Telstra Group Limited (TLS) Earnings Call Transcript & Summary

Good morning. My name is William Chuah, and I'm from Telstra's Investor Relations team. On behalf of our sustainability and IR teams, welcome to Telstra Sustainability Roundtable for 2020. Before we commence, on behalf of Telstra, I would like to acknowledge and pay my respects to the traditional custodians of country throughout Australia, and recognize their continuing connection to land, waters and culture. We pay our respects to the elders, past, present and emerging. On to the agenda. We'll begin today's session with an overview of our sustainability strategy and key performance highlights for FY '20 with Jules Scarlett. We'll then provide a deep dive on 3 key sustainability topics. Firstly, responsible business with Lyndall Stoyles; and then we'll take a short break; and when we return, Michael Parks will take us through modern slavery. And finally, environmental and climate change with Tom Penny. There will be time for Q&A following each of these presentations. [Operator Instructions] We'll try to answer as many questions as we can. But if your query is not addressed, please e-mail our IR team after this session. I will then cover our planned sustainability engagement in 2021 before we close. With that, I will now hand over to Jules to take you through sustainability at Telstra.

Thanks very much, Chuah. So this meeting is a really important milestone in our sustainability journey. Delivering on our responsibility to investors is something we take very seriously. And having the opportunity to provide an update on some of the key issues Telstra is facing, too, as well as the opportunity to gain your perspective on any horizon issues to help inform our strategy, programs and reporting going forward. Today, I'd like to take the opportunity to explain the genesis of sustainability at Telstra and to introduce you to some of the thinking behind our current strategy and the context of how that is informed. Importantly, I also want to present to you some of our performance highlights for FY '20. So looking at the slide on the screen, some of the key pullouts were where we started. We had a Chief Sustainability Office established in 2011. Prior to that, the CSO -- prior to the CSO being established, our sustainability approach was ad hoc, and to some degree, unfocused. Developing a centralized, consistent approach has provided a clear brand and reputational value for Telstra. Over the past decade, we have built up a strong reputation as one of the corporate sectors leaders, leading sustainability performance, delivering targeted programs that are aligned to our strategy, and importantly, aligned to our tech expertise. Since 2011, we've helped around 1 million vulnerable customers to connect each year. We've created hundreds of millions of dollars worth of value through targeted community investments. We've provided around 23,000 people a year the skills they need to thrive online through our digital literacy programs, and we've made significant environmental gains, including great success in reducing our overall carbon emissions intensity. Thinking about the strategy that we've taken. At the core, it's about thriving in a digital world. Our strategy reflects the issues that are most material to our business. The areas in which we have expertise to make a meaningful impact and where we see opportunities to use innovative tech-based solutions to address major societal challenges and opportunities. So looking at the next slide in terms of sustainability at Telstra. This is the strategic context in which we are operating. The responsible business agenda is key to our success in the current operating environment. Stakeholder expectations are increasing, and trust in institutions is at an all-time low in Australia. This is fundamentally changing the relationship between business and society. As the banking inquiry and ensuing APRA inquiry into CBA have shown us, there are real regulatory and legal impacts for companies who don't manage their day-to-day business responsibly. The ramifications of the inquiry for corporate Australia in terms of people, culture, governance, brand, reputation, regulatory imposed costs, and importantly, the discount in share price have been significant. In a competitive environment, maintaining trust is critical. And along with many of the customer initiatives being undertaken as part of our T22 strategy, we see our responsible business agenda as a key element to how Telstra will maintain trust in the current environment. Each year, we conduct a Materiality Review to identify and prioritize the issues of greater significance to Telstra and our stakeholders, including yourselves and look in considering our investors. While in some instances, this process confirms the obvious that we have material issues such as privacy and data security, and of course, at the heart of our business, customer experience, they are well-known to us and require a significant amount of management attention. But the process also helps us to ensure that our internal priorities remain aligned to shifting stakeholder expectations and the industry best practice. And really importantly, it helps us to identify emerging trends that will become material for Telstra over time. And a good example of that is the rising interest in the ethical implications of the fourth industrial revolution. So we'll be kicking off the process for our FY '21 materiality review in January next year. And at that point, we'll engage with you formally in our annual survey to see what issues are most material for you and your stakeholders. So looking then at our strategy. Our strategy is focused on helping everyone thrive in a digital world. And it has 3 pillars, which are focused on addressing the most significant impacts and opportunities. So going around the circle, we have responsible business. We then have digital futures and environmental solutions. And all 3s there needs to interplay to deliver on our sustainability strategy. Drilling down a little bit more into each of these. Looking at the next slide, we see responsible business is all about ethics and governance, culture and capabilities. Digital futures for us is about everyone in our purpose. It's about keeping everyone connected and having networks and technology delivering good, good for communities, good for our customers. And then the third element is environmental solutions, and that is where we have been having really strong focus on our work on climate change and energy and importantly, resource efficiency as well. Looking then at responsible business. If we drill down to each of those pillars. In the current climate, it's critical that Telstra is viewed by its customers and its stakeholders as being a responsible business that they can trust. The concept for us of thinking about responsible business start with managing our business with ethics and with integrity and being guided by our values and making sure that we're doing things that are right for our customers. In FY '20, we made significant progress towards our long-term responsible business targets. We helped around 2.6 million customers to stay connected in a COVID-19 environment through support packages. Our strategic Net Promoter Score, one of the most important scores from my perspective because it's about the judgment that our customers are giving us, it was up by 5 points in FY '19. We had increased our female representation from 32.3% in the Telstra group, up by 1.3% from FY '19. And then a score that, I think, is really, really important in terms of sustainability because it's at the core of how we deliver our services through our people. And we achieved an uplift in sustainability engagement of a really substantial 16 points from FY '19 to 83. We were also the first major Australian company to introduce a paid pandemic and pandemic leave policy, including extending that to our casuals. We invested more than $28 million in employee learning and development. We created employment opportunities for more than 520 people through our very special supported and indigenous workforce programs. And also, we extended our Career Trackers program for a 10-year extension supporting indigenous graduates. But we did not meet all of our targets, and we did not meet our conduct training target. So in FY '19, we had 98.3% of our employees conducted this training. This year, that was 89.4% of Telstra group employees. And that includes contingent workers' partners completing the mandatory refresher training. But a number of factors affected our completion result rates this year. Firstly, with COVID affected several functions in our business, including some of our contingent workforce located in India and Philippines were impacted by closures. But once local restrictions are eased and staff will complete training as soon as practicable. And then also, we did have a number of contingent workers because of the difficulties in accessing Telstra systems through times when we had closures and not being able to access from some of their home IT systems, which meant that we had those lower response rates and completion rates. But as a mitigation, these individuals were provided a hard copy of those Telstra code of conduct -- or access to a copy. So let's then look at what that second pillar about digital futures. Our digital futures program lies at the heart of our purpose at Telstra: To ensure that everyone can enjoy a brilliantly connected future, a future where everyone can thrive. In FY '20, looking at some of these results, if I pull them out, we trained 23,000 people through our digital capability programs. We've provided around 6,500 smartphones to women impacted by family and domestic violence. We helped around 900,000 vulnerable customers to stay connected. We switched on more than 700 Mobile Black Spot program sites. We invested $5.3 million in Telstra Foundation-funded initiatives, which are designed to connect technology through community and make through that do community impact and support young people to thrive online. We provided $150 million worth of value through our social and community investment programs. And we also announced partnerships with 5 major universities to build skills for the future. We didn't make our tactical good target around funding as funding was scaled back, and it was important to highlight that why we were close to that target, it was not met. Looking then at our Environmental Solutions. This year, I'm very proud to say that we announced a new environment strategy that embraces innovation and technology to help address key environmental challenges. Our environmental programs are very well embedded in our business and deliver real cost savings for Telstra every year as well as environmental benefits. We made significant progress against our environmental targets this year. We were proudly certified as neutral across our operations in July 2020 against a target we announced earlier this year. We collected almost 4,000 tonnes of e-waste with a high recycling rate of 100%. We reduced our carbon emission intensity by 55%, and that's from the FY '17 baseline year. And we are also recognized on the CDP A list. So I would note that overnight, we have had the recent results -- most recent results of our CDP rating, and we have been rating still in the leadership area as an A minus. Looking now to the ambitious climate goals that we said. We announced them, and we are driving them hard in our business, some of them are very long-term targets. We also invested $3.7 million in energy reduction programs, saving over 10,000 of CO2 emission. And we collected 19.7 tonnes of mobile phones and accessories for recycling through the mobile master program. Again, I should highlight where we didn't meet our targets. We didn't meet our environment and resource efficiency targets. We were very much on track to meet this with the 60 tonnes we have been targeting. But due to the COVID-19 restrictions, collections were put on hold. And so we ended the year at 59 tonnes. So looking into how we measure and report on our progress. On reporting, I hope that you've been able to see our bigger picture sustainability report because that is a key reporting tool for us. It's published annually. It summarizes our approach, our performance against strategic targets, initiatives undertaken throughout the year to improve social, environmental and customer outcomes. Along with meeting our GRI reporting requirements, it includes our UNGC communication on progress disclosures and now our TCFD disclosures. In relation to ESG indices, we received dozens of requests to respond to the range of ESG indices each year. And we respond to as many as we can. But I would say if there are specific indices that you would like to see us respond to, please do let us know. We are pleased to have been named very recently, the highest ranked company in relation to digital inclusion on the World Benchmarking Alliance's 2020 digital inclusion benchmark. That happened last week. Some of the other indices we recognize within include the Equileap Top 200 companies for gender equality, the Vigeo Eiris Top Global 120 companies list. We're a member of the FTSE4Good, the Ethibel Sustainability Index in terms of excellence in their global division, the MSCI, we have an A rating. And I have just mentioned previously, we're now having A minus rating on the CDP rating, which has just been released. So I think I'll hand back to Will.

