CEO Survey: Companies from C to I

Companies from C to I, alphabetically, respond.

The Australian’s CEO Survey. Artwork by Tom Jellett.

The Australian’s CEO Survey: Companies from C to I

Justin Arter, Cbus Super

How do you view inflation and how do you rate the nation’s macro-policy settings?

 

How much of the current strength in inflation proves to be persistent is something we are watching closely. Most of it is being driven by reopening and temporarily high demand for consumer goods, so is likely to fade with time. Nonetheless, labour markets have been rebounding rapidly and this could drive a more sustained pickup in wage growth and underlying inflation.

 

Our central view is that we will continue to see high inflation readings for the next 6-12 months, but longer-term we anticipate inflation will remain consistent with central bank objectives.

 

It’s also worth pointing out that the inflation environment in Australia remains much more benign than in the US, for example.

 

Before the pandemic we were looking at a lower for longer rate environment. Although central bank rate increases are looking increasingly likely in 2022 and 2023, in response to high inflation readings and strong growth, we believe that the overall level of interest rates will remain low compared to history.

 

Finally, it does seem likely that inflation readings – and the macro environment more generally – will continue to be more volatile than what we became used to in the decade before the pandemic. So it is important that we ensure our portfolio is resilient across a variety of possible outcomes.

 

How has disruption/innovation through Covid affected your sector and how can you stay competitive?

 

Our people have navigated the pandemic while keeping a laser like focus on delivering retirement outcomes for our members. For example, moving our retirement seminars online has been a successful innovation born out of necessity. People have appreciated being able to access the information they need from the comfort of their own homes.

 

We have been focussed on the disruption Covid-19 has caused our members, our members have felt the economic impact of Covid-19 through lockdowns, reduced work hours or projects being put on hold.

 

Covid-19 has accelerated the fundamental forces and trends shaping superannuation – increasing competition, regulatory change, and fund consolidation – this is driving innovation in the sector. The internalisation and maturity of our investment team is a great example, their capacity to respond with agility and a holistic understanding of our whole portfolio has been a great advantage.

 

Our focus is now on making the best make use of loosening borders and offices reopening to build on what we have been able to achieve virtually over the last two years.

 

What three changes are you making to address climate change?

 

Cbus has long been recognised as a leader in responsible investment. We have a comprehensive approach to climate change as a business, as an investor and as an asset owner.

 

As a business we achieved a carbon neutral certification in 2019.

 

As an investor we are part of the broad consensus committed to net zero in 2050 and have a roadmap for emissions reduction of 45 per cent across our portfolio by 2030. We take a whole of portfolio approach to our targets. Both energy users and energy producers need to transition if the world is going to meet its commitments.

 

Cbus directly owns some of Australia’s leading new economy assets including our stake in Bright Energy Investments in Western Australia. Cbus Property is developing and managing the most energy efficient $5bn commercial portfolio in the country.

 

Cbus Property continues to be amongst the top few property groups in the world according to the GRESB rankings and have just announced a plan to put a solar skin on our new landmark development in Bourke Street Melbourne.

 

How do you see the jobs market for 2022 and what are your plans around working from home for employees?

 

Some of the talk about the ‘great resignation’ has been hyped up. I prefer to see it as a new age of purpose. People are looking for more than a paycheck, they want to be making a difference and they want to be empowered. Industry funds like ours are at a natural advantage in this employment market because the end result, producing better retirement outcomes for our members, is clear.

 

We have had more unsolicited job applications in the last twelve months than ever before.

 

The 2021 pandemic experience has really clarified for us that working from home and working from the office shouldn’t be a strict dichotomy. Some people work better at home, some people prefer the office and for a lot of people it’s a mix.

 

There are times when people want to get in a room with others and sort things out. There are other times when people want to use their commuting time to get in some exercise and have a solid block of uninterrupted time to focus. People are at their most productive when they have some agency over what works best for them.

 

So we are making 2022 all about flexibility and empowering our teams to work out what works best for them in terms of working in the office. At this stage I’m not mandating that people come in a certain number of days a week. Demand to return to the office is strong, particularly for people working on collaborative projects.

 

How would you rate business, state and federal government performance this year?

 

I think business and government has acted with the best of intentions during unprecedented times. That’s led to hard decisions having to be made, particularly by governments. I don’t envy any of our leaders for having to make those calls.

 

As we approach recovery, we desperately need both vision and policy stability from government, particularly in the superannuation sector. We have been navigating the pandemic whilst also enacting a significant amount of regulatory change.

 

As super reaches scale we need a collective view about what the future looks like for our members. Having a dependable roadmap for the system will make it easier for us to deploy capital to aid recovery.

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Marc Luet, Citi Australia

Markets are strong, borders are opening. What are the three top risks to recovery and growth of your company and Australia?

 

The main upside risk comes from the potential for households to be better adapted to living with Covid-19, thanks to Australia’s rapid rise in vaccination rates. This would boost activity through higher spending and investing, fuelled through higher household wealth and savings and ongoing historically low interest rates.

 

The main downside risk comes from the prospect of new Covid-19 variants or declining vaccine efficacy, leading to worse health outcomes and a return to mandated lockdowns, resulting in less spending and investing, slowing economic growth and job creation.

 

How do you view inflation and how do you rate the nation’s macro-policy settings?

 

Inflation is likely to remain contained with the RBA’s target band next year. Australia doesn’t have the labour supply issues of the US, nor the energy supply problems of the UK and EU.

 

We have good natural endowments of energy resources and a flexible labour market. Australia’s macro-policy settings have been appropriate for the external shocks that have occurred. The challenge now is for policy makers to remain flexible to potential ongoing pandemic shocks.

 

How has disruption/innovation through Covid-19 affected your sector and how can you stay competitive?

 

I am particularly mindful of the strain many of us continue to feel from pandemic life and increased workloads. It has only reaffirmed to me the importance of our efforts to identify ways to help relieve this stress, simplify our working processes, develop tools for collaboration and ensuring our managers can continue to support their people.

 

What three changes are you making to address climate change?

 

Citi is committed to achieving net zero carbon emissions by 2050. Citi will stop funding thermal coal-mining companies over the next 10 years, and by 2025, the bank will stop providing underwriting and advisory services to the industry and eliminate exposure entirely by 2030.

In Australia, Citi aims to be the leading bank helping local companies transition to a low-carbon economy.

 

In addition to social and sustainable bonds issuance, we’re also investing in new products and solutions including Citi’s sustainability-linked supply chain finance program, that offers cheaper financing to suppliers that hit sustainability indicators; and our ESG tool allowing clients to analyse the sustainability exposure of their holdings at the portfolio and security level.

 

In 2021, Citi raised over A$2 billion of capital in the global debt markets to support the ESG commitments of Australian and NZ companies.

 

How do you see the jobs market for 2022 and what are your plans around working from home for employees?

 

We expect employment to grow in 2022 and labour participation to increase. We estimate Australia will produce over 300,000 new jobs next year and for the unemployment rate to decline to around 4 per cent.

 

The pandemic has certainly stretched our capacity for innovative thinking and for solving problems. It has shown us that we are able to adapt to and even flourish amid adversity.

 

The future of work at Citi is a hybrid approach, ensuring our employees are able to work flexibly and effectively, regardless of their role.

 

How would you rate business, state and federal government performance this year?

 

When I compare Australia’s experience of the pandemic to what I have seen in other countries I have worked in, I believe the state and federal governments have done an exceptional job.

And while there is clearly more to do on climate change, the announcement of net zero by 2050 is a real step forward.

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Mark Schubert, Cleanaway

Markets are strong, borders are opening. What are the three top risks to recovery and growth of your company and Australia?

 

Our Cleanaway business has been quite resilient to the impacts from the pandemic. Vaccine hesitancy and new variants leading to differential state border closures and future lockdowns remain a risk. CBD activity remains subdued with flexible working arrangements potentially leading to a rebasing of activity levels. Ongoing international travel restrictions have knock on effects to certain parts of our business including cruise ships, quarantine work, universities, and tourism, all of which have yet to fully recover.

 

How do you view inflation and how do you rate the nation’s macro-policy settings?

 

Supply chain disruptions and a tightening labour market are contributing to inflationary pressures. Our normal approach is to work hard to offset cost increases with improved productivity and other savings and efficiency ideas.

 

Our aim would be to exhaust these avenues before considering price increases. I think the nation’s macro-policy settings have been appropriate given the challenges related to the pandemic and low inflation over the last few years.

 

How has disruption/innovation through Covid-19 affected your sector and how can you stay competitive?

 

The waste management sector has been quite resilient to disruption caused by the pandemic. Society largely generates the same amount of waste regardless of the conditions, however the source and location of the waste can change. For example, during the lockdowns we saw more waste generated in the home and in the health sector.

 

Certain areas of our business such as cruise lines and airport quarantine remain impacted by the pandemic, but we expect this to resolve over time. We remain competitive by being exposed to different waste streams across most of the economy as well as being integrated along the waste value chain.

 

What three changes are you making to address climate change?

 

We are investing in internal capability to help us plan a way forward to meet our net zero ambition. We will invest to capture a greater proportion of landfill gas from our operations and beneficially reuse the gas to lower emissions in other parts of our business. We are enabling the broader circular economy through our business activities, which will avoid emissions associated with the production of virgin materials.

 

How do you see the jobs market for 2022 and what are your plans around working from

home for employees?

 

We have a largely operational workforce providing essential services to communities and customers around Australia – our approach for this group will be to remain flexible in terms of rosters and other working conditions, to ensure we can attract diverse talent.

 

We will have a hybrid approach for office workers, incorporating a blend of working from home and from the office. The focus, however, will be for each of the teams to decide what best works for them, document the approach, and then review it regularly and tune it up as a team.

 

How would you rate business, state and federal government performance this year?

 

It has been a challenging year for individuals, businesses and governments. We have all had to make difficult decisions and balance conflicting needs.

 

While not everyone will agree with the outcomes of certain decisions, my assessment is that a great deal of effort, care and consideration has gone into pandemic related decisions. When assessing outcomes with the benefit of hindsight we must take care to reflect on the prevailing level of uncertainty at the time of the decision.

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Dig Howitt, Cochlear

Markets are strong, borders are opening. What are the three top risks to recovery and growth of your company and Australia?

1. Skills shortages will be an issue for both Cochlear and Australia. Cochlear requires highly specialised skillsets for some of our roles. As a result, we need to re-open our international borders to skilled people.
2. Supply chain constraints, especially for electronic components. While Cochlear manages its supply chain conservatively and maintains high inventory to reduce the potential of supply interruptions for customers, the current shortages of electronic components could be a challenge in future.
3. Disruption to elective surgeries from Covid-19 or staff shortages in hospitals. This risk is much greater outside Australia.

How has disruption/innovation through Covid-19 affected your sector and how can you stay competitive?

 

In March 2020 we saw that Covid-19 was an opportunity to strengthen our competitive position by continuing to invest in R&D and market growth. The focus of our R&D and technology investments is in enhancing hearing outcomes for our customers and providing increased digital and connected services to support them. In FY21 we invested $195m in R&D, representing 13 per cent of sales revenue, with eight new products and services achieving FDA approval over the past 18 months across all parts of the portfolio.

 

How do you see the jobs market for 2022 and what are your plans around working from home for employees?

 

We expect there will continue to be labour and skills shortages in 2022, leading to significant competition for jobs. Cochlear will be hiring in Australia and overseas and we will need to continue to offer stimulating careers, flexible working conditions, and the opportunity to play a role in realising Cochlear’s Mission of helping people hear and be heard.

