Severn Trent PLC (SVT) Earnings Call Transcript & Summary

[ I'd like to welcome you to ] the Severn Trent Capital Markets Day. My name is Christine Hodgson, and next month, I take over from Andy Duff as the Chair. So for those of you that don't know me, I am currently the U.K. Chairman of Capgemini and I'm also in charge of global corporate social responsibility. And those are 2 roles that I give up at the end of this month. Now when I was doing my due diligence on Severn Trent as part of the process back in September, there were a number of things that particularly struck me about the company: social purpose, customer centricity and performance. And I can honestly say that one Board meeting in and nearly 20 days of induction, what I saw from the outside is very much now what I see from the inside. So over the last couple of months, I spent time -- I've been on the vans, I've been on met customers. I spent time with the waste and water treatment works, network teams, business services, engineers, innovators, central function teams, school outreach program, just about every single aspects of the company. And wherever you go, there is one common feeling that you get, and that's that the people who work for Severn Trent really love the company. Their passion and commitment to do the right thing for customers is palpable. And I think that's something that you should all take lots and lots of comfort from. So one of the things that sort of focus on customer centricity. When you walk around the building, you can almost inhale the sense that everybody appreciates that they're managing critical infrastructure and that they've got to ensure that customers get the services that they need to function. And that focus on customer centricity, it translates into how also we meet our regulatory requirements and not just from a compliance point of view but also when it comes to the ODIs, the outcome delivery incentives. So while those targets are owned by Liv and the management team, there's a laser-like focus and it runs all the way through the organization, with everyone focused on delivering. And maybe that's not surprising when you think that the vast majority of people that work for Severn Trent are also the company's customers. Now today, you're also going to hear a lot about Severn Trent's commitment to the environment. And as somebody who's spent quite a lot of time on this topic over recent years, I've been delighted to read about the triple pledge that the company made last year on renewable energy, on net zero and on electric vehicles. Now, of course, some of the company's assets have been in place for decades. I've been amazed, for example, by the Elan Valley Aqueduct built over a century ago that uses gravity to transport water 73 miles from the Welsh hills to Birmingham, and it's very low use of carbon. But actually, of course, we do have water and waste assets that are quite energy hungry. And so there's more that we need to do on that. And I've also been quite fascinated when I went with Business Services, for example, to see how we are using food wastes and we're using our own sludge and converting that into power for our own operations. And today, you're going to see about the company's investment in technology and ways of working that are going to help it to achieve its pledges. Now when people ask me why did I join the company, there are a number of reasons: of course, the very strong focus on social purpose, very attracted by the fact that the company wants to be the most trusted water company, but also I was attracted by the Board and the quality of the Board and the opportunity to work with Liv. And so on that note, I'd like to hand over to Liv. Thank you.

So thank you, Christine, for kicking off today. And I think we're the lucky ones. I'm pretty sure of that over the course of the next few years. So a massive welcome to those of you who've not been before to Coventry, to our headquarters. And the reason we've got headsets on is this obviously is our live operational building. So we've got the contact center literally just here. We've got teams working around. So we're going to take the volume down a bit, be quiet as a church mouse at the same time as giving you a, hopefully, really engaging experience. Now today is all about sustainability. It's about social purpose. But before we start today, it might help a little bit if we go back to 18 months ago when we last talked at one of our Capital Markets Days. Now those of you who were there, you'll definitely remember that little hedge test. And it was a really engaging experience during which we laid out for you all what is this AMP going to look like, what does AMP7 feel like. Now you remember the date because it's just any old dates in your diaries. I remember the date. It's the 14th of September because, a week earlier, we'd handed over our our beautifully crafted 3,000 pages to Ofwat, hoping they were going to think it was also a beautifully crafted 3,000 pages of brilliance. And so with that hope and that slight desperation and slight [ trepidation ], we were just embarking on sharing with you all what was in the plan and what we were looking forward to doing over the next few years. And we said quite openly on the day that the plan was aimed at making sure that we balanced the needs of all of our stakeholders. We didn't say it would satisfy the need of every single stakeholder, it was a balanced plan in the round. And that's what we hoped the regulator think, and we were very pleased to then achieve the fast track status when we weren't actually chosen as 1 of 3 companies who have got that balance right. And I think twice is alike that. They are a game of balance and of making sure that it feels good enough for all stakeholders for what it is that they want to ask in the next 5 years. Since then, we've not been just sitting back, resting on our laurels. We've absolutely been engaging on the finer details, on making sure that we understand, as things move, as we move from submission of plan through to acceptance for the final determination, we were engaging on that final detail. And it's fair to say it didn't exactly stay static, did it? So we saw some pretty large market movements on the WACC, for example. But for us, net-net in the round, we ended up being made whole. So we gained our totex to about the same tune as we lost on the WACC. And on the ODIs, some of the representations, some of the industry conversation meant that the ODIs became slightly higher outperformance on the one hand and slightly better downside on the other. So again, a slight improvement from all of that conversation and discussion. But the good thing is that, we at Severn Trent, that happens every day. We're actually 2 of the only 3 companies in this price use period to gain more totex than we actually asked for. And that means that we actually are masters of our own destiny. We asked for a certain amount of money. We've gained that. We made sure what we are saying about our targets is what we could do. And again, we've been given the opportunity now to really plow ahead and to genuinely take the future into our own hands. And the fact that we took all of our workforce through [indiscernible] 18 months ago means we've been working flat out on delivering for the last period of time. This isn't like we just received our lives in November -- December [ and then somebody's saying the team is ] right. "This is what we received." We've been working through the course of that last 18 months to get the fast track we wanted to have. And if you consider that 4 companies are now going to the CMA, you could actually almost say that we're actually 2.5 years ahead of a good number of companies and a good number of our competition. So I'm not saying by any stretch that we've got anything other than a massively ambitious, massively challenging journey ahead of us, but it is a journey that we chose and it is a journey that we chose to embark on 18 months ago. And that gives us real hope. And don't forget we have got a totally unrivaled outperformance on ODIs that we know we've got momentum to push on and do that, hopefully, again. And James has done an amazing job over the last few years on financing, taking us from a bottom-quartile position to an upper-quartile position, meaning we know that we earned that reward straight around day 1 on financing, and that again is an excellent start to what is going to be a really ambitious but challenging next few years of our lives. So if we move on and take a look at the last points we'll talk about in positioning of AMP7, which is social purpose. So often, people come along and there's almost like a sense, I think, of people now talking about sustainability. Actually, it's quite different for us. So whilst we spent the last few years telling you about the what we're going to deliver in the course of AMP7, internally, we've known that for years. To some extent, we've been focusing our assets on the how. And we knew that -- for us to be successful for the next 50 years, for the next 25 years, for the next 5 years, take whichever horizon you look at, we knew that we've got to make sure that customers truly trust us and they will judge us on our impact on the environment and the planet. We know that we've got to attract the absolute top-notch talents. And people really judge employees now as to how they treat the wider society and the communities they live and work in. We know that actually we've got an organization where effectively our job is intertwined with the environment. You can always say the environment is our supply chain, to be honest. Effectively, it does the job for us if we do it in the right manner. So whilst externally we've been telling you what, internally the how we've been working on has been creating a much more sustainable business for the future. And that's what we're going to unveil a little bit of today, is some of that sense of how we're going to use the natural environment supply chain to create success for the medium and the long term. And the reason -- one of the ways you can see that we've had that kind of plan for a while is if you look carefully at our plan, and we try to bring it out in the RNS today, there's GBP 1.2 billion worth of investment already linked into our plan in this space. And there's also a whole range of clever incentive mechanisms where we get rewarded for doing the right thing for the planet and the right thing for the society as well as the right thing for our company for the long term. Now let's take a bit of a step back from AMP7 and just focus on ourselves and let's have a look at the context of where everyone is thinking about in this particular start-up phase and then we'll talk about today in a bit more detail. [Presentation]

It's pretty compelling stuff, isn't it? And what I love about that particular video is they talk about these 2 types of companies, those who get it and those that don't get it. And today, I think you're going to get a sense that we're really sure that we absolutely get it and not just here on the stage but in the very much the DNA of our organization. And that's why we asked you to make the trip, to get the train to head to Coventry, because we can introduce you here to tens of colleagues to get a real sense of the culture of the organization and the fact that firmly in our DNA is a much more sustainable approach to how we're going to deliver maybe some of the same outputs of the past but in a very, very different manner. So as I said, we see the natural environment as being literally part of our supply chain, part of our job. We see there's an amazing opportunity with our particular products linked to the manner that we can do things differently to be a differentiator for us within our sector as well as us versus other utilities in the U.K. and also globally. Now you will judge any business, I would imagine, quite harshly as to whether they look at risks in the round and take them seriously. And of course, one of the greatest risks for us is clearly climate change, and that is a big and real risk. And we've seen that probably even more in evidence in the last few years, from the long hot summer a couple of years ago to the most recent flooding and devastations we've seen across our [ patch ] in recent months. And every year, probably what you don't know is that we run 10,000 different climate change scenarios. That's part of how we run water resource management. And when we look at it, we analyze against all of those scenarios what's the opportunity. What occurs to us, to our natural supply chain, to our business? If you have a 2-degree warming or you get a 3-degree warming, what's the implications for us? And we take out of those scenarios some potential numbers and we effectively say this is what we've got to assume is the impact of climate change. How do we get ourselves ready for the future in that moving, ever-evolving situation? Now I think what we've done is a few things. The first thing is we've taken really good extra calls in AMP6 on resilience. We feel we've prioritized the right areas. We feel we've got ourselves into good shape and made improvements where we feel we could be more resilient for the future. We feel good that we've received all of the money that we asked for in AMP7, so we haven't gone and made that priority [ today in MB ]. We received the funds that we've requested right at the start of the pricing process, and that means we have the funds to invest in all of those climate change scenarios that we felt were right to be invested during the next 5 years. And today, you'll get the chance to see a few of those things. So let's talk about what we're actually going to be doing today. So the first thing we're going to do is we're not going to be sat here. You're not going to see many slides. I know [ that they're going to be dotted ], but there's going to be no charts. I mean, literally, it's going to be tough, but you're going to make it. What we're going to do instead is we're going to divide you up and we're going to take you into zones. And we're going to start with 3 environmental zones. And the first of those zones is going to bring to life effectively how do we use the natural innovation that exists within the environment to make our business better in the future. So we're going to talk about the innovation within our local environment. The second thing we'll talk about -- and they'll be in no particular order. The second thing we'll talk about is we're going to give you a chance to see that we really take climate change really seriously here. This is not something we're planning for in 2050. We're planning for it right now in the next few years. So we're going to talk to you about the triple carbon pledge. And we're going to bring to life through 6 different areas in that particular zone exactly what we're doing across a whole range of areas to get ourselves ready to go net zero in 2030. Also in the environment area, we're going to show you how we're using technology and the ability to influence customer behavior to really [ assess this ] water resource management for the future. So that's the 3 environmental zones you're going to look forward to. Now I get super excited about the whole opportunity in the sustainable future of Severn Trent. If we've got 2 measures [ to that ] to get even more excited about, I would say it's 2 of those in that space. I mean most businesses are talking about 2050. That's the government's ambition on net zero. Really good, well-recognized brands are kind of going bold and going 2040, and we're openly committing to 2030 and committed long before most of the people about a year ago. And that really gets the whole of Severn Trent properly excited that we're taking a leadership position on net zero. And we're a heavy carbon sector. So it's not like it's a walk in the park for us. That's one thing I think, hopefully, you'll get as excited as I am. The second [ one is just an ] individual measure is the fact that we're going to effectively take a really big leadership play on biodiversity. So the government has outlined that in order for the U.K. to fit within the Paris conventions, then we've got to restore biodiversity. [ An extra ] 500,000 hectares of land have got to go into biodiversity net gain. And we're going to take what's called the Nature Recovery Network, and we're going to own 1% of the overall nationwide target and actually improve 5,000 hectares. And you'll learn more about that today, which again I think is a magnificent ambition and a really great thing to be involved in. So that's the environment area, but it's not just about environment, is it? When we talk about sustainability, it's about society. And that's [ then the thought of the ] zones you'll see today. And in this zone, you'll get the chance to understand from a colleagues, customers and communities perspective exactly what does it mean to be a great organization and leading on societal matters. And we've got this lovely dynamic at Severn Trent where, the vast majority of people, they come to work every day, they are also our customers and they live in their communities and take an active part. So the people you'll meet in that zone, they are all effectively representing all 3 parts of that in the course of the conversations. We've got some lovely little case studies, some real vignette of Severn Trent folks, and I think it will bring to life the fact that [indiscernible] is about being a brilliant employer. We're already in the top 5% of utilities globally for our engagement scores. We want to push on and be even better. It's about being fantastic in communities. We give away 1% of our profit, and that's unique, [ I guess ], and 1 of the top 50 for giving away money to charitable causes. But again, it's not just what you're doing. It's how we're going to do it, and you'll learn about that today. And of course, we're going to show that our customers have an amazing experience that is personalized, that is modern but feels as though it's helping those who truly need the assistance. All of that will come out during the society zone. And if all of that wasn't worth one GBP 60 return train ticket, there's even one more opportunity. We'll then come back here later, and Christine and Bronagh are going to share with us their thoughts on what great governance and great organization looks like. And you'll get the chance. You'll see many presentations like this. You'll get the chance to compare. Do we really understand how vital governance is? Are we clear on what's the opportunity to make sure that it's part of the DNA, that doing the right thing is built into the core values of the organization? I think we'll give you an opportunity to see that we know that we have to earn and maintain that trust and how important that is to our future, and we genuinely think great governance is a differentiator. And I think we have got some great examples of where that's working well in practice. And you're bound to have questions by then. So at the end of the day, you'll have myself and the full executive team here to answer questions on any topic that you so desire. So that's our outline during the course of it. And to set you up in the right mood and to, hopefully, get you, I guess, excited about the investment, the opportunity, I want to show you photos from yesterday because it's lovely to have you guys here today. And you look half excited, if I'm honest, but this is what the organization looked like yesterday. So this is, at the end of the day, how engaged and how truly pumped up for it our top 300 leaders were. And that's why we have Capital Markets Days the same day as business leaders. It's a perfect opportunity to multitask. We share with our top 300 people all of our plans for the future, and then we share with yourselves, our important stakeholders, all of the important plans for the future. And I think it's great to work at a company like Severn Trent where you know that what you do actually matters. People can't live without water, [ and that pays ]. However, to work at a company that does something essential and also is doing it in a manner that is even more focused on sustainability and the future, that is twice as exciting. And that's the faces you see of our people there yesterday. And this guy is thinking, "I so want to be out of it." And if you think about it, I guess the way I look at it, is when you put 300 people genuinely galvanized, genuinely energized on the ambitions that we're sharing, then we're not just going to deliver what we talk about today. We're bound to outperform. We're bound to go even further on the basis of those 300 are going to go back and really engage the 6,500 Severn Trenters. And before you know it, it's this lovely domino effect that just naturally takes place. So to get you in the right mood, I'm going to show you a little video now that we're launching on social media today, which brings to life all of our ambitions in this space into one single, I think, quite cute 90-second video. [Presentation]

So then what are we actually going to be doing today? So we're going to be -- divide you up into 2 fantastic groups. Now before you go, let me tell you about [ hopefully you can answer ] today and then maybe you can mull that at the back of your mind. So first of all, we've previously shared the what is in our plan. We've talked about exactly what it looks like over the course of the next 5 years. We've shared with you quite openly that we intend to outperform, that we start our position with a good track record in ODIs, with a strong situation in terms of financing, and we've been working hard to get ourselves ready to be in the perfect cost lines. So we feel good that we've got the opportunity now to achieve that and deliver it. And of course, it's a bold ambition. You're bound to pick up extra details, as you wander around, around some of the ODIs and some of the [indiscernible]. But today is really around the how. It's about how we intend to achieve all of that but also making ourselves a leader in the space of sustainability and setting ourselves up for a long-term, genuinely successful future using the environment in a manner that is great for communities, great for people but also great for [ paths ]. So you're probably going to get a sense more of the how today than it is the what, but I know the eagle eyes will also find a whole lot of what they may also can take great comfort from. We're going to divide into 2 groups because there's no point cramming this all together. And then when you actually get to the 2 groups, you're going to end up being subdivided [indiscernible] to watch and see different things, which will give you a real chance to meet and -- those different Severn Trenters during the course of the day but also ask different Q&A across the piece. Our people love curiosity. It's 1 of our 4 values. So feel free to be as curious as you want. I'm afraid you're going to be overwhelmed by passion, that's another 1 of our 4 values, and you're going to see that [ in heat and in space ] during the course of the morning.

Hi, everybody, and welcome to our carbon triple pledge session. Just let me check, has everybody got one of these before we start? If you haven't, put your hand up and you'll get one. I'm Andy Smith, and I look after our Business Services division. And my colleague, Helen Miles, here who looks after capital delivery and commercial -- are going to host this session with you. We're going to do a short introduction, and then we'll get you off into the -- into 6 breakouts where you're going to learn about our exciting initiatives here on the triple pledge. Severn Trent has been innovating and leading on carbon for a long, long while. In fact, over 50 years ago, we were generating biogas from the anaerobic digestion of our sewage sludge, and we've remained leaders in the water industry to this very day. Now -- but then, of course, it wasn't driven by carbon or climate change but by need to treat our sewage sludge, one of the products of our wastewater treatment process. We're unable to pump that into the sea because we're landlocked unlike other water and sewage companies. So a desire to do the right thing by the environment, a commercial focus and the willingness to innovate drove the adoption of anaerobic digestion or AD that you're going to hear referred to throughout this session and the generation of electricity from the resultant biogas. Now back then, it made great business sense, and it makes great business sense today, too. It was the same combination of environment, commerciality, innovation that drove us to ramp up the use of our -- use of combined heat and power engines fueled by our biogas 25 years ago. We were fast adopters of government incentives on renewables. We've been willing to innovate on new technology and importing technology from Germany on our crop AD plant, which is one of the biggest and best performing in the U.K., and we moved into food waste. Now all of those initiatives have put us in a strong position as the country's leading owner and operator of anaerobic digestion. And we supply around 5% of the U.K.'s supply of biogas from anaerobic digestion. In parallel, we've been developing wind and solar. We've got a strong focus on energy efficiency across the whole organization. And we dipped our toe into the energy flexibility markets, too. So carbon is ingrained in what we do here at Severn Trent, and we're very proud of what we do at Severn Trent. And we've got 6 fantastic breakouts to take you through the way we're going to share some of our plans to build on our track record to date. But before we do that, let's just take a couple of minutes to reflect on our progress that we've made so far. [Presentation]

[ With that aside ], there are some fantastic achievements we've made shown in the video. Regardless of how well we've done, we know we can do better, and we want to do better, particularly given the climate challenges we're facing. We want to play a leading role in this space, and we believe we're well placed to do so. And that's why, last year, we made the bold step to commit to the triple carbon pledge. You've also just seen on the video we are committed to Science Based Targets. That will ensure that when we deliver our net zero commitment, we'll do so in a way that's consistent with the Paris Agreement. You'll see us put greater emphasis on reducing our scope 1 and 2 emissions through direct action on our operations. It will also see us step up on focusing on our scope 3 emissions and the embedded carbon in our assets. So we know this is hugely ambitious, and we know it's going to be challenging, and we don't have all of the answers. But we do have some of them, and we know where the gaps are, and we're working hard to fill those gaps. And over the next hour, we're going to share with you how we're getting on the front foot to achieve our goals. Through illustrative examples, we'll show you through our proven Severn Trent approach how we're going to make our business better for everyone. So we're now going to split you into groups. So if you're in the demand zone, you're staying in this room with me, and we're going to share with you our plans on electric vehicles. We're going to share with you how our asset design team are thinking about carbon and energy in what they're doing. And also, we're going to share with you how technology and innovation is going to support our reducing emissions. And if you're in the -- if you've got a piece of paper that's got self-generation or flexibility or anaerobic digestion, you're going with Andy.

Into the supply zone. Here we go. So if you do have self-generation and PPA, just give me a wave just to make sure that we've got it. Great. Now you in the supply zone, there was a subtle process going on selecting you because we picked you out as you're less likely to get lost than the rest because you're going to move out of here as we move out. It's the most stress-y part of the day for us. I could show you. If you've got self-generation and PPAs, you're going to learn about what we're going to do to increase the amount of our renewable generation and some exciting stuff on power purchase agreements. And don't move yet, but when you do get of the move, you want to go straight down there into room 723, and somebody will guide you there in a second. Flexibility, you're going to be moving that way as well and then turning left to go and spend a few minutes with Howard Perry, who's going to tell you about the exciting stuff we're doing to move our demand generation up and down in order to balance the grid as it becomes more dependent on variable renewable energy. And anaerobic digestion, last but by no means least, you're going to go into room 706. So you'll go out and turn left from out of here and Leah and Simon will tell you about the fantastic stuff we're doing as, as we said, the country's leading operator of anaerobic digestion.

I'm Leah Fry, and I'm head of Bioresources business. And over the next few minutes, we're going to expand a little bit more around our AD business and the opportunities that it gives us. So as Andy stated in his intro, we're very proud of our AD business and extremely excited about the opportunity to do more commercially as the new competitive market develops and also use it to deliver our triple carbon pledge. So we got into AD 60 years ago because of our geographical location. So we're landlocked, which means that we couldn't dump our sludge into the sea as others did but had to spread it to land. That is a really costly process. And with necessity being the mother of invention, we got into AD. It's a brilliant process both from an environmental and commercial point of view. What it does is reduce the volume of solids that we're left with at the end of our waste treatment process. That means lower carbon emissions and lower cost of disposal. It leaves us with a product which we call cake, not the sort of cake you'd want to eat or I can promise you we'll be serving later, but it is a great fertilizer. We're also able to capture methane, which otherwise would be released into the atmosphere. We use that as a green fuel and, therefore, avoid those damaging greenhouse gases. Overall, our sewage treatment works produce a lot of sludge, 4.2 million tonnes of it a year. That's equivalent to 11,000 tonnes a day our customers are a productive lot. And we operate 26 AD sites across our patch I've shown on this map here to treat that. And we think we're pretty good at it. So we're always on the lookout how we can use that competence in an innovative way. 10 years ago, we moved into crop digestion. So we own some farmland which can't be used to grow human -- crops for human consumption on. And we worked out that actually by using that crop as a fuel for AD, it's far better from an environmental and commercial point of view. That has been really successful. But sadly, there is very limited growth opportunities in crop AD. And so in 2013, we decided to move into food waste. So we saw this as a strategic play given society's increasing desire and willingness to separate waste [ and sort ] rather than sending it to landfill. So we built 2 plants near Birmingham, and we're just commissioning a third plant up in Derby. And in 2018, we bought another 5 plants, which are the blue blocks on this map. So in total, that gives us 0.5 million of capacity to treat food -- sorry, 0.5 million tonnes of capacity of food waste treatment a year. By treating the waste in this way, we're avoiding emissions that would have been released from material rotting in landfill. And from the renewable energy that we're producing, we're saving 51,000 tonnes of carbon a year. So together, our bioresources from food waste plants make us the largest operator of AD in the U.K. We're on track to deliver over 400 gigawatts of renewable energy a year. That's enough to power 100,000 homes and save a whopping 110,000 tonnes of carbon. We use our energy to power our own sites wherever possible, and it forms the bulk of that 54% of our equivalent energy use as a company, which makes AD the largest contributor to our renewable energy and net zero commitment. So I'm now going to hand over to Simon Farris, who is our Bioresources strategy lead, who's going to look at what are the future opportunities for us.