Thanks, Jules. We'll now open up for questions. [Operator Instructions] So Jules, we've got the first question that's come in. What action is Telstra taking on the United Nations Sustainable Development Goals?

So at Telstra, we see technology and indeed, digital inclusion as an enabler of our actions on SDGs. And this is reflected in our focus that you have just heard as I walked through in our sustainability strategy. So our strategy is aimed at helping people to thrive in a digital world, and it includes initiatives and targets to address our impacts and opportunities in relation to our 4 priority SDGs that we have been focusing on. And those 4 that we focused on are gender equality, decent work and economic growth. We're focused on industry innovation and infrastructure and on climate action. So our SDG priorities reflect the areas that we believe Telstra is best place to contribute to. And whether that be through partnering with major universities, for example, to build skills for the future and to ensure that we represent the communities within which we operate. I think another good example is providing smartphones and technology advice to women impacted by family violence. We also -- a good example is the training that we've been doing for thousands of people through our digital capability programs. And also, if we think about the climate action priority, we've been minimizing our environmental footprint by reducing emissions, recycling devices and the steps that we've taken this year to being carbon neutral.

Great. Thanks, Jules. Next question we've got here is, what impact does COVID-19 had on your program delivery this year?

Thanks. Well, I think that everyone couldn't envisage what a year this would be and the way that the impacts are flowing through. So as has been the case for all of us, COVID has required us to reconsider some of the programs and particularly how we deliver those in an online environment. And in many instances, we've also been provided the opportunity to really partner with organizations and innovate to see how we could maximize the impact of the programs that we work on in the environment that we found ourselves in. So I think of that like what we have done in terms of the impact. And I think about it in terms of providing us with an opportunity to actually support those and particularly those most vulnerable in our communities in COVID, but also an opportunity to help our partners to pivot as well. So some examples, maybe I will draw out in relation to that, Will, is our face-to-face, tech-savvy senior programs and social seniors. That was so much based on face-to-face training. But we were able to deliver online in 2 of the largest states in New South Wales and Victoria, and that's been really successful. And we will continue to offer online training as part of our standard now digital literacy offers going forward. We also increased the numbers of smartphones, which we provided to WESNET as part of our safe connections partnership. We increased that by 25% because we saw that as very important with the increase that we had seen in relation to domestic and family violence during the lockdown and the increased stress that was in households during the COVID situations. Within our Telstra Foundation, this is where I'm particularly proud of the pivot that we were able to do. So we put the challenge to our partners of how, in this environment, using technology, we could see what we could achieve in programs, which were often largely based on face-to-face types of delivery. So we provided the flexibility for our partners to pivot, and they responded in spades in relation to the shifting demand and increasing demand, and in particular, in relation to some of our programs like the focus on mental health services through a giving of COVID-19 mental health relief package. This package enabled us to work with 2 partners in particular, which is ReachOut and Orygen Digital, to quickly digitize the youth mental health services that they provide into an online delivery model. And this is all in addition to relief packages and support which we provided to our customers, particularly our vulnerable customers. And Lyndall will talk more about that when we take up the responsible business items shortly.

Great. Thanks, Jules. And the next question that's come in is, why is Telstra focusing resources on sustainability initiatives when performance elsewhere in the business could use more focus?

I think that's a really reasonable question. But as an organization, it's really important, I think, for this audience to understand that we are incredibly focused on executing T22. And as we detailed recently in our Investor Day, we know all too well that we will only be successful and successful for our shareholders if our customers, our employees and our communities enjoy success as well. So as we have seen firsthand this year and very much in recent weeks, there are very real regulatory, legal, reputational impacts for customers when they don't get this balance right. And so we believe that it's through our sustainability strategy, that we are able to proactively manage key social and environmental risks as they emerge, and ensure that we are meeting all of our stakeholders' expectations sufficiently because we think that, that is essential to maintain the social license that we need to operate.

Thanks for that, Jules. And we've got one last question here. What governance mechanisms are in place to ensure Telstra meets its sustainability commitments?

