Yesterday’s Australian Agricultural Co annual general meeting in Brisbane saw an unusually large amount of time devoted to explaining and exploring the company’s approach to sustainability.
Coinciding with the release earlier this week of AA Co’s 2024 annual Sustainability Report (click here to access), both chairman Don McGauchie and chief executive officer spent time during their AGM addresses on sustainability topics – some of which are included in a major strategic review of company operations currently being undertaken.
Mr Harris told shareholders that sustainability was fundamental to one of the company’s three principal activities – the ownership, operation and development of its pastoral properties.
“Significantly, AA Co’s depth of understanding in this important area has increased over the past financial year, and our approach to addressing our impact on climate followed,” he said.
“AA Co takes a broad view of sustainability. We seek opportunities to have a positive impact on nature across our cattle production system – our cattle operations span 6.5 million hectares of land, and the focus is not just on what we are doing, but also how we are doing it,” Mr Harris said.
“Through how we operate we can be part of the solution to addressing nature-related challenges which can lead to a positive impact on climate.”
Zero Net Emissions CRC
Mr Harris said the company was excited about the direction and opportunities in this important area.
Among notable areas of progress in the financial year ended March, AA Co had signed up as a Tier-1 partner in the newly-activated Zero Net Emissions from Agriculture Cooperative Research Centre.
“As part of the bid team, AA Co played a key role in the early development of the CRC, and we are looking forward to the program of work that follows its recent formal launch. It’s Australia’s largest-ever CRC and AA Co’s ten-year investment reinforces our commitment to sustainability and the efforts to reduce our emissions,” Mr Harris said.
In addition to the CRC, AA Co has also completed the first phase of its Rangelands Carbon by Satellite project. That included delivery of a product for testing that the company anticipates will eventually allow measurement of landscape carbon via satellite imagery, at scale.
“Once completed, we hope the product will remove one of the key barriers both to entering soil carbon markets as well as unlocking new understandings about the potential for soil carbon sequestration at scale in northern Australia,” Mr Harris said.
AA Co also conducted a unique analysis of the way carbon moves through its supply chain in the 2023-24 financial year, which will be used to inform emissions accounting, as well as opportunities to reduce emissions, shareholders were told.
It also progressed further work into methane-reducing feed additives, including trialling delivery methods and opportunities in grazing environments, beyond earlier feedlot work.
The company also completed another year of its Beef Cattle Herd Management Program, designed to improve and track cattle productivity.
EU deforestation regulation
Mr Harris said AA Co continued to closely monitor consumer trends (in areas like attitudes towards sustainability), as well as the potential impact of trade and other mechanisms that could impact market access.
“The EU’s deforestation regulation is one example,” he said. “The regulations were announced in the 2023-24 financial year, and will come into effect this financial year.”
“We are engaged in the conversations around their implementation in Australia and are preparing our own supply chain in readiness,” he said.
Nature to lead ambitions
During the AGM, board chairman Don McGauchie outlined the company’s plans to undertake a review of strategic direction.
“From the original Shorthorn cattle that AA Co brought from England 200 years ago, we have constantly sought to invest in and improve our animals. The new strategy will continue this effort, building a better beef program and improving on the quality genetics that we possess. Dedicated and targeted programs involving our best bulls and cows, accelerated through commercial scale intensive artificial reproductive technology, will help us breed and grow animals with traits that are more desirable for our customers,” he said.
“Nature will lead our ambitions in this area – a theme you will see through the new branding and marketing activities for Westholme (AA Co’s leading Wagyu brand). As an example, we are in the final stages of assessing our first carbon sequestration project to register with the regulator.
“We look forward to sharing more details of the strategy review and opportunities that we are pursuing in the near future,” Mr McGauchie said.
During the AGM questiontime, a shareholder asked about carbon sequestration on company properties as part of diversifying landuse.
“The vast tracts of land we have are quite remarkable,” Mr McGauchie said.
“We are certainly looking at whatever opportunities might be out there as part of the strategic review process,” he said.
“Included in that, as part of the ongoing running of the business, are things like how we can sequester carbon, as well as containing the carbon (methane) output of the herd.”
“We may need to be offsetting some of that as well, so there are opportunities there, and potentially selling carbon credits,” Mr McGauchie said.
“But there’s a whole lot of other things we might do, as well. We are very much looking into those, and have a very open mind about what those possibilities might be.”
Having said that, Mr McGauchie said it had been his intent as chairman – and David Harris’s as chief executive – to focus on the ‘big elephant in the room’ – the beef business – to get it working as well as possible.
“That’s where the big dollars are – but that doesn’t mean we are excluding the opportunities that might exist in some other parts of the business, such as carbon,” he said.
Mr McGauchie said as a listed company, the AA Co board could not talk about potential new developments until there was ‘enough substance about them’ to be able to report accurately to shareholders.
“So you may not see some of these things coming out publicly for a while, until they are genuine opportunities, and are genuinely moving towards being taken up. We (have to be careful not to) mislead the market. We are all seeing this green-washing issue become quite a significant one in the sustainability space, and we are highly conscious of that, and other areas of reporting high-flying ideas that may not come to anything,” he said.
“We’re conservative around issues like that, but I guess that’s why we have been around for 200 years,” he said.
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