Evolving our approach to sustainability governance Our people work towards our sustainability commitments every day as part of their roles. A performance-management system ensures we adhere to our Sustainability Framework and agreed metrics. Our governance framework is approved by the Chair of the Severn Trent Plc and supports the Board in making decisions and maintaining oversight, identifying and managing non-financial risks and opportunities, and ensuring we remain on track to meet our sustainability commitments. During the year, the Board provided input into our carbon and waste strategies. Page 93 of our Annual Report and Accounts details which Directors have sustainability – particularly climate change – experience. Our Board-level Corporate Sustainability Committee, chaired by Non-Executive Director Dame Angela Strank, oversees sustainability risks, commitments and performance, as well as the Company’s Values. Pages 92 – 94 of our Annual Report and Accounts give an overview of the Committee’s activities in 2020/21. A Sustainability Steering Committee, composed of Executives and senior management and reporting to the Corporate Sustainability Committee, oversees our performance on all the topics in our Sustainability Framework. From 2021 onwards, the Steering Committee will hear regularly from our sustainability subject expert groups, and provide guidance and oversight of our overall approach. Each subject expert will have senior-level sponsors accountable for specific sustainability commitments and targets, and subject matter experts to provide guidance and measurement. Other committees discuss sustainability topics. For example, in 2019 the Energy Steering Committee made the decision to commit to 100% renewable energy. Also, employee rewards are linked to our performance in sustainability and health and safety. Ethics Our Code of Conduct, Doing the Right Thing, sets out the cultural norms and behaviour expected of everyone at Severn Trent, and provides a consistent framework for responsible business practices. A number of policies support the Code, helping employees act on suspected wrongdoing, maintain safety standards and use sound judgment – these include our Group Data Protection Policy, Group Conflict of Interest Policy and Group Financial Crime Policy. We also require suppliers to sign up to the Code of Conduct as part of their contract with Severn Trent. Whistleblowing We encourage all our employees to raise concerns at work through their line manager or senior management. They can also use our confidential whistleblowing helpline or email service, operated by an independent company. Every concern raised is investigated independently and reported to the Audit and Corporate Sustainability Committees. In a recent survey, staff rated the following statement 8.2 out of 10 (where 10 is highest and 1 is lowest): ‘If I suffered or witnessed wrongdoing at work, I’d be confident Severn Trent would respond appropriately.’ Bribery and fraud Our Financial Crime Policy prohibits bribery, corruption and fraud in all our business dealings. Employees’ in roles identified as high risk, through a risk review for all roles, are asked to take part in online training and a test to ensure they’re aware of, and comply with, our Anti-Bribery and Corruption Policy. Managing risk As a provider of one of life’s essentials, failing to manage risk can have serious consequences for our customers and communities. We identify, assess, manage and monitor the significant risks on our risk register through our Enterprise Risk Management (‘ERM’) process. This allows us to adapt rapidly to emerging and changing risks by accelerating action or even changing course. Our significant risks are reported to the Executive Committee, Audit Committee and Board every six months, and the Board discusses specific risk topics throughout the year. The Audit Committee is responsible for assessing the effectiveness of the ERM system and internal controls on behalf of the Board. Sustainability governance severn trent PLC BOARD Oversight of Company strategy and ensuring the long-term success of Severn Trent CORPORATE SUSTAINABILITY COMMITTEE Provides guidance and direction to the Company’s Sustainability Strategy based on our Code of Conduct, Doing the Right Thing. The Committee also reviews the Group’s non-financial risks and opportunities SUSTAINABILITY STEERING COMMITTEE Executive and senior management oversight of sustainability performance against sustainability framework SUSTAINABILITY SUBJECT EXPERT GROUPS Senior level sponsors and subject matter experts set and measure performance against targets ENVIRONMENTAL (e.g. Energy steering group) SOCIAL (e.g. Diversity and Inclusion steering group) GOVERNANCE (e.g. Values working group) Building a better business Making decisions for the long term