Origin Energy Limited (ORG) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to Origin's 21st Annual General Meeting. For those of you who don't know me, my name is Gordon Cairns, and I'm the Chairman of Origin Energy Limited and of today's meeting. Before I formally declare the meeting open, I would like to acknowledge that we are hosting today's meeting virtually on the land of the Gadigal people, the traditional custodians of this land. I also acknowledge the traditional custodians of the various lands and places from where you are joining this meeting virtually today and pay my respects to elders past, present and emerging. We will now play a short acknowledgment of country produced by our people. [Presentation]

As it's now 10:00 a.m. and as there's a quorum of shareholders present, I formally declare the meeting open. Although we are not able to meet in person, I'm pleased that we have been able to come together virtually to update you on your company, conduct formal business and answer any of your questions. Those of us in the same room today are practicing appropriate social distancing in line with government health guidelines. As this is a virtual meeting, we will not be breaking for refreshments. In addition to those participating virtually in the meeting, the holders of 1.1 billion shares or approximately 61% of the issued capital are here represented by proxy. I will take the notice convening the meeting as read. The minutes of the 2019 AGM have been signed, and copies are available upon request from the company secretary. Please also note that this meeting is being webcast live, and a copy of its recording will also be available on our website after the meeting. Before commencing formal proceedings, I would like to introduce the Board and members of senior management who are in the meeting today. Sitting next to me, our Chief Executive Officer, Frank Calabria; and Company Secretary, Helen Hardy. Also in the room are Mr. Scott Perkins, Nonexecutive Director and Chairman-elect; Ms. Maxine Brenner, Nonexecutive Director; Mr. Bruce Morgan, Nonexecutive Director; Mr. Steve Sargent, Nonexecutive Director. Joining us virtually Mr. John Akehurst, Nonexecutive Director; Ms. Teresa Engelhard, Nonexecutive Director; and Mr. Greg Lalicker, Nonexecutive Director. Other members of Origin's senior management are Jon Briskin, Executive General Manager, Retail; Greg Jarvis, Executive General Manager, Energy Supply and Operations; Kate Jordan, General Counsel and Executive General Manager, Company Secretariat, Risk and Governance. My God, that's a mouthful. Tony Lucas, Executive General Manager, Future Energy and Technology; Sharon Ridgway, Executive General Manager, People and Culture; Mark Schubert, Executive General Manager, Integrated Gas; Samantha Stevens, Executive General Manager, Corporate Affairs; Lawrie Tremaine, Chief Financial Officer. Mr. Andrew Price of EY, the company's auditor, has also joined us. The order of the business today will commence with my Chairman's address, following which Frank will discuss our results and prospects for the coming year. Finally, we will consider the formal business and resolutions set out in the Notice of Meeting. This is my final AGM after 7 years as Chairman. With your indulgence, I'd like to reflect back over those years, what went well and what I'm disappointed with. If the primary job of the Board is to select the best CEO, then the last almost 4 years have demonstrated our wisdom and confidence in Frank. He is transforming Origin despite a very challenging backdrop with lower oil prices, COVID-19, a lack of coherent energy policy and the government's reregulation of electricity pricing. He has put together, both from external hires and internal promotions, a first-class executive leadership team. We have built a much stronger culture around a clear purpose and values, with employee engagement at an all-time high and in the top quartile in corporate Australia. We are becoming a truly customer-centric retailer with strategic Net Promoter Score, NPS, at an all-time high. And our key investment in Octopus Energy and the adoption of its operating model and Kraken platform for the retail business will take this to a whole new level. And as importantly, we have been mindful of those customers who are suffering hardship during this pandemic, issuing thousands of payment extensions and committing to not disconnecting those in financial distress along with our long-standing Power On hardship program. Our initiatives in new energy are now bearing fruit with the launch of Spike, the first gamified demand response technology for residential smart meter customers in Australia. Spike was launched in August, and we are seeing some strong engagement from customers with already close to 15,000 signed up and participation rates in our Spike Hours events consistently around 70%. The prospects for this type of program to help customers save energy and money as well as supporting the grid during peak demand events, particularly in summer, are truly exciting. We are accelerating towards clean energy through our commitment to half our Scope 1 and Scope 2 emissions by 2032. We were the first company in Australia to have our emissions targets endorsed by the global Science-Based Targets initiative. And we have recently announced plans to update Origin's emissions reduction targets to a 1.5-degree centigrade pathway with our longer-term aim to achieve net zero emissions by 2050. We made good progress in 2020 with our Scope 1 and Scope 2 emissions decreasing by 9% and our Scope 3 emissions by 12%. Integrated Gas continued to drive down costs to make us globally competitive. And in financial year 2020, our investment in Australia Pacific LNG delivered $1.275 billion in cash distributions. We are a safer place to work with TRIFR reducing to 2.6. And all of this was underpinned by capital discipline that saw us reduce debt to the lower end of our target range. Finally, I want to call out the groundbreaking work of the Origin Energy Foundation, which marks its 10th anniversary, during which it has provided more than $27 million in philanthropy. As testament to the foundation and our community sponsorship and commitment to reconciliation, Origin has been awarded Australia's Best Workplace to Give Back by GoodCompany for the second year running, beating out a field of more than 300 companies. We are incredibly proud to receive this recognition for our work in the community. Having reflected on performance, let me now switch to governance. I would like to acknowledge the contribution of Teresa Engelhard who retires from the Board at the end of today's meeting. She has been a major contributor to developments Origin has made in the new energy space, and we will miss her. We have also announced 2 new appointments to the Board: Joan Withers and Ilana Atlas. This will bring the number of women on the Board to 3, which we absolutely see as a minimum. Both are experienced first-class directors with distinguished executive and Board careers, and both are passionate about energy and the enabling role it plays. I also want to explain to you the extension of discussions we have had on remuneration. Our start point was that the current long-term incentive plan, the LTIP, was not fit for purpose. Vesting of the award was largely a function of the oil price and where you happen to be in the cycle. It was not serving its purpose in retaining, attracting or incentivizing management. Furthermore, it was not creating share ownership, which has the highest correlation with long-term increase in shareholder value. We therefore proposed to replace the LTIP with a heavily discounted scheme that granted stock with a 5-year vesting and extensive and transparent underpins. In discussion with both proxies and major shareholders, it became apparent that this proposal was too radical, and it would not gather sufficient support unless it contained a long-term incentive that was financially hurdled. Hence, we withdrew Resolution 4 and made an ASX announcement that we were replacing it with a hybrid 50% LTIP with a relative total shareholder return and a 50% with a long-term share plan, again, on a heavily discounted maximum opportunity. I am pleased to say that this has been better supported, meets the needs of shareholders and incentivizes management and will give us moreover the opportunity over the next 12 months for continued engagement and refinement. I also want to briefly address questions regarding our engagement with the traditional owners in the Northern Territory as this is the third year in a row we've had resolutions of this nature at our AGM. I personally have visited our Beetaloo operations and met with our host traditional owners as have our CEO and several other directors. Our host traditional owners have agreed to and support our exploration work in the Beetaloo, including our planned activities at declared locations and hydraulic fracture stimulation, commonly referred to as fracking. We work with the Northern Land Council to engage with the traditional owners who are the native titleholders and claimants who may speak legally and culturally for the areas where our activities are proposed. We have had on-country meetings with them this year as well as on site following the resumption of exploration. And they have been working with us on sacred survey sites and other clearances. I am very confident in the way we engage with the traditional owners and with our processes for engagement, guided by the principles of free, prior and informed consent. Turning now to the future. The pace of transition is increasing. We have transformed in the last 5 years, but the next 5 will be just as challenging. And this is why one major disappointment. Despite the strong operational performance over recent times, the share price is not where we would like it to be. The current share price is reflective of the depressed outlook for oil and reduced energy demand from COVID-19, which is also impacting our other commodities, electricity and natural gas. An uncertain regulatory environment and lack of coordinated energy and climate policy is also a contributing factor. We do not believe the share price accurately reflects the value of the company or its future prospects. But if we can capture the new opportunities in data and energy, in gas as a firming source of energy, in electrification, in renewables and in green hydrogen, we will overcome these externalities, and the future will be very exciting, which I am sure will then be reflected in enhanced value for shareholders. And so I hand over the Chair to Scott Perkins with a great deal of optimism. I can think of no one more capable. He has been a source of wisdom to me and the Board for 5 years. He has an excellent relationship with Frank, and they will form a formidable team. And he is passionate about the opportunities that lie ahead for Origin and is equally determined to realize them. I would now like to invite the CEO and Managing Director, Frank Calabria, to address the meeting. Thank you.

