using investments to affect company policy

DullGreyGuy

callum9999 said:

Millyonare said:

Despite media hysteria, the UK has just about the cleanest drinking water on all of planet Earth. By international benchmarks, UK water companies barely make average profit margins.

One unintended consequence of the hysteria is that our UK water bills will likely jump (much) higher in the next 1-5 years, to pay for the perceived vital upgrades of leaky pipes, sewage overflow, etc. Be careful what we wish for.

Huh? The "hysteria" has nothing whatsoever to do with the quality of the drinking water. There are always conspiracy nuts for any wacky topic, but I've genuinely not heard that raised as a concern by a single person.

I'd love to see your stats for "average profit margins" given the overwhelming majority of the world (87% of the population from what I can see) has a publicly owned and run water system. It seems that only Chile and three African countries join England in having a fully privatised system.

Preventing massive water leaks while the UK suffers from regular droughts that are increasing in frequency and severity seems like a fairly rational thing to do. As someone who lives on the coast, I also much prefer it when the sea isn't contaminated with raw sewage. These things could have been improved already at no additional charge with the £2.8bn paid out in profits to private companies last year... But regardless, those are things that are clearly worth paying for so I have no need to be "careful" about wishing that they're resolved.

https://en.wikipedia.org/wiki/Water_privatization

Whilst full privatisation is rare plenty of countries and/or major urban areas have effectively privatised by provision of  concessions where a private company is given a 20-30 year contract to run the whole show and materialise profits from that.

£2.8bn wasnt "paid out" in profits, it was the operating profits the companies made but that isnt the true profit because its before tax, interest etc. If you look at Anglian Water, simply as the first one on the list, it had 1.4bn of revenue, £441m of operating profit but then had to pay £575m in loan payments and write downs on financial instruments and £310m in tax meaning an overall loss. 

safe_hands2

Avoirdupois said:

Over recent years, we read of a wide range of what you might call social injustices inflicted on our country and its infrastructure.  I have in mind the growing gap between the richest and the poorest, the increase in privately owned energy company's profits at the same time as rocketing prices, the failure of the water companies to reinvest at levels that protect our networks, the abandoment by the Environment Agency of our rivers and beaches to pollution and sewerage - and all at the same time that boards & ceos appear to be getting colossal levels of remuneration... including, unbelievably, receiving bonuses inspite of letting all us citizens and our country down by failing to improve performance!!
Meanwhile, I'm a modest invester, either indirectly, via my local government pension scheme and also via my own stocks and shares.  Surely there are steps I can take to attempt to influence the way so many of our essential infrastructure companies behave.  Or should I just keep quiet and take the best return I can get and leave behind a country much reduced - a shadow of what it could be, if all these companies invested more generously in our future.  Any comments, dear reader?

I struggle with this too. I wish we had more responsible capitalism where profit and growth wasn't everything. I feel overwhelmed at times by the enormity of problems the world is facing at the moment. I try to do the small things I can to make a little difference...in my actions, purchasing and where my money is. I haven't got 'perfection' in any of that, but feel at least I'm trying.

This organisation do some great work: https://shareaction.org/

callum9999

DullGreyGuy said:

callum9999 said:

Millyonare said:

Despite media hysteria, the UK has just about the cleanest drinking water on all of planet Earth. By international benchmarks, UK water companies barely make average profit margins.

One unintended consequence of the hysteria is that our UK water bills will likely jump (much) higher in the next 1-5 years, to pay for the perceived vital upgrades of leaky pipes, sewage overflow, etc. Be careful what we wish for.

Huh? The "hysteria" has nothing whatsoever to do with the quality of the drinking water. There are always conspiracy nuts for any wacky topic, but I've genuinely not heard that raised as a concern by a single person.

I'd love to see your stats for "average profit margins" given the overwhelming majority of the world (87% of the population from what I can see) has a publicly owned and run water system. It seems that only Chile and three African countries join England in having a fully privatised system.

Preventing massive water leaks while the UK suffers from regular droughts that are increasing in frequency and severity seems like a fairly rational thing to do. As someone who lives on the coast, I also much prefer it when the sea isn't contaminated with raw sewage. These things could have been improved already at no additional charge with the £2.8bn paid out in profits to private companies last year... But regardless, those are things that are clearly worth paying for so I have no need to be "careful" about wishing that they're resolved.

https://en.wikipedia.org/wiki/Water_privatization

Whilst full privatisation is rare plenty of countries and/or major urban areas have effectively privatised by provision of  concessions where a private company is given a 20-30 year contract to run the whole show and materialise profits from that.