Yes. It's really critical for us to ensure that we have appropriate governance and risk management throughout our business. The Telstra Board is responsible for overseeing and monitoring the effectiveness of our sustainability strategy and policies. And the Board receives updates from us on that sustainability progress 2 times a year. And further updates are provided as appropriate or required during the year. The Board also approves our annual Modern Slavery Act Statement, which you'll hear more about today from Michael, and it plays a key role in identifying our list of material sustainability topics, which, in turn, then informs our strategy and the development of our programs, and also, they have a key role as in regard to our annual reporting. Within Telstra, our sustainability team is responsible for championing and embedding sustainability principles across Telstra and ensuring we're managing the risks and opportunities related to current and emerging sustainability issues. We work with the business to deliver social and environmental programs and outcomes. And they're making sure that there are outcomes for not just our customers, but broadly for communities. The team also oversees implementation of that strategy that we have just stepped through, and they work closely with the business to ensure key targets are set, tracked and performance indicators are met. I think our approach is supported by a number of frameworks. But what I would particularly highlight is the policies that we are supported by. So that include, importantly, the backbone of our conduct, which is through our group code of conduct. We have policies regarding diversity and inclusion, health and safety, privacy, human rights, environmental and disability service policies. And importantly, and probably of interest to this group as well, is the Supplier Code of Conduct. And that sets expectation, not just that are relevant for us, but expectations that we're sitting for our business partners and that broader supply chain.

Great. Thanks, Jules. And that's all we have for the Q&A part for this session. I'll now hand over to Lyndall to take you through the first of our deep dives, responsible business.

Thanks, William. I'm Lyndall Stoyles, Telstra's Group General Counsel and Group Executive Sustainability, External Affairs and Legal. I joined Telstra on 1 April this year and lead the function responsible for providing legal advice, policy advice, stakeholder management and community programs across the government -- government relations, sorry, regulatory, sustainability and regional affairs areas within Telstra. I joined Telstra from Caltex, where I was the Executive General Manager for People, Communications and Governance as well as the Group General Counsel and Company Secretary. Today, I'm going to talk about responsible business. This is 1 of the 3 pillars of our sustainability strategy, the other 2 being the ones that Jules focus on, digital inclusion and climate change. What it means to be a responsible business in 2020 can be interpreted in a myriad of ways by organizations, by customers and indeed by the investment community. What is agreed upon, however, is that customer -- sorry, companies must conduct their business responsibly because stakeholders simply won't accept anything less. At the end of the last decade, community trust in the corporate sector had reached a new low point. And yet in a short space of time, more and more corporates are standing up on important issues. Companies are demonstrating they understand the expectations on them and their responsibilities to the communities in which they operate. Thoughtful companies realize they are only successful for their shareholders if their customers, employees and communities enjoy success as well. For us, being a responsible business is about doing what's right. It means being accountable for our own actions and stepping up when times are tough, which, this year, has certainly required. COVID-19 has challenged us to adapt to find new ways to support our customers, our people and the communities in which we operate, particularly when times are tough. Our actions have included suspending job reductions, supporting casual workers, increasing recruitment in Australia, bringing forward CapEx spending, creating relief programs for small business and consumer customers as we did during the bushfires as well and providing unlimited data allowances for fixed broadband and mobile customers. At the same time, we've not lost sight of our shareholders, quite the contrary. All of us have adapted to working, studying and self-isolating from home in response to COVID. We move quickly to shift our entire organization to work productively in a remote way. And while we've had some challenges with customer support in some areas, we've worked hard to address these quickly. The rest of the company didn't miss a beat, and we continue to work productively and efficiently from home. This was critical as demand for connectivity reached an all-time high as the-COVID pandemic accelerated the digital revolution and Australia's trajectory towards a digital economy. This shift has made clear the critical importance of telecommunications networks and the value of our T22 strategy. We've seen a fundamental shift in online usage from customer service support to online shopping, to telehealth, to home learning and working, as demonstrated by these stats. Peak data traffic on our fixed network increased by as much as 70% at the height of the pandemic as people move to work and study from home. The peak time for Internet use at home shifted from 9 p.m. pre-COVID to 4 p.m. during COVID. We've also seen an upload traffic increase more than 50% as use of video meetings exploded. And as it changed the way people interact with us as well. Before COVID, around 50% of consumers contacted us through digital options. Now this is more than 70%. And as the country looks to digital economy to get us through the COVID impacts, Telstra will play a vital role in helping Australians use digital tools and technology to get back on track. We're also cognizant, though, that there is still 2.5 million Australians who remain offline, nearly 1 in 10 who are cut off from the digital services that have proved so crucial to many during the pandemic. The 2020 Australian Digital Inclusion Index report released in October shows that a high level of digital inequality persists. Many Australians continue to miss out on the benefits of being online. As this year's report highlights, there's much more work to do to close the digital divide and give Australians equal access to vital services. The Inclusion Index is an annual study of digital inclusion in Australia. It's produced by the RMIT University's Digital Ethnography Research Centre and Swinburne University's Centre for Social Impact, and this is done in partnership with Telstra. The research explores digital inclusion in terms of 3 dimensions: access, affordability and digital ability. It's a source of evidence and a guide for action. The index shows us where digital inclusion is improving and when more needs to be done. For example, we know that there are approximately 800,000 secondary students in Australia who are from households that earn less than $35,000 a year. They're lacking access to technology options and suitable devices. They pay a larger proportion of their household income for digital services and generally have lower digital skills. We also know that people aged 65 and above are one of the least digitally included groups in Australia. Around 1 in 5 older Australians do not use the Internet, and that is a problem in the COVID era. It means older Australians are less able to mitigate against the isolation brought on by social restrictions with the use of technology and digital alternatives. The good news is that the index showed Australian Internet users are accessing the Internet more often, using an increasingly diverse range of communications technologies and taking up higher speed Internet services. Digital inclusion is a shared national challenge, one made more pronounced by the impact of COVID. And the index shows that there's more work to be done, urgent work that is needed if all Australians are to benefit from the digital economy. Having access to these stats helps us focus our efforts in the right place to make sure we're supporting those who need extra support. Along with helping the around 2.6 million people stay connected during the COVID pandemic, we provided assistance to around 900,000 vulnerable customers and enabled 23,000 people to receive digital capabilities training in FY '20. We do this through a number of programs, including Access for Everyone program, which supports those experiencing financial hardship; the Safe Connection program, which supports women experiencing domestic and family violence; our digital literacy programs, like Tech Savvy Seniors and Deadly Digital Communities; and the Telstra Foundation Partnerships, which back initiatives that build community resilience and enable young people to thrive in a digital world. It's these programs that have seen Telstra take out the top spot in the 2020 Digital Inclusion benchmark by the World Benchmarking Alliance. It's a multi-stakeholder initiative brought together by groups such as AVEVA, Index Initiative, the UN Foundation and the Business Sustainable Development Condition. We know how essential digital technologies are for keeping people connected. And our sustainability strategy focuses on helping people thrive in a digital world. This year also brought many things back to first principles, highlighting again the importance of being able to connect to people and things we love, the services and information we need and the communities to which we belong. While we strive to promote digital inclusion for all Australians, we do, however, have to face into the reality that we don't always get it right. And it's how you show up in these moments, the difficult moments that can really test if you're as committed to your values as you claim. A few weeks ago, it was announced that we reached a settlement with the ACCC, including a proposed penalty of $50 million in relation to unconscionable conduct. This conduct involved 5 Telstra licensee stores -- licensed stores that were engaged in inappropriate sales practices to 108 indigenous consumers between January 2016 and August 2018. While it was a small number of licensee stores that did not do the right thing, the impact on these vulnerable customers has been significant, and this is not okay. We've taken steps to provide full refunds with interest, waive debts and allowed most customers to keep their devices to try and help make things right. It's important to note that the ACCC agrees that our Board and senior executives were not aware of, involved in or authorized these sales practices. The settlement, though, will now be considered by the Federal Court. What we're focused on is building trust with our customers and operating responsibly. So it's extremely important when thing -- sorry, it's extremely disappointing when things go wrong, especially when we needed to act more quickly and with a better understanding of the issues affecting customers in vulnerable circumstances. Being a responsible business and doing what is right for customers and the community is not negotiable for Telstra. Part of being accountable for your own actions means you've got a stand up when you've got it wrong and learn from your mistakes. Earlier this year, our CEO, Andy Penn, visited the Northern Territory, South Australia and Western Australia to meet with some of the affected communities and customers to apologize, and he, firsthand, the impact that these sales practices have had on them. We've appointed a customer advocate to help us better identify and respond to issues like these. Plus, we're working closely with community representatives and financial counselors due to their expertise and relationship with many of the customers involved. We've also accelerated ways to improve our experience for all customers right across the company and with licensees. This includes removing excess data charges on our new simplified mobile plans; better processes to cater for affordability, including tighter credit checks; new rules on selling to customers who may be vulnerable; improve staff training; and changing our sales incentives with licensees. We've now passed the halfway point of our T22 strategy and are becoming a much leaner, simpler and digital -- sorry, company for our customers. As T22 progresses, there are things we need to focus on to ensure the telecommunications industry remains viable while supporting our digital economy. We need to do the right policy and regulatory settings to set up the whole industry for success, and this includes nbn pricing. We need to change the way we serve our customers, mainly adopting digital processes, using AI may be quicker and smarter, but recognizing that this will require adjustment for many, including our teams and customers as we learn new more digital ways of operating. We know what's important to our customers, so voice calls will be answered in Australia for our consumer and small business customers by the end of T22, and we'll continue to invest in delivering the connectivity, products and services, our customers and country needs. We're also creating a future workplace experience for our people and future team members. That's about building on a long-valued approach to flexible working by giving people choice with where and how they work and technology that helps them perform at their best, wherever they're located. We're committed to making these changes and building a future-ready Telstra for the benefit of our people, customers, shareholders and the communities we live and work in. We'll be guided as we make these changes by our purpose, and that is to build a connected future where everyone can thrive as well as our values. Living up to our purpose and our values is at the heart of being a responsible business. And as we continue to work through this extraordinary year and into 2021 and what will be an extraordinary new era of technology innovation, we must also never lose sight of the fact that how we do things is just as important as the why we do them. Thank you, and I'll now hand back to William.