Thanks, Leah. So we're incredibly proud of this, but we're not content. We continue to strive for more. So in the sewage sludge market, we're delighted that Ofwat has taken steps to develop the bioresources market, which means that from the start of the next AMP in a few months time -- or in a month's time, we will be able to operate under a different regulatory regime, and that will allow us to trade sludges across our boundaries. So you can see we're really well positioned geographically with a number of the fellow wastewater companies around us. And if you look at the far side there, that's the share of the U.K. bioresources market currently. There's plenty for us to go at. So to drive our triple pledge, we need to treat more waste and generate even more renewable energy. So we'll continue to invest in our cake products and our energy to ensure that we drive our carbon impact down as a business. In the food waste market, we're bang on strategy, with the mandatory segregation of food waste looking likely. We currently hold 25% of the U.K. market share for food waste. And provided we can maintain that percentage in the projected growth, we'll be able to deliver 70% of Severn Trent Water's energy needs from aerobic digestion. That's a massive 125,000 tonnes of CO2 we'll be saving every single year. We're really excited about that. And we're really keen to make it happen. And finally, as the government starts to develop its heat decarbonization policy, we're really well positioned to play a role. So we currently use our biogas to produce renewable electricity and biomethane that we can inject into the grid. Depending on various policies and legislation that the government pushes forward, we'll be able to dial up our electricity production, increase the amount of green gas that we inject into the grid. We'll produce some of that green gas as fuel for some of our vehicles or potentially even use it to produce hydrogen. In summary, we see the AD industry as critical to the U.K. delivering its heat decarbonization ambitions. It makes sense financially. It makes sense economically. We've got a proven track record. We have industry-leading capability. We have ambition, and we have momentum. So we're really excited about what we can do in this space, and we're looking to grow.

I'm Pete. I'm a technical lead in our innovation team. And this session is all about how technology innovation is going to help us meet our carbon ambitions, particularly scope 1 emissions. Now you'll be hearing later about some of the exciting activity that's already under way to help us achieve our carbon commitments. But in terms of net zero emissions by 2030, we realize that that's quite a challenge. And in order to meet that challenge, we're going to need technology innovation. So we know we don't have all the answers, but what we do have is a really strong pipeline of innovation coming through and some well-developed project plans. And Albi and I are going to introduce you to a couple of key innovation activities that are going to help address that triple pledge challenge. So the first of these is our brand-new resource recovery and innovation center at Spernal, which I believe some of you might be visiting tomorrow. So this is a new facility opened the back end of last year, cost us GBP 5 million to develop. It's the only one of its kind in the U.K., and it allows us to run large-scale demonstration trials in a way that just wasn't possible previously. And the advantage of that is it allows us to look at new technologies and processes at scale to improve on our current treatment plant design. So this schematic shows a very typical treatment, sewage treatment, work designed for large urban works. So you'll find these right across our patch. Sewage treatment consists of a number of sequential processes. The first process known as -- or the first stage is the preliminary treatment stage that's there just to protect the downstream works, removes rags and grit. And we have a primary stage, where we separate out the solids from the liquids, then a secondary treatment stage. This is where the bulk of the treatment is done. This is where we're using bacteria to remove any remaining pollutants, contaminants in the wastewater before then discharging it to the environment as high-quality treated effluent. If we have really sensitive, often small, receiving waters, well, we use a tertiary polishing stage, too. And the primary stage and the secondary stage both produce solids, but these rich in energy. So this is great. And we feed that to our anaerobic digestion plant to produce green gas and electricity from that green gas and also fertilizer. But as I've already said, we need to improve on this design in order to meet our carbon ambitions, and that's what the test bed is designed to do. So the very first trial that we're running is targeting this first primary stage. And we found a more efficient way of separating solids from liquids. So the traditional way of doing this is just to use gravity, settlement tanks. The solid settles to the bottom, but we're using very small bubbles of air to float those solids, and that does 2 great things for us: It gives us more of this lovely energy-rich sludge that we can send to our digestion plant, produce more green gas and more fertilizer, but it also reduces the amount of energy we need in the second stage. And it's the second stage that our next trial is focusing on, which we're due to step -- start up in a couple of weeks. So here, we found a really novel technology that can introduce oxygen to the bacteria in a much more energy-efficient way. So the conventional way is to use mechanical blowers and diffusers. But here, we use a membrane to transfer oxygen directly to the bacteria, as I say, much more energy efficient. So the test bed has really helped cement our position as sector leaders in innovation, but it's also been really useful in helping us to secure external funding. So in AMP6, we secured GBP 2.6 million of direct grant funding from likes of the EU's Horizon 2020 program, from Innovate UK, from the Carbon Trust. And we also secured access to GBP 42 million of leverage funding. But having this test bed, having that strong pipeline of innovation coming through, we're really confident we're going to do even better in AMP7. At this point, I'll hand over to Albi, who will talk to you about a second exciting innovation.

Thanks, Pete. Morning, everyone. I'm Albi. I'm our innovation exploitation lead. I will talk to you about a groundbreaking process called anaerobic membrane bioreactor. Approximately 45% of Severn Trent's total energy consumption is used in our wastewater treatment sites. A conventional way of treating sewage, as Pete mentioned earlier on, is using blowers to pump oxygen into the tanks. This is effective, produces high-quality effluent, but it also requires a lot of energy, a lot of chemicals and produces a lot of greenhouse gas emissions such as nitrous oxide. We've got better and better over the years and done quite a lot of work, increased efficiencies, reduced cost, but there are diminishing returns. So we thought, what if you didn't need oxygen at all? And we've been working with our research partners to develop this process called AnMBR. This technology uses the same bacteria that we know and understand well. Indeed, it's that same bacteria that we've been using for years. The bugs love to be warm so we heat our bypass digesters using waste heat from our electrical engines. The breakthrough, however, with this technology is it get -- is the process -- getting the process to work with dilute cold wastewater that enters our treatment works. We're now in a very exciting stage of building a large demonstration-scale plant that will be installed and commissioned in early summer this year at Spernal. We spend about GBP 14 million a year to aerate our to -- on electricity to aerate our activated sludge plants. If we prove this fantastic technology and, over time, replace all of our activated sludge plants, then we could potentially save all of that OpEx together with 40,000 tonnes of CO2 emissions. The icing on the cake is that we've also developed a way of capturing and recovering valuable nutrients such as nitrogen and phosphorus. Not only that gives us valuable resource, generates opportunity and more income, but it also allows us to remove all the nitrous oxide from all the greenhouse gas emissions from the system, which have a climate effect of about 300x that of CO2. Thanks, Pete.

Thanks, Albi. So just as a quick recap. We've invested this GBP 5 million in our industry-leading resource recovery and innovation center, and that puts us in a fantastic position going into AMP7. We're going to build on the really successful job of securing external funding that we did in AMP6. But this transition from the traditional aerobic treatment to anaerobic processes has huge potential. So we're going to be working up our plants to come and pave -- we're in a position to start introducing this technology and begin to save some of that energy and those CO2 emissions associated with that. And then on top of that, as Albi's explaining, as process emissions, fugitive emissions become more and more important in working out your carbon footprint, the fact that we're moving to processes that reduce those fugitive emissions will be hugely beneficial, too. Yes?

[ I was wondering if you're going to go into plant ] access here to do R&D work....

Yes. So absolutely. And we see our test bed as a great asset in that. And so we're open to doing collaborative work on that test bed with others. And yes, Ofwat's innovation fund may well be one route to pull in funding to do that.

[indiscernible]

Yes -- sorry. Good point. So the question was -- sorry, was are we anticipating accessing Ofwat's GBP 200 million innovation funding. So yes is the short answer. And as I said, I think having the test bed will help us with that. And then you're quite right: the EU funding from the Horizon 2020 program. A project called NextGen contributes some but not all of the funding for the anaerobic MBR.

So I'm Chris Wand, the head of supply chain and logistics. I'm going to give you a quick insight today into our exciting plans to electrify our fleet and reduce our transport carbon emissions. So vehicles represent about 5% of our total carbon emissions. And we've already done lots of things to reduce those. So for example, we currently buy super low-carbon diesel vehicles. We've trialed and purchased electric vehicles. And we also fit diesel particulate filters to heavy goods vehicles. But we now want to go much further. So we've recently announced plans to switch our whole fleet to electric by 2030, in line with our triple carbon pledge. There are some really compelling reasons to do this from both an economic and environmental perspective. So first of all, if you take a look at this board here, this gives you a feel for the speed at which the electric vehicle market is moving. So for example, the government has just announced that it's pulling forward the date to ban petrol and diesel sales from 2040 to 2035. We also expect a really significant increase in the number of electric vehicle registrations. So our current forecast is that by 2030, 70% of new car sales and 40% of new van sales will be electric. Severn Trent itself also have some really compelling reasons to switch to electric. So we operate a large fleet of around 3,000 vehicles but operate in a very limited geography, so generally doing shorter trips. We've also got sites, such as Minworth and Spernal, that generate excess renewable energy, meaning we can use that to power our electric fleet rather than putting back into the grid. And a lot of our supply chain is also based locally, creating an opportunity to collaborate and share infrastructure costs. So our strategy is to start with the quick wins in areas like cars and then progressively roll out to the more challenging areas of our fleet. So what does that look like? So Severn Trent Water has just announced plans to only buy electric cars from now on. We plan to replace them in line with our normal replacement cycle, which will mean that by 2026, we'll have a fully electric fleet. We also plan to buy increasing numbers of electric vans starting this year, with smaller vans doing shorter trips. We'll still need to buy some diesels in parallel because there aren't all of the electric equivalents on the market at the moment to meet our operational needs. But we forecast that from 2023, we'll buy only electric; and by 2030, we'll have a fully electric van fleet. We're also doing things like downsizing vans from bigger vans into smaller vans so that we can accelerate our plans further and because a lot of the models on the market are smaller vans. Heavy goods vehicles looks a lot more challenging. So at the moment, we forecast there won't be the right models on the market to be able to meet our operational needs by 2030. We're, therefore, looking to things like hydrogen and biogas, where we have a strategic advantage as we produce our own. Now to support all of these plans, we obviously need a really good charging infrastructure. So we've just announced plans to buy 300 of this type of charge point here, which is a fast-charge unit. It charges in around 3 to 4 hours versus 9 to 10 for a normal 3-pin socket. You've got a contactless capability so that we've got potential to be able to charge private car users, employees to be able to charge their cars. And there's also a really smart back-office software package to allow us to get some really good insight into our energy consumption and optimize the management of our fleet. So from a cost perspective, our strategy is likely to cost around GBP 2 million more CapEx over the next few years due to high capital costs. But we become cost neutral from 2022, and then it will deliver a significant reduction in operating costs into the end of this AMP and beyond. Electrics are obviously a lot cheaper to run, operate and maintain. We're also speaking to our supply chain about their own plans so that we can identify ways to collaborate with them and go even faster. And our colleagues are really excited about our plans. So a recent survey showed they were either happy or very happy with both our strategy and the role they can play in switching our fleet to electric. So to pull all that together and summarize. We're really excited about the potential to create a new and electric fleet powered from our own generated renewable energy on our own operation or sites, creating a truly green carbon-neutral cycle. We plan to have a fully electric car fleet by 2026, a van fleet by 2030. We're looking into hydrogen and biogas for our HGVs. And we're just about to roll out a new charging infrastructure over the next 18 months. So hopefully, that gives you an insight into the things we're doing to decarbonize our transport operation and how to tackle climate change.

Good morning. My name is Frank Thompson, and I'm the head of our newly created design team. So I have some of my designers here today, some of my brilliant design team. And we're going to talk through how we can support the business in delivering our carbon pledge and our science-based targets [indiscernible]. So we've got some statistics on the screen, and we'll talk you through those to help you bring to light some of the opportunities that we have in each of our program, but let's just take a second to think about where we are today. During the past, energy has been freely available and reasonably cheap to find. So naturally, a designer would come up with solutions and designs that have been energy intensive and also have used a lot of carbon to help support our environmental and customer needs. Things need to change, and we can't carry on as we are. And that's one of the key reasons for bringing design in house this time around, and we're the only water company to do so. By doing that, we can have greater control over the assets that we renew and we build and design. And we could also, as part of that design process, put energy, carbon and chemicals at the heart of our decision-making. So the team will now talk you through each of those 4 areas. And we'll start with [ Mike ], who is going to talk about the waste treatment program.

Thank you. 45% of the energy we use is associated with treating wastewater. We also have a significant environmental program to enhance the quality of the watercourses in our region by improving the effluent quality from our sewage treatment works. Now in AMP6, we've added a lot of energy, a lot of carbon delivered in this program through concrete, through chemicals and through electricity. In AMP7, we've got the opportunity to think a little bit more -- a little bit differently, a little bit more holistically by designing a wetland solution as opposed to conventional sewage treatment works. These are a series of natural ponds to act as a filtration system to give us a really low operational cost and really low-carbon-impact solution. They don't require major construction works, and they avoid the need for additional treatment processes down the line. We've identified a range of sites where we can make this happen. And if we're successful with all of them, we can achieve an energy saving of 160,000 kilowatt hours and a saving of -- on embedded carbon of 180,000 kilograms. Now I'm going to hand over to [ Nick ], who's going to talk to you about reusing assets.

Thanks. So it's not always about building brand-new -- building and designing brand-new assets. Sometimes just by using a little bit of lateral thinking, [ you can ] do something with what's already there. [ So let's take an ] example in Mansfield. We had a significant sewer volume problem. And we recognized we needed to provide additional capacity within our existing network. So our engineers did some investigations, [ and what came about is ] there's an unused underpass beneath the public highway that's owned by the local authority. It created a thought that, well, actually, we can convert that into a gravity sewer. And by doing that in this instance, we're able to avoid the need for a brand-new pumping station and also the large underground concrete storage tanks. So that actually saves us 18,000 kilowatt hours per annum of energy use and 95,000 kilograms of embedded carbon in the scheme, obviously the best possible scheme for Severn Trent Water, but also the local authority get the benefit that they've not got this unused asset that they need to maintain on an ongoing basis. So both parties win out of it, really. So I'm going to hand over to [ Jo ], who's going to talk to you about off-site manufacturing.

So we have over 200 dosing rigs out in our network. These put chlorine into the drinking water to ensure that it's good to drink. I have here a 3D model, which has been printed using 3D technology, of a standard dosing rig just to try and bring this to life for you. So our in-house design team have developed a standard which reduces the amount of concrete that's required by bringing more equipment into the kiosk. This enables us to manufacture this off site, reducing the number of site visits and the number of deliveries to each individual site we need to work on. This gives us a saving of 70,000 kilograms of embedded carbon by reducing raw materials used and reducing wastage. It also gives us a time saving whilst we're out on site by reducing the construction duration. The next area that we're going to focus on in with this design is looking at the use of solar panels on the kiosk to reduce our energy costs. I'm now going to hand you over to [ Alan ], who's going to talk to you about our [ waterways ] program.

Yes. So renewing our water networks is a huge part of what we do. And that's because of 2 reasons: bursts and leaks. These have significant environmental impacts. Firstly, the water itself has invited energy costs since production. Secondly, the method for renewal [ asks for ] carbon emissions. So if you can imagine this is 100 meter of new pipe that we need to install. The traditional [ patch ] renewal would be to open cut, where we would excavate a trench at the entirety of that length, install the pipe and backfill. However, this leaves large areas for reinstatement using tarmac and stone, both of which have high embedded carbon. So we're focusing our designs on using trenchless solutions. These use, these utilize small [ bits start and end ]. And in between those various techniques you could use, for example, you could directionally drill the pipe or you could even pull it through an existing. This drastically reduces the amount reinstatement that we'll be using, making savings on raw materials, stone and tarmac, but also the transport costs for them. If you can design a scheme using no-dig or trenchless solutions, you have the possibility of saving up to 90% of the embedded carbon on that scheme. And going forward, we aim to deliver half of our water network projects using no-dig solutions across AMP7. I'll now pass you back to Frank.

Thanks, [ Alan ]. So we've talked there about some of the opportunities in the 4 key areas of our program. We've talked about wetlands, which is a natural treatment process, and how that is good for the environment but is also great for us because it helps to reduce our operational costs. And our flooding program, if we focus on gravity solutions rather than pump solutions, again, we can make a massive impact because we don't have to have concrete tanks which consume carbon and we don't have to install pumps which consume energy. Off-site manufacturing gives us a great-quality product. And that's possible using our standard design because you put together in a factory environment and not on a wet, muddy site [ as even be today ]. So that helps to reduce the wastage and helps to reduce the raw materials overall. Both have a massive impact on embedded carbon. And because it's manufactured off site, it saves time in the construction process, meaning we save both time and money. And lastly, on our [ major ] renewal program, if we can focus on a construction [ tech of being ] no dig during the design stage, we can not only benefit the environment, but we can also benefit the customer because it's a quicker installation process, meaning we're on site for a shorter period of time. All of this is possible because we now have an in-house design team. So thank you for listening. I hope you found all those examples informative. And I hope you've enjoyed listening to some of my team. Thank you very much. [Audio Gap]

Where you're going to learn about how we decarbonize our energy supply. In the next 5 minutes or so, you're going to learn a bit about Severn Trent's self-generation, how we compare to our peers and power purchase agreements. My name is Jess. I'm a renewable energy engineer currently commissioned at AD treatment waste plant at Derby, which uses autoclave technology. It's actually the first of its kind to be used in the food waste industry. For Severn Trent, our second largest controllable cost is our electrical consumption, second only people. And back in 2015, we made an ambitious target of having 50% self-generation. But we weren't exactly sure how we were going to do that at the time, but we took some risks. We invested in [ pace ] and the incentives are now made available to us. But what did we invest in? So you can see we did a bit of solar, wind, hydro, but we stuck to our area of expertise, which is anaerobic digestion. And we invested in the crop and food waste plants also. And the good news is, as of '18, '19 March, we hit our 50% self-generation target for the first time. As of the year so far, '19, '20, our yearly average rate is 51%. And as of January 2020, we're actually at 54%. This is great news for us. But how do we compare to our peers? So we're not going to name and shame anyone, but as you can see, we're well ahead of the pack at the moment. And what that means is that we're better protected against price volatility, and we're actually hitting our [ wider ] environmental commitments a lot earlier. So the approach that we've taken is by investing in our own assets. The acquisition of Agrivert now means that Severn Trent Green Power and Bioresources are the largest U.K. owner and operator of AD plants in the U.K. And in the food waste market, we're actually a top 3 player now. So with the current environmental bill currently going through parliament, which strongly favors recycling, renewable heat and anaerobic digestion over incineration, we're best placed to actually expand this growing market. I'm going to hand you over to Neil now.

Thanks very much, Jess. So I'm Neil Corrigall, the Managing Director of Severn Trent Green Power, which is the renewable arm of Severn Trent. So part of the triple carbon pledge is committing that we will secure 100% of the electricity we use from renewable sources and to achieve that by 2030. So off the back of that commitment, we went to the market, we identified a number of suppliers that we can work with. And through some [ serious ] negotiations, we've been able to secure a deal which, starting from April 2020, means that 100% of the electricity we buy is renewable with REGO-backed electricity. So effectively, we've delivered our commitment 10 years early, which is fantastic. I asked Liv if I could retire off the back of that, but she said,"No. Go and find us additional opportunities." And so the things that we're looking at right now is can we find additional renewable growth opportunities. Or can we actually engage in the market in a different way to how we've always done it, which was to build, own and operate everything ourself? So what we're looking at now is corporate power purchase agreements. So simply put, this will be someone else building a solar plant using their balance sheet. And us, we're commissioned to offtake that electricity for a defined 5-, 10-, 15-year period. So why would we be doing this? Well, there are 3 good reasons. So firstly, we had a large number of energy-intensive assets with a very predictable demand load. And we know that those assets are going to be around through all the next period of time. Equally, we haven't actually got enough land near a lot of -- lots of those assets where we can build out our own generation on our own land easily. But there are nearby landowners and specialist developers who could do a better job actually taking that development risk, taking that land through a planning process and building out, say, a solar plant or a large wind array. Secondly, from an operational resilience perspective, we rely on the national grid to ensure there is electrical resilience to our sites. But if we can connect more of our own, say, electrical generation behind the meter and then start to [ pad it up ] with flexibility and storage technologies which are emerging very rapidly, we could actually improve the overall electrical resilience of our sites. That's something customers expect that we will be constantly looking at to ensure we can supply them with water in ways that they need. And then, finally, the economics make a lot of sense. So more than half of the electricity bill we pay today is for the network, distribution, transmission and group balancing costs of the current electrical system. But if we can connect more of our -- of generation behind the meter, we can still avoid a fair amount of those costs. Not all of them, there's still a fair amount of them, irrespective of what Ofgem does going forward. So there's some money on the table, potentially, to be had. Equally, as a high-credit-quality counterpart with a secure offtake agreement, the project developer could take that to a bank and raise a really good cost financing for those sort of farms. And that's a really -- a real win-win situation, where someone else can use their balance sheet, low cost of finance and equally, we can have a deal which is cheaper than buying electricity directly off the grid. A real win-win to be negotiated. On the map to the side that you see, all the orange dots are our existing solar sites that we have built out on our own land [ connected into ] our energy sites. And equally, those orange squares are the wind farms that we've built on our existing sites. And the green and the blue dots are some of the new projects that we're working on. This is just a subset of the broader projects that we're looking at, green being ground-mounted solar and the blue being floating solar. And in floating solar, we're focusing on non-public access reservoirs so that any -- so they will be [indiscernible] community impact if we can get those projects developed. Now these -- some of these projects may take 5 years-plus to develop, depending on the land and the planning and the commercial arrangements. But equally, some of these are relatively well progressed and we expect to announce them within the next year or so. So overall we're continuing our journey to generate more renewable energy, but we see this as a slight nuance about how we go about it. And rather, can we use our corporate buying power to underpin some of these projects and allow new renewable assets to be built out but without us committing our balance sheet in doing so? So what are the things that we should take away from this session? Well, firstly, we've hit our 50% target, which is great. But we're not stopping there. We're going to continue to look at generating more renewable electricity from our existing assets and finding those marginal gains that we can make on those assets. Equally, we're looking at where can we grow further in the renewable space, both on the electricity and the green gas side. At the moment, there aren't electrical -- incentives on electrical generation at the scale of the projects that we're looking at. But on the green gas side, there still is the Renewable Heat Incentive, which we expect to be renewed, and that creates opportunity for biomethane plants to be added into our existing anaerobic digestion sites. And then finally, we're going to use our corporate buying power to look at good-value corporate PPAs where we can actually save money against buying it directly from the grid, and finding those opportunities to be part of creating more renewable assets in the U.K. but without using our balance sheet.

