The Australian’s CEO Survey 2024: CBus to Fortescue to IAG
The Australian surveyed the nation’s top CEOs on inflation, energy and opportunities ahead for 2024. From Cbus Super to Fortescue to IAG, these are the responses from C-I companies.
The Australian surveyed the chief executives of the country’s largest companies. We asked their views on inflation, energy, industrial relations, and all the issues and opportunities for their businesses in 2024. From Cbus Super to Fortescue to IAG. These are their responses.
Cbus Super, Kristian Fok
■ How is inflation and the prospect of higher for longer interest rates affecting your business? Importantly, is the behaviour of your customers changing?
From an investment perspective, we are keeping an eye on the response to inflation, predominantly the significant rate rises that have been implemented with the objective of getting inflation under control, while also avoiding a recession or a sharp slowdown.
How successful central banks (including the RBA and the US Federal Reserve) are at navigating this challenge will have a significant impact on the outlook for both equity and bond markets over the coming 6 to 12 months, as well as the short term returns for our members.
In addition, the evolution of interest rates and the markets perception on the outlook for rates may result in higher financial market volatility in the near term.
However, over the longer term, the rise in interest rates to more ‘normal’ levels relative to history is a positive for members.
Asset prices have already largely adjusted to the rise in interest rates to date. Equally as importantly, the higher yields on both cash and fixed interest investments helps boost member returns, as well as providing more defensiveness to the portfolio in the event of equity market weakness.
From our members perspective, their experience very much depends on their age and stage of life, but a big focus for Cbus is how we meet their needs and help them navigate these times.
Cashflows are telling an interesting story – Super Guarantee inflows and member growth are both very strong.
There is plenty of work for our members now and in the pipeline, particularly in commercial and infrastructure projects, which means balances are growing.
However, with the current cost of living pressures, we are seeing a recent change of retired members or members approaching retirement age, withdrawing small amounts more regularly.
Some are looking into how to tap into some extra money for the first time, so these recent trends are showing the importance of continued education to help our members adapt and make good financial decisions as they move between the accumulation phase and into the deaccumulation phase.
■ How would you rate the shape of the Australian economy as we head into the New Year?
Higher interest rates are clearly having an impact on disposable income and spending and, as a result, consumption remains the weak spot of the Australian economy.
Stronger than expected September quarter inflation resulted in the RBA hiking rates in November after a four month pause and markets are expecting one more hike in the first half of next year.
Having said that, it appears as though the tightening cycle is nearing its peak, and the additional hikes, if they come, will only have a minor impact, compared to the increase in interest rates seen already.
While we are past the peak of the fixed-to-variable rate mortgage dynamic, there will be more pressure from rising mortgage payments on consumption over coming months. The labour market remains tight, which may lead to more caution by the RBA.
With respect to the construction industry, the increase in input costs and blowouts in project timelines remain a challenge.
In contrast to the weak outlook for consumption, growth has been supported by strong migration and exports, especially services exports.
Overall, given the challenging backdrop of higher rates and soft household disposable income, a slowing in growth over the next year is likely. The risk of recession has increased and is higher than normal, but it is not a foregone conclusion.
■ What do you think is the big area of reform needed to happen so the Australian economy (and your business) can sustainably reach full potential?
The current skills shortage we are experiencing in Australia is an area that must be addressed.
We simply need more young people enrolled in vocational training as a steppingstone into trade related work to meet the skills gaps.
But this will take time and there is an immediate need to rely on overseas workers to fill some of the gaps with construction and renewables infrastructure.
The concern with a growing reliance on overseas workers is that many are at risk of being exploited by their employers if they don’t know their rights. As an example, recovering unpaid super is a key focus for Cbus, the Fund recovering $126.4 million in unpaid super in the last financial year for members.
There are some perfect storm issues here – there is a need for skilled workers, but they also need housing.
Building of housing needs to be super charged – this creates plenty of work for our members, but the skills shortage comes for the fore to really get this happening.
There are some more state-based issues as well, the Olympics will take much of the construction workforce out for the next 10 years in Queensland and away from building residential property.
■ Australia has six years to meet its 2030 targets for a 43 per cent reduction in baseline emissions. What needs to happen here?
There are currently a wide range of opportunities to invest in the energy transition in Australia, but these opportunities do not always provide the best risk-adjusted returns for our members.
In order to meet the 2030 targets, policies for the energy transition need to be clarified and approvals expedited, which requires a consistent and coordinated approach across all levels of government.
It is possible to simultaneously achieve the best financial outcomes for our members, while also supporting Australia’s energy transition, but this requires clear policy settings that cause Australia to be as attractive for new investment as offshore markets.
The energy transition is vital for our future energy security, and particularly for Cbus members who work and live in industries and communities directly impacted by this change.
However, this must be done in a way that revives our industrial base and leaves no region or worker behind.
■ What level of adoption is your business currently at with the use of AI technology?
We are very much in the early adoption phase when it comes to the use of artificial intelligence at Cbus.
We certainly see strong potential in terms of using this technology to streamline operational areas and provide better insights into our members and customers.
It is just one of the tools we are using to enhance member engagement and their experience with us.
■ What external issues do you expect to impact or disrupt your business within the next 12 months - the so-called 3AM thought?
The political debate that surrounds superannuation often distracts from the vital role the sector will play in our economic recovery post pandemic.
However, the view that superannuation is the panacea for all of the challenges facing our economy fails to realise the fact that superannuation is there to ensure Australian’s have access to a dignified retirement.
Member returns are our priority and funds should only be invested when it meets our risk-return metrics.
The impact of significant legislative and regulatory changes also needs to be understood, funds need time to adapt.
The sector has also undergone significant regulatory change in recent years and funds need time to adjust to the new environment.
■ Is business getting the balance right between investor, customer and other stakeholder demands when it comes to ESG issues?
Well-governed companies that manage material ESG risks and opportunities in their operations and supply chains, such as those that impact employees, suppliers, customers, communities and the environment, are expected to enhance value for our members over the long term.
Increasingly it is about the interconnectedness of ESG, and climate change is a good example of this.
If not addressed, it will impact our members in terms of when and how they can work, likewise as we transition to a low carbon economy, we also need to consider and plan for workers in industries and impacted communities so that they are supported through the transition.
Ultimately though everything comes back to governance and a board’s ability to understand, respond to and capitalise on current and emerging material environmental and social risks.
■ How has your organisation’s approach to staff working from home evolved since the pandemic?
Even before Covid-19, Cbus was a champion for flexibility in the workplace because we recognise that individuals have different needs when it comes to their working environment.
As we navigated our way through the pandemic, we developed a further appreciation for the benefits of remote work, but also an understanding of the importance of face-to-face interactions which build connection, collaboration and engagement.
There is no one size fits all approach, that’s why we are embracing the future of work with a hybrid model that offers the best of both worlds, our staff enjoy that collaborative time in the office together but also that bit of flexibility when needed.
We’re also investors in commercial property through Cbus Property and attuned to the rapid changes in what is expected in office space.
The continued trend for 2023 has been the ‘flight to quality’ and ‘flight to experience’.
The strong uptake of leases in the next generation office tower currently being developed at 435 Bourke Street in Melbourne is testament to Cbus being a leader in what corporations want in regard to sustainable design and premium on-site amenity.
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Citi Australia, Mark Woodruff
■ How is inflation and the prospect of higher for longer interest rates affecting your business? Importantly, is the behaviour of your customers changing?
The diversified nature of the business means that overall, we can benefit from higher-for-longer rates and sticky inflation. As we come to the end of the Monetary tightening cycle, we expect confidence to come back through increased deal activity. However, household balance sheets will come under more pressure, and despite the strength and health of corporate balance sheets, those exposed to the consumer cycle will be limited in their ability to continue to pass through price increases as consumer demand falls, in turn squeezing margins.
■ How would you rate the shape of the Australian economy as we head into the New Year?
The Australian economy is in better shape than expected and we should avoid a recession in 2024. But economic growth will remain below potential at just below 2% and inflation will remain relatively high. We expect the CPI by year-end to be 3.5%, still above the top of the RBA’s target band.
Fundamentally, we see sticky inflation as a domestically generated problem. Prices for domestically purchased services and some goods continues to increase. Labour costs continue to increase and combined with weak productivity growth are incompatible with anything except inflation remaining stickier for longer. Long term enterprise agreements locking in substantial wage increases will continue to delay the RBA’s wish for inflation to return to the targeted band.
■ What do you think is the big area of reform needed to happen so the Australian economy (and your business) can sustainably reach full potential?
This could be one or two ideas across any area from education, housing,training; labour shortages, infrastructure, tax; supply chains, regulation, immigration, etc.
Tax reform remains the number one policy issue that needs to be addressed. Australia relies too heavily on income tax and inefficient state taxes that distort investment and the labour market. The high reliance on income tax makes it harder for Australia to increase the participation rate – particularly of women – at a time when we need more people in the labour force. Inefficient taxes like stamp duty distort investment decisions reducing productivity. Tax reform has been left in the too-hard basket for too long and I would like to see the federal government turn their attention to some genuine reforms if not this term – early in the next.
For the long-term, education remains critical and I have been encouraged by some State and the Federal Governments recognising the importance of retaining and developing talent.
If the migration policy can be aligned with improving skills Australia will be well placed to start to improve productivity moving forward.
■ Australia has six years to meet its 2030 targets for a 43 per cent reduction in baseline emissions. What needs to happen here?
I am not alone in saying that the strong desire to make meaningful changes towards the energy transition is very real, but the progress has not been as fast as we would like. Both investor appetite and available capital is present but there are still headwinds in the form of permitting and licensing that are hindering our ability to put that capital to work.
