Good morning, ladies and gentlemen. My name is Peter Botten, and I'm your Chairman. Welcome to AGL's 2021 Annual General Meeting, my first meeting as Chairman of AGL. I'd like to start the meeting by acknowledging the traditional owners of the land on which I'm sharing this meeting from today in Perth, the Whadjuk Noongar people, and pay my respects to their elders past, present, and emerging. Directors and shareholders listening in are doing so from other ancestral lands, and I also pay my respects to the traditional owners of those lands and their elders past, present, and emerging. We had originally intended to hold this year's meeting as a physical meeting in Melbourne, but given the extent of lockdowns throughout Australia and in light of the potential health risks created by the COVID-19 pandemic, we decided it was prudent to host this year's meeting online.
Every effort has been made to ensure that the meeting runs smoothly and that shareholders have the full ability to participate. If you encounter any technical issues which preclude you from attending the meeting live, a recording and transcript of the meeting will be available on our website after the meeting. Shareholders have the opportunity to ask questions in this online meeting format. If you're a shareholder or proxy attorney or representative of shareholder and wish to ask a question about an item of business, select the messaging tab at the top of the platform. At the top of that tab, there is a section for you to type your question. Once you've finished typing, please hit the arrow symbol to send.
If you have a question already prepared, please submit it now on the platform so that we can answer as many questions as possible when we come to the relevant agenda item. You do not need to wait until the relevant item of business. I ask that you please keep your questions brief so that as many shareholders possible have an opportunity to ask a question. For those shareholders who wish to ask a verbal question, an audio questions facility is available during this meeting. To use this service, please pause the broadcast on the Lumi platform and then click on the link under asking audio questions. A new page will open where you will be prompted to enter your name and the topic of your question before being connected. You will listen to the meeting on this page while waiting to ask your question.
Questions sent via the online meeting platform will be moderated to avoid repetition. If questions are particularly lengthy, we may need to summarize them in the interest of time. To assist with the smooth running of the meeting, Liz McNamara, Executive General Manager, Corporate Affairs, will read out the name of the shareholder and their question. We will give all shareholders present a reasonable opportunity to ask questions, but it is possible that not all questions will be answered today. A number of shareholders also submitted questions in advance of the meeting. Individual responses have been sent to those shareholders ahead of the meeting. We'll also address key themes raised in my address and in the Managing Director & CEO's address. I now confirm that a quorum is present, and I declare the meeting open.
If you are eligible to vote at this meeting, a new voting tab will shortly appear on your screen. Selecting this tab will bring up a list of resolutions and present you with voting options. To cast your vote, simply select one of the options. There's no need to hit a submit or enter button as the vote is automatically recorded. You may submit your votes at any time. I will now explain the running order for today's meeting. In a moment, I'll make a few remarks about the results for the 2021 financial year and about other topical matters. Then Graeme Hunt, AGL's Managing Director and CEO, will speak. We will then attend to the formal business of the meeting. As I mentioned we've decided on a poll. I now declare the poll open.
I would now like to introduce my fellow Directors who are joining us today via the online platform. They are John Stanhope, Jacqueline Hey, Patricia McKenzie, Diane Smith-Gander, Mark Bloom, and our Managing Director and CEO, Graeme Hunt. Also attending this meeting today is our Company Secretary, John Fitzgerald, and the Chief Financial Officer, Damien Nicks, as well as other members of the executive team. AGL's external auditors, Deloitte, are also attending this meeting. The Senior Audit Partner, Jason Thorne, is available to answer any relevant questions you may wish to ask later in the meeting. I thank him for attending today. Let me start off by acknowledging that financial year 2021 was an extremely challenging year for AGL and a very disappointing year for shareholders. The acceleration of key operating and market headwinds that we have been foreshadowing for a number of years have now materialized.
Although the extent and impact of those headwinds on our business and industry, especially in the form of declining energy prices and the impact of COVID-19, have proven to be far greater than anyone expected. It is also beyond question that the pace of transition towards a decarbonized future in Australia has rapidly increased, and as Australia's largest electricity generator, and therefore the largest emitter of greenhouse gases, this is also having a direct impact on the value and share price of our business. AGL is already committed to achieving net zero emissions by 2050, and your board recognizes that we must challenge ourselves to see how we can enhance this commitment.
We believe this is possible, but it must also be done in a way that doesn't ignore the essential role that our thermal assets have to play in supporting the transition by keeping the lights on and continuing to provide reliable and affordable energy as we and others invest in the change that is needed to bring new renewable energy sources into the market. Let me be very clear. Your board understands that shareholders are very unhappy with where the AGL share price is today, and we acknowledge the financial performance of the company over the last past 12 months is not acceptable to shareholders or directors. What are we doing about it? I'll firstly briefly summarize the financial performance for the past year, then explain the measures that we are taking to address the challenges facing your company.
Firstly, as I have acknowledged, FY 2021 was a very difficult year for shareholders, where we recorded a statutory loss after tax of AUD 2.058 billion. This compares with a statutory profit after tax of just over AUD 1 billion in the 2020 financial year. The FY 2021 results included charges totaling AUD 2.929 billion, associated with onerous contract provisions and an increase in environmental restoration provisions announced on 4th of February 2021. Charges were also associated with the cessation of Crib Point project and costs associated with acquisitions and restructuring. Underlying profit after tax for the 2021 financial year, which AGL regards as a more useful measure of company performance, was AUD 537 million, down 34% on the previous year, in line with the revised guidance range we provided in December 2020.
The main drivers of the decrease in profit were a reduction in wholesale electricity prices, lower electricity demand due to COVID-19 lockdowns, mild weather, and increasing penetration from rooftop solar, as well as the fact that some of our older, lower-priced legacy gas supply contracts are rolling off and new contracts are being entered into at higher current prices. The final unfranked dividend of AUD 0.34 per share will be paid on the 29th of September 2021. When added to the interim dividend of AUD 0.41 per share, which included the AUD 0.10 special dividend, the total dividend for the 2021 financial year was AUD 0.75 per share. In a disappointing result, it is important to note that the wholesale electricity price is the single largest driver of AGL's earnings, and these wholesale prices have fallen to an extent not seen since 2012.
In the past three years alone, prices have halved. AGL has for some time been foreshadowing market headwinds in wholesale prices. It's fair to say that the extent of the fall has surprised many credible market analysts and observers. We are not alone in experiencing the impact of the decline in wholesale electricity prices, which has also significantly affected others in the industry. Given the prevailing low price environment. Your Board recognizes that we need to respond to these market conditions by tightening our belt. That is why we have committed to reducing our operating costs by AUD 150 million by the end of FY 2022, and reducing our sustaining capital expenditure by AUD 100 million by FY 2023. We have also announced the sale of AUD 400 million of non-core assets by the end of FY 2022. These measures will conserve capital and strengthen the balance sheet of the business.
In June, as another measure to conserve capital, we announced the cessation of the special dividend program and an intention to underwrite the dividend reinvestment plan for FY 2021 final and FY 2022 interim dividends. While your board recognizes the impact on shareholders of no longer receiving the proposed special dividend, and the dilution caused by the dividend reinvestment program, it is prudent to conserve capital ahead of the proposed demerger next year. These measures will also allow AGL to fund long-term value adding growth investments, such as AGL's equity share in PowAR's acquisition of Tilt Renewables, and the development of the Torrens Island Battery. Graeme and I will speak about that, and the demerger a little later on. In the short term, we are also focused on other measures to improve business performance.
In our integrated energy business, we are focused on delivery of the cost and sustaining CapEx reductions mentioned earlier, managing increasing price volatility through optimizing our plant operations, hedging and delivering on grid scale battery growth, and successful re-contracting of short midterm gas supplies. In customer markets, we're focused on continued organic growth in services to customers, delivery of significant sustained cost efficiencies, successful integration and optimization of recent acquisitions, and growth in our commercial industrial segment, expansion of our energy solutions to them offering to take a leading market position in that area. We are also continuing to build on our track record of the last two decades of investing in a renewable energy future. In the past few years alone, AGL has directly invested around AUD 2 billion in firmed renewable projects, including over AUD 180 million in the construction of the 250 MW Torrens Island Battery.
The battery will support the growth of intermittent renewable energy in South Australia, and will be the first to begin construction within AGL's planned 850 MW national battery rollout. Before turning to the earnings outlook for FY 2022, I'd like to briefly highlight some positive news for our shareholders from FY 2021. We made some significant acquisitions throughout the year, which will help drive our growth ambitions. We successfully migrated more than 200,000 Click Energy and Amaysim customers to AGL during FY 2021, following the acquisition of Click Energy in September 2020. In March 2021, AGL acquired two of Australia's largest commercial solar businesses, Solgen and Epho. These acquisitions complement and strengthen AGL's existing solar capabilities, enabling AGL to deliver more tailored and innovative energy solutions for businesses.
Also in March, AGL acquired 51% of OVO Energy Australia, which has provided AGL with exclusive Australia access to Kaluza, OVO's advanced customer experience and energy flexibility platform. We have also, through our 20% interest in PowAR, recently acquired interest in the Tilt Renewables. This transaction will further support our orderly transition away from coal-fired generation. Today, we confirm the earnings outlook for the 2022 financial year as being within the range AUD 220 million- AUD 340 million, provided as part of the full FY 2021 results in August. I recognize that this guidance represents a material reduction on FY 2021, which reflects, again, a material step down in wholesale electricity earnings as hedging positions established when wholesale prices were materially higher progressively roll off, and the non-recurrence of Loy Yang insurance proceeds. I'll now talk about what we are doing to address the challenges currently facing AGL's business.
The cost capital management and growth measures I have already outlined are important measures that are needed to improve business performance amid challenging market conditions. However, your board recognizes that the pace of change continues to accelerate, reinforcing the rationale for our proposed demerger. We are creating two distinct businesses that will be category leaders in their own areas, with AGL Australia as Australia's largest multi-product energy retailer of essential services, and Accel Energy as Australia's largest electricity generator. The proposed demerger will give each business the freedom, focus, and clarity to execute their own respective strategies and growth agendas while playing an equally important but different role in Australia's energy transition. The board considers the proposed demerger will be in the best interest of shareholders by protecting shareholder value and enabling each business to focus on their respective strategic opportunities and challenges presented by the accelerating energy transition.