My name is Howard Perry. I am the Energy Manager here at Severn Trent. I'm going to talk you about our approach to energy flexibility. So [ within the supplies that we've made, one supply on which we critically rely ] as a business is electricity. So we need reliable and affordable electricity [ in order to properly treat ] our water and deliver on our purpose [indiscernible]. So what that means is whatever happens on the U.K. electricity grid affects us as a business. And what we know about the U.K. electricity grid is that it has to decarbonize over the next few years. And that will mean increasingly relying on decentralized and intermittent supplies of renewable energy. And we know firsthand from the assets we operate how intermittent that supply is [indiscernible]. So if you look over here, this is generation from our 2 Derby wind turbines, [indiscernible] Derby. It's half-hourly data back to New Year's Day and within typically just half an hour, as an example, but in this half an hour, we generated enough free generation of clean, zero-carbon electricity [ to power home ] for a year. But there are other times when the wind is not blowing, when it's generating nothing at all. So that problem writ large across the whole electricity supply grid creates quite a supply-and-demand imbalance problem that's got to be dealt with. And what we won't be able to do in a zero-carbon world is rely on coal as we have in the past and natural gas as we do today to make all that supply and demand balanced. So that means 1 of 3 things that the U.K. Committee on Climate Change has said must happen to get to zero-carbon U.K. grid is that we must see more energy user flexibility. So major energy users like ourselves have got to be more flexible in how we use electricity to mirror that supply-and-demand change. Through the business, that affects us in 2 direct ways. So the first way is through the costs and the prices that we pay for the energy that we need. To give you a sample of what that can look like, these are the commodity prices for electricity from last Friday, the 28th of February, which wasn't a particularly dynamic day. There wasn't anything strange going on with supply or demand. But even on that fairly normal day, there were times, midnight, when demand was low, generation was high, and the price is here. There are other times, 9:00 in the morning, when demand rises, generation doesn't necessarily keep pace with that, hence the price is double. And we are exposed to that market through the prices that we pay and the risks that we bear. There is a direct commercial incentive for us to understand those changes and be flexible [indiscernible] and take advantage of reducing that costs where we can. More positively, though, there are an increasing number of opportunities out there, where the National Grid and the electricity distribution network operators are trying to find ways to get us to help them to manage that problem. So in its simplest, I mean, they will pay us for reducing demand at certain times while finding ways to [ reduce that operating ] capacity, which helps them to manage that problem. So both risks there and there's also opportunities for us. What we'll do now is just go through 3 areas where we have and are increasing our energy flexibility in order to contribute towards that U.K. national agenda. So the first of those ways is what we call demand-side response. And simply, that just means we turn down our energy use at certain times of the day in response to those [indiscernible]. So the most well-known example of that in the U.K. is called Triads, and that is during the winter season the National Grid saying to us, "Here's when I'm going to see peak demand. We'll give you a price signal [ to pause ] your demand as far as you can during that short space of time." And we manage those very effectively. To do an average Triad call, we will reduce our electricity demand by about 40% in those short spaces of time, which is a huge shift in the operation of our 24/7 business for a short space of time in response to pricing. That alone saves about GBP 2.5 million a year. And what it shows is that we have a huge amount of capacity [indiscernible] assets to respond to those signals. So a textbook example [indiscernible]. This is [indiscernible] which is [indiscernible] district in Derbyshire [indiscernible] and we've got -- so you've got [indiscernible]. And what we choose to do there is [indiscernible] choose to increase pumping during the day to fill the reservoir so that we can drop that energy consumption down to virtually 0 for a short period of time in response to that pricing. What we can then do is ramp that pumping back up by tonight when electricity is cheap to fill the reservoir and make sure the water's there. And we can see from the black line there that's the particular day with the black line [ through the average ]. So that's the standard control operation for [indiscernible]. What it shows is we have a huge amount of capacity [ utilized to respond to those calls ]. We do know, though, there's lots of change in the area. So the trick for us as a business is to understand the signals that we're getting in the way that energy tariffs and charge [ are checked ] in response to signals [indiscernible] supply control [indiscernible]. It's a tried and tested way that we've been doing for a long time and do today. The second area I'd like to talk to you about in energy flexibility increase is storage. So a solution to a supply and demand problem is to introduce some storage to assist in what we do with the water network. We've got reservoirs so that when demand peaks, there's water available stored. And that's trickier in the world of electricity because it's instantaneous, but batteries offer a technological solution to put some storage into that system. It isn't yet clear where in the electricity network those batteries should sit. Should they be with major energy users like ourselves with some generation on our sites? Or should be further up the chain in the distribution network or even with the major generators. And batteries aren't yet in a commercial place where you can [ quick and cheaply ] deploy them [indiscernible]. So what we want to be is on the front foot for as and when that might change. So what we're doing is we're investing small amounts of capital to trial batteries in places where we have solar generation [ which ] only generates excess supply. If the sun's shining [indiscernible]. That puts us in a position where we drive these assets with no heavy work and we'll be able to decide if and when [ we're going to sell ]. The third area I'd like to talk to you about is a bit longer term and requires more innovation, and that's [indiscernible]. So currently, much of the world relies on burning fuel, [ but at a ] point in time, [ I can move over time and space ] to generate energy when [indiscernible]. And that's where we find diesel, petrol and natural gas. So certain areas of the economy, such as shipping, aviation [indiscernible], rely on those fossil fuel sources that have proven very difficult to find the right [indiscernible]. But hydrogen fuel [ offers one of the only ] ways to replace that [indiscernible] generation [ of historical ] fuel. And the exciting thing about that is the U.K. [ government have got ] interested in developing [ this scenario ] [indiscernible] and developing hydrogen infrastructure and technology. And we as a water company could play a role in that market as we have access to water, which contains hydrogen. We also currently spend a lot of energy [ getting oxygen ] into our sewage treatment processes to treat [indiscernible], which also contains hydrogen. So there is potentially a solution out there that will give us a more efficient sewage treatment process and the hydrogen fuel [ at the back end ]. So what we're doing now is we're trialing out a Spernal wastewater works test bed using technology in concert [indiscernible] see how that works and if and when we should play a role in the hydrogen market. So what I'd like to show you there is energy flexibility is really important [ to us ] commercially [ today ]. It's also crucial to decarbonize the U.K. as a whole. With the work we already do and the work we're looking at, we're well equipped to play a positive role in decarbonizing the U.K. So thank you everybody very much.

Good morning, everybody. My name is James Jesic. I'm the Managing Director of Production, and welcome to the environment zone. Across our region, we've got many wonderful natural habitats which we've tried to recreate for you in this space today. And the reason is that we truly understand the importance of natural environments and the impact that, that can have on the watercourses that run through our region. Now whilst we don't own the rivers, we constantly interact with them and are dependent upon them every single day. Now since privatization, we have seen a constant increase in water quality standards, both on the water side of our business but also on the wastewater side of the business. What that's led to is quite significant investments in chemical and energy-intensive solutions, which are not only costly but also have a significant carbon footprint. Now what we're trying to do is create and to take a real lead role within the industry and create a much more sustainable future. And by using and utilizing our in-house catchment expertise as well as our in-house design engineering function, we will be looking to develop greener solutions for our water and wastewater treatment processes. Now we're going to be announcing 3 bold ambitions today, which not only improve the quality of rivers across our region but also improve the natural environment, benefiting our customers, our communities but also delivering for our business. The first of these is we are going to reduce pollutions by 50%. Now during AMP6, we've already made great strides in this space, delivering or beating our business plan in every year of the AMP. As a result, we've secured really good rewards throughout the [ ODI ] process. Now as part of our final determination, we've been set the challenge of delivering greater than [ 30% further ] reduction. And since then, we've also been written to by the environment agency, asking all companies to deliver [ 40% ] reduction. Now whilst these plans are bold, we think they're not bold enough, and we believe that we could and should do a lot more. Hence, the reason we're going to halve pollutions from our asset base. And I'll shortly be handing over to Emily, who will be taking you through our plans to deliver this. Secondly, we're going to be working with 9,000 farmers across our region. That's around 60-plus percent of all the farmers across the Severn Trent [indiscernible] regions. In those areas, when -- we're looking at working with 44 of our most important catchments, and the reason is that we've had, again, a really good performance in this space over the last 5 years. We've been able to work with farmers through reducing amount of pesticides. And fertilizers have run off the land into our watercourses and, as a result, mitigate the need for some serious investment in upgrading our treatment sites to cope with these pollutants. And we think this has been a really good addition to our portfolio of water treatment management. And as a result, through the ambition and through the delivery that we've seen in AMP6, [ where we should ] put 16 catchments in our business plan, we are going to go much bolder. Now thirdly, we are going to make a huge contribution to the Nature Recovery Network that is being launched across the U.K. We're planning to improve the biodiversity across 5,000 hectares of land. By 2027, we will give a significant environment boost, which deliver multifaceted benefits, not only enhancing water quality but also making the environment a much better place for our customers, our communities and again delivering for the business. Now during AMP6, all these things that we've already been working on have improved over 1,600 kilometers worth of the rivers that pass through our region. Now we think that these ambitions, combined with further enhancements in the wastewater we'll recycle back to the natural environment, will improve a further 2,100 kilometers worth of rivers that pass through our region every single day. That's around 1/3. So over the next 40 minutes or so, you're going to be hearing about how we're going to bring these ambitions to life and the plans that we've got to deliver these. Now we did know that these are bold ambitions not only for our sector but also for the FTSE 100, but we're taking the momentum that we already spoke to you about into our PR19 process, and we've secured radical and unique ODIs, who will not only fund this work but also help shape the future direction of the industry. Ultimately, what we're aiming to create is a much more high-quality river system, which will improve the raw water sources and make them more sustainable and resilient. We'll also improve the health and make the environment across the region much healthier and better for our communities and at the same time delivering for our business, reducing the costs of water and wastewater provision for our 8 million customers every single day. So we'll start by handing over to Emily Timmins, our head of wastewater recycling, who will take us through how we're going to drive down pollutions across the business.

Good morning, everybody, and welcome to the environment protection. As James said, my name is Emily Timmins, and I'm head of wastewater recycling. And it's my job today to tell you about our exciting plans to reduce pollutions by half. Now we know we're a relatively small contributor in this environment, with the farming sector being much more significant, but protecting the environment is really important for us in terms of protecting our water sources, reducing our costs and maintaining our position as environmental leaders. Now we're on firm footing. During AMP6, we delivered a significant improvement of 30% reduction in pollutions. We went beyond our business plan commitments, delivering ODI benefit year-on-year, and in [ numerous years ], received the highest accolade of environmental recognition from our regulator, the EA, in terms of EPA rating of 4-star, which is fantastic. So my team and my colleagues run a diverse and complex network of 94,000 kilometers mains across our patch, discharging into 4,500 pumping stations and then on to 1,100 sewage treatment works, where the sewage receives really high treatment standards, contributing to improving 750 kilometers of rivers in our patch, which is a part of the 1,600 that James has already referenced. It's my job in operations as an operation leader to manage and mitigate the risks that managing such an extensive network comes about. And then we do have a number of key issues that affect our performance, so I'm going to just touch on a few of those. So our customers discharge the wrong things into our sewers. They use toilets as a magical disposal unit. Number two, our trade customers discharge something called fats, oils and greases or FOG into our network, causing nasty accumulations called fatbergs, which I'm sure you've all heard about in the news. They block up our network as well. Extreme weather events. So hopefully, it won't have passed you by, some of the storms that we've had recently. These events stress and test our asset base and on occasions cause it to fail as well. And then finally, third-party damage. So that can affect directly our network or specifically we can receive illegal discharges, which put at risk the treatment that we have on sewage treatment works. So as I said, it's my job to manage and mitigate some of these risks, but some of them come back and cause pollutions, which in some cases harm the natural environment and have an impact on the aquatic environment that it's dependent upon. We absolutely want to, and we know we can do better in this area, which is why I'm super excited to be part of the 50% challenge that we're setting out today, which goes above and beyond the regulatory expectation that our -- EA has set up in terms of the 40% challenge on the industry and goes beyond our business plan commitment as well. It's great business for us because we're protecting our raw water sources. We're reducing costs that we would incur from pollutions as well, but not only that, our customers want it too. 70% of our customer base is fully supportive of our environmental improvement program too. So on to the plan, which I'm sure you're really interested to hear all about. So our plan's focused on 2 things: systemically preventing issues from occurring in the first place; and secondly, on responding much, much quicker. These initiatives we've seen replicate time and time again on the improvement initiatives [ in ] some of the areas that we [ probably ] heard about in Liz's discussion earlier. We know it's a tried and tested Severn Trent formula, which is why we're applying it to pollutions. So there are 4 facets to this I'm going to talk about today. Firstly, encouraging customer behavior. You would not believe what some of our customers put into our sewers: shopping trolleys, bricks, motorbikes. These are probably extreme issues. Actually, the things that really hurt us are fats, oils and greases, FOG; sanity products; and wet wipes. So we're going after these really hard using a mixture of education and technology. So firstly, education. So we've been able to identify sort of hotspot areas, and we're using extensive social media campaigns to really drive home that message that you need to be a binner, not blocker, okay? We're also going right in at grassroots level as well. And we have a huge customer education campaign focused on children in schools, explaining to them what not to put in the bin -- what not to put in the toilet and what to put into the toilet as well. Secondly, technology. Hotspot mapping is key for us. We can identify really high-risk locations in terms of food outlets discharging fats, oils and greases. We're using this technology to drive into particular high-density areas, work with those traders to educate them in terms of fats, oils and greases, install fat traps. But to be honest, we will take more stringent activity if we need to in order to drive that customer behavioral change. And for example, we're working with organizations such as [ Nando's ] at the moment, which has a particular problem for it. Number one, educating our customers; number two, [indiscernible]. Now if we really want to drive behavioral change, we need to work with industries that produce things like wet wipes, so we've worked extensively to redefine a brand-new safe-to-flush standard. And this is key to us to driving that systemic change and sustainable change for the environment and for our customers as well. And I'm pleased to announce organizations such as Kleenex are now fully on board with the fine-to-flush message. That's number two. Number three, telemetry. So we've got a very extensive network. And in order to be preemptive and create that preemptive strike when we start to see things going wrong, we need much more eyes and ears on our network, which is why I'm really pleased to announce today that we're installing 20,000 additional monitoring and additional [ fences ] on our network, which is going to enable us to react much quickly when we start to see assets to deteriorate. And then finally, reactive tankering. Small villages can quite quickly cause us a problem if we don't react. It takes a lot of tankers to suck up sewage, being a little bit graphic, and then take that safely away from the environment into a location such as a sewage treatment works. Now over the last year, we've invested really heavily on our clean water tankering for very similar reasons. And that has driven significant step change over the last 2 years and 50% improvement year-on-year in terms of our supply interruptions. And we're taking that learning away and applying it to wastewater and that's exactly what we're going to do. So they're the 4 key things to our plan. So just in summary, our plan is bold and is ambitious. It just goes beyond our regulatory expectations and our business plan but it's fundamentally the right thing to do to protect our watercourses, protect our environment. It's great for us as a business and exactly what our customers want, and it's fully funded. Great. So now I'm going to hand over to Dr. Jodie Rettino, who's going to talk about our exciting catchment work. Jodie?

Great. Thanks, Emily. So I'm going to take us away from the operational side and I want you to come upstream with us into our catchment to learn about what we've been doing with the wider environment. So welcome to the [ STC ] catchment. As James mentioned, over the next 5 years, we're aiming to improve water quality of over 2,100 kilometers of rivers. This builds on a legacy of work and significant investment we've made over the last decade to remove phosphates from our wastewater sites. This will ensure that 50% of the rivers regions -- the rivers in our region are protected in terms of nutrient levels. Now phosphate is the main nutrient we have issues with and it causes water quality problems. It broadly comes in 2 places: [ dam service ] and through our sewerage network from things such as washing powders or it runs off from farmers' lands, where they've applied numerous slurries or fertilizers. Now our work to remove phosphates from our wastewater sites has reduced our contributions by 66%, but farming contributions are going to increase from 30% to 50% by 2027. Now this is because there's been a surplus of phosphorus applied to agriculture fields over the last 70 years and this has built up and created a legacy of reserves in the soil. Now for us to reduce our contributions to lower and lower levels, it's going to take significant power and chemicals. [ Instead ], over 10 years ago, we decided to start working for farmers and utilizing natural solutions in our catchment. And here to tell you more about 2 of these solutions and how they help to manage phosphates is one of our catchment scientists, Dr. Alex Cooke.

Thanks, Jodie. So instead of using expensive engineering solutions, we're trying to remove the background levels of phosphates in the rivers upstream of where we discharge to. The lower we get these levels, the less work we need to do on our sites. And in some cases, we hope that this could be the total answer. We'll invest completely in these natural-based solutions, and we'll work with farmers to encourage them to change their farming practices. Now I'm going to give you a couple of examples of this kind of work. So over the last years, we've been trialing the use of phosphate socks in catchments where phosphorus in agricultural runoff is entering the river and causing pollution or entering one of our reservoir assets. I've got one here for you today. As you can see, in [indiscernible] style, it is literally a giant sock, but that's filled with material which reduces runoff, absorbs phosphorus and strips out sediment. Now the technology, we've adapted from filter socks in the U.S.A. where they're widely used as a best management practice to control sediment from construction sites. And by adapting the fill media and then placing at the edge of farmers' fields like this one or within drainage ditches like the images on the screen, we -- our trials suggest that we can move up to 99% of the phosphorus that's within agricultural runoff. This could save us [ GBP 13 million ] in capital and operational costs, and that's just from one catchment. We're the first water company to be trialing this technology. And so by doing so, we hope that we won't need to invest in the expensive treatment technologies in order to achieve our phosphorus reduction targets at our wastewater works. So the second solution I have here is a wetland and have one here as well. We've been trialing these at some of our more smaller [ rural ] works, where we've got larger land available. And a wetland is a shallow pond. It's vegetated with plants to treat wastewater, and after passing through the system, the treated effluent is safely allowed to discharge back into the local river. These solutions offer -- they're very cost effective, with low operating and maintenance requirements, and so they offer real savings in terms of energy use and operational staff time. Beyond their operational benefits, they also help to enhance and protect our environment, increase biodiversity, facilitate carbon capture and storage, and they generally help to provide a robust and sustainable process because they're a lot more resilient. Now going forward, we've had -- well, over the last 10 years, we've had very good track record in using natural-based solutions such as these and that's through our leading catchment management program. And Jodie's going to tell you a bit more about this now.

Great. Thanks, Alex. Yes. So we've had some incredible results from our catchment program over the last 10 years. To date, we delivered GBP 11 million in ODI benefits. We've avoided GBP 74 million in totex in AMP6 alone. So we know that for every GBP 1 we invest in catchment solutions, we avoid between GBP 2 and GBP 20 pounds in treatment costs. So not only is catchment management a long-term sustainable solution, it also makes great business sense. Now our AMP7 target is to have successful catchment schemes in 16 of our catchments, but we know we can go further than this and already working in 44 of our priority catchments. But to do this, we need to proactively engage with and change the farming practices of around 9,000 farmers. That's a whopping 63% of all the farmers in region. Therefore, we have one of the largest and most successful catchment programs at work across the water industry. Our Farming 4 Water program has been running for the last 10 years, and we've been working in partnership with the agriculture community to try and reduce pollutants from their farms. And when we talk about pollutants, we're talking about nitrates from fertilizers, slurries and manures; cryptosporidium that comes from livestock, and we've got a lovely [ Daisy the cow ] there standing over there in the corner; pesticides which come from insecticides, fungicides and herbicides; and [ color ] from our upstream catchments from peatlands. But our biggest headache and our biggest challenge over the last 10 years has been metaldehyde. And for those that don't know it, it's the active ingredient in slug pellets, and it's widely used in farming. And it's also used by people in their gardens, so it's been a huge, huge problem for us. So we have a team of highly qualified, experienced and trusted agriculture advisers who are out on the -- work with farmers on a day-to-day basis. They're in the [indiscernible], out in the farms or farmer's market, although if I'm honest, on cold, wet days a bit like this, you'll probably find them in the farmer's kitchen, having a cup of tea and a slice of cake. But their role is to really engage with farmers and help them improve the infrastructure on their farm and also help farmers to go above and beyond current best management practices. To help our advisers with this, we've developed our own schemes and grants. So we have STEPS, not some cheesy pop band but actually stands for the Severn Trent Environmental Protection Scheme. And we run our annual Farm to Tap scheme. And this really helps farmers mitigate the use of pesticides by rewarding them for water quality improvements downstream for their farm. We also offer expert advice and training. We have expert visits. And we also have a pesticide amnesty. So to date, we've engaged over 5,000 farmers. 98% of them have said it's a positive experience working with us. We've awarded over GBP 5 million in grants, to which farmers put their hands in their own pockets and match funded. We've also removed 16 tonnes of unwanted pesticides or old pesticides from the farmyards. Now traditionally, these might have been buried or, even worse, poured directly down the drain. So the large participation and success of our schemes has now started to bring significant improvements in water quality. Our Farm to Tap scheme has resulted in a 40% to 90% reduction in peat pesticides coming into our treatment works. We no longer need to install 5 new nitrate plants, and we've shelved plans to introduce a pesticide treatment at one of our surface waterworks. So I hope you can see that catchment management is our first treatment process. Not only does it help reduce the raw -- [ treat the challenge from the ] raw water quality coming into our works, it also ensures we have calm network, and it's also a great strategy to avoid future costs. We know catchment management can go further than this. For every GBP 1 that we invest, we bring GBP 4 in wider environmental benefit into our catchment, but we can't do this without working in partnership with organization -- with farmers and landowners and NGOs such as the region's wildlife trusts, rivers trust, woodlands trusts, master trusts. There's an awful lot of trusts, the -- and the RSPB. But many years working with these partners gives us great confidence in our AMP7 plans. Now [ most of the future ] and the Upper Derwent Valley is a great example of one of these projects that brings together many of the NGOs, water companies and landowners, plus many, many more partners, all working together for the good of the natural environment. And now, I'd like to hand over to Malcolm Horne, our Head of Water Quality and Environment, who's going to tell you a bit more about our AMP7 commitments around biodiversity.