Thank you, Gordon, and good morning, and thank you for joining us for our AGM, which is a little different to previous years. This has been a very challenging year for our customers, communities and people. Many communities continue to face drought, we had a severe bushfire season, flooding occurred in some places, and finally, COVID-19 caused major disruption to pretty much every facet of life and work as we know it. I'm proud of how our people stepped up and maintained safe and reliable energy supply under very challenging circumstances, particularly in those early days when restrictions were changing rapidly. With the economic impacts and rising unemployment affecting many Australians, I'm incredibly proud of the care shown to our customers with thousands of payment extensions granted and a commitment to not disconnecting any customers in financial hardship. I've been moved by the generosity of our people, donating more than $870,000 to support communities affected by the bushfires and the drought. At this stage, Australia seems to have fared well through the pandemic compared to other nations, although sadly, a number of people have lost their lives. With the immediate health response to the pandemic having eased, the focus has rightly turned to the economic recovery and ways to stimulate investment and get people back in work. Origin has been supportive of government efforts to encourage investment that can kickstart the economy. Turning to performance for the 2020 financial year. Despite the external challenges, our operational performance continued to improve, driving growth in free cash flow, allowing further debt reduction, disciplined investment in growth opportunities and distributions to shareholders. Strong field performance drove record production at Australia Pacific LNG, which, combined with efficiency improvements, contributed to record cash distributions of $1.3 billion, demonstrating the true world-class nature of this asset. We resumed exploration in the Northern Territory. And with fracture stimulation now completed, we will progress to extended production testing. I look forward to sharing initial results of our exploration soon. In Energy Markets, our efforts to assist customers and continued investment in our digital interfaces to make engaging with us easier helped achieve Origin's best-ever customer satisfaction as measured by Net Promoter Score. Importantly, our customer satisfaction is ahead of our major competitors. We also passed on lower wholesale prices from 1 July across New South Wales, Queensland, South Australia and the ACT, which meant most customers received some price relief. The pandemic has caused gas and electricity demand to fall. And Origin responded by utilizing the flexibility of our generation assets and wholesale portfolio to adapt to market conditions and mitigate impacts on the business. We're currently completing maintenance across our generation fleet, so we're ready to support the market and customers through the peak summer period once again. With extraordinary changes to the way we work this year, it has been very heartening to see our people pull together and support each other. And this has been reflected in strong improvements in safety performance and engagement. Employee engagement rose to 75%, our highest-ever score, placing Origin in the top quartile of companies in Australia and New Zealand. We paid dividends of $0.25 per share in 2020, which was in line with the prior year but marginally below our target range of 30% to 50% of free cash flow. We acknowledge the importance of dividends to our shareholders and took a prudent decision reflecting the uncertainty of the current economic conditions. Successful execution of our strategy to connect customers to the energy and technologies of the future will enable Origin to continue to prosper in a world increasingly decarbonized, decentralized and digitized energy. With electrons increasingly flowing 2 ways, energy companies are evolving from their traditional role as suppliers of energy to one of aggregators where customers will entrust us to manage their energy in a way that's most efficient for them and the broader grid. Today, it's chiefly rooftop solar, but very soon, it will be batteries in electric vehicles and a myriad of other connected devices around the home. I would like to highlight a few of the steps we've taken to position the business for this transition. We have established a strategic partnership with U.K. technology company and retailer, Octopus Energy. What impressed us about Octopus was that everything was geared to the customer, including operational design and technology. And this is reflected in satisfaction scores consistently ahead of their competitors. The retail operating model is far more agile than that of its traditional competitors, delivering costs that are 40% lower than the closest major peer. And frontline employees are more empowered and more engaged to solve customer queries. By adopting Octopus' operating model and Kraken platform, we aim to emulate their industry-leading cost structure and customer satisfaction. We are progressing well and expect our first cohort of 50,000 customers to be on the Kraken platform by the end of this calendar year. We have been rapidly growing Origin's virtual power plant where we are using artificial intelligence and machine learning to run air conditioning units, pool pumps, batteries, hot water systems and electric vehicle charges to provide the best value for more than 11,000 customers, and looking at how we can utilize this decentralized capacity in the system to help stabilize the grid. Industry-leading, in-house cloud-based data and analytics capability is being applied right across our business to enable us to make better decisions and operate our assets more efficiently. Applications of this include an enabled production optimization tool where we have replaced one operator manually monitoring 30 gas wells a day with a system powered by artificial intelligence that can monitor thousands of wells at once, and real-time optimization at Eraring Power Station, which is allowing us to reduce emissions. We are continuing to utilize our strengths in unconventional gas development so we can help meet the market's needs for cleaner, affordable natural gas through the energy transition as a partner to growing intermittent renewables. This expertise is also advantageous as we progress our future fuel strategy, in particular, focusing on opportunities in green hydrogen. Hydrogen is a very promising fuel because it can be produced with zero emissions, can be readily and safely stored and transported, and the production process can contribute to grid management and stability. Today, we have reaffirmed all financial year 2021 guidance and note the considerable uncertainty created by the ongoing impacts of COVID-19, which has contributed to a more challenging outlook for the year. Energy Markets underlying EBITDA guidance is expected to be between $1.15 billion and $1.3 billion, reflecting lower electricity gross profit due to pass-through of lower wholesale electricity prices to customers and higher network costs absorbed in the regulated tariffs and also a lower natural gas gross profit with legacy contracts rolling off and tariffs repricing. This is partially offset by a targeted $70 million reduction in our cost to serve our customers. Australia Pacific LNG production is expected to be 650 to 680 petajoules, reflecting anticipated lower demand, albeit with very strong field capability to increase production in response to changes in demand. The distribution breakeven at APLNG is expected to be in the range of USD 27 to USD 31 a barrel at an average Australian-U.S. exchange rate of $0.69. Contributing to the development of integrated energy and climate policy remains a priority. Our focus is on advocating for market structures and settings that can achieve balanced outcomes with respect to energy affordability, reliability and emissions reduction. There has been much discussion about government announcements to support a gas-led recovery out of the pandemic. In general, we support actions to stimulate investment in gas supply and put downwards pressure on prices, including the removal of duplicative and costly regulations and the development of priority gas basins, including the prospective Beetaloo. We do support measures to increase transparency in the market and note numerous reports have confirmed the gas market is well supplied, with domestic prices continuing to fall following the most recent ACCC report. We continue to caution against arbitrary or unrealistic gas price expectations, noting the cost of domestic gas must reflect the life cycle cost of production and that gas producers, like any company, should be able to earn a return on the significant capital required to bring gas supply to market. Finally, I would like to acknowledge Gordon who has been Chairman since 2013 and steps down today. Origin has continued to evolve through his tenure, embedding our position as Australia's leading energy retailer, becoming Australia's largest coal seam gas producer and an exporter of LNG, and we've made strong progress in pivoting our business so it continues to thrive in a low-carbon world. Personally, I have valued his guidance and admire his passion for Origin. I very much look forward to working with our new Chair, Scott, on Origin's next phase. To conclude, while we face near-term headwinds due to COVID-19 and its impact on energy demand and its impact on commodity prices, I hope you share my confidence and optimism about our prospects. Today, Origin is far more resilient to commodity cycles than it has ever been in the past. Operationally, our performance continues to improve, and we are making a demonstrable progress on our decarbonization journey and pivoting our business towards a cleaner, smarter energy future. I thank you for your continued support.

Thank you, Frank, particularly for those very kind words. Ladies and gentlemen, I now turn to the formal business of today's meeting. And although this meeting is being conducted virtually, please let me assure you that there will be ample opportunity for you to ask questions. [Operator Instructions] We will endeavor to address questions you submit during the meeting. However, these may be moderated or amalgamated if there are multiple questions on the same topic. To allow everyone attending our virtual meeting an opportunity to vote, I am opening the polls now in respect of all motions that shareholders will vote on today. Shareholders and proxyholders participating can vote online via the Lumi platform by clicking on the bar chart icon. Select the option corresponding to the way you wish to vote. Once the option has been selected, the vote you selected will appear in blue. To change your vote, press a different option to override. Votes can be changed up until the time I close the polls. Proxyholders with directed votes will have those votes automatically voted as directed. All open votes held by our shareholder or proxyholder will be voted in accordance with the option you select via Lumi. It is my duty as Chairman to ensure that shareholders as a whole have had reasonable opportunity to ask questions about or comment on the management of the company, the remuneration report and other items of business before the meeting. To achieve this, the following procedures for this meeting will be adopted. First, please note that as this is a shareholders' meeting, only holders of Origin shares, their attorneys, proxies and authorized corporate representatives are entitled to vote and ask a question or provide a comment. If you are participating as a proxy and have been instructed how to vote, I ask you to ensure that any vote you cast is in accordance with those instructions. Voting on the instructions for consideration at today's meeting will be determined by means of a poll. Boardroom, the company's share register, will be the returning officer for the purpose of the poll. The persons who are entitled to vote on the poll are all shareholders, representatives and attorneys of shareholders and proxyholders, except those precluded by operation of law or listing rule as set out in the Notice of Meeting and explanatory notes. I advise that subject to the voting exclusions set out in the Notice of Meeting, on a poll, every member who is participating themselves or by proxy, attorney or representative will have one vote for each share held by him or her. Second, you may ask questions or make comments on the management and operation of the company. You may also ask questions of the auditor on the conduct of the audit, the preparation and content of the auditor's report, accounting policies adopted by the company and any other matter relating to the independence of the auditor. If there are any questions of that nature raised today, Mr. Andrew Price of EY is available to answer them. I can confirm that the external auditor did not receive any written questions from shareholders prior to the meeting. Third, please note that the remuneration report will be considered for adoption as item 3 on the agenda, so I will defer any specific questions or comments on the remuneration report until then. Fourth, if you have any questions relating to your personal dealings with Origin as a customer, your questions will not be addressed at this meeting. Instead, we ask that you contact our customer service representatives at the e-mail address shown on the screen. One of our representatives will contact you after the meeting to answer your query. [Operator Instructions] Once other shareholders have had a chance to ask their questions, we will return to any additional questions. In order to address a broad range of topics relevant to the business at this meeting, I may defer to, later in the meeting, further questions on a particular topic or subject if there have already been a number of questions asked on that topic. Finally, please ask your questions or raise your comments in a constructive and dignified way, and I will answer them in a constructive and dignified way. I now move to the first item on the Notice of Meeting being the financial report and the reports of directors and auditors for the year ended 30th of June 2020. These are now laid before the meeting for consideration. Please note, this item of business does not require any shareholder vote. I now open the meeting for discussion. [Operator Instructions]

