Our Corporate Responsibility pages 2016

Transcription

1 UNITED UTILITIES Our Corporate Responsibility pages 2016 Assurance statement and commentary AUGUST 2016

2 Our Corporate Responsibility pages 2016: Assurance statement and commentary Assurance statement United Utilities has commissioned Corporate Citizenship to provide external assurance and a commentary on its Our Corporate Responsibility pages United Utilities updates the material on these pages throughout the year. We have been contracted to provide on-going assurance through the year. This statement covers the material posted up to 23 August We will be reviewing new content after that date. All materials assured will be marked with our assurance checked logo on the website. The scope of our assurance The assurance provides the reader with an independent, external assessment of the report and, in particular, with how it corresponds with the AA1000 standard. It is intended for the general reader and for more specialist audiences who have a professional interest in United Utilities corporate responsibility performance. United Utilities has chosen to use the AA1000 assurance standard AA1000AS (2008). Our assurance is a Type 1 assurance as defined by the standard, in that it evaluates the nature and extent of adherence to the AA1000AS principles of inclusivity, materiality and responsiveness and assures the behaviour of the organisation as reported here. Our assurance used disclosed information as its starting point and then investigated the underlying systems, processes and sustainability performance information to arrive at its conclusions. United Utilities is entirely and solely responsible for the contents of the report, Corporate Citizenship for its assurance. As noted above, our assurance is confined to the Our Corporate Responsibility pages A detailed note of our assurance methodology appears at the end of this statement.

3 Opinion and conclusions In our opinion the United Utilities Corporate Responsibility pages 2016 reflects the principles of AA1000 (2008): inclusivity, materiality and responsiveness. With regard to inclusivity, the principle that people should have a say in the decisions that matter to them, we find that United Utilities has a widespread programme of engagement with stakeholders that shapes its agenda for action. With regard to materiality, the principle that decision makers should be clear about the issues that matter, we find that United Utilities regularly updates its material issues taking account of stakeholder opinions and interests. With regard to responsiveness, the principle that organisations should act transparently on material issues, we find that stakeholder views shape both United Utilities programmes and reporting. We note particular attention to customers views, needs and opinions. Further, we would be remiss not to note that United Utilities has changed the form of its reporting. It has moved from the issuance of a single, annual hard-copy report to Corporate Responsibility pages This increases the speed with which United Utilities can respond authoritatively to stakeholder concerns. It illustrates and reinforces United Utilities responsiveness. The level of assurance is that defined by 緰 AA1000 ΐ as moderate, which means that we believe there to be sufficient evidence to support the statement such that the risk of the conclusion being in error is reduced.

4 Commentary United Utilities operates within a heavily regulated industry. It would be easy to assume therefore that the organisation had little room for manoeuvre in the delivery of its corporate responsibility and little opportunity for innovation. In fact United Utilities shows that the opposite is the case. United Utilities asserts that: :the manner in which we undertake our business:has, for many years, included corporate responsibility factors in its strategic decision making. Certainly United Utilities has such a long-standing commitment. The question is how is it being followed through? Two factors are striking about the way in which United Utilities implements its corporate responsibility programme. The first is the diligence with which the board Corporate Responsibility Committee addresses itself to the agenda. This is true both in terms of the regular agenda, such as the delivery of the plan and of extraordinary events like the major water quality incident in the summer of 2015 and the major floods over the year end The second is the determined way in which United Utilities has ensured that corporate responsibility is fully integrated ᐰњinto the day-by-day operations of the different functions of the company. We saw ample evidence of the fruits of this approach in our assurance, most particularly in the interviews that we conducted. United Utilities clear and comprehensive approach to materiality assists in both instances. United Utilities materiality matrix is distinctive in the number of issues covered, the clarity with which the issues are prioritised and its readiness to show what issues receive low priorities. It is thorough, ordered and transparent. The matrix is also unusual in providing a direct link from the matters included through to the detailed coverage a particular boon for readers. These are underlying fundamentals of delivery. What individual issues struck us as being of note? Two customer related matters stand out. The first is the volume of effort going into customer stakeholder research. That a monopoly supplier should be making such an effort is in some senses surprising. Yet the volume of effort was not the most remarkable facet of the issue. It was the complexity, thoughtfulness and depth of the activity. Equally United Utilities is making remarkable use of data to identify and assist customers who have difficulty paying their bills (and at the same time customers who can pay but are not doing so). With customers who have difficulty paying we noted some unusual and distinguishing features in the United Utilities approach.

