Veolia Water UK Plc Corporate Responsibility Report 2007 by Veolia Water

Veolia Water UK Plc Corporate Responsibility Report 2007

Satement from the Rt Hon. John Gunmer

2 Introduction by the Managing Directors 4 Highlights of the year 6 The water businesses of the Veolia Water UK Group 7 Veolia Environnement 8 Policy development and implementation 10 Managing the Veolia Water UK Group responsibly 12 Our business

Our goals…to manage water resources so as to preserve their social, ecological and economic value and to meet our customers’ expectations for water and related services.

22 In the workplace

Our goal…to provide employees with the opportunities, resources and environment to allow them to make an effective contribution to the business.

26 In the community

Our goal…to work with and support communities, charities and government in improving the quality of life.

31 In the environment

Our goal…to seek opportunities to reduce our consumption of natural resources and greenhouse gas output, by using alternative means where possible, and by optimising efficiency, whilst protecting and enhancing the environment.

40 Glossary 42 Verification statement 43 Invitation to comment

Key Veolia Water UK target Highlights where our programmes and targets contribute to the UK Government’s Sustainable Development Framework Indicators, part of its Sustainable Development Strategy

Highlights progress measured against the water industry’s sustainability indicators Highlights progress in meeting Veolia Environnement’s sustainable development commitments

Notes on text and symbols This report contains information on social, economic and environmental performance during the reporting year 1st April 2006 to 31st March 2007. It is also available from www.veoliawater.co.uk The activities described took place during this period unless indicated otherwise. Key statistics and other information reflect either the average during the year or the position at the end of the year as the context indicates. Unless indicated otherwise the sources of these data are reports published by the Director General of Water Services.

Beyond business as usual for everyone Statement from the Rt Hon. John Gummer

Urgency should be the spirit of the moment. With unprecedented temperatures, the driest winters and the most extreme flooding on record, it is clear that the climate is displaying a rate of change that heralds the shift from ‘nature as usual’. The latest report of the Intergovernmental Panel on Climate Change, the Stern report and many other predictors all indicate that the acceleration of severe changes in climate and their catastrophic effects means that ‘business as usual’ is no longer acceptable.

environmental impact of abstraction. Following the so-called ‘twin track’ approach to water resource management, the companies endeavour to balance the supply and demand of water. On the supply side this is about optimising the abstraction of water and treatment processes and reducing leakage. This is in addition to encouraging the Environment Agency to apply the polluter pays principle efficiently and rigorously where drinking water sources have been contaminated.

So what is Veolia Water doing about this situation? As far as mitigating the emissions of carbon dioxide is concerned, all the operating businesses are improving their efficiency in the use of electricity and fossil fuel for treatment, movement and management of water. This effort has to be intensified over the coming years.

With respect to demand, the businesses have invested significantly in fitting meters to domestic supplies and have increased the rate of installation as an urgent priority. Allied to this has been a campaign of education and promotion of water efficiency. While this appears to have been effective in drought conditions with a significant reduction in demand, the challenge is to maintain that level of awareness and action. This requires a consistent and sustained change in attitude and behaviour as far as the public and property developers are concerned. It means treating water conservation as seriously as conservation of energy and reduction of carbon dioxide

For some time the companies supplying water in the dry South East of England have adapted to changes in climate. Dry spells are not uncommon and the productivity of water resources is continually under pressure from pollution, increased demand and balancing the

Veolia Water UK Plc Corporate Responsibility Report 2007

emissions. It also means recognising the social demands of those most hard-pressed and I continue to insist that we uphold the Veolia tradition of social awareness and involvement by looking to develop socially just tariffs alongside our metering policies. The value of each drop of water, which only usually manifests itself when its supply is threatened, must be recognised and preserved in the wettest as well as the driest times. Water is a precious gift, essential for life. It is no more a free gift, however, than, say, oil or coal. They all exist in nature but there is cost in discovering, preserving and nurturing the sources, collecting and refining the product and delivering it to the customer. To ensure we have enough water available for future generations everyone must become conscientious and respectful in their use of water.

Rt Hon John Gummer MP Non-executive Chairman of Veolia Water UK Plc

Introduction by the Managing Directors

It was difficult to imagine at the end of this year’s rain-drenched summer that a year earlier the South East of England was gripped by drought. We avoided any flood-related damage to our operations, but such extremes of climate, and the difficulty in forecasting them, clearly demonstrate our challenges. We are working with the rest of the industry to understand better how our activities contribute to climate change and we are assessing the potential impacts for the next 25–50 years in our Water Resources and Business Management plans. During the year we continued our efforts to reduce leakage and encourage customers to use water wisely. This, coupled with the hosepipe bans by Folkestone & Dover Water and Three Valleys Water, helped to reduce the demand for water. All three water companies reduced leakage ahead of targets set by the regulator, OFWAT, and continued to provide water of the highest quality. Veolia Water Industrial Outsourcing saw continued growth in providing sustainable solutions in industrial water management.

Veolia Water UK Plc Corporate Responsibility Report 2007

In water supply and customer service Tendring Hundred Water continued to outperform the rest of the industry. However, in August 2006 the company discovered an error in income calculations that resulted in customers’ bills being too high from April 2005. The company reported the mistake immediately to the regulator and set up an independent investigation. As a result the company has made refunds to all customers. Three Valleys Water’s customer service was adversely affected when it discovered past errors in reporting the number of customers receiving a bill based on an actual meter read.

activities. We believe that our practical model of Corporate Responsibility management, information gathering and reporting accurately demonstrate the Group’s performance. We have successfully met the demands of our regulators and increased our support of local and national community activities. Our core business of drinking water supply and sustainable industrial solutions consistently provide high quality products and innovative services. In addition, we provide healthy financial returns for our investors, while continuing to play a full role as a responsible corporate member of the local and national community.

In November 2007 the Veolia Water UK group grew substantially when it acquired the commercial water service businesses of Thames Water in England, Scotland, Wales & Ireland. These new businesses, known as Veolia Water Outsourcing Ltd, have an annual sales turnover approaching £100 million. In this report, the twelfth in a series of Environmental, Social and latterly Corporate Responsibility reports, we aim to demonstrate how we have developed and integrated sustainable development, business ethics and transparency into all our

We were pleased to maintain our top ranking (Platinum band) in the Sunday Times list of “Companies that Count”, based on the 2006 Business in the Community Corporate Responsibility Index. This appraisal gives public recognition to our commitment to protect the environment and enhance the lives of the local communities that we serve. The Veolia UK Pension Scheme Trustee was awarded “Engaged Investor Best Trustee Governance – Private Sector – Award” for maintaining high levels of governance, and Three Valleys Water received

a gold Green Apple award for their Community Programme, and a ‘Best Utility Company Award’ for their waste recycling work. We will always need to rise to the many challenges of resources, climate variances and unforeseeable events; but we are confident that we are moving in the right direction.

Introduction by the Managing Directors continued

FrĂŠdĂŠric Devos CEO, Veolia Water UK Plc and Managing Director, Veolia Water Outsourcing Limited

Andy Smith Managing Director, Three Valleys Water Plc

Veolia Water UK Plc Corporate Responsibility Report 2007

David Walton Managing Director, Folkestone & Dover Water Services Limited

Nevil Muncaster Managing Director, Tendring Hundred Water Services Limited

David Wright Managing Director, Veolia Water Industrial Outsourcing Limited

Highlights of the year

Our Statement of Corporate Responsibility Policy and Principles incorporates our environmental, social and economic policies and principles. These underpin our efforts to achieve our goal of developing in a sustainable manner. How did we perform this year?

Environmental performance • For the twelfth year in succession none of the companies was prosecuted under environmental legislation nor were any water pollution enforcement notices served. • We supplied our customers with drinking water of the highest quality. • We reduced the risks of incidents, principally through catchment protection and upgrading treatment works. • All three companies achieved leakage rates better than their targets. We continue to perform better than the industry average1. Folkestone & Dover Water beat its target by almost 6%; Tendring Hundred Water has the lowest leakage level in England and Wales. • Unprecedented low rainfall over two winters, followed by a hot summer, led Three Valleys Water and Folkestone & Dover Water to introduce hosepipe bans to encourage water saving.

• Three Valleys Water won ‘Best Utility Company’ award for producing guidance for utilities on using recycled excavated material. • We achieved leading status (Platinum ranking) in the Business in the Community Environment Index 2006 (part of the Corporate Responsibility Index), above the average of FTSE 100 companies.

Social performance

We maintained our leading status in Business in the Community Corporate Responsibility Index 2006

• Three Valleys Water uncovered an error in reporting the number of meters read during the year. As a result the percentage of metered customers receiving a bill based on an actual read fell to 95%. • Tendring Hundred Water discovered an error in their income calculations which resulted in increased customers’ bills from April 2005 to July 2006. The company reported the error immediately and set up an independent investigation. The overcharge, including interest, has been refunded to all customers.

• Our companies fitted over 47,000 water meters during the year.

‘Industry average’ means the average of all the water service companies and water supply companies in England and Wales

Veolia Water UK Plc Corporate Responsibility Report 2007

Highlights of the year continued

• Tendring Hundred Water was again judged best performing company by OFWAT for water supply and customer service. • Folkestone & Dover Water improved its management of occupational health and safety by obtaining certification to the OHSAS 18001 standard. • We continued to develop programmes to support education. Three Valleys Water’s Education Centre was awarded a golden Green Apple award for an innovative watersaving project for schools. • We continually update our Safeguard Register to ensure we satisfy the individual requirements of vulnerable and special needs customers. • We are on target to meet the industry-wide initiative ‘Clearwater 2010’ target to reduce Health and Safety Incidents by 30% by 2010. • Staff turnover decreased by a third to 14%.

From Veolia Water UK Plc Annual Report & Accounts 2006

• The Veolia UK Pension Scheme Trustee was awarded “Engaged Investor Best Trustee Governance – Private Sector – Award” in July 2007 for maintaining high levels of governance.

• The Group participated in and benefited from research undertaken by other companies within the Veolia Environnement SA Group. Expenditure in the UK in the year exceeded £600,000 (2005: £732,000).