Thanks, Lyndall. We'll now move on to Q&A. [Operator Instructions] So the first question we've received is, Lyndall, regarding the sale of products to indigenous consumers in 2016 to 2018 and your emphasis on building a trusting brand for customers, what specific training has been provided to franchisees in the area? And how is management monitoring this over time? And to follow up that question as well, what safety guides have you put in place to ensure this type of incident does not happen again to provide confidence to investors that there are -- there is an open system of communication in your organization to deal with this as there was a lot of reputational damage which resulted from this incident.

Thanks, William. Good questions. So I'll address the first one first. In terms of the training that we've provided, both to our licensees and to our people on the ground in our stores, we focused on a few things. But the first thing that we've actually focused on is simplifying our products because what we realized through this experience was that it was the complexity in our products that added and contributed to the problem. So we've simplified our products, including by removing excess data charges and also applying some caps around the amount of products that people can actually take from us. This helps to mitigate the potential for day-to-day surprises, the customers to be surprised by receiving a larger bill than they expected, either through excess data charges or because they might -- some people had up to 8 devices. So that's the first thing. Secondly, in relation to the training that we've provided, we've provided training, both in terms of clarity about the products that we sell, but also training in terms of determining what is it that the customer truly needs and wants from us, rather than what we actually want to sell. So there is an enormous amount of work that has gone into that kind of training and hardship training as well. So we can work out and better assess what customers can actually truly afford. In terms of what -- I think it was described, William, as safety mechanisms we've put in place to ensure that this doesn't happen again, I think the challenge we will always have is that we are a large and complicated company with many customers. And so we're not in a position that we can guarantee things will never happen again. However, what we have done is that we've got this clarity about what we sell and how we sell and what our expectations are of our people. We've got a far greater oversight over how things are sold. So that if problems do arise, we can pick up on them more quickly and act more quickly. So one of the critical learnings we learned from this was that we weren't close enough to the actual sales to be able to identify the problem quickly enough nor act quickly enough in order to address the problem. And so that's critical that we're actually closer to -- more closely monitor how things are actually being sold and the customer experience in order for us to be able to pick up if there is an issue more quickly. We've also done some work on our -- the commissions that licensees receive to try and provide more of a balanced scorecard that focuses as much on customer experience as it does actually on the financial results that they may deliver. And I think we think that all of these things combined will help ensure a better experience for customers, but also allow us to pick up more quickly when problems do arise so we can address it more quickly.

Okay. Great. Thanks. Thanks, Lyndall. Next question is, how can Telstra claim to be the best at digital inclusion when you've let down so many indigenous customers?

Yes. A very, very fair question and one that we have been thinking about very deeply within our organization. So I think our claim to be the best in digital inclusion is something that has been recognized externally rather than necessarily by us. So the World Benchmarking Alliance is the one that has actually recognized us as being #1 in digital inclusion. Saying that, we have been very open all year since we really understood the depth of the issue, both about what actually took place, but also about what we have done to remediate the customers that were harmed by this conduct. And that has included not just the things that I mentioned about waiving debts and allowing customers to keep devices and things like that, but we've also put in place a number of programs in these communities that help support the communities to better understand and ask the right kind of questions when they are looking to buy a telecommunication service or device. And there's a lot of work. There's 1 particular program that has gone into some of the communities that supports teenage school kids by providing them with the information about what you need to know in order to work out what you want, what telecommunication service you want and what questions you should ask when you're buying that and helping them actually work with us to better educate people within their communities. So they can make sure that they are buying things that are right for their needs rather than things that our people may want to sell them.

Okay. Great. Thanks, Lyndall. And the final question we have is why is Telstra focused on being a responsible business and a good corporate citizen?

Telstra is focused on this, both because it's what we truly believe a corporation needs to do, but also because we think that it is the key way in which we can ensure that we are delivering products and services that customers want, creating an environment, a working environment that employees want to work in, maximizing the benefits to the communities we operate in and minimizing the harm. And through doing all of these things and really focusing on that customer experience and that people experience, we believe that we will become -- we will continue to be and become even more, a company that delivers real value to our shareholders.

