Affinity Water

Infracapital worked with Affinity Water to implement best practice governance standards as the company invested to deliver a sustainable and responsible service to its customers.

About Affinity Water

Industry: Water Utility
Headquarters: South East England

Affinity Water is the UK's largest water-only supply company by revenue and population served. Each day, the company delivers 900 million litres of drinking water to 3.6 million people in the south east of England.

Case study - Affinity Water 

The impact of our ownership

Between 2012 and 2017, Infracapital owned a 35% stake in Affinity Water. Given the essential and regulated service that Affinity provides, we placed significant focus on ESG factors and considered its governance, environmental practices and community interactions in depth prior to investment.

Throughout our ownership, we worked closely with Affinity's management to implement several important best practice governance standards at the company. These included:

  • Improvements to risk management and reporting protocols with respect to ESG issues
  • Ensuring the company worked closely with regulatory bodies such as the Department for Environment, Food and Rural Affairs, the Environment Agency and the Drinking Water Inspectorate
  • Ensuring the company abided by performance targets set by the Water Services Regulation Authority (Ofwat)
  • Regularly reviewing progress and challenging management on ESG issues
  • An alteration of board composition to ensure that independent non-executive directors constitute the largest single group
  • Ensuring the company adheres strictly to relevant legislation and continuously sets new objectives and targets
  • Helping the company pledge to create a working environment that achieves zero harm and improved wellbeing for its employees

Tackling ESG issues 

The company's environmental management system exhibits a high level of commitment to mitigate environmental impact and ensures that appropriate controls are in place. As part of this, Affinity has undertaken proactive conservation schemes, such as restoring the Springwell reed-bed in the Colne Valley, an important breeding habitat for bird species, in conjunction with the Middlesex Wildlife Trust.

Affinity has also made specific commitments to the environment within its business plan, which are brought together under five key themes:

  • Managing water resources
  • Managing land and assets
  • Managing materials and natural resources
  • Responding to climate change
  • Working with contractors and suppliers

Affinity Water’s ambition is to be the leading community-focused water company and has conducted projects that aim to reduce flood risks, minimise water wastage and inspire local schools. The company recognises the importance of opening its land for recreational use by the public and has partnerships with angling and sailing clubs who regularly use its reservoirs. It has also established a customer scrutiny group that ensures it is accountable towards the communities it serves.

The value of investments will fluctuate, which will cause fund prices to fall as well as rise and you may not get back the original amount you invested.

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