Southern Water and sewage: how do we stop big business just going through the motions?

One of the things that has cheered me in recent years has been the signs that big business has started to take environmental action seriously and show real leadership in addressing the environmental crisis. I like to think that this is not only because environmental destruction has become a material risk to their business model, but also because they are run by people, who like the rest of us, appreciate that we need a habitable planet to live on. This includes being able to swim, as I do, in the English Channel without getting ill.

It was with real disappointment that I read about Southern Water’s repeated illegal discharges of raw sewage from 2010 to 2015. The discharges were known about at the highest level of the organisation and allegedly conferred “considerable financial advantage” on the company, raising the question of whether the criminal behaviour was motivated by profit. This must not only have damaged the marine environment, but also caused harm to local businesses and human health.

This case shows environmental laws are not enough
This case is yet another in the growing mass of evidence that shows that having positive environmental leadership, and even laws, is still not enough. It is clear that laws must be implemented and enforced effectively. All credit to the Environment Agency for successfully pursuing this case, and to the judge for awarding a £90 million fine that should help deter other companies from breaking environmental regulations. However, the reality is that the Environment Agency’s Environment and Business division has had a 63 per cent budget cut from 2009 to 2019, while government spending on the natural environment in the UK has almost halved over the past decade, despite our economy growing significantly.

How can we expect to meet the government’s commitments to reverse the declines in our environment when those organisations charged with taking action to prevent damage have such inadequate powers and resources?

Strong, independent oversight is necessary
This is a pertinent question that we can address now, as the Environment Bill completes the final stages of its parliamentary journey. The bill commits the government to develop targets to reverse environmental decline, and set up a new body, the Office for Environmental Protection (OEP). This body will need enduring independence and no strings attached resources to do its job properly. This will be especially important in tackling the systemic failures of our environmental rule book such as this behaviour by Southern Water. Its chair designate, Dame Glenys Stacey, has already identified water quality as a potential candidate for an early thematic review.

As for Southern Water, let’s hope this enormous fine is enough to make its board and senior management (who were not in place when these incidents happened), as well as those of other businesses, take the action necessary to comply with environmental laws. However, it shouldn’t have to take a fine to make companies recognise that their activities, and success, rely on a healthy functioning natural environment and climate; and to acknowledge that they need to go beyond legal compliance to help in addressing the environmental crisis.

This blog was written by Green Alliance’s strategy director, Belinda Gordon, without the input of any Green Alliance trustees.

Rosemary Boot has been a trustee of Green Alliance since 2014. She has been a member of the board of Southern Water (SWS Holdings Ltd) since March 2015. The conduct for which Southern Water has been fined occurred between 2010 and December 2015 and came to the company board’s attention in the summer of 2016. Rosemary has been actively involved, including as audit chair, in overseeing ongoing improvements to the company’s structure, governance, processes, systems and culture since these matters first came to the board’s attention.

Trustees on Green Alliance’s board have a range of experience from business, politics and academia, as well as the environment sphere.

Southern Water is a member of Green Alliance’s Business Circle, a cross sectoral scheme with 23 corporate members.

2 comments

  • Fining the company is unlikely to be that effective and might even misfire if money were diverted from (say) reducing leakage. Regulators and legislators need to be able eithwr to impose actions or even to dismiss top-level managers.

  • Why dont you look at the alternative business model provided by Welsh Water which was deliberately set up as a not for profit body that can give its social and environmental obligations equal weight with its financial obligations?

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