Okay. Great. Thanks, Lyndall. And that's all the questions we have for that particular Q&A. We'll now take a 5-minute break, and when we return, Michael will take you through our approach to modern slavery. [Break]

Good morning, everyone. The expectations on businesses of the awareness and management of human rights among slavery are rapidly evolving. I can't think of a topic with such a significant trajectory from the purview of niche NGOs into the boardroom of large businesses around the world in such a few short years. Today, I'll talk through a few things, how we identify and manage modern slavery risk. I'll give you a bit of insight into our largest areas of risk, the supply chain, in particular and share some perspectives on how we manage issues and why a partnership is so important. Firstly, though, to level set with some context. COVID has acerbated social inequality. Supply chain disruptions, border closures, lockdowns have meant those in vulnerable circumstances are at greater risk of exploitation. At the same time, we're also seeing increasing regulation with many countries and jurisdictions requiring human rights or supply chain transparency reporting. And those that aren't considering it with proposed legislation set to be introduced across many jurisdictions, such as Hong Kong, Switzerland and Canada. Expectations of businesses are increasing at the same time, but trust in business and institutions is at an all-time low. And in that context, we're also seeing stakeholders expect more and more business. From a customer perspective, both individual consumers as well as our larger end of town, the business enterprise customers, are requesting more information on the products and services they purchase. Many of our large customers, including government, are also caught by modern slavery legislation and expecting us, their suppliers to have robust management systems in place. We're also seeing investors asking more questions. All of this is leading to enhanced scrutiny on business. And this is compounded by the digital age increasing access to information, also meaning that workers are increasingly empowered to speak up. And at the same time, we've got corporate benchmarks and NGOs are naming and shaming and become increasingly sophisticated in their activism. All of this means it's no longer sufficient to have the human rights policy. Companies must demonstrate that they have a meaningful risk-based approach to managing human rights and modern slavery. Telstra manages the risk of modern slavery through its broader human rights program. We have a range of external commitments as well as legislative requirements, which we abide by. We use the UN Guiding Principles on Business and Human Rights as our key guide on how we approach, and we regularly review our human rights risk to come up with the most salient human rights risks. When we're identifying human rights risk, it involves looking right across the value chain. And this slide outlines some of the key areas we've identified as high risk of human rights. Just to pick out a few of them. In terms of products, there's a risk spots, but not least of all electronic product manufacturing, which occurs primarily in higher risk countries and often many tiers down the supply chain. In terms of services, we have a large contingent workforce, which provide a range of services to Telstra and its customers. Some of these workers are located in high-risk regions, such as India and the Philippines. And we also have a quite large construction and physical network infrastructure piece, which is high risk due to the nature of the work and also the use of contingent workers. We also run a Telstra store network, which is a licensee network, where workers are not directly employed by us. So in terms of our human rights program, it continues to mature and respond to those now-in-risk areas. I thought it'd be useful just to demonstrate conceptually how we manage human rights and how we've integrated into existing frameworks and management approaches. So at the top of the slide there, you can see our purpose and values which really guide our behaviors and actions. Sitting underneath that, there's a suite of Telstra group policies that set out our human rights commitments and expectations. And there's also a number of other supporting policies such as occupational health and safety, privacy, diversity, inclusion and so on, that really represent that human rights as this umbrella topic. Sitting right underneath that is our human rights compliance program, which pulls together all our various regulatory requirements and external commitments into a set of principles, which all the functions are required to abide by. The compliance plan covers our operations right through to our supply chain as well as our business partners. And each functional area of Telstra is required to complete a risk assessment against each of the principles, and based on the risk level, implement appropriate controls. Sitting underneath the compliance program, you can see the functional areas that we've called out, both supply chains and operations. And we've identified, I guess, some of the key controls which sit within those regions to manage the risk. Supply chain is the area of our largest risk, and I'll go into a bit more detail on that one shortly. But in terms of our operations, workforce and recruitment have been identified as having higher risk and include -- and is managed by things like a global employment framework that complies with local laws and covers aspects such as wages, leave entitlements and hours of work. Our recruitment policy helps ensure we have a consistent and fair process, and this is used for both our permanent and contingent workforce, and all our recruitment agencies are required to follow it. In addition, our online recruitment management system has various gateways to ensure that policies are followed, and this includes things such as verifying age and right-to-work status. In terms of our delivery partners, we have 3 functions: global business services, consumer and small business, as well as network and IT, which use a high proportion of delivery partners outside of Australia. To help manage the risk, all delivery partners must sign up to our Supplier Code of Conduct, demonstrate compliance through our controls, whether it be questionnaires, desktop audits and site visits, but they're also required to have onboarding processes for workers to make them aware of the relevant policies and procedures, entitlements and to have a functioning of Whistleblowing Policies. In terms of the retail network, we operate a network of stores, some of which are owned by Telstra, some of which are not, which are the licensees. And there's various dealership arrangements in place with partners such as JB Hi-Fi and The Good Guys. To ensure workers' rights are upheld across this broad network, we have a range of practices in place, including annual attestations by our licensees of compliance with the terms of their agreement, including employment and labor obligations. There's operational reviews, which are conducted on a quarterly basis, where performance is reviewed against those commitments. And this year, we actually expanded our supplier sustainability audit program to include licensees, and we ordered about 5% of our licensee network through that program. In terms of training and awareness, our aim is to raise awareness of human rights and modern slavery across the entire organization. And there's probably 2 categories of training that have been developed to support this. There's just general awareness, which everyone must complete as part of their business essentials training. And then there's a bit more focus on roles that carry specific risks. So for example, all executives and people leaders across Telstra as well as those that are responsible for managing procurement, recruitment or managing business partners are in scope of much more detailed training. In addition, our procurement professionals much complete -- must complete even more specific procurement focused training. And then sitting across the bottom, industry associations, which is a really important part of the ecosystem, and I'll touch on that a little bit later. Going into a little bit more detail on our largest risk area supply chain. We manage sustainability-related risks in our supply chain using our supplier risk governance framework. This assesses supplies across a broad range of risks. The key document, which sets out the expectations for suppliers is our Supplier Code of Conduct, which basically outlines the minimum expectations and forms part of our purchasing terms. This is regularly updated as our knowledge grows, and we use it as a basis to engage suppliers. Over FY '20, we updated our Supplier Code of Conduct. And reminded suppliers of the commitments within it coming with a message from our chief executive to suppliers. We also held a forum focusing on our top 100 suppliers to discuss the code of conduct and the key changes and what it meant for them. To assess and manage the risk in our supply chain, we complete a range of due diligence activities, which include supplier questionnaires, document reviews, media assessments as well as on-site audits, and we also use a centralized procurement system and team to help reduce risk even further. So in terms of our supply due diligence program, one of the key areas and an area of particular focus from stakeholders is our supplier audit program. In FY '20, we audited approximately -- or we audited 46 supplier sites. And we use independent third-party auditors who use industry standards to -- on the basis to complete their audits. And we also partnered with our industry peers, namely through the joint action cooperation to complete some of these audits. This partnership really allows us to go beyond Tier 1 and audit down to Tiers 2 and 3 in particular. And this is really critical in lifting up the industry as a whole and getting deeper into our supply chain. Now to date, we haven't identified any instances of modern slavery, but we do find things from time to time that are not aligned to our Supplier Code of Conduct. Over FY '20, we found 14 critical or unacceptable findings, and these predominantly related to working hours and health and safety. Our approach to remediation is to work with the supplier to correct any issues identified and to confirm the findings have been appropriately actioned. This is done by a reaudit to confirm that the actions have been addressed before we actually close them off ourselves. So in terms of giving a little bit more color on how we approach remediation, because I think this is a really important part of demonstrating effectiveness. We're very transparent in our statement around where we do find issues that give us concern and the steps we've taken to remediate. And I thought it would just be useful to spend a bit of time how we've sort of approached those to date. Because I think that's useful in terms of your thinking as you engage with other companies. So key lesson #1 is that any finding is really complex to navigate. There's no one-size-fits-all response. That is it's situation specific, and it's really based on our relationship and leverage with the organization in question. It's also clear that coming together across the business to arrive at that agreed solution is the best path. To give a little bit more color on the case study that's on the screen, this was originally found through our supplier audit program, but the response was managed internally via multidisciplinary team, which included representatives from legal, our local India people team, which really helped us understand the local legal requirements; the whistleblowing team, including the company secretary; sustainability as well as executives from the areas of the business which purchase the goods and services from the supplier as well as obviously, procurement. We all had to really understand the issues, speak to our various perspectives and collectively decide on how to proceed. And obviously, there's a lot of internal discussion and perspectives, but ensuring the best outcome for the impacted workers was a key sort of outcome that we're all working towards. And in the end, the supplier agreed to our actions and a follow-up audit confirmed that the changes requested have been made. And this really underlines, I guess, the importance of our approach, which is try to work with the supplier rather than terminate. If we terminate, we lose all leverage to improve the conditions. In the past, we unfortunately have had to go down this path. And we've disclosed this in prior Modern Slavery Statements. So in terms of working with partners. I think modern slavery is a really complex issue. And working with industry peers is a way to effectively respond to the issue, but also to increase the leverage we have with suppliers. So we're part of the Joint Action Cooperative (sic) [ Joint Audit Cooperative ], or JAC, which is a global ICT industry group, which shares the results of sustainability audits amongst common suppliers. Remember, there are companies include other organizations, other telcos like AT&T, Telefónica, Verizon, Vodafone and so on. And it's through this initiative, we also work together on allegation and on allegations and remediation. And when there's action or an issue with a common supplier, a letter sent on behalf of all JAC members, which helps provide consistency for the supplier, and allows us to leverage our work to an agreed solution. We're also members of GeSI, which is a Global ICT Sustainability Industry Group, which drives greater sustainability across the entire ICT community, and this is both network operators as well as technology providers. Telco Together Foundation is an Australian-based telco industry group, which aims to make a social contribution to Australia. And its members include all the major Australian telcos, whether it be Optus, Voda and so on. A key initiative this year has been to raise the awareness and capability of managing modern slavery risk across the industry. And last week, if you're not familiar with it, TTF put out a leadership statement, which was signed by all the major telcos, and committing us to a set principles to work together on modern slavery. In terms of our reporting, and I won't spend too much time on this one, but we obviously produce a Modern Slavery Statement. This year was our fifth, but our first under the new Australian legislation, and it's been lodged and available through the border force online register or, of course, available on our website. We also include other supporting information on sustainable supply chain and the broader work on human rights through our annual bigger picture sustainability report. In terms of what's next, I think it's really important that there's always more work to do on the topic of human rights and modern slavery. This is not one and done. Suppliers change, circumstances change, risk appetites change, and your program needs to evolve accordingly. So we continue to nurture the program and also our reporting, and our intention is to demonstrate year-on-year progress. We've made a number of external commitments through the statement, and we'll report on progress against those in the next year's statement. A new step forward this year is we're obtaining some pre assurance over some of the metrics in the statement with the intention of moving this to external assurance in future years. One call out, though, that is really important, particularly in this sort of nascent field, is feedback. We find it incredibly useful to help inform our programs and reporting. And so please feel free to drop into the chat or reach out after this roundtable if you've got any areas that you'd like to see further action or reporting or disclosure on. That's all I want to cover. So back to you, Will, for Q&A.

