creating a sustainable corporation and reducing business risk · 2014. 10. 20. · amp mdu losses...
TRANSCRIPT
![Page 1: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/1.jpg)
Tony Coleman Chief Risk Officer & Group Actuary20 May 2008
Creating a sustainable corporation and reducing business risk
Australia and New Zealand Sustainability Reporting Awards 2007
![Page 2: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/2.jpg)
Overview
• Risk management, risk culture and sustainability
• Risk example: climate change and rising sea levels
• Sustainability: adding value through staff engagement & innovation
• Engaging with stakeholders to add value through economic, environmental & social opportunities
![Page 3: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/3.jpg)
2000 2001 2002 2003 2004 2005 2006 2007
NABFXHIH
collapse
Largest Australian Insurance Loss
(Sydney Hailstorm)
Sept 11 2001Terrorist attacks
Major losses in share markets Tort law
reformAMP
lossesMDU collapse
APRA reforms
“Stage 2”
FSR
UK TerroristattacksEnron
Scandal
Arthur Andersen Collapse
Marsh Brokers Lawsuit (Spitzer)
Financial Re (AIG)
Iraq war begins
Dot-com collapse
NRMA Demutualised
ZurichFinancial Re
Anti-Money Laundering
Hurricane Katrina
UK Floods
Sub-Prime Crisis
Basel II
GI APRA Reforms
New Australian Government
Australia signs Kyoto
A Time of Significant Change & Risk
![Page 4: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/4.jpg)
But how do we monitor the risks on the horizon ?
![Page 5: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/5.jpg)
Where are the threats to your business? Where are the opportunities to create sustainable value?
![Page 6: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/6.jpg)
Dow Jones: corporate sustainability is….
“… a business approach that creates long-term
shareholder value by embracing opportunities and
managing risks deriving from economic,
environmental and social developments.”
Dow Jones Sustainability Indexes
![Page 7: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/7.jpg)
Assessment criteria used in DJSI measurement (I)
Source: DJSI Annual Review September 6, 2007
IAG is one of the DJSI industry leaders for the insurance sector in 2006 & 2007
![Page 8: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/8.jpg)
Assessment criteria used in DJSI measurement (II)
Source: DJSI Annual Review September 6, 2007
![Page 9: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/9.jpg)
Global 100 Most Sustainable Corporations in the World
“The Global 100 companies are
sustainable in the sense that they have
displayed a better ability than most of
their industry peers to identify and
effectively manage material
environmental, social and governance
factors impacting the opportunity and
risk sides of their business.”
www.global100.org
![Page 10: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/10.jpg)
Snapshot: sustainability reporting in Australia
• KPMG, 2005: sustainability reporting is growing in Australia but still low by international standards
• In 2002, 14% of ASX100 produced a sustainability report
• In 2005, 23% of ASX100 produced a sustainability report
• Australia ranked 11 out 16 countries surveyed
• Dept Environment & Heritage, 2005• Surveyed 468 companies
• 24% (119) produced a sustainability report
• Of these, 40 (34%) were independently verified• The highest rate of report production (46%) occurred
among foreign-owned proprietary companies.
![Page 11: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/11.jpg)
ASX Corporate Governance Principles –Principle 7: Recognise and manage risk
• Background:
• Principles introduced 2003, revised 2007
• “If not, why not” reporting requirement (only applies to ASX-listed companies)
• ASX reviews found confusion and a low standard of reporting against Principle 7
• A broad definition of Material Business Riskswas therefore introduced in 2007:
“They can include but are not limited to: operational, environmental, sustainability, compliance, strategic, ethical conduct, reputation or brand, technological, product or service quality, human capital, financial reporting and market-related risks”
![Page 12: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/12.jpg)
Does sustainability risk reporting affect business and the economy?
• “There is a strong economic case – to the tune of$1.2 billion GDP pa and a significant profit gain of 2-3% for medium and large companies that voluntarily report on sustainability risks.”
• Why?
1. reduction in capital risk premium of around30 basis points
2. lasting gain in labour productivity of around 0.8%
3. brand-based price premium of around 2%.
- Finsia (Financial Services Institute of Australasia), 2007, The Financial Impacts of Sustainability Risk Reporting on Business and the Broader Economy
![Page 13: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/13.jpg)
Do Investors Care?
