Responsible Business
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STRATEGIC REPORT GOVERNANCE RESPONSIBLE BUSINESS ANGLIAN WATER SERVICES LIMITED ANNUAL INTEGRATED REPORT 2018 Anglian Water Services Limited Annual Integrated Report 2018 1 STRATEGICSTRATEGIC REPORT REPORT GOVERNANCEGOVERNANCE STATUTORYSTATUTORY ACCOUNTS ACCOUNTS EXTERNAL A RESPONSIBLE RECOGNITION BUSINESS 3 STRATEGIC REPORT Business in the Creating long-term value Winner 4 Community Responsible 6 Chairman’s welcome Business of the Year 7 Chief Executive’s statement 10 Supporting economic regeneration in our region ROSPA Gold – Anglian 12 Innovation Shop Window Water and @One Alliance 14 Water Resources East 16 What matters most to our stakeholders 18 How we’re addressing opportunities and challenges Queen’s Award for Enterprise: 20 Our Love Every Drop strategy Sustainable Development 22 How we create value 24 Defining our role in wider society 26 Financing our business Glassdoor Highest Rated CEOs 28 Our leadership team Employees’ Choice 2017 29 Our year in review 30 Smart business 54 Smart communities Glassdoor Best Places to Work 62 Smart environment Employees’ Choice 2018 70 Outcome performance table 72 Climate-related disclosures 74 Risk management and Leading Utilities business viability statement of the World 91 Financial performance 96 GOVERNANCE Green Finance Award 97 Chairman’s introduction 98 Board of Directors 102 Corporate Governance Report 110 Audit Committee Report 114 Nomination Committee Report British Construction Remuneration Report Industry Award 116 136 Directors’ Report 139 Statement of Directors’ responsibilities Utility Week Awards 140 STATUTORY ACCOUNTS Anglian Water Services Limited Annual Integrated Report 2018 2 STRATEGIC REPORT GOVERNANCE STATUTORY ACCOUNTS A RESPONSIBLE BUSINESS DELIVERING FOR CUSTOMERS, COMMUNITIES AND THE ENVIRONMENT UK’S HIGHEST ACCOLADES Anglian Water is the largest water Anglian Water was named Business in and wastewater company in the Community’s Responsible Business England and Wales by geographic of the Year for 2017 – one of the UK’s area. We employ 5,000 people highest accolades for business. It is given to companies that put social and supply water and water Hartlepool recycling services to more than and environmental concerns at the heart of their strategy, demonstrate six million customers in the east a commitment to sustainability and of England and Hartlepool. embed it in the culture of their entire business and supply chain. Our Company has been delivering for customers and for the environment for the last 30 years. East of England SINCE 1989 WE HAVE: DELIVERED GREAT CUT LEAKAGE CUT OUR CARBON VALUE FOR CUSTOMERS BY A THIRD EMISSIONS Our bills have increased just We’re industry-leading Capital carbon is down on leakage and are investing 20P 57% for every £1 other companies £124M on 2010 levels, and operational have added to their charges between 2015 and 2020, carbon down by 19.6 per cent driving it lower on 2014/15 levels They’ve fallen around 10 per cent in the last five years, twice Our leakage is half the national The costs of building and the industry average average by water lost per maintaining our infrastructure kilometre of pipe have fallen and we have been Efficiency savings have been able to pass even more savings shared with customers through We have a 300-strong team back to customers lower bills focused purely on leakage Anglian Water Services Limited Annual Integrated Report 2018 3 STRATEGIC REPORT GOVERNANCE STATUTORY ACCOUNTS IT IS OUR PRIORITY TO CREATE LONG-TERM VALUE... ...for our customers, the regional economy and the communities we serve while running the business in a sustainable and responsible way. We anticipate the unique Our unique challenges help CHALLENGES we face and use to inform our long-term ...which is realised through our STRATEGIC REPORT GOVERNANCE STATUTORY ACCOUNTS our expertise to sustain value. STRATEGY... BUSINESSHOW WE CREATE MODEL VALUE ... Our sustainable business model is structured to create long-term value for our customers, shareholders and the environment. 3 WHAT RELY ON WE C WE REA CES TE UR SO LEAKAGE 1 E is at a three- R year average of E USED WATER H OUR SEWAGE 183Ml/d against THE T Collected, treated a target of AVERAGE BILL and returned to process OUR LAND TREATMENT 192Ml/d. is £1.17 a day, the water cycle. generated 90 GWh of Needed to collect, treat of which just renewable energy from and return water to the WATER 2p is profit. biogas this year and will environment, but also rich Taken from rivers and EVERY £100 produce about 370,000 in wildlife and recreational aquifers for treatment MILLION WE tonnes of biosolids for opportunities. and supply. agriculture. INVEST creates or secures an estimated 2,000 MANUFACTURED jobs across our FINANCIAL 99 PER CENT of supply chain. RESOURCES Capital, revenue our SSSI land is in The steel, concrete, glass and and profits invested favourable condition, other processed materials in our business. compared to an 93 PER CENT OF we use to build and maintain