5 The first was that United Utilities set about getting a true and deep understanding of why the client could not pay. Second that where geographical concentrations of non-payers were apparent that United Utilities acted to mitigate the problem. It is too easy simply to provide an end-of-pipe solution to such issues. United Utilities is looking, in so far as it is able, to tackle the root causes of the problem. Looking to engagement with others, we were pleased to note the success achieved during the year on bathing water quality. This is certainly an instance where United Utilities recognised the necessity of engaging others to deliver results. It was not the sole instance of successful co-operation and engagement. We were favourably impressed by the engagement that had taken place with suppliers to ensure better delivery of projects. Securing effective engagement with stakeholders was the strongest theme emerging from our engagement with the asset management function. What of the challenges facing United Utilities? The water quality incident remains under investigation by the Drinking Water Inspectorate. This investigation has yet to be concluded. Consequently we have been unable to take it into account in this assurance. However it is clear that United Utilities will need both to show a thorough-going response to the findings and to be frank with stakeholders about what it has learned from the issue. 䞀 ї The North West is set to enjoy devolution with elected Mayors for Merseyside and Greater Manchester. United Utilities has always been clear that its economic contribution to the North West is a key component of its business case. The advent of elected Mayors may well shine a spotlight on that claim and provide opportunities for collaboration to contribute to reviving the local economy. Investor interest in non-financial matters as contributors to long-term business success continues to grow. This is both challenge and opportunity. It challenges United Utilities to articulate in greater detail how its management of corporate responsibility underpins the long-term profitability of the company. It provides the opportunity to be the lead the industry in responding to that challenge. Corporate Citizenship London 23 August 2016

6 Methodological notes The assurance work was commissioned in January 2016 and was completed on 23 August Detailed records were kept of meetings, assurance visits and correspondence relating to the inclusivity, materiality and responsiveness of the report, as well as to technical matters relating to the accuracy and presentation of data. A team of three, led by a Director, undertook the assurance and commentary process. A second director acted as adviser to the group. The team has a variety of professional and technical competencies and experience. For further information please refer to our website Our external assurance and commentary process for United Utilities Corporate Responsibility pages 2016 has involved, but not been limited to, the following elements: Understanding United Utilities, its business and broader business context; its approach to and understanding of corporate responsibility; how it identifies issues material to its operations and in particular how this has been shown through its strategy development and reporting; A media review of key coverage of United Utilities corporate responsibility related issues and incidents; In-depth interviews with representatives from United Utilities including those responsible for corporate responsibility strategy, customer debt, customer research, diversity, environment, 崰 investor ў relations and supply chain management; A detailed evaluation of United Utilities reporting against the principles of inclusivity, materiality and responsiveness; Examination of reporting in its development including reviewing and commenting on drafts; Testing of assertions throughout on a section-by-section basis, including scrutiny back to source documents, review of regular monthly internal reports, sight of proprietary internal presentations, examination of key external communication documents, reports rendered to United Utilities by external contractors and certificates of compliance with certain voluntary external standards. Our work did not extend to a complete audit of the report s contents. We have not been responsible for the preparation of United Utilities Corporate Responsibility pages 2016 or in devising the internal management and reporting systems that yielded the data contained therein. The opinions expressed in this external assurance statement and commentary are intended to extend understanding of United Utilities non-financial performance and should not be used or relied upon to form any judgments, or take any decisions, of a financial nature.

7 Corporate Citizenship is a leading assuror of corporate responsibility reports and an AA1000 Licensed Assurance Provider. We have worked with United Utilities since 1997 and have provided assurance since Regarding independence, during the reporting period, except as noted below, our work with United Utilities focused exclusively on assurance. United Utilities is a member of the LBG (London Benchmarking Group an evaluation framework for corporate community involvement which we manage on behalf of its members and adherents. 睐 ў