 

Cochlear had a flexible working policy for employees (pre-pandemic) where job roles could be split between time in the office and remote working. In 2020, we took the opportunity to support and expand and enhance our flexible working policy.

 

We recognise the benefits of flexible work and how it supports our diversity and inclusion strategy by improving access to work for more people. We also recognise the importance of face-to-face and informal interactions to build relationships, knowledge and enhance creativity, so we believe achieving a balance between these is key to our continued growth and success.

 

How do you view inflation and how do you rate the nation’s macro-policy settings?

 

We expect to see some pressure on inflation from the tight labour market and supply chain constraints. We all need to be striving for productivity improvements to underpin real wage growth and improving Australia’s international competitiveness.

 

Improving efforts to diversify our economy through policy that supports and builds high tech sectors where we have research strength and competitive advantage is key. Policy programs also need to support decarbonising the economy.

 

There have been encouraging steps toward realising the potential of Australia’s medical and bio-technology sector over the past two years – the modern manufacturing strategy and the announcement of a patent box are prime examples. Australia’s health system can be more encouraging of innovation, with faster regulatory approvals and ensuring the reimbursement regimes reward innovation.

 

What three changes are you making to address climate change?

 

While Cochlear has a relatively small carbon footprint we are committed to playing our part in tackling climate change. We are developing a roadmap for reductions targets getting us to next zero well ahead of 2050 and will be announcing this target in 2022.

 

This year we introduced our first public emission reduction targets focused on business related flights which was our biggest source of emissions pre-pandemic.

 

Our commitment is a 50 per cent absolute reduction in flight related carbon emissions by FY25 compared to our FY19 baseline. We have also committed to using 100 per cent renewable energy at all our manufacturing sites by the end of FY22.

 

This will significantly  per centduce our Scope 2 emissions.

 

How would you rate business, state and federal government performance this year?

 

It has been another challenging, unpredictable year for business and governments.

 

Overall, Australian businesses and governments – as well as the community at large – have managed the balance between ‘saving lives and livelihoods’ well.

 

The vaccination effort in the last nine months, has been an incredible demonstration of united purpose and cross-sector cooperation. I think state border closures have outlived their use-by date, but I am confident both business and government will continue to learn and adapt as we deal with the next phase of the virus.

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Steve Cain, Coles

Markets are strong, borders are opening. What are the three top risks to recovery and growth of your company and Australia?

 

In 2022 we will be cycling the sales and cost impacts of the Covid-19 lockdowns however as vaccination rates continue to rise across the country, we are optimistic about the overall outlook.

 

With the construction sector returning to full capacity, 2022 will be a significant year for the final building phases of Coles’ transformational projects, with our two automated distribution centres in partnership with Witron in Queensland and NSW; and our two online food customer fulfilment centres in partnership with Ocado in Melbourne and Sydney continuing. The facilities represent one of the largest retail automation programs in the Southern Hemisphere and collectively will improve sales, efficiency and safety.

 

The reopening of state and international borders is essential to Australia’s economic growth and to ensure we have the right skills sets for the future in sufficient quantity.

 

How do you view inflation and how do you rate the nation’s macro-policy settings?

 

We are seeing some cost price increases from our suppliers with rising input costs for selected commodities as well as on packaging and freight however, in other areas such as fresh produce there is deflation.

 

Globally and in Australia there are some signs that costs are rising but it’s not uniform. As always, Coles is focused on putting the customer first and ensuring we are delivering great value.

 

How has disruption/innovation through Covid-19 affected your sector and how can you stay competitive?

 

Covid-19 lockdowns drove strong growth in eCommerce revenue for both supermarkets and liquor.

 

It spurred innovation in our business, including being the first and only mainstream supermarket to stop the paper catalogue in favour of an improved digital shopping, promotion and recipe experience. It also drove the expansion of our home delivery network, moving click & collect from service desks to car parks, and the launch of same-day home delivery and Click&Collect Services (Coles Rapid).

 

We have partnered with Witron to build two automated distribution centres in NSW and Queensland, and two online automated customer fulfilment centres are under construction in Sydney and Melbourne through our partnership with Ocado.

 

Our commitment and investment in these transformational projects will collectively improve sales, efficiency and safety.

 

What three changes are you making to address climate change?

 

Manage climate risks and opportunities: As supporters of the Taskforce on Climate-related Financial Disclosures, we are working towards a comprehensive approach to managing and reporting climate-related risks and opportunities as well as understanding the impacts of climate change on our corporate strategy.

 

Decarbonisation: In March 2021, we announced our target to source 100 per cent renewable electricity by June 2025, and we already have the agreements in place to achieve this. In addition to solar installation on 83 stores, solar installation at our distribution centre at Edinburgh Parks in South Australia recently went live, which will reduce grid consumption at this site by about one third. All new distribution centres have plans for rooftop solar. We have also set targets to reduce combined Scope 1 and 2 greenhouse gas emissions by more than 75 per cent by the end of FY30 (from a FY20 baseline) and to deliver net zero greenhouse gas emissions by 2050. In August we announced the conversion of $1.3bn of bank debt to sustainability linked loans, connecting our cost of capital to key sustainability indicators – the reduction of greenhouse gases, diversion of waste from landfill and the percentage of women in leadership roles.

 

Influence climate action: We are seeking opportunities to work together with our stakeholders to create positive change and we understand our ability to influence climate action is not limited to those areas directly under our control. In FY21, I became a member of the Australian Climate Leaders Coalition, a group of cross-sectoral Australian corporate CEOs supporting the Paris Agreement commitments and setting public decarbonisation targets. It provides a common voice on why decarbonisation is so important to big business to ensure long-term economic sustainability. During the year we also launched our first sustainability marketing campaign which clearly highlights our ambitions around “Together to zero” emissions and reflects that this is something we all need to work on together with all our stakeholders.

 

How do you see the jobs market for 2022 and what are your plans around working from home for employees?

 

We’re expecting a buoyant jobs market in 2022 as many businesses return to normal settings after the many lockdowns of 2021.

 

Through Covid-19 we developed a flexible model for our non-store team members, which is supported by technology.

 

In-store team members can access roster options to balance important commitments such as caring duties.

 

We are committed to supporting all team members, who want to work flexibly, it’s just one of the things that makes Coles a great place to work and how we want to improve diversity within our team.

 

We expect many store support centre employees will work both at home and at the support centre in the future.

 

How would you rate business, state and federal government performance this year?

 

As an essential service provider, Coles has worked closely with state and federal governments throughout the pandemic to ensure all our customers and communities had access to food, beverages and fuel.

 

As vaccination rates rise and we hopefully leave significant lockdowns behind, we will continue to work productively with all levels of government to support the opening-up of the economy.

 

Australia has done a good job overall managing Covid-19, we are now a leader in vaccination rates, and it will be great to see the country fully reunited again in 2022.

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Steve McCann, Crown Resorts

Markets are strong, borders are opening. What are the three top risks to recovery and growth of your company and Australia?

 

The pandemic, skills shortages and regulatory challenges.

 

Clearly Covid-19 will continue to cast a shadow over parts of the Australian economy in 2022.

 

With hospitality and tourism undoubtedly one of the sectors hardest hit by Covid-19, the pandemic will continue to affect the Australian economy and our business in the short-term. That said, Crown is pleased to see momentum building among governments at all levels to eliminate travel restrictions and open up borders. While lockdowns during the pandemic have significantly impacted economic activity, the Australian economy has shown remarkable resilience and signs of quickly bouncing back when restrictions are lifted.

 

We’d encourage governments to work towards a uniform national approach around Covid-19 measures as we emerge from the pandemic. This consistency would provide certainty to businesses making decisions on investment and people. As a nation, we also need a greater sense of urgency around preparing the economy for the inevitable rebound in travel and tourism.

 

Attracting the domestic leisure market is the immediate and biggest opportunity for the next 12 months. All the signs indicate consumers have money to spend and there is pent-up demand for travel. Research has shown us that the two reasons for travel in the medium term are visiting friends and family and literally “taking a break”.

 

With ongoing instability from Covid-19 internationally, we can expect continued caution about travelling overseas. This opportunity to capitalise on the untapped value within the domestic tourism market means that investing in world-class tourism assets that truly compete on the global stage, like Crown Sydney, will be key to Australia remaining competitive and encourage Australians to keep their tourism dollars local.

 

As domestic tourism returns, corporate travel and conventions will rebuild after that and should return quickly due to the strength of the economy.

 

Australia risks a missed opportunity if we are not ready to go when tourists are starting to make travel plans. We cannot be complacent and expect that Australia will simply reopen and pick up where we left off.

We need a coordinated and collaborative approach – not just between governments and industry, but within the industry – to ensure that we make it easier to invest in Australia. This work needs to take place now, it will be too late to wait until tourists return.

 

As we head into a likely federal election next year and a state election in Victoria in November it is imperative that there is a focus not just on the next three or four years but on a pathway to recovery and longer-term stability.

There needs to be a discussion on how to fix the long-term labour shortage in the hospitality sector.

 

Whilst international students and skilled migration can go part of the way in fixing the current gaps, we need to see an approach that highlights that a career in the sector is a stable and rewarding career path.

 

Whilst Crown continues to face uncertainty from ongoing regulatory processes, we will continue our cooperative approach with our regulators as we seek to embed the enhancements to our governance and compliance across the organisation. There is no risk of complacency as we go about this task, and it remains a priority for the business as we approach the new year.

 

How do you view inflation and how do you rate the nation’s macro-policy settings?

 

Australia’s economy continues to boast strong fundamentals, despite the sharp pandemic-driven downturn in activity during the pandemic. As the nation opens up, we can expect a pickup in spending by cashed-up consumers.

The current low interest rate environment supports confidence to consumers as we emerge from the pandemic. In hospitality and tourism, we know customers are itching to embrace the new normal of a post-pandemic world with family and friends. One of the best informal barometers on this demand is the bookings and average spend at some of the marquee restaurants at Crown Sydney. Woodcut and a’Mare are full on weekends and the average spend per customer is up. Yoshii’s Omikase and Oncore by Clare Smyth fill up once bookings are released for the months ahead.

 

We have all become used to a sustained low interest, low inflation environment and there is likely to be an adjustment behaviour if that ended. There is growing expectation of inflationary pressures and that’s an area where we are watching closely.

 

How has disruption/innovation through Covid-19 affected your sector and how can you stay competitive?

 

Covid-19 has been a massive disruptor to the Australian hospitality and tourism industry. Pandemic-related lockdowns to reduce community transmissions and restrictions on travel between states and territories – and the closure of the border to international visitors – have had a devastating impact on Crown and the hospitality and tourism industry.

 

While we supported these measures to protect the health, safety and wellbeing of the Australian community, there is no question these restrictions slammed the brakes on economic activity and hurt our business. However, the pandemic-related restrictions forced us to embrace innovative thinking about the way we deliver premium service for our customers. We are a physical experience provider, so we have prioritised safety for our guests.

 

Even though restrictions are being lifted, we have continued to apply elements of this fresh approach to provide confidence to our customers. With the backdrop of a strong economy, Australia’s relatively successful Covid-19 management will be an opportunity for both our tourism visitor numbers and the attraction of tourism investment for the future. History shows us time and again, that people will place their personal time, their investments and their future in locations that provide certainty. Australia has risen on that list – many other countries that would be competitors for tourism investment haven’t done so well.

 

What three changes are you making to address climate change?

