other ways
(Manetti, 2011). With the experience of over 180 years in the energy industry of Australia,
AGL Energy has gained huge market standing and reputation which has opened up large
avenues for its growth and development. The management of the company is of the believe
that AGL Energy has the core responsibility of offering sustainable, secured as well as
affordable energy products to its customers. Furthermore, AGL Energy is also aimed at
shaping the sustainable future of the country by making it carbon-constrained world and by
promoting customer advocacy across the country. AGL Energy has the strategy of embracing
its transformation processes, driving effective productivity and unlocking the growth
opportunities at each phase of the business operated by it. As a part of its sustainable
business strategy, AGL Energy had set certain targets for the FY 2017 in terms of its
performance in economic, social, environmental terms. After the completion of 2017, it had
carried a comparative study of actual and expected results and on the basis of actual results
and future expectations, it has again determined the effective targets for 2018. To integrate its
sustainable strategy in the overall business strategy of the business, AGL Energy has

Sustainable Reporting and its relevance 3
formulated strategic goals and targets in various important areas such as corporate
governance practices, ethical conduct, development of sustainable market designs and
frameworks, legislative compliances, customer experiences, community and employee
engagement, environmental management and the economic performance of the business
(Lozano & Huisingh, 2011).
Key stakeholders of AGL Energy Limited:
The stakeholders of any entity are those parties whose decision making processes are
influenced with the actions and performance of such entity in the market. These are the
parties which are directly or indirectly linked to the company in various ways and hence they
require information about the company while making sound and informed decision making in
relation to the business of the company. The stakeholders of AGL Energy are bifurcated into
two main groups i.e. internal stakeholders and the external stakeholders. The internal
stakeholders of the company are those user groups which are directly involved in the internal
business activities and operations of the company. These parties are its employees,
management and its owners. On the other side, external stakeholders are those parties which
are not involved in the internal business operations of the company but still they require the
information about its overall performance to assess its financial and non-financial standing in
the market. The external stakeholders are its investors or shareholders, banks and financial
institutions, regulatory bodies, customers, business community and its suppliers (Gray &
Milne, 2002).
Employees of the company use the information about company’s performance to ascertain its
profitable state so as to as to determine the prospects of wage compensation as well their job
security in the future period. The owners of the company are called its stakeholders because
they base their investment decisions on the basis of overall business performance and

Sustainable Reporting and its relevance 4
capabilities (Kolk, 2008). The management or AGL’s board is referred to the stakeholder of
the company as they require the information about company’s performance to formulate such
policies and targets which are desirable for the growth and success of the business.
AGL Energy presently holds around 3.6 million accounts of its customers which is quite a
wide base of customers. The existing customers of the company and potential customers are
considered as its stakeholders because they are keen to know about the quality of the products
and services offered by the company. Further, the shareholders are the investors who invest
their surplus monies in the company in return of some voting rights or dividend income. The
shareholders of AGL Energy are entitled to the dividend which is the part of company’s
overall profits. Hence, these use the financial information of the company to assess the
financial health of its business before keeping their investments intact and even before
making any further investments (Lozano, 2006). Further, the governmental bodies such as tax
regulators, accounting regulators, environmental bodies which regulate the business of AGL
Energy are its prime stakeholders as they assess the overall performance of its business
towards the compliance with all necessary and relevant laws and regulations. The tax
regulators are keen to know about how AGL Energy is fulfilling its tax obligations. The
environmental regulators are keen to know about how effectively company is adhering to the
environmental protection laws and regulations (Lozano & Huisingh, 2011). Further, the
banks and other financial bodies which are providing AGL Energy a financial assistance are
its key stakeholders as they are also keen to know about the financial standing of the
company before and after sanctioning the loans. If the company is facing high financial risk,
these stakeholders will take their lending decisions accordingly. The business community
constitutes various other firms operating in the same community (often called as competitors)
are also the key stakeholders of the company as their economic decisions are highly
influenced by the AGL Energy actions and performance. The society in which AGL Energy

