Our people are at the heart of the value we create. In a year where public and regulatory scrutiny of the water sector has intensified, our colleagues have played a critical role in maintaining essential services and delivering improvements for the customers and communities who rely on us.
With nearly 4,000 colleagues across our Group, we understand the scale of our responsibility both as a major employer and as a provider of essential public services. Our priority is to create a working environment that is safe, inclusive and future-focused – one that develops skills, supports wellbeing and reflects the values we expect of an organisation delivering essential services. This year we strengthened colleague engagement, built capability across our teams and reshaped the Group to ensure we are better aligned and prepared to deliver the outcomes our communities depend on, now and in the future.
Prepared to deliver
This year we have continued to shape the Group so we are set up to deliver with greater clarity, capability and operational focus. We have aligned our structures, strengthened frontline teams and made progress in ensuring we operate as one integrated organisation. These changes mean we are better positioned to meet the delivery challenges in AMP8 and beyond and respond confidently to heightened scrutiny across the water sector. We welcomed our new CEO on 1 April 2026, through a series of in-person meet and greets across the Group. Keith has held open forums in order to share the next phase of our transformation, and to encourage transparency with colleagues.
Our values and culture
Our culture remains the foundation of how we work and how we deliver for our customers and communities. This year we continued to embed our values Be You, Be Rock Solid and Be The Future, ensuring they guide the decisions we make, the standards we set and the behaviours we expect every day. Our values are now firmly part of the colleague experience — from onboarding and training, to recognition and leadership development.
In the spirit of ‘Be You’ we continued to reinforce our values through our engagement programmes — including colleague listening through our Employee Network Groups, and our You Rock Awards, which celebrate those who live our values in action. These initiatives have helped colleagues feel more connected to our purpose and to each other, strengthening a sense of shared ownership and pride.
A key focus has been strengthening leadership at every level. We know that leaders have a defining influence on culture, and this year we have continued to develop the skills, confidence and capability our leaders need to set clear expectations, support their teams and role model our values. This includes equipping leaders to have open, constructive conversations, build trust, and create an environment where colleagues feel heard, respected and empowered to perform at their best.
We remain focused on building a workplace where people feel supported, safe and motivated, and where our values translate into high-quality service and responsible decision-making. This work will continue to evolve as we welcome new leadership and move into the next phase of our transformation.
Learning and development
Building the capability of our people remains essential to delivering high-quality services and strengthening our longterm organisational resilience. From leadership to managers to colleagues, we invest in development at every level, ensuring they have the skills, confidence and support they need to succeed in a period of heightened expectations and operational focus.
Leadership Development
A key part of this has been investing in our leaders through a bespoke leadership development programme designed for the needs of our Group – “Leading for the Future”. This programme focuses on equipping leaders to role model our values, enable high performance, support colleague wellbeing and lead through change. By strengthening leadership capability, we are ensuring our people have the clarity, support and direction required to deliver for customers and communities.
Empowered to Act
All of our managers attend an “Empowered to Act” programme, designed to equip managers with the knowledge and practical tools to confidently manage employee relations decisions, actions and processes within their teams, supporting consistent, fair and effective people management across the Group.
H2Grow
We also recently launched our new Group wide Learning Experience Platform (LXP), H2Grow, giving colleagues access to a modern, personalised and comprehensive learning environment. The platform brings together technical training, professional development, compliance learning and skills content in one place, making learning more accessible and more aligned to the needs of our organisation.
Early careers
Our commitment to developing future talent remains strong. We continue to be active members of the 5% Club, reinforcing our ambition to ensure that at least 5% of our workforce consists of apprentices, graduates and trainees. Since 2021, we have onboarded 105 graduates into the business. Our graduate and apprenticeship programmes remain a key part of our talent pipeline, supporting skills development in priority areas.
Through these initiatives, we are building a learning-led, future focused organisation – one equipped with the right skills, leadership and talent to deliver consistently, adapt to changing expectations and support the longterm success of the Group.