 

Our ambition is best practice for the tourism and hospitality sector as the world transitions to a zero-carbon economy. We are currently focused on developing a better understanding of the Corporate Net Zero Standard advocated by the Science Based Targets initiative, which aims to reduce emissions in line with climate science.

 

Our CrownEarth program leads the way in reducing Crown’s environmental impacts. This program looks at all aspects of our business, including enhancing the energy efficiency of our resorts, improving our recycling rates and reducing single use plastics in our supply chain.

 

How do you see the jobs market for 2022 and what are your plans around working from home for employees?

 

Labour shortages could be a real issue for businesses, big and small, in Australia next year. Everything points to a strong jobs market and with the unemployment rate potentially starting with a “4” in 2022, it’s territory the Australian economy hasn’t explored for a decade or more.

 

There’s no question we may see labour shortages in some areas. With Crown Sydney ramping up, we will be adding to the demand for labour. We have welcomed more than 3,000 employees and contractors to Crown Sydney, at a time when the hospitality industry has been severely impacted by Covid-19.

 

We are fortunate to have our dedicated training facility, Crown College which specialises in delivering qualifications in hospitality. It’s recognised as one of the largest and most successful registered training organisations in the country. We have announced 1000 new traineeships for Crown Melbourne in 2022 and are receiving applications now. While the college provides a pool of talent for our resorts, we are also actively recruiting for experienced food and beverage personnel.

 

A reputation for premium service necessarily requires a personal touch or having people on hand to anticipate the needs of our customers. This doesn’t lend itself to working from home arrangements. Having said that, all too frequently in recent years our teams in Sydney, Melbourne and Perth have been required to remain flexible under the various pandemic-related lockdowns. We adapted quickly to operating in a virtual environment and endeavoured to initiate opportunities for our people to interact with colleagues and managers directly, as well as highlighting the range of support services available for employees.

 

On re-opening, we recognised the importance of reconnecting with team members. All our people attended face-to-face “re-onboarding” programs to develop the skills required to operate in a COVIDsafe manner. These sessions also helped facilitate a smooth transition back to the workplace. You have to remember the circumstances of the lockdowns were unique for most of us.

 

Looking ahead, we can work smarter but generally the roles and responsibilities of our team members require them to be on our premises to meet, engage and serve our customers. We are a people business and that will never change.

 

How would you rate business, state and federal government performance this year?

 

We are now well into the third financial year where economic activity has been stymied by the pandemic and the various responses by health authorities to minimise community transmission. We recognise the priority was to protect the community and can understand the strategy.

 

From a health perspective, Australia has managed the pandemic relatively well. Compared with the experience of many countries around the world, Australia’s performance has been first class. That reflects the combined efforts of Federal and state governments and the nation is well positioned to recover from the slowdown in economic activity. Our governments should be congratulated for that.

 

But the job is not done. We have to acknowledge the remarkable willingness of companies to adapt to a constantly changing and unpredictable external environment.

 

For many companies, navigating Covid-19 has been one of the biggest hurdles they’ve ever faced so it’s a credit to them and their people. It would have been much more difficult without engaged employees willing to confront the challenges thrown up by Covid-19. I know that’s certainly the case with Crown. Our people have displayed extraordinary dedication, resilience, and patience during 2021 but now they are already looking ahead to next year. They are delighted to be coming back to work and can’t wait for patrons to back in full swing and enjoying the world-class facilities on offer.

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Adam Powick, Deloitte Australia

Markets are strong, borders are opening. What are the three top risks to recovery and growth of your company and Australia?

 

Access to skills is the most significant risk we are facing as an organisation and as a nation. With our borders closed to skilled migration, we are experiencing material shortages in key capability domains such as accounting, cyber, digital, cloud, legal, M&A and risk & regulatory. We need to actively address this challenge through focused migration and education programs to avoid skills shortages putting a real brake on our economic growth.

 

The other two risks we would highlight are:

1. Continuation of our fragmented and inconsistent approach to border closures and Covid-19 management responses. Running a national business and economy is extremely difficult in an environment where state and territory jurisdictions have different, and often rapidly changing, border and health restrictions.
2. The need to look beyond short term political and economic agendas to set Australia on the path to long term prosperity. This should include considerations like industry and skills development, high tech manufacturing, fostering innovation and commercialisation, more effective connection to Asia, and properly seizing the opportunity to be leaders in clean energy transition and export.

How do you view inflation and how do you rate the nation’s macro-policy settings?

 

There’s been lots of talk about inflationary pressures. Supply chain bottlenecks, skill shortages and the global energy crunch are pushing up some prices in Australia and globally.

 

However, our Deloitte Access economists believe the current price rises primarily reflect pandemic-induced disruptions that are impacting the supply of goods and services rather than an indicator of an economy growing too fast or too slow and that pressure on prices will subside during 2022.

 

How has disruption/innovation through Covid affected your sector and how can you stay competitive?

 

Covid-19 has acted as a catalyst to significantly accelerate transformation that was underway in our sector and the broader economy. The most obvious shift has been in the domain of remote work and the need for organisations like us to embrace more flexible, hybrid working models, which provide appropriate work life balance for our employees.

 

Covid-19 has also significantly accelerated the digital agenda for many organisations including our own as we look to underpin our service offerings with digital and data solutions and strengthen the way we use digital technology to engage with our clients and people and improve our business operations.

 

On the downside, Covid-19 has resulted in significant skill pressures and shortages across our sector and many parts of the economy and that is why we were an early mover on encouraging vaccination to facilitate border reopening.

 

To stay competitive, we are focused on our talent agenda and elevating the value we can provide our people in areas like learning, coaching, flexibility, culture and diversity. From a market perspective, our goal is to be the most digital and innovative professional services firm in Australia. We are also focused on building market leading capability to serve the needs of our clients in high priority domains such as digital transformation, climate transition, future of work, growth & innovation and risk & regulation.

 

What three changes are you making to address climate change?

 

We are focusing on three core pillars of activity – reducing our carbon footprint as an organisation, having a leading voice in shaping Australia’s climate change response, and delivering market-leading climate action services for our clients.

 

At Deloitte Australia, we have committed to being Net Zero by 2025 and have taken action across several domains – ensuring all our energy contracts are 100 per cent renewable, investing in high impact carbon off-setting initiatives, and rolling out a global eLearning program – co-designed with the World Wildlife Fund – to enable our people to better understand this important topic and build their own personal action plans.

 

Nationally we have been front and centre in re-framing climate change from a negative cost issue to one that balances environmental and economic opportunity – a shift that has fundamentally changed the dynamics of the debate. Our work with the Business Council of Australia and our role in establishing the Climate Leaders Coalition has helped galvanise business to lead Australia’s drive to a net zero future.

 

Ultimately we believe our most important impact is to influence and support our clients turn net zero ambition into action. To meet this challenge, we have elevated Climate & Sustainability to our most important market agenda, enabling us to marshal investment and the full-service capability of our firm to support our clients’ climate transformation agendas.

 

How do you see the jobs market for 2022 and what are your plans around working from home for employees?

 

We are in the midst of a very tightly constrained talent market that has been brought on by border closures and mobility restrictions, as well as significant pent-up demand from clients. While the re-opening of our international borders will provide some relief, we believe these conditions are firmly embedded and it will be several years before Australia’s professional talent market returns to some normalcy. So we predict a continuation of a fluid, highly competitive job market in 2022.

 

In such an environment, talent attraction and retention are increasingly important. One of our key priorities is supporting our people to work more flexibly, including from home. This year we launched the Deloitte Experience as our new way of working to empower our people to make choices about where and when they work based on client, team and individual needs. This program has been very well received and we have recently extended DX to include support for our people travelling overseas so they can spend more time with their families as global borders re-open.

 

At the end of the day, our people want more choice in the type of work they do and where and when they do it. Employers like us are redesigning how work is done underpinned by concepts such as flexibility and digitisation to accommodate this fundamental shift.

 

How would you rate business, state and federal government performance this year?

 

2021 has been a complex and challenging year, but Australia has fared relatively well from a health and economic perspective. While we have experienced some inconsistent and conservative government health settings, we have also seen the deployment of appropriate economic support and stimulus packages and the Australian economy has navigated the events of the past 12 months in decent shape.

 

In 2021, Australian businesses generally took the mindset of investing beyond Covid-19 and we have seen a greater focus on growth, innovation and transformation compared with 2020. Importantly business is increasingly working together and leading on key national topics like climate change, skill shortages and workforce diversity.

 

From a Deloitte viewpoint, our business has performed strongly over the past six months and has returned to better than pre-pandemic levels of growth and performance. As a result, and in line with many businesses, we are looking forward to 2022 with confidence.

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Mark Allison, Elders

Markets are strong, borders are opening. What are the three top risks to recovery and growth of your company and Australia?

 

Elders has been fortunate to have experienced limited operational impact from Covid-19 to date. We were able to capitalise on favourable agricultural production conditions to deliver a record earnings result in our financial year ending September 2021.

 

The top three risks to Elders’ continued growth are: (1) global supply chain pressures, (2) geopolitical issues and (3) climate change.

 

The global shipping crisis initiated by uneven post-pandemic recovery of countries has coincided with high global demand for agricultural inputs such as fertiliser and herbicides and production constraints in key source countries. As a result, we are seeing supply constraints and record high agricultural input prices which has potential to limit production in 2022. Fortunately for now, strong commodity prices for outputs such as grain is supporting continued investment in production despite the higher cost base.

 

Geopolitical issues and climate change are inescapable risks in agriculture, Covid-19 notwithstanding. Despite strained trade relations with China in recent times, Australian farmers enjoy access to a diverse range of export markets and we expect this to continue in 2022. Export limits on key agricultural inputs is a watch out, with China and Russia recently restricting exports of fertiliser to ensure sufficient domestic market supply.

 

Climate change will also be a key driver of weather volatility and with La Nina, we expect a wet year ahead with localised flooding which has potential to damage crops and limit production in some areas.

 

The biggest threat I see to recovery and growth of Australia as a country is the emergence of new Covid-19 variants and we will know more on this front as the potential impact of Omricon becomes clearer in the coming weeks.

 

How do you view inflation and how do you rate the nation’s macro-policy settings?

 

Inflation has responded to accommodative fiscal and monetary policy settings and is now at the bottom of the RBA target band. Further upside pressure is possible in 2022 from global supply chain inefficiency, which may prompt a tightening of macro settings sooner than currently contemplated.

 

How has disruption/innovation through Covid-19 affected your sector and how can you stay competitive?

 

Covid-19 has disrupted our ways of working and driven significant digital adoption and innovation.

 

Remote working & travel constraints has led to a rediscovery of regional and rural Australia, drawing more people into the regions, and opportunities for Elders and agriculture to attract new talent.

 

The accelerated adoption of new technologies has enabled Elders to realise growth through our online platforms, such AuctionsPlus (where we have seen 48 per cent increase in user registrations and 78 per cent increase in website audience) and Clear Grain Exchange (where we achieved record volumes in FY21), which have provided new trading options for vendors, agents, brokers and buyers through Covid-19.

 

In recognising the importance of continuing to develop digital innovation and infrastructure, Elders has embarked on the first phases of our Systems Modernisation program aimed at delivering a more customer centric, cost efficient and enabled business.

 

In many ways, disruption has had a positive impact on the sector’s willingness to adopt agricultural technology. Far from challenging our ability to remain competitive, disruption has increased our opportunity to respond to customer needs in increasingly agile ways with new tools and greater agtech adoption.

 

What three changes are you making to address climate change?