Sustainable Reporting and its relevance 5
is operating its business is the major stakeholder as it is using the resources of the society for
its business operations and hence its success and growth is totally dependent on the support it
obtains from the society. A society only supports those corporations which are actively
participating in the fulfilment of their corporate social responsibilities (Hahn & Kühnen,
2013).
The key areas where the performance of the business was strong are discussed below in
the form of table.
Areas Policy Target for FY 2017 Actual performance
FY 2017
Energy market
evolution
AGL Energy had an
aim of contributing
to the development
of electricity market
design so as to
support the safety
and reliability of the
electricity supply
using different
sources
It had a target of
publishing of two
thought leadership
documents which
could support the
electricity market
design.
More than two
papers have been
published by AGL in
2017 which is a clear
sign of its effective
business strategy
implementation
towards
sustainability.
Public policy
engagement
AGL had a policy of
actively and
transparently
involving in the
designing of
government’s public
It was aimed that all
the material
submissions which
support the overall
policy statement will
be made on time to
All the material
submissions were
made on time and in
the transparent
manner.

Sustainable Reporting and its relevance 6
policy. the governmental
bodies.
Corporate
governance
To adopt best and
appropriate
governance practices
The company had the
aim to report
effectively on its
corporate governance
practices to its
stakeholders.
A corporate
governance statement
has been issued by
AGL which shows
the adequacy of
Corporate
governance practices
of the company
(AGL Energy a,
2017).
Legislative
compliance
AGL had a policy of
strictly complying
with all the laws and
regulations
applicable on it.
It was aimed that
there must not be a
single court
proceedings case
with respect to
Australian Consumer
Law and also there
must not be any case
of penalties and fines
in regards to
licensing
requirements.
Further, the
No case of adverse
proceedings against
the company under
Australian Consumer
Law was reported
neither did the
company bear any
penalty or fine for
breach of any law.
The actual ERRFR
was merely 1.

Sustainable Reporting and its relevance 7
Environmental
Regulatory
Reportable
Frequency Rate
(ERRFR) was
targeted at lower than
1.5 level
Customer satisfaction The policy was to
provide maximum
support to the
customers.
Net Promoter Score
was targeted to be
improved from that
of 2016.
The NPS in FY 2016
was -19.8 and now it
is -18.7 in 2017
Community
engagement
To actively
participate in the
mutual development
of energy projects
those are beneficial
for society.
It was targeted that
at-least 4 events must
be held in respect of
such development
projects.
At least 4 events
were organised at
each particular site.
Employee
engagement
To retain the cream
workforce.
Key talent retention:
≥ 80%
Key talent retention:
93%
Environmental
protection
To protect the
environment from
various pollution
types.
In relation to waste
management
Environmental
Regulatory
Reportable
Frequency Rate
Environmental
Regulatory
Reportable
Frequency Rate
(ERRFR): 1
(AGL Energy b,

Sustainable Reporting and its relevance 8
(ERRFR)5: <1.5 2017)
Economic
performance
To enhance the
profitability of
business.
To improve
profitability state as
compared to 2016
It was actually
improved in 2017 as
compared to 2016.
(AGL Energy c,
2017)
The areas where the company could not achieve the desired results are:
Its ethical conduct of business: AGL Energy has failed to achieve its target standards in terms
of number of sustained issues in relation to the unacceptable behaviour at the AGL’s
workplaces. It was targeted that no issues must be reported during the entire year regarding
ethical concern but in real, there were total of 8 issues which are recognised in respect of
ethical concern.
Its community investment: AGL Energy had a policy of contributing positively to the
communities which are significant for its employees as well as its customers and hence it had
targeted the Employee Volunteering participation rate of35%. However, the actual
participation rate was quite lower than the targeted performance as the company only
achieved the rate of 16% in respect of such participation.
Quality of the sustainability report of AGL Energy:
The quality of the report prepared and presented by AGL Energy in respect of its sustainable
business practices depends on the relevance and reliability of the information contained in the