Sustainability - Employees
- Policies and statements
- Recruitment and attracting talent
- Equity, Diversity and Inclusion
- Health, Safety and Wellbeing
- Modern Slavery
We have a series of policies to promote best practice. These are reviewed annually and where necessary are approved by the Board. All of our policies can be found here.
We have a comprehensive programme of training and engagement which runs throughout the year. The programme has been designed with the Group’s key compliance and principal risks in mind to increase resilience, heighten awareness and embed our culture of doing the right thing. The training consists of a number of online modules relating to our key policies and procedures including: The Pennon Code of Conduct, Regulatory and Compliance, Whistleblowing Speak Up, Gifts and Hospitality, Anti-Corruption and Bribery, Anti-Facilitation of Tax Evasion, Anti-Modern Slavery & Human Rights and Conflicts of Interest.
This year we modernised and strengthened our recruitment capability by implementing Teamtailor, our new Group wide applicant tracking system. This marks a significant step forward in transforming recruitment and how we attract top talent from across the market.
Teamtailor is driving Group integration, replacing legacy systems and a range of localised practices, giving the Group one consistent way of managing our hiring activity. This consolidation has improved visibility, streamlined workflows, and created a more efficient and joined-up experience for candidates, hiring managers and our recruitment teams. It also allows us to make better use of data, enabling clearer insight into our workforce pipeline and supporting more informed and inclusive decisionmaking.
We have refreshed our careers site with a focus on improving clarity, accessibility and representation so that our opportunities appeal to a broad and diverse pool of talent that reflects the communities we serve.
We remain committed to partnerships and programmes that support fair access and broaden participation. This includes ongoing involvement in initiatives such as the Armed Forces Covenant and 10,000 Black Interns, as well as targeted support for early career talent joining us through our graduate and apprenticeship routes.
Our commitment to inclusive hiring continues to strengthen. We closely monitor application trends to identify areas for improvement and ensure our processes remain fair and accessible. Last year, 30% of applicants were female and 31% were from ethnically diverse backgrounds, signalling healthy engagement from groups historically not represented in the utilities sector.
With Teamtailor now embedded, we are well positioned to continue enhancing visibility of opportunities, reduce unnecessary barriers for applicants, and deliver a recruitment experience that is modern, efficient and aligned to our values. This transformation supports our ambition to attract and retain the skills and talent we need to serve our customers, protect the environment and deliver sustainable, long-term growth.
Creating a workplace where everyone feels valued, supported and able to contribute their best remains central to our culture and long-term success. This year we continued to strengthen our approach to Equity, Diversity and Inclusion (EDI), expanding colleague networks, improving governance and building the foundations for greater representation, inclusion and opportunity across the Group.
Launching our family friendly policy
As part of our focus on equity, diversity and inclusion, we have conducted a review across all our regions and business of our family friendly policies and relaunched a refreshed approach. Recognising that family life looks different for everyone, these policies are designed to support colleagues at important life moments, whether welcoming a child, growing a family through adoption or surrogacy, supporting a partner, or navigating fertility treatment or neonatal care.
Our updated Family Leave policy brings together Maternity Leave, Supporting Parent Leave, Adoption Leave, Shared Parental Leave, IVF and Assisted Conception Leave, and Neonatal Leave into a clear and consistent framework. It is designed to provide greater financial support, increase flexibility and choice for families, and ensure a fair and inclusive approach across the organisation.
We know that taking family leave is a significant moment, both personally and professionally. Our aim is to ensure that colleagues feel supported, informed and confident before, during and after their leave, reflecting our values and our commitment to supporting a modern, diverse workforce.
Expanding and strengthening our Employee Resource Groups
Our Employee Resource Groups (ERGs) play an essential role in creating safe spaces, strengthening community and ensuring colleague voice shapes our policies and decision-making. Over the past year we have expanded our networks, increased membership and strengthened executive sponsorship to ensure each group has a visible platform and clear influence across the organisation.