Thanks. Thanks, Michael. We'll now take questions. [Operator Instructions] So the first question we have here is, given the importance of on-site audits for identifying modern slavery risks, why did Telstra conduct audits about 32 suppliers in FY '20?

Yes. Look, so I think -- I think the number is an important one because it's a risk-based approach. So we have a various number of screenings that we do so that we identify the suppliers that we think are the most riskiest, and then we hone in what is a limited audit program on those suppliers where we think the risk is greatest. This is also informed through our work with other telco operators through JAC. And I think we'll probably see the numbers even slightly smaller this year, thanks to the impact of COVID. What we have done at the same time is obviously really engage much deeper with suppliers and so ensure that whilst we may not be auditing, we're very so the actions they are taking that are in line with our code of conduct.

Great. Thanks, Michael. Next question is, how has COVID-19 impacted your ability to audit offshore suppliers? How do you guide against unintended consequences of contract termination?

Yes. So look, I think the impacts of COVID are still being felt. Obviously, the numbers, as I sort of mentioned earlier, we think the numbers will be slightly lower this year, and that is what it is. And so I think the process of engaging and having really good relationships and focus on supply chain resilience and continuity of suppliers has been a more immediate focus. And I think it's a bit of a learning experience for all companies, COVID in particular. In terms of the unintended consequences, again, I think this comes back to having the relationship. As I said earlier, if we just terminate whenever we find something that's critical or unacceptable, we instantly lose all leverage to actually engage with the supplier. Having good relationships where you can discuss and share your point of view and push progress towards something that is the right outcome for the worker is the real path forward here. And doing that ourselves is great. But I think the real answer is that modern slavery and human rights issues are incredibly complex, and that we really need the whole ecosystem, that is companies, the industry associations and not-for-profits working together to really hone in on the areas that we need to basically move this to the outcome that we all want.

Great. Thanks, Michael. In relation to -- the next question. In relation to the third-party audits, are the audits preannounced? Or are they unannounced spot checks? Do you also team up with NGOs in terms of identifying risks i.e., above and beyond the third-party audits?

Yes. The majority of the audits are preannounced and that they form part of a continuation. So we will have a look at what we're seeing in the media, what the responses have been to our self-assessment question is and the various due diligence that we do in terms of looking at other risk factors, whether it be country of operation, AML sanctions and so on, to help inform that view of risk. Unannounced audits, I think are something we are looking at. And sorry, what was the second part of the question?

Do you also team up with NGOs in terms of identifying?

Yes. Sorry. Yes. Look, so look, we're constantly engaging with NGOs in terms of what they're finding, in terms of how they're reviewing and assessing corporate action, both in terms of policy and process. So we're very close to the sort of, I guess, the structural side. I think where we can probably go a little bit better and an area of focus is engaging with NGOs on the ground and understanding the really particular local issues. Currently, we rely on our audit partners to plug that gap there from the local -- or country and understand the local context in conditions. And so I think a natural sort of progression for Telstra is to build out that muscle itself.

