Severn Trent plc (LON:SVT) is hosting a Capital Markets Event today to provide more detail about three key areas of differentiation that we believe will drive outperformance in the years ahead, benefitting all of our stakeholders:
1. Our sector leading customer ODI performance and how we can continue to deliver outperformance into AMP8 and beyond.
2. Strong RCV growth, with a particular emphasis on our six Green Recovery schemes.
3. Our approach to Net Zero, and how we will reach our Triple Carbon Pledge target by 2030.
Sector leading customer ODI performance
Our strong ODI performance in the first year of AMP7 resulted in a sector leading ODI reward of £79 million1. We have harnessed the power of ODIs to transform our business for the benefit our customers and wider stakeholders. We remain confident in the guidance we provided at our year-end results, of a net reward of at least £40 million1 for the current year.
Investing for the future
Following the award of Ofwat’s Green Recovery scheme, we expect AMP7 RCV growth in real terms to be over 10%. Our Projects will support economic recovery in our region and deliver environmental improvements, through new innovative schemes that could provide a blueprint for future RCV growth. 85% of the £565 million2 investment under the Green Recovery Scheme will be added to our RCV, with the balance taken as AMP7 revenue.
Path to Net Zero
In the two years since we announced our Triple Carbon Pledge of Net Zero Emissions, 100% Electric Fleet, and 100% of energy from renewable sources – all by 2030, we have made good progress:
· We have substantially achieved one of our triple pledges, with all our electricity now coming from renewable sources.
· We have put in place extensive monitoring and baselined our carbon reduction target at 470 ktonnes.
· We have innovative trials including low emissions processes currently treating 500,000 litres of water per day while also creating green fertiliser.
We recently had our plans accredited by the Science Based Targets initiative and are signatories of the Global Race to Zero initiative, which is central to COP26. Today we provide more details on our progress to Net Zero and insight into the projects that underpin our plan.
We are also publishing two other documents today:
· Our full TFCD disclosure, which is aligned to our Climate Change Adaptation Report, Strategic Direction Statement and Environment Strategy; and
· Our Caring for our Environment report, which showcases the role that sustainability can play in providing one of life’s essentials for our customers.
1 Customer Outcome Delivery Incentives are quoted pre-tax in 2017/18 prices.
2 In 2017/18 prices.
Liv Garfield, Severn Trent Chief Executive, said:
“While the pandemic has quite rightly taken everyone’s attention in recent months, we’ve always taken the long-term view and have been clear we wanted to thrive and not just survive during this difficult time. We’ve achieved this by being bold; by targeting the measures that matter most to our customers on our ODIs, by submitting and winning the sector’s most ambitious set of Green Recovery schemes, and by setting out a very clear and achievable path to reach Net Zero by 2030. It’s this ambition that makes Severn Trent that little bit special.”