1st Newsletter 2017 | Improving Water Governance: to avoid conflict and increase sustainability

Water is arguably our most essential resource, but its availability and quality is increasingly at risk, with the related danger of international conflict. This newsletter explores how water can become an ‘enabler and connector’ between sustainability goals, and how it raises profound questions about Where, How, and With Whom we make decisions.

Welsh Water – a different way of doing business

Welsh Water at the Royal Welsh Show 2016, © Welsh Water, 2016

Welsh Water at the Royal Welsh Show 2016, © Welsh Water, 2016

Peter Davies is an FDSD Trustee and Chairs Welsh Water’s Customer Challenge Group.

Where I was born in Pembrokeshire in south west Wales, 61 years ago, our water came from a well. Piped water arrived only after my father dug a ¾ mile trench to connect to the mains. The majority of people around the world still have this very direct relationship with their supply of water. But for those of us fortunate to have water provided as an essential public service, we simply expect high quality water to flow when we turn on the tap, and for waste water to be taken away. This shift from active involvement to being passive receivers has provided huge improvements in quality of life, but also creates challenges for how we better manage our water resources for the long term. One way this can happen is by incorporating stakeholders and customers directly in the business model.

Water and sewage provision in England and Wales

In England and Wales water supply and sewerage services were privatised in 1989. They are now managed through 32 private, monopoly water and sewerage companies operating in a highly regulated sector and providing services to over 50 million household and non-domestic customers. Customers are the life blood of any business, and should be the focus for every public service. However, in regulated sectors (and in public services in general) it is easy to think of customers as passive receivers of utility services.

This lack of consumer involvement was behind Ofwat’s decision, as the economic regulator for the water industry, to: “put current and future customers at the heart of the way companies run their businesses.” Since 2013, Ofwat has required each water company to create an independent Customer Challenge Group (CCG) as a key means to deliver this vision. Each CCG has the responsibility for ensuring that the company engages customers in its business planning process and that their views are properly reflected in the company plans submitted to the regulator.

The CCG is not representative and should not be confused with the statutory role of the Consumer Council for Water. It is however independent and brings together a range of expertise and networks that work alongside the company to ensure that the company’s business plan meets the needs of all its customers. It has a particular responsibility to reflect the needs of vulnerable customers, who find it most difficult for their voice to be heard, and for those future generations of customers who do not yet have a voice, but whose needs will be met by decisions the company takes today. The independent CCG brings together a range of relevant expertise and reference points to ensure the company is both challenged and supported to ensure that its customers are at the heart of how the company operates.

I have the important task of chairing the CCG for Dwr Cymru Welsh Water, providing independent challenge, scrutiny and advice on the:

  • quality of the company’s customer engagement and involvement
  • extent to which the results of this engagement are reflected in the company’s decision making, business planning and operations.
  • return of value to customers

This task has a different context in Wales as we are proud to have a very different delivery model with a very different relationship with its consumers to that in England. The vast majority of our water services are provided through Dwr Cymru Welsh Water − a not for profit company.

Dwr Cyrmu Welsh Water

Welsh Water is the sixth largest water and sewerage business in England and Wales and, since 2001, it has been owned, financed and managed by Glas Cymru. Unique in the water and sewerage sector, Glas Cymru is a company limited by guarantee and as such has no shareholders. It operates as the only not-for-profit water company with all financial surpluses used for the benefit of its customers. Its corporate governance functions are the responsibility of its Board, which has a majority of independent non-executive directors. These roughly 70 members are appointed following a process undertaken by an independent membership selection panel. They cannot be representatives of outside stakeholder groups but rather are unpaid individuals whose duty is to promote the good running of the company, in the best interests of its customers.

Dwr Cymru Welsh Water therefore has a different relationship with its customers than the other water companies in England and Wales. The business model enables customers to help decide how the company should reinvest its financial surpluses. Over 12,000 customers were involved in last year’s consultation on how the company should reinvest its approximate £30 million profit. However, the fact that well under 50% of customers currently realise that their water company is not-for-profit, indicates the size of the challenge to really involve customers.

Increasing consumer power

We are seeing huge changes as technology empowers people making them smarter, better informed and more demanding than ever. Despite our largely passive relationship with waste water and supply, the water industry is not exempt from these changes. The UK Government is introducing competition into business and retail markets giving consumers some element of choice of service. However, in reality it is largely illusory as competition only applies to retail services such as billing, as opposed to the core business of water supply. The industry itself is collaborating to provide consumers with comparative performance data on the core business via www.discoverwater.co.uk.

