The company’s sustainability record has been disappointing, despite the issuance of green bonds. While the proceeds have been earmarked for water management and water recycling projects with a reduced climate footprint, they have seemingly failed to improve the company’s track record on sustainability. This contributed to regulatory fines amid growing financial challenges.
Though the fate of the company hangs in the balance, there are some lessons for the broader UK water sector. Investors, issuers and stakeholders need mechanisms that better align their incentives when it comes to meeting sustainability objectives and defining more meaningful performance targets, particularly in sectors that provide critical infrastructure. Sustainability-Linked Bonds (SLBs) offer one way to achieve this alignment.