I'd now like to take a few moments to discuss a few board matters. At the conclusion of the AGM, John Stanhope will retire from the board. On behalf of the board, I'd like to sincerely thank John for over 12 years of very invaluable service to AGL. Jacqueline Hey will retire by rotation at the end of the meeting, and is standing for re-election at today's meeting. For the reasons set out in the notice of meeting, the board recommends that shareholders vote in favor of the reappointment of Jacqueline. Also standing for election to the board is Ashjayeen Sharif, a retail shareholder who has nominated himself as a candidate for election.
For the reasons set out in the notice of meeting, the board does not consider the election of Mr. Sharif to be in the best interest of the company, and recommends shareholders vote against the appointment of Ashjayeen Sharif. However, the board does recognize that further skills and expertise in climate change risk, ESG governance, and industry transition are required on the AGL board, and a search process is underway to appoint a new director with the requisite skills and experience. We are on track to appoint a new board member with those skills in the first half of FY 2022. In addition to appointing an additional director to the AGL board this year, we recognize that additional skills will also be required on the boards of each of Accel Energy and AGL Australia.
Following the update of the AGL board skills matrix in FY 2021, board skills matrices for Accel Energy and AGL Australia were prepared, and we have also consulted with and received input from a number of investors and other stakeholders on the appropriate skills required for the new entities going forward. In particular, skills and experience in energy transition, ESG, technology, customer experience, project development, and finance have been identified as priority areas. The board is currently undertaking a search process for directors with these skills, with a view to appointing some additional directors to AGL Energy ahead of the demerger, but also to ensure that each entity is well-placed to appoint additional directors following the demerger. I'll now speak briefly about two resolutions that we received from a small group of shareholders for consideration at the AGM. These are items 6A and 6B in the notice of meeting.
The board respects the right of shareholders, of course, to put forward resolutions. The board does not consider these resolutions to be in the best interests of AGL for the reasons detailed in the notice of meeting, and the board recommends that shareholders vote against these items. Item 6B is contingent on the outcome of item 6A being the special resolution to amend AGL's constitution. Based on the proxy and direct votes received ahead of the meeting, and the number of votes that I've been informed are represented at this meeting today, item 6A will not receive sufficient support from shareholders to be passed, therefore, as advised to shareholders in the notice of meeting, item 6B will not be put to the meeting.
We recognize that item 6B has received a level of support from shareholders ahead of the meeting, and we will give shareholders an opportunity to ask questions about these resolutions later in the meeting. I want to assure shareholders that AGL takes the matters raised in the shareholders' resolutions, items 6A and 6B, very seriously, and they are matters that the board continues to consider very carefully. Item 6B requests the board disclose, in association with the forthcoming demerger scheme documents, short, medium, and long-term targets for reductions in Scope 1, 2, and 3 emissions of the proposed de-merged company. That's for both Accel Energy and AGL Australia. Those disclosures are aligned with Articles 2 (1)(a) and 4 (1) of the Paris Agreement.
Details of how Accel Energy and AGL Australia's capital expenditure, sustaining and growth transformation capital, will align with those targets, and details of how Accel Energy and AGL Australia's remuneration policies will incentivize progress against those targets. AGL understands the critical importance of the decarbonization of the electricity sector and the need to lean into the transition as never before. We also already operate the largest portfolio of renewable assets of any ASX-listed company, and we have invested more than AUD 2 billion directly in renewable projects. It's often easy to simplify the challenges facing Australia's energy industry. Renewables have grown at record pace, and aging thermal assets are playing a diminished role. AGL and its proposed de-merged entities will work with governments, regulators, and other stakeholders to define a responsible pathway to transition to a decarbonized electricity sector as soon as practical.
We are already putting this into action by proceeding with the closure of the Liddell Power Station, which commences next year and will lead to a 23% reduction in emissions by the end of 2024. We're also actively engaging with all stakeholders to understand their perspectives and concerns. The success and speed of the transition will require an effective level of coordination between government, regulators, and industry, and the board does not believe it is in the best interest of AGL to make this commitment unilaterally. The task is to create a glide path rather than a crash landing in this transition. It will require the right policy and investment settings and a focus on customers from all market participants. It will also require a market design that supports an orderly transition.
Despite the challenges and uncertainty facing the energy industry, AGL has already made a number of commitments in relation to climate change, including a commitment to net zero by 2050 as part of our climate statement released last year. We know more is required, and work is underway to define the decarbonization roadmaps for both Accel Energy and AGL Australia. These roadmaps will be informed by scenario analysis and will consider the settings of short, medium, and long-term targets and will become an integral part of the strategies of these businesses. This work will include analysis and impact on our business of commitments and related to the Paris Agreement and deliberations that will come from the UN Climate Change Conference, COP26, in November. It will inform decisions on how both companies can appropriately lean into the transition as never before.
Further details of these roadmaps will be included in the de-merger scheme documents to be sent to shareholders during the fourth quarter of FY 2022. There is no doubt that both new organizations will be committed to the challenge of doing more and will play a critical part in the decarbonization of Australian energy. The scheme documents will also describe the business strategies for both entities, including capital allocation and emission targets. If the proposed de-merger proceeds, Accel Energy and AGL Australia also intend to put their respective climate reporting to a non-binding advisory vote of shareholders at their first annual general meeting. If the de-merger does not proceed, AGL will put its climate reporting to a non-binding advisory vote of shareholders at its 2022 annual general meeting. Finally, I wish to make some comments on the second item on today's agenda, the remuneration report.
The chair of the board's People and Performance Committee, Diane Smith-Gander, will speak to the remuneration report in more detail shortly. At the 2020 AGM, 46.5% of shareholders voted against approval of the 2020 remuneration report. This resulted in AGL incurring a first strike. I want to assure you that your board takes the feedback it receives on AGL's remuneration practices seriously. Since the 2020 AGM, AGL has consulted with stakeholders to seek to understand the concerns that led to the first strike. These discussions have influenced the setting, assessment, and disclosure of key management personnel remuneration and outcomes for FY 2021. I'm pleased to say that the resolution to be put to the meeting in relation to the 2021 remuneration report has received sufficient support to avoid the company receiving a second strike. Therefore, the conditional spill resolution, item 5, will not be put to the meeting today.
In summary, despite FY 2021 being a challenging year for AGL, I'm optimistic about the future for AGL and its shareholders. We have a comprehensive program in place to improve performance, to lean harder into the energy transition, and to respond to the evolving operating environment. In particular, the 2022 financial year will be a significant year in AGL's history as the proposed demerger is progressed. The board is intending to hold shareholder meetings in the fourth quarter of FY 2022 for shareholders to consider the demerger proposal. As I mentioned earlier, the board considers the proposed demerger will position us best to meet existing and future challenges of the company, including through refreshed board and management teams that are focused and have the appropriate skills and experience to respond to evolving ESG expectations, the energy transition, and new technologies.
It's now my pleasure to invite Graeme Hunt, your CEO, to address you. Following Graeme's address, we'll move to the formal business of the meeting.
Thank you, Peter. Good morning, everyone. It's my pleasure to be joining you today, albeit virtually, after what has been a very challenging yet pivotal year for AGL. The chair has talked about company performance. I'd like to reiterate how disappointing the performance of our business has been over the last two years to shareholders, management, and your directors. I can assure you that the team and I are working as hard as we can to deliver a strategy that will protect and deliver future value for you, our shareholders. While we expect conditions to remain challenging into the next year, I am confident in our strategic direction and our team to manage the business through the energy transition and demerger.
The underlying momentum of the business is strong, and amidst the challenging conditions, it is still important to reflect on the achievements and hard work over the year. From progressing our strategy to growing our business, all while adapting to the new ways of working. This short video provides a snapshot of the team's work.
The Chair has provided a summary of our FY 2021 results, touched on business performance, as well as confirming our guidance for FY 2022. Today, I'll provide more detail on operational performance, strategy execution, and outlook, as well as recap our proposed demerger plans. First, let me focus on safety. I am pleased to say that there was an overall improvement in our health, safety, and environmental performance, illustrated by a marked reduction in total injury frequency rate to 2.3 per million hours worked, which has now trended lower in consecutive years.
It is critical that this improvement in total numbers of injuries and severity of those injuries does not lead to any reduction in the drive towards a zero-injury workplace. The need for this ongoing rigor was reinforced in late 2020 when one of our people was seriously injured in an incident at the Liddell Power Station. We are very thankful that this employee is recovering well and has commenced the return-to-work process. Safety remains our utmost priority, and we continue to thoroughly review high-risk tasks and strengthen our safety protocols to support the drive towards zero injuries. Another key focus for AGL is employee engagement. Our FY 2021 employee engagement score fell 11 percentage points from the previous year. Albeit disappointing, this result was understandable given the significant challenges in energy markets, ongoing challenges presented by COVID-19 fatigue, as well as uncertainty arising from our demerger plans.
We are working hard to address engagement through a strong internal communication, as well as the timely establishment of new organization structures to provide our staff with greater clarity. Moving now to operating and financial performance. We know this has not been good enough and understand that we need to do more to protect shareholder value. With that said, I'd like to take you through some of the conditions under which we have been operating. FY 2021 was certainly one of the toughest energy markets I've seen. Wholesale liquidity prices were at levels not seen since 2012. Energy demand was impacted by ongoing lockdowns in our major capital cities, mild weather, and increasing penetration from rooftop solar. While at the same time, energy supply increased through the connection of large grid-scale projects.
The confluence of a decrease in demand and an increase in supply have applied material pressure on wholesale electricity prices over the year. We also saw challenges in our wholesale gas business as low-cost legacy supply contracts matured, which translated into lower margins. AGL has a highly flexible gas portfolio, and we will continue to execute on our supply strategy to meet customer demand from existing and new domestic supply sources, as well as proposed third-party gas import projects. AGL also continues to competitively recontract medium-term volumes to augment the gas portfolio as a consequence of the proposed import project at Crib Point not proceeding. In response to the challenging operating environment and resulting impact on the company's financial performance, we are pursuing initiatives to preserve liquidity and ensure we have sufficient financial flexibility.
These measures include a commitment to deliver AUD 150 million of sustainable operating cost reductions by FY 2022 and AUD 100 million reduction in sustaining capital expenditure by FY 2023. These targets are in addition to the capital preservation from the termination of the special dividend, the full underwrite of the final dividend, and the amount sale of approximately AUD 400 million of non-core assets. To deliver on our strong OpEx and CapEx targets, operationally, we are thinking differently about how we run our coal-fired operations. Today, rather than maximizing generation across the year, we are focused on maximizing our generation when demand is at the highest levels. This means the plants don't need to be available all of the time, and we can optimize maintenance schedules and costs.
