The company
Anglian Water, part of the Anglian Water Group, provides water and wastewater services to around six million industrial, commercial and domestic customers in the East of England, and Hartlepool. It is regulated by Ofwat.
Anglian Water’s core business aim is to deliver a reliable service at an affordable price. Its vision is to become the leading water company in the industry. “We want to be known by our customers principally for the reliability of our service. We also want to be recognised as a leading company in terms of managing growth in the region and the impact of climate change”.
Providing such a vital service to customers means that corporate responsibility (CR) has to be incorporated into the everyday running of the business, including governance structures. A board-level CR Committee oversees the vision and strategy, whilst the CR Steering Group co-ordinates day-to-day activities. CR targets are built into individuals’ performance development programmes as appropriate.
Anglian Water has seven strategic priorities:
- Mitigate and adapt to climate change impacts;
- Anticipate and invest for growth in the region;
- Increase the resilience and reliability of water and wastewater services;
- Secure and conserve water resources;
- Improve the environment in the region;
- Keep bills at current affordabiity; and
- Improve the company’s efficiency and flexibility.
The company also has seven defined standards that underpin these aims, namely safety, people, community, environment, risk, integrity and accountability.
This case study focuses on Anglian Water’s response to climate change.
The drivers
Anglian Water believes climate change is the most serious issue facing the region and it is essential for the company to adapt to protect customers, services, sites, infrastructure, employees and the environment from the associated risks. Operating in the driest region of the country (with only two-thirds of the average rainfall in England and Wales) with one of the longest coastlines (circa 1,240 Km) and low-lying land, the effects of climate change uniquely affect the company.
Wetter winters and drier summers, together with increased demand from customers because of substantial planned growth (i.e. approximately one million new homes planned in the region over the next 25 years), will affect the region’s water resources, water quality and biodiversity. The company’s assets and infrastructure will be increasingly vulnerable to rising sea levels and more intense storms and flooding.
As one of the largest energy users in the region, the company also recognises its responsibility to reduce its carbon emissions to limit its contribution to climate change.
Taking action
Anglian Water’s climate change strategy assesses the impact of the main climatic changes on its operations and identifies what actions are required to continue to deliver its vital service.
Adaptation:
Anglian Water has developed an adaptation strategy to prepare for the implications of climate change in the East of England. Anglian Water has been building adaptive capacity within the company through a programme of raising awareness with staff, undertaking research to investigate what measures are required to protect critical infrastructure from future flooding events and, with the Tyndall Centre, undertaking a project to understand the implications of sea level rise for coastal assets. Adaptation actions are now being delivered on the ground at a number of sites including Great Yarmouth where the company has utilised its knowledge of rainfall intensity changes over recent years to validate an increase in the design capacity of its proposed sewer improvements in the town over the next two years.
Other areas include the development of new lagoons at Rutland Water which will provide new wildlife habitat for the internationally important wildlife that may be displaced when more water is abstracted from the reservoir to meet the demands of growth and the impacts of climate change.
Stakeholder engagement:
Latterly, extensive stakeholder engagement to inform the company’s 25-year strategic direction report has recognised climate change and regional growth as the highest priorities for the business. Engagement involved completion of a survey by 1,500 customers, as well as the creation of five expert opinion panels of domestic and business customers, environmental representatives and community groups.
Carbon reduction – strategy and action:
Anglian Water has drafted and is implementing its carbon reduction strategy. Energy costs the business around £50 million pounds per annum. Targets have been put in place to:
- Reduce carbon emissions by 60% by 2050 and 20% of that by 2010 – on track 2007/08 reduced emissions by 4.4%;
- Reduce energy costs by 20% by 2010 – 2007/08 achieved 15% on target.
As part of efforts to minimise its carbon footprint in the 2007/08 financial year, Anglian Water has:
- Reduced energy costs by £7.6m since energy initiatives began in 2005/06;
- Conducted energy efficiency site audits and implemented 180 energy-saving projects across the company;
- Launched think energy with energy reduction tips for employees;
- Saved 7,060 tonnes of CO2e (i.e. carbon dioxide equivalent) by generating its own renewable energy, compared with buying it from the grid;
- Focused on using methane to generate renewable electricity;
- Commissioned a further four new CHP units;
- Reduced business mileage by 10% through its why travel campaign (from 2006/07 baseline);
- Introduced an Anglian Water car share database; and
- Launched a new incentive scheme to reduce single-occupancy employee car journeys (Monthly prize draw with 1 prize of £250, 2 x £100 and 7 x £50).