Aggressive targets are helpful in driving change and developing urgency, however policy at all levels of government needs to be aligned to facilitate the ambition. We continue to work with clients on helping this transition and see significant demand from local and offshore firms to invest in the transition and beyond.
■ What level of adoption is your business currently at with the use of AI technology?
The potential use cases for artificial intelligence across many of our business streams are boundless, but at this stage in the game, they’re not without risks.
Citi has several Centres of Excellence that guide our innovation strategies with governance and risk management parameters, and we have a Centre that is solely focussed on exploring opportunities in AI. We want to dedicate the right level of due diligence to explore these opportunities thoughtfully and responsibly.
Around 70 per cent of Citi’s use cases for AI are focused on enhancing productivity in the bank’s internal operations, but that is likely to shift as we learn more about leveraging the technology is a safe and responsible way.
■ What external issues do you expect to impact or disrupt your business within the next 12 months - the so-called 3AM thought?
It is difficult to move past the impact of cyber risk as the “3am thought” as it continues to evolve. While our infrastructure is extremely strong, impacts through third-party cyber events continue to stretch scenario planning and impact assessments. The amount of regulatory change locally and globally continues to challenge businesses to invest with confidence. Any acceleration of regulatory impost would disrupt the investment cycle and reduce competitiveness at a time in the business cycle where confidence will be key to avoiding a significant economic downturn.
■ Is business getting the balance right between investor, customer and other stakeholder demands when it comes to ESG issues?
ESG has evolved from a corporate PR exercise to top-down, truly integrated corporate strategies that impact the way that business gets done. That is probably the biggest shift that I have seen in the last five to ten years. For example, Citi’s ESG commitments are embedded into the layers of our business, and each year we report on our activities and performance. We also publicly committed $1Trillion towards the combatting the climate crisis, and to achieving net zero by 2050.
In the past, most organisations probably had programs that were focussed on the environment, sustainability, and governance but they weren’t threaded together in a cohesive strategy, and they probably weren’t being reported on in a measurable way. This has changed significantly and will continue to accelerate as the demand from end users drive change in corporate behaviour.
The governance or the ‘G’ in ESG is very top of mind for the C-suite individuals and board member we are talking to. The level of scrutiny across every facet of operations has never been higher, and the margin for error has never been more acute.
Are we all striking the right balance one hundred percent of the time? Probably not. But we shouldn’t let perfection get in the way of progress. You would be hard pressed to find any large corporate or listed company that isn’t taking the ESG conversation extremely seriously.
■ How has your organisation’s approach to staff working from home evolved since the pandemic?
Banking is a relationship-driven business, so a good proportion of our workforce needs to be in the office most days, because nothing can replicate the advantages of those face-to-face interactions. We are finding that the majority of our team wants to be in the office. They want to be out and about talking to clients. They don’t want to be talking to people from behind screens.
Citi offers a hybrid working environment, which we believe delivers the right balance. Employees need to be in the office for a minimum of three days per week to foster a culture of collaboration, idea sharing and creativity.
Coles, Leah Weckert
■ How is inflation and the prospect of higher for longer interest rates affecting your business? Importantly, is the behaviour of your customers changing?
We are pleased that inflation is moderating in key categories, including fresh produce and red meat. In our most recent quarterly results, we reported a total supermarkets inflation figure of 3.1% for the quarter, down from 5.8% in the previous quarter.
We anticipate that cost-of-living pressures may continue to be felt by many Australian households, and we will continue to focus on delivering trusted value. This includes through our value campaigns, everyday prices, weekly specials and promotions, personalised Flybuys offers and our exclusive brand range.
We know from our consumer insights surveys that customers are increasingly eating and entertaining at home, seeking out loyalty points and bonus offers, and looking for more affordable alternatives as they seek more value in response to cost-of-living pressures.
■ How would you rate the shape of the Australian economy as we head into the New Year?
Official forecasts have Australia slowing sharply but avoiding a recession in 2024, is that consistent with your view? Have economic pressures such as tight labour markets eased or got worse?
We know many Australian households are facing significant cost-of-living pressures with rising inflation, mortgage payments, fuel and energy costs. However, we are optimistic overall about the resilience of the Australian economy and in particular, non-discretionary sectors like supermarkets.
Through our customer insights work, customers have shared that they are increasingly eating and entertaining at home, seeking out loyalty points and bonus offers, and looking for more affordable alternatives as they seek more value in response to cost of living pressures.
After a number of years of low growth during the pandemic, we expect population growth to support the labour market and continued demand.
■ What do you think is the big area of reform needed to happen so the Australian economy (and your business) can sustainably reach full potential?
Over the past year alone, we have witnessed the fragility of supply chains across Australia. Rail outages and road closures have challenged our supply chain and hampered the transportation of food and groceries.
As we face into a summer with a greater risk of fire and heatwaves, we have been working with government and with our suppliers to prepare.
Despite our best efforts to ensure we have a sufficient volume of goods in our stores and distribution centres, reliable rail and road infrastructure is critical to enable communities, particularly those impacted by natural disasters, to have access to food and groceries.
We encourage all governments to continue to invest responsibly in critical infrastructure and prioritising supply chain resilience.
■ Australia has six years to meet its 2030 targets for a 43 per cent reduction in baseline emissions. What needs to happen here?
In my view, both industry and government are deeply engaged in the transition to a net-zero emissions economy. Six years is not a long time to deliver on Australia’s 2030 targets, and significant and coordinated efforts will be needed by multiple parties across multiple areas, including in policy reform, asset investment and in systems and processes.
At Coles, we are committed to reducing our emissions and this year achieved a 27.7% reduction in our Scope 1 and 2 emissions from FY22 and set a Scope 3 supplier engagement target.
■ What level of adoption is your business currently at with the use of AI technology?
We are excited about the possibilities of artificial intelligence, particularly in its potential to help provide customers with a personalised shopping experience.
For example, by personalising our Flybuys offers to customers who have opted into Weekly Specials emails, we can improve our communication and make it more relevant to them.
We have also integrated AI into our stock replenishment system which forecasts customer demand on products in store. By helping us order what we need only when we need it, we can ensure maximum shelf life, greater availability and less waste.
■ What external issues do you expect to impact or disrupt your business within the next 12 months - the so-called 3AM thought?
The Covid-19 pandemic, extreme weather events and natural disasters have demonstrated the necessity of business continuity plans to ensure critical supplies, including food and groceries, can continue to be accessed by local communities.
The Bureau of Meteorology has predicted an increased risk of fires and heatwaves this summer.
For many months we’ve been working internally, with government, and with our suppliers to prepare for these scenarios. We’ve increased the supply of products that are most in demand during natural disasters, such as water and have created additional storage in our stores.
At Coles we have a dedicated and experienced team whose role it is to coordinate our response to natural disasters.
It is this level of planning and investment in resources that provides our business with the confidence to respond to future challenges.
■ Is business getting the balance right between investor, customer and other stakeholder demands when it comes to ESG issues?
We saw the “S” come to the fore during the pandemic as we worked hard to support our customers and community during unprecedented challenges.
The “E” has also been brought into sharp focus in recent years, with investors and other stakeholders increasingly challenging business to take meaningful action on climate change and to set clearly defined targets that are aligned with net zero ambitions.
In our view the “G” is paramount, and more than ever is crucial to successfully navigating ESG issues. This is especially true, given the new reporting standards will require companies to disclose in detail their governance frameworks with respect to oversight of climate-related risks and opportunities.
At Coles, governance is fundamental to everything we do. Our corporate governance framework and risk management policies and processes support the effective operation and management of our business and enable us to create value for all our stakeholders.
■ How has your organisation’s approach to staff working from home evolved since the pandemic?
At Coles, we have a Flexible Working Policy for team members and we are committed to supporting every team member to work flexibly, as far as practicable.
We have made significant investments in technology to allow our support centre team members to work flexibly. More and more team members are choosing to attend the office a few days a week to collaborate and attend events in person again.
In stores, we offer a range of rostering options to help team members balance their work and home life.
Commonwealth Bank, Matt Comyn
■ How is inflation and the prospect of higher for longer interest rates affecting your business? Importantly, is the behaviour of your customers changing?
We are conscious that cost of living pressures are understandably top of mind for many Australians. While many of our customers are well positioned, we have seen considerable tightening in the last 12 months. The latest CommBank iQ Cost of Living Insights Report shows that most consumers are cutting back on discretionary spending, with people in their twenties reducing both their discretionary and essential spending the most. We can also see that people living in metropolitan areas, particularly in New South Wales and Victoria, are feeling more pressure from rising housing costs, compared to regional Australians. We recognise that 2024 is going to be a difficult year for many Australians and we are determined to provide as much support as we can.
■ How would you rate the shape of the Australian economy as we head into the New Year?
While the economy continues to slow, it is proving to be resilient during the challenge of bringing inflation under control. We believe the prospect of a recession in 2024 remains low, although there are risks if high inflation persists and the RBA has to raise interest rates further. However, given the sharp rise in interest rates over the past 18 months, we think we are at or very close to the top of the current rate cycle. General economic pressures remain, although, for example, the most recent unemployment figures suggest that the tight labour market might be easing but we will need to see a few more months data to see if that trend is maintained.
■ What do you think is the big area of reform needed to happen so the Australian economy (and your business) can sustainably reach full potential?