![Page 14: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/14.jpg)
It is vital to distinguish between:
Genuine Risk Management
• Setting an organisation’s risk appetite
• Seeking to optimise the return for that risk appetite
• This is not just about risk minimisation!
Compliance
• Ensuring that regulations and rules are followed
• Compliance is a necessary but not sufficient part of risk management: compliance is not value-driven
![Page 15: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/15.jpg)
IAG’s purpose: creating a sustainable risk management balance across all stakeholders
Our long term sustainability relies on our ability to price risk accurately and fairly
Operating costs are factored into premium prices, so we must be as efficient and productive as possible
It makes good business sense for us to reduce risk in the community: fewer risks mean fewer claims and lower premiums (hence more customers and better pooling)
Our operations pay about$14 million each day in claims
Internal stakeholders: around 16,000 employees
![Page 16: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/16.jpg)
Risk structures are necessary – but not sufficient!
Bankrupt airline’s jobs safe for now
Herald-Sun , 11 December 2002
Shock solvency risks found in Aussie companies surveyThe Mercury 20 December 2002
Australia awaits verdict on
A$5.3B collapse of HIH
National Post , 16 December 2002 Ansett staff sing for
Christmas payThe Australian , 17 December 2002
ASIC to in
vestigate
31 compani
es over
financial
reports
ABC News,
19 Decembe
r 2002
Asbestos chokes HardieThe Gold Coast Bulletin, 15 February 2005
Bribes probe blasts AWB cultureSMH, November 27, 2006
10 Ex-Directors From WorldCom to Pay MillionsNew York Times, January 6, 2005
At Enron, Lavish
Excess Often Came
Before Success
NY Times February 26, 2002
Corporate culture on the noseSMH, January 26, 2006
![Page 17: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/17.jpg)
Risk CultureIf you are trying to drive fast you need good brakes
![Page 18: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/18.jpg)
Risk Culture means we need to…
• Foster an environment where risks / incidents / breaches are reported promptly
• Avoid ‘bad news travels slowly’ syndrome
• Avoid ‘shoot the messenger’ syndrome
• Promote transparency and a ‘fix it’ mentality
• Quantify the risk culture measure and report it regularly
• Use the risk culture measure as part of performance evaluation for all managers (including for annual bonus)
• IAG experience shows that risk culture measures are very strong lead indicators of operational risk arising in business units - now used to target discretional internal audit activity
![Page 19: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/19.jpg)
Measuring our Risk Culture (illustrative)
Strongly agree and agree responses only
IAG Australia
overall
BU1
BU2
BU3
BU4
BU5
BU6
BU7
CU1 CU2
CU3
CU4
CU5
Indices Businesses Corporate & Shared Services Risk 62 63 63 63 59 60 49 46 60 66 69 70 58 Engagement 56 60 57 56 51 54 58 50 49 60 63 62 53 Questions Role Clarity –Expectations
75 77 77 78 73 76 57 59 63 77 78 77 65
Role Clarity -Feedback
67 65 71 70 65 65 56 46 57 60 69 61 57
Training
60 57 64 63 55 55 50 52 51 64 72 74 45
Accountability
43 45 46 47 41 42 43 33 38 44 41 44 29
Encouraging Env –Mistakes
48 52 46 47 42 51 44 22 61 54 53 60 45
Encouraging Env -Ideas
73 71 75 74 70 70 55 55 67 76 81 85 75
Prevention - planning
65 64 64 63 61 58 n/a 44 68 75 80 76 70
Detection – speaking up
54 60 51 53 55 57 40 43 59 59 61 64 47
Recovery - responding
70 67 70 69 63 64 n/a 48 69 79 78 82 81
Continuous Imp - Learning
67 67 68 66 64 64 47 57 68 74 75 77 67
Classification Scale for 2006 Results
Below 45% 45%-54% 55%-64% 65%-74% 75% and above
BU0
![Page 20: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/20.jpg)
• Risk management, risk culture and sustainability
• Risk example: climate change and rising sea levels
• Sustainability: adding value through staff engagement & innovation
• Engaging with stakeholders to add value through economic, environmental & social opportunities
![Page 21: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/21.jpg)
Climate Change takes off in US corporate reporting
This graph compares the
number of times the phrase
climate change appeared in
first-quarter corporate filings
with the US Securities and
Exchange Commission from
2005-2008.
