Yorkshire Water has become the first-ever UK water company to develop an environmental profit and loss account (EP&L) to help integrate sustainability into its core business strategy.
The EP&L was created in partnership with Trucost, the global leader in natural capital valuation. By putting a monetary value on positive and negative environmental impacts, companies can better manage the challenges posed by climate change, resource scarcity and a growing population.
Yorkshire Water wanted to investigate the potential of natural capital valuation to deliver insights for its 25-year corporate strategy, Blueprint for Yorkshire. The strategy is guided by a set of business objectives, including providing safe water, sustainable water resources, and excellent rivers, catchments and coasts.
Overcoming environmental challenges and achieving its vision will require new ways of thinking and working within Yorkshire Water and throughout the entire Kelda Group.
The EP&L has provided Yorkshire Water with a single view of all of the environmental impacts associated with its business activities. By expressing these impacts in the single, comparable metric of monetary value, the company can easily identify and manage its most significant environmental risks and opportunities.
The EP&L gave an interesting insight into water abstraction for Yorkshire Water. By applying regional environmental valuations to traditional volume-based water use metrics, the EP&L identified opportunities to improve the long-term sustainability of its water network by highlighting local water scarcity levels at abstraction and recharge sites.
The insight has been useful in informing discussions with water regulator Ofwat and the Environment Agency over water resources and how to strike the right balance between ensuring future supplies at a fair price while protecting the environment.
Simon Barnes, programme director at Yorkshire Water, said he carries the EP&L around on his iPad and regularly uses it to engage companies in the supply chain: “It provides a fast view of our environmental impacts that can be easily understood by everyone, from suppliers, customers and regulators to our own board members and business managers. Key to its success is its ability to highlight risks and opportunities that drive our long term business strategy, and is key to the delivery of our strategic business objectives.”
Richard Mattison, chief executive of Trucost, said: “As climate change makes our weather more variable and extreme, with drier summers and wetter winters, water resources will require careful management. Yorkshire Water has shown tremendous leadership in using natural capital valuation as a practical business tool to raise the profile of this issue in the water sector, as well as among regulators and policymakers.”
Trucost: James Richens, 020 7160 9804, firstname.lastname@example.org
Yorkshire Water: George Kotschy, 01274 804005, email@example.com