£2.8bn wasnt "paid out" in profits, it was the operating profits the companies made but that isnt the true profit because its before tax, interest etc. If you look at Anglian Water, simply as the first one on the list, it had 1.4bn of revenue, £441m of operating profit but then had to pay £575m in loan payments and write downs on financial instruments and £310m in tax meaning an overall loss. 

You do realise that article backs up exactly what I've said? The vast majority (87%) is not privatised in any way, shape or form. I didn't specifically spell out that some urban areas also have privatised systems, but that is implied by the 87% figure I quoted and isn't particularly interesting. 

My apologies for the sloppy wording, I'll change it to roughly £60bn paid out in dividends since privatisation 30 years ago. I look forward to hearing your argument for why that is a good thing.

Though I'll also add the caveat that the water companies, including Anglian Water (which paid out £96m despite the supposed loss), have borrowed vast sums of money to then pay out as dividends (in my view, legalised theft), which is why the loan payments are so high. Although people would have you believe that privatisation is good because they're "increasing investment" that the government wouldn't have done, they've actually cut investment by an average of 20% over this time. If you scrapped the dividends then the sector would have no debt at all and some left over to invest in capital improvements (or lower bills) and nationalisation while keeping investment/services at the same level as now would save £2.3bn per year.

Section62

callum9999 said:

I'd love to see your stats for "average profit margins" given the overwhelming majority of the world (87% of the population from what I can see) has a publicly owned and run water system. It seems that only Chile and three African countries join England in having a fully privatised system.

What is your source for "87%"?

callum9999

Section62 said:

callum9999 said:

I'd love to see your stats for "average profit margins" given the overwhelming majority of the world (87% of the population from what I can see) has a publicly owned and run water system. It seems that only Chile and three African countries join England in having a fully privatised system.

What is your source for "87%"?

The very reliable (!) Wikipedia, quoting a report from a large legal firm that works with utilities. 

Though I think it's fairly obvious that the overwhelming majority of the population are covered by publicly owned water, whether the 87% figure is exact or not. 

Section62

callum9999 said:

Section62 said:

callum9999 said:

I'd love to see your stats for "average profit margins" given the overwhelming majority of the world (87% of the population from what I can see) has a publicly owned and run water system. It seems that only Chile and three African countries join England in having a fully privatised system.

What is your source for "87%"?

The very reliable (!) Wikipedia, quoting a report from a large legal firm that works with utilities. 

Though I think it's fairly obvious that the overwhelming majority of the population are covered by publicly owned water, whether the 87% figure is exact or not. 

Thanks for confirming. As I suspected, you've unfortunately made a rather grave error (and not in using Wikipedia as a source).

Whilst (according to that source) it is true that a figure equivalent to 13% of the World population were "served by the private sector in one form or another", it doesn't follow that the remainder were served by a publicly owned water supply (i.e. 87%).

Approximately a third (33%) of the global population* are estimated to have no access to safe drinking water, and whilst some of that third will be getting unsafe publicly supplied water, the majority simply won't have a piped water supply at all.  (*WHO, 2019)

Of the two-thirds who do have access to 'safe' drinking water, many of those will be using 'private' sources such as wells, pumps, boreholes, springs, and clean river water.  In England and Wales alone, an estimated 1% of the population use a private water supply of this type. (Drinking Water Inspectorate)

Because different countries adopt different approaches to water supply it is rather difficult to draw meaningful comparisons in terms of the %age of population with "publicly owned water".  However, if we crudely add the 13% with 'privatised' water supply to the 33% who don't have safe drinking water, we have the equivalent of 46% of the world population who don't have a "publicly owned water [supply]".  It would not surprise me in the least if another 20+% or so of the world population have their own private supplies (the 1% in E&W represents two small and relatively densely populated countries with a long history of public supply).  Therefore I doubt the majority of the global population have a public water supply, let alone the "overwhelming majority" having a publicly owned one.

I'd also question whether, in the context of this thread, the basic premise of the 87%/13% figures (i.e. that the countries in the 13% are somehow 'wrong') is misguided.

As already mentioned, the UK has a long history of public supply (both of potable water and sewerage services) and work done by the likes of John Snow and Joeseph Bazalgette, along with a mulitude of boards, commissions and authorities, led us to a position where we eventually had most of the public water supply and almost all public sewerage services in England and Wales in the hands of 10 regional water authorities.

