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We are focused on creating long-term value for our investors and other stakeholders through the delivery of our strategic objectives and growth agenda. Our value creation model depicts how we create value through seven Business Value Drivers, by identifying our key inputs, the activities we perform, and the resulting outputs and outcomes in terms of value creation.

Key relationships and trade-offs between Business Value Drivers

Every decision that AGL makes may have a positive or negative influence on one or more of its Business Value Drivers. AGL must therefore balance a number of competing influences in its decision-making processes. The need to create value for all stakeholders must also be balanced with the financial impact of decisions on AGL’s overall position. This includes weighing up the need to maintain short-term financial performance while also creating long-term value for shareholders. Some of the key relationships and trade-offs between AGL’s Business Value Drivers are summarised below.

Energy transition
We believe that the energy transition will be led by customer demand, how communities act, and how technology evolves. We recognise that a balance needs to be struck between community expectations in relation to decarbonisation of Australia’s energy sector with the role that our coal-fired power stations currently play in supplying affordable and reliable electricity to our customers. Our thermal assets remain significant emitters of greenhouse gases, however we continue to run these assets responsibly as we work towards their closure, investing capital to improve the reliability and flexibility of their output without increasing their emissions intensity.

End of life asset planning
As we undertake end of life planning for our thermal assets, we are addressing safety concerns from ageing infrastructure as well as issues of local community economic sustainability, and the broader community’s desire for carbon-intensive assets to be closed. When planning for asset closures we are mindful of the impact that this will have on our people who work on these assets and on the communities where they are located. AGL has committed to no forced redundancies when we close the Liddell Power Station and we expect to provide retraining opportunities as we re-purpose the site and progress plans to provide new sources of energy supply.

Development projects and operational sites
Our existing and potential investments in energy infrastructure create both social and economic opportunities and potential impacts in the communities in which they are located. We expect our investments in energy supply to contribute to the long-term affordability and reliability of energy. While such investments will benefit our customers and the community and economy more broadly, we recognise the need to balance these benefits with the specific needs of the communities and environment in which our projects are located.

Digital capability
Changing energy customer preferences and the rapid digitisation of our business has been accompanied by significant investments in systems and processes. These investments help our people to undertake their work more effectively, which in turn allows us to deliver a superior customer experience. Making it easier for customers to interact with us also means we can operate more efficiently. In addition, investing in customer insights and analytical capabilities enables us to deliver better products and services that meet the changing needs of our customers.

Customer-centric culture through values-led organisation
We are focused on continuously improving our organisational culture to become a purpose and values-led organisation because we recognise that investing in our people and culture will ultimately allow us to deliver better outcomes for our customers and the community. In turn, we recognise that making responsible decisions in respect of our customers and communities fosters a sense of trust in AGL, which can lead to the improved engagement and wellbeing of our people.

Supporting vulnerable customers
AGL supports a shared-responsibility approach to addressing energy affordability issues across the community, which takes into account the responsibilities and strengths of customers, industry, government and the community sector. The collaborative approach we take with other participants across the energy supply chain (e.g. through the Energy Charter) leads to a broad recognition of the need for the energy industry as a whole to adopt a more customer-centric approach. We also recognise that during times of crisis (e.g. 2019/20 summer bushfires, drought, and the COVID-19 pandemic), we have a role to play in supporting customers and the community when they are at their most vulnerable. While investing in support programs may impact AGL’s short-term earnings, we understand that it is necessary for the long-term health of the economy and our customer base.

While we do not own or operate electricity or gas transmission or distribution infrastructure, we rely on this infrastructure to deliver energy to the market and to our customers.

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