The Australian economy has both strong foundations and structural tailwinds, for example from its low unemployment and steady migration intake. However, there is near universal acceptance that housing supply and affordability remains a critical issue. CBA welcomes the September 2023 National Planning Reform Blueprint which increased the existing five-year target of building 1 million homes to 1.2 million by 2028. CBA also welcomes the role of National Cabinet in renewing the National Housing Accord with State Governments, with additional funds available to these state governments if they reach specific housing supply targets. However, there is still a way to go and we would be supportive of additional policies which would improve housing supply in Australia.
■ Australia has six years to meet its 2030 targets for a 43 per cent reduction in baseline emissions. What needs to happen here?
We welcomed the Government’s 2030 emissions target. It’s ambitious but achievable, and provides industry, banks, and investors with clear direction to guide investment decisions. Building out firmed renewables to maintain reliable and affordable electricity as coal-fired power plants retire is priority number one. There’s a lot of work to do, particularly in wind, storage and transmission and distribution. However, Australia is well-positioned – CSIRO ranks us third in the world in terms of renewables competitiveness.
■ What level of adoption is your business currently at with the use of AI technology?
AI has been a core strategic focus for CBA for a number of years. Our Customer Engagement Engine, which we launched in 2016, now uses 1,400 machine learning models analysing 157 billion different data points to deliver the best and most personalised services to our customers, particularly through our CommBank App which is now being used by 8 million digitally active customers.
Generative AI is proving to be transformative in both improving our customers’ experience and simplifying core operational processes. CBA now has more than 50 Gen AI use cases in development and our data scientists have access to over 100 Large Language Models through our CommBank Gen.ai platform.
We are currently working on CommBank Customer Co-Pilot¸ a unique AI powered assistant for every customer, to make banking even easier and simpler.
It is critical that we continue to use AI responsibly and ethically, and we were pleased to be recently named the top Asia Pacific bank and number six globally in the Evident AI Index for banks, a global standard benchmark of Artificial Intelligence maturity. The same index also rated CBA as the #1 bank in the world for Responsible AI Leadership
■ What external issues do you expect to impact or disrupt your business within the next 12 months - the so-called 3AM thought?
Australia is not immune to global forces, and there are a number of potential macro or geo-political risks which could have a significant impact. The timing or likelihood of these sorts of events are in general impossible to predict, and so we invest heavily to ensure the Commonwealth Bank is well prepared to respond to a range of possible scenarios.
■ Is business getting the balance right between investor, customer and other stakeholder demands when it comes to ESG issues?
ESG is increasingly being integrated into business as usual, and given growing expectations from regulators, investors, customers and other stakeholders. That trend is likely to continue. Of course, there will always be different views on the right approach. We try to get the balance right, considering a range of perspectives in developing our own commitments. The context for environmental and social matters is very dynamic and often very complex, and good governance remains critical for delivering the right outcomes for customers.
■ How has your organisation’s approach to staff working from home evolved since the pandemic?
Our approach to hybrid working has always been about finding the right balance between our long-standing commitment to flexible working and ensuring we deliver the best outcomes for our customers. Throughout the pandemic, we were an essential service and had more than 15,000 our people working in customer-facing areas. Non-customer facing roles began to return to the office in February 2022.
Since July this year, the vast majority of our people now spend 50 per cent of their working month in the office. Research has shown that connection, innovation, and the ability to build and strengthen relationships is absolutely fundamental to how we continue to work.
CSL, Paul Mckenzie
■ How is inflation and the prospect of higher for longer interest rates affecting your business? Importantly, is the behaviour of your customers changing?
We are fortunate in that we are nearing the end of a significant capital investment program that will enhance our ability to meet patient demand. For example, we have expanded our plasma fractionation capacity by nine times at our Broadmeadows facility in Victoria.
People continue to need access to medicines and vaccines to treat their rare diseases and protect them against infectious viruses. Increasing the prices of our products significantly is not a lever we will pull, so we are hyper-focused on efficiency measures. One example we recently shared with the market is a focus on yield. In short this is about extracting more product from the same level of input. Initiatives like this have become increasingly important in the high inflation environment.
■ How would you rate the shape of the Australian economy as we head into the New Year?
This is consistent with our view. The Australian economy has proven resilient. Labour markets remain tight, and we still experience difficulty filling skilled positions at some of our manufacturing sites.
■ What do you think is the big area of reform needed to happen so the Australian economy (and your business) can sustainably reach full potential?
Implementation of the recommendations of the Review of Migration System (particularly with regard to skilled migration) are urgently needed to ensure that Australian companies, notably those involved in advanced manufacturing can effectively and usefully access skilled migration in targeted areas where the Australian population cannot meet known skill gaps. Uniquely skilled individuals have choices. When governments (be it Australia or our peer nations) implement increasingly difficult migration processes that are either not fit-for-purpose or fail to provide reasonable security of tenure, it very specifically impacts a countries attractiveness as a location and the ability to maintain world-class operations locally.
■ Australia has six years to meet its 2030 targets for a 43 per cent reduction in baseline emissions. What needs to happen here?
Obviously, there is no ‘silver bullet’, but the continued transition to renewable energy simply must occur. While many projects have been announced, actual grid connections are often slow and laborious. This needs to be sped up in order for more capacity to come online at the required rate.
Lowering the threshold of the safeguard mechanism so that other medium emitting corporations/industries are captured would also make a lot of sense.
Then I think more can be done in the electric vehicle (EV) space. Federal incentives on EVs, as well as the timely provision of capital infrastructure to enable more of them on the road (for example, charging stations versus petrol stations especially in regional towns).
■ What level of adoption is your business currently at with the use of AI technology?
I am excited about the potential of Generative AI to democratise access to our organisational knowledge, for employees, for donors, for providers, and for our patients.
We have an ‘AI Accelerator Program’ that I sponsor, so I monitor our progress first-hand. The biggest area of opportunity for us is in R&D. Artificial intelligence can help eliminate some of the guesswork from the process and increases the probability of success of R&D projects. This has the potential to ultimately help us get medicines and vaccines to market faster and achieve better patient outcomes.
■ What external issues do you expect to impact or disrupt your business within the next 12 months – the so-called 3AM thought?
Cyber security is an issue that I think about regularly in an increasingly connected world. We pay a lot of attention to it internally, but we can’t control how cautious others are in our supply chain. We’ve seen many examples where one company has a breach, but many other people and organisations are affected. The contagion can be a scary thought!
■ Is business getting the balance right between investor, customer and other stakeholder demands when it comes to ESG issues?
With these types of topics, the pendulum invariably swings to extremes, but we see the balance normalising. Internally, we just keep focused on our Sustainability Strategy regardless of ‘noise’.
I don’t believe the “G” is being left behind. For every major company I have worked for around the world, good governance is a non-negotiable, and CSL is no different. We have a strong governance record, and we will keep it that way.
Those who ignore governance do so at their own peril; never before has it been easier to unveil poor governance practices, and self-organise against companies who are not meeting their obligations.
■ How has your organisation’s approach to staff working from home evolved since the pandemic?
A majority of our people work in critical frontline roles that cannot be done remotely (eg advanced manufacturing sites or in labs). For those who can work remotely, we believe our flexible work policy has been popular with our people finding a good balance between collaborating in person at our offices, and working from home. Flexibility is important in a global organisation, as many of us connect with colleagues in other countries outside of standard office hours.
CSR, Julie Coates
■ How is inflation and the prospect of higher for longer interest rates affecting your business? Importantly, is the behaviour of your customers changing?
Cost inflation is a significant challenge for CSR, particularly regarding raw materials, labour, and energy. We aim to preserve our operating margins by driving efficiency through our operations, and by offsetting inflationary costs through pricing increases.Interest rates have a direct impact across the building and construction market, from owner-occupiers, to developers to investors. The market will adapt to a given level of financing costs, and more certainty about the direction of interest rates would be a positive for the confidence of our customers and consumers more broadly.
■ How would you rate the shape of the Australian economy as we head into the New Year?
The strength of underlying labour markets should support economic activity into 2024 with record levels of employment and net overseas migration. The detached housing market may well see some softness, but we are looking to other sectors to compensate such as medium to high density housing, schools, hospitals, and the commercial market.
We are seeing some easing in the extremely tight building trades market, although this does vary by trade and by region.
■ What do you think is the big area of reform needed to happen so the Australian economy (and your business) can sustainably reach full potential?
We see strong underlying demand conditions for housing, commercial projects, and social infrastructure. At the same time, we see significant supply-side constraints – from zoning, planning and approvals processes to land supply, labour availability and infrastructure provision. Reform is required across these areas to unlock the housing supply that Australia needs.
■ Australia has six years to meet its 2030 targets for a 43 per cent reduction in baseline emissions. What needs to happen here?
Australia needs a holistic process that seeks to achieve its targets at the lowest cost to consumers. That will involve overcoming planning, engineering, supply chain and technology hurdles, settling an efficient and consistent way to price externalities such as carbon emissions, as well as supporting businesses and industries to transition to lower emissions technologies at a pace that is technically and commercially feasible.
■ What level of adoption is your business currently at with the use of AI technology?
Digitising our business to drive efficiencies, cost savings and customer loyalty is a key element of our strategy. We take advantage of embedded AI in many of our business applications, such as our Cyber Security capability, our marketing tools, and the Microsoft 365 range of personal productivity applications. We also leverage Machine Learning where large volumes of data occur such as in our Integrated Business Planning capability, analytics, and finance functions.
We are starting to see the use of generative AI to support content creation in roles such as marketing and expect usage to grow in the next 12 months.
Acknowledging the rapid rise, opportunity, and risks of AI, we are updating our acceptable use policies to cover the use of AI across CSR.
■ What external issues do you expect to impact or disrupt your business within the next 12 months - the so-called 3AM thought?
