Resilience is the ability to cope with, and recover from, disruption and anticipate trends and variability in order to maintain services for people and protect the natural environment now and in the future. Though resilience has always been an important issue for customers and the sector, the nature, awareness of and tolerance to future threats is changing. As a result, resilience has moved up the political and social agenda.
Resilience in the round is what matters to customers and is a core concept for Ofwat. In order to manage resilience in this more complex and less predictable world, companies will need to see the bigger picture if they are to deliver against customer expectations – linking corporate, financial and operational elements together with customers at the heart. The concept of “resilience in the round” is at the core of how companies should approach this issue. This includes:
- operational resilience – the ability of an organisation’s infrastructure, and the skills to run that infrastructure, to avoid, cope with and recover from disruption in its performance;
- financial resilience – the extent to which an organisation’s financial arrangements enable it to avoid, cope with and recover from disruption; and
- corporate resilience – the ability of an organisation’s governance, accountability and assurance processes to help avoid, cope with and recover from disruption and to anticipate trends and variability in all aspects of risk to delivery of services.
The operational, financial and corporate resilience of companies affects all current and future customers’ water and wastewater services. The impact of disruptions to services on customers, the environment, the economy and communities can be significant. Climate change and population growth may place increased demands on services such as surface water drainage and the resilience of infrastructure and services to drought. Water companies must maintain a water supply system and a wastewater system to meet their statutory security of supply and service obligations. It is therefore vital that services remain resilient over the long term.