Source: Climate change now on
corporate radars, Politico, 5 May 2008
![Page 22: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/22.jpg)
The graph shows GHGand temperature have
been very closely interrelated for the past
420,000 years.
Greenhouse gases (GHG) & temperature are closely interrelated
Where does this data come from?
• The ice core drilled at Vostok, Antarctica, is a 3000m-deep 420,000-year sample (horizontal axis shows thousands of years before present).
• Ice core samples are analysed for radioactive isotopes that show temperature history, and for bubbles of trapped gases that show GHG history.
Source: James Hansen et al, Climate change and trace gases, Phil. Trans. R. Soc. A (2007)
Why has warming of the Earth happened so much faster than cooling?Possible explanation: natural systems of “positive feedbacks” speed up warming.
What if human GHG emissions speed up warming even further?
![Page 23: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/23.jpg)
Garnaut: are we already exceeding even the “worst case” IPCC GHG global emissions scenarios?
Growth this century, especially in China & India, has resulted in:
• unexpectedly high growth of the world economy
• unexpectedly high energy intensity of economic growth
• heavy continuing use of high-emissions fossil fuels
Source: Garnaut Interim Report, February 2008, Figures 2 & 3
![Page 24: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/24.jpg)
How “positive feedbacks” speed up global warming
1. The Earth’stemperaturegets warmer
2. Arctic &Antarctic
ice melts faster,turning into water
3. Water and melting ice are less reflective
than ice and snow
4. More of thesun’s energy is
absorbed by the Earth,and less sunlight bounces
back into space
Example: ice melt changes the reflectivity of the Earth’s surface (“surface albedo”)
• Ward Hunt Ice Shelf, largest in Northern Hemisphere, has fractured into three main pieces (April 2008)• Only five large ice shelves remain in Arctic Canada, covering less than a tenth of the area than they did a century ago.Trent University, Canada, April 16, 2008 Retrieved April 21, 2008, from http://www.sciencedaily.com/releases/2008/04/080415205350.htm
![Page 25: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/25.jpg)
Coastal vulnerability: storm surge, tides and wind all affect sea levels
Tides, storm surge, and wind can drive ocean waves several metresabove average sea level
K. L. McInnes, K. J. E. Walsh, G. D. Hubbert and T. Beer, Impact of Sea-level Rise and Storm Surges on a Coastal Community, Natural Hazards 30: 187–207, 2003
![Page 26: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/26.jpg)
High waves can flood and / or destroy coastal land
• Erosion on Belongil Beach on the NSW Far North Coast© NSW Department of Land and Water Conservation
• Property damage at Wamberal, 1978, due to beach erosion http://www.environment.gov.au/coasts/publications/nswmanual/appendixc2.html
![Page 27: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/27.jpg)
Sea levels are rising because of climate change
• More than 425,000 Australian addresses are below 4m above mean sea level and within 3kmof the shore
• Greater Sydney: 46,000addresses within 1km of the shoreline have elevations less than 3m
• Nerang River, Gold Coast: around 15,000 properties are vulnerable to both coastal and riverine flooding
“A national coastal vulnerability study” Risk Frontiers (2006)
• IPCC: global sea level rise of 18-59 cm by 2100, plus possible additional contribution from ice sheets of 10 - 20 cm. But this is only a small (?) part of the story!
• What about melt/slippage of land-based ice sheets? Potential increase of several metres in sea level. Warning period and rapidity of impact are unknown.
• Crucial risk area: How much do polar temperatures increase if average global increase is say 4 degrees? What does this magnitude of warming mean for land-based ice masses?
• What happens when higher sea levels, greater windstorm intensity/storm surge and natural high tide all combine?
Property insurance does not cover land value.Consider financial risk to lenders (banks) & owners if land becomes unusable.
