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Corporate responsibility committee members

  • Dr Catherine Bell (chair)
  • Stephen Carter
  • Steve Mogford
82 Cathrine Bell

Dr Catherine Bell
Chair of the corporate responsibility committee

Dear shareholder,

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

There have been a number of changes during the year to the membership of the committee. As planned, Nick Salmon stood down at the AGM in July 2014 and Stephen Carter joined the board and the committee on 1 September 2014. I am pleased to welcome Stephen as a member of the committee. His views and previous experience on corporate responsibility issues in other businesses have added valuable perspective to the work of the committee.

The committee examined progress made by the company in delivering its objectives to provide the best service to customers, at the lowest sustainable cost and in a responsible manner. Acting responsibly helps us to be a successful long-term business for shareholders and customers.

We measure ourselves against national and international benchmarks, independently and externally assessed. We were delighted to retain 'World Class' status in the Dow Jones Sustainability Index for the seventh consecutive year and, for the first time, we became the leader in the multi-utility and water sector. Given our long-term stewardship role in managing water and wastewater, we also assess our effectiveness in the management of the risks and opportunities linked to climate change. In 2014, we achieved our best ever result in the Carbon Disclosure Project in which over 90 per cent of the FTSE 100 participate to describe their approach to climate change; we are now members of their Disclosure Leadership Index. And very recently we secured the Carbon Trust Water Standard for our efforts to reduce water use in West Cumbria.

In addition to these external benchmarks, last year the board approved the development and publication of a detailed corporate responsibility (CR) performance scorecard, to give greater transparency to responsible business performance for those working in the company and for external stakeholders. Performance against the CR scorecard was reported in the United Utilities 2014 corporate responsibility report: corporateresponsibility2014.unitedutilities.com. This showed strong performance on most of the measures. As we begin the next five-year investment period, this year the CRC will reset the responsible business measures and targets out to 2020, recognising the importance of setting targets for the long term. One particular area for sustained scrutiny through the corporate responsibility lens will be the impact of the company's investment programme on customer needs and environmental goals. Further progress on our corporate responsibility programme will be reported periodically on our website.

The CRC also looked closely at how acting responsibly impacts the way stakeholders, including customers, see the company. We concluded that our CR programme is important in sustaining the reputation of the company and helps build trust and confidence over the long term. As we begin the next five-year investment period, the CRC will continue to examine the relevance and value of our CR programme to United Utilities, its customers and shareholders.

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 finance director; 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 attend the committee to report on the environmental and social impact of major investment programmes and projects
  • The corporate responsibility committee has existed for over seven years

Quick links

Terms of reference – corporate.unitedutilities.com/corporate-governance

Main responsibilities of the committee

The board approved a slightly modified set of terms of reference (ToR) for the CRC in April 2015. The main duties are to:

  • consider and recommend to the board the broad 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; and
  • review the profile of the charitable donations directed by the United Utilities Trust Fund.

One of the small changes to the CRC ToR approved by the board related to approval of the company's CR report. This has been changed from production of an annual report to a yearly performance statement, supported by year-round regular reporting of the company's responsible business activities in enhanced CR pages on the United Utilities website.

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

In carrying out its duties, in the past 12 months the CRC has paid particular attention to the following:

  • governance – the flow of information to the board was further improved through specific reports on responsible business performance provided quarterly by the CEO to the board;
  • measuring and reporting CR performance – the CRC approved the publication of a comprehensive update on how well we are meeting our responsible business commitments in the 2014 CR annual report. The committee noted strengthening performance on the majority of measures in the CR scorecard;
  • trust and reputation – how the company is addressing the challenges of governance, trust and transparency. The company's key reputation indicators for brand and media were discussed and good progress was noted; and
  • preparing for the 2015-20 period – the committee discussed how the CR agenda and United Utilities' strategic intentions for the next five years should be aligned.

Specific topics included:

  • CR benchmarks – the committee reviewed the challenge and value of external CR benchmarking indices as a measure of United Utilities' responsible business performance;
  • delivering sustainability benefits through investment and efficiency programmes – the CRC considered how the company's investment in transforming its wholesale business activities will bring customer and environmental benefits, whilst at the same time reducing operational cost;
  • affordability – given the impact of continuing challenging economic conditions in the North West, the CRC examined what this means for debt, affordability and the payment assistance schemes offered by the company;
  • retail competition – the CRC looked at building trust with business customers, and how the United Utilities' brand, underpinned by strong CR credentials, is helping deliver value in the competitive market; and
  • trends in corporate reporting – the CRC supported the recommendation that the 2015 annual report should present the CR themes in a way which is integrated with the company's strategic aims.

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

  • agree the responsible business measures and targets set out to 2020, aligned with the group's 2015–20 business plan;
  • review a number of key CR strategies including:
    • carbon reduction and waste strategy;
    • debt and affordability;
    • talent and young people;
    • diversity and inclusion; and
    • how community spend is targeted.
  • continue its focus on the interaction between CR, communications and reputation.