As such, we are working on ensuring our preventative maintenance is efficient and scheduled in off-peak periods, while making our plants as efficient and flexible as possible. These changes will not only ensure our plants are efficient, but also that our plants are responding to the transition of our energy system. We have taken steps to make our plants more flexible. We have lowered the minimum generation levels at Bayswater to reduce the run periods when demand is low and spot prices are below our marginal running costs. We're also developing digital models at both Bayswater and Loy Yang to optimize operations. We continue to further assess options to improve plant efficiency and will implement additional initiatives throughout this financial year.
In customer markets, our previous investment in systems and our ongoing focus on simplification and digitization continue to deliver sustained operating cost efficiencies, assisting in the delivery of our cost targets. Despite the challenges we have faced this year, AGL has continued to deliver on its strategy. Customer service growth remained strong in FY 2021. Over the year, we added 254,000 new services through good organic growth and the Click Energy acquisition, maintaining our status as Australia's largest energy-led multi-product retailer. Against the backdrop of a highly competitive market, we maintain low levels of churn, while our strategic net promoter score reached a new record high. Customer operating costs were also driven lower for a second straight year on the back of material reduction in ombudsman complaints and a greater proportion of our customer base utilizing our digital channels.
AGL's telecommunication products were launched in February this year. We are already seeing steady growth and the anticipated benefits of customer loyalty, multi-product growth, and tenure coming to fruition. Notably, 98% of AGL's telecommunication sales today are part of an energy telco bundle. In addition, we have expanded our carbon neutral offering across all AGL products, with over 260,000 carbon neutral services now in place. During the year, we also announced a number of key acquisitions to support our growth ambitions and decarbonization pathway. The acquisitions of Solgen, Epho, and Tilt, via our 20% interest in PowAR, have added customers, expertise, and access to quality renewable generation. These acquisitions also build on our long-term history of investment in renewables and support our commitment to transition away from coal-fired generation. We remain on track to deliver on our plans for at least 850 MW of grid-scale batteries by FY 2024.
During the year, a final investment decision was reached on a 250 MW Torrens Island battery, and good progress was made on the Liddell and Loy Yang batteries. This energy storage infrastructure, positioned at our strategic sites, will be critical in helping to firm renewable generation entering the National Electricity Market. Participation in these acquisitions and developments strongly aligns with the commitments set out one year ago in our Climate Statement, representing the next steps in our decarbonization journey. I'm pleased to say that we have made progress in each of our five Climate Statement commitment areas, which will not only help us on the path to net zero emissions by 2050, but also in challenging ourselves to aim higher.
We believe we can deliver on our leadership role in accelerating the energy transition while also ensuring our thermal assets remain available for as long as they are needed to support the affordable, stable, and sustainable provision of electricity, and as we and the market develop sufficient renewable electricity generation. Turning to our outlook. As the Chair noted earlier, our short-term outlook remains challenged, and our guidance for FY 2022 largely reflects the continuation of market and operating headwinds, which have impacted energy market in recent years. As such, we expect the year-on-year decline in overall earnings to be driven by a material step down in wholesale electricity earnings, as hedging positions established when wholesale electricity prices were higher progressively roll off, and a small impact to wholesale gas gross margin from maturity of low-priced legacy gas supply contracts.
In addition, the Loy Yang 2 insurance proceeds received in FY 2021 will not reoccur. These impacts are expected to be partially offset by the AUD 150 million of targeted operating cost initiatives, which we are working very hard to deliver. Markets continue to experience market volatility. Prices have fluctuated significantly. Demand continues to be impacted by both COVID-19 lockdowns and milder than usual weather conditions. These factors will continue to impact our business as we navigate COVID-19 and the transition away from coal-fired power towards firm renewables. Encouragingly, we have seen some improvement in forward wholesale electricity pricing in recent months. Given that AGL produces some of the lowest cost generation in the National Electricity Market, we are well-positioned to benefit from any sustained recovery in wholesale electricity prices, the single biggest driver of AGL's earnings.
As we see the pace of change continuing to accelerate in energy markets, we are further assured and committed to our proposed demerger strategy to create two new entities, both with the clarity of purpose and agility to lead the energy transition in their own ways while protecting and delivering value for shareholders. AGL Australia would execute on its customer-led multi-product strategy backed by a flexible trading, supply, and storage position. Accel Energy would ensure the safe and efficient operation of our thermal generation asset base as required by the market, actively engaging on policy matters relating to the energy transition, and partnering with other entities to transform our strategic operation sites to low-carbon industrial energy hubs. I am pleased to say that good progress is being made on our demerger plans. The internal separation of our IT systems and key corporate functions are advancing.
Further key management personnel and high-level of progressing the funding and capital structures for both entities. Importantly, you, our valued shareholder will vote on the proposed demerger at a scheme and general meeting expected to be held in the fourth quarter of FY 2022. A scheme booklet containing detailed information about the demerger and the two proposed entities, including their expected asset allocation, capital structures, energy transition plans, will be sent to you prior to the scheme meeting. This will also include information on how you can vote on the proposal. This is a very challenging time for electricity generators and retailers, and AGL must effectively deal with these challenges and charting an exciting next chapter in our 180 year+ history. In closing, this difficult operating environment we are facing will continue to test our resilience as an organization.
I'm confident that the decisive actions we are taking today will enable us to protect shareholder value as we create two leading organizations and prepare for a cleaner, more sustainable future. I'm immensely proud of the dedication and hard work of our people during these challenging conditions, I assure you we will continue to strive to deliver for our customers, communities, and most importantly, you, our valued shareholders. Thank you.
Thank you, Graeme. It's now time to address the formal business of the meeting. The notice of meeting sets out six items of business. As outlined in the notice of meeting, item 5 and item 6B are contingent resolutions. As I mentioned earlier, item 5, the conditional spill resolution, will not be put to the meeting because the company did not receive a second strike in relation to the 2021 remuneration report. Item 6B is contingent on the outcome of item 6A, being the special resolution to amend AGL's constitution. Given the proxies received for the resolution to amend the constitution, and the votes represented at this meeting today, item 6A will not receive sufficient support from shareholders to be passed, and item 6B will not be put to the meeting.
Shareholders will have the opportunity to speak on or ask questions about each item of business, including item 6B, and the proxies for each item will be shown and released to the ASX. Votes will be counted immediately following the meeting, the results will be notified to the ASX before the end of today and posted on the company's website. Turning now to the first item of business. AGL published its 2021 annual report in August, which contains full information about the company's financial and operating performance during the year. Under the company's constitution and the Corporations Act, there is no requirement to our shareholders to vote to adopt the accounts. You may ask questions or make comments on the 2021 annual report and the management and performance of AGL. As I mentioned earlier, Jason Thorne from Deloitte is available to answer questions relevant to the audit.
A copy of the written questions Deloitte received ahead of the meeting are available on the platform under the Documents tab, if any shareholder would like to review them. I will now ask Jason to outline the questions received by Deloitte ahead of the meeting, which Deloitte determined to be relevant to the content of the auditor's report or the conduct of the audit and Deloitte's responses to those questions. Jason.
Thank you, Chairman. As previously stated, the company has received a written question from a shareholder in accordance with Section 250PA of the Corporations Act, 2001. In our capacity as auditor, we have provided a question list to the company that has been made available to members on the virtual platform today. The questions outlined on the question list does, in our view, relate to the conduct of our audit for the year ended 30 June 2021 and the content of the audit report as provided for in Section 250PA (1) of the Act, and accordingly, Deloitte welcomes the opportunity to respond to the question. Before responding to the specific question to convey the context within which our response is provided, I direct you to our independent auditor's report on page 173 of AGL's annual report.
In addition to providing our opinion, our report describes the basis for that opinion, the key audit matters, the responsibilities of the directors for the preparation of the financial report, and our responsibilities for the audit of the financial report. I will now respond to the question. Auditing standards require an auditor to identify and assess risks of material misstatement through understanding the entity, its environment, and its internal control, thereby providing a basis for designing and implementing audit responses to the assessed risks of material misstatement. Amongst others, we identified risks of material misstatement in relation to the quantum and timing of impairment charges, the quantum and timing of onerous contract provisions, both of which arose as a consequence of the accelerated deterioration to long-term wholesale energy market forecasts subsequent to 30th of June 2020.
The quantum and timing of changes to AGL's environmental rehabilitation provisions, which were an outcome of AGL's three-yearly review of those environmental rehabilitation provisions, and the associated disclosures made in the financial report. Our assessment of the risks of material misstatement included consideration of the timeframe over which the accelerated deterioration to long-term wholesale energy market forecasts had occurred, and therefore, the appropriateness of the period in which the impairment charges and the onerous contracts were recognized. It also included considering the appropriateness of the timing of the recognition of the outcomes of AGL's three-yearly review of its environmental rehabilitation provisions. We designed and implemented audit procedures to respond to the assessed risks of material misstatement. These responses are described in the Key audit matters section of our audit report, along with a reference to the disclosures made by the company.
Upon completion of those audit procedures, we issued an unmodified independent auditor's report. That concludes my response to the question outlined in the question list. I will pass back to you, Chairman. Thank you.
Thank you very much, Jason. I'd now like to open the meeting for discussion. Please, Liz, could you please let me know if there are any questions relevant to this item?
Thank you, Chair. There are questions. The first question comes from Helen Manning of the Australian Shareholders' Association. How should retail shareholders look at the company going forward? What benefits are there in owning AGL shares?
Thank you, Helen. Thank you for that question, and thank you for the Australian Shareholders' Association for showing continued interest in the company. To answer that question, I think I need to give some context to give you a view about the excitement that we feel as, and certainly I feel, towards the future of the organization. As many of you are aware, AGL's had some very successful years built on acquisitions that were made of generating plants in the last decade and building what was called or is called a vertically integrated company, with generation through to trading through to customers. The changes and market forces that are now applicable to AGL are very different.
The vertically integrated model provided us with record profits 2018, 2020, and over AUD 2.6 billion was returned to shareholders in terms of share buybacks and dividends during that period of time. The model worked.
