Net zero commitments are now gaining momentum in many different countries and economic sectors.

Water companies in England are the latest to set their own goals, and it is the first time we’ve seen a whole sector come together in this way. Their recently published route map lays out the scale of the challenge, with England alone facing a future shortfall of over 3 billion litres of water each day by 2050. Given that today, the water industry contributes a third of the UK’s greenhouse gases from industrial and waste management processes, how does the industry make such a significant shift? 

Step one: identify the emissions

Carbon emissions are a feature of every aspect of a water company’s activities, and to be credible, achieving net zero targets means including supply chain partners. The CDP Supply Chain Report of 2019 revealed that supply chain emissions in the infrastructure can be 4.8x direct operational emissions. The mantra that ‘you can’t manage what you can’t measure’ applies if you want to make an honest attempt to reach net zero. Water companies have been thinking deeply about enhancing their resilience, and we recognise that hidden emissions can be a resilience risk.  

It will clearly require a more rigorous and deeper level of analysis. Analysis of a business’s spending data can start to reveal where the less expected emissions might be being generated or hidden. Arup found this when we worked with SEQ Water in Australia to undertake an analysis of upstream and downstream emissions.

Assessment leads to opportunity

Given its status as a shared global goal, progress with net zero is likely to play an increasingly key role in successful investment decisions. Activist investor groups are becoming more vocal in calling out companies across many industrial sectors for their progress (or lack of) on emissions reductions. Investors are already using standards like the Task Force on Climate-related Financial Disclosures (TCFD) to help them understand who is and isn’t taking the issue seriously. The UK government has stated its intention to introduce TCFD as a mandatory reporting starting this year for large listed companies. This adds to its value as an assessment tool for utility companies, de-risks their business and makes them more attractive to future investors.  

It’s also an opportunity to be leaders, particularly as the UK prepares to host COP26 in 2021. For example, Anglian Water embraced the idea that working with the wider industry would strengthen their own future plans and positioning. They decided to invest in the development of the PAS2080 guidance for carbon management in infrastructure – work that helped set their internal roadmap at the same time as bringing new clarity to an industry in transition. 

Avoid unintended consequences

Given the scale of existing and legacy infrastructure, there’s always a risk a well-intentioned intervention in one part of a business will cause additional carbon emissions somewhere else in the network. You could be building more pipes as the only solution to make water supply more resilient, only to increase emissions through construction and operation as a result. This is why a highly rigorous analysis is needed before any net zero plan is likely to work – it needs fresh thinking and innovation, system-wide. There is an excellent opportunity to achieve the twin goals of enhancing resilience and reaching net zero by taking a whole systems approach.  

Push green infrastructure harder

Water companies have the potential to expand their use of green infrastructure. Many have already recognised the benefits to manage flood risk and improve water quality, but green infrastructure solutions can also sequester carbon and reduce energy (and hence carbon) in operation. We found, for example, that Welsh Water’s catchment wide surface water removal and sustainable drainage systems (SuDS) solution in Llanelli saved 6,000kg CO2e annually. 

Be creative with existing assets and land

Water companies are typically major landowners and could be using their land to host a variety of renewable energy sources, whether that’s solar or onshore wind generation. However, we’re also seeing a growing appetite for sequester carbon through tree planting and peat rewetting programmes. The Committee on Climate Change report earlier this year estimated that restoring at least 50% of upland peat and 25% lowland peat would reduce UK emissions by 5MtCO2e by 2050. Careful consideration of the complementarity of different land uses and the multiple benefits that can be achieved will be required to determine the best use of water companies’ land. 

This in turn leads to the exciting possibilities of new collaborations between related industries, including beneficial partnerships between organisations working in complementary fields, like energy and water, or energy, water and transport.  

New ideas are already taking hold. We’re working with Northern Ireland Water (NI Water) on a scheme to generate hydrogen, that may also fuel the bus network operator, Translink’s fleet of new hydrogen buses. Given the scale of the net zero transition, this kind of holistic approach and ‘uncommon collaboration’ will be vital. 

A whole system approach

With water industry-wide targets agreed, the next phase is about effective tactics. As individual companies move to develop their own net zero action plans, which are expected by summer 2021, there’s an opportunity to get ahead of the deadline and develop a forensic, ‘whole systems’ view of the water sector aligned to TCFD requirements and begin the innovative collaborations this huge shift will require.