Thank you, Jodie. Good morning, everybody. So Jodie and Alex did a brilliant job explaining why working in landscapes and catchments is brilliant towards quality. What I've also learned from that journey is it's brilliant for nature as well. So as we're looking at our plans for AMP7, we'll get really confidence actually we can have a really powerful impact on nature and enhance the environment across our region. And that was built on a number of things: a, the confidence we've got from the work that Jodie has been describing. We're used to working with partners, which is key for doing this at scale on third-party land. And also, the regulatory framework allows you to create your own ODIs. So there are common ones like leakage and supply interruptions that are common to everybody, but you now have to create your own bespoke ODIs. And they're driven by things that your customers say are important or peculiar to us. So we built an ODI which enhances -- is around enhancing biodiversity and it's across third-party land, our land and the rivers in our region overseen by NGOs because it's very hard to metricate biodiversity. So to give us some flexibility to do the right things is overseen and [ altered by NGOs to sign off ] and that's generally enhanced biodiversity. And that gives us a real great opportunity to make some landscape-scale impact and also to do some community-level improvements like greening cities for our customers. So we've, in the business plan, got commitments to improve just over 1,000 hectares of biodiversity. But as we've been building up those plans, we're thinking actually, and with our partners, we've got the opportunity here to do [ something indeed more ] impressive. So as Liv announced this morning, we're going to be announcing our great big nature boost. You will see this logo appear over the next year as we are announcing more and more of these programs and projects. And this is to improve an area of around 5,000 hectares. Now we've given ourselves 7 years for this as we're building up [ tonnes ] at the moment. And we've got quite a bit now in the pipeline to start to deliver. I'm going to show some of those examples with you now. So this is a wildflower meadow. It's actually on one of the farms that we work with. And what we do with the farmers is we [indiscernible] wildflower margins. So they give over some of the edges, [ like beyond ] hedgerows, to wildflowers. And the reason they do that is that it creates a great environment for bees and butterflies. That actually helps to increase the pollination of their crops. So actually, the increase in those yields makes up for that little land given over. But also, you then get communities of like ladybugs and other things -- a picture of ladybug here. It look like cute but have little efficiency for that size. And so they will come out from those wildflower meadows, eat the pests on the farmers' crops so they can back off the levels of pesticide they're using, which makes the job that Jodie was describing easier. It also means that when those wildflowers go over in the autumn time, you've got food for birds. So there's a whole ecosystem here that gets better and better. [ And unless we generally ] believe that we work with nature, we can strengthen the natural environment. It actually makes our job as a water company easier, and this virtuous circle then takes off. And also, when the farmers are applying pesticide, because you've got these strips along the edge, they'll catch any spray and drips again and stop that being into streams. So there's loads of benefits that come together from working this way with nature. The other [ things which need to be a metric on this job around ] is beetle banks. So again, a bit like wildflower margins. You put these into the edges of farmers' fields. And [indiscernible] grasses that are winter home for beetles. They come out in the spring, again, to eat the pests and reduce pesticide use. The other neat thing is, if you put them in the right place, they help to stop things like this happening. And we'd have all seen in the last couple of months a lot of the streams and rivers look pretty brown and orange. We have soil running off from farmers' fields. If you use these banks in the right place, it stops the erosion. It's good for the farmers, they keep the good soil on their land, and it's better for us. We've got less difficult water to treat. Trees. So we have heard a lot of people talking about we need more trees in the country. And everyone is in on that now. It's great for carbon benefits. It's also great for nature, it's great for people. They feel like going out and enjoying open spaces. It's also great for us in that they seem to help with blood reduction and holding water down in the ground; and also good for water quality, and the reason a bit like sewers. They hold nutrients and sediments back. And a good example of that is what we call the Clough Woodlands. So Jodie mentioned Moors for the Future, so the Peak district that sits above Ladybower, Howden and Derwent, which are big reservoirs just below the peaks. We've been working with Moors for the Future, which is a big partnership project with National Trust, Peak park and other landowners to rewet the peat bogs, which is what Jodie was describing. But the water that comes off those peat bogs comes down these deep valleys, and those deep valleys [indiscernible] up there. And we were predicting, at some point in the future, [ the craziness ] is we don't have to dredge those reservoirs at some point if this thing keeps carrying on because it washes all the sediment there. So I'd much rather spend my money on trees than desludging a reservoir. So we are planning to [ natively water ] these woodlands [ in ] these deep valley sites, again, in partnership with the local areas, across hundreds of hectares to stop that erosion and hold all of that stuff back, which is brilliant and you get all the nature benefits that come with it. So there's loads of options we've got to have an impact at landscape scale. Also, I would like to see us doing stuff at a community scale as well as most of our communities don't get out to these rural areas. And we're going to be working with councils, with woodland trusts around how we make some green spaces [indiscernible] [ making parts that are near schools ] in communities as well, those who don't get out to these rural spaces. So the ODI allows us that flexibility to do the right things. And Jodie mentioned all these trusts, right? And this is really key. I don't think we've been -- we would have been as bold on this if we hadn't got that confidence to work with partners on doing this work. We'll be doing some of the work in our land, and we own quite a bit of land. But in practice, that land is being used for other things as operational sites and so on. So maybe 10% of that 5,000 can come from our land. But in practice, to do this at scale, you've got to work across third-party land. It's not about just buying all that land, though. It's about working with people who own that land to do different things. And the secret to that is working in partnerships, typically these NGOs like those on the screen. So Moors for the Future is a good example of a landscape scale that brings the National Trust, RSPB. We work at landscape scale. But also, we begin to work with the wildlife trusts and rivers trusts at local community scale. They're very much in touch in their counties with community and interest groups. So it gives us a great, diverse range of projects that we can do. So in true partnership spirit, I'm delighted to say that we've got Emma, who is the England Director from RSPB, to come and talk to you about the work we're doing together at Sherwood. We've got a long history of working with the RSPB at Vyrnwy in Wales. It's pretty much the only site, as a water company, where we own the whole catchment around the reservoir. Typically, water companies own just a strip around the edge. And then a lot of the rest of the land is owned by third parties. So over many, many years, we've worked together at Vyrnwy. But also, we now want to work together at Sherwood, and Sherwood is really interesting for us. There's a big aquifer that sits underneath Sherwood, an aquifer we extract from. Anglian extract from it. Landowners extract from it. And we all know it's stressed, right? So we need to do something different. So an option we have is we'll ship more water in from the grid or somewhere else. But again, that's back to the hard engineering, lots of [ pumping ] and so on. So other ways that we can work with the natural environment to help that aquifer, help to improve the hydro ecology without us doing hard engineering. So I'm going to hand over to Emma to tell you why we're going to work together on that.

Thank you very much. I am absolutely delighted to be asked to be here today. And also, it's actually not just partnership. To -- we are in the middle of a climate and nature emergency. And that's an undisputed fact. So we have to act. And actually hearing an organization with the scale, the size, [ the health ] of Severn Trent talking about biodiversity in such a bold and positive way is absolutely wonderful. And also to recognize the actions actually needed to order to change the prospects for nature. So as Malcolm said, we've been working for many years in partnership at Lake Vyrnwy, a really positive partnership. We've been doing vital restoration on peat bogs to lock in carbon. We've been managing one of the largest organic farms in the U.K., and we're now working on a new bid to really improve that site even further. It's a really exciting project and partnership. So you're probably also thinking, "Aren't you just about birds? Why on Earth are you here? Why are you involved?" Well, actually, we're not just about birds. So we have many teams doing wonderful work on species cultivation, on protecting our most endangered birds. But we also manage 200 nature reserves across the U.K. We also manage a huge amount of conservation on a landscape scale, just one example being Wallasea Island down in Essex. So we've been working with Crossrail for a number of years. And that's involved transporting 3 million tonnes of earth from all out of the tunnels and moving it by boat across the water to create a brand-new island. So that's salt marsh, lagoons, brand-new habitat, 740 hectares. So this is about doing it at scale. We also work globally. So we work in Sierra Leone, working to promote and support sustainable farming practices. And that's actually protecting the Gola Rainforest. And one of the really nice unintended consequences of that is actually we now produce our own chocolate. So I encourage you to go out and buy some of that. We work really hard to make sure that science and evidence is at the heart of legislation as well. So working with governments, working with decision-makers to make sure they have the evidence to create really important legislation, such as with our agriculture and environment bills going through parliament as we speak. And saving nature through people is at the heart of everything we do. So not just our over 2,000 members of staff, not just our 12,000 active volunteers, not just our 1.2 million members but actually getting the public at large to go out and fight for and save nature. And one of the things about this partnership that gets me really excited is the potential to bring in Severn Trent Water's 8 million customers into that. You join us all together, and what a powerful force of nature we will be. So why did we think about using Sherwood for this partnership? Well, it's quite close to my heart. It's one of the first reserves I built when I first joined the organization, but it also houses one of Europe's largest collection of ancient oaks, a truly internationally important place. And it has 350,000 people every year going through its doors. Now I'm pretty sure they're not going to go and look at the natural wonders as they go through that [ pine needle ] landscape. They're probably going for a bit of archery, to go and see what they've hit, but we can change that conversation and talk to them about this partnership, talk to them about the importance of what they're seeing, about the changes that we can make. So we've worked really closely with our Severn Trent colleagues to look at a variety of complexity and scale in the projects that we can do. In year 1, we're looking at 120 hectares, improving the biodiversity across woodland, across wood pasture, across [ oak land ]. And then for the remainder of the program, looking at scale across 900 hectares of habitat to give better improvement in biodiversity. As a result of that, this truly will be an exemplar for biodiversity and landscape-scale conservation. So what else about Sherwood? Why is it so important? Well, the Major Oak. Has anyone here actually seen the Major Oak? Good. I'm really pleased to see some people have. If you haven't, please make it your ambition this year to go and see it. It is truly one of the most impressive trees you will ever witness. It's over 1,000 years old. It's girth is 10 meters. Its canopy stretches for 28 meters. If you were to lift it, it would be 24 tonnes, the same as 4 adult elephants. It is monumental. But it's also only 1 of 1,000 ancient trees. To be ancient, that's over 400 years old. And each one of those ancient trees houses around 1,000 species, species that can only live in those ancients. So it provides many civilizations for birds, for bats, [ for fauna ], for insects and [ orphaned ] insects. If we look at one of the rarest insects there is, it is the only U.K. home for the spookily named ghost spider; for one of the rarest insects in the world looking at decaying wood, and it needs decaying wood to survive, the cosmo click beetle. It is internationally renowned and people flock from across the world to go and see it. Sherwood also has one of the largest remaining historic lowlands heathlands in the Midlands. Nottinghamshire and the Midlands used to be covered with it. Now we've only just got a really small place for it remaining. And as I said before, 350,000 people, and growing, going through there daily. So we have got a chance to actually change that conversation. So what have we been doing to date? Well, we've taken an entire old visitor center out because it was actually planted in the middle of the most protected part of the forest. So a SSSI, a Site of Special Scientific Interest, in the 1970s. And all of the ancient oaks were intertwining with the car park that they were going into the tarmac. They were going into the buildings, which is not the greatest place for an ancient oak. So we've removed all of that. And that was probably the most careful demolition project you will ever have seen in your life. It's truly incredible. But now, we're seeing those oaks take them to stage, they're really finding their place again, which is wonderful. And now, we're looking at what else can we do. So we're looking at a [ burrow ] project at the heathland, pulling the earth back to give more homes for insects. Insects may be tiny, but they are the lifeblood of civilization, and we need them. We're looking at making sure those -- we have trees for the future. So we've got these 1,000 ancient oaks. But what about the trees coming through? We're making sure they're having the right natural characteristics to keep those species that -- for the future and increasing the abundance of species as well. We're looking at creating wildflower meadows. We're looking at hedge planting. We're looking at creating wildlife corridors, which means that nature can get across all of the fantastic habitat across the entire landscape of Sherwood. This image just shows you the scale that we're talking about. And partnerships have been critical to this the whole way through, from Nottinghamshire County Council who used to manage the sites through to a whole range of funders, through to Natural England who've been a critical stakeholder to help us get here. And this partnership that we are starting today enables us to work at scale and at pace, which is what nature needs. And we couldn't do it without Severn Trent Water. So as I said before, we are in a climate and nature emergency. Working together means that we can be powerful. We can introduce the 8 million customers to the work that we're doing together to showcase what's happening, but we're also doing transformational change and addressing that crisis. So together, we can be powerful for nature's future and for our future. Thank you very much.

Thank you, Emma. So I know, everybody who came yesterday, Liv was showing this morning [ we had a walk here in the valley ] just yesterday. And Emma was here. They're really proud of this. So I hope you'd be proud as well, the impact we're having together. So Emma and I have been working on this with our teams for a number of months. It's lovely to finally share and reveal it today and start a really exciting program. So we are blessed with some really amazing landscapes across our region, and we've got some great drone footage of those from us. Whilst it's been great to be working with partnerships, they've got some amazing footage, too. We've pooled all that together and tried to bring this story together through a little video for you. So I hope you enjoy this, and this will be available after the event as well. [Presentation]

So I'm not sure about everybody else, but I think this indicates a real shift for the industry. We always talk about infrastructure. We always talk about new processes that we're building, which will remain important. We're not debating that. But what we're talking about here is really using nature to really help us provide the best water and wastewater services that we can, drive down costs, improving service for customers and, at the same time, making our communities a much healthier and better place to live. Now we've heard today from Emily, who took us through how we're going to halve pollutions by really getting customers to think about what they dispose of down that magic bin that is the toilet and really getting a habitual change from customers in their day-to-day lives. We've also heard about how we're going to use much more telemetry across our network and really improve the predictability of where we're going to see issues and then, finally, how we're going to respond much better by building our own in-house tank capability. And those are just a few things that we're going to be doing to improve our pollution performance. Secondly, we heard from Jodie and -- Dr. Jodie and Dr. Alex about how we're working with 9,000 farmers across our region. And if any of you do have any farmland, in the room, I'm sure they'll be able to take you through the great innovation, [ at least for phosphates ], to really reduce the pollutants that run off land. And then finally, we've heard from Malcolm and, of course, Emma from the RSPB on how we're utilizing partnerships to improve biodiversity and give this real boost to nature and, of course, contribute to the Nature Recovery Network that we are building across the U.K. Now all in all, what we're trying to do is really ultimately drive an improvement in natural resources. We'll improve the quality of the water that passes through our region and, therefore, improve the quality of the water we abstract, which means then less treatment for our customers. What we will deliver is a more sustainable, reliable raw water source both to enhance the environment for our communities across our region and, at the same time, continue to drive down the costs of the water and wastewater services that we provide to our customers every single day. So thank you very much indeed for your patience and for your listening. We've got about 6 minutes now for any questions that anybody might have. Oh, we have one over here. [indiscernible], Malcolm?

Very impressive stuff. As a non-scientist, quick question. In terms of phosphates, looking away from the farms, is there anything you can do with industry and government to stop it [ putting ] cleaning products in the first place? Because it seems we're paying for it at the shop, and then it goes through the system, we're paying for it and taking it out -- taking out again.

Yes. So it's a really good question. And there are challenges across the piece. Now one of the things that we faced into around the wet wipe challenge and getting that Fine to Flush symbol attached is, obviously, there's a huge market for this stuff and finding viable alternatives. So there are viable alternatives. And what we're trying to encourage really is the use of more nature-based products. Now getting that through legislation and getting government to change that would be a difficult task. And I think we need the full might of the industry behind us on that. I don't know if there's anything further you've picked up from conversations...

Hard, yes.

Excellent. Well done, Malcolm.

It's Mark Freshney from Crédit Suisse. It sounds like a lot of what you do overlaps heavily with what the EA should be doing and people are definitely should be doing as well. And clearly, they have their own funding for this. So what is there to stop you moving in and becoming the delivery partner for some of those schemes? Because it seems to me that you're already going way beyond. So why not expand there?

I think the difficulty -- and clearly, Liv wants to step in. I don't know if you...

Just in case, get the mic.

There's a microphone. Do you want to carry on?

No.

Fair enough. So clearly, the EA or nobody owns the rivers and such. Nobody owns the quality of the rivers. Nobody owns the watercourse itself. And what we actually recognize is that we are reliant on the quality of the rivers every single day, which is why we've stretched further into catchment. Now, of course, there might be further changes in that in the future. But as it stands at the moment, we recognize the importance of the quality of resources, and we know that we can work with farmers in those catchments to improve that river quality. But I don't know if there's anything you want to add...

Yes. I think it's a [ fair share of what that I think is that ] we can do. And I think that is definitely the dialogue for the next few years, is that the government only has so much money, EA has only so much money. And are there cleverer ways that people like us could bring products investments to make a better step change for the U.K. on river quality? We think there is. We're going to trial a whole lot of exciting things over the next couple of years and then have those bigger, broader conversations ready for the next [ count ]. But it feels like there is more opportunity in rivers than there's been before.

Very good. There's a hand over here. [ Was there ]?

Verity Mitchell, HSBC. I was just very interested in the trees. So they are very specifically targeted, aren't they? So how are they funded? I mean, do they actually come out of your totex budget?

They are, absolutely. I don't know if you want to add to that, Malcolm.

Yes. So as I said, having [ an ODI ] to help fund this is very helpful. We're working with the Woodland Trust to help supply the trees, and we started that with tree packs for farmers. So I think there's going to be a range of things here, from tree packs, which can be modest copses, alongside [ pledges in ] farmers' fields through to the likes of Clough Woodlands and landscape scale, again, working with partners. So I think the secret to all of this is working with partners who have the experience of which trees in the right place sits with the right communities, the landowners and ourselves to do this together.

That would be [indiscernible].

No, we'll be giving somebody else.

Was that [indiscernible]?

So they're your -- are they your trees?

Yes. So my question is, I mean, are they in the RCV? I mean, are they...

Yes, yes.

Yes, yes, yes...

Exactly. [ So the trees are ] in the RCV. [ I'm talking about who does the ] [indiscernible] they're your assets...

Yes, yes.

So -- and I think Jodie gave a good example at the start when she said, for every GBP 1 invested, it mitigates GBP 2 to GBP 20 worth of further treatment. And that forms that part of our investment piece. So yes, they will be part of...

I think, perhaps a lot of this, we'll be working in partnership with those where there's other landowners and they will [ all ] look after a lot of this as well in landscape. And that's what we got comfortable with doing. It's a shared thing.

Okay. Any other questions? We've got 2 more minutes. This side. Sorry.

Apologies.

How supportive is the regulator of this kind of expenditure which delivers medium-term benefits rather than short-term benefits?

Well, I think this comes back to the point I was making during the presentation, when we've managed to secure unique and radical ODIs that will not only fund this but also shape the direction of the industry. So I think, inherently, we're seeing a shift change, too. Because we've got a good track record of delivery, I think that the regulators, generally, not just Ofwat but also the likes if the EA and the DWI, are acknowledging that the work we've done and the catchment expertise we have is truly making a difference. And therefore, we are seeing the support for that approach going forward.

So also adding we're working with the likes of the Environment Agency around how consenting regime shifts, to work with this kind of approach, away from like a point source intervention to a catchments intervention. And there, we're working with them as well other companies around how that guidance can change because it's a different way of working.

Okay. And then there's a question just here as well. Sorry.

[ Pauline from Yor ]. First of all, I think it's already well evident that the purpose of the company is shifting, and it's very encouraging. It's just then a question. When I was looking at the presentation, there is this moment where you say this field will have stopped pesticides from entering the aquifers. But it seems like it's, at some point, going to still -- nature is all interconnected. And how can it magically stop the pesticides from entering, at some point, the aquifers? It seems a bit naive, but...

Okay. Yes. So on the presentation that you saw, what we're talking about was the banks of wildflowers and beetle banks will prevent pesticides effectively being blown off the land into receiving watercourses. Now what we're doing in order to prevent contamination of the aquifers, that's the alternative products that we're talking about. And that's where the beetle banks, the wildflower meadows will actually improve the amount of pesticide or reduce the amount of pesticides needed for that land by creating a natural habitat which will consume any pests that attack those crops. One of the other benefits that we saw, and I think Jodie mentioned this earlier, is farmers actually see increased crop yields as a result as well because they get much greater pollination again from the natural habitat and the biodiversity that's growing in the natural habitat on a day-to-day basis. So that's the prevention. And I think when we heard about the Sherwood Forest piece, trees themselves will prevent contamination going down from the ground into the aquifers itself. So it's a multifaceted approach that protects surface, water surfaces and watercourses as well as the aquifers that live in the ground as well.

[indiscernible].

Oh, yes. Yes, that was the last question. Thank you, Liv. [ Well reminded ]. So thank you very much -- so [indiscernible] says we're running slightly late, so -- and we've got a few more minutes for any other questions if anybody has any. Over here...

[ Will Hatton ], [indiscernible] personal company. It's a remarkable kind of vision of Severn Trent, making nature work for you, and I -- or rather, you kind of inverting the whole [ peer ] equation. How far can it go? I mean, how -- is there a tipping point where you become a company that is kind of entirely structured around working with nature? And have you done any modeling about how far it can go in various areas, catchment area and going upstream and working with forest? So I'm just trying to achieve [indiscernible] I'm trying to imagine a final destination, a final resting point because you're in transition. Do you have an idea in your mind what the ultimate group looks like?

I don't think we have at the moment. I think it's a really great question and something that we will, obviously, start to shape over the next 5, 10 years or so. I think as we see climate change and other challenges that we see current around the globe, that we'll ultimately slightly shift and adapt the approach that we're taking. So I think it's something that we are thinking about. What the final destination will be, who knows? As it stands, I can't yet see a different way of disinfecting water because, in my head, I mean, chlorine's killed bacteria, for instance. But I think going forward, we will continue to expand in the space.

[ Tom ] from Morgan Stanley. You're working with 63% of the farmers in your catchment. What is the limiting factor stopping you going the whole way? Is it just operational? Or is it Ofwat's appreciation of what you're doing, therefore it's because they're not giving you more than the ODIs?

I'm trying to work our Liv from that question. [indiscernible]. So at the moment, it's a case of capacity. We haven't got unlimited resources. We need to target our 44 most important catchments, and hence, that's the approach that we take. Now, obviously, as we start to see success and we improve our methodologies of delivery, who's to say we might not be able to do more? But as it stands at the moment, that's the plans -- or those are the plans that we've pulled together.