The model now is not, in our view, as a board, applicable to the future of the organization. The model has to address the very rapid transition away from fossil fuels into renewables. Despite having the largest renewable portfolio on the ASX, the implications of having a combination between coal-fired generation and renewables, the access to capital that that means into the future, the direction and policy settings that are appropriate for carbon-heavy coal-fired generation versus renewables and customers are actually very different. On that basis, our share price, which is not acceptable in anybody's terms over the last 12 months, is reflective of a number of things. Graeme has mentioned that. The overarching influence on share price is the value of wholesale electricity prices that give us revenue as an organization.
Back in the heyday, not too many years ago, electricity prices were in the high AUD 80s, AUD 90, AUD 100 a megawatt hour. In the last 12 months, due to a greater level of supply, uncertainty on policy direction, and lack of clarity around the glide path that is the progressive decommissioning of coal-fired generation, the electricity prices dropped enormously, going from AUD 95-AUD 100 a megawatt hour down to in the order of AUD 35-AUD 40 a megawatt hour. Although Graeme has highlighted there's been a pickup of that number in recent times, it's still a significant impact on our revenue streams. AGL share price is absolutely a bellwether for energy pricing.
On that basis, although we see relatively subdued activity in terms of pricing over the next few years, moving beyond that, the pricing will be absolutely dependent on how the transition away from coal-fired generation and how fast the renewables generation picks up. However, at AUD 35-AUD 40 a megawatt hour, no one will be making any money, and it's hard to demonstrate a real compelling investment case unless there are sustainable higher pricing. Coming back to the question, why do you invest and what do you see in AGL? Firstly, we believe the separation of the two businesses, the renewables and customer business away from the carbon-heavy business, is one that is logical and compelling in present market circumstances and how the market is moving. Coal-fired generation will remain an absolutely critical part of stability on the National Electricity Market for many years to come.
Right now, the capacity of other generation, including renewables, to make up the shortfall when the sun goes down and the wind doesn't blow. It's just not there for us to be able to withdraw and shut down our coal-fired generation without proper coordination with regulators, with governments, and sustaining a reliable, affordable supply of electricity to our customer base. We think Accel Energy, being the core company to generate from coal, will be a critical element of the future and will have a substantial role in managing the transition away from hydrocarbon generation. It will be very much subject to where you think electricity prices will go. We think in the medium and long term, that is likely to be higher than it is on a historical low that we've seen in the last 12 months.
Accel Energy also has the ability to leverage its significant real estate in terms of connections, its talented workforce, and it has the capacity to build on, in an unprecedented way, energy hubs that can drive renewables within the real estate that it owns with the connections it has, and that would utilize capital from ourselves and from partners. If you look then at AGL Australia, AGL Australia has an unprecedented customer base of close to 4.5 million, a value-creating business that is substantial. It will also have connections initially in offtake agreements to Accel Energy, but it also will have the strategies and mandate and flexibility to continue to drive the renewable transition, and will attract, we believe, the appropriate capital, which Accel Energy will struggle to do into the future. The appropriate capital and multiple that will drive the value in AGL Australia's share price.
We think separation is the way forward. We also believe that the vertically integrated company is probably something of the past. Driving that transition will give both entities leadership. In one side, carbon-heavy business and the transition, an active role in leading that transition with a view to electricity pricing and energy hub development. On the other side, the renewables with substantial access to capital and a different multiple and a different direction. Both companies have a slightly different, or fundamentally different, attitude to some of the regulatory changes that we think are necessary. Again, the separation into two companies with distinct value upside is absolutely the way forward and addresses the significant challenge of the transition over the next 15, 20 years. I'm excited about the future of AGL. I'm extremely disappointed with the performance in the last 12 months.
Clearly, the accelerated transition requires us to move to different models and drive our business in different ways. I believe the way forward, enunciated with the separation, is the way forward for AGL. I should say that this opportunity through the AGM is one for shareholders to express their frustration, for the board to take its medicine, but also an opportunity for the board to highlight the direction going forward with the company. I'd like to take that opportunity over the next short while to at least give you the direction, the reasons behind performance, or lack of, and the commitment that we as a board have to turn AGL, a great company, into an even better two companies addressing the transition. Hopefully that gives you some context, Helen, as to why you should own shares.
The next obviously 12 months or so are critical in our future. The core assets that we hold, whether it be generation from coal or our very substantial renewables portfolio, it is a fantastic platform along with our customer base for future growth in our business and to allow us to drive the changes in the best interest of our shareholders.
The next question is from Helen Manning of the Australian Shareholders' Association. Shareholders will be wanting to know why AGL is asking to be split. Given that we will be given more detail with the demerger documents, can you explain quite simply now, why?
Well, Helen, thanks again for the question. Probably I've answered that second question with my response, which answered hopefully your first question. We think the evolution of our business does require us to split the carbon-heavy piece of our business, the coal-fired generation, away from our renewables business and customer base. There are compelling reasons to do that, including differences in the way we would like to see both sides of the business in terms of regulation. There's compelling reasons for our renewable and customer piece to command a high level of access to capital and trade at a different multiple. Accel Energy definitely has an upside in its exposure to the power pricing and its unprecedented real estate value in terms of building energy hubs in our key areas.
We have a great workforce, and we need to work with our workforce and communities to help them best address the transition as well. Certainly, we have all the prerequisites, along with our partners, to drive growth in that area as well. Details of that undoubtedly will be provided in the scheme document, but I also think, and Graeme signaled it, that we would be taking further advice and input from our shareholders and other stakeholders in the lead up to the publishing of the scheme document. We think it's critical to, and value-adding, to have that input from shareholders as we go through this evolution of this great company.
The next question is from Dan Gocher of the ACCR. It appears that the share price is in free fall, declining 45% since the demerger was announced in March, and 80% from its high in early 2017. What are the board and the senior executives doing to arrest this decline? Is AGL's timidity around the early closure of its coal-fired power stations coming at the expense of shareholders' best interests?
Thank you, Dan and ACCR for the question. I'll reiterate that the impact on share prices of the company are multiple, and the core impact for 2021 was undoubtedly the very significant drop in wholesale energy pricing, which impacted our revenue streams for the year. Other factors that drove share prices were soft offtake, obviously due to COVID lockdowns, the ongoing and growing impact during the day of renewables, and a substantial supply of electricity at various times during the day, which again has driven down pricing. I think some of the initiatives that have been put forward by governments has also led to uncertainty, and there's no doubt that the sensitivity of major investors towards carbon-heavy assets and investments in carbon-heavy companies has also led to some reticence to invest, and certainly is starting to constrain capital that might be used by carbon-heavy industries, including AGL.
I suppose the key area that I'd like to highlight is that a shareholder wrote to me in a letter a couple of days ago and pointed out that on the 15th of September at 10:00 P.M., only around 8% of the electricity on the NEM was being provided by renewables, and some 80%+ of the NEM was being provided by coal-fired generation. Whether we like it or not, coal-fired generation is a critical part as other generations, especially focused on renewables and firm renewables, is built. A KPMG report 18 months or so ago highlighted that to take fossil fuel generation down to 20% of the NEM would require some AUD 50 billion in investment in renewables to allow that to happen. We believe we need to lead into the transition as never before.
On that basis, we are carrying out the appropriate analysis to be able to provide the strategy and direction together with appropriate goals into the future for us to apply Paris Agreement and into our capital allocation and our rewards for our people. On that basis, I think the application of early closure of its coal-fired stations is not necessarily a big driver right now for us with respect to share price performance. Other factors are clearly more applicable, albeit that I believe the board is absolutely of one mind to work hard to provide much greater clarity about that transition, but work with other stakeholders, state governments, and others to assure a smooth landing and a smooth transition.
The next question is from Mr. David Rossiter and Mrs. Catherine Rossiter. AGL recorded staggering impairments in FY 2021 while the share price has continued to freefall. The company's current plans, and therefore valuations for its coal power assets, are aligned with a 3 degrees Celsius plus warming scenario. In other words, predicated on the failure of the Paris Agreement. I note investors have been writing to companies and governments demanding financial accounts be aligned with global climate goals. How much more value destruction can shareholders expect to see when the value of AGL's coal assets is brought into line with a 1.5 degrees Celsius warming scenario?
Well, firstly, thank you David Rossiter and Catherine Rossiter for your question. You're right. There were significant impairments recorded in FY 2021, driven significantly by a change in value of our renewable power purchase agreements, which were signed between 2006 and 2012 at higher levels of pricing. It undoubtedly was a response to much, much lower electricity pricing and forced that change in valuation. We have made a commitment to be carbon neutral by, or emissions neutral by 2050, and I would dispute that our coal-fired assets are aligned to 3 degrees Celsius plus warming scenario. Certainly, we remain very committed to doing our role to meet Paris Agreement.
We've made a commitment earlier today to, prior to that in discussions with shareholders, that we have made a commitment to review all of that and note changes, even as late as the COP26 meeting that's coming up in Glasgow over the next couple weeks into our modeling. As part of the overall direction of the companies, both AGL and Accel, we will be publishing our strategy. Undoubtedly, our strategy with respect to how we manage the transition, how we will push for a glide path in this process, and how our commitments will align with the Paris Agreement. We're very well aware that the expectations of investors and shareholders generally are changing significantly in this space. We're right now doing all the work necessary to make informed views before publishing that strategy on behalf of the two companies.
I think we're making progress on that with more to come, prior to and in the scheme document. Undoubtedly, the scheme will be a quasi comment on our direction with respect to climate change and our role in the transition.
The next question is from Mr. Andrew McPherson. On 8th September, Macquarie Bank disclosed it has been shorting AGL's shares. At the same time, it is the underwriter of our dividend reinvestment plan. This morally questionable and duplicitous behavior gives rise to a serious conflict of interest, in my opinion. While Macquarie may argue they're simply hedging their downside from a potential DRP shortfall, I believe it more likely about Macquarie making proprietary trading profits for itself ahead of its corporate client, AGL's best interests. By shorting the company's shares during the DRP price setting period, Macquarie effectively drives down AGL's share price, further undermining shareholders' confidence in AGL and willingness to take up the DRP, thereby allowing Macquarie to profitably cover its short position with a larger than normal shortfall of DRP stock at suppressed prices.
My question to the board, one, do you think this behavior is acceptable? Two, do you think we should use Macquarie's services in the future?
