England’s privatised water utilities have borrowed more than £10.5 billion ($13.2 billion) through green bonds since 2017, positioning themselves among the UK’s largest corporate issuers of sustainable finance. Yet despite this surge in climate‑linked borrowing, the sector’s environmental performance has deteriorated, sparking accusations of greenwashing and raising questions about credibility.
Rising Pollution, Red Ratings
Major issuers such as Anglian Water (£3.5 billion) and Thames Water (£3.1 billion) recorded the highest number of pollution incidents last year and remain rated “red” by the Environment Agency ESG News esgpost.com. Data shows raw sewage discharges into rivers and coastal waters have surged, with incidents rising by more than 100% in the past 12 months, equivalent to 3.6 million hours of untreated waste released esgpost.com.
Questions Over Green Finance Credibility
Investigations reveal that in many cases, proceeds from green bonds were used to refinance existing projects or fund activities already mandated by law, raising doubts about the additionality and environmental impact of the investments ESG News samcorporate.com. Critics argue that while the sector has tapped billions in sustainable finance, it has failed to deliver measurable improvements in water quality or pollution control.
Public and Regulatory Pressure
Campaigners and watchdogs warn that the disconnect between record green borrowing and worsening environmental outcomes undermines investor confidence in the sector’s sustainability claims. Regulators are now under pressure to tighten oversight, ensuring that green finance delivers genuine ecological benefits rather than serving as a reputational shield.
Outlook
With water companies facing growing public anger over sewage spills and environmental degradation, the controversy highlights a broader challenge for sustainable finance: ensuring that green bonds translate into real‑world impact. As scrutiny intensifies, the sector’s credibility — and its ability to access future green capital — may hinge on proving that billions raised are not just financial instruments but genuine tools for environmental improvement.
Green FinTech, Green Bonds Image by Gaurav Uttamchandani, itmunch.com
Sources: ESG News ESG News; ESG Post esgpost.com; SAM Corporate samcorporate.com.
