Southern Water improves its environmental performance rating, with further improvements planned

Today, the Environment Agency published its annual Environmental Performance Assessment (EPA) of all nine water and sewage companies operating in England – and Southern Water was awarded a two-star rating for 2022, up from one-star for 2021. 

The Environment Agency report notes a significant reduction in serious pollutions (down 58%), amongst other signs of progress, in the face of a regulatory framework which progressively revises metrics and tightens thresholds. 

Southern Water has ambitions to go further, as repeated and reinforced in recent Turnaround Plan. We are focussed on accelerating the improvement in our operational performance across multiple areas, embedding a culture of improvement, with an ambition to reach a three-star EPA rating by 2025.   

To achieve this, Southern Water has recently announced plans to invest more than £3 billion of capital investment during the 2020-25 regulatory period, the equivalent of more than £1,500 per household. This is a further increase from the £2 billion of capital investment that was announced in late 2021, when a new majority shareholder injected £1.1 billion of new equity into the Southern Water group. To facilitate this additional capital investment, Southern is engaged with its shareholders to secure an additional £550 million of equity funding by October 2023.

Lawrence Gosden, Southern Water’s CEO, said: 

“This has been a challenging year for our customers and our business. The sector is under intense scrutiny. We also face diverse and significant regional and industry-wide challenges of climate change, population growth and the need to upgrade a legacy network of pipes and pumping stations, treatment works and storm overflows to meet increasingly stringent regulatory standards and the expectations of our customers and wider.  

“We understand and are responding to these challenges. Whilst we are making progress against the commitments outlined by our new majority shareholder in late 2021 and our April 2023 Turnaround Plan, we recognise the desire of all stakeholders for us to go faster. We are directing all our efforts into executing our plans, investing wisely, and employing cutting-edge technology in the right places to highlight risks and to enable us to respond more intelligently and proactively.”