Ethical sourcing: Northumbrian Water Group

1st December, 2023

A case study on embedding responsible procurement, Good Business Charter Accreditation and Social Value

By: Steve Betts, Head of Procurement

The Northumbrian Water Group employs over 3000 people, and became GBC accredited in December 2021.

 

THE CHALLENGE 

The Northumbrian Water Group is one of the UK’s leading water companies, employing over 3000 people.    The Northumbrian Water Group became GBC accredited in December 2021.  

The Good Business Charter is an accreditation scheme which provides a holistic solution to measuring responsible business behaviour and in particular being able to showcase your social impact as an organisation in a credible and meaningful way. 

It covers 10 components (shown in Appendix 1) and an organisation must meet ALL 10 of these components to receive accreditation. This ensures clarity in what organisations have committed to, which is particularly important to give the general public confidence that a GBC accredited organisation is indeed a responsible organisation that cares for its employees, suppliers, customers and the planet whilst paying its fair share of tax. 

97% of consumers believe it is important that businesses act responsibly.  Members of the British public polled by the Institute of Business Ethics consistently state organisations not paying their tax dues as their top concern in relation to UK businesses.  More and more people want to work for, invest in and shop with responsible businesses and they need a clear way to understand which businesses are the responsible ones, committed to care for people and planet. Even the charity sector has some way to go in ensuring they are behaving responsibly towards all their stakeholders. It is no longer enough to do good whilst treating your employees poorly.  Regulation dictates certain disclosures in annual reports and financial statements but to the general public, this information is inaccessible and largely incomprehensible. The Good Business Charter provides a clear, transparent, robust way for organisations to communicate the good work they are doing in a way we can all understand and trust.  The GBC is also very nicely aligned with the corporate goals of NWL and our new Responsible Procurement strategy, that was released in September 2022.  Ethical sourcing, one of the GBC’s 10 components, has been a feature in NWL since the previous responsible procurement strategy was released back in 2016. 

 

THE MEASURES 

In December 2021 Northumbrian Water limited achieved GBC accreditation.  The 10 components that NWL must meet to be accredited align perfectly with the elements of Impact Initiative 7 within our responsible procurement strategy.  Within NWL we made amendments to our operating practices in relation to prompt and fair payment, to meet the GBC’s Prompt Payment component.  Now when working with smaller or SME businesses we may reduce our standard payment terms. 

It was important for NWL to become accredited as the GBC will help NWL demonstrate the good practices we have running within our business, but also allows NWL to support the wider GBC community and specifically supporting those smaller SME partners, with our knowledge. 

The main alignment for NWL was our work on social value and given the GBC’s unique emphasis on the ‘S’ in ESG, it provides an effective way to showcase our social impact on both our and their website and in other promotional material. 

Within NWL we have already communicated our good work on responsible procurement to our workforce and our key suppliers.  The GBC provides NWL with a framework to communicate with our employees, the ways in which we champion them, as well as the way NWL as an organisation wants to treat our customers and suppliers as well as reduce our environmental impact. 

Although there are so many accreditations and certifications. The GBC brings together a number of different standards in a more holistic approach to responsible business behaviour.  Good Business Charter accreditation is not a tick-box exercise, done once and forgotten about for a year. There was an expectation that the GBC would be embedded into our organisation in a way that was appropriate for NWL as an organisation, but as a minimum, all our employees are aware of the accreditation and what it stands for, and that we proudly display our GBC accreditation on our website. 

The new responsible procurement strategy was a big change for NWL as we moved to a more output focussed strategy.  Partners like the GBC not only assist us to achieve these new outputs but also allow us to assist others within the GBC community that may be at the start of their journey or requiring some support in specific elements of their journey. 

Our work on social value has been driven initially by NWL becoming members of the County Durham Pound initiative (CDP).  The GBC now also allows NWL to explore wider social value issues outside of the County Durham area and across our wider operating areas.  Our initial challenge in relation to social value was designing a way to record the good work we did and then finding a method for gathering auditable data to evidence all our achievements.  The CDP gave NWL access to the social value portal and by utilising the national TOM’s framework, we had a clear way to measure ourselves.  Having robust data allows NWL to evidence to GBC our progress to ensure we maintain our accreditation.  

 

THE RESULTS 

The result of being measured and gaining accredited by the GBC have been shown in several of our business practices that form part of the 10 components. Highlights of these include.  

• Real Living Wage – NWL is now accredited with the living wage foundation and all employees who work directly for NWL or indirectly through our supply chain (who spend 2 hours per day or more, over an 8 week period, in our offices, operational sites or working on our assets) are paid the real living wage rate.

• Prompt payment to suppliers – Smaller or SME businesses on reduced payment terms. 

• Environmentally responsible – We were recognised in 2022, for the eleventh consecutive year, as one of the world’s most ethical companies by Ethisphere, a global leader in defining and advancing the standards of ethical business practices. We remain the only water and sewerage company in the world to be included on this prestigious list and one of only three companies operating in the UK. We feel that this recognition exemplifies our commitment to operating in an ethical way. 

• Employee Wellbeing – NWL has won an award recognising us for our unique work in using a “colleague as consumer” approach to design our Living Well wellbeing offer. Northumbrian Water Ltd also sits in the Top 50 great places to work in the UK. 

Ross Smith NWL Partnership’s Manager said “We are proud to have been the first water company to achieve Good Business Charter accreditation. This has helped us to benchmark our responsible business practices in a number of areas, including employment, environment and customer service. It has been particularly encouraging to work with them on our responsible procurement strategy, through which we aim to use our position as an anchor institution in our regions to make an even greater contribution to social, economic, and environmental wellbeing.”