Bristol Water maps out steps to a social contract

Modernising governance, building a deeper connection with society and embedding social considerations into long term decision making are the key steps water companies need to take to evolve the social contract, according to a joint Bristol Water/ICS Consulting paper published last week.

The paper, Social contract for water: evolution or revolution? set out the background of, philosophy behind and wider business context to the social contract concept, and explained why Bristol Water had set about re-shaping its social contract with the local populations it has served for over 170 years. It argued: “The emerging evidence is that customers will value these new directions which are local in their focus, bottom up in their design and evolutionary in their intent.”

The report identified three core phases needed for the idea to take hold in water.

Phase 1

Embedding the social contract into the governance of water companies. It said actions to consider include amending Articles of Association to include a clear statement of purpose and duties to deliver on this; refreshing how the business is governed; and reviewing how business is financed and owned to ensure long term investors’ interests are aligned to those of the community the company serves.

Phase 2

Embedding local communities into company processes to enable them to hold companies to account and to really shape activities. The paper argued: “Local customer and community engagement is absolutely vital to defining the social contract, which may differ region to region, depending on local priorities. National standards and regulators provide a baseline level of customer protection but cantot and should not replace the relationships that companies need to have with the local communities that they serve and are part of.”

Phase 3

Embedding the social contract into the company’s strategic decision making for the long-term, which in turn shapes day-to-day operations on an ongoing basis. This requires setting a culture that empowers front line employees to take decisions that benefit society (“fixing that problem, even if it isn’t strictly legally the company’s responsibility”); and reviewing business processes to ensure that benefits to society are not only taken into account in decision making, but are actively sought out and generated.

The paper concluded: “The social contract between customer and company has to be rooted in a clear and transparent understanding of what water companies are in business to do (their purpose), who it is “they work for” (their citizens) and how they go about meeting society’s expectations (their social contract). These are the factors that can solidify an enduring public consent for water companies.”

Bristol Water published the paper ahead of hosting a debate with local and national stakeholders on Thursday about the social purpose of those who provide essential public services.