Sure. Welcome back. I hope you had a good lunch. My name is Sarah Bentley. I'm Chief Customer Officer here at Severn Trent, and I look after our retail customer-facing teams. But I also look after our network teams but both on the water and the waste side. And the next 40 minutes or so is going to be all about water management. So I know you've had some really, really great sessions so far. But we're going to focus on 2 things around water management. The first thing we're going to focus on is all the work that we're doing -- come on in and grab a headphone. The first thing that we're going to be doing is focusing on all the work we're doing to improve the network and reduce leakage because, obviously, that's critically important in managing water. And the second area that we're going to focus on is all the activity we're doing with our customers to help them become aware of how much water they're using and also how much water is wasted from their homes. Because between these 2 things, we can really make a big impact in the water in our area. And we're not going to be sit -- sat here for all of this. In a minute, I'm going to get you up and we're going to go out and have a look at some of our teams in action. But before we do that, I just wanted to set a bit of a context as to why we're here and why we're talking about water on an ESG day. Now it's not lost on me for a minute that it's been very, very wet over the last little while. I also look after the waste networks. And my teams are out running around, trying to sort out the flooding from the rivers and just the management of the sheer volume of water. But believe it or not, these pictures were taken from our patch just 18 months ago, and it's sometimes hard to remember that we had the hottest, driest summer for over 40 years. And actually, water is a really critical resource. And I know you've heard about our triple carbon pledge. And obviously, carbon is a massively important thing in the fight against climate change, but I think water sometimes gets forgotten. And last year, the United Nations water -- world water report said that by 2050, 5 billion people will be living without -- in water-scarce areas, and some of those people are going to be in the U.K. Now we know the problem is much worse in the South, but we do have water-stressed areas of our region, too. So it's really important that when we're thinking about ESG, we are a water company and that we put water management right at the heart of that strategy. So the good news is we are a water company, and we are doing a lot about it. So we have these 25-year water resource management plans. And that's where we look over 25 years about all the different dynamics, population growth, urban development but also scenario modeling and, [ as Liv mentioned ], thousands of different models that look at different scenarios with 2, 3 and 4 degrees global warming so we can make sure that we're doing -- putting the right infrastructure in place and got the right long-term plans to secure water in our area. So we care about it passionately. You've seen our purpose today, which is taking care of one of life's essentials. And that's because it really is the core to our purpose of making sure this very precious resource is not just available for today but for generations to come. So our teams are working around the clock, and I can't wait to take you out and show you -- get you to meet some of them in a minute. So to manage water well, you need to do 4 things brilliantly. The first one is to invest capital wisely. The second is to be brilliant at delivering big capital schemes. The third one is to be able to improve your network and reduce leakage. And as I said, we're going to look at that in a minute. And the fourth one is to work with customers to change their behavior so that we're all much more water aware. So I said, we're going to be looking at the last 2 in a minute, but I did just want to touch for a minute on all we're doing in terms of investing capital and planning for those future scenarios with our water resources management plan. We've got brilliant asset strategy and management teams who've been modeling and working out where we need to invest this precious capital to make sure the right parts of our network get the right extra capital injections. But then we've also got a fantastic capital delivery team. And Helen's actually in our group at the moment, and her team has delivered the most incredible program of work. And you can see some of it here, just the sheer scale of some of the operations that we've been doing. And probably, the obvious one when we're thinking about long-term water resilience is the Birmingham Resilience Programme. And I'm very proud to be part of the company at a time where our teams have worked round the clock for 5 years to try and create a second alternative water source for the second largest city in the U.K. And this isn't just important for today but, as I said, for generations to come. So we're clearly very good at the first 2 categories of investing our capital wisely and then doing the complex work of, as you can see, just the scale of it, these huge capital programs. But what I really want to focus on is these 2 areas of what we're doing to improve our network and then get customers to change their behaviors. Now we've got to look at our own network first. We can't expect customers to think about water if we're not doing the very things we need to, to reduce leakage. And it's been a difficult couple of years with the Beast from the East, where the long, hot weather has put real stretch and stress on our network. And I'm delighted with all the recovery programs that meant that we hit our leakage target last year, which was a phenomenal task for my teams in that area, but then equally as much, all the work that we did through that process to make sure we're set up to hit these bold targets of 15% in the next 5 years and 50% over the next couple of AMPs. And we need to do 3 things really well: firstly, operate our network calmly to reduce the likelihood of leaks occurring in the first place. Secondly, we need to find leaks really quickly. Quite often, a leak can be going on just as a seep for a week for up to 80 days before it's visible on the surface. So we need to get there and stop that wasted water the minute it starts to occur. And then the third thing is once we do know there's a leak, we need to be able to fix it efficiently. And as you'll see a bit later on, that doesn't always mean digging a hole, fixing the pipe and filling the hole back in again. Once we've got credibility in really tackling leakage, then we can help to encourage our customers to think about the water they use. And I'm quite sure all of us are guilty of chucking fresh potable water over our lawns to make them nice and green or using that same water to clean our cars. There are some parts of the world where that thought is just apparent, that we do that with clean drinking water. And we need to get customers to care as passionately about water as we do. And we believe in this so much that we've signed up to some really bold ODIs, and they're supported by our customers because our customers want us to really focus on this area as well. So we've got these 4 ODIs of leakage; per capita consumption, that's the amount of water each person on our patch uses every day; customer education; and metering. So on the first 2, leakage and per capita consumption, we're signing up for saving 89 megaliters of water over the next 5 years. That's a huge amount of water that we're going to save. And just to put that in context, that's enough water for 300,000 people. So -- and that's just by managing leakage better, being more efficient at that and by helping, getting customers to think about their water use. But we want to go much further. So we're thinking much more for the long term. And so with our customer education program, we're going to be educating the next generation, 0.5 million children to think about water in a different way than you and I do. Because I think we'd all say we take it a bit for granted, and we need the next generation to treat it as this precious resource. And then metering is obviously a key thing, more eyes and ears on the network. So we're going to put in at least 0.5 million more meters. And this will be a very, very key tool to get our customers to become more conscious of the water they use. So I'm really feeling confident about the plans that we've got over the next while to really manage water wisely in our patch, but we're going beyond that as well and playing our part on the national stage. I talked about the fact that the South is very water stressed. And I'm going to invite now Bob Stear, who's our Chief Engineer, to talk about some of the work we're doing with other water companies nationally. Cheers, Bob.

Thank you very much, Sarah. Good afternoon, everyone. How was lunch? Was it all right? Jolly good. Right. So I'm Bob Stear. I'm our Chief Engineer. I've been here for about 23 years. And I'm going to talk about some of our strategic water resources schemes. So as Sarah said, obviously, we've got big populations in the South East and not all rain falls in the South East. It largely falls up in the North West, as we know, around Manchester, et cetera. So this is about us doing our bit in the middle of the country to see what can we do to help connect up those that have a lot of water and those that need it. So that's what this is all about. And in fact, it wasn't just us that said this. The National Infrastructure Commission, back in 2018, said even when you take in account of people improving their leakage, using metering, reducing their personal consumption, we're still going to be really short in the South East over the next 30 years or so, in fact, to the tune of about 1,300 megaliters a day, which to put it in context, is about 6 million people's worth of water. So this is all about our role in thinking about what strategic options are there to get water from the North West to the South East. Now the good news is -- because I like a bit of good news. The good news is that if you think about some countries that are water stressed, like Australia had the Millennium drought, obviously, the geography involved there means that large-scale transfer schemes just aren't practical as opposed to in England. Obviously, we've got -- we like to think we're a big country, but the truth is we aren't really very big so some of the connections, we think, for us are quite big [ spikes ] but in the overall scheme of things aren't. So we'll talk about a bit more detail of those. Now then back in 2011, one of our colleagues in -- Tony Ballance, started to publish some documents called the Changing Course documents. And that set out in 2011 that we felt we could play a really key role in transferring water because we thought that might be a better solution than building more resources down in the South East such as desalination or more reservoirs, for example. In 2016 to 2018, we firmed those plans up and we put them into our PR19 process, which you'll have all heard about. And we're delighted to say that Ofwat agreed with the fact that we should be looking at those schemes. And they promoted across the companies a basket of GBP 469 million just to do the feasibility work to say, of that basket of schemes, what's the very best way that you can create 1,300 megaliters more in the South East. So that's the task. We've got GBP 43 million of that to look at and -- look at feasibility. So that's not to build anything. That's to do the feasibility work because there's a lot of environmental considerations to put in place. And at the same time this year, of course, you'll have heard about we delivered the Birmingham Resilience Programme. So that means we've got good confidence that we're pretty good at this big transfer stuff. We've delivered the biggest scheme I've ever been involved with, for example. So in 2020, a group of regulators called RAPID have been formed, and they're going to start to look in 5 years time what is the very best way to achieve the outcome of more water in the South East. And for us in Severn Trent, we've got 2 main options: We've got the Grand Union Canal scheme, which is about how do we actually use the system of the canals that already exists to transfer water from the North West to the South East. And we've also got the Severn Thames Transfer scheme, which is how do we get a bit more water down the River Severn so that we can pump it across to the River Thames so that London can use it. And that's what I'm going to talk a bit more about now. So then we've got a map. It's a very high-tech map. So to start with. So the name of the game is we can see that we've got the River Severn travels down here. And of course, the thing to keep in your mind is by the time you get down to Gloucester, that freshwater in the river effectively goes out to sea. So what we've got to think about is, every drop that goes out that way, is there a better use for that somewhere else. So the name of the game for this scheme is how to put an extra 300 megaliters of water in the River Severn so that in times when they need it, they can take it from down in Deerhurst, pipe it across the column, down the River Thames and use it in London. So that's fundamentally what the scheme is trying to do. And the way it's trying to do that, I've got a totalizer. So we need to get to a magic 300 megaliters. So -- to go back then. Sorry. The first bit is Liverpool and Manchester right up at the top of the catchment. It's not actually in our patch. It's in United Utilities' patch. They currently get their water from a big reservoir called Vyrnwy. And what we've worked out is if they could develop some more sources locally, then we could use that water from Vyrnwy and actually get it into the River Severn to start our journey, and that gives us a little bit on our totalizer. In fact, there's a totalizer -- gone missing. It goes up to 180 megaliters. So in fact -- there it is. I knew we had a totalizer somewhere. So I had faith in you all along. It's okay. Right, so 180 megaliters, so that means we can get 180 megaliters more flowing down the River Severn. The next thing is we pass Shrewsbury in the middle of our patch. Now Shrewsbury has got a water treatment plant, but if we can develop the sources around it, we can avoid abstracting 15 megaliters of water. So that's an extra bit that can travel down the River Severn. So there you go, that's adds to our totalizer. It gets us up to 195 meg. Now by the time we get down to Gloucester, right down towards the Severn estuary, we've got a sewage treatment works called Netheridge. Now Netheridge produces a wonderful effluent. And if we've worked out -- if we can treat it to a slightly better standard, we can pump it back up the River Severn a bit. So rather than go out to sea, we can then use it to go across to London. So that's the next bit. And then finally, the big one, if you like, is Birmingham has got a very large sewage treatment works called Minworth, which is -- treats all of Birmingham's wastewater. And we've worked out that if we can treat that to a high standard, we can actually put it into the River Avon, which in turn flows down the river into the River Severn down there. So if we do all those things, we actually get to our target. In fact, we get a bit above our target of 300 megaliters per day. And so obviously, the last job then is we need to big -- build a big pipe that connects the River Severn to the River Thames. That's 87 kilometers. So it's obviously a big part. We have to pump it quite a lot [ and went ] uphill, and then that will give water to the people of London. So that makes sense so far, hopefully. But along the way, of course, there's a few things that we've noticed. So if you go back in history, often, water treatment works were generated around local areas, local towns, local authorities. And if you look in this area here, for example, we've got a big water treatment works in Gloucester, we've got a big one in Shrewsbury and we're going to have some assets in Deerhurst. So it's a good opportunity for us to have a look at that actually a bit more holistically and think are there a better set of assets that can deliver a really great product for the long term for all of our communities, including us. So we're taking the opportunity along the way. The other thing to notice is that we already do effluent reuse. So all these towns along the River Severn put effluent in and they're taken out by another town downstream, but we'll be looking much more actively to actually reuse systems for ourselves. So for example, we may be able to use effluent from Minworth's sewage treatment works to put into our Coventry system, as way of an example, to make us more resilient. Right then. So if I go back to the other slide to recap before we go into the really interesting stuff about -- learn about leakage and what happens in the [ homes ]. So we've been championing water trading schemes for a long time not because we're definitely sure they're always the right option but because actually, as a basket of options to get more water into the South East, they should be compared and contrasted with desalination and big reservoir options. The choices need really careful environmental consideration because whilst clearly it may seem wasteful for water to go out to sea, at the same time, we do have to do some pumping. And we want to make sure we don't cross-contaminate the catchments of the River Severn with the River Thames. So it is a lot of work to make sure that we have -- we protect against invasive species migration, for example. While we're going down the way, we're looking -- these are big once-in-a-lifetime strategic options. We're going to be looking at options of how do we make our own communities more resilient along the way. And then lastly, projects like the Birmingham Resilience Project give us real confidence that we're pretty good at this big infrastructure cost. So we can -- we've got some really good ideas of how we do these things efficiently. So that's what I was going to say on the big transfers. Now hopefully, they made some sense. We're now going to hand you back to Sarah, who's going to go [ over the leakage ]...

Great. Bob, thanks very much. Yes, really good. Right. It's time to see some of our teams in action and, as I said, to focus on those 2 areas of how we improve the network and how we get our customers to change their behavior [Audio Gap]

Welcome to the customer [ acts ] [indiscernible]. My name is Steve Witter. I'm Head of the Customer Leakage Operations for Severn Trent Water. And it's been my 30th year this year. So I joined as an apprentice and I've worked in all kinds of areas for Severn Trent, but my particular passion is distribution and leakage, which is [indiscernible] have leakage. So it's sort of the essence of kind of the job that I designed and wanted. So I'm particularly enjoying doing that. [ But last year is a ] difficult sort of year before with [ breeze storm ] and hot weather. It was extremely challenging. Well, extremely rewarding now to see some of the strategies, the implementation and all transactional design, which you will hear a bit about next door, is now really bearing fruit. So what do I need to talk to you about this morning? Well, in terms of water scarcity, I'm sure you've seen already in the introduction it's quite a challenge for all of us globally, nationally and locally. So at Severn Trent, we engineer a number of ODIs, which are [ internally timing ] overlapping almost. And the reality is it's all about conserving water. So the next story you're going to hear is wrapped around my job basically, leakage on the Severn Trent network. And that said, next door is around 62 megaliters. But in here, my -- what I was talking to you about is how we can actually influence customers to use less water. It's -- these are really easy tips and techniques on how we can get them to do almost a bigger contribution as the 62 megaliters next door for finding and fixing, [ digging in a highway ] as opposed to getting [ it rise ]. So are how we going to do that? Well, one of the ODIs that we have designed is called per capita consumption. We refer to that as PCC. And that's the amount of water that customers typically will use in their daily lives. So understanding [ work at the ] house because I'm sure you could spot appliances that use water and can use different amounts of water. So the 36 megaliters is going to come broadly in a number of ways, underpinned by customer education. We know this works because we've been doing this in AMP6 and it's been very successful, educating customers and allowing them to understand what they use, how it compares to family and friends and averages and also the impact you could have on -- when you think about electricity. For example, if you're saving hot water, you're saving twice because you're heating that water which is also going to waste. And so it's not -- it's a bit broad, and we say it's more broad -- or broader than just a specific water use. So we actually go out and we engage customers on the doorstep. We go into their homes, and we talk to them about what they have, how many showers they have, how many toilets they have. And then we offer them water-saving tips but also 3 unsubsidized devices, which we know the economics mean cheaper for us to save water in home rather than abstract it, treat it, pump it and it go literally down the drain. How much do customers use then? Well, it's around 130 liters per head per day. That is what we use. That is what's used. And the [ main theme ] when I first heard the facts, only 2% of that is actually consumed. The rest of that is used for the purposes of washing the car, et cetera, so quite small amounts. So the final piece in the -- in jigsaw then is metering. In AMP7, we're going to fit 500,000 meters. And those meters, again, are fitted at the boundary of the property. And that's quite crucial because one of the big savings, the bottom box here, we think, is 50 megaliters. And that 50 megaliters has been shown -- will come from what we call personal and private pipes, which we'll explain a bit later on. That's a key point. It means it's not in the boundary and you can't identify that. So 50 megaliters, that's the amount we'll try to save by influencing customers' behaviors. That's about [ 24 ] Olympic-size swimming pools, so not a small amount of water. But we've got some great experience and track record, and we've got some absolutely brilliant plans. So I'm going to welcome on stage, firstly, [indiscernible], and then, secondly, [ Rose ], who are going to talk to you about, with my help, some of the details of those plans. [indiscernible]?

Thank you very much, Steve. Hello, everyone. I'm [indiscernible]. I'm currently working with Severn Trent [indiscernible]. So the [indiscernible] across the entire [indiscernible] program and then design with strategy which activities we should do across the entire [indiscernible] program but also look at [ assets health ] and what are the metrics we are looking at. But this piece of work in terms of the PCC work that we're looking at, per capita consumption, has got me really excited. And 2 key reasons why it's got me excited. One is that effectively we're working in customers' homes and we start to save water in customers' homes. What that means is [ we're able to improve for every home ]. So what that means effectively is if you're using less water, then you start to abstract less water. If you abstract less water, you're going to be treating less water, so less chemicals and less energy. And then across the board, what that also then means is it's improvement for the environment, and it also means lower bills for customers. And overall, from a Severn Trent perspective, it means [ they're big decisions ]. So in terms of kind of that entire [ geographic ] water cycle, this gets me really, really excited. Now the trick to doing something like this when you're talking to customers and [ how to think of their part in their ] energy is to make it really simple. This can't be something that can go [indiscernible] and it's almost effortless in terms of how they operate. So let's just get into our study house. [ And the ] house could actually work in [indiscernible]. So as Steve said earlier, customers only use about 130 liters per head per day. Majority of that water goes -- get used in the toilet [indiscernible] use in the toilet. A lot of that water is flushed down the toilet. So let's start with the toilet [indiscernible]. As we've been changing kind of technologies and ways to do different flushing techniques, what we found is that [indiscernible] flush toilet has become quite popular these days. And when you look at the studies [ understanding contamination schemes some of the other regions ] have done, what we find in our region is about 5% to 8% of toilets are leaking. That 5% to 8% [ in simplest terms ] has been equivalent to about 240 liters per head per day. So it's almost like having 2 extra people in your house using that water every day. So clearly, this is something we want to go after. And actually, when you really drill down to it, it's quite simple. So I'm going to let Steve do a little bit of one of the things we will do to look out for and how we can rectify those things.

I think simple is the key word here. So the reality is, I think, it can be seen quite difficult if you've got -- if your target is to try to influence people to make a change or do something different, go out of their way, even spend money or spend effort. But we've got [indiscernible] how simple some of these things are, I believe, and that will give you the confidence that we could hit these numbers. So [indiscernible] and fit it all in the back of your toilet system. The old -- in the old days, the system will be almost double the size of this and would have an -- tend to have an old ballcock-style floating ball with an overflow [ pipe guard ] to the wall. And you might see those, either on your own property or neighbors, dripping or running down the wall, a big green patch potentially or down -- a patch on floor. It doesn't seem a lot, but when you realize some of these adding up and when you talk about an extra 2 people in your house, that type of use is quite astonishing, I think. So the modern-day flush, instead of having the ballcock, you get one of these [ pulley ] kind of flush. But the design flaw on these, and this is worldwide, is that the washer on the button gets a little bit -- there's a few nods in the audience, so it's been experienced here already. And the washers can be replaced very easily and very cheaply. I think we can [indiscernible] warm water and you can put them back up and stop that leak. In fact, leaks, if passive, the water is literally just running into the bowl [ in a way ]. So you would now, hopefully, provide [indiscernible]. People don't recognize, they never realize that, that water is not supposed [ to move back in the ] bowl all the time because it always has. And so we are trying and educating our customers. And when we do the home water surveys, we [ all say these approved ] in each of the toilets in the house and leave customers knowing that they're as water efficient from their toilet use as they possibly can be.

Yes. And the other [ common scene ] that we find is mostly customers don't know their toilets are leaking because you're not sitting in the toilet listening to the trickle. And so [ we can see ] ways to do it [indiscernible]. [ This blue film ], if you look at it, it's a really simple thing [indiscernible]. You put this in your cistern. It turns the water blue. So clearly, when you're flushing the toilet, the toilet is blue. But when you're not using the toilet, if you see a trickle of blue down your pipe, then you know your toilet is leaking. And then there are some simple actions to take. The other thing that we looked at is when you look at all the houses, and there's quite a few in our region, the older toilets, if you remember the ones with a hand flush -- I don't know if you remember those toilets. If you look at those toilets, they have quite a large cistern. And those cistern, you're talking about 7 liters [ and all the water ] [indiscernible]. The newer cisterns, you're talking about 4 or 4.5 liters of water. So that means when you have an older toilet, every time you flush, there's a lot more water that you know trailing down your toilet. So there are 2 things that we offer to customers. One is, I mean, we could convert their toilet. And we normally recommend that [ they do it first so, one, that they can give a small flush ] in simple ways. But equally, we recognize that there a number of customers who might not want to change their toilets. They like their setup [indiscernible]. And so what we offer is this really neat thing, which I really like, which we call as a hippo bag, and this hippo bag is very simple. What you do is you put it in your cistern -- in the cistern. It holds about a liter of water. Now because it's holding that liter of water, when you flush your toilet, you're automatically flushing your [ standard ] toilet. So a really, really simple thing that automatically will make a big difference. And the same thing when you go into taking a shower. So there are some really efficient [indiscernible] showerheads. Use those ones. You could save about 25 liters a day when using some of those efficient showerheads. And equally [ we've got ones ] taking showers. You could get lost in the shower in terms of how much time you're taking. Why not use this handy timer to track the amount of time? We recommend [ as a guide 4 ] minutes. It's quite neat. It fits quite nicely in the tiles. It looks lovely. And those are the things that we can do in the bathroom. Now the other thing as we kind of work through a house, when you go into the kitchen, a lot of things -- in terms of the efficient devices that we have in the space. I mean we recommend an efficient dishwasher [ to hands ]. And even things that have worked really well for me is the fact I hate hand washing. So perhaps if we can get handwashing [indiscernible] but then using the dishwasher is really [indiscernible] in terms of water savings. And if you want [ to dishwasher ] really well and you use it, then you're saving water as well. So kind of a win-win there. And then with the washing machines, we have some really good water-efficient washing machines in the market these days, [ recommend those ] as well. If you choose a shorter -- or shorter kind of cyclones [ so ] you get your clothes really clean, you also save water [ rinsing them ]. So really simple things are what we're kind of talking to our customers about and supporting them, helping them when we go and do these home surveys. In terms of when we go after their garden, again, really simple things that we've got and offered through discounts on water [indiscernible] pump on our website. Customers can get [indiscernible] as well. And that really helps in terms of collecting rainwater when it's raining heavily and using it [ on either pieces dry ]. So if the weather is dry, use that collected rainwater to water plants or to clean your car. So all of these simple things that I've just talked about, when you hand it out [ for people to find aid ], all right, customers can save about 10% of daily water use if they change their behaviors, who just can't carry on with their daily life, with these simple tools. 10% when we look at adding all of that on. What we find is effectively that could help us deliver a per capita consumption target. Now clearly, at first it's not enough and we need to do a lot more. And this time, I'm going to hand it over to my colleague [ Rose ], who's going to talk about how we do the rest. Thank you.

Great. Thanks a lot, [indiscernible]. Hello. I'm [ Rose Dolly ], and I work in our innovation team. I'm here to talk to you about metering. So [indiscernible] will allow around 0.5 million meters, as Steve mentioned earlier. And that equates to around 186% compared to the [ overall standard ]. So that clearly demonstrates the really big ambition on our part to focus on metering over the next [ time ]. There are 2 key reasons for doing this. The first reason is around identifying leaks in the customer side of the boundary. So at the moment, we find around 10,000 [ blocks of customer private pipes together ] and that [ is equal ] to around 10 megaliters a day. We estimate by adding 500,000 more meters to the equation that we'll find an additional 5 megaliters a day or 5,000 leaks on the customer side of the boundary. The second benefit to this is the impact on the amount of water customers use. So [indiscernible] just mentioned that we see, on average, around a 10% reduction on water use from customer's engagement and water-saving activities. We find having a meter really helps to incentivize customers to do this when we save money on their bills. So Steve now will demonstrate how we install the meter [indiscernible].