Housing affordability, the national housing shortage and the incidence of homelessness is a concern for our society and is often top of mind, even at ‘3am’. Government has a role in building houses to help remedy the housing shortage, but it is housing affordability that is a potential disruptor for our business. Land release bottlenecks, lengthy approval processes, trade labour shortages and population growth all play into the housing affordability equation and government policy is integral to the solution here too.
■ Is business getting the balance right between investor, customer and other stakeholder demands when it comes to ESG issues?
We are moving toward stakeholder alignment on ESG issues. Our customers include large, listed builders and hardware distributors with responsible investors and sustainability targets like our own. From an environmental perspective, Government has set improved energy efficiency requirements via the National Construction Code, and on the social front has allocated more than $33bn to affordable and social housing. However, there is an imbalance when it comes to stakeholder time horizons.Governance is a mature practice amongst ASX-listed entities, and it’s this “G” in ESG that provides the framework to consider “E” and “S” factors. Every investment that CSR makes considers environmental and social impacts and we are as conscious of these non-financial elements as traditional financial performance hurdles and risks.
■ How has your organisation’s approach to staff working from home evolved since the pandemic?
Our work environment is broader than just the office, we have customers to visit as well as factories, warehouses, trade centres and depots. We’ve asked our team to spend most of their time in the business and this will mean different things for different roles.
We know that collaboration and connection are important to our people and enable an inclusive environment. We encourage teams to work together in person and leverage virtual where it works for us.
Flexibility is key and so we’ve stopped short of creating hard and fast rules and manage the exceptions as needed.
Dexus, Darren Steinberg
■ How is inflation and the prospect of higher for longer interest rates affecting your business? Importantly, is the behaviour of your customers changing?
We are seeing a changing investment environment where higher inflation is resulting in a repricing of real assets across the spectrum for real estate and infrastructure. From an office perspective, higher for longer interest rates are delaying some office developments which will constrain the supply of new office space post 2025. As a result, customers are bringing forward their leasing negotiations to secure space prior to lease expiry to secure space. Premium office vacancy in Sydney is less than 3% so customers are willing to pay a premium for location and quality of their workplace.
With the impact of interest rates, valuations are lagging so many investors are waiting to see more transactional evidence before committing capital. We expect it could be a good time to invest as prices reset to suit the new environment.
■ How is inflation and the prospect of higher for longer interest rates affecting your business? Importantly, is the behaviour of your customers changing?
The economy is in better shape than we thought it would be 12 months ago. From a global perspective the Australian economy is screening attractively. What we are seeing on the ground is consumer sentiment is weak and spending is weakening as the impact of the interest rates flow through. Although employment growth is easing, companies are still hiring, and the unemployment rate is low at 3.7%. Population growth as well as infrastructure spending are also providing a boost and will continue to underpin the growth of economy. A soft landing rather than recession seems the most likely outcome.
■ What do you think is the big area of reform needed to happen so the Australian economy (and your business) can sustainably reach full potential?
Capital has many places it can invest around the globe and Australia needs foreign capital for growth, so it’s important the right incentives are in place to give investors the confidence to invest. We fundamentally need overseas capital to fund the necessary infrastructure investments, so it is important we get the settings right. Australia is very well regarded on the world stage, however when governments tinker with the tax environment we know it is impacting investor sentiment. Streamlining the number of taxes we have on foreign capital, ironing out differences in state regulations and generally cutting red tape to reduce the cost of doing business in Australia will stop capital being deployed to other jurisdictions.
■ Australia has six years to meet its 2030 targets for a 43 per cent reduction in baseline emissions. What needs to happen here?
When you look at the energy transition, Australia is facing a trilemma: cutting our reliance on fossil fuels while building our capacity in renewable sources and storage, and at the same time keeping downward pressure on price and keeping the lights on.
We have been net zero emissions across the properties we manage since June 2022 and by 2030, if not earlier, we intend to source 100% of our electricity from renewable sources.
The amount of investment needed in Australia is in the range of trillions. I know it’s quite controversial, but we should be looking at all options, including nuclear, to help us reach our emissions targets.
■ What level of adoption is your business currently at with the use of AI technology?
We are excited about the opportunities to use AI in our business. AI offers enormous potential to run our assets more efficiently, reducing energy costs, increasing uptime and leveraging predicative analytics to fix problems before they occur. We are actively exploring the practical deployment of these technologies but still have a way to go.
At a corporate level, we are being thoughtful and considerate in our adoption of generative AI software. We are ensuring our staff are aware of its risks and limitations and have set up a governance framework around the handling and ownership of our data which provides protection and are exploring multiple avenues for its use including productivity improvements and assisting the business with reporting and business decisions.
■ What external issues do you expect to impact or disrupt your business within the next 12 months - the so-called 3AM thought?
A sustained high inflation environment and further geopolitical risk is not good for business. We are hopeful interest rates are near their peak and inflation is in check, however the geopolitical environment is unpredictable and out of our control.
■ Is business getting the balance right between investor, customer and other stakeholder demands when it comes to ESG issues?
Most organisations see ESG as risk management, but we see it as a growth opportunity, and we recently set a new sustainability strategy with priority areas that align to our group strategy to drive commercial value. Our Sustainability team is not a siloed team driving outcomes. It is wide-reaching with sustainability initiatives embedded across our business operations with clear accountabilities with asset managers, development planners and investment-decision makers. We think this approach helps balance between investor, customer and other stakeholder demands.
Governance underpins all business decisions and like the “E” and the “S”, should permeate through every level of an organisation.
■ How has your organisation’s approach to staff working from home evolved since the pandemic?
We have hybrid working which provides our people with the flexibility to work from home if they need to. There is no set operating rhythm but most of our people are choosing to be in the office for most of the time as they find it more effective to collaborate, innovate and build their team’s culture. I am also hearing from our customers that there is a distinct lack of productivity where office attendance is limited to set days and they are having to incentivise their staff to come to the office more regularly.
DuluxGroup, Patrick Houlihan
■ How is inflation and the prospect of higher for longer interest rates affecting your business? Importantly, is the behaviour of your customers changing?
• Our businesses continue to be relatively resilient as consumers continue to undertake home & garden improvement tasks. This continues a decades’ long trend where our product portfolio has had the characteristics of ‘consumer staples’ - rather than ‘consumer discretionary’ - throughout various economic cycles.
• Furthermore, consumer preference towards our premium branded products continues to hold up as they continue to focus on ‘doing it once and doing it right’. Our focus remains on brand-led innovation in this context.
■ How would you rate the shape of the Australian economy as we head into the New Year?
• While we expect conditions to remain subdued over the remainder of the year, with consumer confidence impacted by cost-of-living (particularly energy costs), inflation and interest rate rises, we anticipate these conditions will ease over the course of 2024.
Tight labour markets, including access to skilled tradespeople, continue to be a constraint on construction activity.
■ What do you think is the big area of reform needed to happen so the Australian economy (and your business) can sustainably reach full potential?
• In terms of getting Australia’s productivity growth back to the long-term norm of about 1.5 per cent, one of the factors at play is Australia’s relative competitiveness for capital investment, particularly in manufacturing that is linked to sovereign R&D capability and retention of IP and commercialisation here in Australia. There is no ’one big area of reform’ to address this. It requires a suite of reforms across taxation, skills & education, industrial relations, energy policy and the regulatory environment.
• In the long run, science & technology is the key enabler of productivity. We saw this first-hand when we built our new $165m Dulux factory in Melbourne, where we halved batch sizes and made twice as many batches in half the previous production time.
Even though it could run fully automated ‘lights off’, we still employed the same number of operators as were previously running the old technology. But we’ve trained employees in all aspects of working in a digital manufacturing environment, creating skilled, well paid jobs.
■ Australia has six years to meet its 2030 targets for a 43 per cent reduction in baseline emissions. What needs to happen here?
We need to accelerate the pace of the transmission build and level of investment in renewables technology and firming capacity. That requires a combination of the right investment attraction settings, fixing the regulatory and planning processes for transmission build and the policy framework to support a transition period that delivers on end-user cost and reliability. This will take better coordination and cooperation between all levels of government. In doing this, we need to ensure the global competitiveness of Australian industry.
■ What level of adoption is your business currently at with the use of AI technology?
• Our businesses are very much at the experimental, proof-of-concept stage. While we are exploring its use in areas such as supply chain, marketing and customer service, as with
all early phase technologies, it’s a slow build while we start to leverage this unique and transformative opportunity, while being conscious of any associated risk.
■ What external issues do you expect to impact or disrupt your business within the next 12 months - the so-called 3AM thought?
• Supply chain constraints continue to be something we are constantly trying to stay a step-ahead of and mitigate. In terms of Cyber-risk, we plan for ‘when’ not ‘if’, which means we are hyper-vigilant, focussed on prevention and mitigation & recovery.
■ Is business getting the balance right between investor, customer and other stakeholder demands when it comes to ESG issues?
• Scrutiny of ESG performance and regulatory disclosures is more intense than ever, and meeting obligations to relevant stakeholders should ultimately align with investor interests and strong company performance. But in addressing ESG related issues, we do need to be careful not to lose focus on strategy and growth that is centred on the primacy of the consumer & customer. It’s ultimately self-defeating if we get that balance wrong. It’s about knowing why the company exists in the first place.
■ How has your organisation’s approach to staff working from home evolved since the pandemic?
• It’s worth noting that approximately 75 per cent of our workforce cannot work from home, such as our people in factory, warehouse and R&D roles. For office-based roles, we have a model of 3-4 days a week in the office, ‘with flexibility’. We take a ‘leader-led approach’ to this, which means leaders work with their teams to determine how this best works for them. We’ve found that people are welcoming the regular face-to-face contact and collaboration, while retaining flexibility where needed.
