What is the real cost to Water Companies of pollution incidents?
Our rivers are a living ecosystem, which can largely take care of themselves without too much intervention from us. But, they can be overwhelmed by what we put into them. A river system cuts its way from sources in hills and springs, through farms, villages, towns, cities, and gradually throws whatever it picks up on its way, into the sea. We purposefully put our waste into the rivers, usually after its been “treated” to be the least problematic for the river, as there’s nowhere else to put it. There’s around 9000 sewage works, there doesn’t appear to be any exact figures on this, doing just that. And not just sewage waste goes in – but as we’ve seen in the press, it’s also used as a dumping ground for both legal and illegal waste. Rivers can be a long way from people – so they’re an easy target for cheaply getting rid of waste while no-one is watching.
So what is the cost to a water company for a polluted river system? Firstly fines. Yorkshire Water have just been fined £700k for polluting and killing fish, from an incident in Pools Brook near Chesterfield. Not a lot of money for a company with debts of £6.8 billion, and a capital value of £9.2 billion ( Yorkshire Water Interim Report, Sept 2024 ), but the statement from the company says it all “Protecting the environment is a key part of what we aim to do..” Who can disagree with that? It’s certainly over and above just protecting their own resources – and there is a financial cost to not doing it – as the courts have shown. And of course, there is the cost of solving the direct problem causing it, the clean up costs.
And the mistrust is high. In company lingo, the effect on PR is big. Simply put – “protecting the environment” is more than just paying a fine, apologising and moving on. The long term effect on the environment of the pollution only goes away over a long period, and so the mistrust in the company also takes a long time to disappear.
Pollution incidents that go to court attract sustained media coverage, more political scrutiny, and can feed a narrative of mismanagement which damages brand trust, and worsens customer and stakeholder perception.
Since 2015 The Environment Agency has concluded 63 prosecutions against water and sewerage companies – with an outcome of over £151 million in fines ( Creating a better place, Environment Agency blog, 30/10/2024 ). Poor environmental scores in Ofwat and Environment Agency reports can lead to outcome-delivery penalties – i.e. returning money to customers. £120 million was returned to customers of a number of water companies in November 2022 ( Worst performing water and wastewater companies, Ofwat 8/12/2022 )
So the direct cost to water companies can be large, and being seen by the public as having to be penalised in this way – is highly detrimental to brand trust in a similar way.
Being seen to be a part of the system and community looking after the river system, could be a part of rebuilding that trust. A whole of river approach to monitoring the river system does not have to be costly – and it can supplement all of the other strategies used to prevent pollution incidents, and maintain effective sewage and recycling works.
We maintain that the ability for water company customers to view live data from a whole of river system, which reflects on the capability of the living ecosystem to thrive, would be highly beneficial to any organisation that wants to show it truly cares about the river ecosystem, and the environment we all live in.