So I think I'll start just to make sure people can visualize, if you haven't seen it before. So this is a very small version of our network. So followed by modern-day plastic pipe, this is [ a thorough strap in the ] [indiscernible]. So you have this [indiscernible] so if you have -- if you were building a new house, for example, one of our -- in our area, one of our teams would dig out, take this [indiscernible] apart and make a good and hygienic connection and then provide the pipe to your house. So for the purpose of this demonstration, the pipeline disappears under the road typically and then pops up in the footpath normally, in one of these things, which is the modern-day stop tap. So some people have an old [indiscernible] on the top. And if you're taking the kids to school, walk kids to the [indiscernible] or the church, that's what you'll probably [ want them to top of ]. There might be different shapes and sizes, but broadly, hopefully, that's what you've seen, nice [ and enclosed and ] safe in the footpath. What's inside? It's not very exciting unless you're like me thinking it's quite a brilliant invention. Because when you take, when you think an old [ brick and chain ] that will be built in the footway, with the brass stop tap in the bottom, maybe towards [ a copper out in the other ]. And we look [ at the center ] we provide now, our teams, you'll see some techniques next door, they can install these really, really quickly. So the bottom there, you'll see -- hopefully, you can see there's a bolt basically, which you remove, and that literally screws out. You screw that out and you screw one of these in currently. So this is a water meter. And previously, most water companies would fit this water meter inside the property. So it would be under the kitchen sink typically and it would be obviously within the big pipe that comes into your house, [ this now ], and then goes up into the rest. It's amazing how many people don't know where their internal stop tap is. So if you don't, please have a look when you get home. It's really important because these -- the old stop taps in the road don't always work and people don't always treat them with care. If you've got a problem in your house, it's simple, but if you can't turn that off, you can't stop the flow of water. So why we [indiscernible]. Well, if you can [ imagine this very pipe ] from the meter, then this frees up your long, winding driveway where you live, and then it pops into the house. If there's a leak on that pipe anywhere, unless it shows itself or you don't get water obsessed, how would you then know? And [indiscernible] we find -- we already find 10,000 of these a year. So it's really, really important for us to be able to quantify some of the very small leaks. And you'll see how we deal with some leaks again next door. And so you fit in the meter here and we can then do a simple -- what we call a simple internal check. If the meter is spinning around in that outside property and you turn that valve off, if the meter is still going around, you know obviously there's an escape of water between here and there. So it really is quite simple. And then the customers can decide [ what makes them say they want to go out ] because the customer, of course, owns the pipe between [ down blocks ] and their property, and we offer loads of [ company ] advice and assistance to be able to get that built. And the reality is any advice I would give to people is, "You want a modern-day [indiscernible]." It's the best from a hygiene perspective. It's best from a health perspective. And if [indiscernible] with a lead pipe, I would strongly recommend anybody to replace it with a modern-day best in class that you could get. So meters are relatively cheap [indiscernible] this is around GBP 35 to buy, for the standard meter, but the installation costs of going, mobilizing the team and getting [ in the highway ] is [indiscernible] and it can be a lot more expensive. Of course, we are focusing on the efficiency. And again, next door, you'll see how much productivity gains we've been able to get. Well, one of the other [ bits of mounting tech on here ] is this is called a [ side-worn tub ]. And basically, rather than having to open the land box and read the meter, you can drive past -- at the moment, the technology, you can drive past and fit this [ into the meter really low ]. So it's really, really efficient for us. But the main thing for us from an efficiency point going forward is that once this receptor is fitted -- I always say let's imagine this is the Betamax video equivalent of meters today. In 5 years' time, when the modern Blu-ray equivalent or streaming comes out, you've got another [indiscernible]. You haven't got to go to that expense. You can screw this out and screw the new one in. You don't have to disturb the customer or the customer doesn't necessarily have to be at home. So we are really future-proofing, I believe, to be able to put those and that -- those pieces of new technology as and when we could. So the 500,000 that we are getting fitted now, we're not buying 100,000 of this in the same meter. We're going to buy what we need along the way and then, I believe, we'll pick the right product, the right technology for the customers going forward. So if you haven't got a meter, I strongly [indiscernible].

Great. Thanks, Steve. So you just heard the particular benefits [ our business have in meter ]. First is that it's much easier for them to identify [ if it's got need ] [indiscernible]. And secondly, it helps them identify the [indiscernible]. Thanks, [ everyone ]. I'll pass back to Steve now.

Thanks, [ Rose ]. So [indiscernible] [ water ] management perspective. We have got a global water scarcity problem. We know we have one nationally. We've already seen how we're going to look to influence that nationally and help all the water [indiscernible], but equally we have to help ourselves. And then when it comes down to locally, we're using our great track record and we're using our -- and we're using our foresight, if you like, from AMP6 to be able to now [ confidently ] deliver these targets in AMP7. The advantage, I guess, for you guys is you'll be able to see our progress against those because, on a yearly basis, you will see our progress and hopefully -- not hopefully, I'm [ extremely ] confident you'll see us knock those numbers down year-on-year to hit the target. So thank you very much for your attention.

Good afternoon, everyone. I'm Stuart Howell. I'm the Head of Finance and Operations here at Severn Trent. And welcome to our network zone. So you've heard Sarah talk about 4 key ODIs within water management and we're going to talk about 1 of those here, which is leakage. So we've got an ambitious 15% or 62 megaliters per day target in AMP7, and around 50 megaliters of that will be from direct improvements on the network, with the remainder from reducing customer leaks on their private pipes. So we're going to hone in on 2 key areas in this section. One is faster finds. So faster find means finding leaks earlier and faster, so hopefully, when they're smaller, before customers report them. And then once those leaks have been found, fix them as quickly as possible. So we've made some enormous progress in the last few years in this area, and technology has been a huge enabler. So for those of you who were there at [indiscernible] 2 years ago, we've invested in much of the technology we'd have shared then, and the team will share some of that shortly. So leakage reduction is clearly beneficial from a climate perspective. It also presents some wider business opportunities for Severn Trent. So firstly, we estimate that we'll save around GBP 2 million per annum just from not having to treat and distribute water that would have otherwise leaked through pipes, so good news. I guess with [ confidence ] in our performance comes an opportunity to help form an ODI. So we've got a GBP 325 -- sorry, GBP 325,000 reward for each megaliter beyond target. And I guess leakage is one of those systemic issues for us. So reducing our leakage by 15% can only improve our reputation with both customers and [indiscernible]. So I'm going to hand over to the team now. So firstly, Adam, who's going to talk about some exciting plans that we've put in place for faster find before [ Sophie ] [indiscernible] picks up the fixed area. And then [ Matt's ] going to share some really exciting innovation that could be absolutely game-changing for us in AMP7 and beyond. So over to Adam.

Thank you. Afternoon also. I'm Adam Perkins, and I'm the operational lead for leakage. And today, I'm going to you about our faster find. So our faster find program is with the aim of supporting our 15% leakage reduction challenge. And we've been working on a people and technology plan over the last 2 years to gear ourselves ready for that challenge. We know from -- to achieve that 15%, we're going have to be aware of leaks 20% sooner than we are today and then, when we're aware of them, find them 20% quicker. So that's our challenge. And our challenge is bringing together people in technology, and we call that our leakage operating model or what we like to call as LOM. And our LOM program over the last year or so has been an insourcing strategy, bringing in 116 what we call water network technicians. These water network technicians are patch owners. So they look after their own areas [indiscernible] into 116 areas and each of them have ownership and accountability for delivering the leakage performance in an area. So it's really clear what they need to achieve. And over time, they've built some great knowledge of how that network works as they live and work in these areas day by day. So to bring that to light, I'm going to hand you over to [ Tom and Ryan ], 2 water network techs who work here in this area, to bring that to life for you.

Hi there. So I'm [ Tom ]. I work for leakage in Warwickshire. So since the new leakage operating model has gone live, it's really given our guys the ability to have a lot more focus, flexibility and ownership of working in their district metered areas. So here we are, starting with the city center. Surrounding by this is the [ ring road ]. And to give you an idea, inside that [ ring road ] is actually one district metered area. So how a district metered area works, you've got to have a look at the rig. The water comes into the network and then it passes through a sluice valve. So these are just like big taps on our water mains. And then that go through then our meter, this is where we collate all our data so we know exactly what's happening in the district metered area; down our water mains; into our service pipes, which feed your homes. And you have your external stop taps. And our other assets at the end of the mains, like our fire hydrants. So the city center here is where we've got a high level of leakage. And historically, this has been a really difficult place to work. [ We manage ] students, night clubs and et cetera stuff that we have. So we have to put a plan together to how we're going to tackle this. So I'll pass you over to [ Ryan ].

Hello, everyone. I'm a water network technician here in Warwickshire. And the DMA that [ Tom ] has just been describing to you is in my patch, so I actually own this DMA that we're in currently. What LOM helps me do is change my shift patterns to what's needed to specific areas. So as you can imagine, the city center, in the day, it's so busy. You can't do it, so all of my work has to be done at night. We've also got these permanent loggers here, so that's new technology, and that helps me, give me specific areas to target to try and find the leaks rather than going to the area of the pipelines. It also helps me find the leaks a lot quicker than traditional methods. When we got the [ first ] mains that are found in this area repaired, these are now repaired, this area is now at its lowest levels of leakage it's ever been. And also going forward, these loggers will help me sustain that level of leakage as well. Thank you.

Perfect, perfect. So hopefully, a little glimpse there into what it's like in working in our leakage operating model. And like you heard the guys saying, this ownership and accountability is driving a step-change in our performance. You also heard them talk about technology helping them, new tools in the toolkit. So it's not just our people. It's about giving them the right equipment to deliver their job and deliver our 15%. So if you were here 2 years ago at [indiscernible], you would have seen a lot. We talked about acoustic loggers and about loggers that I think were attached to ceiling actually at the time. And then we're investing GBP 10 million in 36,000 of these. And essentially, these are spread every 150 meters on our network, listing out the leaks all the time. We've decided to put them on the 15% of our most reactive network, which isn't the shiny stuff over here. It's more like this, more of our aging infrastructure, our cast iron mains that have high burst rate and high [ consequence value ] when they do burst. So where we get the best value for money is put on this 15%. So what that will help us do is find leaks underground long before they become visible, long before they impact customers' lives; and also give us the added benefit of improving our resource efficiency of finding that leak by around 30% in the areas where we've got these. So I guess, how do they work? So really simple ways that, like the guys said, between 2 a.m. and 4 a.m. in the morning is when the network is at its quietest, when we have the least demand and we have the least background noise from, I guess, people that you see here today. So what that does is it takes a sound bar between -- at 2 a.m., 3 a.m. and 4 a.m., and if it hears a signature that it believes is a leak and it hears a consecutive signature 3 times during that night, it would alarm out. And it will alarm and send that alarm into our field -- into our office teams and then pass down to our field teams first thing in the morning. So instead of having to look at a whole area, say this DMA may be 15 kilometers of main network, we are pinpointing an issue down to 150 meters. So for someone like [ Tom or Ryan ], they're not going to spend a day walking around this area looking for that issue. They're going to be very -- to the point of where we know the issue is. And that's obviously created this step-change performance that we've seen in the amount of leaks that we're finding before a customer knows there's a problem. So we've seen that increase from 35% to 50%. So that means that we're now finding 50% of our leaks non-visibly underground before you see -- before the customers have a chance to report them, before customers' supply may be interrupted if it does fail catastrophically. And also, that gives us confidence that we're finding leaks much sooner in the journey and, therefore, leaking less water. So these are [ great ] metallic networks on pipe metal -- old metal pipes and we've got our network. But we know, as we put more new networks in the ground, that's likely to be plastic, and therefore, acoustic technology isn't the best solution. So that's where our [indiscernible] pressure loggers come in. So we've invested a further GBP 4 million in 6,000 pressure loggers. This will cover, again, 15% of our plastic network. And essentially, it's looking for pressure changes in the DMAs that may indicate that something is not quite right. We know what our predictive pressures are on a day-by-day basis, hour basis. If we know that something is not quite right, we will then start to send these guys into these areas to investigate. Now they're not like the same as the acoustics that may give you a 150-meter area to investigate, but what they do, do is give us segments within a DMA, so we can carve and log and alert the guys to a particular segment of the network that we believe the issue is in. Again, further improving the time to find that issue and also getting on top of that issue before it affects our customers. So you've seen some great work in terms of faster find, but it means nothing to us unless we fix it. So I'm now going to hand it over to [ Sophie ], who's going to talk about some of our faster fix initiatives.

Thanks, Adam. And some really great faster find solutions on safety and then from our customer operations [ for our team in Leicestershire ], and I'm going to talk to you about 2 fast fix solutions. So the first one, you can see outside, to my left, so this is our vacuum excavator. This is essentially an industrial [ heave at the type of the soil ] out with the excavations for us. This is a really great example of where Severn Trent don't always have to lead in innovation. We're also sometimes really fast followers. We saw this idea presented by another water company. And we cracked on with the idea, what they thought about it. So the vacuum excavator helps us to expedite and fix leaks much quicker, therefore reducing disruptions for our customers, reducing our costs through increased productivity of our repair and maintenance teams and reducing the overall volume of leakage on the network. In areas where this has been deployed and is used frequently, we've seen a 30% to 50% increase in the number of jobs completed per day and there's also significant health and safety benefits. So we want the risk of our -- to our employees in their jobs every day to be as minimal as possible. So the key health and safety area is around manual handling. So for excavations that would traditionally have been hand dug, we can use the vacuum excavator and that minimizes that risk. It also reduces the risk of cable strikes or striking pipes within the excavation as well. One of the long-term benefits of vacuum excavation is around reducing our carbon footprint. So it presents the opportunity to actually create smaller excavations, therefore, using less materials like tarmac and also using less fuel to transport those materials. So another really exciting innovation we want to talk to you about that's been sort of in-house at Severn Trent is the [ seek a leak ], and this is it. So this is essentially a putty that can be inserted into customer supply pipe, follows the flow of water, finds the leak and forms a seal to actually cure that leak. This demonstrates that even those smallest leaks we're targeting to make sure we're saving every drop of water that we can. So this is an idea that came out with the 2017 challenge campaign. This is an annual campaign that Severn Trent runs for all its employees to submit and pitch their ideas to drive efficiency within Severn Trent. And if you're at [indiscernible] 2 years ago, you'll remember that this idea was in its very early stage of its development, but now 2 years on, we're halfway through a knowledge transfer partnership with Manchester Metropolitan University to take this idea to the next level and develop something that's unique to Severn Trent and the right means to get this into the customer supply pipe. So it's a really great example of where Severn Trent has taken an idea from a frontline member of staff, added some technical expertise through university and also reduce the overall costs of the project through external funding to produce something that's potentially going to be a transformational, game-changing repair technique. How cool is that? You're actually going to see a live demonstration of this today. So I'm going to hand you over to [ Callum ]. Those of you who can't see from where you sit, it will also be able to screen to the right as well.

So we have the same kind of pipes you're likely to see underneath your driveway. We have this putty. We insert it into the customer supply pipe. And without digging, we are able to repair leaks.

There's an element of jeopardy to that every time. So live demos, they don't always go well, do they? But 10 out of 10 so far, so things are looking good. Thank you, [ Callum and Sophie ]. So my name's [ Matt ]. I am the water innovation leader of Severn Trent, and I'm going to talk to you about a couple of other things that we're looking at that might be our next vacuum excavator or our next seek a leak. So robots, pretty cool. So Severn Trent is really interested in what robotics might mean to the water industry in the future. We're working as part of the TWENTY65 program, which is a academics program -- academics-led program, so a number of universities across the U.K., Leeds and Sheffield being 2 of them, on what robots might look like in order to put into our water networks. So there's 3 key elements of the Pipebots program. The first one is mapping. So how do we put small robots into our pipes so we can map the whole of our system and know where all of our pipes are? So that's really important to us. We have drawings and we know roughly where most of them are, but to exactly know to the inch where they all are would be really interesting for us. So the next one is could these robots also take a view of how good those pipes are performing when they're on the inside. So some condition assessment, helping us to understand where the weakest parts of those pipes might be and which bits need replacing and which bits are actually okay and have a longer life left. And the third thing is repairs. So wouldn't it be really good if they could take a piece of the putty maybe that's [ Callum ] has developed and put those into some of those weaker holes, some of those small leaks and saving us water, and repair them from the inside without us having to excavate at all and get those small leaks before they turn into big leaks and catastrophic failures? So that would be really good for us. So unfortunately, our robots don't exactly look like the ones that you saw on the screen. They look a little bit more like this. So this is an actual robot that's been in a sewer pipe and developed up in Leeds, and that's more what it does. Okay. So robots is one thing. So another thing I'd like to talk about, the second thing, is fiber. So how do we use fiber optic cables to help us understand our waterway network better? So Severn Trent will have a U.K. first. So on the first -- on the 5th of February this year, we put 750 meters of fiber optic cable into a water main in [ Leicestershire ]. And we then stimulated some leaks across that main because obviously we haven't got any on that main. So we have to stimulate some flow and some leaks. And we really understood down to the millimeter of where those leaks were simulated. So if you think about what Adam was talking about earlier in terms of pressure and flow loggers and being able to pinpoint down to maybe 150 meters in length, if we think about fiber, fiber would give us probably tens of thousands of pressure and flow loggers along that length. And rather than sending [ Tom and Ryan ] to go and have a look in this area or along this pipe, they'd be going to have a look at this place and tell us what's going on in this area. So it helps us to become much more efficient in the way that we find the problems and much better at the way that we deliver the solutions to those problems. So you can imagine digging holes that [ Sophie ] talked about earlier is quite a laborious task. We want to dig smaller holes. We want to dig less holes. So being able to pinpoint those problems within an inch and being able to dig right on top of them opens up a whole load of opportunities for us in the way that we repair them. So think of TWENTY65 and the robotics program, what our water and wastewater networks might look in TWENTY65; armies of robots scurrying around, mapping our network, finding the problems, understanding where our pipes are and fixing them. Fiber optic cables on some strategic assets that are really giving us loads of data so we can pinpoint any problems that we've got down to the minute degree really feels like we're taking care of one of life's essentials. Reducing the amount of leakage that we have, reducing every drop that we can possibly find, really going after that abstraction so we don't have to take as much from the environment and reducing our carbon footprint.

I think I'm going to [indiscernible] Sarah [indiscernible].

We're almost there. You'll be pleased to -- I'm just so proud. Thank you. A huge thank you for the whole team who are out day in, day out, round the clock, making sure that we really protect every job. And hopefully, you've got a little bit of the passion that we do. Carbon is a real important part of the whole climate change agenda, but water is a critical part, and we are absolutely passionate with all our people to make sure that we do our bit to ensure water security.

Real measure of success in this space is not what we say or what we believe. It's actually what we have an impact on people's lives. And so we want to share with you some of the work that we're doing and some of the stories from colleagues that really help you understand that impact and how we feel we're making steps forwards. And I guess the S part of ESG, in some ways, is less formed for many organizations, but over the last few years, we feel we've done a lot of work to really take some positive steps forward. And when you look at the external indices, it reflects some of that work. So for example, the Tortoise responsibility index placed us 10th in terms of the FTSE for our work in this area. And when you look at Hampton-Alexander on gender balance or the social mobility index, we place right off at the top of those as well. But if I'm honest, indices are incredibly nice kind of confirmation that you're a good organization, but they're not the things that really, really matter to us. What really matters to us as an organization is how people feel, and that's why we wanted to run the event here today in Coventry so that you could see and feel our staff, our culture, a culture that we're incredibly proud of as an organization. And there's no better measure of that culture than our engagement survey. And when we look at our engagement survey last year, we scored 8.1 out of 10. Now to give you some context, that places us in the top 5% of energy and utility companies globally, a score that we're incredibly proud of. But not only that, on every single cultural driver, we scored in the top quartile, and some of our best and most positive comments were around inclusion and inclusivity. And that culture extends to our workforce and the work that they do every day, going out, going that extra mile to customers regardless of the weather, always making sure that we're delivering on our commitments and promises. But it's a bit more than that as well because nearly 90% of our employees are also our customers and live in our communities. So when they're going that extra mile, they're going that extra mile for their neighbors, their families, their friends, the people they see walking down the street each day. And that's why we also see fabulous statistics like 40% of our employees volunteering to do work in the community beyond their roles. And again, it's something we're incredibly proud of. Now we don't do this just simply because it's the right thing to do. We do this because it's good business. It's good business because if we help to lower -- if we help to lower bad debt through making water property -- reducing water poverty, through increasing employee engagement by our employees being proud of the work we're doing, through attracting skills and talent into the organization by reaching out to different communities and, of course, also through reputation. Now C-MeX is our new regulated measure of reputation, which looks not just at service but also at experience, and in a number of the initiatives that we're going to share with you are really important in trying to drive that experience score up, and we know that top performers in this area will also get rewarded. So we've got 3 sessions for you in this area. We've got customers where we're going to talk about bad debt and making our service available to all. We've got colleagues where we're going to be talking about creating a fair, safe and inclusive environment. And we've got communities where we'll be talking about the work we're doing to tackle [indiscernible] and including our community funds and work on social mobility and skills. So what I'm going to ask you to do is split into 3 groups, and I'll do that. And we'll separate you out. One group will stay here in the market square and then I'll talk about customers. Another group is going to go to our village hall that's just down the road to talk about communities. And then we've got [indiscernible] just a little bit further where they'll talking about colleagues.