• Donations for charitable purposes made by Group companies during the year amounted to £136,000 (2005: £121,000). The Group made no political contributions.

• The Group complied with its policy to settle terms of payment with suppliers when agreeing terms of business and to pay in accordance with contractual and other legal obligations. The payment policy applies to all payments to creditors for revenue and capital supplies of goods and services.

• We achieved leading status (Platinum ranking) in the Business in the Community Corporate Responsibility Index 2006 and the associated Community Index.

2006

Turnover

236.5 228.5

Capital expenditure

104.5 55.3

Expenditure on R&D 0.6 Group turnover 3

2005

0.73

256.4 238.9

Group operating profit 66.1 74.2 (all figures in £m)

Economic performance 2

• Group turnover for the 12 months to December 2006 was £256.4m, compared to £238.9m for the previous year. Group operating profit was £66.1m (2005: £74.2m). • Capital expenditure to improve water quality and supply was £104.5m (2005: £55.3m).

3 Includes figures for Veolia Water Industrial Outsourcing and Veolia Water Ireland

Veolia Water UK Plc Corporate Responsibility Report 2007

The water businesses of the Veolia Water UK Group

The water businesses of the Veolia Water UK group comprise three regulated water supply companies:

•Folkestone & Dover Water Services Limited •Tendring Hundred Water Services Limited

•Three Valleys Water PLC

together with Veolia Water Industrial Outsourcing Ltd (VWIO) and Veolia Water UK Plc (VW).

Each of the regulated water companies supplies water to customers within a designated supply area; they do not provide sewerage services.

Folkestone & Dover Water Services Ltd Population served (‘000s) 160 Employees 88

Veolia Water Industrial Outsourcing provides sustainable solutions to water and wastewater management problems for industry.

Tendring Hundred Water Services Ltd

Veolia Water UK provides support in relation to corporate matters.

Population served (‘000s) 154

Veolia Water Partnership, which provided planning, engineering, scientific and laboratory services, was merged into Three Valleys Water during the year.

Three Valleys Water PLC

Employees 64

Population served (‘000s) 3,070 Employees 1,070

Folkestone & Dover Water

Veolia Water UK Head office - London

Tendring Hundred Water

Veolia Water Industrial Outsourcing office

Three Valleys Water

Veolia Water Industrial Outsourcing contracts

For a detailed explanation of the organisation and ownership of the Veolia Water UK Plc group, as well as economic performance, please see the Annual Report and Accounts.

Veolia Water UK Plc Corporate Responsibility Report 2007

Veolia Water UK Plc is the corporate head office, based in London. Employees 26 Veolia Water Industrial Outsourcing Ltd (VWIO) provides sustainable solutions to water and waste water management problems for industry. Employees 43

Veolia Environnement

Veolia Water is part of Veolia Environnement, the world’s leading environmental services group. www.veoliaenvironnement.com

Across the world Veolia Environnement’s 270,000 employees now operate under a single brand name. The group’s activities comprise water supply and wastewater treatment (Veolia Water), water equipment design and supply (Veolia Water Solutions & Technologies), waste management (Veolia Environmental Services), energy services (Veolia Energy/Dalkia) and transport (Veolia Transport). The group is listed on the Paris and New York stock exchanges. Net revenues for 2006 were €28.6 billion. Veolia Environnement companies have been developing a strong presence in the UK since the mid-1980s. Together the UK companies employ approximately 20,000 people and had a turnover of £1.3 bn in 2006.

Global Business Coalition on HIV/AIDS, and the World Resources Institute (WRI). VE’s approach to sustainable development prioritises stakeholders’ expectations. It is founded on a 12-point Sustainable Development Charter available at www.sustainable-development.veolia.com.en/ Here in the UK, the Charter’s 12 commitments inform the development and implementation of Veolia Water UK’s policies, procedures, goals and targets (this symbol indicates where the commitments are relevant).

Veolia Environnement is over 150 years old. It is listed in a number of socially responsible investment indexes: FTSE4Good, Dow Jones Sustainability, ASPI Eurozone, and Ethibel Sustainability (stock market indexes that take ethical, environmental and social criteria into account to measure a company’s performance on non-financial criteria).

Veolia Environnement and sustainable development Veolia Environnement is a member of the World Business Council for Sustainable Development (WBCSD) and Entreprises pour l’environnement (EPE). The group supports the following initiatives: Global Reporting Initiative (GRI), Greenhouse Gas Protocol Initiative, United Nations Global Compact,

Veolia Water UK Plc Corporate Responsibility Report 2007

Policy development and implementation

The UK Government’s Sustainable Development Strategy In addition to reporting on how we contribute to VE goals and targets, we report also (where you see this symbol ) on how our programmes and targets contribute to achieving the UK Government’s Sustainable Development Strategy. The Strategy is based on the principles of living within environmental limits, ensuring a strong, healthy and just society, achieving a sustainable economy, using sound science responsibly, and promoting good governance. It covers four priorities of: sustainable consumption and production, climate change and energy, natural resource protection and environmental enhancement, and sustainable communities. Progress towards achieving these objectives is measured using a range of indicators. Water industry sustainability indicators The UK Government’s strategy for sustainable development has influenced strongly a project by Water UK, the industry’s trade association, to report annually on the water industry’s contributions to sustainability. We have taken the opportunity in this report to measure our

Veolia Water UK Plc Corporate Responsibility Report 2007

progress against the indicators developed for this report (where you see this symbol ). What do we mean by corporate responsibility? For us corporate responsibility is good management. It is also the means by which we fulfil our obligations to our stakeholders. (A stakeholder is an individual who, or group which, has a legitimate interest in influencing or being affected by a decision.) The way in which we achieve our objectives is outlined in our Corporate Responsibility Statement of Policy and Principles, which can be found at www.veoliawater.co.uk The Statement contains our environmental, social and economic policies. Our primary objective is to provide sustainable water management services to our customers and a financial return to our investors.

Policy development and implementation continued

Veolia Water UK Corporate Responsibility Reports

3V CR Report

FD CR Report

TH CR Report

Veolia Water UK Plc Board

External Verification

VWUK summary leaflet

VWUK investors sheet

Veolia Water UK Plc Executive Water Committee

Safety, Health, Environment & Quality Managers

Folkestone & Dover Water (ISO 14001)

Tendring Hundred Water (internal management system)

Three Valleys Water (Balanced Scorecard)

Veolia Water Partnership (internal management system)

Veolia Water Industrial Outsourcing (ISO 14001)

EXTERNAL REGULATORS Environment Agency

Office of Water Services (OFWAT)

Veolia Water UK Plc Corporate Responsibility Report 2007

Consumer Council for Water (CCWater)

Drinking Water Inspectorate (DWI)

Health & Safety Executive (HSE)

Department for Environment, Food & Rural Affairs (DEFRA)

Managing the Veolia Water UK Group responsibly

At Veolia Water UK we aim to manage our businesses in line with our statement of policy and principles on corporate responsibility and applying the principles of risk management.

The Managing Director of each company has overall responsibility for corporate responsibility performance and reports on this to the companyâ&#x20AC;&#x2122;s Board. Each company has one or more Corporate Responsibility champions responsible for promoting initiatives, monitoring performance and internal communication. Particular attention to corporate responsibility is also paid at Board level, thanks to: The Right Honourable John Gummer MP, non-executive Chairman of Veolia Water UK Plc with special responsibility for the environment. Dr Neil Summerton CB, non-executive director of Three Valleys Water, where he takes a close interest in corporate responsibility, and of Folkestone & Dover Water Services, where he has specific responsibility for environmental policy and performance.

Veolia Water UK Plc Corporate Responsibility Report 2007

Engaging with our stakeholders

Our companies engage with their stakeholders about their requirements and expectations, using various means, including this report. Examples of how we engage â&#x20AC;˘ Customers: customer contacts in the course of business, customer surveys, information leaflets sent out with bills, company internet sites, media press releases, and regular contact with the Consumer Council for Water, the organisation that represents the interests of customers on issues such as price, service and value for money. â&#x20AC;˘ Employees: annual staff satisfaction surveys; a survey of staff awareness of corporate responsibility; statutory safety committees; Joint Negotiating Consultative Committee; monthly Team Briefing; internal magazines Splash! and Cascade; toolbox talks, employee feedback sessions on fulfilling our corporate responsibility (for which a summary of this report is produced).

Managing the Veolia Water UK Group responsibly continued

• Local communities: – The water companies employ communication strategies to mitigate disruption to the public caused by their works. – Three Valleys Water’s award-winning Environment & Education Centre educates both existing and future customers in water efficiency and environmental conservation (see p.28). – Working with local environmental organisations, eg Friends of Stockers Lake, Wraysbury Lakes Liaison Group, Herts & Middx Wildlife Trust (Three Valleys Water), the White Cliffs Countryside Project (Folkestone & Dover Water), Essex Biodiversity Project and Essex Wildlife Trust (Tendring Hundred Water).

Veolia Water UK Plc Corporate Responsibility Report 2007

• Regulators: – Three Valleys Water continues to work with the Environment Agency in the aftermath of the Buncefield oil depot fire in 2005, in order to reinstate a treatment works which was taken out of supply at the time as a precaution. – We work with Natural England when laying a main through any specially designated area such as a Site of Special Scientific Interest. • Industry & agriculture: we liaise closely with the hydrocarbons industry, agriculture, and the chemicals industry to prevent pollution of water resources. • Government partnerships: Folkestone & Dover Water is a partner organisation to Partners for Water & Sanitation, a UK tri-sector partnership initiative (between Government, civil society and private sector organisations) to assist developing countries, initially from Africa, to provide clean water and adequate sanitation.

• Local government and the Health Service: we liaise with Local Area and Health Authorities so that there is a better understanding of local water quality issues. Meetings are accredited as continuing professional development for those attending. • Investment community: annual meetings with our bondholders; the Annual Report & Accounts; we also prepare a one-page summary of our policies and performance, inviting feedback. We are in turn engaged by a number of bodies, eg: • Industry: Water UK, CBI, Environmental Analysis Co-operative, Business in the Environment, Business in the Community, Business Council for Sustainable Development UK.

