In 2005/06, IAG will establish a formal sustainability behavioural change project that will work to further educate and motivate employees to act in ways that are consistent with our goal to become a sustainable business.

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The review of sustainability governance conducted by Group Risk Assurance highlighted that it is important for our people to understand that sustainability is not a “project” but an ongoing part of everything we do.

To this end, we have sought to further embed sustainability and what it means at IAG into our leadership and induction programs, our people policies, our reward and recognition programs, our corporate strategy and risk management framework, and our communication to employees. We also brought together our senior leaders with a view to exploring our values and sustainability. In addition, we have improved our reporting mechanisms and target setting processes.

In 2006/07, our leaders will have components of their remuneration determined by how well they manage in accordance with our values and our principles of sustainability. We believe this is the most effective way to further embed a sustainable approach at all levels of the organisation.

We also aim to further galvanise our employees by providing continued opportunities to get involved and directly influence how we operate. This will entail redirecting and re-energising our champion networks, being clearer in our reward and recognition programs, and providing related community partnership opportunities.

We are currently working on incorporating a sustainability management system into our corporate risk management framework.

In 2005/06, the Group Risk Assurance reviews will focus on the processes and systems within each division that measure sustainability performance.

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The corporate risk management framework has been updated to include a suitable focus on sustainability.

Group Risk Assurance has reviewed the structure and management of sustainability throughout the Group and recommendations are currently being implemented.

The risk management framework is currently being approved and more information will be included in next year’s Sustainability Report.

We are currently in the process of preparing a Code of Ethical Business Conduct for our business. This Code will provide guidance for our people, no matter where they are located, on interpreting our purpose and values and the expectations of behaviour associated with these values.

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In consultation with our stakeholders, we have drafted a Group-wide Code of Ethical Business Conduct covering all impacts of our operations.

The Code of Ethical Business Conduct will be released in 2006/07.

We are still working to collate ethnicity and age data.

During 2004/05, we experienced some difficulties in the collection and storage of this data. These issues have since been rectified and we plan to report on this information in the 2005/06 financial year.

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Diversity surveys are conducted with all new starters and are now incorporated in our corporate orientation program.

Results are being used by our human resources team to better understand our employee base and help match our workforce to our customer base.

In 2005/06, we will be working to improve the number of nominations in the Sustainability & Innovation rewardhelp category, which currently stands at three percent

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Unfortunately our Sustainability & Innovation nominations remain at 3% of total rewardhelp nominations, despite efforts to encourage more acknowledgement of this category.

There is still work to be done to improve acknowledgement of the work our people do in ensuring we are a sustainable business. In 2006/07, we will encourage recognition of sustainable behaviour by more clearly communicating what sustainability means at and for IAG.

We aim to reflect Australia's diverse population in our own workforce. Approximately

2% of the nation's population is indigenous, which would equate to having around 230 Indigenous people working at IAG. We currently have 23.

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In 2004/05, we put a strong emphasis on increasing the number of our employees from Indigenous backgrounds. In 2005/06, we have increased the number of indigenous employees by 52%.

Although the increase of indigenous employees from 23 to 35 is a positive result, there is still work to be done to improve our indigenous employee population.

We are currently in the process of developing an energy management plan to be rolled out across IAG’s major sites.

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We have commenced the pilot project for energy management at the head office of 388 George Street, Sydney.

Once results for George Street have been analysed, we will adopt the successful strategies at other major IAG sites.

Our new SGIC and CGU office in Adelaide, Flinders Link, has been purpose-built to achieve a 5-star Green Star building rating.

IAG NZ’s new Christchurch premises was designed to maximise energy efficiency and minimise waste and greenhouse gas emissions.

We plan to continue to add to the number of hybrid vehicles in our tool of trade fleet.

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We have increased our hybrid fleet by 20% in 2005/06.

In 2006/07, we will be investigating purchasing more fuel-efficient vehicles including, but not limited to, hybrid vehicles.

In the 2005/06 financial year, we will have more tailored divisional targets for reducing office paper consumption that will be supported by an action-planning process.

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Environmental indicators are now available to managers monthly, which allows them to track their teams’ performance and improve it where necessary. Divisional targets have been determined and contribute to an overall Group target of CO₂ per FTE.

Our performance against the overall corporate target of a three percent reduction in CO₂ per FTE will be reported in 2006/07.

We will continue to focus on reducing the amount of print paper we consume.

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IAG's Shareholder Relations team has worked hard to reduce the amount of print paper required to meet our shareholders’ needs. We used 38% less paper in 2005/06.

We will continue to monitor and report on print paper use and build on the solid gains we have made.

We plan to hold one-on-one discussions with a section of managers to investigate what managers see as their role in helping employees understand sustainability and translating it in ways that make sense for their teams.

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Workshops were conducted throughout Australia to coincide with the launch of the Sustainability Report 2005.

In 2005/06 the focus has been at the Executive level, and on those managers with strategy and planning responsibilities.

We will continue to work with senior leaders across the business lines and internationally.