Okay, welcome. I'm Hilary Bennett, and I look after all of our retail operations, along with our visitor experience centers and our wholesale market unit. And this is Bill Wilson. We're going to spend 10 minutes having a quick chat about what we do with our customers, how we support those customers. And if we ask our customers what social purpose means to them, then they'll identify with 2 main themes. They'll identify with affordability and accessibility. And during this time, we've worked really hard to make sure that those things that we developed are actually available to them because we know that -- from our PR19 research that 11% of our customers will struggle across our region [ with affordability ]. So we have schemes such as our Big Difference Scheme, our Severn Trent Trust Fund, WaterDirect, which allows people access to support if they are struggling. We currently support 69,000 customers [indiscernible]. It's really from a standing start. And by the end of AMP7, we are looking to support 195,000 of our customers who struggle to pay. But we need to make it easy for them. So it needs to work, that they can access those schemes. They need to be given channels of their choice to get through to us. It drives inclusivity, some of that digital offering that we've developed over the course of this AMP, but it also hits the mark with affordability. So they're much cheaper channels to serve, our digital channels. And we develop those channels this time. So by the time [indiscernible] and again, at the time of the AMP [indiscernible]. By the time we activate this AMP, 55% of all of our service [ payers ] are going to come in through a digital channel. And we know that, that is industry leading, not just in the water and waste industry but across utilities, to have that level of digital activity. So Ofwat rank us as one of the most cost efficient in the business. And we're proud of that and we're pleased with the fact that over the past 10 years, we have delivered the lowest combined water and waste bill in England and Wales. And we know that, as we go to AMP7, we're going to remain one of the lowest. However, [ even GBP 1 a day ] is a real struggle for some of our customers and sometimes a short-term struggle at different times during their lives. So on our social tariff, we currently support 50,000 of our customers by offering them a reduction in their water and waste bill. And we've developed an auto-renewal scheme with them that allows them, if nothing can significantly change, to stay on that scheme and we avoid a lengthy, costly reapplication process. On our Severn Trent Trust Fund, we help our most vulnerable customers, so those that are often unable to pay [ everything ], by providing them [ 4-step ] grants that will allow them to clear some of their historical water debt and their renewal bills. Or you can get a step further and offer them support on a household basis, things like white goods and beds, et cetera. And it really signals our intention to try and eradicate water poverty right across our region and support those that really need more help. On our WaterDirect scheme, we've worked with the Department for Work and Pensions. And our customers previously benefited from a 16-week lengthy paper application process. And by working with them to support them on a digital journey, we've managed to reduce that down to less than 2, which means that our customers get set up really quickly to pay their water bills directly from their benefits. So across all of those schemes, we are going to concentrate during the next 5-year period to increase the numbers we support to 195,000, to offer them a channel of their choice, which is great for them and brilliant for us on a costs basis, and enabling that service for everybody but at a price that we can support. We get some really [ powerful choice ] across all of those schemes. And the next video just brings to life really how that support is valuable to give them at difficult times during their lives and how that support is so much more than just the water bill. [Presentation]

So to summarize affordability. We've made a massive step-change over the last AMP in terms of the support that we offer those customers financially struggling. It's not just great for them. It's great for us. It's business sense. It means we're not chasing a debt with debt. So I'm Bill Wilson. I'm the digital channel strategy lead at Severn Trent. I'm going to talk to you about some of the digital things we've done, mainly the last AMP, to help our customers from an accessibility perspective. So in 2017, we talked about how we wanted to make our customers' lives easier by giving them more channels to be able to interact the team from a digital perspective, whether that was to pay a bill online, enter a meter read or even set up a payment plan. We've achieved all of that. Alongside doing that, we've introduced some new channels, things like web chat and text messaging, really meeting a growing consumer demand. And those channels have been really significant for us during operational incidents when we can really communicate quickly with our customers. At the same time, we're the first water company to go 24/7 with our customer service offering on social media. And as we continue to grow the service space in terms of the website, we started to see more and more customers sign up. And today, we stand at around about 1,000 customers every single day registering for our self-serve options. In 2012, we collected revenues of GBP 33 million on the website. And by 2018, that more than doubled to GBP 68 million. And in fact, last year, during our main -- busiest period in main billing, we were just short of GBP 1 million in 1 day. 8 transactions every minute for the first 4 hours of the day were being handled. And this year, we're forecasting to take that to GBP 1.2 million. So as we opened these channels and we expanded the choice, our customers have moved and shifted digitally into those channels because it's easier for them to use and efficient for us. And some of the success that that's brought, particularly around web chat, we now see 25,000 customers every single month contacting us. Sometimes we have some really difficult, sensitive conversations, could be around gender identification, could be around long-term disability, but how we handle those is really, really powerful and has brought success. In -- last year, in December, we were recognized by the European contact center awards as having the most effective digital customer experience; second, silver, for the most effective use of social media. And that really cemented our ambitions from a digital perspective as it's proved that we can deliver digital excellence in the utilities space. Above that and beyond that, what digital allows us to do is to connect with our customers at a much higher level and start to use our tone of voice to really embrace emotive, participative conversations through our social media channels, particularly for customers that don't want to use those traditional channels. They don't want to use the telephone. A customer that's maybe suffering with a bereavement and they need to change the account details on their file, they don't want to talk that through with an agent, but they're happy to do that at the end of their phone or on the end of a keyboard. And naturally, a lot of this now happens [ mobily ]. We've all got these supercomputers in our pockets, and our customers can access us 24/7, 365 days a year. And we've invested in technology that makes us even more efficient, delivering a seamless experience and driving that efficiency for us going forward. So we're going to bring our social conversations to life, and it really demonstrates the critical outcomes of our social strategy, delivering C-MeX, helping our vulnerable customers but also bringing visibility to our social purpose. So this is the story of Michelle. Now Michelle originally contacted us through Twitter to talk about a problem that she got with a flooding at the bottom of a lawned area near her property, and she was concerned and she wanted to get things fixed. So naturally, we engaged with Michelle in that channel. We started to put things in place to help going forward, to effect the repair arrangement and technicians to visit. And during that conversation, Michelle suddenly introduced a personal battle she was having, a battle with breast cancer. Now the team immediately recognized this as a transient vulnerability and put measures in place to protect Michelle going forward. So if we did have an incident with no supply, she'd be on our list, and she will be receiving bottled water soon. But what really stood out for us was the way in which the agent had really embraced and encouraged the conversation, absolutely blending the right amount of customer service with a warm and empathetic tone that helped Michelle in her moment of need with her leak but also while she was going through her own personal battle, so much so that Michelle has -- we fixed the leak, but Michelle stayed interacting. She sent some feedback into the guys to say what a great experience that was. And that investment in social doesn't just stop there. We also have social listening on our radar now. We're able to listen to conversations that we would never previously have been able to join, listen to what our customers are talking about, listen to what our colleagues in other utilities are talking about and learn from. And what that does for us is it means that we're able to deliver a really cheaper-to-serve but easier-to-access targeted personal experience, not just a vanilla one, not just something that happens on social media because everybody else does social media but a really targeted experience that's powerful. Now you've heard from Hilary about the schemes that we've introduced to help financially struggling people, and you've heard from me around the increase in adoption. What this has brought for us, obviously, is some operational efficiency as well. So from AMP5 through to AMP6, we've seen a GBP 14 million reduction in our OpEx on a nominal basis, which, for us, in summary, shows that affordability and accessibility, whilst powerful and really powerful for the customer and [ help team ], is also great for us as a business as well. Thank you very much.

Hi, everybody, and welcome to our [ village ] water day. I'm Kat Greenwood. I'm Head of Communications here at Severn Trent. And as Neil mentioned at the beginning, you're going to go 3 -- around 3 different sessions all about society, and this particular one is all about the work that we do in our local communities. So around 1/3 of the U.K.'s most deprived areas are right here within the Severn Trent region. So we do a whole host of things out in our communities to try and help those societies and those people out of deprivation. I'm going to showcase 2 things with you today. We've only got time to show 2 of them. In a minute, I'm going to introduce you to Hossam, and we're going to talk a little bit about education and skills. But first, I want to introduce you to Paul and Daisy. Paul has been in Severn Trent for about 9 years. And Daisy joined 2 years ago on our graduate program, and she's just secured a full-time job at Severn Trent, working on our new Severn Trent Community Fund. So it's a brand-new initiative, started in January. And it will look to donate 1% of profits, so around GBP 10 million over the next 5 years, to good causes in our local communities. And these guys are going to tell you a little bit about it.

Thank you. So as Kat said, I've been with Severn Trent for 9 years and have been lucky enough to be involved in some really exciting projects and initiatives. Honestly, the Severn Trent Community Fund is the best of all of those. So hopefully, we'll be able to [ adjust this over ] the next few minutes and bring it life -- bring it to life for you just how great it really is. So as Kat said, we're going to be giving away 1% of our profits each year, around GBP 2 million, over the next 5 years to community groups, organizations and charities across the Severn Trent region. Why are we giving money away? And why are we excited to do it for our community fund? Well, fundamentally, it's because we're a socially responsible business, and we think it's absolutely the right thing to do to support and embed ourselves in the places where we live, work and relax. We also know it's what the best companies across the world are doing and should be doing. And as Neil has just spoken about, we want to be in that bracket. We want to be not just the best utility company, not just one of the best companies in the U.K. But in this place, we want to be benchmarking ourselves against the very best companies across the world. We're also the only water company to be doing anything on this sort of scale in the next 5 years, so we will absolutely use it to our benefit. And we know already that it's going to help us to build trust and relationships in our communities and our customer base, so it's going to work for us across a number of different levels. So why do this for our community fund? Well, our research has shown is that funding -- community funding in our region has massively declined in recent years, and those groups that rely on this sort of thing have just got nowhere to turn at the moment. Alongside that, we also know that only 6% of all the funders in our region offer grants, individual grants, of over GBP 100,000. So that makes us fairly unique and, as you'll find out, very, very popular. But it means it gives us a great space, and we thought it's a very good opportunity to set up a community fund, which means we can help those small schemes, those small projects that need [ device of ] funding. But also we can get behind those big one-off projects, the GBP 250,000 projects that are going to make a real difference in our communities. So a bit more about the fund itself. It focuses on 3 key areas of community well-being: people, places and environment. We're encouraging applications that hit a sweet spot between the 3 of those areas. And obviously being a water company, we really encourage applications that have a link to or enhance the water cycle in some way, but it isn't a prerequisite of the scheme. So we launched in January. It's fair to say it's taken us all a bit by surprise just how popular it's been, and Daisy will talk to you a little bit more about that in a moment. But just to give you a flavor of some of the applications we've had so far, this is just 5 of the many hundreds we've had then. So a project to transform a disused area of land right in the center of [ Leicester ]. In North Warwickshire, a young persons coding club to inspire the next generations of children to become scientists and help save water. In the middle of Birmingham, a really lovely project to create a [ care file ] for people with dementia and a safe space for them to experience the environment. The [ cost structure ] environmental education workshops for families of disabled children and families with disadvantaged backgrounds. And right here in Coventry, they're looking to build a dedicated community space for young people, giving them access to wider cultural engagement and the skills and talent development that come along with that. These projects, some of them range from GBP 2,000 to GBP 3,000, all the way up to GBP 250,000. So I hope this just gives you a bit of a flavor of the difference we'll be able to make in the next 5 years.

So because the beneficiaries of our new fund are our customers, we felt it was important that we involve our customers in the decision-making process. For that reason, our fund is overseen by an independent panel that are made up of our customers who will review applications and make the final decisions on where our money should go. It's fair to say we've been astounded by how much since just the launch it's generated. We've had over 100 submitted applications, totaling over GBP 5 million, and some 700 applications that have been started. We've had a lot of positive media coverage, too, including BBC's Midlands TV and many local papers as well. One of the key priorities of the fund is to ensure that we are reaching all areas of our region. It's also vitally important that we are targeting those communities that are most in need of our support. As you've heard, 1/3 of the U.K.'s most deprived areas are within our region as -- we want to make sure we're making a real impact in those areas. As you can see from our maps, we're doing a pretty good job so far. The spread of the submitted and started applications sits nicely within those deprivation hotspots [indiscernible] and we will continue to monitor this and provide support to these areas throughout the AMP. As a company, we're genuinely excited to be providing this financial support to [ early ] projects. The first applications will be taken to the panel later this month. And from [ April ] will -- our first donations will be [ rounding up ] in our communities, and we're really excited to be able to show who the first beneficiaries of our fund will be. So very exciting times ahead, and I'll pass you back on to Kat.

Thank you, guys. So as I mentioned at the beginning, our second showcase is going to be all around the work that we're doing internally within Severn Trent but also out in our communities around skills and education. A recent indices put us second in the FTSE for all of the work that we're doing, so I wanted to give you a quick snapshot of some of the things that have helped us achieve that position. First of all, some of you may remember from our AMP7 plan that we're going to be opening a new careers -- a skills academy just down the road from here, in a place called [ Finham ]. So we're going to be investing GBP 10 million, and it will open its doors later this year. It's fantastic for our teams internally because it will be giving them the skills that they'll need to build careers for a lifetime, but it also will be fantastic for us as a business because we'll have some of the most technically competent teams in the sector. Secondly, those of you that came to [indiscernible], to our last Capital Markets Day, might remember our education buses. They're now out and about across the Severn Trent region, inspiring young people. And we aim to see over 500,000 schoolchildren over the course of AMP7. And this is a little bit of a triple win for us. So we have a new ODI next AMP for this, which we expect to be in a rewarding position. We're equally going to be supporting some of our other major ODIs, so PCC and blockages being the main 2. We teach people about, children about how to use water wisely but also what to not put down the toilet and sink. And thirdly, this is one the initiatives that we're seeing come through to improve things like C-MeX scores, which is the new measure of customer satisfaction in the next AMP. And then lastly, our HR teams got into a whole load of work promoting Severn Trent as an employer in our local communities. And to bring to life some of the work that they're doing, I want to introduce you to Hossam, who's going to tell us his story.

Hello, everyone. My name is Hossam Rashid. I work in the general counsel team at Severn Trent while studying at The University of Law, working myself towards becoming a qualified solicitor. So I'm here today to tell you my story. I was born in a small town called Lamu in Kenya, and my family moved to United Kingdom when I was around 4 years old. I moved to an area called Allenton in Derby, which is classed as a deprived area and which is now generally known as a social mobility cold spot. When I first started settling in a new school, I found it really hard to settle and fit in. And I think it's fair for me to say that my school was particularly not -- it wasn't really a good school. Generally through Ofsted reports, it was generally [ ruling and ] reported as inadequate or needs improvement. So I often found career advice was quite limited. Fortunately, in my case, when I started sixth schooling, Severn Trent visited my school during assembly. I came aware of the opportunity to qualify [ at this list of with ] a new scheme. I was instantly excited at the prospect of being able to chase my passion for the law, about having to go down the normal, traditional university route, as I really believed this wasn't meant for me. So I straightaway applied, and I was so excited. The assessment process gave me a real insight into what Severn Trent were about as a business. I was able to meet so many different types of colleagues, and it really put me [indiscernible] as I went through challenging individual and task group activities, all the way up to meeting one of the directors, which I must admit he looked scary, but he was really fascinating. And then I'm just so glad to be here. I mean, in my first year -- I joined around 18 months ago, around since September. In my first year, [ I'm under ] cost recovery from court cases, and I'm proud to say that I've managed to recover just over GBP 125,000 worth of costs. So that was like a personal contribution, which I felt like I played a part in. And I've just moved on into my second year now where I've been able to move on to managing my own matters, and I've really focused on the regulatory side of the business. And I'm just really loving it. And why this means so much to me is because it's helped develop me as a person. I've been able to grow as an individual and have grown so much confidence. And I believe, a few years back, I wouldn't even be able to stand in front of this many people and just speak the way I'm speaking. I feel like I've been able to develop so many skills. And if I didn't follow this route, I wouldn't have that set goal of qualifying as a solicitor, so I really, really do value it. It's helped with my university work as well. I feel big-headed to say, but I've had a good record of achieving [ first and 2 ones throughout my ] course. I've just completed my [ tool ] assessment. I'll get my results tomorrow, [ so pray for me ]. I -- hopefully, I'm not being too big-headed. I'm not going to jinx it, so touch wood. Hopefully, I get good results, and I'm hoping for the best. And what's really interesting about Severn Trent? It's how it's impacted the wider community at my home as well. And I have friends of friends who ask me questions about the apprenticeships and friends who are currently applying for the graduate programs. And Severn Trent have visited my old school. I've been actually involved with going back to my old school and just random students, being aware about the opportunities companies provide and apprenticeships, because all it takes is that little awareness to open the door for somebody. That's what it took for me, and I just really value this opportunity. So I look forward to continuing my career. Thank you for listening.

So I have this slightly impossible task of following that today. So just a small wrap for me, really. Hopefully, that's given you a snapshot of some of the things that we feel really proud to work at a company that is able to make those impacts, but also, hopefully, as well as being heartwarming, you've been able to see the business sense in them as well, whether it be tapping into talent that we perhaps wouldn't have been able to access before; whether it be things about the community fund that will ultimately help some of those areas of deprivation out of deprivation, which hopefully should help things like our bad debt position in the long term; or whether it be helping to improve our reputation through things like C-MeX, which is obviously a big ODI for us next AMP as well.

So good afternoon, everyone. Welcome to [ Trent at depot ]. My name is Lisa Scales. And over the course of the next few minutes, we're hoping to bring to life a couple of stories from our colleagues, which will give you some reflection of what it's really like to work at Severn Trent. I'd love to introduce you to everybody at Severn Trent, but that's not really practical. So hopefully, you'll get a bit of insight this afternoon. So Neil has mentioned in the first section that we do really well externally. So our indices are showing us that we've got some great rankings from social mobility, et cetera. However, we also know that businesses that have a happy, engaged workforce in an open and inclusive culture outperform other organizations by, on average, 10% in customer ratings, 22% in profitability and 21% in productivity. So this makes sense. We also know that in -- we've had our Glassdoor ratings increase over the last couple of years. So 2 years ago, we were at a fairly low scoring, 2.2 out of 5. And what we recognized was that actually in the main, our long-standing employees were fairly happy. But actually, it was a fairly confusing place for our new joiners to start and start their career at Severn Trent, so we've done a lot of work in terms of how we onboard people and how we really set them up for success to start their career with us. Our internal engagement score is 8.1, which we're really proud of. And of course, it's in the top 5% of utilities and energy businesses globally from an engagement perspective. But actually, more rewardingly, we find that 9 out of 10 employees actually say that people from a different background are treated fairly at Severn Trent. So we are proud of what we've done, and we are on a journey. And we are, by no means, perfect, and we are on different stages of maturity with regards to our inclusion agenda, but we're getting there. So I'm going to ask a couple of colleagues to come up now. So we've got Natasha, who's going to talk to us a bit more about the LGBTQ+ community, and then we're going to pass over to Mike, Ciaran and [ Andy ], who are going to talk about the employability scheme. So welcome, Natasha.

Hi.

So Natasha, we talk about [ some of the ] inclusive culture, but can you bring to life your work with the LGBTQ+ community and also your own personal experiences?

Yes, sure. So I grew up in an environment where being gay isn't something that people talk about. For me, it was very much that people laughed and joked about it. And for years, I grew up in an environment with my family that are very much traditional, and my friends are very straight. So I'm just wanting to be somebody different, somebody who I classed back then as normal, just anybody that, however I thought, [ just wasn't ] gay. And I guess, as a result of that, I suffered with severe [ kind of ] mental health issues and anxiety. I just worried about whether people would accept me for who I am. Would my family disown me? Would they be disappointed because I'm not straight? And actually, I made the decision very early on to live a lie, try to fake it, but that didn't work for me. It didn't do me any justice. So later on, I decided to tell family and friends that actually I am gay. And their response was very much they were more upset that growing up's hard, but growing up trying to live a lie is even more difficult. So all they wanted to do was just support me. If I think about my work and career before starting at Severn Trent, it wasn't great. So I've had inappropriate comments towards me at work. I've had [ some back behind in years ]. I've trusted people and have that trust broken. And actually, if anybody would have asked me if I am a gay [ and being mad ] at work, I would have said no just in fear of association. And actually, looking back, it did have an impact on me and actually my career.

So since joining Severn Trent, how has it been different?

So I joined Severn Trent 18 months ago as a strategic change manager in HR. Whenever you start any new job or any new team, you worry. Am I going to be accepted? Am I going to have the same experience as what I've had before? But very quickly, I started to realize that people really didn't care about the sexuality and just wanted to get to know me as a person. To the point that if you had asked me 12 months ago to sit here and tell you this story, I would have said no, living in denial, to now being [ coach here ] of an LGBT network is something I never thought I would do. And actually, it shows you that you can be yourself at work in Severn Trent, and that's part of the reason why we did a "coming out" video last year. If there is anybody that feels that they can't be [indiscernible] they've got no one to speak to, that's the reason why I wanted to reach out to our colleagues. And actually, the response that I had from not only my colleagues, senior leaders or our customers, has been amazing. And that alone just makes me [ psyched ] to say I'm proud to work at Severn Trent. And actually, that's part of the reason why we started the LGBT network in 2018, to develop a strategy that makes people feel, well LGBT in particular, people, feel that it's an inclusive place to work. Huge successes. So we've done our allies program. We've had 200 colleagues who have gone to support us, including senior leaders. And now we're leading the way for other networks to -- we work with Sally, our inclusion manager, to show all the colleagues that it's a safe place to work just to be yourself and not to be afraid, [ and even if I'm just to lead both ] with my story.

Fantastic. So we're obviously doing some good stuff. But as an organization, how can we get better?

So we work with a charity organization called Stonewall, they ensure that our policies and procedures are inclusive, with much huge success. So we've moved from 414th to 175th in the equality index, which just putting into context, most organizations have been doing this for 10 years. We've been doing it for 2, so it's huge for us. We've won Stonewall gay role model champion of the year and senior leader of the year. But for us, it's not about where we place. Or it's great to win awards, but it's more about making sure everybody feels how I feel at work, really safe and inclusive, [ quite a bit ].

Well, that's fantastic. Thank you so much. So I'm sure you'll agree that there are some fairly sobering thoughts in there but also some really inspiring thoughts, too. So I'm going to pass over to Mike now. Mike is going to bring to life his story about leaving the army, finding a job with Severn Trent and helping to set up the employability scheme. Over to you, Mike.

Thanks, Lisa. Yes, I'm Mike Williamson, and I joined Severn Trent 5 years ago after serving for 17 years at The British Army. When I decided to leave the army, I realized I was leaving a vocation. I was moving into the commercial world. And I committed to myself I was going to do something more than the job. Unfortunately enough, I didn't have a job and I didn't know what the [ role ] was, so I had to figure that out. I chose Severn Trent because the culture and the values appealed to me and they've offered me quite an exciting job. So when I started here, I looked for [ that more ]. And quickly, I found the employability model. Employability provides students with special needs education a better chance at getting a job. It's really simple, and I like simple. The first thing I needed to do to make it work at Severn Trent was to get high-level sponsorship. I got that immediately from Liv, Neil and the exec team. I then needed Severn Trent colleagues to help me get started, and I got an abundance of support and help from them. I needed a partner school, and I found that at Hereward College in Coventry. And most importantly, I needed a bunch of great students, and I found them in droves at the college. So with a bit of energy, enthusiasm and drive, we've had 4 successful years of employability at Severn Trent and it's now part of the culture. And [ although I don't know every single student now ], there's a watershed moment in year 2 for me with a young child called Brad. Brad started in mainstream education. He's autistic. He became selectively mute. And he ended up going to Hereward College at about 16. They worked wonders with him. He then joined the internship scheme about 19, and he joined us for a year. During that year, he applied for a permanent role. He got the permanent role with the customer team, you'll find him on floor 5 today. And he's just moved out into his own flat in Coventry, and his parents never thought that was ever going to happen. Such is one little snapshot onto what the scheme can do. So on that point, I'm going to hand over to 2 of my amazing colleagues, Ciaran and [ Andy ], who have helped me make success -- employability a success today whilst, I have to say, do their own [ taxing ] day jobs.

All right. So my name's Ciaran, and I've been at Severn Trent for about 4 years, [ started off in ] clean water, up to now work as a sustainability analyst. So in our society, the unemployment rate with people with disabilities is around 9%, as compared to just over 3% of people without. And despite their appetite for work, only 6% of young guys with disabilities are with paid employment. [ Even though they have to chose ], early involvement in work environments significantly increases their lifetime career prospects. And for me, personally, [ my most vocation ] as a safeguarding manager really opened my eyes to supporting people with disabilities. So when I heard about the scheme, it's just something that I had to get involved with. And you know our business, we serve our communities. And we're FTSE 100, so we have the resources and we should be providing opportunities to those that need them most. That's why for the past 4 years, we've partnered with Hereward College to provide internship opportunities for young guys with disabilities. They're here in the office for 4 days a week over 9 months of the year. And [ as far as for demographic, it's 3x more likely to be unemployed. So employability is self-evidently a good thing today. The best thing about it is it just makes sense. It makes sense for our interns who learn not only the skills related to their job but also with more the social side of work. This is life, life skills and other things like independent travel for the very first time. Then it's the fact that 56% of our interns enter paid employment after finishing our internships with us, many of whom like Brad still work with us today. Employability also makes sense for our business, as well as providing a government-funded boost to productivity, but also helps to embed our social purpose in our company culture and normalize visibility in the workplace. Statistics have shown that people with [ known ] disabilities typically takes fewer sick days than their counterparts, stay longer in their job roles and raise morale of the teams they work in. Speaking of which, [ finance, employability ] is a great source of job satisfaction for many people involved in the scheme. One of our colleagues told us we've seen an intern of ours graduate to full-time employment with us, so we're the highlight of their 17-year career here. And personally, I can testify what privilege it is to work with a project like this alongside my day role as an IRR analyst. The slot wouldn't be complete without hearing from the real stars of the scheme. We've already heard a little bit from Brad earlier. And we've now got a video of some of our interns' thoughts on what employability means for them. [Presentation]

Very inspiring stuff. So I'd like to thank Tash, Mike, Ciaran and [ Andy ] for helping us bring to life some of the experiences our employees have as they work at Severn Trent. We know that engaged people, great cultures is good for business. So thank you very much for listening to me this afternoon.

