Our responsible business commitment to trusted corporate governance
What is this commitment?
We will follow best practice on Board composition and governance. We will not issue any new debt from the Cayman Islands and will look to remove debt that is held there as soon as practicable.
Desired impact – For South East Water to demonstrate commitment to best practice corporate governance.
How have we performed?
Our governance and reporting follows our corporate governance framework and corporate governance code which incorporates the UK Corporate Governance Code 2018 and Ofwat’s board leadership, transparency and governance objectives.
Our company purpose “To provide today’s public water service and create tomorrow’s water supply solutions, fairly and responsibly, working with others to help society and the environment to thrive” is embedded into our articles of association. This also means that our directors must act in the way they consider, in good faith, would be most likely to fulfil the purpose of the company.
With the adoption of a corporate governance framework we also follow an approach to governance that is focused on stakeholder inclusiveness based on regular engagement and feedback for customers and stakeholder.
We set out our remuneration policy transparently in our annual report each year and we have aligned our standard of disclosure on executive remuneration to those that apply to listed companies despite the fact that we are not a listed company. We have also published our dividend policy on our website and are publishing information on dividend every year meeting the expectations set by our regulators as recognised in their own assessment of the information we have published on dividend.
The composition of our board and committees meets the requirements of our corporate governance code and Ofwat’s board leadership, transparency and governance principles. Independent non-executive directors are the largest group on our board and all committee of the board are chaired by and have a majority of independent non-executive directors.
We have also set up a responsible business committee of the board with responsibility to oversee our ESG initiatives and performance.
We have not issued any debt this year and therefore no debt was issued through the legacy financing company registered in the Cayman Islands (which has always been registered in the UK for tax purposes ensuring that no tax benefits have been derived from that entity).
This year we have improved our disclosure under the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). We solidified the scenario analysis that we carried out last year with more detailed analysis of climate data and climate-related risks to improve our understanding of critical metrics and thresholds. This was focused on risks and combinations of risks that present specific challenges to our operations. We used spatially coherent temperature and precipitation daily timeseries in 12km grid-squares from the UKCP18 regional climate model (RCM) to better understand how climate risks differ between the Kent, Sussex and Western regions of our supply area and their potential impact on our assets and operations.
We continued initial work on quantification in the course of the year with a view to expand our TCFD disclosures next year.
