Anglia Ruskin University has worked alongside credit rating agency Standard & Poor's to examine the impact of climate change and water scarcity on the utility companies and energy consumers in the East of England.

Credit FAQ: How Water Shortages In Eastern England Could Increase Costs For UK-Based Utilities, was published today by Standard & Poor's Ratings Services, following collaboration with Trucost, an environmental data organisation, and Anglia Ruskin's Global Sustainability Institute.

The study found that the East of England is likely to face severe water shortages over the next 20 years due to significant changes in rainfall patterns, a steadily increasing population and the growing impact of climate change. These are likely to lead to increased energy prices and create additional challenges for utilities and energy-intensive businesses.

Without increased national and local focus on the management of water demand, water and power companies operating in the region are likely to face both continued water shortages and increasing operating and capital costs.

"Fixed income investors are increasingly concerned about how climate change, water scarcity and other environmental risks may impact the creditworthiness of regions and companies around the world over the coming decades," said Michael Wilkins, credit analyst at Standard & Poor's Rating Services.

"This study sheds light on the potential credit impact of the drought in the East of England for the first time and analyses how water scarcity may add a new dimension to credit risk for investors in critical infrastructure such as power stations and water utilities."