Sustainable Reporting and its relevance 9
report (Dilling, 2010). As the information that is contained in the sustainable report of the
company is of high importance for company’s stakeholders for their assessment about
company’s overall performance, it is important to ascertain whether the company has
transparently disclosed all the relevant information which could affect the reader’s decision.
The company has followed a logical pattern while incorporating the information in the
sustainable reports and also the use of diagrams and flow charts has made it easier for the
users of the report to understand the results of overall performance of AGL Energy in all the
areas such as compliance with the code of corporate governance, ethical conduct, corporate
social responsibilities, economic and environmental performance. Moreover, the company
has made use of a scorecard to summarise its policies and aims in different areas and the
results of targeted and actual performance in such particular areas so as to enable the users of
the report to interpret the results more clearly by making a comparative analysis of the
company’s performance (Butler, Henderson & Raiborn, 2011). The company has also
engaged an external independent professional party to authenticate its sustainability report in
order to raise the credibility of the information contained in such report. The report has been
approved by Deloitte Touche Tohmastu (Deloitte) to provide a reasonable assurance to the
readers that all the information contained in the report is true and fair. After incorporating the
detailed section on how AGL is integrating its sustainable strategies in the overall business
strategies, the company has included a concise section on how it operates its business. Apart
from the qualitative information, the sustainability report of AGL Energy is also covering the
quantitative information which makes interesting for the users to understand the performance
results (Jensen & Berg, 2012). The said report also discusses about the risk management
strategies of the company in various areas such as credit risk, exchange risk, IT risk, legal
risk and environmental risk.

Sustainable Reporting and its relevance 10
The use of global reporting initiatives are introduced with the aim of providing guidance to
the companies to report about their impact on the overall economy of the country and its
environment (Guthrie & Farneti, 2008). The GRI principles has also enhanced the quality of
the report as it has encouraged the company to follow the basic principles of global reporting
such as accountability, reliability, accuracy, timeliness, comparability and transparency
(Boiral, 2013). The inclusion of targeted and actual performance for FY 2017 and 2018 has
allowed the readers to compare the information and understand the significant changes in the
actual and targeted performance for 2017 so as to identify the root causes of such variations.
Also, the inclusion of the areas where the company has successfully achieved the targeted
goals and also those areas where it had failed to achieve the desired performance, in the
report is reflecting the transparency of the information about the actual business activities of
AGL Marketing.
Conclusion:
From the above report on the sustainability practices of AGL Energy which are taken up in
the financial year 2017, it can be concluded that company has effectively communicated with
all its stakeholders about its overall performance of the business. The content of the report
published by the company is highly relevant for the readers to understand its social, economic
and environmental performance. Further, the authentication of such report by an independent
professional party i.e. Deloitte has also raised the credibility of the information content of
AGL’s sustainability report.

Sustainable Reporting and its relevance 11
References:
AGL Energy, 2017 a. Corporate Governance Statement: 2017. Available at:
https://www.agl.com.au/about-agl/who-we-are/our-company/corporate-governance Accessed:
07.10.2018
AGL Energy, 2017 b. Sustainability Report. Available at:
http://agl2017.reportonline.com.au/sites/agl2017.reportonline.com.au/files/
sustainability_report_full_report_0.pdf Accessed: 07.10.2018
AGL Energy, 2017c. Annual Report. Available at:
http://agl2017.reportonline.com.au/sites/agl2017.reportonline.com.au/files/
full_financial_annual_report.pdf Accessed: 07.10.2018
Boiral, O., 2013. Sustainability reports as simulacra? A counter-account of A and A+ GRI
reports. Accounting, Auditing & Accountability Journal, 26(7), pp.1036-1071.
Butler, J.B., Henderson, S.C. and Raiborn, C., 2011. Sustainability and the balanced
scorecard: integrating green measures into business reporting. Management Accounting
Quarterly, 12(2), p.1.
Dilling, P.F., 2010. Sustainability reporting in a global context: What are the characteristics
of corporations that provide high quality sustainability reports—An empirical
analysis. International Business & Economics Research Journal, 9(1), pp.19-30.
Gray, R. and Milne, M., 2002. Sustainability reporting: who's kidding whom?. Chartered
Accountants Journal of New Zealand, 81(6), pp.66-70.
Guthrie, J. and Farneti, F., 2008. GRI sustainability reporting by Australian public sector
organizations. Public Money and management, 28(6), pp.361-366.