Bristol makes case for ethical and social regulation

Bristol Water has contributed a paper to Ofwat’s Future Ideas Hub, which argues for an ethical and social approach to be taken to future regulation.

Regulating for consensus and trust argues that responding to the climate and nature emergencies and changing societal expectations will involve trade offs rather than straightforward defined outputs. These trade offs will necessitate value judgements, which there is little place for in the current regulatory regime as this relies entirely on competitive market proxies.

Rather, the regime should embrace the need to make value judgements and seek to find an ethical, consensual basis on which to do so. Bristol suggests that companies with stakeholders including Ofwat develop scenarios to test consensus, and that risk and return should be explicitly included. This could lead to more variation in returns (and hence bills), company to company.