It may surprise many that Michael Fraser, CEO of Australia’s largest carbon emitter listed on the Australian Stock Exchange, sits at number three on the list of the most powerful people behind Australia’s push to a low-carbon economy.

But there isn’t any other major energy company in Australia that has taken an active and unambiguous stand in favour of pricing carbon and maintaining Australia’s Renewable Energy Target the way Fraser’s AGL has. The other major private sector energy companies have either outright lobbied against the carbon price and the RET (EnergyAustralia and GDF Suez; formerly International Power), or in the case of Santos and Origin Energy backed away from prominent support for the carbon price as their LNG businesses became central to growth, while never being particularly supportive of the enlarged RET.

AGL is indisputably one of the big boys in Australia’s domestic electricity and gas markets. It’s the second-largest energy retailer in the country; the third-largest private sector operator of power generation capacity. While other large corporates such as banks have also backed carbon pricing, it’s AGL’s experience in the main carbon game of energy that has lent genuine credibility to calls for carbon pricing and the feasibility of the RET.

Plus AGL has put its money where its mouth is as the largest private owner of renewable energy generating capacity in the country.

Under Fraser’s guidance, the company has put major intellectual grunt behind its support for carbon pricing and the RET, setting up something almost akin to a think tank. While other companies push their barrow through their industry associations, submissions, speeches and commissioning gun-for-hire consultant modelling reports, AGL did something completely different: its own staff prepared papers for submission to academic journals in finance and economics.

Back in 2008, Fraser raised quite a few eyebrows in the energy sector when he hired the former chief executive of the failed Babcock and Brown Power, Paul Simshauser, to the position of chief economist. But Fraser’s move turned out to be a masterstroke; Simshauser may have been a senior wheeler dealer, but he was also a bit of a nerd with a PhD in economics, who incidentally also works as a professor at Griffith University.

“Even Gillard’s speeches bear the fingerprints of AGL’s working papers.”

The “working papers” written by Simshauser and his staff, even with their arcane mathematical equations, seem to rapidly diffuse across the public service, journalists, ministerial offices, industry and academia. They are read, debated and quite often one sees in the arguments of others the tell-tale signs their ideas have been absorbed. Even Gillard’s speeches bear the fingerprints of AGL’s work.

Is this all the product of a visionary CEO driven to radically transform his company for a low-carbon future? Highly unlikely if you look at the history of the company and the observations of those who know Fraser and AGL.

Fraser is an AGL company man through and through, having worked there for a little over 25 years. A pair of “safe hands” is a common description for him rather than a radical visionary. A few years back he was passed over for the CEO job in favour of Paul Anthony, largely because the board thought the company needed a “change agent” capable of radical surgery.

Fortuitously for Fraser, Anthony’s surgery was too radical. In pursuit of bold initiatives — like trying to take over Origin Energy — the company lost ground, missing profit guidance while staff morale plummeted. The AGL board, in desperate and rushed circumstances, sacked Anthony and turned to Fraser, whose long experience with the company was now highly valued as a ship steadier.

Even AGL’s strategic focus on renewable energy is the product of a decision made two CEOs prior to Fraser, when Greg Martin acquired Southern Hydro. Plus their interest in renewables didn’t stop the company from lobbying heavily against generous feed-in tariff support for household solar PV, where the business had more to lose than gain. And when one of the single biggest CO2 polluting facilities in the country, Loy Yang A, came up for sale at an attractive price, Fraser’s pragmatism won out over any environmental purity.

Nonetheless those inside the company say Fraser will stay true to the strategy of pursuing an environment supportive of low-carbon energy. The view is that Loy Yang A is the cash cow to be milked, but without renewables the company has no “growth story”.  In a recent question and answer session with stock analysts, when asked about the implications of a Coalition victory for the value of Loy Yang A, Fraser’s response was hardly enthusiastic. If anything it was one of frustrated exasperation that carbon and energy policy had become a political game, where his company was one of the pawns.

Having been at the company for so long, Fraser can recognise there’s not much point optimising the company for just the next three-year political term. “Michael Fraser is one of the few CEOs in the country who takes a genuinely long term view,” says one staff member.

In terms of the dangers of failing to prepare for the future, Fraser perhaps put it best in a speech he gave in 2010:

“And for Australia’s coal industry, if world consumers wake up one day and don’t want their product, it will have significant implications for our economy. Ask Kodak … I’m sure in the 1990s, analysts who covered Kodak thought they had nothing to worry about with an enormous share of the film sales and processing market. But then the digital camera came along … and we all know how that was a near-death experience for Kodak. Australia cannot afford to be the Kodak story of the future.”