This centralisation of services in the control of so few authorities is one of the reasons why privatisation was feasible.  In many countries water supply and sewerage services remain separated, and frequently one or both of these is a function of the local authority - the kind of fragmentation that the UK had in Victorian times.

Therefore - at least in part - it is probable that 'only' 13% of the world population have a privatised water supply because so many of the others (who do have a public supply) are supplied by publicly owned entities that form a fragmented system which simply doesn't lend itself to privatisation in the form adopted in the UK. A value judgement on whether one approach is right or wrong doesn't make sense without a lot more context.

adindas

I believe there is no whales investors here.

So Common sense rule: Drop in the ocean .....

IMO there are many more effective ways of influencing policies such as donating to activist groups, charities etc

callum9999

Section62 said:

callum9999 said:

Section62 said:

callum9999 said:

I'd love to see your stats for "average profit margins" given the overwhelming majority of the world (87% of the population from what I can see) has a publicly owned and run water system. It seems that only Chile and three African countries join England in having a fully privatised system.

What is your source for "87%"?

The very reliable (!) Wikipedia, quoting a report from a large legal firm that works with utilities. 

Though I think it's fairly obvious that the overwhelming majority of the population are covered by publicly owned water, whether the 87% figure is exact or not. 

Thanks for confirming. As I suspected, you've unfortunately made a rather grave error (and not in using Wikipedia as a source).

Whilst (according to that source) it is true that a figure equivalent to 13% of the World population were "served by the private sector in one form or another", it doesn't follow that the remainder were served by a publicly owned water supply (i.e. 87%).

Approximately a third (33%) of the global population* are estimated to have no access to safe drinking water, and whilst some of that third will be getting unsafe publicly supplied water, the majority simply won't have a piped water supply at all.  (*WHO, 2019)

Of the two-thirds who do have access to 'safe' drinking water, many of those will be using 'private' sources such as wells, pumps, boreholes, springs, and clean river water.  In England and Wales alone, an estimated 1% of the population use a private water supply of this type. (Drinking Water Inspectorate)

Because different countries adopt different approaches to water supply it is rather difficult to draw meaningful comparisons in terms of the %age of population with "publicly owned water".  However, if we crudely add the 13% with 'privatised' water supply to the 33% who don't have safe drinking water, we have the equivalent of 46% of the world population who don't have a "publicly owned water [supply]".  It would not surprise me in the least if another 20+% or so of the world population have their own private supplies (the 1% in E&W represents two small and relatively densely populated countries with a long history of public supply).  Therefore I doubt the majority of the global population have a public water supply, let alone the "overwhelming majority" having a publicly owned one.

I'd also question whether, in the context of this thread, the basic premise of the 87%/13% figures (i.e. that the countries in the 13% are somehow 'wrong') is misguided.

As already mentioned, the UK has a long history of public supply (both of potable water and sewerage services) and work done by the likes of John Snow and Joeseph Bazalgette, along with a mulitude of boards, commissions and authorities, led us to a position where we eventually had most of the public water supply and almost all public sewerage services in England and Wales in the hands of 10 regional water authorities.

This centralisation of services in the control of so few authorities is one of the reasons why privatisation was feasible.  In many countries water supply and sewerage services remain separated, and frequently one or both of these is a function of the local authority - the kind of fragmentation that the UK had in Victorian times.

Therefore - at least in part - it is probable that 'only' 13% of the world population have a privatised water supply because so many of the others (who do have a public supply) are supplied by publicly owned entities that form a fragmented system which simply doesn't lend itself to privatisation in the form adopted in the UK. A value judgement on whether one approach is right or wrong doesn't make sense without a lot more context.

While I thank you for providing these facts as I despise misinformation (whether it's from someone else or me myself), I'm tired of these weird tangents several of you are going on focusing on irrelevant details.

The 33% without water access is irrelevant for example, given they by definition are not paying for water so would not be included in a comparison of water system profitability.

I also completely reject the notion that a significant proportion of public water supplies aren't in a form that allows for their privatisation - even tiny systems that only serve single towns can and do get privatised.

If you're going to try and convince me why privatisation is good then feel free (I'd find it genuinely interesting to hear as my starting point is that it's morally reprehensible) but I've lost interest in the nitpicking of trivial details that do nothing to change the overall point I've made (while again, sincerely thanking you for valid corrections).