average for England our infrastructure. of 38.7 per cent. THE APPRENTICES and 78 per cent of the graduates employed since 2012 are still with the company. OUR PEOPLE Our employees, suppliers and their know-how. BUILDING AND MANAGING ASSETS That are efficient, reliable and resilient. OUR LOVE EVERY DROP CULTURE STRATEGIC Embedding sustainability throughout our business FUTURE PLANNING OUR BUSINESS MODEL and supply chain. Scenario planning, climate IS STRUCTURED TO and growth projections, ACHIEVE 10 ADDED- COLLABORATIONS regional balance sheet INNOVATION of natural capital and O VALUE OUTCOMES FOR With suppliers, academics, AND THOUGHT customer insight. U and the public, private and 4 T OUR CUSTOMERS AND LEADERSHIP C THE ENVIRONMENT. charitable sectors to deliver O transformational change. M From low carbon E technology to S behaviour change. F OR C T UST EN LUE OME ONM D VA RS AND THE ENVIR HOW WE AD 2 See page 18 See page 20 See22 Anglian page Water Services Limited Annual 22 Integrated Report 2018 Anglian Water Services Limited Annual Integrated Report 2018 23 ...all while ensuring we address what matters ...and ensure we take into most to our CUSTOMERS We measure our performance account the KEY RISKS to and STAKEHOLDERS. against our 10 OUTCOMES... business performance. See page 16 See pages 30–69 See page 74 Anglian Water Services Limited Annual Integrated Report 2018 4 STRATEGIC REPORT GOVERNANCE STATUTORY ACCOUNTS 1 OUR RAW MATERIAL IS THE WATER WE COLLECT FROM RIVERS AND UNDERGROUND AQUIFERS AND STORE IN OUR RESERVOIRS. 3 THE WATER THEN COMES 2 BACK TO US THROUGH OUR SEWERAGE NETWORK BEFORE WE TREAT THE WE TREAT AND RETURN IT WATER AND PUT TO THE ENVIRONMENT. IT INTO SUPPLY. WHAT WE DO Anglian Water Services Limited Annual Integrated Report 2018 5 STRATEGIC REPORT GOVERNANCE STATUTORY ACCOUNTS CHAIRMAN’S WELCOME This is a critical moment for the water @one Alliance won the Supply Chain Excellence industry. We face increasing political, category at the Utility Week Awards. The benefits of that collaborative approach were also recognised regulatory and reputational challenges, by the judges when they gave us the Capital Project alongside those posed by climate Management Award for our Grafham resilience scheme. change, growth and the need for This addresses long-term resilience challenges such increased environmental protections. as climate change and population growth and was delivered with our alliance partners Mott MacDonald At Anglian Water we are doing much to meet these and JN Bentley. Collaboration and the use of innovative challenges, to achieve the outcomes agreed with design and effective test principles created huge customers and to continue delivering first class, savings in cost and carbon in what the judges called a affordable services. “fantastic exemplar for the industry”. This is underpinned by our responsible, sustainable Grafham also won Carbon Reduction Project of the approach to business and by our people, who make Year at the British Construction Industry Awards. This this an exceptional business. was collected on our behalf by Karl Porter, Network Service Support Manager, and Kirsty Jones, Infrastructure Their efforts are reflected in the large number of Modeller. Both were instrumental in the project’s success awards Anglian Water has won this year, including and exemplify the attitude that lies behind all these Business in the Community’s Responsible Business awards – a willingness to challenge accepted wisdom and of the Year for 2017. to pursue innovative solutions in the service of customers, Other awards highlight our achievements and the communities and the wider region. excellent work of individuals and teams across It was focus on innovation and on resilient finances, the business. along with the continuing industry-leading success Our Chief Executive, Peter Simpson, was named of our Leakage teams, that saw us named as one of Best CEO by users of the job and recruitment website the Leading Utilities of the World at the Global Water Glassdoor – an award made more impressive by Summit in Paris. Anglian Water is the only water being based on the anonymous ratings of colleagues. company in England and Wales that has been invited to join this select group. Anglian Water was named the best UK-based company in Glassdoor’s list of Best Places to Work I want to extend my thanks and that of the Board to 2018. We actually came second worldwide, with only these individuals and teams and to all the people who Google rated more highly by its employees. For a work so hard for us and our alliance partners and regional UK water company to perform so well in contribute so much to our success. such a forum is clear evidence that there is something It is they who showcase what a responsible, sustainable special about Anglian Water and its people. and efficient water company we have, and who will Our Treasury team won the Green Finance award help to deliver against our outcomes and our long-term from the Association of Corporate Treasurers with the ambitions.