Great. And another question. With your suppliers, do you have a view on whether it is better to have a more consolidated list of suppliers versus engaging with existing suppliers and improving processes to address potential modern slavery risks?

Yes. Look, it's probably a question for our procurement people. I think 2 things. One, if you've got a smaller list, it's probably easy to manage and you have better relationships with them. But I think picking up on one of the earlier questions, what COVID has shown is that having resilience and redundancy in your supply chain so that you have a variety of suppliers that you can turn to, can help improve customer outcomes and business outcomes. So I think it's a fine balancing act, and there's no silver answer to that, a silver bullet to that one, I think.

And one final question for you, Michael. The Hyderabad case study identifies that bundle was removed for all employees delivering services to Telstra and new hires. Does this mean that the supplier was allowed to continue to rely on bonded labor to employees not delivering services to Telstra?

So there was relatively bonded labor, I think, is how in terms of the local context, it's permissible under the Indian law to actually repay any training that you had under your employment. And so I'd have to confirm exactly how far the supplier went. But certainly, we're obviously focused about the workers working on our particular projects. So maybe we can come back on that one.

Okay. Great. So if the person had that question, you can just send us an email. We're happy to -- more than happy to clarify that for you. All right. That's all the questions we have for Q&A. Thanks, Michael. I'll now hand over to Tom to take you through the last of our deep dives, environment and climate change.

Thanks, Bill. I wanted to spend a few minutes to share with you some of our environment commitments and key achievements for the year, including, in particular, our carbon neutral certification that happened in 2020. So this year has been -- one of our major milestones for this year has been announcing our new climate change goals and ambition. And although we've had an environment strategy since around 2013 and been measuring our greenhouse gas emission since well before that, around 2004 or earlier, this marks a significant increase in our ambition to address climate change impacts. And there's many factors, both internal and external, to our business that have contributed to why we've increased our level of ambition around climate change. And there's a few on this slide that I want to talk through, which are some of the key ones. So it's a business who operates globally and also in some of the most remote regional areas of Australia, we're increasingly susceptible to climate change impacts to ensure that our network, our operations and also our supply chain may remain resilient as we continue to operate our network and provide our services. And the increasing frequency and severity of extreme weather events, which are linked to climate change really has the potential to disrupt populations and economies and have a potentially significant impact on the way that we manage our network and conduct our operations. That's a really big driver for us in our climate change ambition. One of the other ones is around the increased understanding and level of maturity with the public and the communities around climate change. So we're seeing things like younger generations working up to the long-term nature of climate change in risk. We've seen protests, global uprisings. And generally, the globally connected community, having more of a voice in this space. One of the other drivers for us and generally around increasing climate change ambition is around transparency and the increased interest from stakeholders amongst this group as well to really understand better the climate change impacts of business and also to increase transparency around disclosure requirements. And a key example there is around the TCFD framework. Another one is around actually the opportunity. So not just risk-related activities, but in response to increased public awareness, there is a real opportunity to differentiate in the market around climate change and provide low carbon products and services that can enable customers and community to reduce their emissions as well. An example for us is around cloud computing services. And we're also seeing a clear uptick in awareness and expectations on the issues from our customers, our suppliers and also our employees who are looking to see long-term commitment to reduce our impact. So 2 of the most important environmental issues to our business, based on the materiality review that Jules talked through earlier is climate change and energy use and also around resource efficiency. And so that's where we focus our approach and activities and also set our goals and commitments. So our approach to climate change really focuses on 3 areas. The first is around managing emissions, so reducing the emissions across our operations, but also to find ways to collaborate across our value chain, including with our suppliers, with our customers to reduce emissions as well. The second one is around resilience and adapting to climate change impacts. And so that's recognizing that climate change will have an impact and it's already on our business, and we need to find ways to adapt to that and to continue to provide services as that happens. And the third area is really around focusing on supporting our customers' communities and also the economy to more broadly reduce their emissions through low carbon products and services. On the resource efficiency front, this is really focused on maximizing the value of the physical materials that we use and rely on to operate our network and provide to customers. And that's about contributing to a more circular economy. And the 3 focus areas for us really in this space are around the products that we provide to customers. And so that's around mobile phones, modems, those sort of products. And importantly, to provide simple and convenient reuse and recycling options for the customers so that those materials can be recovered. The second one is around packaging. And that's about increasing recycled materials in our packaging, eliminating plastic and ensuring that all our packaging can be recycled. And then the third one is around e-waste. As a large user of equipment and electronic equipment in our network, we generate, as Jules also mentioned, around 4,000 tonnes of e-waste each year. And we have programs in place to ensure that gets recycled. All of these activities and goals are driven by a number of principles that help us to ensure that we're contributing and engaging towards those. So the 5 in the middle of this slide really are focused on leading by example. So that's holding ourselves to account, making sure that we, as a business, are supporting it and really prioritizing those activities to improve our environmental impact. The second one is actually actively reducing our environmental impact or our emissions through things like energy-efficient equipment, decommissioning or increasing renewable energy. The third one is around engaging with our employees to help them understand and reduce their emissions. But also to engage with our suppliers and to support them on their decarbonization journey, which is part of our scope 3 emissions activities that we're working on at the moment. We have another piece around engaging with the customers and the community. So this is how we can actually work with them to provide low carbon emissions products and services, but also how we can sort of enable a transition into a lower carbon economy. And then the fifth principle is around adapting the climate impacts, and that's around the resilience of our network to ensure we can continue to operate as we have more increased extreme weather events. So these are the principles that guide us to ensure that we're working with all of our stakeholders to drive activity that's needed to achieve our goals. And so just for some quick context on the scale of our environmental impact. We have a network that has more than 25,000 assets, including mobile towers, telephone exchanges, data centers located in anything from a metro to a regional area of Australia or internationally. And that brings with it energy use around 1.4 million megawatt hours a year, about 1.2 million tonnes of greenhouse gas emissions. And most of that is driven actually through the electricity we use. And so we have been investing since around 2011 in energy efficiency programs. And to date, invested around $61 million in actually trying to reduce our energy consumption through energy efficiency measures. This year, we've actually also achieved a 5% reduction in our absolute greenhouse gas emissions as a result of some of those activities. But this year has really driven some significant change in our level of ambition. And I just want to quickly run through some of those. So I go back to December 2019. That was when we took a first step in our increasing our ambition level around climate change. And this is where we made the commitment to achieving net 0 greenhouse gas emissions by 2050, in line with the Paris Agreement. But then shortly after that into the new year, in February 2020, we followed this with a formal commitment to set a science-based targets with the science-based targets initiative. Then in March, we saw an announcement of our next 3 climate change goals, and I'll talk through those on the next slide. Through this, we're constantly changing and improving our disclosures as well. From the beginning of the process, we have been working to incorporate TCFD framework into our sustainability report. And so that's a key part that we've done with our recent sustainability report that was published a few months ago where we're starting to align to that TCFD framework. We're continuing to submit to CDP, and Jules announced that we have recently achieved an A minus in the leadership category for our results there. And also from a disclosure perspective, we continue to meet the NGER Act obligations in the -- with the Australian government to disclose our greenhouse gas submissions. We're also working to improve our packaging, including the rebranding of our packaging and to incorporate more sustainable materials. And as a result of this, we were recently nominated for a number of sustainability packaging awards. I'm really pleased to say that we've actually very recently won 2 of those, which is a great achievement and links to one of the videos that we watched in the break there around how our packaging is being transformed. So I wanted to talk through just briefly around our 3 goals that we committed to in March around climate change. And so the first one is around reducing our absolute emissions. And this is the first absolute emissions reduction target that we've set as a business, and it's to achieve a 50% reduction by 2030 over the next 10 years. And so this is really an important goal and a signal to the market that we are taking climate change seriously and transforming our business to adapt and doing our fair part to reduce emissions. We're working to achieve that through a range of activities, including increasing investment in our energy efficiency program, through advancements in new technology, and also building climate change considerations into our long-term business planning as well as the progressive decarbonization of the electricity grid as the uptake of renewables grows. Our second goal is around being renewable energy leaders. And so this is about enabling renewable energy generation equivalent to 100% of our consumption. It's over the next 5 years. And this really feeds on our investments in power purchase agreements to date with our Murra Warra solar farm -- wind farm and Emerald solar farm that are generating renewable energy and feeding into the electricity grid. And then the third goal is actually recognizing that we have a climate change impact at the moment as we work to reduce our emissions over the next 10 years. We want to neutralize the emissions that we have right now. And so that's to go carbon neutral in our operations. I'm very excited to say that we achieved our carbon neutral certification this year in July. And so just quickly on that. That was a really significant milestone that we achieved going from announcing our carbon neutral so -- our commitment in March to actually achieving it in July. So you move very quickly. But it's important to note that we didn't start from scratch with this. In December of last year, our challenger brand, Belong, became the first Australian, carbon neutral telecommunications company. And so we had a good base to work on from that and some learnings on how we could apply for Telstra as an organization. Where you chose to work through climate active, the government organization who certifies carbon neutral to ensure that the offsetting the emissions from our operations were undertaken transparently using appropriate carbon credits. And we're also certified by a reputable organization. And although we had experienced calculating our emissions profile, purchasing carbon credits at this scale was absolutely a new activity for Telstra. And so there's many different types of carbon credits available, and we have set up a evaluation framework to ensure the appropriate governance that we're purchasing reputable and suitable credits for our -- to meet our operations and to meet our carbon neutral certification. So we undertake a due diligence process on those carbon credits that we purchase, and that's very much aligned to our Supplier Code of Conduct. And also some enhanced due diligence procedures around investigating where the credits are coming from and the governance in place for those. And once we -- the credits that we're looking into met that requirement, we then try and maximize the co-benefits of those credits. And that might be things like ensuring that we are purchasing credits from the countries in which we operate or that are aligned to addressing significant impacts or opportunities for Telstra as well. So for example, credits that are coming from renewable energy generation projects or also that might be related to biodiversity or investing in rural and regional areas or supporting indigenous communities. And so our approach to this will continue to evolve over time. But very importantly, we need to continue to build on that and to work with the carbon offset community to ensure we're buying reputable credits. And so thanks, everyone, for listening on the climate change and environment piece. Look forward to any further questions through the Q&A.