Endeavour Group, Steve Donohue
■ How is inflation and the prospect of higher for longer interest rates affecting your business? Importantly, is the behaviour of your customers changing?
From our perspective 2024 is shaping as another challenging year for consumers, as the impact of successive interest rate rises takes hold on the economy. Households with big mortgages are facing a home loan environment not seen for a generation. Already we are seeing signs of consumers being careful with their spending.
Endeavour is in its third year as a listed company so we are managing our operation as a stand-alone business in real time with the volatility unfolding across the Australian economy. What strikes me about our operating performance is the resilience of the Endeavour business.
Australians are inherently social people, and that won’t change. Our research shows customers see our brands – Dan Murphy’s, BWS, ALH Hotels – as go-to options. All are trusted to offer great value for any occasion. These factors have underpinned our resilience through the 2023 calendar year. Obviously the holiday season and summer are an important time for our business and we plan to build on the momentum established during the football finals, spring racing and cyber week events.
We know our customers really well and we are confident Australians won’t stop socialising. However, for consumers worried about household and family budgets as cost-of-living pressures hit, the occasions (and the drinks they choose) might just start to look a bit different. But to date, demand in our businesses has remained resilient.
■ How would you rate the shape of the Australian economy as we head into the New Year?
Undoubtedly, cost-of-living pressures are having an impact with consumers in the wider economy. Both global and domestic factors are playing into the inflationary outlook.
Despite the global volatility and the monetary policy levers, the Australian economy has demonstrated remarkable underlying strength but we are still waiting for the full impact of the increases in the official cash rate to play out in 2024.
Our challenge as a retail and hotels business is to stay close to our customers and move quickly to meet their needs. Getting together with family and friends is a huge part of our lifestyle as Australians and our brands are at the heart of those social moments. The test for us is to always check that we are continuing to offer great value and memorable experiences.
With 30,000-plus team members, the labour market is a crucial factor in how our business operates. Attracting and retaining talent remains a key focus for Endeavour and we can never take our eye off the prize of getting the right people in the right roles – whether it’s on the shop floor of Dan Murphy’s, in the gaming room at one of our Hotels, or in our advanced analytics team in a support office.
It’s clear the low unemployment environment is making it more difficult to find the right people. Ahead of the busy summer trading period, Endeavour hosted a ‘Hiring Week’, an annual event to help us bolster the depth of our team. From that event, we learned that the battle for talent is tougher than ever. That’s why we spend so much time highlighting the career paths available for people in our sector. We are reinforcing that hospitality isn’t just a job, it’s a career. While Endeavour’s dedicated team members are one of our best assets, it’s something we can’t be complacent about. We need to keep working at it to ensure our people know that they’re valued and feel engaged.
■ What do you think is the big area of reform needed to happen so the Australian economy (and your business) can sustainably reach full potential?
One of the key factors underpinning Australia’s attractiveness as an investment destination is the regulatory environment. I can’t overstate the importance of stability and certainty from a regulatory perspective. It gives investors and corporate leaders the confidence to make decisions about the business. Greater investment leads to more growth, more jobs, more tax revenue and improved community outcomes. Endeavour operates in highly regulated industries and as the world changes, we need to ensure regulation keeps up with this pace of change – so it’s fit for purpose, with a focus on evidence and industry consultation. Working with industry and business ensures a better outcome for everyone. Policy decisions made in a vacuum carry much greater risk.
■ Australia has six years to meet its 2030 targets for a 43 per cent reduction in baseline emissions. What needs to happen here?
The future of energy use is an important topic not just for us, but for our whole supply chain, and we welcome any opportunity to be part of discussions aimed at bringing long-term stability to Australia’s energy mix. Our customers, our shareholders and our partners are increasingly asking us questions about how we approach energy and sustainability issues. We’ve made great progress in mapping and setting targets since the demerger just over two years ago. As a business that operates across every state and territory, we can see the value in a uniform policy approach that carries across each jurisdiction. This would accelerate the investment in and approval of projects in the renewable energy sector, opening up opportunities for businesses looking to comply with new standards and lower emissions.
■ What level of adoption is your business currently at with the use of AI technology?
We are moving quickly to integrate AI initiatives into various parts of our business, largely with a focus on improving customer experience. Whether it’s to assist our activity-based rostering process (reducing administrative tasks for team members, enabling them to spend more time face-to-face with customers), or verifying we are delivering the lowest prices in line with our famous Dan Murphy’s Lowest Liquor Price Guarantee. It is also helping us to optimise price, range and promotions across both retail and hotels. When you consider the number of locations and offers we have, there is an enormous amount of data that we can ingest and process to improve customer experiences. I’m always enthusiastic about anything that makes a customer’s experience with us more memorable and increasingly personalised. No two customers are the same, and it’s our job to engage with them as individuals. If we can better understand our customers, we can tailor the experience to suit their needs. The potential is unlimited from my perspective as our customer proposition must continue to evolve to ensure we maintain our reputation as a market leader.
■ What external issues do you expect to impact or disrupt your business within the next 12 months – the so-called 3AM thought?
There’s two ways you can look at the issue of disruption – disrupt or be disrupted. From our perspective at Endeavour, it comes down to better understanding and responding to our customer. If we aren’t continually pushing the needle and leading the way with customer experience, it’s inevitable that we’ll fall behind. That’s why, more than ever, we are focused on what we can do to move with and respond to customer needs throughout this period. So my ‘3am thought’ is often around how we can better connect with our customers at a deeper level and respond to changing needs as quickly as we can. We need to continually innovate and evolve. We’ve put a lot of time and effort into building our advanced analytics muscle as a business, but there’s always more to do to improve customer experience and remove friction from their journey with us.
■ Is business getting the balance right between investor, customer and other stakeholder demands when it comes to ESG issues?
Striking this balance will always be a challenge. Governance will always be crucial for us as a business that operates in heavily regulated industries. Depending on external factors it’s natural for one letter to get more attention at times, but sometimes it is for the greater good. We’re confident that if we get the approach to ESG right, it can actually appeal to customers, stakeholders and investors and in turn drive growth and sustainability, leading to enhanced value for shareholders over the long term. Deriving competitive advantage through thoughtful leadership in appropriate elements of ESG is well understood by the broader investment community.
■ How has your organisation’s approach to staff working from home evolved since the pandemic?
We have more than 30,000 people across the country – most of whom are on the shop floor in Dan Murphy’s or BWS, or serving you at your local pub. Hybrid work and flexibility will continue to be key in attracting talent, but as a business built on socialising and social occasions, we do want to keep people connecting and collaborating in offices, or in fact out in our stores, hotels and wineries so they can stay close to the engine room of our business. We have just opened our new Group Support office in Richmond in Melbourne. I’ve been spending some time there myself and the working environment is fantastic. Getting support teams back together at work means we have to create spaces where people want to be, and where it’s easy to do your work.
EnergyAustralia, Mark Collette
■ How is inflation and the prospect of higher for longer interest rates affecting your business? Importantly, is the behaviour of your customers changing?
There’s no question that many Australian businesses and households are doing it tough, and cost of living is the biggest issue Aussies are facing.
We have seen a 300 per cent increase in customers entering our EnergyAssist hardship program this year so many people are already facing significant challenges with their household budget.
In electricity, Australia’s existing system is ageing and needs replacement. The new infrastructure for a net zero system is required but Australia must do this smartly and efficiently, mindful of cost-of-living pressures.
International inflationary pressures are also building in energy as the world competes to decarbonise.
We are now in a global race against some of the biggest economies, including the massive investment in the American IRA Act, for investment. Our approach in this environment is to invest in the best projects – with the returns then flowing to customers and shareholders.
■ How would you rate the shape of the Australian economy as we head into the New Year?
A growing number of households are experiencing difficulty as cost-of-living pressures bite, and they curtail spending to make ends meet. For example, in energy the number of customers entering our EnergyAssist hardship program grows with each increase in interest rates by the Reserve Bank, so we know monetary policy is hurting and household savings are being depleted. This is an indicator of a softer economy in 2024.
■ What do you think is the big area of reform needed to happen so the Australian economy (and your business) can sustainably reach full potential?
Matching the do-ability of the energy transition with the ambition to achieve decarbonisation targets remains unfinished business. The best way to maintain affordability – and reliability – is to build the new net zero system before closing the existing system. This sounds basic but remains essential, with more to do on ensuring new builds occur before coal closures. So, for example getting the details right for the Commonwealth/State agreement on a strategic reserve for each state is essential. Without this sort of backup, our electricity system holds too much risk for consumers.
■ Australia has six years to meet its 2030 targets for a 43 per cent reduction in baseline emissions. What needs to happen here?
Australia’s energy transition is happening at lightspeed. The scale of the transformation needed to hit the targets by 2030 is hard to overstate. For example, Australia needs to add 1.5 times the current renewable energy production in 6 years – noting the existing stock took 20 years plus to bring to life. Government and corporate ambition is strong, policy is supportive but of course challenges remain around supply chain, social license, workforce and similar. The biggest challenge remains affordability – cost of living is the biggest issue for Australians.
The best way to maintain affordability – and reliability – is to build the new net zero system before closing the existing system. This sounds basic but remains essential. So, for example getting the details right for the Commonwealth/State agreement on a strategic reserve for each state is essential. Without this sort of backup, our electricity system holds too much risk for consumers.
■ What external issues do you expect to impact or disrupt your business within the next 12 months - the so-called 3AM thought?
