Southern Water Annual Report and Financial Statements 2021–22

sustainability

Sustainability

Sustainability

Ensuring we act in a responsible, sustainable way as we deliver our purpose and support the social, economic, and environmental wellbeing of our region.

We know the resilience of our business is directly linked to the economy of our region, the communities we serve and our environment. We can only deliver our vision and purpose if we act in a responsible manner, understanding what matters to our customers and stakeholders, and embedding environmental, social and governance (ESG) matters in our decision-making.

Our purpose is to provide water for life

ESG focus areas

Environment

Protect and improve the
region’s environment.

Deliver improvements that protect and restore the local enviroment.

Protect our customets and enviroment from the pressures of climate change.

Use resources efficiently and responsible manage waste.

Enhance people’s wellbeing
and sustain the region’s economy.

Ensure public and employee health and safety, and support community wellbeing.

Provide a fair and inclusive experience for customers, employees, and suppliers.

Support opportunityies for local people and partners to make a positive impact.

Governance

Be a responsible and trusted business
focussed on prioritising the current and
future needs of our customers.

Embed and embrace new capabilities and systems that enable culture change and business transformantion.

Work in partnership with stakeholders and collaborate with others to tackle our enviromental and social goals.

Responsibly invest to achieve our ambitions and transparently report our performance.

Board’s sustainability-related activities

Board activity this year included review and discussion on our environment strategy and performance, our activities to support vulnerable customers, and culture change programme.

Our journey of embedding ESG

Our approach to sustainability and being a responsible business aligns with the United Nations Sustainability Goals (UN SDGs). The SDGs comprise 17 global goals to be achieved by 2030 that were adopted by the UN in 2015. Of the 17 goals we have now identified nine that we feel we can contribute most to through our operations, investments, and commitments.

We recognise that our customers, stakeholders, and investors are increasingly interested in how we respond to sustainability matters and wish us to disclose data and information on our activities and performance. We are monitoring the range of external reporting frameworks with which we can align our reporting. While seeking to align with a selection of these, we are focused on sharing information that supports our purpose and the topics identified as priorities by our customers and stakeholders. By example, for the first time we have this year voluntarily disclosed information on how we manage climate-related risks and aligned these disclosures with the recommendations of the Taskforce for Climate-Related Financial Disclosures (TCFD).

We also supply information to independent ratings and indices on ESG matters. We performed well in the 2021 Global Real Estate Sustainability Benchmark (GRESB) which assesses the ESG performance of infrastructure assets. We were awarded a Green Star rating, with a score of 91 out of a possible 100 – an improvement on our 2020 score of 70. We also improved our position in the 2021 Inclusive Top 50 UK Employers, moving to 46th from 49th in the previous year.

We understand the value of partnerships to strengthen the work we do and the value they bring to us. We are building partnerships to tackle many of our largest challenges, working with local organisations, peers, other sectors and academia. This year we joined Business in the Community (BITC) to support us in driving our responsible business ambitions.

Future plans

We continue to evolve the way in which we disclose and report on ESG matters. In 2022–23 we intend to publish our first ESG report that will allow us to share additional data and information on our responsible business activities.

We remain committed to participating in independent benchmarks and indices, identifying those where we can obtain best insight to continually improve our performance and effectively benchmark our credentials. In 2022 we will submit information to GRESB, for the seventh year, and participate for the first time in the Responsible Business Tracker of BITC; the results of these benchmarks will inform our ongoing responsible business activities. We also intend to enhance information provided on our website and consider participation in other benchmark initiatives and reporting frameworks.

We continue to integrate ESG matters into our business activities, long-term investment planning and our Risk and Value process that guides investment decision-making, and our engagement with our suppliers, advisors and contractors.

Climate change strategy

Our climate change strategy is about adaptation and mitigation.

Adapting involvesadjusting our thinking,decisions and activities tothe changing climate20% reduction in internal and externalsewer flooding incidents by 2025 23% reduction in water supplyinterruptions by 2025 Zero pollutions by 2040Customer water use 100litres per day by 2040 24% electricity from on-siterenewables by 2025 Net zero whole life carbonemission by 2050