Anglian throws down climate change gauntlet to suppliers
If suppliers don't clean up their acts and join with Anglian Water's efforts to lower carbon emissions, the utility will stop doing business with them. But, as Maureen Gaines found out, the suppliers are more than eager to accept the challenge.
The result for failing to do so could lead to companies missing out on work with the water utility.
This was the clear message made to the 100 delegates who attended Anglian Water's recent summit, Climate Change - the Supply Chain Challenge.
Anglian Water makes no excuses for the tough stance towards its supply chain. After all, the company's energy use costs it £60M a year. And by 2010, there are fears that the company could face charges of around £10M because of its carbon emissions.
The challenge that the utility has set itself is to:
- Reduce its carbon footprint by 60% by 2050
- Reduce energy use by 9% by 2010
- Increase energy from its own renewable resources by 20%.
What is even more daunting is the critical nature of Anglian's supply chain. Its Business Continuity Project identified 51 critical suppliers and found maximum tolerable periods of disruption vary from 30 minutes to two weeks.
The company's supply chain accounts for 60% of its cost base. Companies
supplying goods and services as part of that supply chain will now have to show adaptation to accommodate climate change, and thatthey are mitigating the effects by reducing their carbon emissions.
Nirmal Kotecha, Anglian Water's head of supply chain management, explains: "We are only as strong as our weakest link.
"We will be seeking suppliers who are making the same commitment as ourselves to adaptation and reduction in carbon emissions. We will be asking more questions, and we will start scoring accordingly."
The company's decision to do something about its carbon footprint resulted from the pledge it made at last year's Prince of Wales' May Day Summit on Climate Change, backed by Business in the Community (BITC). It pledged to bring about change.
Mike Brophy, regional director of BITC, says the water utility has demonstrated the lead it is taking on this agenda. "Anglian Water is one of the few companies that is starting to engage in the difficult task of working with the supply chain in lowering carbon emissions. Anglian Water made a pledge that it would do so, and it is, which shows its integrity," said Brophy.
Although the company made its change pledge last summer, it has actually been assessing the impact of climate change for the past three years. It is one of three key areas that the company knows it must deal with - the other two are housing growth, and delivering the kind of service customers expect.
These challenges include:
- Operating in the driest region in the country, and a reduction in summer rainfall
- Flash floods and increase in sea-level - together with a long, low-level and eroding coastline, this increases risk to assets
- Fastest housing growth rate in the country - 536,000 new homes in 25 years
- Average increase in temperature forecast, with climate equivalent to southern Europe by 2080.
"We will start to lose land. Wastewater treatment works and water treatment works will be flooded. They won't be there," he said.
Sea levels could rise up to 77cm by 2080.
While other regions in the UK will be affected by climate change, East Anglia is particularly vulnerable because it has more wetlands, and Anglian Water needs to protect its assets from coastal flooding and intense rainfall for instance.
According to the company, 85% of incidents that its WwTW team dealt with in the past year or so were weather-related.
Anglian Water Group chief executive Jonson Cox says that by meeting tighter standards in improving water quality and wastewater treatment, the company's carbon footprint has doubled over the past 15 years.
He says: "We must find clever ways of reversing the trend. We will help our suppliers understand their carbon footprint and in doing so we will ask them to help us reduce our levels. Climate change is a really big risk for us."
Cox says the company needs to find "clever and innovative ways" to reduce both the effects of climate change and its carbon footprint.
"We need suppliers' help in finding these innovations."
He continues: "We must work together to find the impacts [of climate change] so we can understand our carbon footprint and our suppliers can understand theirs."
Anglian Water's strategy is underpinned by identifying risks, embedding climate change, and raising awareness.
While Anglian Water presses ahead with its strategy to reduce its carbon footprint, Kotecha is very aware not to alienate its supply chain. He says the company has become much more transparent, and is sharing a lot more than it has in the past.
Speaking at summit, Kotecha said: "If Anglian Water's doing things that increases the supply chain's carbon footprint, then say so."
So what do some of the delegates that attended the summit think about Anglian Water's plan?
Paul Ward of ITT Flygt says: "I was sceptical to begin with, and thought it would be a browbeating exercise. But it was enlightening and I feel ITT Flygt can do a lot to help Anglian Water, particularly in innovation."
Iain Cassons, Barhale Group environment manager, comments: "This is an extremely positive event."
Cassons continues: "It's the first water company event I've been to where there has been a focus on the supply chain and the impact of climate change."
Ian Findlater of May Gurney agrees, saying: "Anglian Water is leading the way."
And as Chris Newsome told the delegates: "We've moved from denial, and moved into action. It's the people in this room acting together that's going to do it."
By the end of the summit, the utility had received 500 separate pledges making a commitment to change.