• Customers: GSK Stakeholder Panel. • Charities: Groundwork, WaterAid, KitAid, Herts Community Foundation. • Government: Associate Parliamentary Environment Group, Associate Parliamentary Water Group, Kent Sustainable Business Partnership. • NGOs: Thames Regional Environmental Protection Advisory Committee, National Society for Clean Air, Oxfam. • Regulators: working groups of the Environment Agency, OFWAT and DWI. • Academia: Universities of Hertfordshire, and Surrey, and Brunel University.

• Peer group companies: Folkestone & Dover Water and Three Valleys Water joined forces with five other water companies and the Environment Agency to help beat the drought across the South East of England “www.waterinthesoutheast.com”

Our business

Our goals… to manage water resources so as to preserve their social, ecological and economic value and to meet our customers’ expectations for water and related services .

These goals are reflected in the companies’ business plans for 2005-10 and beyond, as well as their 25-year Strategic Direction Statements. Our plans, as approved by OFWAT and the Environment Agency, tackle supply and demand imbalances using a twin track approach of increasing our water resources and encouraging careful water use. They include increased meter penetration to manage demand, reducing leakage and making better use of existing water resources by investing in infrastructure. This last measure improves our ability to transfer water across our supply areas to the places where it is needed most at any particular time. We are also conscious of the ageing of our network, and have established long-term investment plans to improve the sustainability of our product and service. We are also increasing investment in pipe renewals, targeting our works in areas suffering most from high rates of mains bursts. This investment will reduce the inconvenience caused by supply interruptions and by street works to repair burst mains.

Consistent with the UK Government’s Sustainable Development Framework indicator for river quality, and the indicator for water resource use

Relates to water industry sustainability indicator for managing environmental and sustainability issues

Veolia Water UK Plc Corporate Responsibility Report 2007

Management systems

Formal environmental, health and safety, and quality systems are fundamental to continuous improvement of our performance. These systems are at various stages of maturity throughout our businesses and are being integrated into the overall systems for managing the business. All the regulated businesses have upgraded their quality systems to meet the new ISO 9001:2000 standard. The introduction of systems that are compliant with the ISO 14001 standard at priority sites is a target set by the Veolia Environnement group. It is essential that certification to the standard adds value to our business and undergoes a detailed analysis of benefit and cost. Folkestone & Dover Water Services’ integrated management system meets the requirements of ISO 9001 (quality management), ISO 14001 (environmental management), and OHSAS 18001 (occupational health management). Veolia Industrial Water Outsourcing’s environmental management system is certified to the ISO 14001 standard. Tendring Hundred Water is committed to achieving this standard in the near future.

Three Valleys Water’s health and safety, quality, and environmental management system is integrated into the overall company Balanced Scorecard, the key management tool which enables the Board to monitor performance in a comprehensive way. A pilot site to evaluate the benefits and value of the ISO14001 environmental management system has been selected. Managing the supply chain Veolia Environnement is committed to encouraging partners, subcontractors and suppliers to adhere to its sustainable development commitments. The VE Purchasing Charter sets out the values to be applied in purchasing goods and services from others. These include health, safety and environmental considerations, and the way suppliers must be treated. VWUK companies have adopted as far as practicable the Group purchasing policy, which is consistent with OFWAT’s requirement for water companies to have a transparent system to show trading at arm’s length from associated companies. We have developed and applied environmental and social criteria for use in supplier selection and performance procedures.

Meets VE commitment to deploy an environmental management system

Our business continued

Per capita water consumption

(litres per head per day) (excl. supply pipe leakage) Industry average Measured Unmeasured

Managing for sustainable development

We manage our business to satisfy the needs of existing and future stakeholders. We do this by balancing the demand for water against the availability of water resources in the areas where we operate, while protecting water resources and the environment generally. on water resources in Due to the pressure South East England, this requires innovative solutions. We do not act alone; the Environment Agency plays a major role in determining the availability of resources and determines licence applications to abstract water between competing demands, while OFWAT and the Consumer Council for Water are concerned with the interests of our customers.

consult publicly on their draft Water Resource Management Plans before submitting them for approval by the Secretary of State.

Domestic Demand for Water Other indicators used in planning for water resources are:

An important water resources measure is the security of supply index of each company, as reported to the regulator OFWAT 1. This gives information on a water companyâ&#x20AC;&#x2122;s headroom glossary), that is, its ability to supply (see customers in dry years without introducing restrictions such as hosepipe bans. According to the index the supply:demand balance of Tendring Hundred Water and Three Valleys Water is adequate.

â&#x20AC;˘ Per capita consumption rate. As the Government expects 1.1 million additional households to form in the South East & London by 2021, future household demand is a key driver of water resource planning.

Folkestone & Dover Water increased the amount of water available for use by developing two major new water resources and increased metering in 2006-7. But it continues to have During the year our companies reviewed their a deficit against headroom. The companyâ&#x20AC;&#x2122;s Water Resource Plans and drought contingency successful application to DEFRA4 to designate plans, supplying updates to the Environment its supply area one of water scarcity is allowing Agency. Later in the year they will consult on the company to invest in new infrastructure their strategic direction for the next 25 years, and resources and to increase its metering which will help OFWAT and others to consider programme to reduce demand. The company their business plans for 2010-2015 in a long aims to have 90% of customers receiving water term context. And in 2008 the companies will on a metered basis by 2015.

1 The security of supply index is also a water industry sustainability indicator

Department for the Environment, Affairs

Food & Rural

Veolia Water UK Plc Corporate Responsibility Report 2007

2 Water industry

sustainability indicator

â&#x20AC;˘ Changes in climate patterns, with increased unpredictability in the areas in which our companies operate. â&#x20AC;˘ Changing patterns of land use such as urbanisation and land drainage. To plan for these effects, our companiesâ&#x20AC;&#x2122; water resources plans consider different climate scenarios, development patterns and demand conditions. However, during the long drought in the South East of England which began in 2004, Folkestone & Dover Water and Three Valleys Water joined five other water companies in the region to restrict their consumersâ&#x20AC;&#x2122; water use by imposing a hosepipe ban. They also increased their water efficiency activities and made extra efforts to limit leakage.

Folkestone & Dover Water Measured Unmeasured

Tendring Hundred Water Measured Unmeasured

Three Valleys Water Measured Unmeasured

Water in the South East Case study

Following the 2004-2006 drought in the South East of England, Three Valleys Water and Folkestone & Dover Water joined other water companies and environmental and consumer bodies in the region to launch the “Water in the South East” campaign to help promote the sensible use of water. Originally known as “Beat the drought”, the innovative campaign won a Green Apple award. The campaign, involving characters from the film Shrek the Third, was launched at the same time as the film and involved direct communications with customers, posters and bookmarks for schools, and the chance to win a family holiday in a castle in Ireland. These were promoted

Veolia Water UK Plc Corporate Responsibility Report 2007

through partner web sites and www.waterinthesoutheast.com. The big, green loveable ogre had some simple, Shrektastic tips like using rainwater from a water butt for the garden, turning off the tap while cleaning teeth and taking a shorter shower. Shrek, Donkey and Puss in Boots helped get across the message of ‘reduce, reuse, recycle’ to children and families, so that future generations learn at an early age how precious water is and why they must do their best not to waste it.

Our business continued

Total leakage achievements (incl. communications pipes)

Leakage achievements: actual and target rates of total leakage: Megalitres/day

As a result of these measures, average demand for water in 2006/7 was approximately 5% lower than the previous year. Three Valleys Waterâ&#x20AC;&#x2122;s customers, however continue to exceed the industry average for per capita water consumption, whereas Tendring Hundred Waterâ&#x20AC;&#x2122;s customers use the least amount of water in the country. Using water more efficientlyâ&#x20AC;Śactions

Water efficiency measures cut water use without reducing benefit to customer and helps to bridge the potential gap between demand and supply. All three regulated water companies operate a number of repair, maintenance and water conservation programmes. All three companies promote water efficiency in their publications and at the events they attend, as well as in the local and national media. They tailor their promotion of the efficient use of water to their stakeholders, including local councils and regional planning authorities, in accordance with their duty to conserve water under the Water Act 2003.

Valleys To influence future domestic use, Three Water contributed to the South East and East of England regional housing and spatial plans and are in contact with local authorities to encourage them to take water conservation into consideration within their planning departments. The company continued to promote its Self Water Audit during the year to enable customers to calculate how much water they use in the home , and how much they can save by making small changes to normal daily activities. In all, more than 6,000 customers completed the audits.

Leakage All three regulated water companies achieved leakage rates better than their targets set by the regulator, OFWAT. Folkestone & Dover Water beat its target by almost 6%. Tendring Hundred Water continues to have the lowest level of leakage per property in the industry; its performance is very close to the minimum achievable.

â&#x20AC;&#x153;Folkestone & Dover Water have a very good record in tackling leakage, one of the lowest in the countryâ&#x20AC;? Elliot Morley, Environment Minister (March 2006)

Target

Other water efficiency activities during the year included work with schools through Three Valleys Waterâ&#x20AC;&#x2122;s Education Centre (see Having achieved consistent levels of leakage, p.28), a joint campaign with B&Q to encourage the companies intend to continue to achieve customers to use less water, sponsorship of BBC these levels in 2007/8. Gardeners World Show, and water efficiency packs for local authorities. Folkestone & Dover Water ran local radio and newspaper advertising campaigns, and competitions with a water saving focus.

Folkestone & Dover Water Actual rates Target rates

Tendring Hundred Water Actual rates Target rates

Three Valleys Water Actual rates Target rates

Consistent with UK Governmentâ&#x20AC;&#x2122;s Sustainable Development indicator for domestic water consumption

Water industry sustainability indicator

Veolia Water UK Plc Corporate Responsibility Report 2007

Our business continued

Target

Three Valleys Water aims to have 44% of domestic properties across its region metered by 2010. Folkestone & Dover Water aims to have 90% of its 170,000 customers metered by 2015. Metering is an important demand management tool, as surveys show that households fitted with a water meter use approximately 10-15% less than those without a meter. All three water companies continue to offer metering free of charge, and installed over 47,000 in 2006/7. 66% of all Tendring Hundred Water’s customers now have a meter, 57% of Folkestone & Dover Water’s and 33% of Three Valleys Water’s. On average across the group, almost one in two customers now has a meter. As part of the targets to guarantee water supply security in a region that has half the average nationwide rainfall, Three Valleys Water aims to have 44% of domestic properties across its region metered by 2010. Folkestone & Dover Water aims to have 90% of its 170,000 customers metered by 2015.