Much has improved in Australia’s energy system since 2022 but fundamentally supply has not been added as quickly as coal closures have occurred - meaning the risk remains that ageing electricity system is insufficiently reliable through the transition.
We are investing in the reliability of our generation and in new capacity – like Tallawarra B – that improves this physical situation. Longer-term, what worries us is gas supply. AEMO has been saying for years that there are big gaps in gas supply in the southern states from 2026 or 2027 with limits to alternatives like electrification. This is a scary outlook for homes and businesses, a problem that cannot be solved by industry alone.
■ Is business getting the balance right between investor, customer and other stakeholder demands when it comes to ESG issues?
We released our Climate Transition Action Plan this year, laying out our approach to the clean energy transition both for our contribution to the physical energy system and how we work with others to support the transition.
For example, we are planning now for employee and community transition at the Yallourn power station in Victoria ahead of its closure in mid-2028. At the same time, we are starting early on engagement and community benefit sharing for the new projects - like storage – that will be a big part of enabling renewables into the system.
■ How has your organisation’s approach to staff working from home evolved since the pandemic?
EnergyAustralia is committed to flexible working. We want people back at work, but our approach is to allow each team to decide what works for them, which typically involves some time in the office and some time working from home.
Personally, I’ve enjoyed spending more time in the office this year. Things like informal chats in the corridor and in-person meetings support creativity and better collaboration. With the business challenges we are managing, we need more of that in-person connection rather than less.
Fortescue Metals, Dino Otranto
■ How is inflation and the prospect of higher for longer interest rates affecting your business? Importantly, is the behaviour of your customers changing?
Yes, customer behaviour is changing, and we have made sure that from a demand perspective we’ve got a product suite that is counter-cyclical.
When there is demand for low steel margins our sector does very well. But with Iron Bridge coming online we’re also seeing a huge demand for higher grade product going into the green steel sector. So, with low grade and high grade, and with Gabon also adding to our product suite, we’re positioned for any cycles in the market.
In terms of a specific shift in behaviour, it’s clear that the steel mills in China have had a direction to go green for a segment of their portfolio by 2030. Along with our green iron ore products, we’re investing in a plant to make green iron in the Pilbara to then export into that market.
■ How would you rate the shape of the Australian economy as we head into the New Year?
I can speak to the outlook for us as a business and as a major contributor to the Australian economy.
Like others we’re not immune to factors like inflation and a tight labour market or the impact economic pressures have on our contractors and our supply chains. But overall, I’m optimistic – we’re still seeing demand for around a billion tonnes of crude steel coming out of China so our products, and the Australian iron ore sector which is a major contributor to our economy, should be well-positioned for the immediate future.
■ What do you think is the big area of reform needed to happen so the Australian economy (and your business) can sustainably reach full potential?
A key focus would be the energy transition and the reform required to ensure Australia is best placed to seize the opportunity that comes with it.
We need policy settings which aid our energy transition in a domestic and global sense. Domestically, incentives for businesses to take the leap and outlay the investment required on the technologies and innovation that best enables them to reduce their emissions. And incentives for customers to change their behaviours, to aid in the uptake of green alternatives.
Globally, incentives which attract and retain the investment and talent Australia needs to be a leader in green metals, energy and technology.
It’s clear the Government is aware of this and it’s encouraging to see the action they are starting to take to support the energy transition and industry’s role within it.
■ Australia has six years to meet its 2030 targets for a 43 per cent reduction in baseline emissions. What needs to happen here?
The decarbonisation of heavy industry has a key role to play. We’re committed to eliminating emissions by 2030, and as part of our decarbonisation road map are busy rethinking the way we operate to ensure we retain our productivity while reducing our emissions and risk profile.
The technology and innovation available to aid the decarbonisation of industry is constantly improving and will only speed up as demand increases. A zero-emissions mining fleet would not have been possible a decade ago – today, we already have battery electric trucks being trialled on our sites.
Industry is a major contributor to Australia’s emissions – it is on all of us to do our part, to make the investments required, to ensure we are acting in the interests of our shareholders and the environment for generations to come.
■ What level of adoption is your business currently at with the use of AI technology?
AI will be a strategic capability for us into the future. Several programs of work are already using AI and improving our decision making with benefits to production, cost and safety. We are focused on building core AI capability within our business and see a significant opportunity for AI technologies to support our decarbonisation strategy and fast track our journey to real zero.
■ What external issues do you expect to impact or disrupt your business within the next 12 months – the so-called 3AM thought?
For the last few weeks, we’ve had crews battling bushfires around our operations in the Pilbara. This is obviously a key concern from a people safety perspective, but it’s also a concern in terms of the disruption it causes to our operations and to the broader teams who are taken offline to respond to and manage the situation. With rising temperatures, I worry this will become more and more prevalent in seasons to come. The impact that this will have on our people and our operations could be significant. It’s on all of us to do what we can to combat global warming.
■ Is business getting the balance right between investor, customer and other stakeholder demands when it comes to ESG issues?
Our people are a driver of ESG, along with our shareholders and customers – it’s as much driven internally as externally for us. The E, S and G are integrated across our ways of working – in terms of its evolution I’d say this is now seen as standard by the market, rather than as a company going above and beyond. We’re a Values-driven business and our approach to ESG reflects this. Our journey to diversify and become a global green metals, energy and technology business is central to our ESG approach. It is in part a response to expectations from the market, in part driven by the need to reduce risk and invest in future growth for our shareholders, and importantly, in part to ensure we have an engaged and motivated workforce who are proud to be part of the Fortescue family.
■ How has your organisation’s approach to staff working from home evolved since the pandemic?
Flexible work means a lot of different things to different people – it might mean job sharing, working part-time or having the option to work from home. For our operational workforce, it might include choosing a roster that suits their personal circumstances. At Fortescue, we have a range of options in place which support our team members to work flexibly, while balancing individual needs with business requirements. We haven’t had an issue with people returning to the office, and encourage our teams to work in the way that suits them best.
GrainCorp, Robert Spurway
■ How is inflation and the prospect of higher for longer interest rates affecting your business? Importantly, is the behaviour of your customers changing?
We continue to see strong demand for Australian grain and products, and the pricing for those products is set by the commodity markets.
By nature, those markets incorporate higher interest rates and other inflationary costs into the overall pricing, so we don’t have to negotiate or pass on higher costs to our customers.
This highlights the resilience of the grains sector for our customers – people always need to eat.
For GrainCorp, our focus on cost management and the way we’ve diversified our business has helped us to manage volatility in a higher inflationary environment.
■ How would you rate the shape of the Australian economy as we head into the New Year?
We’re optimistic about the shape of Australia’s economy in 2024.
Australia is a resilient nation and our agriculture industry is a key pillar of our economic health, both from a productivity and quality perspective.
There’s still high demand for Australian grain and this extends across food, feed and fuel, so it’s a rising tide that lifts all boats.
Labour challenges have eased somewhat given we can once again move workers around the country, and thanks to the strong career opportunities that the industry provides.
■ What do you think is the big area of reform needed to happen so the Australian economy (and your business) can sustainably reach full potential?
The de-carbonisation of the transport industries will be key to supporting Australia’s emissions reduction ambitions.
There’s an exciting opportunity in biofuels, and the role that agriculture can play in providing feedstocks for sustainable fuels in the aviation sector.
Moving agricultural production efficiently to our ports is also a strong step to a more sustainable future; we recognise it needs to be affordable, but sensible investments in rail infrastructure by the Government will be crucial in the years to come.
■ Australia has six years to meet its 2030 targets for a 43 per cent reduction in baseline emissions. What needs to happen here?
GrainCorp has decreased emissions across processing sites by 11% per tonne of production in the last year, and we’ve committed to setting science-based targets for emissions reductions.
Reducing emissions has to be a joint commitment by industry and government – it can’t be done alone or by the few.
We need to increase education and focus on setting strong policy for the years to come in order to decarbonise major transport sectors.
■ What level of adoption is your business currently at with the use of AI technology?
GrainCorp has invested in companies that use AI to digitise and drive innovation in the agriculture industry.
Products like ZoomAgri use AI to finesse the onsite testing process for high quality malting barley, which benefits the entire supply chain, from the grower through to the end customer.
We’d encourage the use of AI where it supports better business outcomes for the majority, while making sure the risks are managed with appropriate cyber controls in place.
■ What external issues do you expect to impact or disrupt your business within the next 12 months - the so-called 3AM thought?
The world is a volatile place, and seeing first hand the impacts of the Black Sea conflict on GrainCorp’s team in Ukraine has kept the safety of our people firmly front of mind.
It’s also a reminder that food will always be a critical resource, and so maintaining Australia’s access to global markets so that farmers can continue feeding the world is a crucial way to maintain stability.
Cyber safety is a priority for us and no doubt many others, with the increasing sophistication of attacks on businesses and consumers. It requires an ongoing concerted effort to defend our systems.
■ Is business getting the balance right between investor, customer and other stakeholder demands when it comes to ESG issues?
GrainCorp’s team has taken big steps over the past two years to re-design our sustainability strategy and reporting. We’re proud of our holistic approach to the E, S and G in equal measure.
Governance underpins our ability to follow through on the commitments we make in our Sustainability Report, and promotes a culture of compliance, ethical behaviour, integrity and respect.
■ How has your organisation’s approach to staff working from home evolved since the pandemic?
The majority of GrainCorp’s workforce operate our valuable assets at over 160 grain handling sites, seven ports and processing facilities, and the nature of this physical and highly skilled work requires in-person presence.
Where the roles allow it, we offer flexible working arrangements with at least three days a week in the office. This is part of our goal to strike the right balance between personal life and continued connection to the team, as well as to be an employer of choice.
