Our CFO Phil Aspin shares an update on our company's ESG performance

Our strategy is simple and is based around three strategic themes: to deliver the best service to customers at the lowest sustainable cost and in a responsible manner. Our approach to ESG is central to this strategy, driving us to deliver our services in an environmentally sustainable, economically beneficial, and socially responsible manner. By putting ESG at the heart of our strategy, we're able to enhance the resilience of our services, deliver on our purpose, and underpin the robust and sustainable financial performance of the business. This approach delivers better outcomes for customers and the environment, and allows us to retain and attract the best talent by delivering on issues that matter to our employees, and creates long-term sustainable value for all stakeholders.

We're a leader on environmental performance. The Environment Agency assesses how well the water and sewage companies perform in terms of protecting and enhancing the environment, and in its most recent annual assessment, we were one of only a handful of companies to achieve the maximum four-star rating and the only listed company rated as green across all areas of assessment. As a key part of our business plan for AMP7, we're investing 730 million to protect and enhance the environment. By the end of AMP7, this investment will deliver a range of benefits including 1,500 kilometers of river that will be improved or protected and 500 tons of phosphorus removed from wastewater each and every year. And we're particularly proud of our performance on pollution, where we have seen the benefit from our pollution incident reduction plan. As a result, we're delivering frontier performance on pollution with no serious pollution incidents for the last two consecutive years and a 31% reduction in the total number of incidents year on year.

Fundamental to our success has been our systems thinking approach. Systems thinking gives us a joined-up understanding of our operating assets as an interconnected network, providing data and technology to make proactive interventions and improving performance for both customers and the environment. To give you an example, for 20 years we've been investing in driving resilience in our catchments through extensive use of nature-based solutions. More recently, we've evolved our approach through something we call Catchment Systems Thinking, or CAST, the widest ranging application of systems thinking. Through this approach, we work with our partners to manage our catchments holistically, taking into consideration factors such as farms and other land users, weather patterns, and customer behavior, all of which extend far beyond the boundary of our own assets. Through this approach, we have found we are able to deliver a better overall environmental outcome in a more efficient way by focusing on the most cost-effective actions across the catchment. We recognize, of course, that there's always more you can do, and looking to the future, Defra's 25-year plan, along with public desire for a greener future, will support a strengthening of our environmental ambition. Further environmental regulation is very likely to result in significant ongoing investment needs for the sector, and we expect our capex programme to be bigger in AMP8 and beyond.

Over recent years, we've demonstrated enhanced resilience by extending services to the growing and changing population while maintaining services through numerous record-breaking extreme weather events. We have benefited from the 250 million reinvestment of outperformance in AMP6, giving us demonstrable improvements in resilience, while our plans for AMP7 will take us further. But the requirement data is clear and the risk is growing. Climate change adaptation will require substantial investment but will likely feed into our capex programme for AMP8 and beyond.

In recent years, we've delivered a 73% reduction in greenhouse gas emissions, thanks in part to a mix of wind, hydro, and solar energy production and energy recovery from sewage sludge. This put us ahead of our target at 2020, and so in our 2020 annual report, we published six carbon pledges consistent with our commitment to achieving net zero by 2030. We're on target against all of our pledges. We were the first company in the sector to have science-based targets approved, including scope 3 indirect emissions that include both a supplier engagement target as well as a stretching absolute reduction target on other scope 3 emissions. More details on our carbon commitments can be found in our TCFD disclosure, having led the sector by adopting early in 2020. We have further enhanced our reporting in our 2021 annual reporting accounts.

The support we provide to customers who are struggling to pay their bills has never been more important than through the COVID-19 pandemic. We take the time to understand our customers, recognizing that each one is unique, and we have a wide range of schemes that are tailored to support individual circumstances. Our AMP7 plans committed to 71 million of voluntary support for customers, and last year we obtained additional customer support for up to a further 15 million a year for customers struggling due to COVID-19. In total, we're currently supporting around 200,000 customers who are struggling with affordability. As one of the largest employers in the region, we have a key role to play in enhancing skills and social mobility. We're supporting the government's Kickstart program by providing 250 placements for young people across our business and supply chain, and we have continued to recruit apprentices and graduates through the COVID-19 pandemic, welcoming our latest cohort this month. Last October, we hosted the sector's first social mobility summit, engaging over 100 organizations on this important topic, and launched our Opportunity Action Plan, giving detail of our commitment and encouraging others to do more in this area.

United Utilities is a great place to work, and I can say that with confidence having worked at the company for over 25 years now. But don't just take my word for it: 92% of employees would recommend UU to friends as a great place to work, and current and former employees score us 4.5 out of 5 on Glassdoor in terms of how they view United Utilities as an employer, positioning us as a leading place to work. Being a great place to work is important as strong employee engagement is critical to business performance. Over the past year, we've achieved an engagement score of 89%, positioning us significantly above the norm for UK high performing companies. We need fantastic people to enable us to deliver a great service, and we're determined to reach and recruit from every part of the community we serve and to support employees to achieve their full potential, making them feel valued and included regardless of their gender, age, race, disability, sexual orientation, or social background. Reflecting the progress we've made with this approach, we're delighted to be one of the top 1% of 15,000 companies across Europe in the Financial Times' diversity and inclusion leadership survey.

We've raised environmental funding for many years, principally from the European Investment Bank. With EIB funding closed to us post-Brexit, we've evolved our approach, publishing our Sustainable Finance Framework in November last year and issuing our first sustainable bond in January of this year, with proceeds allocated to the financing of eligible green or social projects. The recent 300 million sustainable bond issue attracted significant investor appetite, with the order book more than three times oversubscribed. And in further evidence of the link between ESG performance and investor value, we outperformed the regulatory assumptions for AMP7 new cost of debt by around 150 basis points, securing almost 40 million of financing outperformance on this one bond issue alone. We would expect our Sustainable Finance Framework to play a fundamental role in new debt issuance going forward.

We actively participate in a broad range of global ESG ratings, indices, and frameworks to benchmark our approach against best practice and emerging sustainability challenges. We find we're consistently assessed as a leader in this space. Picking out a few indices that research shows investors and experts place the most confidence in: we have attained world-class status on the Dow Jones Sustainability Index for 14 consecutive years. In April this year, we were ranked 9th out of 604 global utilities in the Sustainalytics ESG Risk Rating assessment, positioning us as the leading water utility in this index. CDP is a global disclosure system for environmental reporting, and in 2020, our CDP climate change rating improved from B to A-, demonstrating leadership level reporting and disclosure. Along with Wessex Water, we're the only two companies in the UK water sector to achieve this leadership level in this important area. In February, we received an MSCI ESG rating of double A. This is a relative assessment across the sector, with MSCI recognizing United Utilities as a sector leader in managing industry-specific ESG risks.

ESG has been at the heart of our strategy for a long time and will continue to be a fundamental priority. We have a deep and long-standing relationship with the environment in which we operate and the communities we serve. What we've talked about today is just a snapshot of what we've achieved, and you'll find more details of our plans for the future on our corporate website and in the annual reporting accounts. Our strength in the area of ESG is clear to see, but we recognize there's always more to do, and by delivering our plans, we will ensure we continue to improve for the benefit of all our stakeholders.