Northumbrian Water Group (NWG), owner of Northumbrian Water and Essex & Suffolk Water, has taken an innovative new approach to annual reporting using the five capitals that organisations depend on to look at their influence and impact in the wider economy, environment and society.

The Group has produced its first ‘Our Contribution’ report which seeks to go further than simply monitoring the performance of the organisation based on its financial return, by encouraging a wider understanding of its impact on society, the natural world, the economy and its employees.

NWG is aiming to provide a far more integrated picture of its performance by putting human, environmental and social indicators alongside financial indicators.

The Group has significant resources - employing thousands of skilled people, owning assets worth billions of pounds, managing a multi-million pound annual investment programme, and working in partnership with thousands of suppliers.

Central to the Our Contribution report are five capitals that NWG relies on as a business for its goods and services – financial capital, manufactured capital, natural capital, human & intellectual capital and social capital.

Commenting on the ripple effect of its financial and manufactured capital on the local economy, the report says for every £100 million of investment and expenditure in the Northumbrian Water region an estimated £80 million could be generated as a result, with a corresponding £28 million for every £100 million of investment and expenditure in the ESW region.

The report recognises that understanding and managing the organisation’s interactions with the five key capitals is critical to its future business success, and sets out how each area of the organisation depends on them.

Nature of business gives NWG "massive influence and dependency" on natural environment, the economy and communities it serves

Heidi Mottram, NWG’s Chief Executive Officer said:

 “The nature of our business means that we have a massive influence and dependency on the natural environment, the economy and the communities we serve. We embrace this responsibility and recognise that sustainable growth is critical to our business resilience and continued success. This is reflected in our vision to be the national leader in the provision of sustainable water and waste water services.”

 “We need to understand and make business decisions based on the impacts of all our capitals, so that we can continue to provide a first class service to our customers, protect and enhance the environment, make a positive contribution to society and be a thriving and successful business.”

In order to measure performance in the most comprehensive and credible way possible NWG used PwC’s Total Impact Measurement and Management (TIMM) framework.

It has also taken expert advice from the professional services firm and consulted both inside and outside the business.

The report identifies material impacts and outlines key dependencies - the areas are defined in terms of the direct impacts from the following NWG business activities, together with the indirect impacts from the water company’s supply chain :

• catchment management
• raw water abstraction
• water supply and network
• wastewater network and catchment management
• wastewater treatment and discharge
• customer service
• supply chain

Assessment of postive and negative impacts includes pollution, flood attenuation and greenhouse gases

Areas where these are assessed, together with an indication of the relative scale of the impacts ranging from negative to positive are as follows:

• Greenhouse gases
• Air pollution
• Ecosystem services and land use
• Flood attenuation
• Water and sewage pollution
• Water resource management and use
• Waste disposal (including sludge)
• Economic value
• Training, education and knowledge
• Employee health and wellbeing
• Customer engagement and wellbeing
• Traffic
• Community investment

The report points out that like all water companies, the nature of their business means they are a high energy user, commenting:

“While we are leading the industry in our use of advanced anaerobic digestion, and have exceeded our targets on the generation and use of renewable energy, we recognise that our greenhouse gas emissions are a key impact on our natural capital.”

The report also says that due to the mix of proxy data and expert judgement to inform the impact materiality assessment, the results are presented in relative rather than absolute terms and should be considered as indicative at this stage.

Over the next year NWG will be working on more detailed metrics that it can use to measure both the positive and negative flows of its business activities, their impacts and their value for society.

Further detailed analysis of these key areas in the years ahead will give more precise quantitative data on the comparisons of these relative impacts.

Click here to download OUR CONTRIBUTION : NORTHUMBRIAN WATER GROUP’S ENVIRONMENT, SOCIAL AND ECONOMIC IMPACT REPORT