Partnership working:
Partnership, influencing and lobbying on a regional, national, EU and international scale is a keystone of Anglian Water’s efforts to tackle climate change. The company is part of the Regional Water Partnership, the first of its kind in the UK, bringing together regulators, government agencies, NGOs and water-only companies in the area to put water at the forefront of the planning process. Anglian Water was a founding member of the Corporate Leaders Group on Climate Change, signing the Bali Communiqué to get governments to change and adapt to climate change. Various senior members of staff also sit on a number of Government and non-government bodies, including the East of England Climate Change Taskforce; Water UK’s Climate Change and Energy and Carbon Management focus groups; an Environment Agency Taskforce and EUREAU Change Climate Group. As well as sponsoring Business in the Community’s May Day summit since its inception in 2007, Jonson Cox, the Anglian Water CEO, has also spoken at a number of events which are designed to get people aware of climate change and place emphasis on adaptation.
Employees:
With a workforce of 3,800 across the East of England, employees play a critical role in the success of Anglian Water’s climate change efforts. Employee engagement in this area focuses on long term behavioural change, which is being monitored through an annual sustainability survey.
Besides the think energy, why travel and car share database initiatives referred to earlier, Anglian Water has run an ongoing employee communication campaign specifically focused on climate change since 2006. This has involved, for example, a climate change road show with 25 screenings of Al Gore’s “An Inconvenient Truth” and presentations by the company’s Climate Change Advisor explaining the science in layman’s terms.
In September 2008, Anglian Water ran its second annual Green Week with a series of fun events to raise awareness around responsible travel and energy consumption. Travel bingo, for example, encouraged employees to consider more fuel efficient alternatives for travelling to and from work that week.
Green Teams have evolved naturally across the company through people who are keen to do something in their offices. These were officially recognised by Anglian Water in 2008 with the creation of the Green Team Network.
Supporting suppliers:
Anglian Water’s May Day pledge was to help suppliers measure their own emissions. In early 2008, Anglian Water held an event on climate change for 70 of its suppliers. These businesses have committed to calculate their carbon footprints and draft adaptation strategies by March 2009.
Anglian Water uses the Achilles Verify System to accredit new suppliers over £25,000. The company sits on the steering group that agrees on the criteria on which to base accreditation and is promoting it to other water companies as a means of increasing transparency and reducing the amount of verification work required at tender time.
Customer service:
Anglian Water is putting the same amount of water into supply now as it did in 1989, despite having to supply an increased population. This is the result of the company’s focus on leakage and metering (because East of England is a particularly dry region). Anglian Water had the best leakage rate in the UK in 2007 (Ofwat reporting). It also has the highest percentage of customers with metering – currently 62% - thanks to effective promotion which demonstrates to customers that per annum they could save on average £100 and use 10% less water. Where other companies have imposed hosepipe bans during recent dry summers, Anglian Water has not had to do so since 1991.
The challenges
Calculating the company’s direct carbon footprint was a challenge in itself, but now more challenges are being encountered in calculating indirect carbon emissions, such as those from employees, suppliers, transport, building materials and chemical use. Another obstacle has been obtaining more accurate conversion factors for nitrous oxide and methane emissions from its process and from biosolids (treated wastewater sludge) to land.
Anglian Water has also had to reconcile itself to the fact that getting employees, customers and suppliers on board involves a change in behaviour which can take years and often requires a change in legislation to enable effective promotion of an issue such as water efficiency.
Anglian Water’s wind programme has also been problematic; the company still has not been granted planning permission for wind turbines on its sites.
Business benefits
The most visible benefit of Anglian Water’s climate change programme in the short term is reducing energy costs. The company has already achieved a 15% reduction (based on 2006/07 baseline of 748 KWh) towards its target of cutting costs by 20% by 2010. In addition, Anglian Water has been recognised as an industry leader on energy management which has raised awareness and increased trust amongst key stakeholders.
Why is it CSR?
Anglian Water has recognised the business risks presented by climate change and has built its approach to combating and adapting to climate change into its overarching business strategy. It is taking a holistic approach to the issue, bringing benefits to its full range of stakeholders.
What next?
Now that employees’ general awareness of energy efficiency has been raised, the next step of the campaign is to provide more tailored advice and training, so that employees know what to do.
Further work will be done to help suppliers achieve their targets and engage with additional suppliers further down the supply chain.
From an operational perspective, Anglian Water will continue to work on process improvements that reduce energy consumption and enhance efficiency. Wastewater aeration will be optimised by collaborative work with Air Technology, whilst inefficient pumps will progressively be identified and replaced.
Anglian Water is also part of a major European consortium, ‘Integrated Biomethane into Supply’ (IBIS), bidding for European funding to research and develop the next generation of sludge treatment facilities. The Consortium is focusing upon demonstrating cutting edge technologies at full scale to drive forward alternative applications for biogas generated through the anaerobic digestion process.
For more information on Anglian Water, please email Rachel Dyson, Corporate Responsibility Manager, on rdyson@anglianwater.co.uk or visit www.anglianwater.co.uk.
© Article 13 – CSR Case Study Series, October 2008
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