Section62

callum9999 said:

While I thank you for providing these facts as I despise misinformation (whether it's from someone else or me myself), I'm tired of these weird tangents several of you are going on focusing on irrelevant details.

The 33% without water access is irrelevant for example, given they by definition are not paying for water so would not be included in a comparison of water system profitability.

I think it is relevant where it has been claimed "the overwhelming majority of the world (87% of the population from what I can see) has a publicly owned and run water system".  Clearly 87+13+33% would be an impossibility.

It also offers a guide to the wider issues surrounding the concept of public water supply (whether private or publicly owned) and profitability.

Specifically, that when their own governments see no benefit of providing approximately a third of the global population with a safe source of water, it is improbable that corporations will see any profitability in doing so either.

This might inform us that the circumstances in which there is a commercially viable business proposition in the supply of (potable) water are somewhat constrained.

callum9999 said:

I also completely reject the notion that a significant proportion of public water supplies aren't in a form that allows for their privatisation - even tiny systems that only serve single towns can and do get privatised.

Of course, but you've possibly overlooked the choice of words I used which were "...privatisation in the form adopted in the UK."

Water supply is a "network" business.  To run it efficiently (and profitably) means optimising the size and operation of that network.

It would be relatively easy to privatise (on a concession basis) the water supply of a single town.  Less easy to privatise water supply on a regional scale when each and every town council is responsible for the water supply in their town, with few (if any) network connections between them.

callum9999 said:

If you're going to try and convince me why privatisation is good then feel free (I'd find it genuinely interesting to hear as my starting point is that it's morally reprehensible) but I've lost interest in the nitpicking of trivial details that do nothing to change the overall point I've made (while again, sincerely thanking you for valid corrections).

I'm not trying to convince you of anything.

Only pointing out the private vs public discussion is more complicated than your 87% figure suggests.

Which I suppose touches on the thread title "using investments to affect company policy" in that the people using investments to affect company policy need to be sufficiently (and accurately) informed on the company's activities, otherwise there is a risk of the influence these investors bring to bear having an adverse impact on society (and other investors).

callum9999

Section62 said:

callum9999 said:

While I thank you for providing these facts as I despise misinformation (whether it's from someone else or me myself), I'm tired of these weird tangents several of you are going on focusing on irrelevant details.

The 33% without water access is irrelevant for example, given they by definition are not paying for water so would not be included in a comparison of water system profitability.

I think it is relevant where it has been claimed "the overwhelming majority of the world (87% of the population from what I can see) has a publicly owned and run water system".  Clearly 87+13+33% would be an impossibility.

It also offers a guide to the wider issues surrounding the concept of public water supply (whether private or publicly owned) and profitability.

Specifically, that when their own governments see no benefit of providing approximately a third of the global population with a safe source of water, it is improbable that corporations will see any profitability in doing so either.

This might inform us that the circumstances in which there is a commercially viable business proposition in the supply of (potable) water are somewhat constrained.

callum9999 said:

I also completely reject the notion that a significant proportion of public water supplies aren't in a form that allows for their privatisation - even tiny systems that only serve single towns can and do get privatised.

Of course, but you've possibly overlooked the choice of words I used which were "...privatisation in the form adopted in the UK."

Water supply is a "network" business.  To run it efficiently (and profitably) means optimising the size and operation of that network.

It would be relatively easy to privatise (on a concession basis) the water supply of a single town.  Less easy to privatise water supply on a regional scale when each and every town council is responsible for the water supply in their town, with few (if any) network connections between them.

callum9999 said:

If you're going to try and convince me why privatisation is good then feel free (I'd find it genuinely interesting to hear as my starting point is that it's morally reprehensible) but I've lost interest in the nitpicking of trivial details that do nothing to change the overall point I've made (while again, sincerely thanking you for valid corrections).

I'm not trying to convince you of anything.

Only pointing out the private vs public discussion is more complicated than your 87% figure suggests.

Which I suppose touches on the thread title "using investments to affect company policy" in that the people using investments to affect company policy need to be sufficiently (and accurately) informed on the company's activities, otherwise there is a risk of the influence these investors bring to bear having an adverse impact on society (and other investors).

The number of people served by public and private systems is more complicated yes, but why exactly should anyone care what that specific number is? 

I have no idea why you're choosing to be so cryptic about the supposed complications behind nationalising the UK's water supply systems? If you don't want to discuss it then so be it, but that makes this a complete waste of time (I'm obviously not going to believe you otherwise, am I...).