Our approach to ESG ensures everything we do supports our commitment to provide environmental stewardship and to support our customers and local communities. As a responsible employer, we remain focused on employee development alongside a robust health, safety and wellbeing programme. Our activities are underpinned by a strong governance framework that upholds our core values within the organisation and throughout our supply chain.
Our ESG strategy is aligned with our business strategy, vision and values and our Group ESG policies. Our ESG Strategy is approved and monitored by or Group ESG Committee.
Our Group ESG targets to 2025 reflect the priority issues identified by stakeholders in our materiality assessment that are not already addressed in existing regulatory commitments and plans. All Group ESG targets incorporate Bristol Water business.
The 2024-25 ESG target definitions are available here
For more information on our ESG performance metrics, see the ESG Databook available here.
Further details on aspects of our ESG performance including external benchmarking and assurance can be found via the tabs below whilst further details of our ESG strategy can be found on the following pages
- Materiality Assessment
- ESG Capitals Programme
- 2023/24 ESG Target performance and assurance
- External Benchmarking
- UN SDGs
In 2021, we conducted a comprehensive materiality assessment through stakeholder consultations, research, and analysis to identify crucial ESG issues and shape our targets until 2025. The outcomes were disclosed in our 2022 Annual Report, and we plan to refresh the assessment in 2024/25. Subsequent stakeholder engagement in 2022 and 2023 informed our strategic direction and business plans, emphasizing customer priorities, community well-being, and environmental sustainability. This extensive feedback, combined with risk assessments, guided the review of our material issues, affirming our commitment to addressing high- priority matters through impactful initiatives and investment plans, while adapting to evolving concerns.
Creating value through our ESG approach
Everything we do links to a capital in some way, whether that is our freshwater stewardship (Natural capital), ensuring the wellbeing of our employees (Social & Human capital) or the governance we apply to how we run our business (Manufactured, Intellectual & Financial capital) – the development of our capitals framework is integral to better decision making for the future.
Our ESG capitals framework tracks a wide range of metrics to manage our capitals performance, and our materiality assessment has been fundamental in helping inform and update our future ESG targets. By taking all these factors into consideration when planning for the future, we will maximise our value and impact for each of the capitals, deliver more sustainable outcomes and make decisions based on what matters most.
Our Group ESG targets set in 2021/22 to 2025 reflect the priority issues as identified by stakeholders in our materiality assessment that are not already addressed in existing regulatory commitments and plans. All Group ESG targets incorporate our Bristol Water business, and we are working to embed SES Water in these targets moving forwards.
Key successes include exceeding our catchment management, GHG reduction and water efficiency targets. We achieved all our social targets achieving both gender and new REACH target and exceeding the 5% club target instead receiving “Gold” membership. In addition to retaining our Fair Tax mark for the 6th year running, we also improved our lead health and safety measure (LTI).
Our Governance targets were all achieved and included exceeding our targeted score in our key Sustainalytics ESG Rating and delivering 100% of our new debt raised through our Sustainable Financing Framework.
For more information on our ESG performance metrics, see the ESG Databook available here.
Our assured metric definitions are available here
Assurance
Our performance against selected ESG metrics in 2023/24 was externally assured by DNV. DNV’s method of assurance includes testing the assumptions, definitions, methods and procedures that are followed in the development of data and the auditing thereof to ensure accuracy and consistency. DNV’s 2023/2024 Independent Limited Assurance Report is available here.
Our Community Impact data has been assured by Business for Community Impact (B4SI). This is the first year Pennon Group has applied the B4SI Framework and has been a part of the global B4SI Network, accessing full guidance and support for its application. B4SI’s independent assurance statement is available here.
Our ESG performance is assessed by a number of independent ESG rating agencies. Our performance across these assessments is a useful indicator of our sustainability performance both informing the Group on topics where we are performing well and helping us focus on improvement areas. Overall, our performance continues to improve across key ESG assessments, maintaining our leading position across the sector in many of these ratings.