Key progress included:
• Growth in membership and wider colleague engagement
• Executive sponsorship for every network
• Annual plans agreed with each ERG
• Increased collaboration between networks to share learning and insight
• Direct involvement in shaping policy
Our ERGs are becoming an increasingly integral part of how we listen to our people, helping ensure lived experience continues to inform organisational priorities.
Establishing the Pennon Inclusion Council
To strengthen alignment and accountability across the Group, this year we established the Pennon Inclusion Council. This brings together executive sponsors, ERG leads, inclusion specialists and representatives from across our businesses.
The Council focuses on:
• Aligning EDI activity across our brands within the Group
• Reviewing representation and workforce insight data
• Monitoring progress against our EDI commitments
• Providing structured challenge and strengthening governance
• Ensuring inclusion is reflected in strategic workforce planning
The Inclusion Council ensures EDI is embedded into how we lead, plan and make decisions, not treated as a standalone activity.
Broadening access to opportunities
We continued our commitment to creating pathways for underrepresented groups. This includes our participation in the [10,000 Black Interns] Programme, offering six week paid placements designed to broaden access to professional experience for Black undergraduates and postgraduates.
We also continued working with Change the Race Ratio, aligning our ambitions for diverse leadership with nationally recognised standards and strengthening transparency through annual benchmarking and data disclosure.
In addition, we introduced a flexible bank holiday policy, enabling colleagues to swap traditional bank holidays for days that better reflect their cultural, religious or personal significance — supporting greater inclusivity and wellbeing.
Our Gender and Ethnicity Pay Gap
In the latest FTSE Women Leaders Report, we once again solidified our standing as a leader in female representation, securing the gold position for best performer in the Women on Boards category across the entire FTSE 250. This external recognition highlights the progress we’ve made and the impact of our efforts to improve gender balance at senior levels.
We have published our Gender Pay Gap report for the past seven years, and this year we are pleased to publish our Ethnicity Pay Gap report for the second consecutive year. The latest results show encouraging progress, with our median gender pay gap reducing from 11.1% to 9.6% and our median ethnicity pay gap improving from 11.9% to 10.7%. While these shifts are incremental, they reflect sustained focus on representation, progression and fair reward, underpinned by strengthened governance, clearer leadership accountability and deeper colleague engagement. Both reports are available on our website: www.pennon-group.co.uk.
We continue to invest in diverse talent pipelines, including our long-standing graduate and apprenticeship programmes and our ongoing participation in the 10,000 Black Interns initiative, which is enabling us to attract a broader range of ethnically diverse applicants. As more of these individuals join and develop within the business, we anticipate further positive impact on our ethnicity pay gap in the years ahead.
Despite this progress, we recognise that sustainable change requires continued commitment.
We have set a focused three-year plan to accelerate progress on Equity, Diversity and Inclusion, centred on strengthening representation, improving inclusion and leadership accountability, and expanding social mobility and early career access.
- Strengthening Representation
We will improve diversity across our workforce and leadership teams by embedding inclusive recruitment standards, widening senior talent pipelines and reviewing policies and practices through an EDI lens.
- Improving Inclusion and Accountability
We will enhance workforce insight, increase voluntary disclosure rates and embed measurable EDI objectives into leadership performance to ensure inclusion remains a core leadership responsibility.
- Expanding Social Mobility and Talent Pipelines
We will grow work placements and early career routes, strengthen progression into apprenticeships and graduate roles, and increase socio-economic diversity across our entry level pathways.
- Governance and Transparency
Progress will be monitored through strengthened governance and leadership dashboards and reported annually through our ESG and EDI disclosures.
HomeSafe, the Group’s flagship health and safety programme
Ensuring our people go home safe to their families every day remains at the heart of our HomeSafe programme. We have made progress on each of the four cornerstones of our strategy supporting our people and reducing risk. The four cornerstones - Process Safety, Occupational Safety, Occupational Health and Wellbeing, and Security - ensure HomeSafe manages risk in all areas of health, safety and wellbeing.