We have the first question from a shareholder. How has diversity and inclusion improved in the workplace?

So the first comment I'd like to make is that diversity and inclusion is a major focus for Origin because it supports a culture that focuses -- that fosters better outcomes in performance. Our 2020 gender targets were all met or exceeded. These targets are for equal average pay for men and women, improving the appointment rate of women to senior roles by 15% year-on-year and improving the retention rate of women in senior roles. I'm now happy to report that I think we have 35% of female representation in the workforce, and we have recently announced the appointment of 2 more women directors to the Board of Origin, bringing that to 3. I think these are tangible demonstrations of our commitment to diversity.

Next question from a shareholder. Given that burning gas as energy gives off almost the same amount of carbon as coal, why are you planning to increase your production of gas as a bridge towards fully renewable power? Are they not sufficient signs that the planet is in crisis to turn away from gas, not to increase its production?

Thank you for that question. Gas has a clearly important role to play in meeting the world's needs for a cleaner energy supply and to support growing renewables in the energy system. So gas is the transition fuel and firming fuel. It's a cleaner-burning fuel having half roughly the emissions of coal. And according to the international agency's World Energy Outlook, natural gas recovers quickly from a drop in demand in 2020, demand rebounding by almost 3% in 2021 and to 14% above 2019 levels by 2030 with growth concentrated in Asia, where it replaces brown and black-fired coal generation.

We've had a number of questions from a number of shareholders about the company's decarbonization strategy. In line with the Paris Agreement, what is the company's plan to lower carbon emissions by 2030 and 2050? And what are the KPIs towards achieving these goals in the interim? And how are you advocating Origin's position to government?

Well, this is a hugely, hugely important question. And as Frank said in his address, we are committed to decarbonization. So we have short-, medium- and long-term aims to drive our decarbonization. Our near-term objective is to reduce Scope 1 and Scope 2 emissions by 10% on average over the next 3 financial years. This is also -- and this is an important point. This was requested by a number of shareholders. This is also linked to the short-term incentive plan for key executives. We have also committed to halving our Scope 1 and Scope 2 emissions by 2032 as well as reducing Scope 3 emissions by 25%. Our long-term aim is for net zero emissions across our business by 2050. Origin's decarbonization strategy, outlined in detail in our sustainability report, guides our actions, including exiting coal-fired power by 2032, which we have already announced and committed to, and growing renewables firmed by lower carbon gas.

A question from Mr. [ Johnny Bojeski ]. When will the Board take responsibility for the share price dropping by over 75% from its record high?

Well, I think there is no escaping the fact, and I said this in my address, that the biggest disappointment, both personally and on behalf of the Board, has been our share price performance particularly in the last 5 years. And having publicly acknowledged that, I absolutely, as do the rest of the Board, take accountability for that. I think it's fair to say that there are many factors that influence that share price performance. And the nature of our business, whether we like it or not, is leveraged to 3 commodities: oil, gas and electricity, all of which have declined significantly this year. And some of the major drivers of declining commodity prices are COVID-19 and the impact on international gas and LNG demand; geopolitics and the subdued demand due to COVID impact on oil prices; and finally, a well-supplied power generation market and the subdued demand. But I think you also saw reflected in both my address and Frank's, these are exogenous factors. We can only control what we can control. And the future for Origin looks bright in the way that Frank has described Origin's intensification in terms of electrification, hydrogen, gas, I could go on and on and on. So I am disappointed and take accountability for the share price today but optimistic for the future.

A question from Mr. Raymond Dixon, proxyholder. This is a statement from the Mudburra/Jingili people. Listen to our words. You and your company are strangers to these homelands and our sacred grounds. We don't want fracking to continue on our land. It puts our environment, our culture, our water and our community at risk. We don't want a gas pipeline running through our land because it damages our sacred sites. When will you stop this destruction and leave our lands?

Well, thank you to the representative for the Mudburra/Jingili people. To reassure you, we are still in the exploration phase, and our pipeline has not yet been planned. If we were to proceed to production, all partners would need to work with the Aboriginal Areas Protection Authority, that's the AAPA, and comply with the Northern Territory Sacred Sites Act. If a location and work activity is not able to be certified by AAPA, no work can proceed. This is best practice that ensures that sacred, significant and cultural heritage sites are avoided and protected. AAPA considers all elements of cultural significance in each and every application they assess for certification.

A question from [ Lisa Go, Dion Nominees Pty Limited ]. The IPCC report outlined that coral reefs are expected to decline by a further 70% to 90% even under a 1.5-degree scenario, but that rises to more than 99% reef loss as temperature rises hit 2 degrees Celsius. Have you done any research to indicate the impact of fracking in the NT would have on the reef? And do you have any plans in place to compensate traditional owners and tourist operators for damage to the reef?

As advances are made in our collective understanding of the science of climate change, we've committed to looking at ways in which we can increase our contribution to emissions abatement. And Frank, in his address, committed us to -- by 2050 to actually be carbon-neutral. We have recently announced plans to enhance our emissions targets in the short term to attempt to further limit the temperature increases. On fracking, the native titleholders recently visited our site during live fracking operations to hear how the process is safely undertaken and importantly how their land and water is protected. As scientific reports repeatedly confirm, and we rely on the science over the last 20 to 30 years and also a recent CSIRO report, the process is safe, is tightly regulated to protect both land and water.

A question from the Australian Shareholders' Association. Given the apparent challenges within the retail energy sectors and falling wholesale prices of renewables in particular, how will the partnership with Octopus Energy assist Origin to radically transform our retail operations?

Yes. Thank you to the Australian Shareholders' Association for that question. We continue to have a great relationship with them. So let me, first of all, say that to repeat what Frank said in his address, we are committed to becoming a customer-centric retail organization. And on that journey, we recognized that the leading company in the world in terms of customer-centricity in the energy space was Octopus Energy from the U.K., and that was identified by our people. And what they liked was the -- 2 things: the culture and organizational alignment around customers and also the technology platform referred to as Kraken. After extensive discussion, and it was certainly one of mutual due diligence, they were as concerned to do due diligence on us as we were on them, we recognized that it was an absolute alignment between our ambitions and our culture. So let me give you some reference material here as to why Octopus are recognized as the best. Their costs in the U.K. are 40% lower than the next best major competitor at the same time as having leading customer satisfaction scores. Its operating model is organized around autonomous teams serving groups of 50,000 customers. So when you call up one of these autonomous teams, you always get the same autonomous team servicing you, which improves customer satisfaction dramatically. We will replicate that success in the Australian market by adopting their model. And we're targeting savings of between $70 million to $80 million in financial year 2022, increasing to $100 million to $150 million a year from 2024. But I want to just reinforce, it's not just the financial targets that actually are important here. It's the fact that this will enable us to become the leading customer-centric retailer of energy in Australia.

A question from [ Amy Knibbs ], proxyholder. Fracking gas underneath the Beetaloo Basin in Northern Territory would release 22 billion tonnes of CO2 equivalent emissions. Globally, in 2020, we have witnessed the impacts of climate change, most notably catastrophic bushfires in Australia and now California. People have lost lives and livelihoods. The science is clear: we need to leave all new reserves of fossil fuels in the ground to avoid the worst impacts of climate. How can you claim to be a leader on the climate whilst opening up one of the large fossil fuel basins in the country?