Ofwat has made it clear that company business plans need to be based on customer views in the next price review. The real goal is to move from consultation to active involvement. The Dwr Cymru Welsh Water business model provides some advantages in that customer trust increases significantly when they are aware of the not for profit business model. However the task of moving customers from passive receivers to active participants focused on the long term wellbeing of future generations remains a real challenge.

Encouraging people to participate in co-creation has the potential to deliver far better solutions that businesses or public bodies can achieve alone. In developed countries this may not now require digging your own trench, or going to the well, but it is critical that we reconnect consumers practically and emotionally to the governance of how we manage such a vital asset.

Integrated Management at local scale to achieve global Sustainable Development Goals

Dimple Roy is Director, Water, International Institute for Sustainable Development (IISD).

When it comes to safeguarding the future of our natural habitats, natural resources, livelihoods, and economies for future generations, we now have the guidance of the Sustainable Development Goals (SDGs). These are a set of seventeen aspirational ‘Global Goals’ aimed at ensuring all countries collaborate towards a sustainable future for all.

Although the SDGs are thematically focused goals, the suite itself defies viewing sustainable development in silos, promoting integrated approaches. Indeed, this is how the International Institute for Sustainable Development (IISD), has addressed its work on sustainable development.

For example, IISD’s Water program has taken a more broadly encompassing approach to management of fresh water, through the Water-Energy-Food (WEF) nexus model. More than just freshwater management itself, it is vital to consider these three vital components of human well-being, and how they are interlinked (with action in one area impacting two or three of these areas), when developing the most effective policy options for decision-makers.

In Canada and further afield, we have been championing and providing guidance on how to implement the WEF approach in various contexts and in different ways. Outlined below are two ways that IISD has spearheaded integrated WEF management; one in Canada and the other in Suriname.

Figure 1. Algal blooms on Lake Winnipeg. Source: Greg McCullough

Figure 1. Algal blooms on Lake Winnipeg. Source: Greg McCullough

Lake Winnipeg, Canada

Lake Winnipeg is the 11th largest freshwater lake in the world, and has a basin that encompasses parts of four Canadian provinces and four American states. This large basin supports large and small communities and faces issues including algal blooms, floods and occasional drought. The Lake Winnipeg Basin provides drinking water for communities, fisheries, recreation, agriculture, and is fundamental to water, energy, food security as well as economies for the region and for Canada.

Using a somewhat organic, bottom-up WEF approach, we envisioned a healthy Lake Winnipeg, where a diverse landscape provides a range of benefits, including reliable water, energy and food, including thriving rural economies, nutrient recycling, water storage and protection from floods and droughts, etc.

First, we looked at the problem of nutrient overloading and algal blooms. We found that wetland plants absorb nutrients very well from water systems. These plants can be harvested to remove excess nutrients from the system. Working with a diverse range of partners, we developed a set of fuel pellets from these harvested plant materials to be used as clean, renewable sources of energy. Combined with phosphorus recycling for agricultural fertilizer, this addresses the WEF nexus.

WEF security through the Lake Winnipeg Watershed

In Canada, in the context of the Lake Winnipeg Basin, watershed managers are looking at excess biomass to see how they can use ditch maintenance and wetland management as ways to not only reduce nutrients, but also develop carbon credits, and localized energy while recycling phosphorus for use as agricultural fertilizer. Over the past decade, we developed this idea while working with watershed manager, farmers, entrepreneurs and government officials.

Next stage? We are developing an atlas to map biomass resources in the province in developing a regional bioeconomy. This atlas will help understand the costs and logistics to replicate and scale-up this successful management approach and prove an invaluable tool for a range of stakeholders including farmers, resource managers and government.

Maripaston, Suriname

In a more formal, systematic application of the WEF nexus, we worked in the country of Suriname. Suriname’s economy relies strongly on mining, and there was a desire to understand the interactions between a mine in Maripaston, and its relationships with water, energy and food. The goal was to consider how they might impact one another within that context. We developed and pilot tested a tool (the WEFsat-Mining tool) to aid decision makers in understanding “triple wins” for water-energy-food security through investments in specific underlying systems.