HESTA, Debby Blakey
■ How is inflation and the prospect of higher for longer interest rates affecting your business? Importantly, is the behaviour of your customers changing?
The impact of rising costs for everyday goods and services and the resulting inflationary pressures adds a layer of complexity to market volatility, creating challenges for investors like HESTA as well as for our members.
We’ve seen one of the most aggressive interest rate hiking cycles in decades, and we’re still seeing the impacts of this flow through to member behaviour. However, it’s important to remember that short-term market fluctuations are part of the investment journey, and maintaining a long-term perspective is crucial, especially during challenging periods.
HESTA members primarily work in the health and community services sector; they are critical workers, but the undervaluation of their work means that they will feel the cost-of-living pressures more acutely than most. With the most recent RBA rate rise, our members with a typical $500,000 mortgage over 25 years, means they have seen more than $1,200 added to monthly repayments since May 2022.
The number of calls we’ve received regarding accessing funds has doubled since 2020. We’re hearing from members who are not in traditionally vulnerable cohorts who find themselves struggling. We are also hearing about members who have effectively retired and feel they will need to return to work.
Last year, we partnered with Ask Izzy to support vulnerable members. Ask Izzy is a website that connects people in need with financial help, housing, family violence support, and much more. It is free and anonymous and since
late April, over 1,100 HESTA members have used Ask Izzy, 90 per cent of whom found it via our website.
■ How would you rate the shape of the Australian economy as we head into the New Year?
In short, 2023 was a challenging year for predicting the path for the Australian economy. Inflation became stickier, interest rates were lifted to higher levels than we thought a year ago, and consumer confidence remained in the doldrums. There was some good news, with strong employment and higher wage growth supporting some households.
The outlook for 2024 is shaping up to be equally challenging. Household spending is expected to slow further due to higher mortgage rates biting into incomes. However, savers holding cash are being rewarded for the first time in a decade. High immigration rates support house prices and rents, so that cost-of-living challenges will remain live for some time. Businesses are in good shape, limiting widespread job losses. We believe Australia can avoid a deep recession, but we maintain a cautious stance in the portfolio.
■ What do you think is the big area of reform needed to happen so the Australian economy (and your business) can sustainably reach full potential?
The energy transition is one of the biggest challenges and opportunities that Australia faces.
Funding the climate transition has been largely led by private investment to date and the policy settings have lagged. Having reached the renewable energy target early a new mechanism has been required to match the climate and energy transition ambition with actions in the economy.
Superannuation is an incredible national advantage for Australia that can help power the domestic transition but to date there has been uncertainty, with multiple energy policies. Legislated targets and the recent announcement of the Capacity Investment Scheme means investors have certainty that has never been there before.
HESTA also sees housing and housing supply as a critical area for the nation.
This issue has been a growing concern in the country due to rising property prices, tight rental vacancy rates, a shortage of affordable housing, and an increase in homelessness rates.
It impacts our member’s ability to retire with dignity and holds back the broad prosperity of the nation.
Housing is a complex area of regulation with inputs from local, state, and federal levels of government. There is a clear role for investors as public money cannot meet this challenge alone, but superfunds need clarity of the policy settings and investment landscape, so we are able to earn the long- term strong returns we require for members.
Our members, who work in healthcare and community services, are experiencing housing affordability challenges that could affect their financial security in retirement.
We have invested significant capital in affordable housing projects over the last couple of years and committed to help deliver almost 2,000 affordable housing units over the next few years and maintain an ongoing commitment to address community demand for sustainable housing.
HESTA also supports the Federal Government’s Housing Accord, Housing Australia Future Fund, and related legislation to address this crucial issue.
■ Australia has six years to meet its 2030 targets for a 43 per cent reduction in baseline emissions. What needs to happen here?
Transitioning to a low-carbon future is crucial for the well-being of future generations in Australia, and the approach to this shift is central to economic sustainability.
Given its long-term investment horizon, superannuation is well-positioned to play an important role in the energy transition. We also have the opportunity to be a critical minerals super power, a leading country supporting a vital global transition to a low-carbon world.
Global investors, including HESTA, are strategically driving down carbon emissions in their portfolios while seeking opportunities arising from the transition to a low-carbon world.
I’m optimistic about our ability to reach our targets in Australia and do the work collaboratively to get there. Australian policymakers are playing a key role in this transition. The government’s announcement of a Capacity Investment Scheme is a crucial step forward, opening the door for investors like HESTA to play a significant role in funding the transition.
In the best financial interest of our one million plus members, HESTA has committed to achieving net-zero by 2050. To get there, we are investing in transition opportunities that support innovation in technologies and businesses leading the charge towards a low-carbon future.
■ What level of adoption is your business currently at with the use of AI technology?
At HESTA, we are starting to make use of AI within multiple areas of the business, covering machine learning, segmentation, predictive analytics, investment analysis and chat.
Our most recent venture has been the establishment of an internal Generative AI Playground, with an initial emphasis on Large Language Models (LLMs). These models are at the forefront of AI technology, offering capabilities ranging from question-answering and content generation to language translation and conversational engagement, which are revolutionising service automation and content creation.
Beyond their functional applications, we are proactively examining the inherent biases within LLMs to ensure ethical and appropriate use. We are assessing which models are optimally aligned with various tasks and establishing a framework of guidelines to govern their application.
We will continue to use AI responsibly within our business and pilot new forms of AI to determine where they can add the most value and generate efficiencies for our organisation, that will ultimately benefit our members.
■ What external issues do you expect to impact or disrupt your business within the next 12 months - the so-called 3AM thought?
Persistent concerns about heightened inflation are one of the things at the forefront of my thoughts, particularly considering the imperative for our 1 million-plus members to safeguard their purchasing power during retirement.
Encouragingly, our Ready-Made Options have consistently met their CPI+ investment objectives over the last decade.
However, the pivotal factor for sustaining these achievements in the future hinges on restoring inflation to its target levels.
While our forward-looking projections indicate that returns are poised to surpass our investment objectives over the medium term, the immediate horizon may witness ongoing volatility.
This volatility is expected as the repercussions of elevated interest rates continue to permeate the economy.
■ Is business getting the balance right between investor, customer and other stakeholder demands when it comes to ESG issues?
Social licence is a critical element of company success, but it can be challenging to quantify, identify and protect in the abstract.
Unfortunately, we have seen a few recent examples in Australia of social license erosion, which has impacted company value but provides more clarity on the concept.
“G” isn’t left behind in ESG; governance is the starting point to properly consider and manage E and S. The evolution of ESG is such that governance matters become threshold issues – binary notions of good and not-so-good.
Whereas environmental and social matters require more nuance.
Long-term investors like HESTA expect a broad consideration and an understanding of stakeholder concerns because we firmly believe that builds value over our investment horizon. By taking a stakeholder view, value is created at a company and an economy level.
■ How has your organisation’s approach to staff working from home evolved since the pandemic?
Recognising the increasing prevalence of remote and hybrid working, I am acutely aware of the necessity to uphold our team’s connection to and enthusiasm for our shared purpose and future vision. The shift to hybrid work allows our employees to balance concentrated work and collaborative in-person engagements to create value for HESTA.
At HESTA, we view flexibility as a holistic means of supporting our team members to deliver the best work of their careers. Our hybrid model, allowing for 50 per cent remote work, aims to provide the benefits of flexibility while preserving the strong collaboration and interconnectedness that in-person interactions foster. HESTA’s hybrid way of working design recently received a Good Design Award.
Insignia Financial, Renato Mota
■ How is inflation and the prospect of higher for longer interest rates affecting your business? Importantly, is the behaviour of your customers changing?
As one of the country’s largest superannuation providers, much of our business is non-discretionary and so is less impacted by inflation and interest rates. Where our business is impacted by higher interest rates is the resultant impact on investment markets, our member balances, and our funds under management and administration, which in-turn impacts our revenue.
Higher interest rates have provided retirees with some improvement in risk adjusted returns with rates on deposits and cash-based investments providing better returns with less risk.
That being said, inflation is impacting cost of living for all Australians. We’re seeing the increased importance, demand, and need for financial advice, coaching and guidance, particularly around budgeting and cashflow management.
■ How would you rate the shape of the Australian economy as we head into the New Year?
Australia’s economy appears to be struggling to maintain growth. Leading indicators such as business and consumer confidence, job ads, and housing construction suggest the economy is growing slowly. However, positives such as strong population growth and a large pipeline of infrastructure projects to complete, should assist the economy.
There are limitations in assessing the economy by way of averages. The impacts of the current environment are being felt with ever increasing rates of bifurcation, between those who are struggling and those who are not. We should consider the societal pressures that may arise from this increasing disparity in economic experience.
■ What do you think is the big area of reform needed to happen so the Australian economy (and your business) can sustainably reach full potential?
In the context of an ageing population that is living longer, evolving community expectations of retirement, structural pressures on public finances, and cost of living pressures, we believe improving accessibility and affordability of advice will have positive impacts for individuals and importantly reduce the burden on public safety nets.
People are navigating evermore complex lives and as they approach retirement, the financial decisions they need to make are substantial and life-changing. They must consider a wide range of circumstances when planning for their retirement and good quality advice can help manage through this complexity, making a difference to people’s anxiety, and their financial situation overall. With more Australians looking for their superannuation funds to play a greater role in providing advice, we hope the Government’s response to the Quality of Advice Review will go some way to enabling Australians to access affordable quality advice.
■ What external issues do you expect to impact or disrupt your business within the next 12 months - the so-called 3AM thought?