Okay. So now we're going to talk about governance. And it's probably a little bit early for me to give you my views on the governance at Severn Trent. I've had one Board meeting, but I've -- what I have had is I've been through the selection process, obviously, and the induction process. And what I can tell you from that one Board meeting, the selection process and induction process is my first impressions are really very favorable. The Board has a great cross-section of skills and experience, they are highly engaged not only in the Board meeting but in between Board meetings. The selection process was ruthless, you'll be glad to know. They put me through so many hoops. I was interviewed by every single member of the Board, and I've spent plenty of time with Liv. She even took me to a water treatment works to see if I fell in, metaphorically. And it was great. And now I am just coming to the end of the induction process, and it was actually a condition of the employment that I did 20 days. And it has been 20 very intensive, very comprehensive, extensive days. I've been accompanied by [ Martin ]. It's actually a stroke of genius that throughout all my meetings I've been accompanied by somebody who's spent 49 years with the company. And what it means is when I come out of a meeting and I don't quite know what the message was, [ Martin ] makes sure that he joins the dots for me. So I would give you that as advice in your own organizations. Shadow whoever needs inducting with somebody who really knows what they're talking about, and it's fantastic. And so a great process so far. I am -- I have thoroughly enjoyed the induction. And I can tell you that every single thing about the governance I've seen so far is extremely professional. Now I'm going to hand over to Bronagh, our General Counsel and Company Secretary, who will tell you a lot of details about how we manage governance. Thank you.

So thank you, Christine. I'm absolutely thrilled that in the few short weeks that you've been with us, you're able in your opening remarks and just now to really capture the special magic that makes Severn Trent different and, we think, unique. Now governance, for us, is giving you confidence that we're going to deliver against the commitments that we've set out for you today. We all know that well-governed companies endure for longer and they're more successful than their competitors. And I'm sure we can all think of companies that looked to be successful in the short term but ultimately failed because of weak governance. So for us, governance isn't something that we do because we have to, we do it because we want to, because we know that it's essential to our long-term sustainable success. And so I'm going to take you through some 4 key themes that may be familiar to you, but for us, it's really personal. So our themes are living our values, balancing the interests of stakeholders, running our company for the long term and being open about what we do and sharing what we know. Now it might seem a bit strange for you that the very first thing on my list, my corporate governance checklist, is living values. And that's because we believe that having the right culture from the boardroom right down to the front line is the beginning and the end of good governance. Having that culture ingrained is just key because you can have all the policies, all the procedures in the world, but if people don't want to do it, they won't do it. And so I'm really thrilled today to be introducing to you our new purpose and values. Our purpose, put simply, is taking care of one of life's essentials. Our values are embracing curiosity, showing care, having courage and taking pride. But rather than me talk to you about what these mean, why don't we listen to what some of our employees have got to say about what it means for them? [Presentation]

I couldn't have said it better myself. So we think that having that strong sense of purpose and values inspire all of our employees to really go the extra mile every day but, more importantly, to do things the right way. So I'm going to move on to our next subtheme of this, which is our social purpose. I think it came across a bit in those videos that our employees really feel that they're delivering a really important public service. And so for them, having a social purpose is important. And I'll take you back to our last Capital Markets Day, when we introduced you to our customers' hierarchy of needs. Now you'll see at the bottom, "Prevent the problems, just do the day job." Next, "Treat me as a person. Listen to me. Respond to me." Above that, "Do more for communities and society. Create green spaces where my children can play." And above all, "Be a company that I can trust." Now we actually achieved our ambition of being the most trusted water company in England last year. But this research really brought it home to us, we needed to be much more explicit about what we were doing in that top box, and that's what's driven a lot of what you've seen today. So we also consulted with our wider stakeholders about what being socially purposeful meant to them. And as a result, we've come up with 7 commitments, which you'll take away on the brochure that you've got today. But we went one step further. We've actually asked Ofwat to enshrine our social purpose as a license condition. That means it's legally enforceable. It's binding. We have to report on it every year, so how more genuine can we be? And moving on to my next theme, which is balancing the interests of all our stakeholders. Knowing who your key stakeholders are, assessing what their needs are, making sure that you respond and think about them when you're making decisions for the long term is clearly key. And we do that in a variety of ways. We invite our stakeholders to come to Board meetings to speak directly to us. They can either do that formally by presentation or they can have an informal and frank conversation over dinner. We invite them to come to events like this, and they invite us to come and listen to their events. We also engage with them on a one-to-one basis at very senior level. And we also engage with them at regular events outside the formal. We read their annual reports. Sometimes they make us wince, but they're always truthful. And that system is replicated throughout our company from CEO down to county manager level. We really think it's important. Now you've been reading a lot in the press about the employee voice. And here at Severn Trent, we do that through what's called our employee forum. Now everyone's free to attend, and each of our Board members come along. It gives the employees the opportunity to tell the Board what's on their mind, and equally, it gives the Board an opportunity to tell employees what's worrying them. No subject is off limits, even Liv's pay. It works really well for us. But if there was something that somebody told us would be better, quite frankly, we'd be open to that, too. Now I thought it would help bring to life the tricky balancing that we have to do around some of the key decisions we make, if I gave you a practical example, and that was our AMP7 dividend policy. We had to come up with a policy that was going to be sustainable for 5 years, and it needed to satisfy a range of stakeholders. So for our customers, we needed to think about how we use their money and would be -- still be able to perform the service commitments that we made in our business plan. For our investors, were they going to get a fairer rate of return against the proportionate risks of their investment in us? Was it going to be good for employees' past, present and future? And of course, Ofwat had made it very clear what their views were. So in the round, taking into account all of those various competing, at times, interests, we came up in the end with a policy that we think works for everyone and importantly retains our credit ratings that we assumed in our plan. My next theme is running our company for the long term. And for [ us ], this is about Board's composition and oversight. It's about having an effective risk management system and strong internal controls. It's about having a good ethics program backed up with a really effective speak-up system and, last but not least, aligned and balanced reward. So in terms of Board composition, we're really proud of the fact that we've got a highly effective, engaged Board, as Christine said, but it's also one of the most diverse in the FTSE. 44% of our Board is female, and we are not rare breed of having both a female CEO and a female Chair-to-be. But we recognize that we've also got a responsibility to bring on the next generation of Board talent and 42% of our executive committee is female. But we know we're not perfect and we've got a lot of work to do, and we're particularly mindful of the Parker Review, which says we need a lot more ethnic representation on Boards, and you can be assured that we will be working on that. We are absolutely determined that in our business, from the top to the bottom, we will reflect the diverse nature of the communities that we serve. Having effective risk management is at the core of most sensible business decisions. And for us, it's not just about having the usual supervision by the Board, supervision by the executive committee, supervision by the strategic leaders. We have an effective enterprise risk management system that encourages every single employee, no matter what they do, to think about the risks that are taken every day and to look forward, horizon scan about what might be coming over the hills. That means, we think, we've got a system that lives and breathes, and in a fast-moving world, it enables us to be more agile to change course, to accelerate mitigating action if we need to. A good ethics program, I think, is founded on the culture of the purpose and value that we talked about earlier. But it's really important that everybody in Severn Trent should feel that it's safe to speak up, to say when we're doing something that doesn't quite chime with those values. And so we encourage everybody to report anything, anything at all no matter how trivial, that makes them feel uncomfortable. Those allegations get independently investigated out of the line. They're reported directly to the Board. And every finding has either a substantiated or an unsubstantiated finding, and we act on them. And I think it's the fact that we act on them means that our employees are growing in confidence that actually they don't have to go to our independent whistleblowing hotline. They can raise concerns either through the line to Liv, to me, to any of the executive team, and they know that they're going to be acted on. And in our recent employee survey, our employees scored us 8.1 out of 10, which puts us in the top 10% of companies in the energy sector and the telecom sector -- sorry, energy and utility sector. So last but not least, aligned and balanced award. So we think we've got a pretty good track record on rem. We got a 99.9% vote in favor of our last [ risk-rem ] policy, which most companies would kill for in the current political context. And in the last 2 years, our shareholders have given us a 99% vote in favor of our rem policy and our report. We think this means that our shareholders really believe that we set challenging targets, that we set stretching targets. And above all, we will only deliver, and we will only get reward if we do deliver. And we want that alignment and that sense of sight between strategy and the front line to be throughout our whole organization. And so we've got a bonus system that goes from CEO down to front line with the same bonus metrics, and 30% of those are based on sustainability measures. My next theme is being open about what we do and sharing what we know. Now I believe that all transparent reporting is there to build trust. Do I really believe what I'm reading? Are they really telling me the truth? Now in addition to our usual set pieces, we have our annual performance report. We have our annual report and accounts. We have long-term reports that are about water resources management planning, about climate change adaptation, and for the first time this year, we'll be producing a brand-new sustainability report that will enable you to hold us account for the commitments that we made today. We'll also be including new reporting methodologies, which will set our climate change risk against TCFD requirements, and we'll be setting our approach to Science Based Targets. But for me, the honesty is in regular dialogue that I mentioned earlier, those quarterly meetings, those informal sessions, actually taking feedback and being honest about the difficulties that we're encountering on our performance and how we're delivering our business plan. The whole aim is no surprises. And through that, we build mutual trust. So there we have it, the 4 themes of our governance. But at the bottom of it all, and at the top of it all for me, is culture. That's why we wanted you to come to Coventry today. We wanted you to see it. We wanted you to hear it. And we wanted you to feel it. So thank you for coming. And with that, I'll hold -- hand over to Liv.

Thank you very much, Bronagh and Christine. So we've got literally 10 minutes left of your time and chance for us to use once again our very magic throwing mic for any last questions. I've been practicing in the garden with kids for weeks. I hope you've all been working out and are getting very good catching. I've seen some brilliant questions along the day, but I'm sure you might have a few. So you can talk about questions about anything right now for the next 10 minutes. I've got the whole executive team here, so they can jump in as and when they wish on any topic. So who's going to start us off? Has anyone got a question for us? Brilliant. Are you ready, James? Beautiful. Started well.

Yes. so can you hear me? Because I can't hear myself...

Yes.

James Brand from Deutsche Bank. I was interested just if you could maybe talk a bit more about anaerobic digestion. And if -- it does seem like the government is very keen on that as part of the kind of decarbonizing heating strategy. And if the right subsidies or incentives came through on that, how much could you, [ all via blue sky ], in terms of how much you could be investing in new capacity?

So it's James's favorite topic, wherever he is. And I'm sure he'll be watching me like a hawk to check I give the right answers. And so effectively, there's 3 ways we view it. So the first thing that's good news is the fact that food waste is going to be segregated. There's no doubt that we will end up, because of our food waste plants, being the largest provider down in the U.K. There was a real growth opportunity as food waste comes in. It's going to take a while for every council to put in place all of the technology and the mandated activities. So I think it's over the course of the AMP that we'll see food waste increase, but there's definitely opportunity. I think government is due to issue some more targets [ for this over time ] in terms of more incentives as to how they're going to try and continue to encourage that area. We watch with interest those to see what else that encourages us to do in terms of nonregulatory investments. We've spent GBP 190 million over the last 5 years. It would be interesting to see what [ there is that ] comes out and says we should do more in that space over the next period of time. So then a second area. And then, as Neil said earlier, what we need is -- there's no doubt that we could do more with our own assets already. So I think one of the reasons we bought Agrivert was to understand if you are a not a large corporates -- and sometimes large corporates can be their own worst enemies because, well, maybe not as efficient or sleek. If you were to buy a smaller, much more niche player, how clever could they be with their assets? How much more could they drive? There's definitely some more upside for us in terms of rolling that out across all of our green power estate. So I can't give you numbers because we agreed not to give numbers today, and the team will actually drag me off stage, but there's definitely growth in all 3 of those areas, and that's exciting. So it feels like a good investment and a good place to be. Now you've got to throw it back to me and I'm going to ahead and catch it, right? So beautiful. Oh, my goodness. So let's get it down here [indiscernible] some nice laughs off that. So front row first.

Sorry. Just one question about...

You've got to hold the thing a bit closer. There we go.

Okay. It's regarding the project Bob has mentioned previously to bring water from Severn and Thames river to London. So are we able to know the approximate costs and who will share the costs?

Good question, [ Sarah ]. Let me take the thing back first, we've got a fresh rover. So the interconnector, that was a question around the interconnector. So for the moment, what's agreed at the moment is that we will do get ready for spades ready. So we've got the GBP 40-odd million to get ready. By the end of this AMP, we could be spade ready to do that work. Ofwat will then judge which of the various interconnector schemes they want to progress with and we'll know that, I would say, in 3 years time-ish. I think RAPID is likely to begin to choose, "We want this scheme to go ahead," or not the other scheme. So we'll know more and we'll keep you up-to-date as we get closer to that. So it all depend on population growth, continued levels in the South East. For certain, that's the customer base there. And we haven't got detailed costs yet because we haven't yet managed that through, but you're talking of hundreds of millions of pounds to build something of the scale that we're talking about. That is likely, though, that a major chunk of that is going to be on the pipeline. It's likely that will be direct procurement. So that's one of the areas I wouldn't necessarily encourage you to think that's definite RCV growth with Severn Trent. I think that is a more likely [ it seems ] tied to a sale model. I think on parts of the journey, that is growth for us in that space. But I think the major pipeline is more likely to be a DPC , a direct procurement activity, if that gives you that. All right, I've got -- Nigel, are you ready for this? Everybody else in the wake -- you're ready for this, right? Yes, okay, [ job one achieved ].

Nigel Hawkins, Hardman & Co. First of all, can I just say, a very interesting day and, if I may say so, very different from going to Southern Water in the early 1990s in terms of company culture. Two questions, if I may. First, during your busy week, you may have read that the government is planning to kick-start onshore wind and solar investment following the abolition of subsidies for new plant in 2017. Should we expect you to be participating in bids for new onshore wind and solar CFDs, perhaps with the likes of SSE, Greencoat UK Wind or NextEnergy Solar? And secondly [ say Royal Mail ] and [indiscernible] revenue, you have one of the largest U.K. retail franchises. How are you going to maximize the use of this valuable asset?

Very good. Right. Let me try and take the -- I've got to take it back. So mind your heads. James, get ready to [ die ]. Oh, good god. That's why it's bounceable. That was just too much. Thank you very much. That's good. So I guess, on the second one, I mean, on retail, we do have a good retail base. So we've got 8 million customers and 4.3 million that we bill. And I think the key thing there is just to keep a better plan, I think. Sarah has talked about this in previous Capital Markets Days. There's more that we can do in terms of personalization. There's more that we can do in terms of technology. There's more that we can do in terms of making sure that we talk to customers about different water-saving activities and these devices. But I guess we don't see that as being kind of [ like it ], that is not a topic of today that says we're going to grow our retail base. The topic is very much that we think we need to use customers to have better relationship and better trust, and that will help us in communities. That will be the angle that we take in that space is we want to get those retail customers to trust us, to use water wisely and to engage in our core businesses. So that will be that part. And in terms of whether the government is going to announce new centers, let's see, right? So I've read the same topics of interest. And I think we all look to see what the details look like. Certainly, we have 5 types of different energy [ term ] at the moment. And solar is a good one for us. We talked earlier and Neil has talked about PPAs. If there is going to be more opportunity for us or for others to invest in more solar, we would, of course, be interested in that. And likewise, we've got a few turbines. Again, if onshore wind suddenly becomes more attractive, then we'd be interested. So you should assume that we're going to read with interest, understand with interest, and we still do have a good chunk of our energy needs that we'd love to end up making purely renewables.

[indiscernible].

Am I what? Sorry.

[ Your hat may be in the ring ].

My hat may be in the ring. We'll see. We'll read with interest and decide. I was definitely [ cagey that ] my hat was in the ring. But yes, something like that. Brilliant. [ Wasn't that great ]? Okay, if -- oh, well done.

Martin Young from Investec. Four of your peers have decided to take Ofwat to be at the CMA. I mean that obviously will be what it will be in terms of binding then with the decisions for the next 5 years. But if we think sort of longer term about what the CMA might come out with, where do you see the opportunities of this process for Severn Trent in AMP phase and beyond?

So ignore the CMA. Or...

No, what the CMA might come out with. Let's just say they're talking cost of capital, talking about investment and cost of capital. And presumably you can find someone to tell you, someone else will tell you [ as ] why it is what it is, that the issue of investment is quite really important here and those companies undoubtedly will say, "Look, you're not giving us enough to do what we need to do." If that is the decision for CMA, then that quite clearly has potentially positive implications for the water sector for longer term.

So I think that regardless of the CMA ruling, I think that we can all agree there's likely to be more investment in the future. So I think you've got long-standing elderly infrastructure in some place else that is going to need renewal. Equally, I think there's a bigger role for water companies to play on topics such as river quality, for example, such as possibly even helping with some of the management of catchment areas to resolve flooding. So I think there is a very strong case for good companies to evidence over the course of AMP7 how we could do a slightly wider catchment role and how we could do more in that space. I think the second area that we can see opportunity for the future is just purely in the environmental area, so whether it's water from our direct activities or whether it's building on some of the topics you've seen today. Again, we feel that there are really good cases to be made. Regardless of [ other people and CMA ] opportunities, I think we would say already Ofwat has already been open that they're looking for people to identify more resilience moments, more growth opportunities. If we've got a good business case, really I think the onus is on us, so certainly for us a company and as the sector, to identify in the next few years what are those absolutely fantastic investment cases. And our experience of the [ voting ] process is that even if you have a really big scheme, which Birmingham Resilience is the largest scheme in the sector for the last 2 AMPs, even if you have an incredibly large scheme like that, if you evidence it really well, if it proves the need and you prove that the cost base is efficient, then the regulator will fund it up and will approve it. So I think we've probably had slightly different experiences between different companies. So we see it as the opportunity is with the company to provide the evidence. Who else has got a question? Brilliant. So okay, Martin, can you throw it to Iain without killing people on route? Beautiful.

You've talked quite a bit today about -- talked quite a bit today about climate change. And obviously, the U.K. is quite a small emitter now in global context. And everyone needs to do their bit. But clearly, whatever's going to happen to the climate is going to happen, more or less, whatever we do. What do you see as the challenges and the opportunities coming from climate adaptation just for Severn Trent in the next 5 years and then perhaps in the longer term?

So we think we can genuinely -- if all business steps up and did some of the things that we're doing today, we think that the climate won't necessarily do what it'll do there actually. It's a collective business opportunity to change what is currently the run rate on climate. That's our big picture today is that we're going to do our share and more and all of it by 2030. In terms of adaptation, well, I guess we know what the impact's going to be. That's what the modeled scenario say. That's why, I guess, Sarah and Bob talked about water scarcity earlier. I think James talked about the fact that we can see more extreme events. So we know that if we don't do things, we know what's going to happen. I think that brings with it investments opportunity, certainly, to make sure we protect the assets more and we get ready for adaptation. It also brings with it the opportunity we shared today that, if we actually use the environment better, we think we can avoid some of those adaptation impacts. So we think it's still [ all to play for ]. It's not yet set in stone that the world has to path -- has to play out in the current path. We're kind of hoping to interrupt and try and make the path an easier, better path for everybody. Okay, bril. Okay, you ready? [indiscernible].

Peter Hyde from ATLAS. Could I just sort of follow up on that? Because you mentioned the TCFD requirements to announce these type of things you're doing and it's all to do with climate change physical risk. Do you think it's actually going to be just a case of reporting what you're doing? Or is it actually changing the way you're thinking about things? And do you think as an organization you've actually got to change perhaps what you're doing and actually, well, should I say, spend money, reorganize a bit to actually make sure you're meeting the TCFD?

So okay, I'll take the [ pressure first of the ball ]. So we think that by having really mulled over the last 3 years what the future of our business collectively looks like, we think that we've already built in our ambitions for TCFD, for biodiversity, for science-based target. They're factored into our business plan and are factored into our forward look of the -- of our business for the next 5 to 25 years [ and don't necessarily ] for everybody else. So I think what TCFD will do, which is why we're quite encouraged actually by it, is it will encourage other companies to do that same navel-gazing to some extent. And what we would have done previously maybe is build concrete. So often, we would have looked at a Water Framework Directive target and said the answer is to build X, and instead what we're now doing is saying the answer is wetlands and is doing something different. I would imagine every sector is [ phasing ] into science-based targets for carbon, TCFD across the piece and saying. "Actually, was -- my current modus operandi, is it right? And do I need to change?" I think we'll see a lot of change over the next while. There we go. Oh, my god. Thank you for ducking.

So 10 years down the line, Severn Trent has got to net 0. What next? Have you done any thinking about sort of carbon-negative anything of -- on that framework?

I love it. So you announced, "You're going to go to net 0 20 years before government and 10 years before the best in the FTSE." And somebody says, "But surely, you think that's enough?" You sound like my 10-year old. So when I talked to my 10-year old regarding 2030 for net 0, and I thought he'd been nagging me for ages, I thought he was going to say, "Liv, that's amazing." He said, "That's so long, mommy. We need to do 2025." So no, we're going to stick with plan A, which is 2030. We're going to stick. We'll try to work out what else we can do on the self renewables journey, and we'll keep you in the loop. But we'll definitely not going to set more targets today beyond 2030. I think I'll definitely be dragged off stage by my team. So -- and there are some of them sat here just to monitor me. So we're going to stick. Okay, Dominic. So probably, we're going to be timed now, this is probably the last couple of questions, to actually leave on time.

Yes. So Dominic Nash, Barclays. A couple of questions -- well, actually one question, but how is senior management going to be incentivized in the next AMP? And in the current AMP, I think it's been heavily focused on RoREs. And with the increasing focus on ESG, are you going to be having more ESG incentives into your sort of remuneration?

Great. Let me take the bouncing thing back first. So there's 2 ways that senior management is incentivized. So first is bonus, in-year bonus. Second is long-term investment -- LTIPs, long-term incentive plans. On the LTIP, the measure that will remain for the next 3 years or the next few years is definitely what we measure, and we think that factors all of it in. So it takes, obviously, the financing, it takes the totex, but a lot of what we're talking about actually does factor into totex. A wetland is cheaper than doing capital build. So it plays in. And it takes the ODIs. And again, a chunk of our ODIs are absolutely firm in the space. On the bonus, 1/3 of the bonus measures are aimed around all -- loads of things you've heard about today, so all of which added to that sustainability journey. So you've got a mixture of the bonus measures, which are some of them are on areas such as leakage and water scarcity. Some of them are on areas like the environment and biodiversity. So I think there is firm link. The key thing to me is, if the way you're running the business, the how you're running the business is in this manner, then you can't achieve any of the targets, whether it's the in-year PBIT or the in-year capital spends or the in-year ODIs, without it being that way. And that's why we wanted to get away from saying we're going to run the business this way and have some extra ESG metrics. We've chosen as a senior team and as a Board to say we're going to -- the how of how we're going to deliver our plan is where this is totally embedded, and that's the only way we're going to deliver. So we live or die by the success of delivering things differently than we have done before. Bril. So I think we're going to have to call it a day. We're not going anywhere. So the good news is all the senior team is here. We're here to linger. So if any of you is not going to dash for a train, then please feel free to come and grab us and ask questions. And thank you for being so brilliantly curious all day and so actively engaged. I'll ask 2 things of yourselves today. I ask for you to kind of really kind of get a sense that it wasn't going to be loads more new numbers, loads more detailed plan about how we're going to deliver AMP7 but instead to bring the how to life, and you've been fantastic in engaging with all of our colleagues. And the second thing I'd like to add is try and spend time with people to understand the culture because that's worth the train ticket. If we brought you here just to share the story, that wouldn't be enough. It was the culture we're trying to bring to life. And everyone has thoroughly enjoyed meeting you all and spending time, so I genuinely appreciate your involvement during the day. Thank you very much indeed.