Well, first of all, let me say it's premature to estimate emissions should the project go ahead. Obviously, that would be part of the environmental approval process should the project proceed to production. Secondly, we obviously consider any future fossil fuel developments in the context of our portfolio and of my and Frank's stated ambition -- publicly stated ambition to be net zero by 2050. So you have to put it into that context. And finally, the International Energy Agency in this year's World Energy Outlook confirmed that gas will continue to play and must continue to play a key role in the transition to lower emissions. When the sun doesn't shine and the wind doesn't blow, you need gas as a firming fuel.

A question from Mrs. [ Allison Myers ]. Why is Origin fracking when gas is a fossil fuel, which is bad for the climate, poisons water and is uneconomical if it needs taxpayer funding? Furthermore, it is opposed by the traditional owners. A second part to this question...

What owners?

The traditional owners.

Okay. So let me make a couple of points here. As I said, gas has an important role to play in meeting the world's needs for cleaner energy supply and to support growing renewables in the energy system. It's the way to get there. Gas is a cleaner-burning fuel, having roughly half the emissions of coal. And finally, let me say that fracking is both safe and tightly regulated to protect both land and water. The science-based evidence on this is complete and unequivocal. And finally, let me say that for the traditional owners, with whom we actually have a wonderful relationship in the Beetaloo, we obviously work through these issues by consultation.

There's a second part to this question. How exactly does opening new gasfields correspond to a commitment to reduce emissions?

Well, the question is actually multifaceted because we need gas as a transition fuel to a renewables future, as I've said. Secondly, we also need gas prices to come down. And Origin, again, is on the public record of saying the way to reduce prices is to increase the supply of gas. So that's the second point I'd make, is affordability. And then the final point I'd like to make is that people in Australia rightly should expect that they can have enough gas when they want it and not be short of supply. So you have to look at all 3. You have to look at the decarbonization argument, you have to look at the affordability argument, and you have to look at the regulatory of supply.

A question from [ Rachel Deans ], proxyholder. Origin's emission reduction targets are based on an outdated scenario with just a 50% chance of limiting global warming to 2 degrees. The Science Based Target initiative now only accepts targets aligned with the Paris Agreement goals of a 1.5 degree or worse, a well below 2-degree warming outcome. When will Origin update its emission reduction targets to bring them into line with its stated support for the Paris climate goals? Have SBTi or any of our institutional investors made this request to the company?

Well, this is something I feel particularly passionate about, and I'm particularly proud of the progress we've made. Let me -- before I get to the thrust of your question, let me just recap for you the progress we've made. Financial year '20, we reduced our Scope 1 and Scope 2 emissions by 9%. Our short-term incentive plan addresses an average reduction of 10% over the next 3 years in Scope 1. We have committed by 2032 to a 50% reduction and by 2050, net zero. We are 1 of only 2 companies in the ASX 100 to be measured by the Science Based Target initiative, so not just claiming that we're making these changes but actually having them scientifically measured. Now let's get to the thrust of your question. Origin's ERT was set under those earlier criteria, and they are still valid, effective and will contribute substantially to the achievement of the goals of the Paris Agreement through reduced carbon emissions that I've outlined. We also recently announced plans to update Origin's emission reduction targets to a 1.5-degree C pathway. And we will continue to review all our communications and consider if there are any modifications that can be made to provide additional clarity.

A question from Mr. [ Gregory Alan Walker ]. This question is for the auditor. For the conduct of the audit, when assessing macroeconomic assumptions adopted in Origin's statement of carrying value of APLNG, did the auditor consider oil price forecasts consistent with a 1.5-degree warming scenario or a well below 2-degree warming scenario? And the second part to this question, if so, what was the scale of potential impairment when forecast assumptions aligned with a 1.5-degree or well below 2-degree scenario were applied?

So would you like me to answer that question? Or would you like me to pass it to the auditor to answer the question?

Can we pass it to the auditor? Yes. We can pass it to the auditor.

I'm happy to pass it. Before I do, let me just say that as a Board, we obviously had to address this question in some seriousness and an extensive discussion. We took a view on the oil price which was at the conservative end of the range. And that conservative end of the range had a dramatic impact on the impairment of APLNG, the significant impairment of LNG and also on one of our contracts. We could have taken a more optimistic view of the oil price as some of our competitors did, and we would have had no impairment. So I think my first observation to you as a Board, you would expect us to be appropriately conservative in this area. Andrew, is there anything you'd like to add to the question? Have you got a microphone there, Andrew?

Can you hear me, Chairman? Sorry, Chairman, can you hear me?

Yes, we can hear you. Yes.

Great. Thanks, Chairman. And certainly happy to add to the question from Mr. [ Alan Walker ] and the 2 parts of it with respect to the way we carry out our financial audit. So thank you very much for the question, and we certainly welcome the opportunity to explain the way we go about our audit and the work that is done. And for that purpose, we have, as a profession, move to including within the financial statements long-form audit reports that clearly set out the various factors that we take into account. And for Origin, that's included in the annual report document at Pages 132 through to 138. And so you can see that there's quite a lot of detail set out in that report as to the key audit matters that we consider and how we've gone about doing our work. So now to -- I guess, turning specifically to the question of climate change. So in planning our audit, we've considered the expectation of key stakeholders in the company, which obviously includes investors. And these considerations assist us in determining what are the key risks that could result in a risk of material misstatement in the financial report that we sign off on. Now the impairment of APLNG was a key audit matter, and that's been described in the audit report at Page 132 that I've set out. In that context, we did consider the impact of climate-related risks in our overall risk assessment and testing strategy for impairment and attain representations from management about impairment as required. And as the Chairman has said, an impairment was taken. I would also make the point about the key market pricing judgments that underpin the accounting standard requirements with respect to those judgments that are made by management, that have been compared by us to both independent long-term broker forecasts, analyst reports and other market data, including peer company views. All of this would have resulted taking into account a range of risk factors, including that of climate change. I would conclude by saying, however, that it is not appropriate for me to disclose what the impact of the consideration of climate-related risks was in the company's impairment assessment as this detail has not been disclosed in the financial report. So with that, Chairman, I'll hand back to you.

Thank you, Andrew.

We have a question from Mr. [ Malcolm MacKay ] of Queensland. Will the Board commit to holding future AGMs with a face-to-face component when it is safe to do so?

Well, I'd like to think so. And hopefully, that will be at the next AGM.

Thank you. A question from [ Charlotte Cox ], proxyholder. My question is for CEO, Frank Calabria. Regarding item 1, recent polling showed that over 79% of Australians would prefer the government to invest in solar rather than gas. Have you ruled out using public funds for your projects?

Thanks for the question. Our projects are typically funded by the company and any of our joint venture partners. So whilst we've not ruled out using public funds, we really have not adopted that to date. So that's probably the best measure of the way we've undertaken those projects.

Thank you. Next question I have is from the Australian Shareholders' Association. Why were 2 directors appointed after release of the Notice of Meeting? Shareholders cannot vote on their election until the next AGM in 12 months.

Yes. I'm not going to apologize for that. It's perfectly normal in corporate Australia depending on the timing. And the short answer to your question is that we've been discussing with a number of candidates. And timing, just the Notice of Meeting came out before we'd actually appointed them. No more complicated than that.

There's a second part to this question. Why does neither new director have no operational or management experience in LNG or energy retailing?

Well, because when you look at a team, you want various skills and attributes on the Board. You don't want everyone being the goalkeeper.

Second question from the Australian Shareholders' Association.

There are 3. I can count. You're only allowed 2.

As a relatively new director of Origin and given his extensive experience in the North American gas industry, could Mr. Lalicker please give us the benefit of his views on the global gas industry in terms of output and pricing and the particular challenges and opportunities for Origin?

Well, thank you for the question, but I'm not going to allow that question here because it would take up an enormous amount of time. All I would say is that Greg, because of his experience in North America and globally, provides enormous amount of expertise and insight for the Board.

And a final comment from the Australian Shareholders' Association. The ASA wishes to acknowledge the contribution of Mr. Cairns as Chairman of Origin during a period of significant change and challenges within the energy sector. The ASA wishes him well in his retirement from the Board of Origin and congratulates Mr. Perkins on his appointment as Chairman from the close of this meeting.

Well, thank you, [ Louis ], for those very kind words. And all I can say is I've enjoyed my association with the ASA, and I think you do a very good job on behalf of shareholders.

A question from a shareholder. Is the Board willing to allow shareholders a binding vote on the remuneration report? And if not, why not?

Well, the answer to that question is very simple: if you'd like that, you have to get the corps act changed. The corps act does not allow us to have a binding vote on remuneration.

A question from Naomi Hogan, a proxyholder. I am an Alawa traditional owner of the Hodgson River that's near Nutwood, EP98. And we want to stop this fracking because our water is life. Water is important to us, and we would like to see someone come across to make us satisfied, sit down and talk with us. My question is to the Chairman. I am Naomi Wilfred from Minyerri community. Last year, these delegates went to Sydney, traditional owners of native title. And they all said that they didn't want fracking on their native title area. We did say so, but why do you keep continuing to frac on our land?

