Utilities provide a vital public service but as Utility Week’s New Deal for Utilities campaign has been highlighting since it launched at the beginning of the year, rightly or wrongly utilities are not always held in high regard by the people they serve.

Simply keeping the lights on and the gas and water flowing is no longer enough. Water and energy companies need to go beyond delivering a “largely invisible” public service.

For instance, speaking at Utility Week’s Water Customer Conference in Birmingham last month, Claire Forbes, Ofwat’s senior director of corporate communications, advised delegates that “customers want to feel they know their water company”.

She suggested that in future the visibility of companies, relationship building and perceived relevance will be “drivers of customer satisfaction”.

The same is likely for energy companies. Abbie Sampson, director of external affairs at Energy UK points out in the column, left, that any discussion on how to build trust in the energy sector comes back to the “importance of customers”.

But as utilities do silently go about delivering energy and water to the millions of homes and businesses all over the UK, the hard work going on in the background can easily be taken for granted.

Flick a switch and the light comes on, turn the tap and water pours out – quite rightly that’s what customers expect and most of the time what companies deliver. It’s not until people are forced to go without water or heating that they realise how much they depend on it.

Highlighting the extreme weather events of last year (the Beast from the East followed by the rapid thaw and the extended heatwave), Forbes suggested that ensuring a reliable and consistent service was “becoming more, not less challenging for companies”.

And to tackle wider problems such as climate change, population growth, decarbonisation, floods, droughts, sustainability and resilience, utilities are constantly trying to provide a “business as usual” service while preparing for the transformation required to meet such challenges head on.

Tony Cocker, the chair of Affinity Water and former chief executive of Eon, recently wrote in Utility Week (25 January): “Energy companies are at the forefront of tackling climate change, and water companies are at the frontline of mitigating the impacts of climate change and making a positive contribution to the environment.”

Utility regulators set high standards for companies to adhere to and hold them to account if they fail to deliver. But utilities need to get better at explaining their purpose if they are to restore and secure public trust.

They need to be transparent about how they go about business, ensure they provide a high standard of service to all consumers, provide extra support to customers in vulnerable circumstances, work to best protect the environment and do more to address real concerns such as leakage levels.

Regulatory cycles put great pressure on companies to deliver efficiencies. Utilities are having to find innovative ways of delivering more for less.

Tony Smith, chief executive of the Consumer Council for Water (CCWater), says the water watchdog has been “pressing” water companies to make sure customers receive a cut of rewards from regulatory outperformance.

“We’d like to see companies dip into their own pocket to ensure more low-income customers get financial support,” he tells Utility Week.

Smith suggests that while some companies fund measures to help vulnerable customers, their social tariff schemes “rely too heavily” on other customers’ willingness to fund them.

“That goodwill is in danger of running dry,” he warns. “We know that customers are much more willing to chip in if they can see their company is also playing a part, but as it stands only Welsh Water, United Utilities and Yorkshire Water are making significant contributions to funding their schemes.”

A spokesperson for Energy UK, adds: “Energy companies provide a broad range of support and benefits to both their customers and the communities they serve, and to the wider economy and environment, from investment and apprenticeships to educational programmes in schools, community funds and charity partnerships. This is in addition to the support for customers in vulnerable circumstances.”

Jane Asscher, chief executive and founding partner of 23red, says it is easy to forget that utilities are more than businesses, they are emergency services

She says: “While there is a growing list of legislation-led initiatives to protect vulnerable customers, such as the Priority Services Register, Debt Assignment Protocol and Pre-Payment Meter price protection, these don’t go far enough to support the most vulnerable in society. How companies implement and reach customers is crucial to genuinely support vulnerable customers.”

In a recent blog post on Sustainability First, Sharon Darcy goes further and says utilities need to consider their public purpose, philosophy and public service values.

Darcy, a member of Ofgem’s Consumer Progress Panel – set up to provide advice on the implementation of the Competition and Markets Authority energy market investigation remedies – writes: “Many energy and water companies have started to ask themselves fundamental questions about what they are there to do and the impact they want to have as a business. Across a whole range of sectors, academics, politicians, and companies themselves are becoming more engaged in these questions about corporate purpose.”

In December last year, Sustainability First’s Fair for the Future project held a “major workshop” on what a “Sustainable Licence to Operate” might look like in the water and energy sectors in terms of purpose and values.

She says: “The strawman proposes that companies need to ask themselves: first, if they’ve got the basics of service delivery right and if they are compliant with their current statutory and licence conditions (including in terms of fairness and the environment); and second, whether they may need to reinterpret their public purpose for the future given the role they play in delivering shared social, environmental, economic and political ‘systems’ value.”

Darcy says the “exponential changes” facing the sector mean legitimacy is likely to remain an “ongoing issue” for water and energy companies.

And it also found that the need to “re-evaluate” the purpose of businesses is not limited to utilities. It is an issue across the economy.

Utilities need to take a long, hard look at what they are here for and how they can best serve customers. To have a positive impact on society and the environment, utilities need to shout louder about their achievements, respond to their critics on occasions when they fall short and be ready to demonstrate their commitment to today’s customers and those of tomorrow.

They need to be ready for difficult conversations and be at the forefront of what effectively needs to be a public awareness campaign on the value of utilities. If they can get this right, they and the people they serve will be able to reap the rewards together.

Sharing best practice for sustainability

Major utilities including EDF, SSE, Iberdrola, Engie, Orsted and Tideway recently teamed up to launch a sustainable finance hub for European businesses.

A total of 16 companies co-founded the Corporate Forum on Sustainable Finance initiative, which launched on 16 January.

Its aim is to encourage businesses and policymakers to view sustainable finance as “critical” in the drive to limit global warming.

Founded by companies from across the utilities, transport, built environment and finance sectors, the forum will act as a permanent network in which businesses can share best practice advice and collaborate to drive greater investment in green infrastructure projects.

Specifically, the group will lobby for ambitious standards and regulatory frameworks for sustainable finance instruments, promote best practice on impact reporting and promote green projects to investors.

By joining the forum, member companies also commit to “deeply integrating” sustainability into their respective financial strategies.

Sustainable finance is becoming an increasingly prominent issue for investors. European sustainability bank Tridos estimates that in the UK alone, the socially responsible investing market will grow by 173 per cent to reach £48 billion by 2027.

Pledging action

Anglian Water won the coveted 2018 Utility of the Year Award after impressing the independent panel of experts over the rigorous two-stage judging process with its strong leadership, business transformation, long-term thinking and all-round performance.

Anglian was described by the Utility Week award judges as a “confident company, ready to get on the front foot without losing its focus on operational excellence”.

Peter Simpson, chief executive of Anglian Water, said winning the award was testament to all the hard work of the company’s staff, partners and suppliers. He said: “Water, along with other utilities, is vital in powering our region’s businesses and local economy, and in the East of England we face some unique challenges, being the driest, but fastest growing region in the UK.”

Highlighting some of the company’s initiatives and achievements in 2018, he said: “We’ve made a pledge to tackle plastic waste across the East of England, launched state-of-the-art technology to drive down leakage even further, concluded our biggest ever consultation with our customers, issued a second green bond to generate sustainable finance, and been awarded first place in the water industry league for customer service by our regulator.”

The company was also recently recognised for its commitment to its employees. Anglian Water beat the likes of Google, Ikea and Apple to be named the UK’s best place to work in a list compiled by employer review site Glassdoor.