The Water Industry Forum, working with Water UK’s Environment Policy Advisory Group members, through Welsh Water and supported by Atkins, has produced a set of principles to guide the water sector on the use and application of Natural Capital type approaches in investment decision making.

Richard Whale, Market Director for Water at Atkins, said:

“The importance of natural capital cannot be underestimated as our industry strives to do its part to tackle climate change and biodiversity loss, and help the UK transition to a Net Zero future. At Atkins, we thrive on these kind of projects, and it’s a real privilege for us to have been working with Water Industry Forum, water companies and regulators to create a framework which puts natural capital at the heart of our engineering and asset management decision making. The UK Water Industry has taken a leading position, which is likely to benefit other sectors that follow.”

The principles say that Natural Capital approaches should aim to:

• facilitate balanced decisions that will meet the needs of the present without compromising the ability of future generations to meet their own needs
• create benefits across a broad range of outcomes beyond individual targets, for environment and society
• offer best value options for environment, and stakeholders.

The guidance says that a Natural Capital Assessment approach should be well evidenced, highlighting the social, economic, and environmental wellbeing of communities as well as aligned with national policy. It also recognises that:

• any such systems based decision-making approach will result in some difficult trade-offs being required
• not all are necessarily practicable, or even appropriate in terms of applying such an approach to all investment decisions.

The full list of principles are set out in the Water Industry Forum report ‘Natural Capital Principles for the Water Industry’. 

Peter Drake, Water Industry Forum’s Chief Executive commented:

“The list of principles are the result of a true collaborative effort by water companies, regulators and governments from across the UK working in partnership. As a neutral and independent forum, we are really pleased to have been able to facilitate an outcome that moves the industry forward.”

The report is seen as a best practice guide for water companies and regulators to help design and apply Natural Capital type tools - ultimately with the aim of making more sustainable investment decisions and delivering better outcomes for customers and the environment.

The Water Industry Forum membership comprises around 600 organisations including government, regulators, regional water companies, contractors, consultants, manufacturers, research organisations, third sector organisations and investors.

Tony Harrington, Welsh Water’s Director of Environment said:

“We are delighted to have led with the Water Industry Forum and Ofwat the development of these Natural Capital principles for our sector. Through effective collaborative working, the industry is now in a position to take these principles forward and subject to the availability of funding, expand our ambitions to work more with nature and so focus on addressing the longer term challenges we all face such as climate change and biodiversity loss. Such an approach will help ensure that our services support the environmental, social and economic wellbeing of future generations”.

Ofwat’s Director of Environment, Public Value and Governance, Bart Schoonbaert said the regulator welcomed the collaborative approach taken to arrive at the principles and looked forward to seeing these applied in practical ways. He added:

“Natural capital approaches can enable better decisions on and assessments of investment proposals, and lead to better outcomes for customers and the environment. This work, alongside a focus on natural capital approaches in processes such as WRMPs, helps to move the entire sector forwards in this space.”

Click here to download Natural Capital Principles for the Water Industry’.