MEETING ENVIRONMENTAL TARGETS

The situation

In our 2004 Sustainability Report, we examined how our operations impacted on the environment and set targets for reducing our impact in the key areas of paper, electricity, fuel use and air travel.

Across the business, our people have made great efforts towards meeting these targets. Unfortunately, however, our environmental targets for the 2005 financial year have not been met for a range of reasons outlined below.

The considerations

Although we would have liked to have performed better, we acknowledge that this result is not uncommon for organisations at a similar stage as us in the sustainability journey. We recognise, and are working to manage, the increasing complexity involved in reducing our environmental impact while delivering on our corporate strategy. For example, is it appropriate for us to have set targets for reducing our amount of air travel considering that we have a strategic goal of securing and growing an Asian foothold?

Similarly, as we work to deliver customer related advances and internal efficiencies through new technology platforms, we are discovering challenges with knock-on effects to our energy consumption.

One of our major site's energy use increased significantly over the past year. This property is where the computer servers that store all of our customer data are located. As we work to improve our systems to make it easier for our customers to deal with us, we are increasing the demands on our data servers which, in turn, increases our electricity use.

The way forward

Wherever possible, we are working to balance the needs of our various stakeholders while minimising our environmental impact. For instance, at the site mentioned previously, we have slightly increased the temperature of the air conditioning units that keep our data servers cool. This small step has helped offset some of the electricity use at this site and we are looking to do the same in other locations where data servers are housed.

We have also made some significant inroads in other areas. For example, our Personal Insurance division now has 50% of its printers converted to double-sided printing. This has been one of the contributors to its 21% divisional reduction in office paper cosumption per FTE.

Our network of Sustainability Champions and individuals across the business are also making an impact through day-to-day steps such as turning off their computer monitors, printing double-sided and reducing the amount of paper they use.

In the past financial year, we have spent a considerable amount of time working to ensure our systems and processes for measuring our environmental performance are in place. We are now also working on a pilot programme that will improve our monthly reporting and give managers the ability to track their environmental and related financial performance on a monthly basis.

Targets

We have also learned more about where we should be focusing our efforts to make the biggest impact. We are working to tailor targets to each division, based on a model that assesses each area's impact and influence. We are also looking to incorporate these targets into the divisional business planning process in the 2006 financial year and we will support this target setting work with tailored internal communication.

IAG's divisional environmental targets will be available on the IAG website (www.iag.com.au) from January 2006.

Most importantly, we will be implementing a grassroots action-planning programme across all divisions to help improve our environmental performance. In addition, in January 2006, the pilot reporting process, mentioned earlier, will commence which will provide our managers with a monthly report on their performance against environmental targets and the costs associated with their CO₂ emissions.