Dr Catherine Bell

Chair of the corporate responsibility committee

We have retained world class status in the Dow Jones Sustainability index for the 6th consecutive year.

Corporate responsibility
committee members

  • Catherine Bell (chair)
  • Nick Salmon
  • Steve Mogford

Biographies of the directors are in the Board of directors.

Dear Shareholder

I am pleased to report on the work of the corporate responsibility committee (CRC) over the past 12 months.

To see how we are performing as a responsible business, we measure ourselves against national and international benchmarks, independently and externally assessed. This year we retained world class status in the Dow Jones Sustainability index for the 6th consecutive year and for the last five years have achieved the highest 'platinum big tick' ranking in Business in the Community's Corporate Responsibility index.

One of the challenges is how we continue to deliver stretching business objectives in a responsible way over the next five years and beyond, recognising that the external political, regulatory, physical and social environment in which we operate is constantly evolving. In considering this, the CRC has recommended and the board has endorsed re-balancing our approach to responsible business to focus on:

  • effective implementation of UU's five Business Principles commitments, using a set of performance scorecards to highlight achievements and identify risks and mitigating actions relating to both performance and reputation;
  • scrutiny of the impact of our investment programme viewed through the corporate responsibility lens; and
  • how responsible activities best support the reputation of the company.

We are also considering how techniques such as social impact assessment can help measure the return on investment from community projects. These techniques can help us set consistent criteria for choosing future projects to support.

As we look to the next five-year investment period, the CRC will seek to ensure the Business Principles are aligned with the business plan outcomes customers expect to see.

Dr Catherine Bell
Chair of the corporate responsibility committee

Quick facts

  • The committee comprises three directors appointed by the board, two of whom are independent non-executive directors
  • The company secretary attends all meetings of the committee
  • The corporate affairs director, who has responsibility for company reputation, and the business services director, who has responsibility for human resources, regularly attend meetings
  • Senior operational managers report on the environmental and social impact of major investment programmes and projects
  • The corporate responsibility committee has existed for over six years
  • Terms of reference – corporate.unitedutilities.com
    /corporate-governance.aspx

 

Main duties of the CRC

The board approved a revised set of terms of reference for the CRC in April 2014, with the main duties to:

  • consider and recommend to the board the broad corporate responsibility (CR) policy taking into account the company's desired CR positioning;
  • keep under review the group's approach to CR and ensure it is in alignment with the group strategy;
  • review CR issues and objectives material to the group's stakeholders and identify and monitor the extent to which they are reflected in group strategies, plans and policies;
  • monitor and review compliance with the board's CR policy and scrutinise the effectiveness of the delivery of the CR policy requirements;
  • develop and recommend to the board CR targets and key performance indicators and receive and review reports on progress towards the achievement of such targets and indicators;
  • review all approved specific giving where the aggregate financial contribution exceeds £100,000 over the period of the proposed funding and to review all community giving expenditure annually;
  • review the profile of the charitable donations directed by the United Utilities Trust Fund; and
  • agree and approve the annual CR report.

What has been on the committee's agenda during the year

In carrying out its duties, in the past twelve months the CRC has paid particular attention to the following:

  • governance – the CRC recommended changes to its terms of reference, subsequently approved by the board, and the flow of information between the CRC and the CR panel, the leadership body for CR on behalf of UU's executive, was improved.
  • measuring CR performance – the CRC endorsed a set of measures and targets that will evidence the progress the group is making in meeting its responsible business commitments, as set out in its Business Principles.
  • Specific topics including:
    • PR14 – the CRC examined the price review process through a responsibility lens, seeking reassurance that responsible business themes were woven into the group's five-year business plan;
    • affordability – with around half of the most socially and economically deprived areas of England in the North West, the CRC examined the positive impact the group's charitable Trust Fund and support for debt advice services have on customers struggling to pay their water bills; and
    • bathing water quality – more stringent EU bathing water standards from 2015 are likely to result in an increase in the number of North West beaches failing to comply. The CRC reviewed plans to bring key stakeholder together to tackle this complex issue.
  • Specific trends in CR, including:
    • trends in corporate reporting – the CRC debated the merits of bringing together the annual and CR reports into a single document, in response to an emerging trend known as integrated reporting;
    • diversity – the CRC reviewed initiatives focused on improving the diversity of the group's workforce; and
    • the relationship between CR, communications and reputation. Following discussions at the CRC, the group has enhanced how and what it reports on as a responsible business. This is especially important at a time when public trust in business needs to be renewed.

Looking to the next year, as the water industry prepares for its next five-year investment programme, the CRC will:

  • approve an updated set of Business Principles and related measures and targets, aligned with the group's 2015-2020 business plan;
  • review the next iteration of the group's carbon strategy and targets, updated for the 2015-2020 period;
  • continue to examine how a better understanding of the social benefit of our programmes can shape which community projects we choose to support;
  • consider the sustainability benefits that flagship investment and innovation programmes like the new Wholesale Operating Model will bring;
  • examine the group's approach to sustainable supply chain and the benefits that can be achieved; and
  • continue its focus on the interaction between CR, communications and reputation.