Okay. Thank you for your question, Naomi. Let me say, first of all, that I was horrified by the treatment you were subjected to last year at the AGM where, quite frankly, you came along and, I think quite honorably, to ask questions at the AGM. But you were not the traditional owners of the land on which we drill. And those traditional owners on the land on which we are drilling were absolutely opposed to the fact that you should come along and pretend to speak on their behalf. And so I think while I feel an enormous amount of empathy for your concern, you actually didn't represent the traditional owners on the land on which we drill. And for the ACCR to pretend that you did, I think, was actually an affront to you and to your dignity, in addition to which I gave you the opportunity at the last AGM to stay behind and consult with us. You left and didn't take the opportunity to do so. So having got that off my chest, now let me say that our position is we work with the Northern Land Council to engage with the traditional owners who are the native titleholders and claimants. We do not decide who they are. The Northern Land Council decides on our behalf. The Northern Land Council is the statutory representative body responsible for advising which native titleholder groups we engage with about where we are working. It was a privilege to host those native titleholders on site last month during fracking operations. They were able to inspect the equipment and talk with our specialists about how the process is safely undertaken. They actually want us to come because they can see the benefits, the economic benefits that will accrue to them as a result of us being on the land. And we also have committed to them that their land and water will be protected. I would suggest to you -- the same invitation is open. If you would like to consult with us and you would like to do it openly and transparently, if you are recognized titleholders, we will obviously consult.

A question from Mr. Victor Komarovsky, a proxyholder. Origin assumes oil prices will rise to $60 per barrel real by 2026, and that's a $1 per barrel change in the oil price, would cause a $223 million change in APLNG's value. The IEA's sustainable development scenario, which gives just a 50% chance of holding global warming to 1.65 degrees Celsius, forecasts oil prices at $57 a barrel in 2025, falling to $53 per barrel by 2040. A 1.5-degree scenario would obviously imply even lower prices. Why doesn't Origin use assumptions aligned with the Paris Climate goals in its financial statements?

Well, thank you for your question on oil price. You'll appreciate that oil price forecasts are a function of global supply and demand. And our medium-term forecasts are broadly in line with our peers. As I said earlier, they're not at the most optimistic end, and they're not at the most pessimistic end. I'd describe them as appropriate and not too aggressive and not too pessimistic. We have set targets on -- consistent with implementing the Paris Agreement, and I've addressed that. And we've also announced plans to update our emissions target reductions on 1.5-degree centigrade pathway. And obviously, we will implement our climate change strategy to make progress towards the decarbonization of the business, as Frank has committed to.

A question from Ms. [ Kay Renegle ].

Just -- so just at this point, just to set expectations, how many more questions have we got to go?

There's about 30 questions to go.

All right, about 30 more questions to go. So I'm going to have to ask for those of you who are online for your patience here because the questions are important, and we are committed to shareholder democracy.

A question from Ms. [ Kay Renegle ]. Gas is an expensive fossil fuel, particularly unconventional gas, and it is increasingly being beaten out by cheaper renewable electricity and battery storage. The company's own Head of Energy, Supply and Operations recently said in an interview that Origin is seeing a lot less gas being used for power generation due to competition from renewables. Residential gas demand peaked in 2008, and it's increasingly cheaper for industry to use renewables in gas and manufacturing. Given these facts, is it worthwhile for Origin to risk shareholder capital carrying out a costly development of unconventional gas in the Beetaloo Basin, which carries a very high commercial, environmental, social and brand risk? Is Origin concerned at the prospect of this development becoming a stranded asset and destroying shareholder value?

Okay. Well, to some extent, I've answered part of the question, which is the role of gas as a firming fuel, and it's an important source of -- firming source of energy to support the growing intermittent renewables in the system. So I think we both share the same objectives, which is to use gas to eventually get to a renewable future. There's no difference between us. The only difference is how do we get there. And gas plays a firming role alongside other technologies, which we're also in or investigating batteries and pumped hydro. Batteries can support the market for short bursts, as you would be aware, and pumped hydro can support through intraday peaks, but gas is useful when firming is required over a number of days or weeks. And that's why we are committed to gas in the short term. In terms of your question on whether the Beetaloo would -- might become a stranded asset, I think it's early days yet. It's early days in our exploration there. And it would be -- while we can be optimistic at this point in time because the results are highly prospective, a lot can change, as you know.

A question from Hillary Montague, proxyholder. How does Origin plan to reach zero net emissions by 2050 if you are fracking for shale gas in the Beetaloo Basin?

Well, the answer is that in order to achieve net zero emissions by 2050, any prospective Beetaloo production project would have to come under this commitment. So it's not as if there -- we've committed to that excluding Beetaloo. The other thing I'd say is if you look at a major source of emissions, it's from the Eraring Power Station, and we've committed to closing that.

A question from [ Amy Knibbs ], proxyholder, to the CEO. The company says that it's seeing a lot less gas being used for power generation due to competition from renewables. How does Origin justify risking shareholder capital carrying out a costly development of unconventional gas in the Beetaloo Basin, which carries a very high commercial, environmental, social and brand risk, which is the risk that this will become a stranded asset? I know we've had that before, but it's come up again. How does the company justify risking shareholder capital carrying out a costly development of unconventional gas in the Beetaloo Basin, which carries a very high commercial, environmental, social and brand risk? What is the risk this will become a stranded asset and obliterate share value?

Yes. So we undertake assessment of -- any investment, we undertake an assessment of all of the risks associated. And Beetaloo would be no different to that. As the Chairman said earlier, it's early days in the exploration, and Beetaloo looks like a very prospective basin. But as we approach any investment decision, you would expect us to assess a range of risks, including those that need to be consistent with our long-term aim of net zero -- our ambition of net zero by 2050. So that's something we would always take into account when we undertake any investment decision.

So our shareholders, I'm -- as I'm entitled to do as the Chairman of the meeting, I'm going to take an executive decision here. I think we've had a number of questions on Beetaloo as a stranded asset, so I think we've answered that question. We've had a number of questions on gas as a firming fuel, and so I'm going to take no more questions on that. I think we've answered that extensively. And then finally, on our commitments on carbon reduction, Scope 1, Scope 2 and Scope 3, I think we've answered that extensively as well. So I'm going to take no more questions on that. That will also provide an opportunity for shareholders to ask other questions and give everyone the opportunity to hear a wide variety of questioning. I know that's going to put an enormous pressure on our staff here, but I know they're up to it.

Thank you. We have a question from the Australasian Centre for item 1. The company set a target to recycle 80% of ash produced by Eraring by 2021. Last financial year, the company recycled just 39%. How will Origin double the recycling rate in a year when the highest rate Origin has ever achieved is 47% in financial year 2012?

Okay. Eraring has the highest recycling rate of all New South Wales coal generators. And we are working to increase the recycling rate by investing in new technologies, exploring new markets and advocating for the removal of regulatory impediments. What I'm happy to do is we have our expert here, Greg Jarvis, and he's been very fulsome at the Board on the new technologies that we're exploring. And so I'll give Greg an opportunity to address the question. Thanks, Greg.

Yes. Thanks, Gordon. Yes, we've made considerable progress in recycling of ash. There's many opportunities in this field. Again, we're the highest recycler of ASH in the marketplace. But we've spent capital on investing in getting more of our gas into cement in the cement industry, and there's lots of other opportunities. So we're on target, and we're making considerable progress. We're also talking at length with the New South Wales government to get legislation on actually using more of this ash in roads and other industries such as that. So yes, it's all going well.

Good. Thanks, Greg.

Question from Hillary Montague, proxyholder. Can you disclose what public money Origin has already received from the federal government and the Northern Territory government specifically in relation to the Beetaloo Basin?

Frank, would you like to...

Yes, sure. There are obviously many operators in the Beetaloo Basin, and Origin is only one of those operators. Our exploration activities are entirely funded by Origin and its shareholders. We do not receive any government funding for this activity. So we don't have any government funding in relation to what we do at Beetaloo.

Thank you.

A question from Will van de Pol, proxyholder. What is the total expected cost of the Beetaloo fracking project? And how will -- how is the company planning to finance the project?

So I think it's -- well, I think it's premature to estimate the cost ahead. We've got to complete the exploration phase and proving that there is commercially recoverable resource there. You'll appreciate where the Beetaloo is. I don't know whether you've been there or not. I've actually been there. It's 18,500 square kilometers. To give you a perspective, it's about the size of Wales. It's a lot more attractive than Wales. But as I said, it's premature. It's almost like drilling onshore with offshore complexity because of the wet season.