 

Elders is on the path to full alignment with the TCFD Recommendations. We have set short, medium- and long-term climate-related targets to support our transition to net zero emissions by 2050. We aim to achieve our targets by strategically transitioning to renewable electricity, reducing our emissions intensity and by participating in research and partnering with industry on the development and implementation of technology to tackle the carbon footprint of our cattle.

 

How do you see the jobs market for 2022 and what are your plans around working from home for employees?

 

Job Market: Across Australia there is a lack of migration, aging population and slowing population growth so this means we are expecting the tight labour market to continue in Australia for some time. As an employer our annual employee turnover is 13% and while there is talk about the ‘great resignation’ Elders is clear on our employee value proposition, and confident how this positions us as a preferred employer. This is evidenced by our consistently high employee engagement scores across all segments of our workforce. The Covid-19 pandemic has contributed to a shortage of casual labour in the Australian Agriculture sector, so we are involved with initiatives like Harvest Force to support our growers in getting access to labour.

 

Working from home: We think about our workforce in 2 segments – (1) those in our Branches and warehouses across rural and regional Australia, and (2) those in offices in metropolitan locations. For our people in rural locations, they are client facing roles either in store or on farm, so often working from home is not an option. For our people in metropolitan locations, they are office-based roles and therefore we have been working on a hybrid basis between home and the office in line with state government regulations. We have had a flexible work policy in place for some time now which does provide for working from home arrangements so this will continue to be part of how we work.

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Steve Donohue, Endeavour Group

Markets are strong, borders are opening. What are the three top risks to recovery and growth of your company and Australia?

 

We’re positive about the outlook but do anticipate ongoing volatility, so it’s important that we continue to remain agile in how we respond to change.

 

The key risks to recovery and growth for our business will include any further Covid-19 impacts, our ability to maintain access to team members with the skills and experience to fulfil the wide variety of roles we require, and supply chain related risks.

 

Dealing with these challenges while achieving our growth and sustainability aspirations will largely rely on a continuation of the strong Australian economy, as well as a collective commitment to improve social, environmental and economic outcomes. We’ll work to support that by delivering on our group purpose of “creating a more sociable future together”.

 

How do you view inflation and how do you rate the nation’s macro-policy settings?

 

Like all business operators, managing the impact of inflationary pressures is an important part of operating our business successfully. At present we are experiencing both supply chain disruptions and skilled labour shortages, which will likely cause some cost inflationary challenges, but we’re also simultaneously working on various productivity improvement initiatives with the purpose of largely keeping the impact of that inflation in check.

 

How has disruption/innovation through Covid-19 affected your sector and how can you stay competitive?

 

One of the most significant changes flowing from the Covid-19 pandemic across the Retail and Hospitality sectors, and indeed all aspects of society, has been the acceleration in digital adoption.

 

As a business, we’ve seen first-hand how the pandemic has changed the way consumers shop retail and the rapidly changing experience of hospitality patrons, given the growth of online and low touch activities. We’ve adapted quickly to these changes and we’ll need to continue to do so in order to stay competitive.

 

In F21 we saw strong growth in traffic across our digital channels, ecommerce grew by 35 per cent across our retail business as customers chose more convenient and contactless ways to shop, and the introduction of contactless ordering technology in our hotels has been very successful. Continuing to improve customer experience and customer engagement through our digital channels; improving convenience; increasing engagement with our apps; and delivering on the personalisation promise across multiple channels and customer touch points will continue to be focus areas for us.

 

What three changes are you making to address climate change?

 

We recently announced our first sustainability strategy, which is built around three core principles - Responsibility & Community, People and Planet. Under the Planet principle, we have committed to having 100 per cent renewable electricity by 2030 and net zero emissions by 2050.

 

We’re now working on developing our detailed plans for reducing the climate related impacts of our businesses in order to meet our targets. This involves exploring what changes we need to make and the most appropriate pathway for us, including where we source our renewable electricity, what potential technologies will help us, and working with industry and our partners to find solutions in managing both climate change and our natural resources.

 

How do you see the jobs market for 2022 and what are your plans around working from home for employees?

 

I’m optimistic about the prospects for the Australian economy going into 2022, given the positive indicators we’re seeing for employment as restrictions have eased and businesses invest to grow.

 

However, we’re already experiencing a shortage of skilled labour, and I’d expect that we will get back to close to full employment next year off the back of the reopening of sectors like hotels and hospitality. So our focus as a country needs to be on returning to as close to pre-pandemic settings as is possible, including becoming a destination for international travel once again in order to support the skilled migration that industries such as hospitality rely on.

 

When it comes to working from home, we’re a diverse business with teams operating across retail, hotels, winemaking, technology, distribution and support offices, so the function of the various workplaces varies greatly, as does the ability for people to work remotely.

 

Our goal is to continue to offer as much flexibility as possible to support individual workstyles, while balancing the needs of the business and ensuring our culture continues to thrive.

 

We believe a hybrid model is a good option for our office-based teams, given our people want to have flexibility, but equally, believe in the importance of the workplace for collaboration, connection and coaching.

 

How would you rate business, state and federal government performance this year?

 

Given the experience that we’ve had with Covid-19, I think the performance of all stakeholders involved has been good. We shouldn’t forget that we’re nearly two years into an unprecedented global crisis and that hindsight is 20/20. I think everyone has done their best to adapt, to maintain open lines of dialogue, to listen to key inputs and to try and make the best decisions possible in the interests of all Australians.

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Mark Collette, EnergyAustralia

Markets are strong, borders are opening. What are the three top risks to recovery and growth of your company and Australia?

 

We’re doing our best to ensure that our power system remains strong, stable and continues to meet consumer demand through the energy transition. The change from a coal-based system to a renewables one is underway and exciting – and Australia can do this well.

 

There are problems to solve along the way, things like ensuring we have enough backup in the system to supply customers through all weather conditions and supply shocks. We need more than just solar, wind and batteries to power Australia reliably. We may need a few technologies not yet available. Understanding this and working on the problem now is essential given the long lead times involved.

 

As the power sector transitions, the skills we need change. We are investing in learning and development for our people and recruiting for additional skills. Our success in building and developing the team will be the main driver of how well we meet the needs of our customers and Australians.

 

We also need to ensure customers experiencing financial hardship continue to receive the support they need. The past two years have been extremely tough for some. We will be in recovery mode when all Australians have recovered from the effects of Covid-19.

 

How do you view inflation and how do you rate the nation’s macro-policy settings?

 

I’m leaning towards the view that inflation is on the rise and likely to persist for a few years, broadly driven by demand growth exceeding supply. I tend to see supply growth being slowed by our global societal desire to produce commodities more sustainably – generally, better outcomes take more planning.

 

Australia has a great record in getting big macro policy decisions pretty much right in recent decades. If inflation bites, I see rising income inequality is the main issue to address. I suspect governments will need to reconsider if current settings provide enough of a fair enough go for all Australians. In particular, lower income families and workers, and communities facing economic transitions come to mind.

 

How has disruption/innovation through Covid-19 affected your sector and how can you stay competitive?

 

When the coronavirus pandemic was at its peak, we marshalled resources toward supporting customers experiencing hardship. We doubled our EnergyAssist team and tailored plans to ensure customers’ lights were kept on and debt didn’t spiral out of control. Out of the pandemic, we also created a dedicated program called Rapid Business Assist, which has supported hundreds of small businesses with their energy needs.

 

Ensuring we keep the lights on during summer, we had to rethink how we do major maintenance at our generating assets. For example, at Yallourn we introduced new measures to make the work site COVID-19 safe by installing huts at different sections of the plant and temporary lifts to promote social distancing. By continuing this work, we contributed tens of millions to the Latrobe Valley region.

 

The pandemic did not stop us from innovating either. From new solar and battery products such as Solar Home Bundle or committing to modern energy projects, I am so impressed at how our people managed their sometimes-chaotic lives to deliver for our customers.

 

What three changes are you making to address climate change?

 

We are addressing climate change with action. We recently updated our Climate Change Statement, which now includes specific emission-reduction targets to give communities and our customers confidence in our approach. Our declaration now publicly commits to being net zero (scope one, two and three) by 2050, to be out of coal by 2040, and to reduce our direct emissions by 60 per cent by 2028/29 relative to this year.

 

This year we also brought forward the closure of the Yallourn power station to mid-2028 and committed to a large battery of 350 MW capacity by 2026. We underpinned the 250 MW Kidston pumped hydro facility in Queensland. We committed to and are building the 300+ MW gas and hydrogen fueled Tallawarra B power station in New South Wales. The project’s emissions will be fully offset over its operational life.

 

At a customer level, we offer the opportunity for our customers to offset their carbon emissions through Go Neutral as well as ways they can curb their energy use on the very hot days with PowerResponse. We have also just launched a great solar, battery and grid energy plan in NSW, called the Solar Home Bundle.

 

How do you see the jobs market for 2022 and what are your plans around working from home for employees?

 

It’s a great time to be building a career. 2022 is starting with demand across many job families: digital, customer, retail, hospitality, it’s all pretty strong. In this environment, jobseekers are looking for employers with a great working environment.

 

EnergyAustralia is committed to flexibility, based around teams in a way of working we call Energise. Each team agrees to a style that works for them individually as well as their broader team. Typically, there is some time in the office and some time working from home, it’s up to the team.

 

We recognise work is more than just tasks - connection and inclusion are core to our success. So we are very much looking forward to more in person time and events in 2022.

 

How would you rate business, state and federal government performance this year?

 

All things considered, Australia has had a great year and governments have taken tough choices in difficult circumstances. Business has been just outstanding in the way that goods and services have continued to flow throughout the vagaries of another Covid-19 year.

 

Covid-19 has shown what government and business can achieve together. I hope to see us take this sense of joint focus into longer term reform actions in 2022. There is much still to do, for example, in framing an orderly transition of the energy system, finishing the work of the Energy Security Board, and ensuring that local communities and customers are not left behind.

 

I hope 2022 is a year where we return to thinking of ourselves as Australians. Politics is local and I think we all understand why we have had different rules in different states in recent years. Every family has a tale of how this had made their lives harder – I’d love to see families, and businesses, come back together in 2022.

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David Larocca, EY Oceania

Markets are strong, borders are opening. What are the three top risks to recovery and growth of your company and Australia?

 

EY has performed strongly through the pandemic and made no redundancies nor did we cut anybody’s pay. The firm posted a pleasing 9 per cent increase in annual revenue to $2.31bn, thanks to the outstanding contribution of our people and client demand particularly in strategy, transformation and sustainability. We see this demand continuing.

 

The consistent conversation we are having with our clients across industry sectors is ESG, particularly decarbonisation – and how we can help them in that transition.

 

The top three risks to growth are skills shortage, skills shortage and skills shortage. It is likely that Australia will be a net exporter of talent in the short-term – however we have an opportunity to make Australia ‘the place to be’ for skilled talent, because of the way our country has handled the pandemic. This means governments and the private sector working closely together to make it easier, faster and less costly to get skilled talent into the country.

 

As EY, we’re addressing this through a focus on ensuring we’re the best professional services firm to work for – keeping the great people we have, both in Australia and internationally, – and attracting professionals from diverse industries.

 

How do you view inflation and how do you rate the nation’s macro-policy settings?

 

We are seeing inflation in both asset prices - especially house prices - as well as wholesale prices and most recently consumer price inflation. US headline inflation is above 6 per cent annual, and at 3 per cent in Australia. Bond markets are reacting with yields both volatile and rising.

 

Our EY Chief Economist Jo Masters says we are “in the middle of a perfect storm”.