Financial services remain one of the most heavily targeted industries in Australia for cyber criminals. We’ve also seen the disruption this can cause to critical infrastructure and operations in enterprises as threat actors become increasingly damaging.
We have announced further investment in cyber related activities in FY24, which includes the upgrading of cyber detection capabilities and tools to keep up with the changing threat landscape but also to focus on preparing our response to cyber incidents when they occur to minimise the impact to the business. This is in conjunction with the increased regulatory focus on cyber security, not only across our own environment but extending to our supply chain and the impact a cyber incident at a third party can have on us.
■ What level of adoption is your business currently at with the use of AI technology?
We are an early adopter of artificial intelligence (AI). By integrating AI into our operations, we’ve streamlined processes, enhanced security measures to bolster authentication processes, reduced errors, and freed up time for our employees to focus on meaningful interactions with clients.
Alongside our proprietary models and code, we’ve partnered with organisations to deploy digital workers in the form of intelligent software bots to automate processes and achieve efficiencies, including across finance, operations, and human resources.
We recognise the enormous potential for AI across our business and continue to look for ways to implement AI with the goal to provide benefits to not only our people, but our clients and members.
■ Is business getting the balance right between investor, customer and other stakeholder demands when it comes to ESG issues?
At Insignia Financial, we are committed to helping secure a better future for all our stakeholders, embedding ESG factors into decision making across our business is critical for us to deliver sustainable long-term growth.
To ensure we continue to meet investor, customer, and other stakeholder demands, we have refined our ESG strategy over the coming 2-3 years. Details of this assessment and material topics can be found in our annual report.
Governance is a priority as part of this realignment of our ESG focus, with areas such as cyber security, responsible investment, and our broader Risk Division being reviewed and invested in over the past 12 months. This investment will ensure we continue to meet stakeholder and regulator expectations and build a trusted business into the future.
■ How has your organisation’s approach to staff working from home evolved since the pandemic?
We believe in and support flexibility – working from home and having options on when and how our people work is important to us.
There can be potential missed opportunities to connect and collaborate as a result of hybrid working arrangements, like a reduction in water cooler chat and decreased opportunities to share ideas. We think it’s important we’re deliberate in how we support our people to learn and build culture, as creativity is an important part of innovation.
From February 2023, Insignia Financial employees were all expected to spend a minimum of 40% of their working days in the office together. Since then, we have seen benefits to our culture, decision making, and agility in complex problem solving from the in-person interactions.
Insurance Australia Group, Nick Hawkins
■ How is inflation and the prospect of higher for longer interest rates affecting your business? Importantly, is the behaviour of your customers changing?
Our business has felt the effects of inflation, particularly in the cost of repairs for our customers who need to make a claim. Across most parts of our home and motor portfolios, our costs have gone up faster than the general level of inflation, largely because of factors such as higher construction costs, and motor parts inflation.
The overall effect of higher inflation is putting pressure on our premiums which impacts our customers. We have worked hard to manage costs to help minimise the impact of higher premiums, and we are pleased that despite this tough environment, our renewal rates remain high. I believe this reflects the value of insurance and the importance customers place in brands they know and trust.
■ How would you rate the shape of the Australian economy as we head into the New Year?
The Australian economy has been remarkably resilient in the face of higher interest rates, and inflation, with unemployment remaining at historic lows. That said, people are really feeling the cost of living pressures and are cutting back discretionary purchases.
I think it’s fair to say that some of the acute pressures, particularly in the labour market, have eased a bit, although wages pressures remain. The RBA is trying to engineer a soft landing, and at the moment that looks achievable.
■ What do you think is the big area of reform needed to happen so the Australian economy (and your business) can sustainably reach full potential?
There are two areas of reform that are front of mind for me. One is around land planning reform – now for natural disasters and into the future as we face a changing climate. The second is skilled and labour shortages which are impacting all businesses.
On land planning reform, we know natural disasters have long lasting impacts on Australian communities and the economy, which is why we have long advocated for funding to reduce natural perils risk through mitigation and planned relocation, and reforms to land planning across all states and territories.
Our recently released “Addressing Resilience in Land Use Planning” report, puts forward recommendations to address the challenges we face with land planning as a country. The report makes a point of saying that all levels of government need to rethink how natural hazards and climate risk are addressed in land planning decisions.
Governments and insurers need work together to define a standard for natural hazards risk tolerance in land planning, so the communities we’re building aren’t burdened with rising catastrophe costs into the future. The report also recommends relieving the strain on Local government planning teams, by funding additional roles to support growth and adaptation in areas constrained by natural hazards.
Skilled and labour shortages is another area that needs more reform if we are to truly unlock the potential of the Australian economy. While immigration changes under the Albanese Government have provided some relief for businesses, we believe a better targeted and a more efficient migration system will address labour skill shortages and improve productivity in the motor and building repairs sector. And this needs to be complemented with greater investment in vocational training for existing and emerging jobs, as well as upskilling.
This is an important issue for our industry, as we are currently grappling with labour shortages in areas such as motor and building repairs, which are critical for the insurance industry and for our ability to help customers get back on their feet. And to support the transition to clean vehicles which is underway, we believe the Federal Government needs to ensure that Australia has the appropriate skills, training and knowledge to repair EVs safely.
■ Australia has six years to meet its 2030 targets for a 43 per cent reduction in baseline emissions. What needs to happen here?
Policy settings need to support an accelerated but orderly transition to a low carbon economy to ensure Australia meets its 2030 targets and minimises the impacts of climate change.
A clear and long-term climate and energy policy will unlock the required private sector investment that will support the transition.
The energy transition plays a key role in Australia meeting its emissions targets. As a company, we have committed to net zero by 2050 and we have prioritised actions through our Climate & Disaster Resilience Action Plan, including purchasing 100% renewable energy in Australia by 2025.
■ What level of adoption is your business currently at with the use of AI technology?
We have an established program of AI in machine learning and are in the early stages of trialling new customer experiences using Generative AI. We have successfully deployed AI across our business, and this includes enhancing the customer experience through quotes and renewals. We’ve also realised customer benefits through the automaton of some claims processes.
IAG has a long history of thought leadership on the responsible and ethical use of AI, co-founding and continuing to sponsor the Gradient Institute, which is an independent not-for-profit organisation founded to research the ethics of AI and develop ethical AI-based systems.
AI has the potential to deliver transformational shifts in terms of the experiences we deliver for our customers, and the tools and resources we have available to support our people.
We’re now pursuing opportunities to use Generative AI to deliver new, personalised experiences for our customers, and we’re also investigating the use of GenAI to improve the way we access and process data to unlock knowledge across our company, which ultimately will deliver better experiences for our customers.
We’re working with our cloud providers and software partners to assess the use of large language models, which understand and generate text in a human-like fashion, with our historical data sets and external information to deliver personalised offers for our customers.
■ What external issues do you expect to impact or disrupt your business within the next 12 months - the so-called 3AM thought?
The potential for a climate and economic shock to occur at the same time, which would produce an overnight step change in the cost of perils risk and reinsurance, is a very real risk. Importantly, what that scenario would mean for our customers is something the industry needs to work on with policy makers to plan for such an outcome.
Without doubt, the climate risk is shifting and is having a bigger impact on the operating environment which is putting pressure on our natural perils costs which ultimately impacts premiums for our customers. Today, gross natural perils and reinsurance costs make up 20% of every dollar of premium we collect, this is compared to 13% in 2016 and 16% in FY22. This increase is largely due to the increase in severity and frequency of weather and climate events over the past two years which has resulted in a hardening of reinsurance rates.
So, the accelerating change in climate risk is something that weighs heavily on me, particularly now when consumers are doing it tough. It’s also critical that we get the balance right between meeting shareholder expectations and customers’ needs.
Equally, I see cyber security as an increasing risk.
We have invested heavily in our cyber and data security controls, we have multiple layers of defence in place to help mitigate the risk, and we regularly test our security controls to ensure they are operating effectively. But that doesn’t mean the risk goes away. It’s something we are monitoring closely every day to ensure we keep our customer and corporate information safe.
■ Is business getting the balance right between investor, customer and other stakeholder demands when it comes to ESG issues?
Balancing stakeholder demands on ESG issues is becoming increasingly complex. However, increased investor and regulator focus is elevating the importance of ESG at the Board level across all sectors. This in turn is helping business become more sophisticated in responding to the environmental and social issues that matter most for customers, employees, and business sustainability.
At IAG, our purpose to make your world a safer place helps us to consider all stakeholders in the way we deliver on our strategy.
There has been significant progress in governance frameworks and policies addressing social and environmental topics in recent years. The challenge is keeping up with growing stakeholder expectations and being able to respond to the evolving and emerging risks, including cyber security, modern slavery, and customer equity. This needs to be a continued focus.
With considerable attention expected on climate disclosures over the next few years, business also needs to make sure we maintain focus on the “S” in ESG.
■ How has your organisation’s approach to staff working from home evolved since the pandemic?
We have a long history of providing our employees flexible workplace arrangements, and we had already set up many of our customer contact centre teams to work from home before to the pandemic.
Rather than a one-size-fits- all approach, we’ve encouraged our leaders to work with their teams to decide the rhythm that works best for them. We provided a guide to help them determine their rhythms taking into account the needs of our customers, while maintaining connection, collaboration and career development opportunities. I believe leaders have an important role to play supporting our people through coaching and development, and that’s why I expect leaders, particularly our senior leaders, to spend more time at our worksites.
On the whole our approach is working well and is meeting the needs of our company and our people. The 2023 Leesman survey provided a good proof point where we were in the top two companies globally (for companies our size) for our work-from-home experience and 5th best for our worksites.
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