Thank you. A question from [ David King ], proxyholder. Has the Board read the Lethal Power report released in August, which found air pollution from Australia's coal power stations is responsible for 800 premature deaths, 14,000 asthma symptoms among children and 850 cases of low birth weight in newborns each year? As the operator of Australia's largest coal power station, does Origin accept that it is directly responsible for a significant proportion of these devastating health impacts?

Well, let me say straightaway that as a responsible company, that question is somewhat inflammatory. The report that you referred to was not subjected to proper scientific peer review before its release. And I think both as executives and as directors of the company, we should rely on the science and the peer review before we start jumping to conclusions, in addition to which subsequent assessments by qualified environmental scientists have found that emissions and exposure estimations are flawed and misleading. They are not based on good science and have resulted in a significant overestimation and inflammatory public comments.

A question from [ Vanessa Farley ], proxyholder. As the wet season in the Northern Territory is approaching and there are predictions that this could be one of the largest wet seasons in years, how can Origin Energy guarantee that toxic wastewater will not flood across country and pollute the water that remote communities rely on? There's a concern that many aboriginal communities are incredibly worried about now and into the future if fracking continues.

Well, the simple answer to your question is that we've completed fracking ahead of the wet season. But secondly, I think just as importantly, we are assiduous about our water management policies. And there is -- we've had no evidence that -- well, there is no evidence that fracking actually, in any way, pollutes the water table.

A question from a shareholder. The audit remuneration report for the parent company increased 7% to $1.75 million, and the auditor of the controlling entities increased 150% to $173,000. These increases do not seem justified in the current low-inflation, low-wage environment. Please justify these.

Yes. It's well picked up. Origin changed its auditor this year to EY from KPMG, who had been our auditor for a number of years following an extensive tender process. The truth of the matter is EY undertook additional procedures on new accounting standards such as leases. And the $173,000 increase in their audit fees for the controlling entities relates to requiring 2 years of additional financial statements for the OC Energy acquisition. So simple answer to your question is additional scope.

Thank you. A question from Amelia Telford, proxyholder. Earlier in the year, Origin Energy put operations in the NT on hold after widespread concerns from remote aboriginal communities and traditional owners about the risk of spreading COVID into their communities. Despite there still being a risk, Origin have recently recommenced operations, but communities are still worried about the large numbers of fly-in, fly-out workers traveling across the NT, entering towns, shops, clinics coming into contact with aboriginal people. Remote aboriginal communities are most at risk from COVID-19 with overcrowded housing conditions, a lack of access to proper health care and many community members already dealing with chronic health conditions. The company needs to take this risk seriously. What plans does Origin Energy have in place to prevent the risk of spreading coronavirus across the NT?

So we obviously take our responsibilities very seriously here. And we -- as you say, we paused our activity to keep communities safe. We have resumed in line with government restrictions being eased. And we will continue to take the health and safety of our employees and our communities as the #1 priority.

That's the end of questions for this section item 1, Chairman.

Thank you very much. So I'll now move to the remaining items of business. As noted earlier, you may submit your votes at any time in case you need to leave the meeting. But I'd encourage all of you to stay for the discussion and to ask any questions. I will also give you a final opportunity to cast your votes if you haven't already done so before I close the poll towards the end of the meeting. The next item of business is the reelection of a director. The process for nomination of directors standing for reelection involves an external assessment of the Board of the relevant director's contributions to the work of the Board over the past 12 months. The results of this assessment form the basis of the Board's recommendation to shareholders. So we now move to resolution 2, which is the election of Maxine Brenner. Maxine joined the Board in November 2013 and was reelected in 2017 and accordingly seeks reelection by shareholders under the ASX listing rules and the company's constitution. Maxine is the Chairman of the Risk Committee and a member of the Audit and Nominations Committee. Maxine is an independent director. Details of Maxine's biographical information are set out on Page 5 of your Notice of Meeting. The Board, other than Maxine, unanimously recommends her reelection. I'll now ask Maxine to speak to her reelection.

Thank you, Gordon, and good morning, fellow shareholders. I joined the Board of Origin just under 7 years ago at a time when our company operated in a very different environment. Like many industries, disruption in the energy industry has only increased, and the transition to a decarbonized world, it is accelerating. While volatility in commodity prices has seen extreme swings this year, electrification is one of the growing tailwinds of our industry. Coupled with an acceleration in technology, there are significant opportunities for our company. Origin is transitioning towards this future. Despite the considerable uncertainty that COVID has brought, we have moved towards this future, and our investment in Octopus Energy is one such example. This is an exciting journey. And with your continued support, I would feel privileged to continue to be part of the Origin team as a Board member, as Chair of the Risk Committee and a member of the Audit and Nominations Committee. My executive experience over 20 years has focused on all aspects of corporate advisory work, including finance and law, providing me with the skills and insight to support Origin over the past several years. This has assisted particularly in our acquisitions and transformations, navigating an increasingly complex regulatory environment and charting a road map for the risk framework in the changing landscape in which we operate. As a nonexecutive director of companies in the airline, mining services, property and university sectors, I've been exposed to both fast-growing environments and very challenging ones. Many of these situations have required wholesale strategy resets and strong execution in the context of great uncertainty. Learnings around customer, platforms, commodities and new green fuels have been particularly useful, and I've tried to apply these insights to our deliberations. I would hope to bring these skills to my role as a director of Origin. I have both the commitment and time to devote myself to the role and, with your support, would be privileged to work with my Board colleagues and management to create ongoing value for you, our shareholders, customers, employees, communities and partners. Thank you.

Thank you, Maxine. Is there anyone who wishes to ask a question or comment on the motion?

One question, Chairman, from the Australian Shareholders' Association. It is clear that Ms. Brenner has substantial experience in the field of finance and law as well as in being a nonexecutive director of public and private sector organizations. Could the Chairman elaborate on what specific industry experience and contributions she brings to the Board of Origin with its focus on gas and energy retailing?

Thanks, [ Louis ], for your question. So let me be very specific. The first thing is, having been an investment banker and a lawyer, she brings outstanding skills to the table when we're engaged in M&A. And we have been in the past 12 months, and I'm sure we will be in the coming 12 months. And that will be a major area of focus for us. Secondly, given her background in Orica, she is highly skilled in major CapEx evaluation of significant projects. Secondly, having spent a considerable amount of time on the Qantas Board, she understands risk management and brings a skill to the Chair of our Risk Management Committee, which benefits from the experience that she gains at Qantas. But as importantly, the qualities that we look for in a nonexecutive director are the following. She has an inquiring mind where she absolutely respects the obligation to dissent around the Board table, and she's a great team player. And on that basis, she gets the unqualified support of all of our colleagues. [ Louis ], hopefully, that answers your question.

There are no further questions on this matter at this stage, Chairman.

Okay. So this slide shows how shareholders have directed the proxy votes be cast. You will see that 93.09% of the votes have been cast in favor of the motion. Undirected proxies held by me as the Chair will be cast by me in favor of the motion. As indicated earlier, voting on this resolution will be by means of a poll. Please now vote via the Lumi platform. [Voting]

Okay. The next item of business on the agenda is to adopt the remuneration report of the company. The disclosures in the remuneration report focus on the company's policy for setting director and executive remuneration and the actual amounts paid to directors and key executives for the year just passed. While the vote on the remuneration report is advisory only, as we have done in prior years, we will take into account any comments from shareholders and the size of the vote by shareholders in the formulation of future remuneration practices. Our remuneration framework is designed to support the company's strategy and to reward our people for its successful execution. It is designed around 3 principles of attracting, retaining the right people, paying them competitively and to drive focus and discretionary effort. We announced the withdrawal of resolution 4 from the Notice of Meeting on the 5th of October. This resolution related to the grant of restricted share rights to the CEO and Managing Director, Frank Calabria, under a new long-term share plan. The existing long-term incentive plan will be modified as we announced to the ASX to adjust the maximum achievable from 180% to -- I think that should say 120%, to 120% of fixed remuneration and retaining the existing total shareholder return hurdle. We believe this strikes a sensible balance between the conventional external hurdle approach and the incorporation of new arrangements with the Board, which believes it's the right thing for our business and for the future. The directors recommend that you vote in favor of adopting the remuneration report. I now move that the remuneration report be adopted. Is there anyone who wishes to ask a question or comment on the motion?

We do have some questions, Chairman. First question is from the Australian Shareholders' Association. The ASA notes that the CEO received 83.5% of his maximum opportunity short-term incentive based on 7 financial metrics totaling 65% and 3 nonfinancial metrics totaling 35% after a 5% reduction applied by the Board. As part of this year's reconsideration of the remuneration framework, could there be a simplification of the number of financial metrics to perhaps fewer and more visible metrics that are more aligned with shareholder experience?

So thank you again, Louis. I'm not going to prejudice what my future Board colleagues decide by giving my views, other than to say I think that our short-term incentive, by focusing primarily on financial incentives, actually aligns the performance of the business with shareholders. As Frank said, we've just come off a good year, which is why he -- and the short-term incentive that he did. And the final thing I'd say is I haven't met anyone yet, when you get into a discussion on remuneration, who's not arguing for simplification.