Andrew, thank you. Thank you for your comments. I would like to reiterate that I think the process that Macquarie is doing with the DRP is one that is standard banking practice during the price setting. I think accountability for doing the DRP has to come back to the board rather than Macquarie, albeit the mechanics of these things do require them undoubtedly to cover their risk with appropriate shorting. The reality is that this I think was a very difficult decision for the board to go ahead with a DRP. It's interesting to receive input from shareholders that highlight the differential interest that people have around receiving a dividend. Will we use Macquarie into the future? Macquarie is, like all investment banks, subject to competition from other people who can provide services. We continue to look at that and pick the best people for the job.
As I say, I think the process with the DRP has led undoubtedly to share price weakness. In reality, too, the story around the core future investment in AGL remains extremely strong. I would encourage people to take it up.
The next question is from Mrs. Helen Costa. I initially invested with AGL as I was led to believe that the company was taking steps towards renewable energy and that it was carbon neutral, something that is very important given the dire predictions for the future of our planet posed by climate change. I now learn that AGL relies on coal to source over 80% of its energy and plans to rely on coal until 2048. How can this stance be regarded as consistent with its claim to be climate neutral? Isn't it the real test of climate neutrality and acting on climate about how high the renewable energy percentage is and taking steps to move away from the use of fossil fuels much sooner than 2050?
Helen, thank you very much for your question. The reality for AGL is, and we haven't hidden any of this, is that a significant part of AGL is presently based on coal-fired generation. I think we make up somewhere around 30% of the NEM in terms of our capacity to provide power from coal. We've highlighted that that's not a long-term sustainable position for the company and that we've made a commitment to be carbon neutral by 2050. The reality is that we need to make an orderly transition from coal to other forms of energy and do that in conjunction with the reality that our generation is still required on the NEM.
I highlight that we have the largest renewable portfolio on the ASX. I also highlight that the board is leaning in through its different direction with respect to company structure, leaning into this transition as never before. We certainly are reviewing what can be done both through Accel Energy and AGL Australia in terms of redoubling our commitment to that transition from a different stance, Accel to AGL Energy. This remains work in progress, but one that we are making material progress on.
The next question is from Mr. Mamoon Reza. AGL's plummeting share price can't simply be attributed to market conditions, as other energy companies have fared better over the last 12 months. Why is the share price still falling, and what will the board do to earn back shareholders' trust that they can revive the company and restore the share price?
Thank you for your question, Mr. Reza. Look, our plummeting share price has been covered in some of the discussions I've had before. In actual fact, our peer group or some of our peer group within the market have also seen substantial changes to their share price, not too dissimilar to us. That's people with different portfolios and other ways of managing the present transition risk. Look, we've outlined where we think the direction of the organization is going. We are committed to the demerger of our two entities and separating the coal-fired generation primarily with its upside in energy hubs away from our customer base in renewables. We think that is the way forward and will allow each of those companies to appropriately address the challenges of transition to a different and decarbonized Australia.
It also allows a very coherent direction and discussion with various stakeholders to drive that transition in an orderly way. I think the direction is one that will deliver shareholder value in the medium and long term and appropriately address the insensitivities of the transition with many of our shareholders and investors.
The next question is from Mr. Alastair Anderson. "What is AGL's stance on nuclear?
At the moment, we have no nuclear and no study of nuclear activity or nuclear generation in our portfolio.
The next question is from Mr. Austin Hunt. Could you please elaborate on the speculated demerger that was proposed for 2022? Additionally, can you provide any insight into how assets and finances would be split between these two entities if it is to proceed?
Thank you, Mr. Hunt, for your question. Look, as I say, enunciated in both my speech and Graeme's speech about the importance of the demerger. There is material that was published on 30th of June, or around that time, which provides a lot of information about which assets, or likely which assets go where. There's also information around the capital splits and some of the financing that is represented within that split. There is no doubt that many shareholders want to see more information, and that information is being actively worked on and will be published in the scheme document. There'll be updates and strategy updates around that prior to the scheme document being published, but this remains work in progress. I would encourage you to look, though, at the information that's already been published, which is on our website. As I say, more to come.
I think we're a little disappointed it's taking a long time to get to this. Reality is, some of the approvals that are needed to get the merger happening are actually not in our control, and we remain a little cautious about the timeframe that we will take to get those approvals from regulators and others. Second quarter next year is down for the time for publishing the scheme document.
The next question is from Mr. Stephen Mayne. After our share price peaked at over AUD 26 in April 2017, it today opened at around AUD 5.72, giving us a market capitalization of only AUD 3.4 billion. However, we claim to have net assets of AUD 5.5 billion. Does this mean further write-downs are coming? Please summarize the key covenants on our circa AUD 3 billion in debt. Could the auditor also please comment on the AUD 2.1 billion disparity between market value and book value?
Thank you, Stephen, and thank you for your email earlier this morning. I'm going to ask our CFO, Damien Nicks, to answer the question and provide any detail on the covenants. Damien, I can see you're there, so please, if you could give your response to that one in detail.
Thank you, Chair. Good morning, everyone. Just briefly on the question from Stephen Mayne, thank you for the question. When we assess the asset carrying value, we assess a number of factors, but particularly looking at the long-term cash flows of the organization. Your second part of the question is in relation to bank covenants. I'd refer you to the accounts for the year where we state that we have more than AUD 600 million in unused cash facilities as part of our debt facilities, and we continue to have strong support for our banks. Look, I won't go through all of the individual covenants within those banking arrangements. I am happy to take those on notice. I think, Chair, that answers broadly that question.
Thank you, Damien. We might move to the next question then.
The next question is from Mr. Robert Casamento. Why have the directors not issued comments or statements on AGL exiting the ASX 50 on the 3rd of September?
Thank you for your question, Robert. Look, we did exit the top 50 shareholders on the ASX in early September. We believe that hopefully that will be a temporary time process. Reality is, too, that certain investors will readjust their portfolio because we're not in the ASX top 50. We believe, again, the direction of the company will see us move towards that top 50 or into that top 50 as soon as we can.
The next question is from Mrs. Carol Williams. What is being done by AGL in the hydrogen area?
We are presently engaged with a number of parties on studying and working the feasibility of hydrogen in our energy hubs, and we'll continue to push those opportunities as we can reasonably be. We are looking much more at green hydrogen than other types, but it's certainly an area of technology which we are pushing hard with our partners.
The next question is from John Calder. Is AGL getting into the rooftop solar business?
I'll pass this question across to Graeme Hunt, our CEO, and let him give you an update on where we're at with rooftop solar. Graeme, over to you.
Thanks very much, Chairman. We have been involved in rooftop solar for many years at different levels. As covered in both my speech and the Chairman's speech during this solar installers, Solgen and Epho, that are involved not only in rooftop solar in residential, but at an industrial commercial scale, which we think is obviously a developing market. Rooftop solar is and has been a part of AGL's activities for many years.
The next question is from Jane Gibian: If Tomago Aluminium Smelter follows through with its plan to go 100% renewable by 2029, doesn't this mean Bayswater Power Station is rendered economically unviable? What is the plan to provide renewable energy to retain Tomago's business?
Thank you, Ms. Gibian, for the question. We undoubtedly are already in discussions with Tomago for the long-term supply of power to its business, renewable power, and a combination of whatever they require. Tomago is a very significant customer to us and those discussions are ongoing. Certainly, we're aware of their sensitivities and are working hard to provide options for them at a competitive price for the future.
The next question is from Kevin Daley. Accel Energy is likely to be treated in the media as a pariah company no matter what it proposes to do. For example, Accel Energy, Australia's largest emitter. Is there any chance that AGL will operate a sale facility so that shareholders will not have to actually receive Accel Energy shares?
Well, I suppose, first off, I would not characterize Accel Energy as a pariah. It is doing a role for the NEM, which is an essential part of the NEM, so people can turn on their heaters and air conditioners and cook their meals every evening. I understand, AGL is already seen as the largest emitter in Australia, and we've outlined ways that we think we can reduce our footprint in that way and transition to other forms of energy appropriately, as well as providing responsible supply of power which is required to the market. I think I've outlined a lot of the plans that we anticipate or we are pursuing right now. It'll be whatever it'll be in terms of that strategy and the timing.
We've highlighted that that's not a long-term sustainable position for the company and that we've made a commitment to be carbon neutral by 2050. The reality is that we need to make an orderly transition from coal to other forms of energy and do that in conjunction with the reality that our generation is still required on the NEM. I highlight that we have the largest renewable portfolio on the ASX, I also highlight that the board is leaning in through its different direction with respect to company structure, leaning into this transition as never before. We certainly are reviewing what can be done both through Accel Energy and AGL Australia in terms of redoubling our commitment to that transition from a different stance, Accel to AGL Energy. This remains work in progress, but one that we are making material progress on.
The next question is from Mr. Scott and Tracy Andrews. Can we expect that a dividend will be paid in FY 2022?
Yes.
The next question is from Mr. Kevin Daley. What is AGL's attitude to the idea of capacity payments being considered by COAG at the moment?
Well, thanks for the question, Kevin. Appreciate this. This highlights a little bit of a difference between if you are a coal-fired generator, you would see that part of the orderly transition could include capacity payments to keep coal-fired generation in the NEM as a required part to supply power as and when needed. If you're in the renewables space in AGL Australia, you might not be so committed to such a move. I think what we're seeing in the government's and regulator space is unfortunately a continuing lack of cohesion around what works and what doesn't work. There's been very good and active dialogue about the future of the NEM after 2025. We look forward as AGL and Accel to play a significant role in helping to promote sensible solutions for that.
The next question is from Benjamin Gallet. Why is Accel Energy receiving such a large share of AGL Energy upon demerger?
Thank you for the question, Mr. Gallet. Look, the final size and shape of the shareholding that AGL Energy may have is subject to ongoing study and will be part of the
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Both finance and insurance. How will AGL be able to access the finance and insurance it requires to operate its coal power assets beyond 2030?
Well, thank you for your question, Ms. Judd. Certainly, we are seeing and have seen a change in our demand financiers and indeed insurance companies to our business, carbon-heavy piece of the business. I should say that Accel Energy, in its discussions with its financiers, old and new, is receiving very strong support from our banking group. We anticipate that will continue. Clearly, there is also an opportunity to help us and partner with us on a number of renewable and energy hub initiatives that we see as being important for Accel Energy. It certainly is a factor that we are mindful of. In part, that is a reason for the demerger to allow AGL Australia not to be necessarily painted by the same brush as Accel Energy and give that company a greater access to capital.
