OUR TO DO LIST

REMUNERATION

What we said we’d do in the 2005/06 Sustainability Report
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.

What we did in 2006/07
Most managers in Australian businesses (that have direct reports) have a component of their short term incentive remuneration based on values-based leadership.

What we’ll do in 2007/08
The FY07/08 incentive plan outlines that Australian managers with direct reports will have 3–5% of their average 20% bonus tied to the extent to which they live the values. Managers will also be provided with feedback on how well they live the values.

EMPLOYEE INVOLVEMENT

What we said we’d do in the 2005/06 Sustainability Report
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.

What we did in 2006/07
Embedded forums and channels for our people to influence our operations and to contribute innovative ideas. Increased volunteering hours and clearly communicated our community partnership opportunities. Each division enhanced their reward and recognition approach based on staff feedback. Incorporated sustainability dialogue into key forums for our people to discuss solutions and to contribute innovative ideas.

What we’ll do in 2007/08
Create forums and networks for our people to get involved in sustainability initiatives, innovations and solutions. This means both formal networks and more informal ‘social networks’ across our business. The sustainability champions network will be reinvigorated to operate on an international basis. We will implement sustainability options in the rewardhelp program and align volunteering hours and partnerships with divisional strategy.

SUSTAINABILITY MANAGEMENT

What we said we’d do in the 2005/06 Sustainability Report
Incorporate a sustainability management system into our corporate risk management system and have it approved for implementation (carried over from 2004/05, the sustainability management system was developed in 2005/06 but required approval and we noted that we would provide further details in this year’s Sustainability Report).

What we did in 2006/07
The Risk Management Strategy was revised in early 2007 to make it more principles based and appropriate for our global operations. Rather than create a separate sustainability management system, sustainability principles are reflected in the company’s risk management practices. Aspects of sustainability measurement have been included in IAG’s financial reporting systems.

What we’ll do in 2007/08
IAG’s Risk Management Strategy and Financial Reporting System are reviewed and updated on an ongoing basis.

CODE OF ETHICS

What we said we’d do in the 2005/06 Sustainability Report
The Code of Ethical Business Conduct will be released in 2006/07.

What we did in 2006/07
We have developed a group-wide Code of Ethics to provide all employees with a framework to make good, informed business decisions and to act on them with integrity.

What we’ll do in 2007/08
The Code of Ethics will be rolled out across our operations over the next 12 months from September 2007. Training and education will be provided to support the introduction of the Code and commit to ensuring that everyone covered by its provisions will be made aware of their responsibilities.

FLEXIBILITY

What we said we’d do in the 2005/06 Sustainability Report
Results from diversity surveys with new employees, which provide data to help us match our employee base to our customer base, are to be analysed and acted upon to ensure a suitably diverse workforce that provides excellent customer service.

What we did in 2006/07
The survey identified pockets where we are implementing flexibility opportunities well but also identified other areas where managers need greater training and support to effectively implement flexible work arrangements. In response to these findings, the IAG Executive endorsed the design and deployment of organisation-wide flexibility skilling for all IAG managers.

What we’ll do in 2007/08
Deliver organisation-wide flexibility skilling for all IAG managers and coach managers on their capacity in implementing flexible work options.

COMMUNICATING SUSTAINABILITY

What we said we’d do in the 2005/06 Sustainability Report
In 2006/07, we will encourage recognition of sustainable behaviour by our employees by more clearly communicating what sustainability means at and for IAG.

What we did in 2006/07
The Sustainable Business Practices team delivered various workshops across the organisation for IAG employees. Our people are involved in and enthused by the sustainable products we launched such as Home Help, Climate Help, GreenSafe Car Profiler and Fuel Efficient Vehicle discounts. They heard about our commitment to be Carbon Neutral by 2012 and other operational initiatives. Our people are obtaining a greater understanding of sustainability by seeing tangible changes and actions.

What we’ll do in 2007/08
Our people will continue to deliver products and initiatives to build more sustainable communities and operations. Our managers will continue to be measured and coached on their leadership behaviours.

INDIGENOUS EMPLOYEES

What we said we’d do in the 2005/06 Sustainability Report
Increase the number of indigenous employees from 35.

What we did in 2006/07
IAG has 32 self-identified indigenous employees, which is a decrease from last year’s 35. During this period IAG has reviewed its indigenous engagement strategy, and will continue to refine the strategy over the coming months.

What we’ll do in 2007/08
Employment will remain a focus of the revised strategy. As part of the new IAG Careers Centre, there will be recruitment specialists dedicated to diversity recruiting, in particular indigenous employment.

ENERGY MANAGEMENT

What we said we’d do in the 2005/06 Sustainability Report
Adopt energy management strategies across the buildings in our operations.

What we did in 2006/07
Our Energy Management Committee has established a number of strategies to reduce energy consumption in our buildings in Australia, and our energy consumption has dropped by 14%. We’ve upgraded light fittings to more energy efficient fittings, we’ve adjusted the timing on our meeting room and car park lights to turn off more frequently, we’ve adjusted the air conditioning settings at our IT data centre, and we’ve moved into a 5-star energy-efficient building in Adelaide.

What we’ll do in 2007/08
We will continue to work on lowering our energy consumption across all our business operations. We will conduct energy audits across a sample of our buildings internationally and develop action plans to reduce CO₂ emissions that are owned and managed by each of the business divisions.

In FY2007/08 we will move into a 5-star energy-efficient building in Melbourne.

FUEL EFFICIENCY

What we said we’d do in the 2005/06 Sustainability Report
In 2006/07, we will be investigating purchasing more fuel-efficient vehicles including, but not limited to, hybrid vehicles.

What we did in 2006/07
We have continued to purchase and maintain hybrid vehicles for one third of our ‘tool of trade’ fleet. While the range of vehicles available to our employees has been expanded, we have seen a drop in fuel consumption in our Australian operations over the year.

What we’ll do in 2007/08
The focus for 2007/08 will be to maintain a steady rate of reduction in fuel consumption for our fleet and to consider policies for all parts of IAG’s business, including our international operations, which encourage take-up of fuel efficient vehicles by employees.

CO₂ REDUCTION

What we said we’d do in the 2005/06 Sustainability Report
Our performance against the overall corporate target of a 3% reduction in CO₂ per FTE will be reported in 2006/07.

What we did in 2006/07
In Australia, our CO₂ per FTE dropped by 19% per FTE.

What we’ll do in 2007/08
We will develop detailed CO₂ reduction plans for each of our businesses that will take us towards our carbon neutral status by 2012.

PAPER

What we said we’d do in the 2005/06 Sustainability Report
We will continue to monitor and report on print paper use and build on the solid gains we have made.

What we did in 2006/07
We have measured print paper usage for our Australian and New Zealand businesses. We have reduced our consumption in Australia by 2%.

What we’ll do in 2007/08
We will work to build measurement systems for our international businesses. (This will hopefully allow us to track print paper consumption across all operations.)