Blackrock urged to tell water companies to clean up their act

THE biggest investor in listed British water companies has been urged to pressure bosses to fix leaks and stop dumping sewage into rivers and the sea.

Blackrock, which has a combined £1.5bn stake in the UK’S three listed water businesses and has repeatedly campaigned for action on climate change, has been told to take “a more practical and visible approach to here and now environmental issues”.

The US investment company is the biggest investor in FTSE 100-listed Severn Trent and United Utilities and the third biggest shareholder of Pennon Group, the FTSE 250 owner of South West Water.

A spokesman for Blackrock said that the stakes were minority investments through its index-tracking funds, and that it was not its responsibility to direct water companies.

Larry Fink, the chief executive of Blackrock, has led calls for companies to respond to the threat of global warming. In his annual letter to investors at the start of this year, he said: “Every company and every industry will be transformed by the transition to a netzero world. The question is, will you lead, or will you be led?”

UK water companies are under pressure to dramatically improve the quality of networks amid claims of chronic underinvestment in infrastructure since privatisation.

Craig Mackinlay, Conservative MP for South Thanet and a member of the Protect Our Waves All-parliamentary Group, said: “If Blackrock are going to talk a big game on their ESG commitments, a more practical and visible approach to here and now environmental issues would be refreshing.

“I’m sure the regular dumping of raw sewage around our coastline and rivers by water companies blighting communities and businesses doesn’t make the front cover of glossy corporate brochures, but it is an urgent problem that requires action and investment.”

An investigation by The Guardian revealed that 70pc of Britain’s water companies are owned by overseas asset managers, private equity, pension, infrastructure and sovereign wealth funds. Debts of almost £54bn have been racked up since privatisation, allowing water companies to pay an estimated £66bn in dividends to shareholders until 2022.

The musician Feargal Sharkey, a prominent campaigner against river pollution, has urged ministers to do more to hold water companies to account.