The next question is from David and Debbie Ziegler. How did the board consider fully the impact on the business of carbon border adjustments? Won't sticking to long-term or long coal closure time frames mean AGL is left out of the race to supply Australia's industrial customers with renewable energy?
Well, I would say that our core strategies for both Accel and to AGL Australia is absolutely to continue to supply a mix of coal and renewables in the short term, but shifting heavily to renewables into the future. I believe both companies, Accel through its energy hubs and AGL Energy through its broader portfolio of renewables, are able to provide competitive, cost-competitive and reliable supply out into the future.
The next question is from Stephen Mayne. With the proposed demerger, is it right to assume that the retail consumer business will take on a bigger share of the AUD 3 billion AGL debt because its profits are more reliable and sustainable going forward? Will it be challenging to receive bank approval for the demerger, particularly for those financiers exposed to the carbon-intense assets?
I'll partially answer that and again ask Damien to reply. He's managing the bank discussions on a daily basis right now. Certainly, we believe we have very strong bank support for both entities. We see that the access to capital for both Accel and AGL Australia remains strong. Damien, you might add to that. You're on mute.
Thank you, Chairman, and thank you, Stephen, again, for your question. I'll refer you again back to the 30 June announcement where we talked about the split of where the debt was likely to go. Back in 30 June, we talked about AUD 800 million going into Accel with the balance going into AGL Australia. Your position that more will go into AGL Australia is correct, and that's on the basis of us working with the banks, and working through what the cash flows of each of those entities will look like between now and into the future. That is correct. Thank you.
The next quest-
Thanks, Damien.
The next question is from Mamoon Reza. If renewable energy source is cheaper than thermal, then why not plan to retire thermal assets and build more renewable quicker?
Thank you for your question, Mr. Reza. Look, the experience that everybody sees across the NEM is that renewables is not necessarily cheaper than coal-fired generation, certainly not for firming capacity. As I mentioned earlier, when the prices are at AUD 35, AUD 40, renewables, in terms of both getting money back, operating costs and a return on investment remains challenged. It is a reality that although cost of capital for renewables may make investments in lower returning projects reasonably attractive. We're seeing that certainly in AGL's renewable portfolio. I think it's a misnomer to say it's cheaper because it's almost certainly not, and certainly not for firming when you have to take on the responsibilities of providing electricity when the wind isn't blowing and the sun's not shining. Obviously, into the future, batteries and significant investment in batteries is a major part of our future.
With battery technology improving year on year, we anticipate that that will become extremely competitive down the track and will want to be a significant part of that technology.
The next question is from Kevin Daley. Instead of leaning into the energy transition, why not leave that to others while AGL seeks to spend capital in ways that generate a high internal rate of return independently of emissions?
Look, I think there is a reality Thanks for your question, Mr. Daley. Reality is that we have people, we have community expectations, and we have a role to play given where we sit in the supply of electricity to the NEM. Investors are clearly critical to our future, and ongoing access to capital is critical. Private equity has a different view of life on this space. As far as we're concerned as a public company, we are part of the system, part of the solution. We're happy to be that way. We, as an organization, can't be immune, in my view, from the responsibilities of addressing climate change. That's part of our core strategy and culture and direction.
The next question is from Mr. Jack Bauer. What are AGL's plans to profit from the transition to electric vehicles?
Thank you for your question, Mr. Bauer. Look, we have a number of certainly a good partnership with a number of parties doing EVs. It is a significant part of growth potential for AGL Australia. We'll continue to push hard on that with appropriate partners to build an EV business and a supply process for that business.
The next question is from Mr. Jonathan Hancock. With a big investment in renewables in solar and wind, what plans have been put in place or considerations made to recycle the solar panels and wind turbines at the end of life, expected to be about 30 years, and what provisions are being made for the cost of recycling the renewable assets?
Well, you're right, Mr. Hancock. Many of these assets are long-dated. We have agreements that are in place for long-term renewables to recycle and dispose of that appropriately. They are long-dated, and clearly, even the technology of how we do that is likely to change over that period of time. We're certainly aware of the requirement for that, albeit long-dated.
The next question is from Ms. Adele Walsh. I don't want the demerger to happen. How can we vote on this before more money is spent on the proposal?
Well, our direction is clear. There will not be a capacity to vote on this before the money is spent on the proposal. We genuinely believe it's a good idea to do, and it's core to our future. You have to make up your mind as to what you do with your investment, Ms. Walsh. I hope we've addressed some of your concerns.
The next question is from Deborah Ann Sykes. How can AGL claim to be carbon neutral when the power is still coming from coal? Isn't this just greenwashing? Won't the company get caught out for this? I'm very distressed by this for a number of reasons.
Our commitment is to be carbon neutral by 2050. We are totally committed to that. Further information regarding our strategies with regards to managing our carbon emissions and exposure will obviously be part of the scheme document and with ongoing discussions with a range of shareholders.
The next question is from Mr. Ashjayeen Sharif. Will AGL Australia, as a de-merged entity, set the goal of sourcing its power from 100% renewable energy by 2030?
Look, I think that will be up to the AGL Australia board. Part of our overall work, with respect to setting strategies for both Accel and AGL Australia. That'll be published at scheme document latest, following a number of interfaces with shareholders and other stakeholders prior to that time. The AGL Australia board will then be accountable for those strategies and those targets. It would be premature of me to set that now while the work is ongoing to finalize what that strategy might be.
Apologies. The next question is from Mr. Stephen Mayne. What was the AGL board's view on the widely rorted AUD 90 billion JobKeeper program? It was very easy to qualify by just forecasting a drop of revenue, even if it didn't eventuate. How did AGL play JobKeeper, and are we aware of any competitors which participated in the scheme?
I can only speak on a personal basis, Stephen, on this one. I think I'd be disappointed that that scheme was utilized in the way it was. I don't believe, in fact, I'm certain we didn't participate in JobKeeper. I'm unclear whether other parties did.
The next question is from Mr. Stephen Mayne. AGL is increasingly looking like its plunging share price and excessive debt will force the need for an emergency equity raising. If this occurs, can the board promise that it will use the PAITREO model with compensation for all non-participants in retail rights trading, similar to the AUD 1.23 billion PAITREO we did at the AUD 11 a share in 2014?
Thank you, Mr. Mayne, for the question. Look, I don't wish to speculate on any capital raising. I don't believe it's appropriate. We have ways and a strong capital process that's ongoing right now with our banks and financiers. At the present time, there's no contemplation of an equity raising, whatever style or shape that you have.
The next question is from Altitude Investment. Did AGL use E.ON and Uniper as a case study for the split of AGL Energy into Accel and AGL Australia? If so, what are your thoughts on how the split of the German company performed post-split?
Look, we did look at a whole range of companies, and examples of how splits took place and the performance. Certainly, a number of the renewables companies performed extremely well after that split. Although, I must say the European market is different to the one that's prevalent in Australia. We did look at examples and, again, the renewables space, and the renewables companies performed extremely well.
The next question is from Australian Trade Corporation. Are we losing household energy supply thanks to rooftop Solar? Does AGL have any plans to expand its market share by adding new retail and industrial customers or supplying overseas markets like Singapore?
Well, certainly we have significant plans in our strategy to build on both our retail and our C&I customer base. That is part of our strategy, which will be driven by Accel Energy. We have looked at supplying, certainly in gas trading, to places like Singapore. Again, that remains a part of a strategy that will be looked at by Accel.
The next question is from Hillary Kuhn. From a shareholder's point of view, it is obvious that the current board and CEO recognize the need for new directors to the board with relevant skills for AGL's future directions, as described by the Chairman in his earlier address. Why did the board not proceed with the process of appointments in order to gain ratification at this AGM?
Thank you for your question, Ms. Kuhn. Getting an appropriate director or directors into an organization is not a five-minute exercise. There needs to be clarity around what you're offering, and it needs to be a comprehensive process to find the right person. We've been looking for this for a number of months. To attract the right person, we need to take our time to find the person with the right skills and commitment to take on some of the challenges that AGL has, and eventually, hopefully, Accel Energy and AGL Australia. We are very committed to bring on people with substantial experience on energy transition and ESG. We also need to, for instance, replace John Stanhope and his financial capabilities and audit processes for Accel and to look at the broad skills matrix which is appropriate for the challenges of the company's future.
The next question is from Parthkumar Patel. You mentioned that it's standard practice for underwriter to use shorting in a way to cover the risk in relation to a question asked about Macquarie short. Can you assert your statement again, and if it is at all in the best interest of shareholders?
Look, there are mechanics around doing a DRP, and the processes that Macquarie are using are standard practice in this space. I don't have any further comment on that.
The next question is from Peter Brooks, a professor at the Centre for Health Policy at the Melbourne School of Population and Global Health. The evidence of the harm posed by both the combustion of fossil fuels and climate change itself, and in the form of heat-related mortality, extreme weather events, nutrition supply, and respiratory illnesses, is becoming more granular every day and already a material risk for our company. Given this, why has our company not listed litigation on health grounds as a tier 1 strategic risk? Will AGL commit to replacing coal with renewable energy by 2030 to mitigate these health risks in line with advice from the International Energy Agency?
Thank you for your question, Peter. Let me say, we continually interface with our communities and workers over their health, and health and safety is a critical part of our strategy and culture at AGL. Thank you, Diane. Thank you for that description. Liz, could you please let me know if there are any questions relevant to the resolution to adopt the 2021 remuneration report?
The first question on this resolution is from Stephen Mayne. There are five proxy advisors in the Australian market. We know that the ASA is recommending and voting against the rem report and the LTI grant for CEO Graeme Hunt. Have any other proxy advisors gone against the board's voting recommendations today? If so, please provide the details.
Thank you for your question, Stephen. Look, there is overwhelming support for both the remuneration report and the grant of LTIs to Graeme in the voting. That reflects the support of the various proxy advisors for that vote. I'm sure that we can provide and will provide details of the voting after the meeting.
The next question is from Adele Walsh. AGL management was able to predict renewables rising and reducing the cost of electricity. Why are we rewarding them?
As Diane said, firstly, we're not basing our STI on criteria such as predicting renewables, and I should stress that we did predict, and they did predict rising impact of renewables and also the reduction in price. Reality is today, the STI for all our management or senior management has been reset in line with shareholder experience over the last 12 months, and Diane enunciated the reasons for that change.