Veolia Water UK Plc Corporate Responsibility Report 2007

Drinking water quality

During the year we provided drinking water of the highest quality to over 3.3 million people. In its report ‘Drinking Water in England 2006’, the Drinking Water Inspectorate (DWI) detailed the performance of water companies in delivering high quality drinking water, as well as issues consumers raise with their water companies, and the expectations of health and local authorities. The quality of the drinking water we supply to our customers continues to be of a very high standard. Three Valleys Water compliance with the standards, which measure some 40 parameters, at 99.98% exceeded the industry average of 99.96%. Folkestone & Dover Water achieved 99.95%; Tendring Hundred Water 99.84%. It should be remembered that UK water standards are among the highest in the world. There were no drinking water quality incidents at Folkestone & Dover Water during the year. At Three Valleys Water there were six incidents requiring remedial action; at Tendring Hundred Water there was one. All incidents were only of short duration.

Three Valleys Water arranges regular meetings with local authority health professionals to promote a greater shared understanding of local water quality issues. The company has obtained the agreement of the Faculty of Public Health Medicine and Chartered Institute of Environmental Health for these meetings to be accredited as continuing professional development for those attending.

Treating water

All water that enters the public water supply has to be disinfected. This is normally achieved through filtration and the use of chlorine or ultra violet light. The Veolia Water UK companies’ approach to water quality is based on the precautionary principle of applying controls wherever assessments indicate that a risk may be present. 20% of the water supplied by Three Valleys Water is now treated through membrane plant. Folkestone & Dover Water has the highest proportion of membrane treatment capacity compared with other water companies. Ultrafiltration and microfiltration membrane plants can reduce the quantities of chlorine required for disinfection, thereby reducing the

Our business continued

environmental impact associated with the use of chlorine compounds. Another advantage is the significant reduction in water loss, chemical usage and solid waste produced in the treatment process . Membrane plants allow the washwater from the plant to be recycled to the head of the works instead of running to waste.

Research and development

The need for ever more complex water treatment (such as ozonation, double stage filtration for pesticides etc, granular activated carbon adsorption, airstripping of volatile organic compounds, orthophosphate dosing for lead, ultrafiltration for cryptosporidium etc.) inevitably results in more energy used per unit of water produced. This illustrates the potential for conflict between public health and environmental objectives.

• Development of Water Safety Plans.

Chlorination Our companies use two methods to chlorinate water: chlorine gas (either generated on site or delivered in cylinders) or sodium hypochlorite solution. Since 1995 they have monitored and greatly reduced their use of chlorine gas, because of the handling, storage, environmental, health and safety issues associated with it, in favour of the less hazardous sodium hypochlorite.

• Investigation of the ecological impacts of low flow rivers.

Consistent with the UK Government’s Sustainable Development Framework indicator for river quality

In the UK, Veolia Water companies spent over £0.6 million during the year on research projects devoted to specific company and collective industry issues . Key projects include: • Water quality in the distribution system.

• Behaviour of soil conditions and their contribution to bursts and leakage. • Impacts of climate change on supply and demand balance. • Development of a pollution assessment tool for water resource protection.

• Application of a biodiversity methodology to pilot sites.

Meets a VE commitment to increase R&D in order to be able to respond to environmental challenges

Veolia Water UK Plc Corporate Responsibility Report 2007

Emergencies

Each company has procedures in place to provide appropriate responses to incidents, ranging from a major burst to a breakdown of IT systems and terrorist action. Drills are carried out regularly to test their effectiveness and communication/cooperation with external agencies and service providers.

Customer service

OFWAT assesses overall delivery of service to customers annually. They publish figures on water pressure, unplanned interruptions, billing queries, complaint handling and meter reading. In the 2006-07 Overall Performance Assessment (OPA) report, Tendring Hundred Water was again top. This is the fifth time in six years that the Company has topped the OPA ranking and the second year in succession that it has done so with a perfect score. Folkestone & Dover Water also maintained excellent levels of customer service, with top performance in four of the five indicators.

3.6m

The number of people receiving water supplies from Veolia Water UK companies

47,000 The number of meters installed in the year

£0.6m The amount invested during the year in research projects

Water industry sustainability indicator for investment in research

Customer Research Case study

During the year Three Valleys Water researched the views and opinions of customers on their experience of the service they receive. The study found that the majority of domestic customers was satisfied with the quality of drinking water and with the overall service provided, saying it represented good value for money. Over half of domestic customers were satisfied with the companyâ&#x20AC;&#x2122;s handling of the drought. Three Valleys Water intends to repeat the survey annually to assess the evolution of customersâ&#x20AC;&#x2122; attitudes and expectations and also the quality of the service provided by the company.

Veolia Water UK Plc Corporate Responsibility Report 2007

Our business continued

Target

All our companies have targets to maintain high levels of customer service. During the year, all three water companies produced new customer information leaflets to accompany water bills. For customers who do not have English as a first language, information can be translated into 100 different languages. Special needs customers registered on Three Valleys Water’s Safeguard Scheme benefit from additional services such as a password scheme for entering a customer’s property, priority deliveries of bottled water in the event of supply interruptions, and bills in large print and Braille. The water companies notify measured customers who may have a leak in their pipework (as identified by a high meter reading). They also offer free supply pipe repairs to domestic customers, plus a leakage allowance. If the pipe condition is too poor to mend, the customer is offered subsidised replacement.

In recognition of the fact that not all customers can be metered, even if they would like one, Three Valleys Water and Tendring Hundred Water have developed an assessed tariff based on estimated consumption. Household debt Affordability and household water debt are serious problems for the water industry and its paying customers. Despite improvements to debt recovery processes customer debt rose 18% last year, bringing the amount owed to an equivalent of £8 per paying customer. Ultimately those who pay have to bear the cost of debt that cannot be recovered from those who owe it. All three companies offer a comprehensive range of payment methods for those experiencing problems in paying their water bills. This is communicated by information leaflets which accompany all final and reminder bills. Customers can make payments near to their home, free of charge, and at intervals that suit their budget. Assistance is also available to vulnerable customers which involves capping their charges at the average household charge rather than the actual measured bill.

Three Valleys Water operates a Customer Assistance Fund for customers in debt. Folkestone & Dover Water and Tendring Hundred Water have joined with four other water companies in the South-East to fund a charity that aims to help people reduce the burden of debt and meet future bills. The Eos Foundation offers financial assistance to reduce or clear arrears of domestic water charges.

includes advice on how to help their customers to be more water efficient. A good working relationship with developers is essential in view of the half million new homes due to be built in the South-East in the next few years. All three companies visit their industrial and commercial customers regularly to offer advice on water consumption and conservation.

Industrial and commercial clients Veolia Water Industrial Outsourcing (VWIO) works in partnership with industry to provide environmentally aware, cost-effective water processing, recycling and wastewater management. The company operates ten contracts in the UK. Three Valleys Water provides an emergency mains repair service to industrial and commercial customers in the event of a burst or leak on their premises. For customers with older networks, this service is invaluable in keeping the volume of water lost to a minimum. The Company’s Developer Services department works with property developers on the design, pricing and construction of water mains. This

Water industry sustainability indicator for number of vulnerable customers

Veolia Water UK Plc Corporate Responsibility Report 2007

Uskmouth Power Station Case study

The Uskmouth Power Station in Gwent, South Wales, operated by Alstom on behalf of Carron Energy, supplies electricity to the National Grid from three coal-fired units. These high pressure boilers require an ultra pure quality water to feed the power conversion turbines. Prior to signing a contract with VWIO this water came from the drinking water mains. Uskmouth Power decided to replace the premium product with treated effluent from a nearby wastewater treatment plant. To reach ultra pure water quality VWIO designed and built a state-of-the-art ultrafiltration plant. VWIO is also contracted to operate and maintain the facility to ensure a continuous supply of demineralised water.

Veolia Water UK Plc Corporate Responsibility Report 2007

â&#x20AC;&#x153;Veolia has had an excellent track record with us since Uskmouth Power was re-commissioned, and we are delighted to be the first power station in Wales to introduce this groundbreaking ultrafiltration technology. Not only will this project deliver substantial financial savings over the next 10 years, it will benefit the environment by enabling us to replace a premium product, mains drinking water, with a waste by-productâ&#x20AC;? Alex Lambie, CEO, Carron Energy

Our business continued

Payments to suppliers

The Group companies are committed to making timely payment for goods and services received. The Group has a policy to settle the terms of payment with suppliers when agreeing terms of business and to pay in accordance with contractual and other legal obligations. During 2006 the average time taken by Group companies to settle suppliers’ invoices was 31 days, compared with 38 days for 2005.

Benchmarking

Each year the Veolia Water UK group benchmarks itself against peer companies in order to understand its performance in relation to ‘best in class’ companies and identify good and better practice to help improve performance.

We took part for the fifth year in Business in the Community’s Corporate Responsibility Index. This Index covers companies’ overall performance in the areas of the marketplace, the workplace, the community and the environment. We have broadly adopted this model for reporting on our corporate responsibility, as can be seen in the layout of this publication, which we think is clear, comprehensive and relevant.

In addition to the overall Index, BITC produces standalone indices for companies’ performance in the areas of the Environment and the Community. Our score in these areas is recorded in the eponymous sections of this report. A Workplace index is planned for 2007.

•Business in the Community (BITC) Corporate Responsibility Index 2006

In the 2006 Index Veolia Water UK achieved leading status (Platinum ranking) with a score of 97.5%. The results, which were published in the Sunday Times as the ‘Top 100 Companies that Count’, are also available on our website, www.veoliawater.co.uk.

