Welcome to our 2014 Corporate Responsibility Report.
UK business continues to meet a challenging environment, with continued debate over issues of trust, reputation and tax. In the wider utility sector there is a sharp political focus on customer bills. To meet these many challenges, we have strong governance around our whole business, reflecting our commitment to act responsibly. Our Board continues to provide sound and prudent oversight of our business operations, in full compliance with the principles of the UK Corporate Governance Code. We have strong non-executive engagement on our Corporate Responsibility Committee and, for the first time this year, we published a statement on the work of our Corporate Responsibility Committee in our Annual Report and Accounts.
Setting The Right Balance In Our Business Plans
When we look at our region, we see a long coastline, many areas of outstanding natural beauty, supporting an important tourist economy. We also have a significant business community too, but our region is characterised by high levels of social-economic deprivation in our cities, urban and rural areas. We believe our task is to strike a balance between growth, the environment and our customers' willingness and ability to pay their bills. Creating our business plans is a challenging process but we ensure that at the heart of our thinking and planning is our responsible business agenda.
Recognising that difficult economic conditions remain in the region, last year we committed to share a tax refund from HMRC to assist customers struggling to return to regular payment.
The focus in the water sector this year has been on finalising plans for the 2015 to 2020 five year investment period. Our business plans are still under discussion with OFWAT but should it accept our proposals, between 2010 and 2020 bills for domestic customers will have risen by less than the rate of inflation over the same period. And we can again confirm we paid all our tax in the UK last year (other than around £1m in Estonian tax paid in relation to the group’s minority investment in Tallinn Water).
The Longer Term
Acting responsibly means making our decisions for the next five years with a long term impact in mind, continuing to strike the right balance between customers, the environment and shareholders. This is why you will see a strong alignment between our five year plan and our 25 year strategy document, called “Playing our part to support the North West”, which we published last year after consulting a wide range of customers, regulators and other stakeholders. In both these publications and this Report, we focus on important longer term themes such as affordability, customer service, and our ageing population as well as the needs of the natural environment and the challenge of climate change.
Winter 2013/14 brought extremes of weather with damaging floods across southern parts of the country. This serves to illustrate the critical importance of continued discussions around water resource management and flood defence. We have helped to bring together a business-led national water taskforce with Business in the Community to connect businesses to these issues and it is pleasing to see a number of projects emerging that will see collaboration between businesses across different sectors. We were delighted that the taskforce received funding from Defra for a water stewardship project starting in October 2014 in food supply chains.
Achievements Over The Last Year
As well as planning for the rest of the decade, and beyond, this report looks back at the last twelve months. We are pleased to tell you about continued progress towards our goal of becoming a leading service provider in the North West and one of the best UK water companies, through the delivery of the best service to customers, at the lowest sustainable cost, in a responsible manner.
It is right that our stakeholders hold us to account for the progress we are making in delivering our business objectives with targets to the end of the current five year investment plan in 2015, charting our progress. In each section of this Report, you will find a series of performance indicators. Across all 33 measures, performance is very encouraging with 88% of measures on track.
We are particularly pleased with certain aspects of our performance in 2013/14. Our service to customers continues to improve and we are now 7th in the regulator's comparison of water company performance, up from 21st three years ago. Our record on sewerage pollution incidents also continues to improve, reducing by 35% last year. And last year we generated more renewable energy than ever before, providing us with 17% of our total energy needs.
One of the more significant changes affecting the sector in recent years has been the introduction of business competition – by 2017 all business customers, whether that is a large water intensive manufacturing plant through to the local hairdresser, will be able to choose their water supplier. This has challenged the whole sector to really think about the needs of business customers and what they should expect from their water supplier. While we make preparations for competition in England, the market has already opened up in Scotland. We are competing there and are pleased with our progress so far – we have secured 5% of the market in 12 months and United Utilities Scotland is now the second largest supplier by volume of water/waste water supplied.
We have also taken important steps to strengthen transparency in how we operate. We hope that many of you had the opportunity to see the BBC2 documentary “The Watermen: A Dirty Business” which ran for six episodes earlier this year. This featured our front line employees in their day-to-day jobs, delivering customer service and running our treatment assets and networks. Each programme was watched by an average 2.4m viewers and we have been delighted with the feedback from customers and industry colleagues alike. This was a “warts and all” presentation of what goes on behind the scenes in running a water company. Sometimes we do not always get it right and our 2014 CR Report also discusses the challenges we face as well as the positive contributions we have made.
The Contribution Our Employees Make
Our employees are central to our plans to delivering the highest levels of customer service and last year we invested in 22,000 hours of training. Our apprentice and graduate schemes continue to thrive, employing 118 and 67 respectively, and we were delighted that the Prime Minister had the opportunity to meet some of our apprentices when he visited our headquarters in Warrington earlier this year while on a tour of the North West. We are also pleased to be leading the Energy Efficiency Industrial Partnership, a cross utility company initiative targeting those not in education, employment and training into utility related training programmes.
Our employees made a significant contribution to local communities, with over 1,000 volunteering a total of 15,000 hours to help local projects in the past 12 months.
Our Achievements As A Responsible Business
Our overall approach to responsible business helped us retain world-class ranking in the Dow Jones Sustainability Index, for the seventh consecutive year and achieve sector leader for the first time. We maintained our Platinum Big Tick status in BitC’s CR index and we are proud to be one of only 7 FTSE 100 companies to hold both accolades.
We are proud of all of these sustained achievements whilst recognising there is still much more we can do to act in an environmentally sustainable, economically beneficial and socially responsible manner.
We hope this report contains something of interest to you - please do tell us what you think by emailing us using the link below.
If you would like to send us a comment about this report, please email our Head of Sustainability, Chris Matthews