We defined WEF security as determined by availability, access to supporting infrastructure and supporting institutions and policies. Two workshops in Paramaribo, Suriname’s capital, convened representatives from local communities, government departments, mining companies, non-governmental organizations, academics, etc. to identify key aspects of WEF security and to validate findings around how WEF security could be maintained and even enhanced through mining activities.

Framework used to develop the WEFSat-Mining tool. Source: IISD

The goal was to understand, monitor and incorporate WEF security into decision making processes, on the mine site and in the region. The tool now allows other countries facing similar challenges to unpack and manage integrated challenges around mining development and towards meeting broader goals.

Together these two different approaches provide a few lessons. Firstly, that that while the WEF nexus provides one way of integrating between SDGs, such integration is complicated and requires a fair bit of effort through interdisciplinary teams. Second, that there is no silver bullet and these approaches are context specific. Other lessons highlight the role of data and good indicators for adaptive management, as well as continued efforts and investment in integrated efforts.

Finally, our experience underscores that the role of the honest broker, played by organizations such as IISD cannot be underestimated, as integrated solutions require strong partnerships and these must be carefully fostered over time.

Local authorities should involve local community groups much more in climate resilience

(CC By 2.0) Herry Lawford / Flickr.com

(CC By 2.0) Herry Lawford / Flickr.com

The Urban Heat project has released its final report highlighting the distinctive and largely untapped potential of the local voluntary and community group sector (VCS) in the developm

ent of local climate resilience and emergency response. On the basis of three local participatory action research case studies, the report provides a range of ideas – at local and national levels – for how the role of VCS groups in local climate resilience and emergency planning can be enhanced.

Focusing on urban heatwaves, and funded by Joseph Rowntree Foundation, the Urban Heat project was led by a team led by researchers in the Policy Studies Institute, supported by community-action experts in Age UK (East London), South West London Environment Network and Transition Town Tooting, and by evaluation experts in Resources for Change.

For further information, please visit the Urban Heat website.

Taking account of intergenerational fairness | New IFoA Bulletin launched

IFoA-bulletinThe Institute and Faculty of Actuaries (IFoA) has launched the first in a series of bulletins on intergenerational fairness. Focussing on the risks to financial stability posed by climate change, it seeks to raise risk awareness among decision makers of not considering long-term implications of societal, environmental and technological changes.
In order “to raise the profile of the debate around what is a fair contract between generations…, so that neither current, nor future generations are unfairly burdened”, the new bulletin takes a financial perspective of longterm roles of discount rates and financial disclosure and the importance of understanding not just the likely possible outcomes, but the worst case scenario when assessing the potential impact of climate change, with a particular focus on the role of long-term institutional investors, such as pension funds and life insurance companies.

IFoA President, Colin Wilson said: “Societies across the world face many complex challenges such as ageing populations, reducing poverty and responding to catastrophic weather events. Intergenerational fairness needs to be considered as a priority for policy makers if we are going to meet today’s needs without putting younger or future generations at a disadvantage.”

Future editions of the Intergenerational Fairness Bulletin will focus on the future of pensions and the funding of health and care services.

The Bulletin can be downloaded here [PDF, 608KB]. For further details, please visit the IFoA website.

Related links

    • Institute and Faculty of Actuaries (IFoA)
    • FDSD provocation by Halina Ward: Democracy in the face of climate change: exploring the present, 2050, and beyond
    • When democratic politics become polarized, the rhetoric of politicians often slides towards proclaiming certainties about the future. However, the future is full of uncertainties, it’s all about risk and trade-offs. For the sake of future generations – and our own futures – democratic debate needs to focus on risk and what to do about it, particularly when a possible outcome could be catastrophic down the line.  That’s where ‘the precautionary principle‘ comes in to guide our collective decision making.  It’s beautifully explained in the video below:

Prosperity without Growth – Foundations for the Economy of Tomorrow


A new edition of Prosperity Without Growth – the landmark work by Professor Tim Jackson – was launched on 19 December at the University of Surrey, at an event which also celebrated his appointment as 2016 Hillary Laureate.

The publication of Prosperity without Growth in 2009 marked a critical intervention in the sustainability debate. Tim Jackson openly challenged conventional economics, questioned the most highly-prized goal of politicians and economists alike: the continued pursuit of exponential economic growth. Its findings provoked controversy, inspired debate and led to a new wave of research building on its arguments and conclusions.

