Our environmental sustainability strategy includes managing not only our impact on the environment, but also the impact of the environment on our business. This means adopting a dual approach through both mitigation and adaptation activities.

IAG's Footprint

Our Australian business is our largest contributor to the Group emissions profile, contributing 83% of the Group's emissions.

This year we have seen a reduction in our Australian emissions of 3.4%, driven by continuing reductions in electricity and paper consumption. Continued implementation of our desk top power down initiative, focusing on ensuring computer hardware is turned off when not required, and consolidation of our property portfolio has driven the reductions in electricity consumption.

We have experienced a significant increase in air travel across these operations as a consequence of the natural disasters that have occurred throughout the year, necessitating additional travel by our people.

The increase in air travel has also been experienced in our New Zealand business and has had contributed to a 22% increase in emissions (or 13% per FTE). It is important to recognise in this business that there have been significant additions made to headcount to ensure that the business can respond effectively to the devastating earthquakes that have occurred across the year.

Our UK and Thai businesses have reported their carbon emissions for the second year running. In the UK, whilst there have been consumption decreases in air travel, rail travel, and electricity consumption, with only minor increases in gas and office paper, the emission's footprint appears to have increased significantly. This is attributable to the UK aligning their carbon emissions factors to the best practice factors that are used by the Australian, New Zealand and Thai businesses, in particular for air travel.

Our Thai business has experienced a number of consumption increases in paper consumption and in particular the tool of trade fleet. The fuel consumed by a number of motorcycles used for business purposes was not previously being included in the figures but this has now been rectified. A move to best practice emission factors for air travel has also increased the emissions derived from air travel.

Helping our customers and the community

You only need to look at the events of the past year to see what a large impact that weather events have had on communities around the world. We recognise the important role that we have to play in building resilience and adaptive capacity, both internally and within the broader community.

• Ensuring we have a good understanding of the risks associated with climate change, for example through our dedicated Natural Perils Research team in our reinsurance division;
• Sharing information on risk and how to reduce it, for example, through information that we provide on our websites;
• Forming partnerships to help communities adapt, for example, through our partnerships with Queensland State Emergency Service;
• Assisting in emergency readiness and response, helping our customers at claims time, by ensuring we can make claims payments quicker and help people to get back on their feet; and
• Influencing and advocating - insurance companies acting alone, or even collectively, will only have a limited impact in achieving success. What is needed is a collaborative effort on many different levels from a range of stakeholders, for example through our submissions to the National Disaster Insurance Review.

Going forward, we see an opportunity for IAG to further leverage its risk management expertise, across a wide range of risks, to help our customers and the community manage the risks that they face, or adapt to those that cannot be eliminated.

CASE STUDY

Australian Direct Insurance business's five star facility in Mulgrave

In April 2011, the Direct Insurance Mulgrave site was awarded a 5-star green star office interior rating by the Green Building Council of Australia. This rating represents excellence in environmentally sustainable construction and is the second of our office fit outs to have achieved this rating, with the Parramatta site achieving the rating in FY10. This will also have benefits beyond the purely environmental, such as workforce productivity gains due to the design features of the building.