Relates to water industry sustainability indicator for responsible contracting

Veolia Water UK Plc Corporate Responsibility Report 2007

In the workplace

Our goal… to provide employees with the opportunities, resources and environment to allow them to make an effective contribution to the business

Workforce profile

The social element of sustainable development concerns how an organisation affects the social systems within which it operates. For our current and future employees, this translates to an objective to ensure that no employee or applicant for employment receives less or more favourable treatment, whether through direct or indirect discrimination, on the grounds of race, gender, disability, sexual orientation, religious beliefs, creed, marital or parental status. Our recruitment and selection policy is therefore based on objective criteria consistent with applicants’ skills, abilities and potential. No applicants or employees will be unfairly discriminated against on grounds of criteria not relevant to the performance of the job. This policy is consistent with Veolia Environnement objectives to anticipate demographic challenges and improve competency management, and to offer secure jobs. Net employment across the Veolia Water UK group during the year rose by 64. Average turnover of staff was 13.6%, down from 19.4% in 2005 1.

Diversity 2 In line with a Veolia Environnement commitment to promote diversity and combat discrimination, we record the composition of our staff. Women make up 39% of the workforce (38% in 2005) and 22% of managers (27% in 2005). Employees registered as disabled make up 0.4% (as in 2005). For the fifth year, we recorded the percentage of the workforce from ethnic minorities: 5%. This compares with estimates that the ethnic minority population in the South East region as a whole is 4%. We also measured the age profile of our workforce to ensure a balance of experience and career progression. The average age is 40.

2,701 Employees who received training

39%

Percentage of women employees

14%

Average turnover of staff

Meets VE commitments to respect fundamental rights, ensure employees’ health and safety, promote diversity, and develop employees’ skills

Water industry sustainability indicator for employee turnover

Veolia Water UK Plc Corporate Responsibility Report 2007

2 Water industry sustainability indicator for workforce diversity

In the workplace continued

Training and career development

Veolia Environnement has adopted a number of objectives aimed at reducing staff turnover and absenteeism through offering secure jobs, job mobility and high quality social protection. All VWUK companies have introduced the personal development system to provide a more structured approach to employee learning and career development. In 20065 , 2,701 Veolia Water UK employees received training (some employees were trained more than once), of whom 398 were managers. The total annual cost of training to the water companies (excluding salaries) as a percentage of total gross annual salary was 1.3% . During the year, in addition to vocational and professional courses, training was provided on health and safety in practice, the carriage of dangerous goods, driving assessments, diversity at work, the group’s ethical policy and stress management.

Figures refer to the 2006 calendar year

Each water company continues to train its new entrants on the company’s environmental and health and safety policies and performance through sessions at the company induction programme. Folkestone & Dover Water staff regularly participate in environmental awareness and safety training as part of the company’s maintenance of the environmental management standard ISO14001. Veolia Water Industrial Outsourcing’s management system includes a computerbased training package developed to increase employee awareness and understanding of environmental and safety issues. Employee recognition Veolia Water companies regularly reward employee behaviour that contributes to the business and supports company values. Colleagues can nominate individuals or teams, who are then judged by a panel of their peers. Winners receive a voucher for an ‘experience’ day and time off to enjoy it.

Employee consultation

Veolia Environnement has objectives to ensure employees have representation at all levels and to monitor and evaluate employee satisfaction. Veolia Water UK companies continue to work positively and progressively with trade unions. We ask our workforce regularly for their views on a range of company and personal issues. The response rate to the 2006 employee survey was 64%, an increase of 11% on the 2005 survey. The overall results showed a general positive improvement in opinion. Areas for further improvement included internal communications, effective cooperation between departments, and reward and recognition. Three Valleys Water has since recruited an internal communications specialist and put in place a communications strategy. Tendring Hundred Water has put in place initiatives to improve communication and reduce stress.

Three Valleys Water employees, “Winning Performance” winners, enjoying an experience day

Relates to water industry sustainability indicator for investment in staff

Veolia Water UK Plc Corporate Responsibility Report 2007

In the workplace continued

Accident incident rate *

Annual number of reportable incidents* per 1,000 employees.

Ethics

Veolia Waterâ&#x20AC;&#x2122;s parent group, Veolia Environnement, expects that the staff of its four divisions will behave professionally at all times. This expectation is embodied in our shared guiding principles:

â&#x20AC;˘ Strict respect for the law â&#x20AC;˘ Honesty and integrity â&#x20AC;˘ Social responsibility â&#x20AC;˘ Risk management

Health & safety

â&#x20AC;˘ Information and corporate governance

â&#x20AC;˘ Commitment to sustainable development. At Veolia Water UK these principles are built into our policies, programmes and practices to ensure that we live the values. An internal audit of employeesâ&#x20AC;&#x2122; knowledge of the Ethics codes is planned for late 2007.

Whistleblowing In line with UK practice, Veolia Water UK businesses have put in place whistleblowing procedures. These aim to encourage an environment in which all employees are able to raise their concerns about acts of malpractice or misconduct within the companies, without fear of reprisal or victimisation.

awareness training. Other training courses included defensive driving workshops, stress awareness, signing and guarding, and a new system to control exposure to vibration from power tool work. The companies are on target to meet the industry-wide initiative â&#x20AC;&#x2DC;Clearwater 2010â&#x20AC;&#x2122; target to reduce health and safety incidents by 30% by 2010.

Health and safety must play an important part Managing absence in the everyday culture of our companies. With out of operational services the contracting A Veolia Environnement commitment to ensure such as mains replacement over the last decade employeesâ&#x20AC;&#x2122; health and safety underpins a target and the growth of call centres, the water industry for all Veolia Water UK companies to improve has developed from a largely manual-based existing accident and incident rates. workforce to an office-based one. An office environment presents a different range of health There were no fatalities in our water companies issues, the most common being stress. These are in 2006/7. The average number of work days lost linked to increased levels of staff absenteeism. due to sickness, accidents and occupational ill health amounted to 7 days per person per year, compared with 8.5 in the previous year. The companies also record the health and safety performance of their contractors working on core operational activities. During the year there were no major or fatal accidents nor any reportable incidents. Managers at all the companies received extensive health and safety

Water industry sustainability indicator for occupational health and safety

Veolia Water UK Plc Corporate Responsibility Report 2007

Folkestone & Dover Water Tendring Hundred Water Three Valleys Water VWIO

* â&#x20AC;&#x2DC;Reportable incidentsâ&#x20AC;&#x2122; are deaths, major injuries,

accidents resulting in 3 days off work, diseases and dangerous occurrences as defined by the Reportable Injuries, Diseases and Dangerous Occurrences Regulations 1995 (RIDDOR).

Note: Within the smaller water companies even one accident among a small number of employees will lead to an apparent large percentage increase.

In the workplace continued

All three companies have trained line managers in attendance management and make greater use of their Occupational Health Schemes. Tendring Hundred Water monitors the occupational health of staff through annual assessments. Folkestone & Dover Water has achieved certification to the occupational health standard OHSAS 18001, which allows it to control risks and improve performance.

Work/life balance

Veolia Water UK companies are committed to supporting employees who are working parents and understand the difficulties that can sometimes be associated with this. To support working parents in managing their working hours, the companies operate a Flexible Working for Parents Policy which enables parents to apply to work flexibly. The companies are also committed to reducing overtime.

Pension schemes

The Veolia Water businesses are committed to offering, and encouraging employees to participate in good quality occupational pension schemes6. Recognising the need to assist employees in making adequate provision for their retirement the Veolia Water companies have provided occupational pensions for many decades. As a result, more than a generation of our workers have had financial provision for a more comfortable retirement.

Veolia Water believes its pension offerings meet the needs of both long-serving employees and the newer, often younger and shorterserving employees, whilst delivering a value proposition that is affordable to the business and its shareholders. The Pension Scheme Trustee maintained high levels of governance activity during the year, which was rewarded when it won the Engaged Investor Best Trustee Governance - Private Sector - Award in July 2007.

The Group’s flexible Defined Contributions scheme, which remains open to new recruits, enables members to save at flexible levels and also to take their benefits at retirement in a manner best suited to each person’s own financial needs. For employees who do not wish to participate in employer-sponsored pension arrangements, the Group maintains a basic level of life assurance cover to provide some protection for the employees’ dependants in the unfortunate event of an employee’s death.

Consistent with UK Government’s Sustainable Development indicator for pension provision

Veolia Water UK Plc Corporate Responsibility Report 2007

In the community

Our goal… to work with and support communities, charities and government towards improving the quality of life 1.

Working with the community

All Veolia Water UK companies give extensive support to the communities in which they operate. All the water companies work with the police, local authorities, crime prevention groups and the local media to raise awareness of doorstep crime 2. Sponsorship Three Valleys Water continued its support of Groundwork Hertfordshire and Groundwork Thames Valley. These are two of 50 Trusts in England, Wales and Northern Ireland, which work with partners in deprived areas to improve the quality of the local environment, the lives of local people and the profitability of local businesses. The company also funded an array of charity and community activities during the year, including local Down’s syndrome support groups, disability groups, Children in Need, local mayors’ charities, a homeless shelter, a children’s hospice and Thames Valley’s Air Ambulance Trust.

Meets a VE commitment to contribute to local economic and social development

The Veolia Water companies’ social and community initiatives are consistent with the UK Government’s Sustainable Development Framework indicator for active community participation

Veolia Water UK Plc Corporate Responsibility Report 2007

Employee volunteering Veolia Water UK companies actively encourage employees to become involved in local community initiatives, in the belief that there are benefits for both the community and employees. In this way, they contribute to a Veolia Environnement objective to foster social cohesion and sponsor good causes. All three water companies are long-standing supporters of the charity WaterAid, which funds projects in 15 of the poorest countries of the world to provide clean drinking water, sanitation and hygiene education. In 2006 Three Valleys Water celebrated 25 years of support for the charity by welcoming the Regional Fundraising Manager to work out of their offices in Hatfield. Total income raised within the region over the past five years exceeds £1 million.

2 Consistent with UK Government’s Sustainable Development indicator for fear of crime

Up on Down’s Case study

In 2006, Three Valleys Water supported six local Down’s syndrome support groups in South West London and Surrey, Essex, Hertfordshire, North London, Bedfordshire and South Buckinghamshire. Down’s syndrome is a genetic condition where a person inherits an extra copy of chromosome 21, leading to a range of medical and developmental complications, Approximately one person in every 800-1000 in the UK is born with the condition.

reach new and existing parents of children with Down’s syndrome, and two social events in the year. As a result the group increased its membership by some 200%. “Thanks to all the publicity and poster distribution, we are starting to get families from further afield joining us. It is very pleasing to see ‘Up on Downs’ taking off this way and how your donation has had such a positive effect.” Julie Evens, New Parent Contact ‘Up on Downs’.