 

With government stimulus, cashed-up households’ spending on goods has hit Covid-19 - related disruption to global production of goods and shipping routes.

 

Nobody knows how transitory these pressures will be. In our view, at least some of the pressure is temporary. Household spending should pivot back to services, and production and shipping lanes should adjust to a new normal.

 

There is a risk that higher inflation will embed in wage setting and inflation expectations, but wages are sticky in Australia: 40 per cent of the labour force operates under enterprise bargaining arrangements which are only re-negotiated every few years, while 20 per cent is employed by government and largely under wage caps or freezes.

 

We think letting inflation and wage growth run a bit fast will provide an opportunity to lift interest rates away from zero, provide a real wage boost after many decades of no growth. While Australia is very good at containing inflation that is too high, we are not good at lifting it when it is too low.

 

We expect bond yields and fixed rates to continue to rise, and the next move in the cash rate will be up, but probably not before 2023. And we are talking higher interest rates, not high interest rates. Indeed, given the amount of debt in the world, we think the real neutral cash rate is about zero, which implies a nominal rate of 2.5 per cent.

 

How has disruption/innovation through Covid-19 affected your sector and how can you stay competitive?

 

To stay competitive through Covid-19 it has been vital to keep close to our people, stay connected and support their health and well-being. Innovative and increasingly sophisticated use of technology has helped give this sense of connection with our clients and to reduce the cognitive load on our people.

 

A lack of access to skilled migration and a challenging recruitment market has meant we have had to double down on our Employer Value Proposition – we are fortunate to be a truly global organisation and this helped us deliver services seamlessly during the pandemic.

 

We’ve taken a ‘health and well-being first’ approach - saving lives, saving jobs and positioning the business for the long-term.

 

We didn’t make any Covid-19 related redundancies and we are seeing high engagement levels from our people which is really helping as we come out the other end, post pandemic lockdowns. We have also focused on creating space for our people – by announcing two days where we completely shut the Firm, with the amazing support of our clients. We called these days “EY Unplugged” and ran them in October and November.

 

Covid-19 has also forced us to more quickly adapt to new ways of working, from the inability to travel, to not being able to be onsite at our clients, to the fast pace change that disruption brings and what this means for businesses – again technology has played a huge role in helping us serve our clients during these strange times. We have been able to take our own experiences and learnings to our clients which has kept us competitive. The way we conducted audits almost entirely remotely is a great testament to that.

 

What three changes are you making to address climate change?

 

We see climate change and sustainability as the most pressing issue of our time. We are committed to making business work for sustainability as well as sustainability work for business.

 

Three changes we have made include:

• One of the first appointments I made as CEO was Mathew Nelson as our EY Oceania Chief Sustainability Officer. Mat sits on our Executive Leadership Team, and we are the first to appoint a leader with this role in our industry in Australia. In this role, he will bring together the firm’s expertise, experience and capabilities to help our clients unlock economic opportunity through transitioning to net zero. We have also welcomed Emma Herd, former IGCC CEO as an EY Partner, who joins Blair Comley, Terence Jeyaretnam, Adam Carrel and our other leading experts on climate change and sustainability.
• As a market leader on climate change, we have strengthened our offering to enable clients to put sustainability at the centre of how value is created.
• As EY we have achieved carbon negative status early this year, and with reduced energy consumption and travel, we are on track to achieve net zero by 2025.

How do you see the jobs market for 2022 and what are your plans around working from home for employees?

 

Today’s recruitment market is the tightest we have seen in 25 years and talent attraction and retention is a constant topic of conversation amongst our clients. And it will get harder before it gets easier as international borders re-open.

 

EY has been proactive in it’s planning for next year. We’ve hired 100 overseas recruits, mostly from Europe and the UK, who will arrive in January. We’re also doubling our recruitment of new graduates in 2022.

 

We have always embraced and promoted flexible working, with our people working remotely, from home or from client sites. We are seeing the office increasingly becoming the place for making in-person connection, collaboration and ‘informal’ learning – so we are re-imagining our work places to maximise this.

 

We also know that a lot of our people have really missed the social aspects of being in the office with their teams, so expect many will choose to return to the office some or all of the time. We are also using and adapting technology to ensure the best possible working environment for our people that maximises their health, well-being and productivity, no matter where they are located.

 

How would you rate business, state and federal government performance this year?

 

From a business perspective, we have had a remarkable year and I am incredibly proud of how our people have navigated through the challenges brought on by Covid-19. We’re heading into the summer with strong momentum and results across all parts of the business.

 

Government has obviously been instrumental in the management of the pandemic and building resilience -– at the federal level to keep Australia’s economy strong – and at the state level providing essential support to impacted workers and businesses.

 

However, Covid-19 has also shone a light on the important roles all levels of government play during a crisis – so we will continue to encourage state and federal governments to, where possible, set aside political leanings and work constructively together to pursue opportunities to maximise Australia’s economic prosperity as it emerges from Covid-19.

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Elizabeth Gaines, Fortescue Metals

Markets are strong, borders are opening. What are the three top risks to recovery and growth of your company and Australia?

 

As new variants such as Omnicron continue to emerge, I believe that Covid-19 will remain a significant risk to economic recovery. In particular, ongoing border restrictions in Western Australia are limiting the return of critical skilled workers to address labour shortages and the much-needed boost for business investment and growth.

 

Investment and job creation will be vital to Australia’s economic recovery, and it is important that we have the appropriate policy settings in place. This includes clear and efficient approvals processes and cutting red tape for business, particularly with respect to investments in new technologies supporting the transition to clean energy.

 

Similarly, a focus on training and skills development to support the green industries of the future will be vital, as well as policies that are supportive of women in the workforce to ensure we are unlocking the economic potential of all Australians.

 

Australia’s mining and resources sector has performed well through the Covid-19 pandemic, generating new record highs of almost $300bn in export revenues during the 2021 financial year, delivering significant economic benefits through employment and the payment of taxes and royalties.

 

The strength of the iron ore sector and its significant contribution remains directly related to our relationship with China and as we look toward 2022, engagement is critical to supporting this important bilateral trade relationship.

 

How do you view inflation and how do you rate the nation’s macro-policy settings?

 

We are seeing inflation attributable to the rising cost of diesel and other production input costs, as well as wage increases resulting from shortages in specialist skills due to ongoing state border restrictions. Fortescue’s strong focus on cost management means we have been able to largely mitigate these inflationary pressures to maintain our industry leading cost position.

In our view, Australia’s macro policy response to Covid-19 has been largely successful in helping to steer the nation through the worst of the pandemic, importantly through income support for businesses, households and individuals.

 

Looking forward, I would encourage the government to ensure our tax regime is globally competitive and to provide further incentives for business investment, especially in the future growth areas of renewables and green energy.

 

How has disruption/innovation through Covid-19 affected your sector and how can you stay competitive?

 

Fortescue has been in a privileged position to continue operating through the Covid-19 pandemic, and through the hard work and commitment of our team members, we have seen two consecutive years of record operational performance and financial results.

 

When I reflect back on the past year and the Covid-19 pandemic, the phrase ‘never waste a crisis’ springs to mind and the challenges we have encountered have reinforced Fortescue’s culture and Values – our approach to empowering our people and focus on family meant we were able to adapt to change quickly.

 

This ability to innovate and adapt will remain critical as we look to turn disruptions into opportunities, including our ongoing investment in new technologies to accelerate the decarbonisation of our operations to achieve our target of carbon neutrality by 2030.

 

What three changes are you making to address climate change?

 

Firstly, we have set targets that acknowledge the need for the energy transition to happen far more rapidly if we are to meet global climate change goals. During the year, we announced our ambitious targets to be carbon neutral by 2030 for Scope 1 and 2 emissions and achieve net zero Scope 3 emissions by 2040.

 

We are transitioning from a pure play iron ore producer to a green renewables and resources company and have established Fortescue Future Industries. We believe green hydrogen is the fastest way to decarbonise all industry, including hard to abate sectors, and through FFI we are establishing a global portfolio of green hydrogen and green ammonia projects to fast track the world’s green energy transition.

 

Fortescue is also investing in cutting-edge decarbonisation technologies through Fortescue Future Industries to progressively eliminate the need for diesel across our operations.

 

During 2021, our Green Fleet Development Team has been managing and trialling technology on renewable hydrogen, ammonia and battery power for trains, ship engines, haul trucks and drill rigs. The team have made significant progress including the successful design and construction of a hydrogen powered haul truck for technology demonstration, the first of its kind in the world.

 

This work will remain critical in 2022 as part of our emissions reduction pathway.

 

How do you see the jobs market for 2022 and what are your plans around working from home for employees?

 

There are some key areas where we are seeing shortages in specialist skills as a result of Covid-19, including electricians, heavy diesel fitters and mine engineers, however our early adoption of automation across our operations has helped to limit our exposure to other skill shortages experienced by many in the industry.

 

Fortescue’s flexible work practices have been in place for some time, supporting our commitment to building a diverse and inclusive work environment. In addition to working from home, other options include flexible start and finish times and job share arrangements, including for our FIFO employees.

 

Throughout the Covid-19 pandemic, we have seen more of our team members utilise and enjoy these flexible arrangements, while continuing to achieve operational records and deliver outstanding performance for the business.

 

How would you rate business, state and federal government performance this year?

 

The performance of governments and businesses across Australia should be commended, given the ongoing challenges and uncertainties throughout 2021 as a result of Covid-19. Australia’s vaccination rollout has seen a remarkable take up despite the slow start, and this will be vital to providing confidence for business investment and job creation in 2022.

 

It was encouraging to see the federal government adopt a net zero emissions by 2050 target, however a more ambitious target for 2030 is needed to reflect the urgent action required to tackle global warming during what is a critical decade in the fight against climate change.

 

In Western Australia, close collaboration between the state government and the mining and resources sector has meant that we have been able to continue operating safely through multiple lockdowns. We look forward to state borders re-opening in the new year and will continue to work closely with all relevant authorities to keep our team members, their families and our communities safe.

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Greg Goodman, Goodman Group

Markets are strong, borders are opening. What are the three top risks to recovery and growth of your company and Australia?

 

Demand for high-quality industrial real estate close to consumers has never been greater and it’s great to see the economy and confidence improving. The top three risks to this though are the unpredictability of Covid, financial market risks, and the health and wellbeing of our people and the communities we operate in.

 

The pandemic has caused us all to rethink what we do and how we do it. While for our business, it has meant that our development workbook has been accelerated to keep up with demand for warehouses as e-commerce adoption increased, the unpredictability of Covid-19 for the wider economy creates uncertainty.

 

We are keeping a close eye on the financial markets around the world, with emergence of new strains of Covid-19. Levels of global debt, interest rates and inflation are the key issues we’re monitoring.

 

The third risk which is not new, is people. How do we protect and support the health and wellbeing of our people, while we continue to attract and retain the best talent? We invest significantly in keeping our people energised and optimistic about the future. What’s new is the significant toll Covid-19 has taken on people over the last couple of years You can’t underestimate this impact.

 

How do you view inflation and how do you rate the nation’s macro-policy settings?

 

Globally, inflation is a function of the disruption around the world in the last 18 months. A big element of this has been supply chain disruption, which we have been adapting to. At the moment there’s clearly a spike which we have allowed for in our planning and business strategy.

 

How has disruption/innovation through Covid-19 affected your sector and how can you stay competitive?

 

Covid-19 has accelerated the structural changes we’ve been seeing around the world. The way we live, shop and work, has evolved. Global e-commerce sales grew almost 30 per cent in the pandemic as consumers wanted everything faster, greener, safer. As a result, industrial real estate is now recognised as essential infrastructure, to support people’s changing lifestyles in the digital economy.