There are no further questions on this resolution.
Thank you.
Sorry, Chair. There's one further question that's just come in from Dan Gocher. In the STI, why is the carbon intensity measure not relative to the NEM average? AGL's carbon intensity is far higher than the NEM average and will likely remain so for the indefinite future.
Look, there is no doubt that both AGL Australia and Accel Energy will look at appropriate remuneration targets for carbon intensity and other objectives that are required in that company based on their strategy for carbon neutrality and benchmarks against those objectives. On that basis, those boards will set the appropriate STI and other remuneration targets for those companies should the demerger go ahead.
There are no further questions on that resolution.
Thank you, Liz. I'll now put the motion, the remuneration report of AGL for the year ended 30th of June 2021, as set out in the directors' report section of the annual report, be adopted. Details of the proxy and direct votes that have been cast on this motion are as shown on screen. Please place your online vote for this item if you have not already done so. Thank you very much. I now turn to the third item of business, which is the re-election of one board-endorsed director and the election of a non-board-endorsed candidate. In accordance with the company's constitution, two directors are retiring at this annual general meeting, John Stanhope and Jacqueline Hey. Jacqueline is seeking re-election. Also seeking election to the board is Ashjayeen Sharif, who has nominated himself as a candidate for election.
The first matter under this item of business concerns the re-election of Jacqueline Hey as a director. A short video will now play, in which Jacqueline will outline why she is seeking your approval to continue as a director of your company. For our online meeting today, we thought it prudent for this address to be pre-recorded to minimize disruption and the risk of technical issues.
Hello, ladies and gentlemen. I really appreciate you joining us today in this virtual mode, and I do thank you for giving me the opportunity to cover some relevant details of my career and background. I'm an economist by university training and have spent more than 20 years in the technology industry, ending up as managing director for entities both here, in Europe, and in Middle East. During this time, I gained a lot of real-life leadership experience, particularly in governance and financials, in large intensive capital projects, technology strategy, people safety, and in customers and stakeholder management. Today, I have ASX board roles with Qantas, and I'm the Chair of the Bendigo and Adelaide Bank. These roles enable me to identify best practices across industries and to apply those learnings to the benefit of AGL.
I also serve as chair of the AGL Safety, Customer, and Corporate Responsibility Committee, as well as being on the Audit and Risk Management Committee. Your company has a proud history. Presently it does operate in an industry which is experiencing substantial change. We must transform as the world we live and work in requires us to address generational, environmental, and social issues. To do it in a way that keeps the lights on, keeps our local communities in which we operate sustainable through this transition, allows our people to continue to be employed, importantly, allows you, as shareholders, to be able to benefit in the future. This evolution means we are moving from an energy landscape built on baseload thermal power to a future of cleaner, more distributed energy generation and storage.
It will require a well-considered and responsible approach to balance the needs of all stakeholders to make sure that no one group gets left behind, and also that Australian households and businesses have continued access to reliable and affordable energy. Ladies and gentlemen, should you provide your endorsement, then I would be very honored to continue to fulfill my director role. I thank you for your consideration. Thank you.
Jacqueline has been a director since March 2016. She is considered by the board to be an independent director. Ms. Hey enjoyed a successful executive career prior to becoming a full-time company director in 2011. Ms. Hey has extensive experience as a director of ASX-listed companies and is currently chair of Bendigo Bank and a director of Qantas. Ms. Hey's skills and experience, particularly her commercial and leadership experience, are valuable to AGL's board for its existing skills and experience. Ms. Hey also adds considerable strength and leadership to the committees on which she serves, including as chair of the Safety, Customer, and Corporate Responsibility Committee. The board, excluding Jacqueline, recommends shareholders vote in favor of this resolution. Please, Liz, could you please let me know if there are any questions relevant to the resolution to re-elect Jacqueline Hey as a director?
Thank you, Chair. The first question is from Stephen Mayne. The current AGL constitution provides a range of between 3- 10 directors, and there are no entrenchment provisions, making it difficult for external candidates to nominate for the board. Will the chair undertake to replicate these features of the constitution in the de-merged company, avoiding following the lead of other de-merged companies such as South32 and Treasury Wine Estates, which had constitutions imposed without shareholder approval, requiring external candidates for the board to be supported by 100 shareholders or 5% of issued capital?
Thank you for your question, Mr. Mayne. The constitution of Accel Energy and AGL Australia is subject to ongoing discussions. Your point and sensitivity is noted, and we'll respond accordingly when we've got to decide, but your point is noted.
The next question is from Stephen Mayne. As the Chair of Bendigo and Adelaide Bank, could Jacqueline please comment on how much Australia's banks are moving to decline or reduce funding for carbon-intensive businesses like AGL? Is Bendigo a lender to AGL?
I can answer at least part of that question. I do not believe Bendigo is a lender to AGL. I can't speak on behalf of Jacqueline about Bendigo and Adelaide Bank's policies of lending, and I would anticipate that I'll ask Jacqueline to respond accordingly to Stephen Mayne after this meeting.
There are no further questions, Chair.
Thank you, Liz. I will now put the motion to the meeting that Jacqueline Hey be re-elected as a director of the company. Details of the proxy and direct votes that have been cast on this motion are shown on the screen. Please place your online vote for this item if you have not already done so. Thanks very much.
The next matter for consideration is the election of Ashjayeen Sharif as a director. Mr. Sharif, a retail shareholder, nominated himself as a candidate for election, which was supported by another individual retail shareholder. A short video will now play in which Ashjayeen will outline why he's seeking your approval to be appointed as a director of your company. As with Jacqueline's address, we have pre-recorded Ashjayeen's address to minimize disruption and the risk of technical issues.
My name is Ashjayeen Sharif. I'm 18 years old, and I'm currently a student at the University of Melbourne. I may seem an unlikely candidate for the AGL board, but I felt compelled to nominate myself because while AGL is Australia's biggest climate polluter, it has the size, the scale, and the scope to turbocharge Australia's energy revolution. I want to help steer AGL away from the coal-burning power that is destroying the climate and AGL's profitability, and towards clean and reliable renewable energy in order to give my generation and all those to come a shot at a safe future. More than 18,000 people from all over Australia have signed a petition supporting my call for AGL to replace its coal-burning power stations with renewables by 2030.
All of those people are calling on shareholders like yourselves to do the right thing for the next generation and for AGL as a business. The AGL board has admitted that it failed to recognize the pace of change in the energy market. Renewables are taking the lead, and AGL is not well-placed to take advantage of the huge opportunities this presents. The failures of AGL's board have cost shareholders over AUD 12 billion in recent years, and AGL's share price has nosedived 70% over the past three years alone. Financial markets are now moving at lightning pace towards climate action, leaving coal companies behind. AGL will struggle to gain financial support from banks, insurers, and investors if it does not respond commensurately to the climate crisis.
As the UN's Intergovernmental Panel on Climate Change and the International Energy Agency all advocate, we must transition away from coal by 2030 to maintain a safer, more livable climate future. It is as simple as that. With the right leadership, AGL can become a genuine renewable energy powerhouse and restore shareholder value to what it once was before the company began purchasing coal-burning power stations in 2012. If you elect me to the board, here are five key steps I would instruct AGL's executive team to deliver throughout the demerger process into Accel Energy and AGL Australia. Firstly, I would push to fully commit to the Paris Agreement emissions reduction targets, including replacing Bayswater and Loy Yang A with renewables by 2030, providing certainty to the market.
This importantly includes implementing transition plans for all workers at Bayswater and Loy Yang A, working closely with unions, relevant governments, and other key local stakeholders to ensure AGL's hardworking workforce receive the job security that they deserve. Secondly, I would prioritize negotiations with our largest customer, Tomago Aluminium Smelter, for AGL to provide renewable energy to as it transitions to mostly renewable power sources by 2029 and commence negotiations with Portland Aluminium Smelter to do the same. Thirdly, I would transform AGL's old power generation sites to be the center of renewable energy industrial precincts using access to land, transmission lines, and renewable energy resources as a major competitive advantage. Penultimately, I would position the company to be the preferred supplier of electricity to the rapidly growing list of major businesses who are making 100% renewable energy pledges.
Finally, I would redirect sustaining capital that is currently going into upgrading worn-out coal-burning power stations beyond 2030 into growth capital expenditure on new renewable energy production and storage projects. As Australia's biggest climate polluter, AGL has the power to become Australia's biggest climate solution by switching rapidly to renewable energy. I want to be a part of that solution, and I want to restore AGL to the great company that it once was and should still be, for the sake of all staff, all shareholders, and the future of the company and the world itself. Thus, I urge you to vote me onto the board so I can deliver my plan. Thank you.
Thank you, Ashjayeen, for the video. The board, assisted by the nominations committee, has carefully considered Mr. Sharif's nomination in the context of the succession planning it undertakes for non-executive director succession and has recommended that shareholders vote against Mr. Sharif's election. As I mentioned previously, the board is currently undertaking succession planning and is seeking to appoint a new director to the board with specific skills and expertise in climate change and ESG in the first half of FY 2022. Liz, could you please let me know if there are any questions relevant to the resolution to elect Ashjayeen Shariff as a director?
Thank you, Chair. The first question is from Henry Kay. Instead of recommending that shareholders vote against the retail shareholder nominee, why don't you accept them on the board as an interim director till the replacement is appointed?
Thank you for your appointment, your question, Mr. Kay. The appointment of a board member is a significant issue with broad ramifications. Reality is that we are in a very advanced stage to appoint directors, a director and/or directors to AGL Energy, therefore absolutely not appropriate for us to appoint any interim director to that role. We're proceeding as per our recommendation to bring on a range of skills which are necessary to drive both AGL Energy and, in the future, AGL Australia and Accel.
Next question is from Stephen Mayne. Could the proxy position be disclosed before the debate on each item rather than after, in accordance with the ASA best practice AGM guidelines? Did Mr. Sharif, the youngest-ever candidate for an ASX 100 board, receive more than 2% of the proxy votes in favor?
Thank you, Mr. Mayne, for your question. I can confirm that Ashjayeen received votes of just over 2% in support of his nomination.
Thank you, Chair. There's no further questions on that resolution.
