Analysis: AGL's 2025 Climate Transition Action Plan (CTAP)

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Executive Summary

Already a late-starter to the energy transition, AGL's 2025 Climate Transition Action Plan (CTAP) offers only modest progress in place of the tenacity that investors could expect of Australia’s biggest greenhouse gas emitter and electricity generator.

Necessary improvements in the 2025 CTAP include the introduction of a scope 3 target, accelerated moves into battery storage, and a welcome commitment from AGL to challenge attempts by its industry associations to slow the energy transition.

However, the 12 GW target for adding new renewable and firming capacity to its energy portfolio remains unchanged and unambitious given AGL’s market size, and a sufficiently detailed electrification strategy with meaningful targets is absent. AGL has no plans to cut emissions from gas supply over the next decade, which sits at odds with recent policy signals aimed at diminishing gas use.

By missing key opportunities to accelerate decarbonisation and position the company ahead of the curve in a rapidly changing policy and market landscape, AGL risks being caught flat-footed.

As a systemically important company critical to the pace of the Australian energy transition, AGL's CTAP is of particular interest for universal owners who stand to benefit from the long-term stability of the financial system, for which climate change remains a material threat. A more ambitious CTAP would help address those risks.

Instead, the 2025 CTAP fails to address the weaknesses of the previous plan, maintaining modest ambition and lacking the clear plans and targets that would give investors confidence AGL is maximising its market-leading position to drive Australia’s energy transition.

ACCR intends to vote AGAINST the Climate Transition Action Plan (Appendix 1) and executive remuneration (slide 23) at the 2025 AGM.

Key findings

• AGL remains misaligned with scientifically valid interpretations of the Paris Agreement – it is following scenarios based on 1.8-2.6°C of warming.
• Coal closure dates are largely unchanged.
• Overall ambition has not increased with the 12 GW new renewables and firming target.
• Capital allocation is heavily weighted towards firming assets, focusing first on short-duration batteries before shifting toward undisclosed mix of long-duration gas peaking, batteries, pumped hydro and new technologies.
• AGL has a new scope 3 reduction target of 60% by the end of FY35 - met primarily by the closure of the Loy Yang mine. 25% of AGL’s scope 3 emissions come from gas, yet there are no plans to cut gas supply emissions in the next decade.
• Concerning absence of an electrification strategy: there are no targets, timelines, or credible plan to support customers or respond to policy momentum.
• Remuneration metrics are weak: AGL’s incentives remain poorly linked to the CTAP, use flawed metrics and do not support absolute emissions reductions – an unacceptable governance oversight for a company so exposed to the transition.
• Policy advocacy is improving but still lacks focus and ambition, especially on electrification and gas phase-out. AGL’s biggest lever for accelerating coal closures is advocating for policy settings that accelerate the rollout of renewables and transmission.

Download a PDF of Analysis: AGL's 2025 Climate Transition Action Plan (CTAP) | August 2025