Project description:

England is one of few countries in the world to have fully privatised its water system. It’s not just run by private companies, but they own all the assets too, from pipes to reservoirs.

As recent sewage leaks and water shortages have made painfully clear – these companies have been opting to pay their shareholders rather than investing in the system.

This investigation tracked the ownership of England’s big nine water companies to find out who is really benefiting from England’s water system and how much money they’ve taken out.

Published as two interactives, each paired with a news story.

Impact reached:

When Margaret Thatcher privatised England’s water system in 1989, the campaign to advertise the stock said that every member of the British public could become an “H2Owner” – a shareholder in water.

Thirty years later, water companies are still using a version of that argument and defend their large payouts to shareholders as helping UK pensioners – citing the fact some UK pension funds own water shares.

But it’s not the average British person, or even British pension fund, who really owns the water companies. Our story: “Revealed: more than 70% of English water industry is in foreign ownership”, has put paid to that argument.

Our story made the front page splash of the Guardian newspaper and was followed up by other UK papers.

The four key stories of this project got 450K views between them, and adding in the opinion and analysis also commissioned, over half a million views.

Both our interactives had very high attention time, reaching the highest rating on the Guardian’s internal system.

A priority for us was making it simple for people with less financial literacy to understand this complex system and particularly the financial engineering involved. People who have been researching this topic for years congratulated us on coming up with a unique presentation that made it understandable.

Internal impact: highly praised by senior management, it was an unusual example of collaboration between desks and people with different skills, setting a new template for collaboration at the Guardian.

The pieces were widely shared by many pressure groups, from environmental writer Rob MacFarlane to Surfers Against Sewage, as well as leading academics.

This work highlighted structural problems with the sector – an important supplement to more traditional news stories highlighting particular sewage leaks. And led to calls for renationalisation of water or at least greater regulation.

Techniques/technologies used:

We went through dozens of financial reports to extract the key information we needed such as shareholders, dividends and corporate structure, carefully logging this information into our database.

There were no patterns across all these documents, so the data collection was a manual process for which we used a tool previously created by The Guardian which applied optical character recognition to PDFs, as some documents were not editable as text.

The database was built in Google Sheets and it had two purposes: to keep track of the findings, the research and the sources in an organised way, and to build the final database for the story.

After speaking to academics, we came up with a method to estimate the value of the sector per shareholder and country, which allowed us to later perform calculations to find the biggest owners of English water.

This data process was combined with traditional reporting – asking for interviews with these foreign owners, and getting reactions from politicians.

To tell this story, we used the Guardian’s standard map library and some simple scroll-driven zoom and pan effects for the map interactive. This allowed us to start the story locally, then to zoom out to the global picture illustrating just how far away the owners are from their customers.

A simple D3.js chart keeps track of the total ownership.

For the interactive illustrating the “financial engineering” that has seen lots of money leave these companies as dividends, we used Greensock.js – a javascript animation library with an SVG graphic produced by our designer.

The animation moves and builds as you scroll, with the step by step format creating a clear narrative.

We wanted the animation to be pleasurable and visually interesting, making it easier to engage readers with this complex story.

Context about the project:

From its conception, this was planned as a visual project that would explain in simple terms a very complex system which is not intuitively visual. There are not many previous examples of taking this approach to this type of financial story and therefore a lot of original thinking was required.

This gave an extra challenge to the project, combined with the fact that the designer working on this could only help occasionally and had to prioritise other work. With more time from a designer we could have done a more ambitious interactive on our ownership story and played more with different elements on the page.

The data collection was a super time-consuming process as we had to learn to read financial accounts reports and check them one by one – complex documents for non-business journalists. Furthermore, these documents are published as PDFs – a format that makes the data process even slower.

From a legal perspective: since we were directly discussing nine companies and mentioning many of the world’s richest companies – from Blackrock, to Hong Kong based CK Hutchinson Holdings – we had a significant amount of high-stakes legal work to do. With over a dozen right of replies and requests for comment sent out and compiled centrally by the team. Overseen by our experienced editor and senior correspondent.

Water companies have been aggressive in protecting their reputations too. We received obfuscatory responses from several, for example, some intentionally using their complicated corporate structures to make claims like “we never paid dividends to our external shareholders”, an argument that obscured the key fact that money – ultimately from customer bills – had left the company as dividends. (In cases where there are layers in a corporate structure, it is normal for dividends to be paid to the parent of the company, and from they can go to external shareholders or further into the corporate structure.)

This was one reason we were keen to include a simple graph showing the number of holding companies in the corporate structure of each water company – corporate complexity became a big part of the story.

What can other journalists learn from this project?

Some of the greatest injustices are hidden in plain sight – they’re just boring and difficult to understand. Though most of the hard work of this story was analysing the public financial statements of these companies, the other vital bit to crack was making this complex financial story hit a nerve with readers.

It is hard to tackle complex system topics like globalised finance – but extremely important. Whether these systems are technical or financial – complexity can be more effective than secrecy in concealing failures and injustice.

Traditional news reporting is rightly focussed on people, but sometimes that means we miss reporting on the systems that increasingly shape our lives. Journalists should tackle stories that make these faceless systems more tangible and work to connect them with their impacts on everyday life.

Visual and interactive journalism can pioneer creative ways to show these complex systems. By making use of the story-telling power of graphics and code, as well as words and numbers, we can make these difficult topics easier to understand.

For example our attempt to visualise the financial technique of “leveraging” with the pipes graphic – was very conceptually challenging. It could be improved, but one success was: people who we explained leveraging to verbally didn’t understand it, but people who we showed the graphic to, did understand.

Collaboration means more resources, time and effort is needed to find people with complementary skills and to organise them between teams. However, the result of that work when done properly has a bigger impact on the media and audience. Readers benefitted from an impactful, richer and high quality journalistic product, while this type of project has strong performance metrics and it helps to build up the brand.

Project links:

https://www.theguardian.com/environment/ng-interactive/2022/nov/30/englands-water-the-worlds-piggy-bank

https://www.theguardian.com/environment/2022/nov/30/more-than-70-per-cent-english-water-industry-foreign-ownership

https://www.theguardian.com/environment/ng-interactive/2022/dec/01/down-the-drain-how-billions-of-pounds-are-sucked-out-of-englands-water-system

https://www.theguardian.com/environment/2022/dec/01/water-companies-debts-since-privatisation-ofwat-refuses-impose-limits