We helped fund expansion of the Hertfordshire group ‘Up on Downs’. Our donation went towards publicity material which was distributed to hospitals, doctors’ surgeries and health centres, enabling the group to

Veolia Water UK Plc Corporate Responsibility Report 2007

In the community continued

Three Valleys Water

Tendring Hundred Water

Charitable donations

During the year Three Valleys Water continued its employee sponsorship scheme, whereby each month each staff member can nominate a community project with which they have personal involvement to receive £200.

Schools programme Folkestone & Dover Water worked with the local community during the year to promote environmental education. The company again sponsored the annual National Trust Plant Fair in Dover, now a major local event, providing the company with an excellent opportunity to engage with customers and promote water conservation. Proceeds from the fair go to the National Trust.

Benchmarking

Fundraising activities at Three Valleys Water include sponsored monthly dress-down days, when the company matches the amount raised by employees, the annual Rickmansworth Road Run, which is organised by staff, and some staff give up their free time each year to man the company telephones for the BBC’s Children In Need appeal.

Folkestone & Dover Water

Folkestone & Dover Water’s fundraising events for WaterAid included subscriptions to the payroll lottery, recycling mobile phones and printer cartridges, and a ‘give an hour’ campaign. The company is a partner organisation to Partners for Water & Sanitation, a UK tri-sector partnership initiative (Government, civil society and private sector organisations) to assist developing countries, initially from Africa, to provide clean water and adequate sanitation.

Tendring Hundred Water staff raised money during the year for Breast Cancer Campaign, Comic Relief, Children in Need and WaterAid.

Tendring Hundred Water’s community programme focussed on welcoming parties of school children to the Environmental Centre at the Manningtree site, and sponsorship of local cultural activities.

Charitable donations made by our companies in 2006 (for the calendar year ended 31 December) totalled £136,000 . Staff raised an additional £5,000 (through dress down days etc.) which was also donated to charity. Three Valleys Water and Folkestone & Dover Water matched the sums raised for charity by employees.

•BITC Community Index 2006

In 2006 Business in the Community produced a standalone Community Index to benchmark companies’ performance in this area. Veolia Water UK was pleased to be ranked in the Platinum band, with a score of 98%.

Target

Veolia Water UK companies have an ongoing target to develop programmes to support education.

Water industry sustainability indicator for investment in communities

Veolia Water UK Plc Corporate Responsibility Report 2007

Environment Centre goes gold Case study

Through its strong links with local education authorities, Education Business Partnerships and environmental bodies our multiaward winning Environment & Education Centre is able to enrich the educational experiences of schoolchildren and students. Now in its ninth year, the Centre continues to promote water efficiency through its education programmes, with national curriculum-linked activities taking place both at the Centre and through an extensive outreach programme. These activities encourage children to be aware of using water wisely, and offer practical ways in which the children and their parents can be more water efficient. Staff from the Centre also take part in numerous roadshows to spread water conservation messages.

Veolia Water UK Plc Corporate Responsibility Report 2007

During the year the Centre was awarded a golden Green Apple Award for its innovative watersaving project for schools. The scheme, known as the Saturation Project, and involving over 1600 schoolchildren from six schools in North London, encouraged pupils and their schools to save as much water as possible over a two-week period. The savings were recorded daily, meter readings were taken before and after the experiments, and each school was given a water audit to pinpoint areas for improvement. The award is the Centreâ&#x20AC;&#x2122;s fourth Green Apple Award but its first Gold award.

Environment Centre staff with the golden Green Apple award

KitAid Case study

KitAid is a Three Valleys Water supported charity that sends unwanted football kit to children and adults across Africa, Asian and Eastern Europe. It started in 1998 when Derrick Williams, a Three Valleys Water employee, visited Tanzania with the charity WaterAid. Derrick, who is passionate about football, realised that the young children in villages in Tanzania shared the same love of football. When he returned home, Derrick spoke to work colleagues and friends and shortly afterwards the first box of donated football kit was on its way to the children he had met in Tanzania.

Veolia Water UK Plc Corporate Responsibility Report 2007

Derrick went on to set up KitAid and the appeal has grown year on year. 2006 was the most successful year, with 302 boxes of kit (12,000 shirts) being sent to 27 different countries across the world. The charity won the “Small charity, Big achiever” category in the Third Sector Awards 2006, and became a fully registered charity in the same year. With Graham Taylor obe as its Patron, the charity has received support from many professional footballers including Les Ferdinand mbe, Lee Sharpe, Malcolm Allen and Bob Wilson.

Ex. Manchester United footballer Lee Sharpe donates football shirts to KitAid

Derrick, who was awarded an MBE in 2004 for his charity work, guarantees that each donation brings a smile to a child’s face and will be valued for many years to come.

In the environment

The principal environmental costs of the water business

Our goal… to seek opportunities to reduce our consumption of natural resources by using alternatives where possible, and by optimising efficiency of use, whilst protecting and enhancing the environment .

Consistent with the UK Government’s Sustainable Development Framework indicator for resource use

The Environment Agency issued no caution letters or enforcement notices to Veolia Water companies during the year. There were no prosecutions for pollution.

Main environmental costs of water

Our environmental data measurement systems are maturing and the confidence we can place in the data is improving each year. For the seventh year we present a summary of the main resources used, the key discharges, waste products and releases to the environment for each cubic metre of water we deliver to our customers. While this table is not a complete picture of the resources used, we believe it indicates the principal impacts. The increases in energy use and CO2 emissions are due to the requirements to treat water using increasingly complex processes.

To deliver 1 cubic metre = 1000 litres (1 tonne) of water to a customer:

1998-99

2006-07

kWh of energy (electricity, gas & heating oil) used

0.77

0.82

cubic metres of water lost from our pipes in distribution

0.13

0.11

cubic metres of water lost from customers’ pipes

0.07

0.06

kg of treatment wastes, excavates & aggregates generated - (of which) kg landfilled - (of which) kg recycled

1.01 0.8 0.21

0.78 0.54 0.24

kg of carbon dioxide emitted into the air

0.35

0.44

litres of fuel used in fleet vehicles

0.005

0.003

Meets a VE commitment to protect the environment, conserve natural resources and biodiversity, and combat climate change

Veolia Water UK Plc Corporate Responsibility Report 2007

In the environment continued

The following sections examine in more detail action being taken to reduce environmental impact under each of the key components.

Catchment protection

The water resources balance is not just threatened by rising demand, droughts and climate change. If raw waters become polluted, they may become temporarily or permanently unavailable, reducing the amount of water available for use. Protecting the quality of raw waters, therefore, is a key part of sustainable water resources management. Our companies do not act alone in this. The Environment Agency has a role in monitoring and protecting the catchment and prosecuting those responsible for pollution offences. Three Valleys Water continued to manage extensive catchment protection programmes as well as actively support research programmes into groundwater quality trends. While single point pollution is closely monitored by regulators, an important issue for future catchment protection is the risk of diffuse pollution from a number of sources such as

Water industry sustainability indicator for river water quality

farmland fertilisers, nitrates and phosphates. We endeavour to control this through education, managing our landholdings efficiently and involvement in industry-wide initiatives. Protecting rivers Societyâ&#x20AC;&#x2122;s demand for water has to be met efficiently and economically; this is the function of the water companies, and they have statutory duties to that effect. This must be done at the same time as ensuring that there is enough water in the environment to maintain good quality rivers, lakes and wetlands. Three Valleys Water continued to operate similar schemes on a number of rivers in their area at risk from low flows, pumping 327 Megalitres of water during the year. The water companies maintain an ongoing dialogue with the Environment Agency, and provided information on groundwater levels, operation of low flow schemes, water quality, and volumes abstracted. It also helped the Environment Agency to develop water resources models.

Water losses

In line with a Veolia Environnement objective to control industrial water consumption, the companies again recorded the amount of water taken from the environment relative to water put into supply 1. At Three Valleys Water, water lost during transport to and at treatment works amounted to 2.7% of the total abstracted. In our offices We have an ongoing target to reduce water consumption at all of our offices. Overall, the group companies achieved a level of 35 litres per employee in 2006/7 which represents a reduction of 20% on 43 litres per employee in 1999/2000.

Target

We have an ongoing target to reduce water consumption at all of our offices.

1 Relates to the UK Governmentâ&#x20AC;&#x2122;s Sustainable Development indicator for water resource use

Veolia Water UK Plc Corporate Responsibility Report 2007

In the environment continued

Energy consumption

Greenhouse gases The annual carbon dioxide emissions associated with all our energy requirements for water supply, offices and transport were 120,358 tonnes. This represents a fall of 1%, or 1,760 tonne reduction, since 1995/96, although it is associated with changes in the mix of fuels used to generate electricity supplied through the public electricity network . Energy consumption in the supply of water surface Pumping water from underground and sources, treating it and distributing it around the network uses large amounts of electricity, which is mainly generated from fossil fuels. Energy therefore represents a major cost to our businesses (coming second only to staff costs) As well as being a Veolia and to the environment. Environnement target, it is in the companiesâ&#x20AC;&#x2122; interest to make every effort to economise energy use, especially as they are subject to the Change Levy. full rigour of the Climate

Despite our best efforts however to use energy efficiently, usage is dependent on climatic conditions, customer demand for water and

operational requirements, including regulatory We also measure our consumption in offices requirements. For these reasons our efforts to and seek ways to reduce energy use where cost reduce the CO2 emissions associated with our effective to do so. At Folkestone & Dover Water, operations are focussed on the efficient use a rolling energy review identifies energy savings of energy and fuel, reducing waste, reducing and promotes best practice in energy reduction. customer demand for water and continuing to reduce leakage. During the year, the Green Team at Three Valleys Water, made up of volunteer staff, continued to Energy consumption per unit of water put encourage colleagues to reduce waste, water into supply has increased over the past five and energy usage. years. Contributory factors are thought to be the use of alternative water sources (water lying deeper in an aquifer requires more energy to pump it to the surface), and an increased number of membrane plants (which require water to be pumped under pressure through the membranes), as a result of the need to treat to ever higher standards. The main effort to reduce energy consumption will continue to be focused on water treatment and pumping because this accounts for 98% of electricity used by the companies.

