England’s water industry issued £10.5bn in ‘green bonds’ despite pollution record

Water companies have issued a fifth of the UK’s “green bonds” since 2017, despite a consistently poor record of sewage pollution during that time, research has shown.

Privately owned water companies in England have together issued £10.5bn in bonds tied to projects that offer “environmental benefits”, according to analysis of financial market data by Unearthed, which is part of Greenpeace UK.

Anglian Water has been the biggest issuer in the water industry, at £3.5bn, with struggling Thames Water second at £3.1bn. The two companies were the third- and sixth-largest issuers of corporate green bonds overall since 2017.

Issuers of green bonds are expected to use the proceeds for defined purposes such as renewable energy, greenhouse gas control and clean transportation such as electric vehicles. Sustainable water and wastewater management is also included. This means many water companies’ standard operations qualify. In return, companies tend to be able to borrow more cheaply, because they attract investors hoping to benefit the environment while also profiting.

Yet the privatised water industry in England and Wales has faced persistent criticism over its environmental record in recent decades, after years of alleged underinvestment and payment of large dividends to shareholders.

The first green bond issued by a UK water company was in 2017, when Anglian, which supplies much of the east of England, raised £250m. However, the UK government’s Environment Agency last month said environmental progress across the sector had declined in the last year. Critics of the water industry said the poor performance raised questions over possible “greenwashing” in relation to the bonds.

James Wallace, the chief executive of River Action, a clean water campaign group, said: “This is corporate greenwash on steroids. UK water companies are raising billions through green bonds while failing to deliver the environmental improvements these funds are supposed to support.

“Their crumbling infrastructure continues to kill rivers and put communities at risk while investors are rewarded. True green finance should deliver real benefits for the environment and public health, not mask ongoing pollution.”

Water companies accounted for 19% of all corporate issuance between 2017 and 2025. If issuance by the Thames Tideway “super sewer” developer is taken into account, that proportion rises to 22%.

Thames Water’s effective owners are pushing for the government to grant it leniency on environmental standards for as long as 15 years as part of a rescue plan. Unearthed also revealed that Thames has failed to publish impact reports detailing its bonds’ environmental benefit for two years. Although not a legal requirement, the failure to publish the reports contravenes the industry standard.

The company said it was still committed to publishing the impact reports for its green bonds. A spokesperson said: “The impact report for 2022-23 and 2023-24, which will detail the allocation of the £1.65bn raised through our January 2023 green bond issuance, has not yet been published. We take our reporting responsibilities seriously, and on this occasion we have fallen short of meeting expectations.”

An Anglian spokesperson said growing the economy while reducing pollution required “significant and sustained investment in infrastructure”, adding that the funds raised “helped to deliver significant environmental improvements”.

“We know there is more still to do, particularly on issues like pollution, but environmental performance is broader than just that one measure,” the spokesperson said, pointing to carbon emission reductions.

They said it was vital that the government create the conditions for an “investable sector” through regulatory reform.

Water UK, a lobby group for the industry, declined to comment.