Sustainability accounting

Our vision

We aim to be able to demonstrate added value to society, the environment and the economy through the systematic use of sustainability accounting practices.

This includes finding ways of illustrating the financial costs both of our main environmental impacts and our spending towards sustainability.

Where are we now?

Environmental and financial management have been moving towards one another for some time and interest has grown in giving a monetary value to environmental impacts.

We have included sustainability accounts alongside our financial accounts since 2001. We report the hypothetical cost of reducing our environmental impacts to a sustainable level and our expenditure - both mandatory and voluntary - on sustainability related benefits for all stakeholder interests.

We calculate our environmental cost by considering our impacts on air, land and water. This places a monetary value on impacts that have not already led to company investment and calculates the cost to reduce these impacts to a sustainable level, either by investment, offsetting, markets or shadow prices.

The overall environmental impacts for which Wessex Water is directly responsible and/or has the greatest ability to control are illustrated from page 71 of our annual review. These are sensitive to the scope of the impacts considered and assumptions about valuation of impacts.

The accounts in the related pages are split into:

• an environmental cost statement which considers the hypothetical cost of reducing our key externalised environmental impacts to a sustainable level
• a statement of investment towards sustainability which identifies expenditure – mandatory and discretionary – on our customers and communities, the environment, our employees and our infrastructure.

Working with Mott MacDonald, we have also developed a tool for calculating the whole life carbon footprint of capital investment.

This tool was used to consider the construction and operational impacts of new assets that we will build in the five years up to 2015. We could then apply this for cost benefit analysis purposes and estimate the present value of greenhouse gas emissions associated with our planned investment.