To increase the energy efficiency of pump motors, all three water companies have a phased inspection and replacement programme and install variable speed pumps where possible.

Energy consumption in water supply

Kilowatt hours/Megalitre (net of imports)/ metre water pumped

Folkestone & Dover Water Tendring Hundred Water Three Valleys Water

Relates to the UK Governmentâ&#x20AC;&#x2122;s Sustainable Development Framework indicator for greenhouse gas emissions

Veolia Water UK Plc Corporate Responsibility Report 2007

In the environment continued

Transport and travel

Fuel consumption Veolia Environnement has an objective to promote the use of cleaner fuels and vehicles 1. At Folkestone & Dover Water fuel consumption exceeded that of previous years due to increased meter installation work. Despite this both Three Valleys Water and Folkestone & Dover Water can demonstrate a general downward trend in fuel consumption per property connected since 1995/96. In the case of Three Valleys Water, the transfer of work to contractors is thought to be a contributing factor. At Folkestone & Dover Water, the reduction has been achieved by the use of route planning technology in a number of its vehicles and raising staff awareness of the need to reduce fuel use.

Target

All three companies have an ongoing target to maintain improvements in fuel consumption.

Consistent with the UK Governmentâ&#x20AC;&#x2122;s Sustainable Development indicators for road transport, and air quality and health

Waste

Three Valleys Water has a programme of active maintenance and routine replacement of fleet Aggregate use and recycling in streetworks vehicles with vehicles which meet the latest We are able to monitor the use of aggregates emission levels. Eligible employees may only by measuring our own purchases and choose company cars with a maximum CO2 increasingly by contractually obliging and output of 200g per km. Job control systems encouraging our streetworks contractors used in the Operations and Customer Services to record the amounts they use, re-cycle departments, the largest fleet users, ensure and dispose of. Contracts to maintain the efficient use of staff time and vehicles, resulting distribution network include provisions to in reduced mileage. encourage the use of trenchless technology and the re-use of excavated material.

During the year Tendring Hundred Water was 7 forced to re-think its policy to replace all vehicles on In 2006-7, that of the we estimate 202,229 renewal with those powered by LPG, due to the lack tonnes of material excavated by our companies of continuity in the supply chain of new vehicles. and contractors, 26% or 52,755 tonnes were Travelling at workâ&#x20AC;Ś All the water companies have introduced tele and videoconferencing in order to reduce the amount of time and energy spent in travelling to inter-company meetings. Three Valleys Water estimate this saved 8,324 km travel in the year, Folkestone & Dover Water 6,100 km, which included car sharing, and Tendring Hundred Water 530 km 1. These figures are thought to be under-estimated due to the difficulties in recording such information.

1 Water industry sustainability indicator on management of materials from excavations (diversion from landfill)

Veolia Water UK Plc Corporate Responsibility Report 2007

These figures are to be treated with caution as they are based on a limited data set

Fuel consumption by fleet vehicles

Annual consumption (litres) by fleet vehicles per property connected

Folkestone & Dover Water Tendring Hundred Water Three Valleys Water

recycled rather than their being sent to landfill 2 2 , compared to 52% or 122,700 tonnes last year. This reduction in the amount of waste recycled is due to exceptional circumstances at Folkestone & Dover Water which did not allow for the majority of its excavate during the year to be reused. All Veolia Water UK companies have an ongoing target to reduce waste going to landfill.

2 Water industry sustainability indicator on management of materials from excavations (diversion from landfill)

2 Moving away from disposal of waste towards waste reduction, reuse, recycling and recovery is consistent with the UK Governmentâ&#x20AC;&#x2122;s Sustainable Development Framework Indicators for waste and resource use

Three Valleys Water wins award for utility guidance on recycling excavated materials Case study

Three Valleys Water won the ‘Best Utility Company’ Award at the London Transport Awards 2007 for investigating the use of recycled material to reinstate holes in order to reduce the environmental impact. The company’s Highways Liaison Manager, Eddie Owen, has produced good practice guidance for utility companies on using excavated materials agreements. As a result of agreements reached between the London and Anglian Highways Authorities and Utilities Committees (HAUC) and all utilities, it is estimated that 95% of all excavated material will be recycled across the region.

Veolia Water UK Plc Corporate Responsibility Report 2007

“I started investigating and trialling the use of recycled materials in reinstatements some time ago” says Eddie. “Current reinstatements use an MOT type stone which is expensive and becoming scarce. In fact by 2010 there’s going to be a shortfall of around 400,000 tonnes of this material, so it is important that we work towards reducing our environmental impact.”

Eddie Owen (right) receiving the award

In the environment continued

Generation and consumption of aggregate material in streetworks Annual generation and consumption (%)

Waterâ&#x20AC;&#x2122;s purchasing policy Folkestone & Dover maximises the purchase of materials that can be recycled. The company recycles stationery, plastic piping, vending machine cups, mobile phones and printer cartridges.

Tendring Hundred Water recycles paper, cardboard, mobile phones and printer purchased for office use cartridges. All paper comes from a sustainable source.

production and disposal Waste in water treatment Water treatment wastes are variable, depending predominantly on the quality of raw waters and treatment processes that are used. They may contain river solids, filtrates or sludges from treatment. Of the treatment wastes generated during the year, 99% (13,300 tonnes) was re-used as a soil conditioner on agricultural land .

Office waste Across the group we used 25 tonnes of photocopying paper in main offices, and 97 tonnes of all other paper. This was mainly used for billing and marketing purposes. Nearly all the paper came from sustainable sources.

Benchmarking

â&#x20AC;˘BITC Environment Index 2006

Water industry sustainability (diversion from landfill)

Tendring Hundred Water Excavated & landfilled Excavated & reused

In 2006 we took part for the 11th year in succession in the BITC Environment Index (the Environment Index was the precursor of the have All Veolia Water UK companies an ongoing Corporate Responsibility Index, of which it target to reduce waste going to landfill. now forms part), scoring 95.7% and achieving Platinum ranking. Further details can be found During the report year Three Valleys Water at www.veoliawater.co.uk. CDs, plastic cups and 4.6 tonnes of recycled paper. The company has an active â&#x20AC;&#x2DC;Green Teamâ&#x20AC;&#x2122; charged with reducing the amount of waste generated by the company.

indicator for sludge management

Target

Consistent with VE objective to the increase amount of waste recycled to agricultural use

Folkestone & Dover Water Excavated & landfilled Excavated & reused

Three Valleys Water Excavated & landfilled

Excavated & reused

Note: Waste figures include some estimation

Veolia Water UK Plc Corporate Responsibility Report 2007

Conservation projects Case study

Bats Working with the Environment Agency and the Herts Bat Conservation Trust, Three Valleys Water is helping to halt the decline in the British bat population. A number of disused military pillboxes on Three Valleys Water sites have been converted into bat hibernacula, and an ongoing monitoring programme put in place. The low concrete buildings with small apertures have been fitted out to allow bats to hide and hang during winter. Staff have worked in the areas surrounding the pillboxes to improve the vegetation which will attract the bats to hunt for insects. Barn owls Three Valleys Water is also helping Barn Owl numbers in Hertfordshire to recover from near extinction. These distinctive birds of prey nest traditionally in manmade structures such as rural barns and churches but changes to agricultural

Veolia Water UK Plc Corporate Responsibility Report 2007

practices mean there are fewer buildings for them to nest in. To address this, the company has provided nesting boxes on company-owned land which several pairs of breeding owls have used successfully to fledge over 40 young in recent years. Dungeness Dungeness is part of Folkestone & Dover Waterâ&#x20AC;&#x2122;s landholdings. It contains 40% of the vegetated shingle in Britain and is thought to be the largest shingle structure in the world. As the site is designated a National Nature Reserve, a Special Protection Area for wild birds, a Special Area of Conservation and an Internationally Important Wetland, the company works closely with Natural England and the RSPB to provide the care and attention that this special site demands.

Photo courtesy of Keith Barker, Herts Bat Group

In the environment continued

Respecting our surroundings

The water companies’ major capital schemes are carefully designed and planned from the outset, with an objective of minimising disturbance to local residents, road users and to the environment 1. This is consistent with Veolia Environnement’s objective to curb local nuisance by enhancing quality of life and ensuring installations are integrated within the local landscape.

Biodiversity

Our policy is to give particular priority to projects and activities that foster species and habitats which are the subject of Biodiversity Action Plans (see glossary) and are found on our own and adjacent land 2. The tables show a selection of species and habitats that we are helping in this way. Three Valleys Water has completed site-specific biodiversity surveys at 12 sites on company holdings. The surveys, which will help to develop site-specific habitat management plans to improve heterogeneous habitats within each site, form part of a company-wide

Consistent with Veolia Environnement’s objective to curb local nuisance by enhancing quality of life and ensuring installations are integrated within the local landscape

draft biodiversity strategy. Once the strategy is finalised (targeted for 2008) additional sites will be surveyed and, where appropriate, plans developed to enhance biodiversity.

Target

To finalise the biodiversity strategy in 2008. Management of our landholdings To ensure our landholdings are managed efficiently the companies record both the amount of land owned which has a statutory designation, eg SSSI, SPA, SAC, including ancient woodlands and sites of high wildlife value, and the percentage of this land covered by a management plan. Folkestone & Dover Water continued to be a partner in the White Cliffs Countryside Project which works to enhance and protect the countryside in south east Kent. The company also supports Water for Wildlife, a Water UK and the Wildlife Trust project working to ensure wetlands habitats are protected for the future. Tendring Hundred Water continued its

Consistent with UK Government’s Sustainable Development indicator for local environment quality

Veolia Water UK Plc Corporate Responsibility Report 2007

sponsorship of the Essex Biodiversity project, a partnership of over 40 local organisations. In return, the project will look at ways of assisting the company with its biodiversity programme. The company continued to promote conservation by receiving schoolchildren at its nature area in Manningtree. The long-standing partnership between Three Valleys Water, Friends of Stockers Lake and Herts and Middlesex Wildlife Trust is an excellent example of business and the community working together. The partnership has succeeded in providing an outstanding conservation site at Stockers Lake to help maintain the wetland bird population 3. Another partnership between Three Valleys Water, Groundwork Thames Valley and Natural England continued its scrub clearing work during the year at Wraysbury Site of Special Scientific Interest (SSSI), providing a range of habitats for wildlife.

