Pennon Group: Finance Culture
WHAT?
As part of our commitment to sustainable finance, Pennon Group was the first business in the UK to pioneer a sustainable financing framework.
The framework directly links finance with sustainability performance, enabling the Group to issue securities as well as enter into financing relationships that support sustainable investment, in line with ESG performance metrics.
Driven from within the finance team, the framework aligns with the Green Bond Principles (GBP), Social Bond Principles (SBP) and the Green Loan Principles (GLP).
WHY?
As one of the UK’s largest environmental infrastructure businesses, providing water, recycling and energy services, sustainability is an integral part of our strategy. In order to create shareholder value, the Group endeavours to maximize the efficiency of its use of resources, reduce waste, increase levels of recycling, fully exploit opportunities for low-carbon energy generation, and divert waste streams away from landfill. It is crucial that the way in which we raise finance aligns with our strategy.
HOW?
The cultural shift across the Pennon Group, through South West Water’s focus on customer and environmental outcomes and Viridor’s transformational approach to waste management, has supported the implementation of a sustainable financing framework. Having seen a successful culture shift in finance teams across the group and having our colleagues understand the business case for a sustainable strategy helped us realize our ambition across the Pennon Group. We recognize that in the past we were not in a position to be able to deliver a project such as the sustainable financing framework, but the incremental changes in our culture, caused by our shift in perceptions to a customer and environmental focus, have made this project highly successful.
This internal culture shift – driven by the CFO – coincided with changes in investor priorities, which often assess eligibility for funding through the sustainable metrics.
Suitable projects that meet the criteria of the Pennon Sustainable Financing Framework are reviewed and approved by the Pennon Sustainability Executive Committee for inclusion within the Use of Proceeds statement. For more information on our sustainable financing framework, see here.