![Page 28: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/28.jpg)
St Kilda, Melbourne: models of rising sea levels plus worsening storm surge under climate change
Source: http://www.portphillip.vic.gov.au/attachments/o23359.pdf
1.25m storm surge (historical)
1.65m storm surge + 35cm sea level rise
2.06m storm surge + 80cm sea level rise
2.31m storm surge + 80cm sea level rise
![Page 29: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/29.jpg)
A suite of adaptive strategies is available –depending on the extent of sea level rise
• Permanent engineering structures (sea walls, artificial reefs, flood barriers etc)• capital intensive: who pays?• can exacerbate the problem and / or
create damaging consequences in other locations
• Active beach sand replenishment programs
• Canals, dykes, pumps, levees, and importation of fill
• Plantings (eg dune grasses, mangroves)
• Sacrifice of land / planned retreat• Land buyback schemes• Building standards: minimum floor
heights, structural requirements for foundations
• Deep setback of buildings from shoreline
• Emergency relocation of buildings or infrastructure
• Monitoring, emergency warning and evacuation procedures
![Page 30: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/30.jpg)
A further solution: a coastal property insurance scheme similar to old-style “whole of life” insurance?
Whole of Life Insurance
• The insurer accepts a regular annual premium that stays level for as long as a person stays alive.
• In return, the insurer guarantees to pay out a fixed sum insured whenever the person dies, whether it’s in ten days or 50 years.
• The insurer charges enough in the early years to build up and invest a fund so that it can pay everyone, regardless of whether they die early or late.
• The insurer uses projections of population mortality, together with individual mortality risk factors (age, health, lifestyle) to calculate each person’s premium.
• The insurer buys reinsurance in case mortality experience turns out much worse than expected.
Coastal Inundation Insurance
• Annual premium stays level for as long as the property remains viable, for a fixed term of say 50 years.
• Insurer guarantees a fixed sum insured once the land is no longer usable.
• Payment is guaranteed regardless of how soon or late the land becomes unusable.
• The insurer uses regional sea level rise projections and individual properties’ Digital Elevation Model data to estimate what sea level rise would cause inundation.
• Government takes over liability for future premiums once property is unusable.
![Page 31: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/31.jpg)
• Risk management, risk culture and sustainability
• Risk example: climate change and rising sea levels
• Sustainability: adding value through staff engagement & innovation
• Engaging with stakeholders to add value through economic, environmental & social opportunities
![Page 32: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/32.jpg)
Staff engagement: our people tell us sustainability is important to them
2006 2007
I value IAG’s focus on balancing its social, environmental and financial responsibilities. 76% 80%
IAG “Your Voice” annual staff engagement survey results (82% participation rate in Australia)…
• This was the single highest score for any question, and is consistent across individual businesses.
• Staff make great critics, and are a good representation of the communities we operate in
![Page 33: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/33.jpg)
Adding value: Engagement and retention
Mobility Engaged (thinking/ feeling/ acting: provide full discretionary effort)
Enrolled (know what to do; tend to get the work done; but are not connected emotionally)
Disenchanted (somewhat disconnected rationally & motivationally; dramatically lower emotional connection scores)
Disengaged (completely disconnected rationally, motivationally and emotionally)
No plans to leave
51% 35% 23% 15%
Not looking but would consider another offer
39% 49% 48% 33%
Actively looking for another job
4% 8% 17% 28%
Have plans to leave
2% 4% 7% 15%
Source: 2007 Towers Perrin Global Workforce Study
![Page 34: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/34.jpg)
Adding value: Engagement and innovation (InsurePink)
• Developed by an employee in one of IAG’s UK businesses
• As a breast cancer survivor, she could not get travel insurance because of her illness
• She developed a travel insurance product which makes affordable travel cover available to breast cancer sufferers
• This has been a successful product for us
• It recognises a significant social issue: around one in eight women are expected to suffer breast cancer
![Page 35: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/35.jpg)
• Risk management, risk culture and sustainability
• Risk example: climate change and rising sea levels