Thank you. Second question from the Australian Shareholders' Association on this item. The ASA notes the late withdrawal of resolution 4, perhaps reflecting insufficient prior shareholder engagement. Can we expect wider shareholder engagement as the company develops its replacement remuneration plan? And can we be assured that the long-term incentive will retain relevant financial metrics?

Well, Louis, that's a bit rich coming from you given that we engaged with you on 2 occasions at your specific request, and we were actually quite prepared to spend as much time with you as was required. So I feel a bit aggrieved that you're accusing us of not sufficiently engaging. Let me tell you that not only did we engage with you twice, but we engaged with most of our major shareholders on at least 2 occasions, and we engaged with the proxy advisers on at least 2 occasions. And with 1 proxy adviser, we engaged on 5 occasions. I do not have enough time in my life to engage any more extensively but I'm happy to take criticism that we could do a better job. And now turning to the issue of withdrawing resolution 4. The simple fact of the matter is, that it was -- as a result of that extensive negotiation and discussion that we actually came to the view that resolution 4 would not, in its current format, actually get the overwhelming approval of our shareholders and the proxy advisers. And it was on that basis that we decided to amend it as a result of their feedback. Now the problem was, we ran out of time. And we ran out of time because, as you know, you need 28 days between the Notice of Meeting and the AGM. And so we had 2 choices left to us. We could basically say to shareholders, you know what, we're withdrawing it. We don't need your support. In our constitution, we can go ahead and we can award it to the CEO. We actually felt that, that was not good corporate governance. And so what we did was the alternative. We issued a stock exchange announcement. And that stock exchange announcement clearly articulated the hybrid plan, a long-term incentive and a long-term share plan. And we then went back, as a result of that, to our shareholders and to proxies, including yourself, to articulate why that change was the appropriate thing to do. So I would say in conclusion, actually -- and a number of shareholders and proxies say this, too. We are probably at the leading edge in terms of consultation. And oh, by the way, we do this twice a year.

Thank you. A question from a shareholder, how can you justify paying the CEO almost 10x the Prime Minister and 6x the ex-President of the U.S.A.? Excessive.

Well, I don't think those are relevant comparisons. I don't think Frank will be standing for President of the United States in the short term. In fact, I hope he stays with Origin. So I don't think that's a valid comparison. What I do think is valid is to look at where Frank is remunerated, firstly, in terms of performance. And in the last 4 years, as I've publicly stated and as have our shareholders endorsed, the public -- the performance has been good. The second thing is the appropriate comparison is with the ASX 50 and the CEOs in the ASX 50. And there, we, as a Board, are very comfortable with where Frank sits, comparable to the other CEOs in the ASX 50. And I can absolutely and categorically tell you that on that comparison, at maximum remuneration, he sits below average. So we're not apologizing for that.

Question from a shareholder. While LTI remuneration targets may be a little high, the STI targets are too generous. STI targets for actual EPS should be included as this had a direct correlation to shareholder dividends. Could you reduce nonfinancial targets to accommodate this?

Well, what I would say to you is, actually, I think the STI targets are fit for purpose. And the reason why the results are where they are is because management have done a good job. It's not the targets that are -- soft targets that are affecting the outcome, it's good performance. And we're not apologizing for that.

There are -- sorry, there's one more question has come through. Sorry, there are no more questions on rem at this stage.

So on the screen, I show how shareholders have directed that proxy votes be cast. You will see that 83.79% of the votes have been cast in favor of the motion. I will vote available undirected proxies held by me in favor of the motion. As indicated earlier, voting on this resolution will be by means of a poll. Please now vote via the Lumi platform. [Voting]

The next item of business on the Notice of Meeting was resolution 4 on equity grants to Managing Director and CEO, Frank Calabria, which I mentioned in the context of resolution 3, the rem report. This resolution has been withdrawn. A group of shareholders holding approximately 0.0157% of the company's shares on issue at the time of the request have requisitioned a special resolution to amend the company's constitution. The proposed amendment is intended to insert a new provision in the company's constitution which 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 directors has been or shouldn't be exercised. The Board respects the rights of shareholders to express an opinion or to engage in dialogue with the company. The Board further acknowledges the right of shareholders to requisition a resolution, which seeks to amend the company's constitution. The Board also recognizes the importance of addressing the issues raised in the requisition resolutions, including our relationship with the traditional owners of the land on which we operate and our advocacy practices and policies. I have discussed these matters in Origin's practice in some detail in my opening address. For these reasons and the detailed information set out in the Notice of Meeting, the Board does not consider changing the constitution to be in the best interest of the company. Shareholder access to nonbinding resolutions should be dealt with through a change in the law, the Corps Act, accompanied by an appropriate framework for companies to respond and for the process to be measured and balanced, instead of special interest groups seeking to use the AGM process of individual companies. Consequently, we, as directors, recommended that shareholders vote against resolution 5(a). And on that, we have the overwhelming support of our major shareholders. So this matter is now open for questions and comments. Is there anyone who has a question or would like to provide a comment on the motion?

There are no questions on this particular item. Chairman?

Good. On the screen, I show how shareholders have directed the proxy votes be cast. As mentioned earlier, this resolution is a special resolution and will only pass if at least 75% of the votes cast are in favor. Undirected proxies held by me as the Chair will be cast by me against the motion. You will see that 89.78% of the votes have been cast against the motion. Please vote via the Lumi platform. We will present the final result of resolution 5(a) on the screen in a few minutes. [Voting]

Okay. So I will now close the poll. Based on the proxy instructions received and the votes represented at the meeting today, 75% majority has not been received on this resolution. And accordingly, the proposed amendment to the constitution is not passed. As such, resolutions 5(b) to 5(c) will not be put to the meeting, and I now declare the poll closed. However, I will allow discussion and questions on these important matters shortly. I will also now display the results of all resolutions put to the meeting today. This might take a couple of minutes, and so bear with me. What we can do while we're waiting, we'll welcome shareholder debate and feedback. So there we go, the AGM final results. So I'll allow you time to digest those. Now I said I will allow a reasonable opportunity to shareholders in attendance today to ask questions on the subject matter to which resolutions 5(b) to 5(c) relate. We are not obliged to do so, and we do so in the spirit of good corporate governance. I would ask that you observe the protocols that I mentioned earlier, which is if we've already addressed these questions, please, we will not take the questions. If you ask the questions, I would also ask that you do so in a way in which the previous questions have been asked, which is with dignity. I'll now ask if there's any questions on these items.

We do have a question, Chairman. A question from Larissa Baldwin, proxy holder. The Aboriginal Areas of Protection Authority, AAPA, the body responsible for registering sacred sites, noted that the practice of shale gas hydraulic fracturing could have significant impacts on sacred sites and songlines arising from interference with either surface water or groundwater in the NT. Considering the fallout from the destruction of the Juukan Gorge, will Origin wait to commence fracking until after a comprehensive cultural water mapping survey is undertaken to better understand the cultural connection between groundwater and surface water across and near the Origin permit areas in the NT? How will the Australian public be reassured that aboriginal cultural heritage will not be phased out?

Okay. Thank you for the question. You'll appreciate that it would be inappropriate for me to comment on Juukan Gorge and another company, so let me restrict my answer to Origin. Last month, the native titleholders visited the site during fracking to see how process is safely undertaken, and importantly, how this impacts on their land and water and that it's actually protected. Last week, native titleholders carried out sacred site clearance surveys at several locations across our permitted area. All our exploration activity locations have been certified by the Aboriginal Areas Protection Authority and comply with the Northern Territory sacred site side. If a location and work activity is not able to be certified by the Aboriginal Areas Protection Authority, no work can proceed. Now this is best practice that ensures that sacred, significant and cultural heritage sites are avoided and are protected. The Aboriginal Areas Protection Authority considers all elements of cultural significance in each and every application that they assess for certification. I would suggest to you, this is industry best practice. In addition to which, as I said earlier, on the ground, we have liaison officers who are aboriginal. They are dealing with the native titleholders. In addition to that, the CEO and the Board of Origin have actually visited the Beetaloo, gone to the sites, met with the traditional owners, had dinner with them, had lunch with them, and established a working dialogue. That's the way we do business at Origin.

We've received 2 similar questions from proxy holders. I'll read out both questions. The first question is from [ Hillary Montague ], a proxy holder. Given this fallout from Rio Tinto's actions with the Juukan Cave blast earlier this year, it's clear that public opinion is shifting in regards to energy companies irrevocably destroying indigenous land. If Origin proceeds with fracking in the Beetaloo Basin, it is clear that Origin's reputation will be vulnerable. How are you going to mitigate this? The second question, from [ Graeme Sawyer ], proxy holder. 2 aboriginal people across the Beetaloo, especially from Elliott to [ Minyura ], the water systems are sacred and the associated songlines to find people's traditional identity, relationships and connections at a fundamental level. Drilling holes in these systems is conceptually the same as blowing up Juukan Gorge. Any pollution events or methane leaks make it even worse. What plans do you have in place to stop Origin being caught up in a fiasco like Rio Tinto?

