Pennon Group PLC

Committing to not invest in fossil-fuel expansion activities, or fund climate-denial or lobbying against climate regulations. [...] This version of the Environmental Policy was adopted by the ESG Committee of Pennon Group plc in January 2025. Overall ownership and responsibility for climate strategy is held by the chair of the organisation's ESG Committee. Implementation of this Environmental Policy is the direct responsibility of the board and senior management, and indirectly, all directors, employees and contractors working for the organisation.

The Group and South West Water Boards provide oversight to the management of our climate-related and nature-related risks and opportunities, through the ESG Committee. The Boards have overall responsibility for the Group's risk management policies and processes, and all principal risks are reviewed by the Boards on a regular basis. The Boards consider climate-related and nature-related risks and opportunities throughout its duties - including when considering the Group's strategy and objectives, monitoring business and operational performance, business planning and annual budget setting, reviewing major capital expenditures and existing investments, and in considering acquisitions/divestments. We are continuing to enhance the awareness and capacity of our Boards and senior executives relating to climate and nature risks and opportunities. For more information see our Corporate Governance report pages 112 to 174. [...] All Board Committees play a role in managing our climate-related risks and opportunities, and several play a role in managing our nature risks and opportunities, and we are continuing to raise awareness of these issues across Board Committees. Matters are escalated to the Board as appropriate. Board Committees report their actions and decisions to the Board, ensuring robust governance - including for matters influenced by climate change, nature recovery and the transition to Net Zero. The responsibility for climate-related and nature-related risks and opportunities is cascaded through the business in order to meet our targets and objectives. Governance of nature-related risks and opportunities will be enhanced in the next AMP period when our performance commitments will include biodiversity. [...] Executive managers play a key role in identifying, assessing, and managing climate-related risks and opportunities, and Executive managers sit on relevant Executive committees. The responsibility for climate-related and nature-related risks is owned, managed, and assessed by a number of the Group's management teams across our business including our management responsible for water resources, wastewater, regulation, procurement, engineering, natural resources/biodiversity, and finance. Risk is identified and categorised in different parts of our business prior to being formally passed onto senior management responsible for those business functions. Each business function and department maintains a risk register, and management escalate risks to the Executive Committees as appropriate. We are continuing to raise awareness and the capacity of teams and executive management to identify, assess, and manage climate and nature risks and opportunities.

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]The Board recognised
that in order to show proper climate leadership, our
plans to achieve Net Zero by 2030 needed to reflect
our engagement with our customers and
stakeholders who require us to deliver against
climate change priorities. Likewise, preparation of
our PR24 plans needed to respond to Ofwat's
positioning statement calling on water companies to
do more to achieve net zero.
In line with our strategy, we therefore developed our
Net Zero plans following discussion with our
regulators and government, presentations to
customer focus groups including the WaterShare+
Advisory Panel, and reviews with suppliers. We
received feedback from our shareholders and
investors who are consistently supportive of our net
zero ambitions, with many shareholders now having
a climate-focussed ESG agenda. We also worked
closely with the Water UK Carbon Removals Group
on an industry approach to capturing carbon
benefits. With the Government Net Zero Strategy:
Build Back Greener, issued in late 2021, our Net Zero
plans were able to take on board the national
policies and proposals for decarbonising all sectors
of the UK economy to meet the UK net zero target
by 2050. We also remain engaged with Water UK via
a number of committees and working groups to
support our planning and approach.