 

These are structural changes that Goodman has spent the last decade preparing for. We’ve positioned our portfolio to leverage the ongoing e-commerce and retail evolution, and the increased consumer expectations that go with it. E-commerce is set to account for 20 per cent of all retail sales globally by 2025 and will be up to 30 per cent in some markets. This means that the demand for warehouses in the major cities around the world will continue to be high.

 

Our strategy, and the focus of our $13bn development workbook, is on infill locations close to consumers, where sites are scarce, and barriers are high. These are more highly valued by our customers and achieve higher cash flow growth for our investors over time as well as help reduce our impact on the environment.

 

We will stay competitive by delivering our long-term strategy, focused on quality, strategic locations, people, and sustainability. We’ll keep looking at long term trends and understanding how to stay ahead of them. Running a global business, we have to be agile and entrepreneurial enough to adapt to evolving marketplaces and situations, and retain quality people to execute.

 

What three changes are you making to address climate change?

 

Goodman is focused on regenerating urban infill sites, greater intensification of use of the land through multi-storey building and driving more efficiency out of our buildings through technology. Along with our capital partners, we’re investing over $700m over the next five years on sustainability initiatives, with the top three areas being:

• Maintaining carbon neutral operations and reducing operating emissions
• Measuring, reducing, and offsetting embodied carbon in our development program
• Investing in renewable energy across our portfolio, including buying 100% GreenPower electricity for our operations in Australia, and including solar PV where we have achieved more than 30% of our global target of 400MW to date.

How do you see the jobs market for 2022 and what are your plans around working from home for employees?

 

One of our strengths is our ability to attract and retain good people.

 

That’s a result of the hard work we put in to having the right culture in the organisation. This includes ensuring everyone acts in line with our purpose, that they live our values, and they think long-term. This is supported by having everyone participate in the long-term incentive plan, so our whole team globally are long-term owners of the business, aligned with our securityholders.

 

Goodman had already introduced the concept of flexible working into our operations prior to Covid-19. The pandemic accelerated working from home but as we had the technology infrastructure in place, so there was limited disruption when our teams around the world had to go into lockdowns at various times.

 

Flexible working is now normal at Goodman. It suits our culture and our global operations. It also protects our teams and increases our productivity and over time we believe it will improve diversity. We won’t be going back to working in the office full time, five days a week, so working from home will certainly continue as part of the mix. Most of our people, myself included, take a hybrid approach, where we generally go into the office two to three days a week and organise our work accordingly. Of course, there are times where will spend more time in the office or more time at home. The key is that we trust our people to do the right thing and get the job done. We focus on measuring outcomes and providing effective communication.

 

How would you rate business, state and federal government performance this year?

 

We really all just need to buckle down and get on with the job of moving our country forward - together. While it’s been a challenging year, what’s been most disappointing to see has been the fractious nature of discourse in the country. It’s been sad to see the needless division and arguments taking place. It doesn’t matter where you’re from or where you live, or where you sit on the political spectrum, we’re all living in this great country, Australia. We need to treat each other better, with mutual respect and work together so that we can leave the place better than we found it for future generations.

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Bob Johnston, GPT

Markets are strong, borders are opening. What are the three top risks to recovery and growth of your company and Australia?

 

The main risk to Australia’s recovery and the path that it takes is the ongoing management of Covid-19 and various strains that will no doubt continue to emerge as borders reopen and mobility increases. With the high levels of vaccination, I am optimistic that we will not see major disruption to economic growth as we have done in the last 2 years.

 

The re-activation of our CBD’s is also vitally important to the recovery. Covid-19 has accelerated changes in flexible working and how people live and work. Our CBD’s however remain vitally important to the recovery generally and particularly for many small and medium enterprises who are large employers of people.

 

Business and consumer confidence remaining positive will also be important to the recovery. Interest rates and the housing market will have a big bearing on consumer confidence and while interest rates will rise over time, policy settings will need to adjust gradually in order to ensure that economic growth is maintained.

 

How do you view inflation and how do you rate the nation’s macro-policy settings?

 

While underlying inflation remains relatively low we have seen inflationary pressure in certain areas of the labour market given limited access to foreign skilled workers, and in building materials costs as a result of ongoing supply chain disruptions. As our borders reopen and supply constraints ease, we should see these pressures abate somewhat during 2022. So overall our view is that the inflationary pressure will be transitory in nature and the macro-economic settings in place have been effective with core inflation at the lower end of the RBA’s target band.

 

How has disruption/innovation through Covid affected your sector and how can you stay competitive?

 

Covid-19 has accelerated a number of trends in the property sector. Technology is facilitating innovation and change in the property sector, and this will continue to be a driver of change into the future. A strong customer focus is key to remaining competitive in the sector as the needs of customers continue to evolve. The focus on ESG has become increasingly important to investors and customers, and ongoing innovation in this area will be increasingly important.

 

There has clearly been strong demand for logistics space with a high focus on efficient movement of goods, inventory management and growth in ecommerce being key drivers of demand and we expect these drivers will continue to underpin strong demand well into the future.

 

Flexible working has become part of the norm for many businesses and we expect that this trend will continue into the future. This is likely to result in businesses considering what their workplace requirements are in the future. There is no doubt that the workplace remains important to businesses to help shape their culture and the learning experiences for their people, as well as to implement business growth opportunities.

 

While Covid-19 has accelerated growth in ecommerce we are also seeing a strong response from customers wanting to return to physical retailing. Many retailers during Covid-19 have invested in both their on-line and physical store experiences are benefitting from strong sales growth and using their physical stores as distribution hubs for their on-line channels. Many new brands and products have also been released and retailers want to be able to showcase these brands through their physical store presence.

 

What three changes are you making to address climate change?

 

The GPT Wholesale Office Fund’s operating portfolio achieved carbon neutral certification in 2020 and GPT expects to achieve carbon neutral certification of its managed assets by 2024, through building efficiencies, using only renewable electricity, and offsetting residual emissions from gas and waste with Australian reforestation projects. Furthermore we are also piloting Smart Energy Hubs that can flexibly adjust demand, store energy in batteries and generate energy on site. We are also introducing initiatives to reduce the amount of embodied carbon in our new property developments.

 

How do you see the jobs market for 2022 and what are your plans around working from home for employees?

 

We expect the jobs market to remain very competitive in 2022 particularly in areas like technology, risk management and sustainability.

 

Flexible working arrangements are common place at GPT but I expect that our people will spend the majority of their work week in our offices to ensure that they still get the benefit of teamwork, collaboration, networking and experiential learning opportunities.

 

How would you rate business, state and federal government performance this year?

 

Overall the business community has shown its adaptability and agility to navigate successfully through the pandemic and uncertain operating conditions that have come along with it. In 2020 there was a greater level of uncertainty given vaccines were not available and the extent of the disruption was difficult to predict.

 

In 2021, despite the lockdowns there was a greater level of optimism that once we had the vaccines rolled out we would see a more sustained recovery. Businesses provided support through encouraging their employees to be vaccinated as the government accelerated the rollout program. The economic recovery has benefitted from the collaboration between government and business. While the different approaches by each of the state government’s to dealing with the pandemic brought with it unique challenges, overall I think that the various levels of government have managed the Covid-19 disruption reasonably well.

 

In terms of climate change, business continues to provide leadership and set emissions reduction targets ahead of the federal government’s targets. The transition to a low carbon economy will require business and government to work collaboratively over the next decade to continue to deliver economic growth and a low carbon future

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Robert Spurway, Graincorp

Markets are strong, borders are opening. What are the three top risks to recovery and growth of your company and Australia?

 

Labour supply continues to be an issue particularly across regional Australia. While pandemic restrictions have been relatively short-lived in most regional areas, these areas have been cut off from the usual supply of backpackers and domestic travellers.

 

Leading on from that, there is plenty of competition between government projects and other investments and the private sector for skilled workers.

 

For Australia, progress on climate change commitments in an economically sustainable way is critical to maintain Australia’s reputation as a high-quality food producer. Meaningful reductions in Australia’s emissions are important to avoid the risk of carbon tariffs or taxes that could reduce our global competitiveness as an export nation.

 

How do you view inflation and how do you rate the nation’s macro-policy settings?

 

High productivity and a growing economy will be critical to recovering from the pandemic and paying down public debt. Inflation within the RBA target range will also support those objectives.

 

Enabling our economy to operate as normal without lockdowns or constraints will be important. I’d like to see the government provide policy settings that deliver confidence and certainty and reduced intervention such as border closures.

 

I’d also like to see the government deliver on commitments to reduce red tape and simplify the regulatory environment especially where it differs between state jurisdictions. Significantly improving the ease of doing business will boost our economic competitiveness with the rest of the world and attract investment to Australia.

 

How has disruption/innovation through Covid-19 affected your sector and how can you stay competitive?

 

GrainCorp endeavours to remain competitive by constantly improving our value offering most recently through technology and innovation. We moved quickly in 2020 to facilitate a contactless delivery process at our up-country sites, using our existing digital platforms.

 

Our contactless warehousing and grain trading platform CropConnect was pivotal to this process and provided growers with instant trading capability and the benefit of two-day payment terms when selling to GrainCorp. This year, we were able to incorporate a service called Croptimiser onto the platform, where growers can source better prices for a delivery of lower quality grain if the farm’s overall quality data during harvest averages out higher.

 

We are committed to expanding our value offerings to growers through innovative technology. Our recent investment into Hone technology, which provides growers with handheld testing devices that can provide accurate, real-time data, will help us to remain competitive on the quality front.

 

What three changes are you making to address climate change?

 

Investing in innovative businesses such as FutureFeed to reduce methane emissions from cattle and Hone, whose technology will be able to measure soil carbon, both of which could deliver global climate benefits.

We are measuring and understanding our emissions across Scope 1, 2 and 3 and will be setting targets to accelerate improvement.

 

Improving efficiency of our supply chain including optimising the balance between rail and road freight options to reduce emissions.

 

How do you see the jobs market for 2022 and what are your plans around working from home for employees?

 

For our office-based staff, we maintain a flexible working model where employees can work three days in the office and two days at home.

 

However, as an essential business we have many employees across our vast network of sites who don’t have the option for flexible working arrangements. These staff members will continue to run our operations on site as they have done throughout the pandemic.

 

How would you rate business, state and federal government performance this year?

 

It’s been a difficult environment across the board over the last year with plenty of challenges thrown up by the continuing pandemic.

 

Importantly, all levels of government have worked together with business to address these challenges which has been very encouraging. In particular, the Business Council of Australia (BCA) has been instrumental in facilitating these connections.

 

We have worked closely with Agriculture Ministers and the Department of Primary Industries to address the challenges faced by our industry and they have been readily available for us to put forward our views and to offer ways of working around issues, often balancing the importance of food and agricultural supply chains against health considerations that have been such a feature of the past two years.

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Debby Blakey, HESTA

Markets are strong, borders are opening. What are the three top risks to recovery and growth of your company and Australia?

 

HESTA has shown incredible resilience in managing the volatility of the pandemic. While we may hope that the challenges of the pandemic are behind us, as a responsible manager of our members’ financial futures, we’re acutely aware of the risks further strains of the virus may have on financial markets and the economy more broadly. The challenge for us all, is how we live with the virus as safely as possible, while continuing to support the recovery.

 

How do you view inflation and how do you rate the nation’s macro-policy settings?