Thanks, Tom. [Operator Instructions] So the first question we've got here is, how have you reduced greenhouse gas emissions this year? And will you continue to maintain carbon neutral certification each year?

Thanks, Will. So we've actually increased our energy efficiency program over the FY '20. And so that's involved us investing further around HVAC system upgrades, lighting upgrades, but really scaling up our work around decommissioning some of our older equipment that's running in our exchanges and replacing that with more energy-efficient equipment. And so that's actually contributed to us reducing our overall greenhouse gas emissions by around 5% over the last year, which is roughly in line with what we need to achieve as part of our 2030 commitment. In terms of our carbon-neutral certification, that's absolutely something that we're looking to achieve year-on-year. And in theory, as we reduce our emissions over time, then the amount that we have to certify with offsets to go carbon neutral will reduce over time as well.

Great. Thanks, Tom. Next question is, how are you helping other organizations on the carbon-neutral journey?

Yes. There's a few different ways that we're doing this. One of them is actually around ensuring that we're providing more low carbon products and services to our customers, and that might be through ensuring that our modems that we provide are more energy-efficient or our cloud computing services can save money. But on the carbon-neutral place, we actually went through a huge learning with going through our carbon-neutral certification. And recently, we helped St Vincent de Paul Victoria (sic) [ St Vincent de Paul Society Victoria ] on their own carbon-neutral journey, providing advice through the process, and also allowing them to get more access to reputable credits that we'd also reviewed.

The next question. How much will it cost to achieve your climate cost? Will you make further investments in PPAs?

Absolutely. So we're still working on the plans for our full 2030 emissions reduction targets. So the exact figures are not sort of -- we haven't worked those out to that level of detail. But what I can talk about is, over the last 9 years, we've invested around $61 million in energy efficiency upgrades. And so that's a decent scale and a marker around what's needed to achieve our commitments. Absolutely, our plans are to invest in more PPAs, and that's very much part of our renewable energy target and commitment. So at the moment, we have 2 of those, and we'll be looking to do more over time.

All right. Thanks. Tom, a couple more questions. What are your plans for TCFD quantitative reporting?

We're on the TCFD journey. And so our last sustainability report began to align some of our TCFD requirements and frameworks into that piece. And so we've begun with some of the qualitative work and aligning those 2 pieces. I think it's a multiyear journey for us, though. And so you'll begin to see, over time, more of the quantitative analysis come into the reports.

Great. And the final question we've got here. What are the TCFD risks you are managing currently?

So there's a lot of work within the business to understand more around climate change risks, and that includes both physical and transition risks associated with climate change. And that covers everything from physical risks related to fiber strain on the network from really hot days, or increased energy costs through cooling when we have hot days or flooding or more extreme weather events like bushfires. And so those things are all being factored into our long-term analysis.

Okay. Thanks, Tom. And that's all the questions we have for Q&A. So that concludes our deep dives into our key sustainability topics. Before we wrap things up, I want to take you through our sustainability and ESG engagement for calendar year 2021. As we have done in the past, we'll continue to provide regular updates on our sustainability approach and performance throughout the year. Our next form of sustainability engagement will be through our annual ESG survey in January, followed by the release of our FY '21 sustainability report in August and our FY '21 Modern Slavery Statement in September. We are planning our next roundtable to be around this time next year. We also published a quarterly newsletter, Sustainability Matters. Please let us know if you'd like to be on that distribution list. And you can also find out more on our sustainability website at telstra.com/sustainability/report. And of course, we are available to engage on sustainability issues throughout the year during our investor meetings. In the meantime, if you have any questions or queries on topics we covered or didn't cover today, please get in touch with us. We welcome your questions and feedback, and I'm happy to help wherever we can. So thank you for joining us today and for your participation. We hope you found the roundtable useful, and we look forward to engaging with you on Sustainability Matters in the coming year. Have a nice day.