Tideway, the company responsible for the design, finance, construction and commissioning of the Thames Tideway Tunnel in London, is undertaking a review to determine where carbon savings could be made if the project was commissioned today.

The review is flagged up in S&P Global Ratings’s assessment of how Tideway monitors and manages its greenhouse gas emissions in its newly published Environmental, Social & Governance (ESG) evaluation score for Bazalgette Tunnel Ltd. which trades as Tideway.

The ratings agency has assigned an ESG evaluation score of 76 to Tideway – the Tunnel is still currently in its construction phase.

The evaluation reflects the sustainability benefits associated with the tunnel itself, as well as sustainability being well-embedded in Tideway’s strategic objectives and operations.

Tideway's ‘E’ score (82) reflects the environmental benefits of the tunnel, which are likely to exceed those of other infrastructure projects in terms of reducing water pollution. As part of the London Tideway Improvements (LTI) plan, S&P expects the tunnel will reduce the amount of combined sewer overflows (CSOs) discharged into the Thames by over 90% and will support the river’s biodiversity.

The company’s ‘S’ score (68) reflects its comprehensive health and safety strategy, including mental health support. S & P has factored in the company’s strong safety track record, although incidents increased during the pandemic in line with “what we have observed with other engineering and construction companies.” The evaluation says S&P also believes Tideway manages its high exposure to complaints from local communities better than many other infrastructure projects.

Tideway's ‘G’ score (77) reflects that its governance structure and oversight are in line with good practices. Tideway’s six independent directors represent the largest group on the 13-member board, including the chairman, which S&P views as in line with best practice. In addition to the sustainability benefits associated with the tunnel, the assessment incorporates the company’s own sustainability credentials, including Tideway’s high governance and social standards which are due in part to its regulated nature.

According to the evaluation, the improved water quality will contribute to better water availability in London, which S&P describes as a city “highly exposed to water stress”, due to the capital’s high population density, exposure to changing weather patterns and strict regulation on water withdrawals.

Commenting on carbon emissions, S & P says Tideway monitors and manages its indirect greenhouse gas emissions well. According to the evaluation, the company has made significant efforts to minimize emissions arising from construction, although its “most material carbon impact stems from the embodied carbon in construction materials.”

Now approaching project completion, according to S & P Tideway is undertaking a review to determine where carbon savings could be made if the project was commissioned today. It expects to share the results with other infrastructure projects to aid carbon savings across the broader industry.

Embedded carbon in manufacturing of materials approximately 84% of total emissions

According to Tideway’s Climate Related Financial Disclosure Report 2020-21, the Thames Tideway Tunnel has a significant carbon footprint due to the embedded carbon within the built asset. The Energy and Carbon Footprint Report that was produced for the Development Consent Order in 2013 estimated a total carbon footprint in the decarbonised scenario of approximately 838,000 tCO2e.

The report says the principal impact of this is the greenhouse gas (GHG) emissions arising from the construction of the infrastructure, in particular the embodied carbon in manufacturing of materials which equates to approximately 84% of the total emissions.

Commenting on the impact on customers’ bills, the assessment says that although the company is still in its construction phase and has limited customer interaction, it recognizes that project cost increases will incur further charges to customers. “The cost overrun has increased to 21% from 8% due to delays caused by the pandemic, but we understand that the cost passed to Thames Water customers is still lower than forecast,” S & P commented.

Click here to download S & P Global Ratings ESG Evaluation: Tideway