 

We expect prices will ease as economic activity normalises and as supply chain disruptions are resolved. However, there is concern that emergence of the Omicron variant may exacerbate global supply chain pressures. This may lead to major central banks more quickly reducing monetary stimulus to contain inflation, with the Federal Reserve indicating they may hasten the tapering of their bond buying program.

 

Over the medium term, central banks may be forced to increase rates to also fight a pick-up in inflation. But we expect them to be able to manage the transition to ‘Covid-normal’ with economic activity forecast to remain above trend next year. We’re confident that we can position our portfolio to withstand a more inflationary environment.

 

How has disruption/innovation through Covid-19 affected your sector and how can you stay competitive?

 

I first want to acknowledge the outstanding work of our members across the health and community services sector who delivered critical services to the community during COVID, often in very challenging circumstances.

 

The community has recognised the vital role of our members and how their work underpins a resilient economy and society.

 

Throughout the 2020/2021 financial year, HESTA’s investment options have performed strongly - our Sustainable Growth investment option achieved 23.03 per cent return for the FY20/21 financial year and delivered 11.28 per cent pa over a rolling 10-year period. In terms of our own superannuation sector, the strength of the system was never more apparent when we were able to distribute billions of dollars of superannuation savings safely and efficiently to members. You can’t do this if you haven’t built strong foundations beforehand. As responsible, long-term stewards of our members’ savings, we’re continually challenging ourselves to look beyond the short-term noise. We want to identify and position the portfolio for those very long-term trends like climate change that will shape the global economy in the years ahead.

 

What three changes are you making to address climate change?

 

Commitment to ‘Net Zero by 2050’ to achieve real-world emissions reductions

 

The risks and opportunities related to climate change have been a key focus for HESTA for many years. We were the first major Australian super fund to implement restrictions on investment in thermal coal and be certified as carbon neutral for our business operations. In 2020, HESTA became the first major super fund to commit to net zero by 2050. We also committed to achieve a 33 per cent reduction in portfolio carbon emissions by 2030 as part of our ambitious Climate Change Transition Plan.

 

Investment opportunities in renewables

 

Our investment in renewables and other clean technology solutions will be vital to ensuring a just and orderly transition to a low carbon economy. While climate change has long been considered as part of our investment process, we’re taking additional steps to integrate climate change into both the investment strategy and investment selection processes.

 

Engagement with heavy emitters in our portfolio

 

We have been active in engaging with companies as part of the Climate Action 100+ investor collaboration, both in Australia and overseas. There is a role for companies and investors like HESTA to work collaboratively on taking action to accelerate the necessary transition to a lower carbon future.

 

While some high emitters are lagging in their decarbonisation efforts, there are other companies actively re-shaping their business models to prepare for the low-carbon future and are setting ambitious carbon reduction targets to get there.

 

As an active member of Climate Action 100+, we’re committed to deepening our engagement with the mining sector to understand how they can implement net zero. We believe sudden, wide-ranging divestment won’t achieve a just and timely transition to a low-carbon economy.

 

How do you see the jobs market for 2022 and what are your plans around working from home for employees?

 

The ‘broad resignation’ in the US suggests that we too could see many quit their jobs post-pandemic, which will impact the jobs market into 2022. This trend tells us that we need to collectively shift our thinking around what people value in a job.

 

Flexibility is a big factor but so is purpose. We’ve always had a wonderful member-centric culture but we see purpose, and bringing that to life through our business strategy as fundamental for our future success. Flexibility is also an important way we holistically support our people to do the best work of their careers at HESTA. It’s about having an ongoing conversation with our people. Our hybrid model supports people to work from home 50% of the time, so people get to enjoy the benefits of flexibility, together with the strong collaboration and team connectedness that comes with in-person contact.

 

How would you rate business, state and federal government performance this year?

 

It’s been an incredibly challenging year, whether you’re running a business, a state or even the country. The businesses that have navigated the uncertainty best are those that have holistically considered the broad stakeholders they serve, which isn’t just shareholders but also the wider community. We’ve long held the view that it’s this focus on long-term value creation that makes a business’ success truly sustainable.

 

What governments across the country can rightly be proud of is that through Covid-19, they have kept the community safe. However, leaders across the country face a new challenge and that’s to take the community with them as we enter this new ‘Covid-normal’ phase.

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Nick Hawkins, IAG

Markets are strong, borders are opening. What are the three top risks to recovery and growth of your company and Australia?

 

The top risk we see at IAG is the increasing frequency and severity of damaging weather, like severe storms, floods, hail, cyclones and bushfires. This year we’ve seen extreme weather all around Australia – including significant heavy rain and flooding on the country’s east coast. We know this summer will be wetter than usual, and that severe weather will increase with climate change, and that’s why we invest in climate science and resilience.

 

The growth profile of our home markets of Australia and New Zealand is another risk. With international borders closed, and immigration paused, Australia’s population growth has stalled, and this impacts not only the take up of insurance – with fewer people to purchase assets – but the access we have to skilled workers.

 

Finally ongoing pressure on supply chains is contributing to claims inflation across IAG’s motor, property and personal injury businesses and this is impacting the broader insurance industry as well. This inflationary pressure will ease when the country fully opens up.

 

Covid-19 and variants continue to pose a risk to Australia’s economy though our high vaccination rates and availability of boosters will make for a more sustainable recovery.

 

Cyber threats are an ongoing national security and economic risk to the country. We’ve made significant investments to lift our cyber capability at IAG and we share knowledge with industry and government to ensure we take a market-leading, holistic approach.

 

We’re on the advisory group to the Australian Cyber Security Centre and we’re one of the founding members of the ACSC’s Joint Cyber Security Centres. We are working with the federal government on a cyber awareness campaign for small business.

 

How do you view inflation and how do you rate the nation’s macro-policy settings?

 

We’re seeing inflationary pressure across our company, ranging from wage pressure driven by a shortage of skilled labour to global supply constraints impacting the cost of insurance claims.

 

The increased costs of building materials, motor vehicle parts and supply, along with a shortage of skilled labour, has driven claims inflation in our motor and property businesses. And we’ve also seen inflation in our personal injury business which reflects the mixed economic conditions of the past 18 months.

 

We’re offsetting some of that pressure through our own supply chain including our motor repair model businesses Repairhub and MotorServe which help us keep repair costs down. We’re also using technology, including artificial intelligence, through our value chain to help us more efficiently manage claims costs.

 

The nation’s macro-policy settings are in good shape, though the longer our borders are locked, the more likely it is that we’ll have greater inflationary pressure.

 

The combination of economic stimulus during the country’s lockdowns, along with the intent to reopen our borders, are both settings that should help manage inflation.

 

How has disruption/innovation through Covid-19 affected your sector and how can you stay competitive?

 

What we’ve seen during Covid-19 is an increase in the number of customers doing business with us digitally. Our ambition is to ensure more than 80% of our customers’ activity is through digital channels and to do that we’re improving and expanding our digital experiences and propositions.

 

In Australia, we’ve launched a new digital business for the younger generation called Rollin’, which provides a subscription-like insurance product, and we’re delivering a differentiated digital proposition to small business customers.

 

We’ve expanded our digital lodgement capability to help people manage their claims, easily and efficiently. Using artificial intelligence, we can predict whether a motor vehicle is a total loss after an accident and allow customers to settle online when their vehicle has been assessed.

 

More than 15,000 customers have taken this up with the fastest settlement time at 40 minutes.

In New Zealand, we’ve shifted our AMI brand from storefronts to digital and virtual, as more customers chose to engage with us by phone, email and website.

 

What three changes are you making to address climate change?

 

First, we invest heavily in understanding climate change science to better measure how risk is changing for people and communities. We have become increasingly sophisticated in our understanding in this area.

 

Our in-house team of climate scientists and specialists is contributing to the scientific discussion and are often called on by government, industry and the community for their research, which has cemented IAG’s position as a leader in understanding current and future severe weather. We’re using this expertise to design products that support insurance affordability and accessibility.

 

Second, we are sharing this expertise to contribute to the policy and the investment case for greater investment in mitigation and resilience, and this includes our work with Federal, State and local governments on flood mitigation projects.

 

Our data and ongoing sponsorship of the Cyclone Testing Station in Townsville has led to stronger building codes and the development of cyclone resilience programs such as the Queensland Household Resilience Program.

 

Along with our community education work, we’re the founding partner of the new Australian Resilience Corps. We’re working with the Minderoo Foundation to create a network of volunteers who will help communities build their resilience against natural disasters.

 

Third, we’re getting our own house in order with clear commitments around driving to zero emissions. We’ve committed to achieve net zero emissions by 2050 across our value chain, including with suppliers and customers, and a 50% emissions reduction by 2030.

 

We’ve updated our Climate & Disaster Resilience Action Plan with our commitments on climate change, including how we manage our own footprint and contribute to the climate discussion.

We also have specific targets around where we invest and what we underwrite to drive net zero across our value chain.

 

How do you see the jobs market for 2022 and what are your plans around working from home for employees?

 

We see a tight employment market in 2022 and are working hard to ensure our employment brand is well understood.

 

Bringing back migration should be a priority to get skilled and critical workers back to the country. We’re feeling the skills shortage across IAG and it’s particularly challenging to recruit roles in technology, risk as well as our customer-facing roles.

 

In 2022, we’re moving to what we call dynamic working at IAG. The majority of our people who work in a hybrid way – that’s upwards of 60% – will spend time with their teams each week in the office on set anchor days and work from home the rest of the time. This shift reflects that how we work has changed forever and most of us will now work in a hybrid way.

 

How would you rate business, state and federal government performance this year?

 

The federal and state governments have managed the health and economic crisis brought by Covid-19 very successfully.

 

We encourage a continued focus on vaccination including boosters as the pathway to easing restrictions, opening our borders, and ultimately ensuring sustainable economic growth.

 

In this challenging environment, we were pleased to see governments prioritising resilience and mitigation. We know there is going to be an increase in the frequency and severity of extreme weather and the country needs a structured program of investment. We welcome the federal government’s recent $50m investment in flood mitigation and the $600m it allocated earlier this year to establish the National Recovery and Resilience Agency and the Australian Climate Service.

 

Business has done a good job supporting the federal and state governments to manage the pandemic. Companies have quickly adapted to help their people work productively in a distributed way and supported vaccination efforts.

 

At IAG we have invested in ways of working to help our people work at home, and in the office, and in 2022 we’re introducing dynamic working. We’ve also encouraged vaccination, and full vaccination is a condition of entry to any of our worksites in Australia and New Zealand until at least March 31, 2022.

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David Neal, IFM Investors

Markets are strong, borders are opening. What are the three top risks to recovery and growth of your company and Australia?

 

Another wave of Covid-19 remains a significant risk to the global recovery. The take up in vaccines in Australia this year has been a magnificent effort across the community and positions the country well for a sustained recovery. However, like the rest of the world, we remain vulnerable to virus mutations.

 

The challenge in the post-pandemic world is to make economies better – that is to say more productive, more inclusive and more sustainable. While the macro-policy settings have been relatively well managed, it is really the micro-economic settings we need to continue to work on.

 

That requires long-term strategic thinking about how we want to evolve as a country and an economy. We don’t have time to waste. Short-term or ad hoc policy creates greater uncertainty and makes it harder for long-term investors to meet the challenges of the future.

 

How do you view inflation and how do you rate the nation’s macro-policy settings?

 

While inflation is the topic of the moment, it is mainly being driven by supply constraints colliding with fiscally fuelled demand. And while it may not be ‘transitory’, it seems reasonable to expect that supply issues will resolve themselves over time.