- 6.1 By 2030, achieve universal and equitable access to safe and affordable drinking water for all
- 6.2 By 2030, achieve access to adequate and equitable sanitation and hygiene for all and end open defecation, paying special attention to the needs of women and girls and those in vulnerable situations
- 6.3 By 2030, improve water quality by reducing pollution, eliminating dumping and minimizing release of hazardous chemicals and materials, halving the proportion of untreated wastewater and substantially increasing recycling and safe reuse globally
- 6.4 By 2030, substantially increase water-use efficiency across all sectors and ensure sustainable withdrawals and supply of freshwater to address water scarcity and substantially reduce the number of people suffering from water scarcity
- 6.5 By 2030, implement integrated water resources management at all levels, including through transboundary cooperation as appropriate
- 6.6 By 2020, protect and restore water-related ecosystems, including mountains, forests, wetlands, rivers, aquifers and lakes
- 6.a By 2030, expand international cooperation and capacity-building support to developing countries in water- and sanitation-related activities and programmes, including water harvesting, desalination, water efficiency, wastewater treatment, recycling and reuse technologies
- 6.b Support and strengthen the participation of local communities in improving water and sanitation management
Aligning our goals with the United Nations Sustainable Development Goals
SDG 6 IN ACTION: Clean Water and Sanitation
What are we doing?
6. 5 Investing in the Centre for Resilience in Environment, Water and Waste (CREWW) partnership with Exeter University to help safeguard future water supply.
- 6.3 Improving our impact on river quality by 1/3 by 2025
- 6.4 Reducing leakage by an ambitious 15% by 2025 (from 20219/20 baseline)
- 6.6 Maintaining our excellent bathing water quality standards all year round and delivering 8 beach improvement schemes by 2025
6.1 & 6.2 & 6.a WaterAid is one of our most important partners, in 2023/24 we leveraged over £550,000 of donations to WaterAid to help address water accessibility, quality and sanitation in developing countries.
6.b We are supporting our communities to increase their water efficiency through our Water Saving Community Fund whilst also running primary school education programmes that will reach over 4,000 children in 2023/24.
United Nations Global Compact
This year we have built on our support for the UN SDGs, by becoming a signatory of the world’s largest corporate sustainability initiative, The UN Global Compact. Becoming a participant affirms our commitment to our ESG targets and the UN SDGs, as we work to embed the ten principles of the United Nations Global Compact covering human rights, labour, environment and anti-corruption into our ESG approach, whilst communicating our progress against these principles annually from 2025 onwards.
Local | Social
Our Neighbourhood Fund is about supporting our local community. We’re funding projects that support the wellbeing of people, the environment and communities in the South West. Since its launch, we have given out more than £100,000 to over 50 charities and community groups helping more than 22,000 people across the South West. In Bristol, our community lottery provides the opportunity for charities and community groups to win £500 each month to fund schemes which benefit the community. We have also this year become tier one funders of the registered charity, the Social Mobility Business Partnership which facilitates the provision of over 3,000 days of work experience and lifetime career coaching to individuals from low-income backgrounds across the UK.
Global | Social
South West Water has been supporting WaterAid since it was founded in 1982. In November 2017, we became the first water company to enable customers to donate to WaterAid through their e-bill reminder. In 2023/24 we leveraged over £550,000 of donations to support WaterAid’s lifesaving activities.
National | Environmental
CREWW is a 25-year research partnership between South West Water and the University of Exeter, building on their longstanding collaboration, including the pioneering Upstream Thinking catchment management program. The partnership brings together subject matter experts from both organizations to conduct innovative research on pressing challenges facing the water industry.
The new dedicated, operationally net-zero CREWW research facility was officially opened in March 2024, underpinned by a £21 million investment from South West Water. It is the only water sector partnership supported by the UK Research Partnership Investment Fund (UKRPIF) and the largest RPIF-sponsored project in the South West region. CREWW has already initiated projects, including a £1.4 million state-of-the-art laboratory focused on tackling microplastics in the environment. This project aims to develop an understanding of microplastics' presence in sewage sludge to inform wastewater operations and ultimately provide guidance to stakeholders involved in sewage operations, management, monitoring, and regulators.
The partnership's outcomes will help inform South West Water's operations, enabling better service delivery for customers, the region, and the environment by addressing critical water industry challenges through collaborative, innovative research.