Okay. Well, let me just say straight off the bat that I absolutely reject the notion that us fracking or drilling is either similar to or akin to what happened at Juukan Gorge. All our exploration and activity to date has been certified and complies with the Northern Territory Sacred Site Act. There are no sacred or significant sites at any of our Beetaloo wellsite locations. We take the protection of cultural heritage extremely seriously at Origin. As I said, we have visited our Beetaloo operations. We've met with the traditional owners. So right throughout the organization, we understand how important it is to -- not only to traditional owners, but to Australia more broadly, that culturally significant places and items are preserved for generations to come. This is our obligation. We have strong processes in place and follow all relevant legislation to ensure that we are protecting the cultural heritage to the highest standards. We continue to work closely and transparently with the Northern Land Council and host traditional owners to ensure sacred sites are protected. This also allows important activity, such as sacred site clearance surveys to be undertaken for every location, which are then certified by law by the Aboriginal Areas Protection Authority.

I have a question from [ Charlotte Cox ], proxy holder. The recent NT fracking inquiry bound for the southern end of the Beetaloo sub-basin of the half of the Origin's permit area in the Northern Territory, the panel's view is that groundwater extraction for shale gas production should be prohibited until the groundwater resource is better understood. As the Board disclosed to shareholders the risk that 50 million to 60 million liters of water you need for each fracked well may not be able to be sourced locally due to the risk of overwater extraction in semi-arid regions of the Northern Territory.

So our position as a company is very straightforward. We are required to apply for a water extraction license for all water used in our activities. These license applications are assessed and approved by the Northern Territory Environment Minister. We will rely on the law.

A question from [ Amy Nibs ], proxy holder. The Origin Board is recommending against an audit of the process to reach agreements with traditional owners for fracking activities on their land and has not disclosed the consultation materials that were used. What is Origin hiding? We demand that the handouts and PowerPoint presentations are provided to shareholders.

Let me take a moment. We are not hiding anything. The amount of information that's available to you, including on our website, is extensive. In addition to which we hold on country meetings, including last month, and we host traditional owners on-site during fracking operations, which, I've already said, where they could learn about the process and talk to our specialists. And we are committed to providing factual information to them. That's easy to understand. And by the way, we translate as well. So I absolutely reject your assertion that we're in hiding.

We have 2 similar questions. So I'll read them out together. The first question from [ Charlotte Cox ], again, proxy holder. Question for Chairman, Gordon Cairns. How can you say you are confident in the way you have engaged with traditional owners when the NT fracking inquiry proved the high level of anxiety from TOs? When asked by the inquiry for materials used to consult with TOs, you refused. Why? The second question from [ Anisia Humphreys ], proxy holder. The Northern Territory Fracking Inquiry Panel specifically asked for Origin's consultation materials that were used to reach agreements with traditional owners for fracking activities on their land. These documents were not supplied to the inquiry by the company. Now Origin shareholders would like to see a copy of the materials used. The Origin Board is recommending against an audit of the process and has not disclosed the consultation materials that were used. Traditional owners asked for these at the AGM last year. What have you got to hide? Surely you have a copy of the handouts and PowerPoint presentations you gave to traditional owners about Origin. And then it ends.

Well, I think I've already answered that question on the assertion that we're hiding anything. Nothing could be further from the truth. And we, as a Board, and as a management team, are very comfortable that our consultation with the traditional owners is of the highest standard. How can I feel confident about that? Because I went there and I sat down with them in their houses over dinner and asked them.

Thank you. A question from [ Fasa Leto PTY Limited ]. General business question on resolution 5(a). 90 million shares were voted against. The 74 million shares abstained. Does the company know which shareholders abstained? And why?

Do you know who abstained?

Yes, we do. And...

Do you want to speak then?

Yes, we do know which shareholders abstained, but it's not appropriate to discuss in this forum. And we do understand the concerns, and we continue to engage with our shareholders.

I would also say that when I became aware of some shareholders who had abstained, I actually prevailed on them, that I think you get better corporate governance by actually engaging and voting. Abstaining is not a good result.

Thank you. We have a question from the Australasian Center for Corporate Responsibility. Item 5(c). 2 weeks ago, Origin suspended its membership of the Queensland Resources Council after the QRC launched an advertising campaign that urges the public to vote against a specific party at the Queensland state election on 31 October. Under what conditions will Origin rejoin the QRC?

So thank you, [ Bren ]. It's good to hear from you. It's always nice to get a question from the ACCR. So let me give you some context here, which I think will be very familiar to you. Last year, you asked a question on industry associations. We outlined all the industry associations we were members of, the industry association policies and where they differed in any way -- in any material way from us. It was clear that both the Business Council and APPEA had policies that we didn't necessarily agree with, particularly when it came to fossil fuels or the carryover of the Kyoto Agreement. And we committed that we would retain our membership, and we would try and persuade them to change their views from the inside. I'm delighted to confirm that the BCA, actually, as a result of that lobby, have actually changed their views on the carryover of the Kyoto Agreement. When it comes to the QRC, their recent campaign was around the Queensland election and they overstepped the clear boundary between policy and politics. We expressed our concerns to QRC, and we have since suspended our membership in line with our policy to not support or actively campaign against any party. We've not made any decision as yet about reinstating our membership, but I think we've sent so far a very strong signal.

We have 1 more question from the Australian Center for Corporate Responsibility. In August, the company published a review of its industry associations that focused only on their policies and ignored their advocacy. Will Origin commit to reviewing both policies and advocacy in the future?

We believe that we can be more effective lobbying for climate change action from within the industry associations. And I think the examples I've used, particularly with the Business Council, actually exemplify that. We review our membership annually, and it's published on our website. So [ Bren ], you can see it there. We may remain a member of an industry association with whom we don't have complete alignment on the basis that through our advocacy, done internally, we can make our views known, and ultimately influence the industry association and the members of that association. We think that's the most effective way.

That concludes the questions, Chairman.

Okay. We've had a robust discussion on these resolutions. How I'll miss this. The results of the poll will be announced to the ASX shortly. But before I formally close the meeting, I'd like to invite the incoming Chairman, Scott Perkins, to say a few words.

Thank you, Gordon, and also thank you, Frank, for your earlier comments. It is truly an honor to be appointed as Origin's next Chairman. My 5 years on Origin's Board has coincided with a period of probably the most intense change in the company's 20-year history and the energy sector more broadly. However, a strong set of values and a clear purpose, getting energy right for our customers, community and planet, has helped to focus Origin and its people to build greater resilience and set us up to continue to prosper. I am excited by the opportunity the future presents. Our focus on becoming a customer-centric retailer is starting to bear fruit. And a further step change will be enabled by the strategic partnership with Octopus Energy. Our future energy strategy continues to accelerate, and we are connecting customers to the world's best new ideas in energy and technology as well as rapidly growing our in-house data and analytics capabilities so we can take on our new role as an energy aggregator. Meanwhile, our actions to bring down costs and improve efficiency in our gas business so we are globally competitive as well as our exciting prospect in the Beetaloo will enable us to meet the market's need for gas as a cleaner fuel with an important role in firming renewables. Of course, there are challenges to be navigated. However, in the future which will inevitably be more electrified, I'm confident that Origin can play a leadership role in this energy transition, creating value in a more digitized, decentralized and decarbonized world. On behalf of the company and everyone at Origin, I also want to take this opportunity to publicly acknowledge and thank our retiring Chairman, Gordon Cairns, who steps down today after 7 years as Chairman and a total of 13 years on the Board. He has overseen a period of tremendous change and evolution at Origin, from expanding to become Australia's largest energy retailer with more than 4 million customers, to a major producer and exporter of gas in Australia Pacific LNG. In addition to these milestones, Gordon was the inaugural Chairman of Origin Energy Foundation, helping to guide its early focus and grant giving, and he has been pivotal in helping to shift the culture of the company to one that we can now say is truly focused on the customer. At the same time, staff engagement has continued to improve under his and Frank's leadership. Gordon's influence on Origin's culture will leave a lasting and profound legacy. On a personal level, Gordon's guidance and advice to me and our fellow board members has been invaluable. On behalf of the Board and everyone at Origin, thank you, Gordon, for your wise leadership, your tireless commitment and unflinching dedication. Ladies and gentlemen and shareholders, I look forward to addressing you all next year and updating you on Origin's progress. Thank you very much.

Thanks, Scott, for those very kind words. I will continue to remain a customer and a shareholder. Finally, I would like again to thank all shareholders for your ongoing support of Origin Energy Limited, for me as a Chairman and for participating in today's meeting. I now declare the meeting closed. Thank you.