Water sector commits to responsible business leadership
England’s water companies have publicly committed to strive to be exemplars of responsible business practice.
Water UK last week published a new sector-wide Public Interest Commitment (PIC), which combines a pledge to champion governance measures to enshrine operating in the public interest in companies’ business purpose, with five specific stretching goals for the sector as a whole.
On governance, the trade body accepted decisions on business purpose are for individual company boards. But it pledged to explore the options with independent specialists and to report back in April 2020 on what companies are doing to enshrine public interest within their business purpose. It explained: “Options which some companies are considering include taking the fundamental step of amending company licences and/or Articles of Association to reinforce the regard already given to a range of interests alongside shareholder value when making decisions.”
The five specific goals are:
Triple the rate of leakage reduction across the sector by 2030.
Make bills affordable for all households whose water and sewerage bills account for more than 5% of their disposable income by 2030, and develop a strategy to end water poverty.
Achieve net zero carbon emissions for the sector by 2030.
Prevent the equivalent of 4bn plastic bottles ending up as waste by 2030.
Be the first sector to achieve 100% commitment to the Social Mobility Pledge.
Water UK said companies would be able to contribute flexibly and according to their specific circumstances. A member of the Water UK board – company CEOs – will lead a programme of work for each sector-wide goal, “working with companies and organisations within and outside the sector to share expertise and identify what needs to be done”.
An independent panel will be created to report annually on how well the sector collectively is doing to achieve these goals, starting in April 2020.
The trade body said water companies are already party to “an implicit contract with society, through which they earn the privilege to serve in return for delivering wider benefits to society and the environment”. While this has worked well for the past 30 years delivering multiple benefits: “As we look ahead to the next 30 years, there is a pressing need to reinforce that social contract. Nationally, there is scepticism about big business in general and particularly the role private companies have in providing essential services like water. Locally, companies’ ongoing work with customers has made clear that they expect us to do more - not just to improve services, but also to play a full role in tackling wider social and environmental challenges.”
The PIC has been drawn up following extensive dialogue with companies and stakeholders, and to reflect customer sentiment as expressed in PR19 research and engagement.
Chief executive of Water UK, Michael Roberts (pictured), said: “The water industry takes its responsibility very seriously, because we play a unique role in running a vital public service for the public good. Water companies individually have set out proposals to improve services over the next 5 years in their business plans, and the Public Interest Commitment is about companies working together to build on those ambitions. It commits us to reinforce the public interest at the heart of everything we do, and to strive towards a set of challenging sector-wide goals which will benefit customers and the environment.”