Delivering meaningful social outcomes – pointers for “purpose-led” utilities

Coronavirus has prompted utilities' leaders to take a fresh look at what it means to deliver on their social contract - but what should meaningful approaches to delivering positive outcomes like social and economic mobility for communities look like? Senior industry representatives and other experts shared some key considerations with Utility Week.

The trials of 2020 have driven a reawakening of social purpose for organisations in a variety of sectors, but nowhere more so than in the utilities industry.

Throughout Utility Week’s Build Back Better editorial campaign – exploring the scope for companies to supercharge a green and regionally balanced economic recovery from the pandemic and embrace lessons in agile and responsible business strategies – we’ve heard from chief executive after chief executive how the pandemic has caused them to reconnect and gain fresh perspective on what it means to lead a privately owned public service provider, in times of crisis and beyond. But what should this renewed commitment to the industry’s social contract translate to in terms of meaningful actions and strategies to deliver social and economic value?

In a recent webinar hosted by Utility Week in association with National Grid, we invited a range of industry leaders and experts on responsible business approaches to share their perspectives on the best frameworks and essential building blocks for boosting social and economic mobility in a meaningful and measurable way.

The event drew out a number of key considerations for companies looking to strengthen their credentials in “purpose-led” business as well as stirring a few points of controversy along the way. Speakers from National Grid and Yorkshire Water gave overviews of the frameworks around which their company approaches to delivering social value are built, along with tangible examples of how these frameworks influence everyday actions and investment thinking.

Here is a brief review of some of the key insights and talking points offered up, or you can listen to the webinar in full on demand here:

1. Social and economic mobility start at home:

Contributions from all webinar speakers backed up the idea that providing meaningful social and economic mobility should start at home with a focus on ensuring recruitment, training, development progression opportunities are transparent, accessible, and inclusive.

Ameer Jasat, senior asset management and strategy engineer at National Grid Gas Transmission spoke of his pride in working for a company which had set stretching targets for diversity and inclusion, to be met by 2050, including commitments for 50% diversity in senior leadership and 50% diversity in all new talent programmes. Meanwhile, Phil Beach – newly in office as chief executive of Energy and Utility Skills Group and previously director of technical qualifications at Ofqual, emphasized that it is critical companies make a concerted effort to supercharge internal training and upskilling programmes now in order to build the skills base required for a green recovery. The urgency of the energy transition, he said, means government and organisations cannot rely on building these skills in new and future employees alone.  They need to equip existing workers to support and thrive in the transition – and prepare them to help train future intake of staff in green economy skills and competencies.

Beach also highlighted the opportunities which may be upcoming for organisations to leverage changes in further education policy which are set to devolve greater control over funding for training to local government. He said this could help utilities work effectively with local and regional authorities to build training and development programmes – for new and existing staff – which are tailored to their local decarbonisation pathways.

2. Cold science versus human touch

To help boost diversity and make recruitment processes more inclusive, many companies have invested in unconscious bias training for managers. During our webinar however, Richard Emmott, director of corporate affairs at Yorkshire Water, controversially slated this approach saying there was “very little data” to support the idea that unconscious bias training actually works in improving diversity in workforces.

Instead of relying on such measures, Emmott advocated a concerted effort from companies to improve the data they hold on the current diversity of the workforces and on the conversion rate of application to appointment for applicants from BAME background in particular when recruiting.

Other speakers agreed that there is a need to improve data on diversity in order to make informed decisions and help target initiatives to improve the visibility and accessibility of employment opportunities to all. However, they also defended the value of unconscious bias training, saying they have found it a powerful and enlightening approach. National Grid’s Ameer Jasat was particularly clear in his feeling that while data is important, leaders must not forget that diversity and inclusion are fundamentally “about people” and require a “human” approach.

3. Systematic approaches to social value needed

The strategies for boosting social and economic mobility shared by National Grid and Yorkshire Water provided two alternative perspectives on how to build robust frameworks for enshrining and delivering on social purpose.

Duncan Burt, COP26 director at National Grid said that the “hard yards” travelled in creating the company’s Responsible Business Charter – which was published earlier this year, will now be followed by hard yards in delivery across the business. He added that the RBC is viewed internally by the executive team as an extension of the annual report – a “gospel” document. And he spoke about the way the Charter is helping the business strengthen its integrity as a leading player in the UK’s energy transition, by articulating its commitment to ensuring all communities are engaged in and feel the benefits of decarbonisation and by using the Charter to help it raise the finance it needs to deliver that transition more cheaply and through new green mechanisms wherever possible. This latter point was identified as a key indirect factor in supporting social and economic mobility for communities across the UK, as it will help to make the energy transition more affordable.

Speaking from the perspective of a regional monopoly, Yorkshire Water’s Richard Emmott extolled the virtues of a different approach to pursuing positive social and economic outcomes for its communities. Emmott described how Yorkshire Water has embedded itself as part of a network of “anchor institutions” in Yorkshire and explained that this model provides “a way of looking at regional economies and the ways in which organisations which are permanent within the region – who are big deployers of capital, big employers of people – can work together on a common and inclusive growth agenda.”

Emmott said the anchor institution approach is particularly effective for regional monopolies which represent “sticky capital” in their license areas. He shared several key examples of the way in which Yorkshire Water’s anchor institution approach has worked effectively in the Leeds city region in particular.

Sharon Darcy, director of Sustainability First and a respected authority on issues relating to utilities social contract delivery agreed that the anchor institution approach can be a powerful one and could help more utilities become “more systematic” in their approach to delivering social and economic value for communities. While she said the sector had many good examples to share of investment in social and economic mobility, she also claimed that these issues are still too commonly “an afterthought” and that strategic approaches to delivering social and economic value are “the exception rather than the rule”. Darcy pushed companies to take a more structured approach in several areas which she said are key to delivering meaningful social and economic outcomes. These included: ensuring diversity commitments are pushed to the very top of companies, including community considerations in strategic risk assessments, adding rigour to the governance of partnerships designed to deliver positive social outcomes and working hard to share best practice between companies. Creating social value “is not something companies should compete on,” she concluded. “It is something they should collaborate on.

You can listen to the webinar in full on demand here.