I will now put the motion to the meeting that Ashjayeen Sharif be elected as a director of the company. Details of the proxy and direct votes that have been cast on this motion are shown on the screen. Please place your online vote for this item if you have not already done so. Thank you very much.
I now turn to the fourth item of business, which is the grant of performance rights under the Long-Term Incentive Plan in the 2022 financial year to the Managing Director and CEO, Graeme Hunt. The number of performance rights to be granted to Graeme is 297,374, with a four-year performance period. The number of performance rights that ultimately vest for Graeme will depend on the extent to which the performance conditions have been satisfied over the relevant performance period.
AGL's FY 2022 long-term incentive plan has two performance conditions. The first, weighted at 75%, measures AGL's total shareholder return relative to those of the constituent companies in the S&P/ASX 100 index, being AGL's peer group. The second measure, weighted at 25%, is related to carbon transition, which was first introduced as an LTIP metric in FY 2021. This metric has been included having regard to AGL's climate statement and AGL's commitment to reduce its carbon footprint and to facilitate the transition of AGL's generation fleet responsibly over time. We think this metric provides the focus for executives to deliver against AGL's commitment in its climate statement. Following feedback received on the FY 2020 remuneration report and the ongoing challenge of establishing an appropriate target range for return on equity metric, the board determined not to include return on equity as a performance metric for FY 2022 LTIP.
The ASX listing rule required that shareholders approve the granting of performance rights to any director, including the managing director. The board, excluding Graeme, recommends shareholders vote in favor of this resolution. Liz, could you please let me know if there are any questions relevant to the resolution to grant performance rights under the LTIP to Graeme Hunt?
There are no questions for this resolution, Chair.
Thank you, Liz. I'll now put the motion to the meeting to approve the grant of 297,374 performance rights to Graeme Hunt under AGL's long-term incentive plan for the year ending June 30, 2022, on the terms set out in the explanatory notes which accompany the notice of meeting. There are the proxy and direct votes for this item on screen as we speak. Please place your online vote for this item if you have not already done so. Thank you.
I now turn to the fifth item of business, which is the conditional spill resolution and this will not be put to the meeting today, given the company did not receive a second strike in relation to the 2021 remuneration report. Details of the proxy and direct votes that have been cast on this motion are now shown on this screen. We now move on to Item 6A, and Item 6A concerns a special resolution proposing to amend AGL's Constitution to include a new provision that would enable shareholders, by ordinary resolution, to express an opinion or request information about the way in which a power of the company vested in the board has been or should be exercised. This resolution has been requisitioned under Section 249N of the Corporations Act by shareholders representing approximately 0.02% of shares on issue in AGL.
The board has recommended that shareholders vote against this resolution. Detailed reasons are set out on page 13 of the notice of the meeting. The board and company are committed to understanding the views of AGL's stakeholders and making a genuine effort to respond to concerns which are raised. The company considers that it has a proven track record of listening and responding to stakeholders' concerns in a way that is cognizant of, and balances, the competing interests of its different stakeholder groups. The board does not consider that the proposed constitutional amendment would enhance its ability to understand the views and sentiments of its shareholders and broader stakeholders. In addition, the board is concerned that the proposed amendment to the constitution could have an effect of enabling groups of shareholders to promote their own interests, which do not take into account the interests of the whole company.
The resolution proposed is a special resolution. This means that it will be passed if at least 75% of the votes cast by shareholders are in favor of the resolution. The directors unanimously recommend that shareholders vote against these resolutions. Item 6B is an advisory resolution and will only be considered if Item 6A is passed by special resolution. The board does not endorse Item 6B and recommends that shareholders vote against it for the reasons set out in pages 14 and 15 of the notice of meeting.
Item 6B requests the board disclose, in association with the forthcoming demerger scheme documents, short, medium, and long-term targets for reductions in the proposed demerged companies, Scope 1, 2, and 3 emissions that are aligned with Articles 2.1A and 4 (1) of the Paris Agreement, details of how Accel Energy and AGL's capital expenditure, sustaining and growth and transformation, will align with the targets, and details of how Accel Energy and AGL Australia's remuneration policy will incentivize progress against targets. AGL understands the critical importance of decarbonization of the electricity sector. However, as mentioned earlier, AGL is not currently in a position to make Paris-aligned targets for Scope 1, 2, and 3 emissions for Accel Energy and AGL Australia. Liz, could you please let me know if there are any questions relevant to the special resolution?
In relation to Resolution 6A, the first question is from Stephen Mayne. Why are Australian boards so afraid of listening to the opinions of shareholders by way of non-binding shareholder resolutions? These are standard practice in the U.S., yet dozens of ASX-listed companies have now recommended against these constitutional amendments. Did you consider supporting this move, and will you consider providing such resolutions in the constitution of Accel?
Well, again, Mr. Stephen Mayne, thank you for your question. The constitution of Accel and AGL Australia are subject to review by the board and eventually their respective boards in the event of a demerger. Your point and sensitivities are noted and will undoubtedly be considered in those board deliberations.
The next question is from Angela Meyer. The International Energy Agency and UN are both calling for Australia to transition away from coal power by 2030 in order to meet the Paris Climate Agreement goals. Does the board and CEO acknowledge that 2030 is the firm target date for coal closure to ensure Paris alignment?
Thank you for your question, Ms. Meyer. We certainly recognize that the date of 2030 is something that is on the table with respect to the UN targets. I believe that 2030 is a very challenging target for coal closure, based on the current pace of regulatory reform and the need for ongoing replacement of coal-fired generation within the NEM. As I mentioned earlier on, our targets and strategies with respect to the management of our coal fleet will be part of the scheme document that will be published in FY 2022. On that basis, further details of our approach to this will be given in those documents.
The next question is from Dan Gocher of the ACCR. The presentation on 30 June stated that AGL would disclose detailed climate change roadmap, including specific decarbonization targets for both demerged companies. Can the chair confirm when this information will be made available to shareholders? Is this information not material to the demerger vote?
Thank you for your question, Dan. As we've said before, the reality is that we are working very hard on analyzing what the targets and appropriate business strategies will be for these organizations. With further engagement with our shareholders and other stakeholders, the board will appropriately publish those targets, including capital allocation and incentivization for meeting those targets as part of a scheme document, which will be published next year. I reiterate that that's a commitment we made inevitably for non-binding. The scheme document will be in part a mandate for shareholders to vote and be comfortable with the actions and strategies that each company is taking towards the transition.
The next question is from Stephen Mayne. When disclosing the outcome of the Paris goals and targets resolution and all other resolutions today on your website, could you please advise how many shareholders voted for and against, similar to what happens with a scheme of arrangement? This will provide a better gauge of retail shareholders' sentiment on all resolutions, and was a disclosure initiative recently adopted by Metcash after its AGM.
Thank you for your question, Stephen. We'll review that and revert accordingly. I will revert.
The next question is from Deborah Ann Sykes. Do you acknowledge that the UN and International Energy Agency said clearly that Australia has to stop burning coal by 2030 to address climate change? What are your plans to meet this target?
I've already said that targets are subject to review right now and our strategy and objectives will be published as part of the scheme documents that'll be published next year. Again, we will work very closely with regulators and governments, both federal and state, to apply, come up with the right answers that provides stability and cost competitiveness to the NEM. Our lead in this transition will be absolutely described in our scheme documents, and they're being worked on now.
The next question is from James Morgan. As a shareholder, it would seem that the board is out of step and the share price reflects this. The board's obsession with Kodak's obsession with analog film. Resolution 6A may help AGL become more relevant. Can the board indicate how it intends to address the shareholders' broader concerns?
Well, I suppose the shareholders' concerns are reflected in their voting. The shareholder votes are, and will be, published as part of this AGM. The reality is that the share price reflects conditions and operating conditions of the day. They don't necessarily reflect a process which involves commitment to targets that are right now being reviewed. On that basis, I think we have a different outlook. The process of how we manage our coal-fired generation is one that is linked into the management of the whole NEM. We can't be independently doing things that regulations and other commitments don't allow us to do.
The next question is from Dan Gocher. If Australia's largest carbon emitter cannot align itself with the Paris Agreement, what chance does Australia have of doing the same?
Well, Dan, I think, you will see what we will align to and commit to at the time of the scheme document publishing. We're clearly mindful of where that's going, and we're clearly mindful that this is an accelerating pace of expectations, both from shareholders and investors, banks, et cetera. That is part of our analysis as we developed the strategy for the scheme document and publishing the rationale for the demerger.
Thank you, Chair. There are no further questions on this resolution.
Thank you. I'll now put to shareholders item 6A, which deals with the proposed constitution amendment. The motion before the meeting is to amend the constitution to insert a new clause, 32.4, member resolution at the general meeting as follows: The members in general meeting may, by ordinary resolution, express an opinion or request information about the way in which a power of the company, partially or exclusively vested in the directors, has been or should be exercised. However, such a resolution must relate to an issue of material relevance to the company or the company's business, and cannot either advocate action which would violate any law or relate to any personal claim or grievance. Such a resolution is advisory only and does not bind the directors or the company. Details of the proxy and direct votes that have been cast on item 6A are shown on the screen.
Please place your online vote for item 6A if you have not already done so. Based on the proxy and direct votes received ahead of the meeting, it's apparent that item 6A for the amendment of AGL's constitution will not be passed. Item 6B, which is contingent on amending the constitution, will not be put to the meeting today. Details of the proxy votes that were received on item 6B are shown on the screen. As mentioned earlier, a poll is being taken on the relevant items of business. If you have not already done so, please indicate your votes for the resolutions via the online portal. A summary of the proxy votes I hold as a nominated proxy for shareholders in relation to each resolution are as shown on the screen.
I advise the meeting that I intend to vote all discretionary votes available to me as chair of the meeting in favor of resolutions 2, remuneration report, 3A, re-election of Jacqueline Hey as a director, and 4, grants of performance rights under the LTIP to Graeme Hunt. Against resolutions 3B, election of Ashjayeen Sharif as a director, 6A, amendment to the constitution, and 6B, Paris goals and targets. Ladies and gentlemen, that concludes the formal items of business for today's meeting. The polls will remain open for another 10 minutes. Results of the polling on each resolution put to the meeting will be provided to the ASX by close of business today and posted on the company's website. It only remains for me, on behalf of the board, to thank you for attending and demonstrating your sincere interest in AGL by taking part in this meeting.
I now declare the meeting closed, subject to conclusion of the poll. Thank you very much.