As one of Britain’s largest water companies, we provide over eight million people across our region with fresh, clean drinking water – about two billion litres every day. And when they’ve finished with it, we take it away again then clean and treat it before returning it safely back to the environment.
We are one of only three listed water stocks in the UK, offering a valuable combination of reliable earnings, long term asset growth and an inflation-linked dividend. The UK regulatory model gives us a high degree of certainty over a five year period, and within that framework we are the sector leaders on Returns on Regulated Equity (RoRE), earning Outcome Delivery Incentives (ODIs) far in excess of any other company in the sector and with a cost of debt among the lowest in the industry.
Our environmental performance has been awarded the highest possible 4* EPA rating by the Environment Agency every year since 2019, the only company to have achieved this. In March 2022, we launched five Get River Positive pledges to help improve river water quality – we are now responsible for only 14% of RNAGS (reasons for rivers not achieving good ecological status) in our region, and are aiming to reduce this to around 1% by 2030. As part of that, we’re investing £1.1bn across our next regulatory period to halve our number of storm overflow spills by 2030.
More broadly, we have committed to a triple pledge that by 2030 we will achieve net zero operational carbon emissions, that 100% of our energy will come from renewable sources and we will have 100% electric vehicles, subject to the availability of specialist vehicles. We’re well on track with each of these pledges: in 2020, we announced that we were 100% renewable on electricity, and in 2024 we launched the world’s first carbon neutral wastewater treatment works at our site in Staffordshire. Additionally, in 2023 we became the first water company in the UK to report our EU Taxonomy alignment.
We’ll soon be embarking on our largest ever growth period, with multiple times more enhancement expenditure than previous regulatory periods, the vast majority of which is underpinned by clear, statutory targets in response to climate change, population growth, and heightening environmental standards. And we’re uniquely placed to deliver it too. We’re significantly more insourced than others in the sector, giving us greater control over our capital programme, and in 2021 we were granted an additional £566m of ‘Green Recovery’ funding (71% of all the funding given to the sector) for innovative green programmes, meaning we have already scaled up our capital programme ready to deliver the growth ahead.
We are committed to delivering all of this while continuing to offer one of the lowest average combined bills in the country, but for those who are unable to afford even this bill, we offer a comprehensive affordability package including bill discounts of up to 90%. We are expanding this offering over the next few years, and expect to support around one in six customers by 2030.
On top of that, as part of our societal strategy we’ve pledged to help 100,000 customers out of poverty across a ten year period. We’ve hosted hundreds of thousands of hours of employability training in the community at our very own Severn Trent (LON:SVT) Academy, have joined forces with local councils and employers to offer direct employability support targeting social mobility cold spots, have partnered with Trailblazers to support prison leavers as they reintegrate back into society. And more broadly than that, Severn Trent’s Community Fund reinvests 1% of profits back into community projects in our region.
In addition to our core regulated business, we also have a large non-regulated business. Severn Trent Green Power is the UK’s largest producer of renewable energy from food waste, and together with our regulated Bioresources division, it helps Severn Trent to generate around 60% of the energy we consume. Severn Trent Services offers a range of services that complement our regulated business, including a long-term contract supplying Ministry of Defence sites. And our Property Development business creates value by developing redundant land for sale, which we expect to generate PBIT of £150m between 2017 and 2032.
But the most important part of Severn Trent is the culture we have built. In our annual independent employee engagement survey, we have ranked within the top 5% of utilities globally every year since it was launched in 2019. And our dedicated training academy continues to foster a pipeline of talent, and the next generation of water industry leaders.
