England's water industry issued 10.5bn in green bonds' despite pollution record

"Water companies have issued a fifth of the UK's green bonds since 2017, despite a consistently poor record of sewage pollution during that time, research has shown. Privately owned water companies in England have together issued 10.5bn in bonds tied to projects that offer environmental benefits, according to analysis of financial market data by Unearthed, which is part of Greenpeace UK. Anglian Water has been the biggest issuer in the water industry, at 3.5bn, with struggling Thames Water second at 3.1bn."

"Issuers of green bonds are expected to use the proceeds for defined purposes such as renewable energy, greenhouse gas control and clean transportation such as electric vehicles. Sustainable water and wastewater management is also included. This means many water companies' standard operations qualify. In return, companies tend to be able to borrow more cheaply, because they attract investors hoping to benefit the environment while also profiting."

"However, the UK government's Environment Agency last month said environmental progress across the sector had declined in the last year. Critics of the water industry said the poor performance raised questions over possible greenwashing in relation to the bonds. James Wallace, the chief executive of River Action, a clean water campaign group, said: This is corporate greenwash on steroids. UK water companies are raising billions through green bonds while failing to deliver the environmental improvements these funds are supposed to support."

Privately owned water companies in England issued £10.5bn in green bonds tied to environmental projects since 2017, representing a fifth of the UK's total. Anglian Water led issuance at £3.5bn and Thames Water at £3.1bn. Green bond proceeds are expected to fund renewable energy, greenhouse gas control, clean transportation and sustainable water and wastewater management, allowing standard operations to qualify. Companies often borrow more cheaply by attracting environmentally minded investors. The sector faces long-standing criticism for alleged underinvestment, large shareholder dividends and worsening environmental performance, prompting concerns about potential greenwashing of bond proceeds.

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