“In our behaviour, we can’t accept what we’ve done in the past,” David Riley, head of carbon neutrality says. “We must constantly move forward against tougher targets. We must encourage our supply chain and product suppliers to deliver the opportunities we need, and we need to be open to those opportunities by challenging our specifications and standards.”
At Anglian this attitude began long before the sector-wide commitment to carbon net-zero made in 2019, which chief executive Peter Simpson is a co-champion of. Riley explains the company’s directors saw the cost benefit of reducing carbon early on and came onboard with the ambition to deliver more for less in a sustainable way.
In 2010 the organisation set the ambition to halve the capital carbon footprint of its assets built over the next five years (from a 2010 baseline) and reduce its operational carbon by 10 per cent through the same period.
Riley says this focused the company’s objectives and its partners began to follow suit.
“The strong leadership in place at Anglian Water sent a very strong signal to our supply chain – and value chain as a whole – that we wanted to work with suppliers who could deliver against those targets. We challenged our carbon emissions across our investment programme and delivering significant reductions in those areas.”
He explains the impacts of investment decisions were challenged through a “robust governance process” at all levels pre-, during-, and post-construction.
As well as delivering carbon reductions through that programme, Riley adds it sends “clear signals to our design engineers within the company and externally that assets had to be delivered against our targets”.
Although difficult in the first couple of years, he says the supply chain soon caught up. “This is where the magic started to happen and we saw the lower-carbon, lower-cost solutions. By 2020 we had already had ten years’ experience of this.”
Green finance
As well as top-down carbon leadership, the company began to see other financial opportunities in sustainability and in 2009 issued its first sterling green bond on the back of its carbon credentials.
The first issuance was three-and-a-half times oversubscribed, Riley notes.
He adds: “Our treasurers saw the opportunity to match our sustainable credentials with green bonds as an opportunity for the business while meeting the market need for people wanting green investment opportunities.”
Anglian followed with a £300 million sustainable-linked bond this year, which was itself six-and-a-half times oversubscribed, linked to the company’s carbon targets.
Strength in numbers
The wider sector is making strides into green finance, including establishing a group through Water UK and some companies are also looking at opportunities, but Riley feels the there will always be more to do to go faster and further.
“It sends a very strong signal out to finance partners that the water companies have committed to delivering net zero carbon by 2030; the sector came together to launch a routemap to net zero last year – it’s an incredible commitment from a sector.”
He says working in silos would not bring the same strength of narrative and credibility as a shared ambition.
“When we ask the market and supply chain to jointly find solutions to our challenges as a whole sector it’s a significant market share open to those supply chains. It means they’re more likely to then invest in the solutions we need.”
That advantage applies in other areas too, Riley says.
“It also gives us a stronger voice where we work in policy and regulation areas, where we work with Ofwat, the Environment Agency and different government departments. When having conversations about where the blockers and barriers are and how can we work to remove those, as a sector our voice is more powerful than individually.”
Priorities
Like other wastewater companies, process emissions are one of Anglian’s most significant challenges. Riley explains that by 2030 more than 60 per cent of the company’s emissions will be from processes, which must be offset.
“As we put together the Water UK and our own Anglian plans, we recognised it’s a huge mountain to climb – it’s about behaviours, technology, innovation, systems we use for measurement,” he says.
Monitoring will be the first step towards having a better data set to work from.
Anglian is installing nitrous oxide and methane monitors at treatment plants across four of its sites to collect data and provide a more informed understanding of how emissions compare with the projections.
“This will also highlight the variability tank by tank, site by site to share with the rest of the sector and create an informed data set for where those emissions are,” Riley says.
In parallel the company is trialling treatment methods that will reduce – but not eliminate – emissions from treatments and carrying out a pathfinder project to retrofit technology on tanks. Riley says this would reduce emissions “quite significantly” but is costly to do.
Other projects Anglian is exploring include using the waste heat from effluent discharged to waterways to warm greenhouses for growing salad and crops. Riley says this can reduce growing costs by up to 75 per cent and is an example of how Anglian can work with other sectors.
“Cross sector thinking of how we can reuse that heat is a great example of the circular economy in action so the more barriers removed the better,” Riley. “It requires financial incentives around heat so we can exploit such opportunities more and more. We need to identify where funding is offered and what is available with different regulators.”
Changing the language
At PR19, Anglian received plaudits from Ofwat on the levels of customer engagement that went into compiling the business plan and an area it referred to in its appeal to the Competition and Markets Authority (CMA).
He feels the conversation should be clearer to help customers and stakeholders better understand how the sector is responding to climate challenges.
“Talking about reducing carbon emissions or climate change sometimes gets a glazed response because it’s a term we often use, but it’s not well-defined,” Riley says.
“I hope the quality of conversations we have going forward are more about what climate change means. For us, the risks around flooding and drought are better understood than ever, so when we talk about investment such as the Strategic Pipeline Alliance, it’s really a climate change resilience scheme.”