• Sustainability: adding value through staff engagement & innovation
• Engaging with stakeholders to add value through economic, environmental & social opportunities
![Page 36: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/36.jpg)
Taking ESG risks and opportunities into account as an asset manager
• Adopted the UN Principles of Responsible Investment• Foundation investor in Generation Investment Management
• Invested $50m in GIM Sustainable Investments Fund two years ago
• IAG & NRMA Superannuation Fund now investing a further $20m
• Investing $40m in new Climate Solutions Vehicle (with Super Fund)
• Bought equity stake in Renewable Devices (a wind turbine builder)• gives us access to small, quiet wind generators
specifically designed for use in urban environments• Member of the Investor Group on Climate Change
• represents Aust & NZ institutional investors with total FUM > $424 billion
• aims to ensure that the risks and opportunities associated with climate change are incorporated into investment decisions
• Created new IAG Sustainable Investments Fund - $150m available
![Page 37: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/37.jpg)
IAG’s progress toward carbon neutrality: 18.5% drop in CO2-equivalent emissions over the past 3 years
01000020000300004000050000600007000080000
2005 2006 2007
Aust & NZ CO2-eemissions
IAG’s Australian electricity savings
in 2007 alone amounted to $630,000
Saving of 14,244 tonnes CO2-e is equivalent to taking 3,543 cars off
the road for a year
![Page 38: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/38.jpg)
Reducing emissions: giving internal stakeholders the info & tools to help (IAG CO2 Breakdown 2006-07)
% of Total CO2 (FY0304)
Electricity usage70%
Air travel6%
TOT Fuel 13%
Office paper
2%
Print paper9%
73.8%
5.8%
1.3%
11.6%
7.5%
![Page 39: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/39.jpg)
Working with suppliers: 2006-07 trial to improve waste management for NRMA smash repairers
Typical workshop waste
Steel 30%
Paper & Cardboard 16%
Plastics 12%
Bumper Bars 11%
Liquid Wastes 9%
Other Wastes 7%
Rags 5%
Headlights 4%
Aluminium 2%
Car Batteries 2%
Glass 2%
Trial with Southern Sydney repairers: how could we help them to increase recycling, reduce landfill and save money?
What we offered:•Commingled recycling bin: saves sorting costs, neatens workplace
•Online Waste Calculator•Plus several additional options
![Page 40: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/40.jpg)
NRMA smash repairers waste trial results
Was 18 tNow 24 t
Was 22 tNow 16 t
Results:• Average recycling rate increased from
39% to 60%• Each repairer saved average of $1,700
in waste collection costs alone• Half the repairers reported staff time
cost savings of $1,500-$10,100 pa each• Well worth extending the offering to
other repairers
A learning experience! Practical challenges for some repairers:• No onsite storage space for waste or large bins• Poor site access for collection trucks• Cost (a few repairers currently have cheaper short-term landfill
options)• Existing contracts locked in• Shop renovations under way
0
10
20
30
Before After
Annual tonneswaste disposal
LandfillRecycled
![Page 41: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/41.jpg)
Fuel Efficient Car Discount, Climate Help, Home Help, and GreenSafe Car Profiler
Working with our customers
![Page 42: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/42.jpg)
Working to attract NEW customers: The “Carbonators”
Sales results: over 32,000 policies so far.Check online updates at nrmacarbonators.com
![Page 43: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/43.jpg)
Our reporting to date
![Page 44: Creating a sustainable corporation and reducing business risk · 2014. 10. 20. · AMP MDU losses collapse APRA reforms ... Dow Jones Sustainability Indexes. Assessment criteria used](https://reader036.vdocuments.us/reader036/viewer/2022071504/612449c00e568c3e9370e64f/html5/thumbnails/44.jpg)
A PeopleA People’’s Assembly s Assembly Sea Level Rise & Sea Level Rise & Population Displacement Population Displacement in the Asiain the Asia--PacificPacific
The IPCC predicts that a one metre sea level rise will displace 145 million peopleHow should Australia respond in partnership with our neighbours in the region?How can we protect our natural environment while protecting ourselves?
Steering CommitteeSteering CommitteeIAG Munich Re Worley Parsons World Vision IAG Munich Re Worley Parsons World Vision Australian Defence Force Engineers Without Borders Australian Defence Force Engineers Without Borders
Griffith University Griffith University UniversityUniversity of Melbourne University of NSW CSIRO Ian Lof Melbourne University of NSW CSIRO Ian Lowe Julian Burnsideowe Julian Burnside
August 29 August 29 -- 30, 2008 30, 2008 BrisbaneBrisbane