The four cornerstones are delivered through visible leadership, ownership and engagement. Combining these elements has seen improved risk management, collaboration and engagement.
Process safety
We have placed a relentless focus on improving controls to assure mitigation of the risks of some of our higher hazard activities with a particular focus on eliminating high hazard chemicals, and upskilling teams who work with and near potentially explosive atmospheres. We have introduced the concept of Potentially Serious Incidents or Fatalities (PSIF) to increase near miss reporting and focus learning on those areas with higher impacts. This approach is in line with other water companies across the UK to collaborate on learning opportunities, reducing risk in the sector.
Occupational safety
We continued our engagement with teams through our HomeSafe Live events. We held interactive scenarioled sessions focused on situational awareness and the importance of making the safest choice.
Our Site Pride Initiative continues to drive the highest levels of standards at operational and office locations, and work vehicles.
We continued our established events including the annual HomeSafe advent calendar where teams use fun, engaging ways to deliver serious health and safety messages to the Group, with over 10,000 views of these materials on the website, providing high levels of penetration.
Occupational health and wellbeing
We joined water sector colleagues for the annual Movember Campaign, with Pennon raising £6,000 for the research into men’s health. We held several Cancer Survivor Video presentations to increase awareness. A new Women’s Health Employee Network Group was launched, sitting alongside the 11 other Health & Wellbeing Groups, including Neurodiversity Representation, Mindfulness and Menopause Support. A specific Men’s Health Group was launched in March, and we have expanded our Employee Assistance Platform (EAP) offering and implemented this into the SES business.
Security
This year’s Security and Emergency Measures Direction (“SEMD”) return was developed with heavy engagement with the internal and external stakeholders and regulators, at all stages. We have driven Security culture across the Group through numerous engagement campaigns. The Group is on track with its undertakings in line with agreed milestones and investment plans to improve security and emergency planning capability.
Our HomeSafe 2030 strategy continues to shift our focus towards leading measures, skills, competencies, assurance and positive actions, setting clear expectations across the Group to ensure everyone goes HomeSafe every day.
In the year we delivered a stable year in terms of total injuries, however over the winter period we had an increase in the number of short duration lost time incidents, almost exclusively as a result of a slip or trip. Consequently, our number of lost time incidents and our Lost Time Incident Frequency Rate (“LTIFR”) increased. We ended the year at 28 lost time incidents, with over half of these happening between December and March. Our LTIFR increased from 0.24 to 0.39. We have developed re-energising plans for the new year to address this, reconnecting people to the emotional elements of why HomeSafe is so important to everyone at Pennon.
Pennon has developed an anti-slavery programme to allow it to understand and mitigate the risk of modern slavery across the group. Please see our updated anti modern slavery and human rights policy. Pennon Group has a zero-tolerance approach to modern slavery and is committed to eradicating it from its operations and supply chain. The Group has implemented policies like the Code of Conduct and Anti-Modern Slavery and Human Rights Policy that all partners and suppliers must comply with. It publishes an annual Modern Slavery Statement outlining the activities conducted to prevent modern slavery and has a Suppliers Code of Conduct aligning the supply chain with the Group's standards.
Pennon Group has membership with the Slave-Free Alliance to develop tailored processes and controls to prevent modern slavery, providing external expertise. The Group is rolling out a three-year program to maintain the highest employment standards for direct employees and the supply chain.
Pennon Group relies on internal efforts and external partnerships to monitor, assess, and reduce the risk of forced labour and human trafficking across its business activities and relationships, demonstrating a clear commitment to upholding human rights and ethical employment practices. Our latest Modern Slavery Statement can be found here: www.pennon-group.co.uk/sites/default/files/attachments/pdf/pennon-modern-slavery-statement-2025.pdf.