This substantially revised and re-written edition updates and expands those arguments. Jackson demonstrates that building a ‘post-growth’ economy is a definable and meaningful task. Starting from clear first principles, he sets out the dimensions of that task: the nature of enterprise; the quality of our working lives; the structure of investment; the role of the money supply. He shows how the economy of tomorrow may be transformed in ways that protect employment, facilitate social investment, reduce inequality and deliver both ecological and financial stability. Prosperity isn’t just about earning more and having more, it is anchored in our ability to participate meaningfully in the life of society.

Related Links

  • For more information about Prosperity without Growth, visit the Routledge website.
  • Find out about the work of the Hillary Institute of International Leadership on the Institute’s website.
  • A video recording of the presentation can be accessed on the CUSP website.

Environmental Audit Committee critical of Treasury’s short-termism

CC-BY-NC-ND 2.0 :: Ben Terrett / Flickr

CC-BY-NC-ND 2.0 :: Ben Terrett / Flickr

Early in November, the House of Common’s Environmental Audit Committee produced a damning report on the Treasury’s influence on sustainability policy in the UK. The Audit Committee was able to marshal considerable evidence that “the Treasury has ridden roughshod over other departments’ objectives, changing and cancelling long-established environmental policies and projects at short notice with little or no consultation with relevant businesses and industries”.

According to the Committee, the Treasury makes judgements on the suitability of investments that “favour short-term priorities over long-term sustainability”. While the Committee offers concrete suggestions on how the Treasury might improve its appraisal procedures to incorporate sustainability concerns, this most powerful of Whitehall departments does not have a good record in responding to such criticisms.

The full report can be accessed on the Parliament website.

Piketty’s call for a new political discourse on globalization

The Motor City, Packard Plant (Detroit) CC-BY-SA 2.0 :: Joseph Stevenson / Flickr

The Motor City, Packard Plant (Detroit) CC-BY-SA 2.0 :: Joseph Stevenson / Flickr

In a recent article for Le Monde, Thomas Piketty argues that unsustainable development – a pattern of globalization which has boosted inequality and so undermined communities and social justice as well as the environment – has brought about the recent democratic upheaval seen in the election of Donald Trump.

He argues that in any trade treaties – as in CETA, the Canadian-EU deal just going through – sustainable development should be at the forefront, not siloed in other international agreements such as the Paris agreement. Without that, present democracy as well as the interests of future generations will be under threat.

The full article can be accessed on the Guardian website.

For the Next Generations | Paula Tiihonen

Part of the Artwork Tulevaisuus (Future), Väinö Aaltonen (1932) © Vesa Linqvist

Part of the Artwork Tulevaisuus (Future), Väinö Aaltonen (1932) © Vesa Linqvist

To mark her retirement as the Counsel for the Committe for the Future in the Finish Parliament, Paula Tiihonen brought together a group of significant thinkers and doers for an international seminar on ‘Work for the Next Generation’. A report bringing together contributions from the seminar has now been published.

FDSD wishes Paula a happy retirement and great thanks for her work promoting the interests of future generations amongst Finish parliamentarians.

The courts, the government and air pollution

(CC-BY 2.0) Manish Prabhune / Flickr

(CC-BY 2.0) Manish Prabhune / Flickr


This week we have seen the UK government lose twice in the courts – once on air pollution and then on Article 50 to formally start the Brexit process. While there are voices questioning why in a democracy the courts should be able to overturn government decisions, the judgement on air quality highlights the critical role that courts can play within the democratic process in moving us towards a more sustainable future.

The government had committed itself to take measures ‘as soon as possible’ to improve air quality in a number of cities to comply with legal standards. But the plan put forward by Defra was judged to be a ‘woeful approach’ by the courts, following a legal challenge by ClientEarth. The government has been told to think again. It is clear that the Treasury blocked more radical plans that would see increased taxes or bans on diesel cars.

Is this interference by the courts in the democratic process? Not at all. It is a critical part of any democracy that there are methods of redress when governments fail to live up to their legally enshrined commitments, be it EU directives or laws adopted by parliament. Given the challenges that will face governments in realising their legal commitments on issues such as climate change and air pollution, oversight through the courts may become an ever more important method for ensuring meaningful action.