 

Central banks are being cautious in their response to inflationary pressures, which in some ways is a positive as it shows their commitment to be supportive of economies and labour markets as the global economy recovers.

 

If inflation does persist, it will require ongoing scrutiny given the potential it has to broaden through economies and erode people’s purchasing power.

 

How has disruption/innovation through Covid-19 affected your sector and how can you stay competitive?

 

The pandemic has been another reminder that the strength of your team is so important. It was also a reminder that buying an asset is not the end of the story – that when major events arise, such as a global pandemic, it is crucial to be able to deploy a well-resourced, experienced and skilled team to support the assets and navigate the complex environment to help protect and grow value.

 

Our team at IFM has done extraordinary work through the pandemic – we’ve continued to generate positive returns for our investors, we’ve continued to grow and we’ve continued to be active on the deal side, despite doing most of this working-from-home.

 

Buying well, owning and managing well, and creating a strong, supportive, and sustainable value creation environment for company management remains as important as ever.

 

During this time, we have seen a greater focus and interest in genuine long-term investing. With interest rates at record lows, the value of long-term patient investors who are able to ride out periods of uncertainty has been shown.

 

The pandemic has also reminded us again of the fundamental interdependence of the communities, environments and economies where we invest and operate. Through this period, we have seen extraordinary momentum build for sustainable investing. I believe there is a clear role for long-term investors like IFM in fostering such an approach.

 

At a more day-to-day level, IFM has definitely benefited from the increased connectivity and global integration that has been possible through video conferencing and new ways of working. Although it does create significant challenges that we are very conscious of, such as the potential for staff burnout.

 

What three changes are you making to address climate change?

 

We’re setting emissions reduction targets and committing to report transparently on our progress. We’re doing this because we believe that it’s in the interests of our investors, and their members and beneficiaries, that we have a plan to mitigate the risks of climate change.

 

Earlier this year, IFM Investors set a 2030 interim emissions reduction target of more than one million metric tons of CO2e for our infrastructure asset class, as part of our commitment to target net zero by 2050. This reflects an emissions reduction target of 40 per cent of IFM’s existing infrastructure portfolio from 2019 levels.

 

Secondly, we’re supporting the transition of our existing infrastructure assets. IFM Investors will continue to invest in essential infrastructure assets that working people rely on every day, with our focus on transitioning these assets to help ensure they can continue operating in a net zero world.

 

Thirdly, we are seeking to take advantage of the significant investment opportunities that are arising because of the energy transition.

 

The International Energy Agency says that by 2030, close to US$1 trillion ($1.39 trillion) will be needed annually for clean energy infrastructure, which is likely to spur the creation and adoption of new technologies, products and modes of transport, which in turn create new business and investment opportunities.

 

As we continue to work with our assets to reduce emissions, we are also playing a role in supporting the new energy economy and expect this to be a growing part of our activity.

 

How do you see the jobs market for 2022 and what are your plans around working from home for employees?

 

At IFM, we have been able to retain our talented and diverse team globally. As we continue to grow, we expect to continue recruiting more people across our various functions over the next twelve months.

 

Like many sectors, we are finding it a “hot” market for talent but we have a compelling proposition that people who join us will have the opportunity to contribute to purpose-driven work, grow their skills and experience, and enjoy a challenging and rewarding career.

 

On the office front, IFM and our global team have embraced the changes and disruptions to traditional work practices brought on by the pandemic.

 

While I hope to see more people back in the office in 2022, the new skills, new ways of working and new flexibility to work from home, or indeed anywhere, that we’ve developed will now be with us forever.

 

How would you rate business, state and federal government performance this year?

 

It has been an extraordinarily difficult last couple of years both in Australia and globally.

While it is easy to criticise, on balance I think all levels of government have done well, as has the business and investment community.

 

The wider community has done exceptionally well given they are the ones who have borne the brunt of the Covid-19 lockdowns. By sticking together and getting vaccinated, we’ve been able to open up again and get back to some sort of normality.

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Jeanne Johns, Incitec Pivot

Markets are strong, borders are opening. What are the three top risks to recovery and growth of your company and Australia?

 

Australia has recovered incredibly well from the pandemic and the test now will be the quality and sustainability of the recovery.

 

The key risks ahead for business include the uncertainty created by new variants and subsequent border and other restrictions, skilled talent shortages, and supply chain disruptions.

 

Border restrictions need to be eased to give business the flexibility to respond to workforce requirements. Safety should absolutely be the number one priority but given Australia’s high vaccination rates, more certainty on borders and quarantine requirements is well overdue. The lack of certainty makes it very difficult for business to plan, not to mention the significant impact it has on our people who have been extraordinary in their willingness to adhere to quarantine requirements and sacrifice time away from their families.

 

The overstretched supply chains from strong and pent-up demand has created a challenging environment with increased costs. Our experienced teams have done an excellent job, however, in responding to the changes in international trade flows that the world has seen.

 

How do you view inflation and how do you rate the nation’s macro-policy settings?

 

Global energy price increases, along with supply chain costs, have resulted in inflationary pressure in all businesses in Australia. Like other countries, pent up demand along with labour shortages would also be expected to continue. It’s certainly an issue the Reserve Bank and federal government are quite rightly watching closely.

 

How has disruption/innovation through Covid affected your sector and how can you stay competitive?

 

While the resources and agriculture sectors we service have been able to continue to operate throughout the pandemic, we’ve responded to many disruptions including border closures and getting our skilled people to customer sites. We’ve been an enthusiastic user of technology to ensure we continue to service our customers. For example, we’ve used video link ups across the country and internationally to problem solve issues previously done by our skilled people on the ground.

 

In our explosives business, it’s our practical and innovative explosives technology that gives us the edge over our competitors and allows us to compete on more than just price. Our customers tell us our blasting solutions are easy to use and we will be continuing to focus on developing technology that works on the ground, not just in the lab. We will also continue to provide technology solutions that lead to improved safety benefits and help our customers reduce their carbon footprint, an increasing focus for our customers facing a decarbonising world.

 

In our fertilisers business, we’re staying competitive by growing and developing new products and services to differentiate our market offer. For example, this year we launched a new soil health testing package to farmers to improve the health and productivity of their soil, including measuring soil carbon levels.

 

What three changes are you making to address climate change?

 

We’re leveraging our world class ammonia expertise and forming significant partnerships to investigate green ammonia commercial opportunities. Our partnership with two of Singapore’s leading companies – Keppel Infrastructure and Temasek Holding – is investigating the feasibility of producing green ammonia at two sites in Australia to meet the rapidly growing demand for carbon-free energy across Asia. We’re also partnering with Fortescue Future Industries to determine the feasibility of manufacturing green ammonia at our Gibson Island facility in Brisbane.

 

As part of our commitment to meet our short and medium term absolute greenhouse gas emission reduction targets, we’re progressing key projects to deliver these targets. At our Waggaman plant in the US we are investigating a carbon dioxide sequestration project and at two of our nitric acid plants –in Moranbah, Queensland and Louisiana, Missouri - we’re investigating abating nitrous oxide emissions.

 

We’ve established a customer partnership to quantify the greenhouse gas reductions associated with our world-class blasting technology Delta E which is helping customers reduce their carbon footprint. And in our fertilisers business, our Enhanced Efficiency Fertiliser range helps increase plant nutrient uptake and reduce greenhouse gas emissions for our farming customers.

 

How do you see the jobs market for 2022 and what are your plans around working from home for employees?

 

It’s likely to be a candidate market in the early part of 2022 but we’re hopeful an easing of border restrictions will allow us to return to moving skilled workers across Australia and globally. This not only increases the pool of skilled workers but allows for the flexibility to match skills and needs.

 

The vast majority of our workforce is essential workers, required to do their work in our plants, customer sites, and dispatch locations – they have continued to operate throughout the pandemic within our COVIDsafe protocols. For those who have worked from home during the pandemic, we will be incorporating what we’ve learned about effectively working remotely into the future as we adjust to life and work post-pandemic restrictions.

 

Our current policy is three days in the office and two working flexibly, but we want to empower our leaders to tailor the approach to suit their team’s needs. We will continue to evaluate the right balance of office and remote working within the business needs.

 

How would you rate business, state and federal government performance this year?

 

It has once again been an unusual year, with business facing unprecedented challenges from the ongoing pandemic with its restrictions on people mobility and impacts on supply chains. Governments deserve high marks for promoting and achieving extraordinarily high vaccination rates throughout Australia which are the envy of most of the world.

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Renato Mota, IOOF

Markets are strong, borders are opening. What are the three top risks to recovery and growth of your company and Australia?

 

2021 was a year of global transition. As we enter 2022, there are signs that economic prospects for our country and the rest of the world are starting to brighten.

 

Three risks to a recovery include the ability of Australian businesses to meet increasing demand against a backdrop of global supply chain challenges; a headline inflation rate of 3 per cent meaning any wage growth will be offset by an increase in the cost of living; and the potential flow-on effects on interest rate movements.

 

How do you view inflation and how do you rate the nation’s macro-policy settings?

 

Inflation is an economic factor to be watched closely as we start to explore the new normal for the world post the pandemic however record low interest rates provide a strong point of leverage in the management of inflation. Debt and deficit are a concern that will need to be managed going forward and both sides of politics will need to have an agenda to build and grow the economy.

 

How has disruption/innovation through Covid-19 affected your sector and how can you stay competitive?

 

Prior to the pandemic we were already seeing a new wealth management industry take shape, driven by changes in regulation and client expectations. These trends have driven the creation of specialist and focused wealth management organisations like IOOF. To remain competitive in that environment, simplification is critical to remove inefficiencies in the system and this will ultimately lower our cost to serve and assist us in continuing to offer more value for clients over time.

 

Covid-19 has driven an acceleration in the adoption of technology within the financial services industry, which continues to drive change. It will be important for our business to continue to focus on enhancing our technology infrastructure to provide a richer client experience and strengthen our ability to secure the financial wellbeing of those we serve.

 

What three changes are you making to address climate change?

 

The sustainability of our business is intrinsically linked to the sustainability of the environment and we have continued to focus on how our business can play a role in this area. Specific changes we have made include calculating our carbon footprint every six months as part of our responsible investing frameworks; conducting an emissions and waste benchmarking exercise for our corporate operations, with a view to making a new emissions reduction commitment; and launching several waste reduction initiatives.

 

How do you see the jobs market for 2022 and what are your plans around working from home for employees?

 

The job market is particularly competitive at the moment. While the completion of our strategic acquisition of MLC Wealth in May this year provides us with a deep talent pool, heading into 2022 our focus will be on engaging and retaining this talent in the face of increased competition for talent across the market.

 

IOOF has always had a flexible work culture. In terms of working from home, IOOF will adopt an ‘event driven’ hybrid model, as opposed to the typical ‘time driven’ one. We believe it is important to capture the lessons learned from the pandemic and foster an environment that provides for the differing needs of our people. For me personally, I suspect I will spend more time back in the office than most.

 

How would you rate business, state and federal government performance this year?

 

State and federal governments have intervened into individuals’ lives at a level that very few might have envisaged before the pandemic. Now with climbing vaccination rates, it is time for all of us to work towards living with Covid-19, particularly as we see new variants emerge. Businesses have shown resilience in switching operations online and finding other ways of continuing to serve their clients – including the task of moving large workforces to a work from home environment. It may be that we look back at this pandemic as an accelerator for the adoption of digital technologies, and as a driver of innovation and new ways of working across Australian enterprise.

 

However we should not lose sight of the fact the human toll of the pandemic will continue to impact people for years to come.

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