The results of Ofwat’s annual investors’ survey for 2020 which was conducted in November last year show an overall downward trend in positive responses since 2016.
The results of Ofwat’s annual investors’ survey for 2020 which was conducted in November last year show an overall downward trend in positive responses since 2016.
The regulator received a total of 61 responses to the survey which was sent to 462 investors on Ofwat’s investor relations distribution list – a 13% response rate (2019 response rate was 16%).
The survey, which consisted of the same mixture of set and free-text questions as in previous years, included the following seven statements, where respondents were required to answer strongly agree, agree, neither agree or disagree, disagree or strongly disagree.
1. Ofwat’s regulatory framework aligns the interests of regulated companies and their investors with those of customers over the long term.
2. Ofwat regulates in a proportionate, consistent, transparent and targeted way, choosing the most appropriate tools from within a wide range of regulatory responses.
3. Ofwat is independent of government(s).
4. Ofwat’s policies are well-considered and consistent.
5. Ofwat is listening to investors.
6. Ofwat engages with the investor and credit-rating communities in an open and transparent way.
7. Ofwat engages consistently and sufficiently with all types of investment stakeholder (debt, equity and analysts).
The one question with a negative balance on this basis was for “Ofwat listens to investors” where 48% disagreed or strongly disagreed compared to 38% that strongly agreed or agreed compared.
The overall results show that for six of the seven set questions more investors either strongly agreed or agreed than disagreed or strongly disagreed. The highest positive balance came from the two questions on the quality of investor engagement activities.
However, the survey shows that the overall annual trend between 2016 and 2020 has seen a decrease in positive response from investors.
It also shows that responses to the seven set questions in this year’s survey vary significantly across the three investor groupings – equity investors in privately owned assets, debt investors and equity investors in listed assets.
For equity investors in listed assets the percentage of strongly agree or agree across the seven set questions ranged from 57% to 87%. In comparison, the same range for equity investors in privately owned investors was 0% to 29%.
Based on the responses from 36 respondents who also provided written feedback, the regulator has concluded that in terms of engagement over the last year Ofwat did well on:
- Engagement - timely investor emails and responses to queries, City Briefings and series of roundtables, 1-2-1s
- PR19 - A well-run process with good engagement throughout
- Covid-19 - Updates on how Ofwat is working with water companies to assess the impact of Covid-19
Areas for improvement over the next year Ofwat has flagged up include:
Access to information
- Make water company performance data more accessible and comparable
- Draw out details within methodology documents and decision documents in more concise summaries
- Make the publications list on the website easier to access
Personnel - Offer more access to senior leadership team and to those working on resilience
Listening - Listen with an open mind and take into account investor views
Click here to download the survey document
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