Relates to the UK Government’s Sustainable Development indicator for biodiversity conservation

Consistent with UK Government Sustainable Development Framework indicator for bird populations

In the environment continued

Priority Species

Folkestone & Dover Water Dormouse, Silver-spotted Skipper, Chalkhill Blue, Adonis Blue, Great Crested Newt Tendring Hundred Water

Dormouse, Stag Beetle, Great Crested Newt, Skylark, Song Thrush, Pipistrelle Bat, Black Poplar

Three Valleys Water

Barn Owl, Reed Bunting, Grasshopper Warbler, Water Vole, Otter, Pipistrelle Bat, Bittern, Great Crested Newt, White Clawed Crayfish, Black Throated Grebe

Veolia Water UK Plc Corporate Responsibility Report 2007

Priority Habitats

Folkestone & Dover Water Chalk grassland, woodlands, Dungeness shingle Three Valleys Water

Chalk rivers, grazing marsh, fen, lowland calcareous grassland, lowland dry acidic grassland, lowland heathland, reedbeds

Further information

Do you want more information about our business and biodiversity? Each water company prepares Conservation, Access and Recreation reports which describe policies, plans and performance relating to conservation, access and recreation within their supply areas. These are included in the annual Corporate Responsibility reports which give more detail on matters discussed in this Group report.

Glossary

Abstraction licence The authorisation granted by the Environment Agency to allow the removal of water from a source of supply. Aquifer A porous water-bearing underground formation of permeable rock, sand or gravel capable of yielding significant quantities of water. Business in the Community Business in the Community is a business-led charity comprising over 750 companies. Its purpose is to inspire, challenge, engage and support business in continually improving its positive impact on society. In 2002 it developed the Corporate Responsibility Index, a voluntary benchmark of responsible business practice.

Business in the Environment An organisation set up in 1989 as an initiative of Business in the Community. It promotes practical steps that will support the UK’s progress towards understanding and applying the principles of sustainable development through action and partnership between business and its stakeholders. It has developed the Index of Corporate Environmental Engagement, which gauges how businesses manage environmental issues. Biodiversity The variety of life forms we see around us. Encompasses the whole range of mammals, birds, reptiles, amphibians, fish, insects and other invertebrates, plants, fungi and microorganisms such as protists, bacteria and viruses. Biodiversity Action Plans Plans which set out proposals and targets for the conservation of priority species and priority habitats identified under the UK’s National Biodiversity Action Plan.

Veolia Water UK Plc Corporate Responsibility Report 2007

Carbon dioxide The most important of the greenhouse gases. Carbon dioxide is produced when fuels are consumed (eg to generate electricity or to power a vehicle). Catchment protection activities Actions to reduce the risk that water from a catchment will be degraded (in quality or quantity) as a result of land-use change, pollution, etc. Distribution losses The water loss from that part of the distribution system which is the responsibility of the water company. It is the difference between water put into supply and water delivered (after allowing for operational uses such as flushing of mains following repair work). Drinking Water Inspectorate (DWI) A body formed by Government in 1990 which monitors water companies’ compliance with the Drinking Water Standards.

Drinking Water Standards The legal requirements governing the quality and the wholesomeness of drinking water. Environment Agency A non-departmental public body with major responsibilities for the management and regulation of the water environment and for the control of industrial pollution and wastes. Greenhouse gases Gases which, when present in the atmosphere, trap warmth from the sun and maintain the temperature of the earth. Groundwater Water held in water-bearing rocks, in pores and fissures underground. Headroom This is the difference between the amount of water a company has available for supply (‘water available for use’) under certain conditions, and the volume of water it is required to put into its network (‘distribution input’) under the same conditions.

Glossary continued

Kilowatt-hour (kWh) A unit of electricity. One Kilowatt-hour is the same as 1,000 watts of electricity used for one hour and is, for example, the amount of electricity used by a typical single bar electric fire in one hour. Kilowatt-hours/Megalitre (net of imports)/ metre head pumped A measure of the amount of energy used to treat and distribute water put into supply after allowing for water that is imported from other companies. It is a useful measure for comparing year-on-year performance and performance between different companies because it takes into account factors such as variation in gradients within the supply area and the depth of the water table. Low-flow rivers Rivers which are identified by the Environment Agency as “having unacceptably low flows caused by authorised abstraction”. Megalitres/day (Ml/d) Megalitres (1 million litres) per day. The usual method of measuring the consumption or the flow of water.

Veolia Water UK Plc Corporate Responsibility Report 2007

OFWAT Office of Water Services. A body established by Parliament with legal duties to ensure that water and sewerage companies can carry out their functions, to protect customers, to promote efficiency and economy, to facilitate competition, and to further environmental conservation and enhancement. Priority species Species which are of the highest priority for conservation action and for which a Biodiversity Action Plan (see above) is in place. Security of supply index This index is designed to give information on a water company’s ability to supply customers in dry years without making demand restrictions such as hosepipe bans. Site of Special Scientific Interest (SSSI) An area of land designated under the Wildlife and Countryside Act 1981 as of special interest because of its flora, fauna, or geological or physiographical features.

Supply pipe The length of service pipe from the boundary of the property to the curtilage of the building; this part of the service pipe is the responsibility of the householder. Surface water Water which flows or is stored on the ground surface. Sustainable development Development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Total leakage The total amount of water lost from the distribution system including “distribution losses” (see above) and losses from the customers’ part of the distribution system.

Water available for use Reliable yield of water resources based on the quantity or yield of water that can be supplied continuously from developed resources. Calculated using guidelines issued by the Environment Agency, takes account of the characteristics of each source and its ability to support abstraction under drought conditions without detriment to the needs of other water users or the environment. Water delivered Water delivered to the customer at the limit of the Water Company’s responsibility. (Water delivered will comprise water used by the customer, water lost due to internal plumbing losses and supply pipe losses.)

Treatment wastes Waste materials produced as a result of treating raw water to ensure that it is safe to drink and complies with the Drinking Water Standards (see above). Examples include coagulant sludges, sludges from iron removal plant and river silt.

Verification statement

Veolia Water UK engaged Det Norske Veritas (DNV) to provide assurance on the environmental and social indicators prepared by Veolia Water UK covering the period April 2006 – March 2007 in its Corporate Responsibility Report. DNV’s terms of reference were to assess the appropriateness and accuracy of the data, claims and commitments made by Veolia Water UK against each of the indicators and to ensure that the information provided is representative. Process DNV has verified Veolia Water UK’s environmental and social indicators on a sitelevel basis. The verification process involved: 1. Conducting visits to the water companies within Veolia Water UK. 2. Reviewing each company’s environmental and social indicators and the accurate transfer of this data to the Veolia Water UK Corporate Responsibility Report 2006-07.

Veolia Water UK Plc Corporate Responsibility Report 2007

Findings DNV commends Veolia Water UK for the progress it continues to make with respect to the accuracy and completeness of the data reported and the robustness of the reporting mechanisms used against each of the indicators.

• DNV recognises the need to streamline the data gathering process throughout Veolia Water UK. In order to enhance the traceability and transparency of reported data, however, the availability to the auditor of detailed supporting evidence could be improved.

To build on Veolia Water UK’s development of good practice, a number of recommendations to strengthen its environmental and social indicators as well as the reporting process are suggested:

Conclusion Overall, it is DNV’s opinion that the information reported against each of the environmental and social indicators at the constituent company/ site-level provides a credible and fair reflection of the way Veolia Water UK has addressed and managed these indicators during 2006-07.

• DNV notes that Veolia Water UK continues to positively engage with its key stakeholder groups. DNV considers that this could be enhanced further by implementing a more structured and consistent approach to stakeholder engagement across all three companies. • DNV recognises that the existing environmental and social indicators provide a fair reflection of the Veolia Water UK material aspects. DNV suggest a review of these indicators would be beneficial in order to ensure they are up to date and reflect current stakeholder material aspects.

Dr. Eric Pape Vice President DNV London March 2008

Invitation to comment

We would like to hear from anyone who has comments to make on our environmental, social and economic performance.

Three Valleys Water PLC

Folkestone & Dover Water

Tendring Hundred Water

Veolia Water Industrial

Veolia Water UK Plc

PO Box 48, Bishops Rise,

The Cherry Garden,

Mill Hill, Mistley,

Blackwell House, 1 Three

37-41 Old Queen St,

Folkestone CT19 4QB

Essex CO11 2AZ

Herts WD2 2QD

Hatfield, Herts AL10 9HL

Services Ltd

Cherry Garden Lane,

Services Ltd

Manningtree,

Outsourcing Ltd

Valleys Way, Bushey,

London SW1H 9JA

Supply area

3738 km2

420 km2

352 km2

N/A

Properties connected

1,255,123

74,442

72,200

N/A

Number of people supplied

3,069,940

159,980

154,340

N/A

Water put into supply

840Ml/day

43 Ml/day

30 Ml/day

N/A

Percentage from

58%/42%

100%

80%/20%

N/A

Please contact

groundwater/ surface

Corporate Responsibility Services Veolia Water UK Plc 37-41 Old Queen Street London SW1H 9JA

Length of main

14,441 km

1,108 km

908 km

N/A

Employees

1070

Turnover

£212.8 m

£16.7 m

£14.3m

N/A

£256.4m

Website

www.3valleys.co.uk

www.fdws.co.uk

www.thws.co.uk

www.vwio.com

www.veoliawater.co.uk

water resources

Tel: 020-7393 2700, fax: 020-7393 2805 E-mail: info@veoliawater.co.uk or comment online at www.veoliawater.co.uk

Veolia Water UK Plc Corporate Responsibility Report 2007