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Development of SEPA’s corporate performance framework and reporting

1. Introduction

SEPA has made early progress in developing a performance management framework in collaboration with specialists. This work encompasses several strategic initiatives including setting up robust Key Performance Indicators (KPIs), developing a systematic process for prioritisation, and establishing a clear delivery roadmap that connects our strategic objectives to execution. This comprehensive approach begins with a thorough analysis of existing frameworks and stakeholder insights to ensure that our performance metrics are not only reflective of SEPA’s strategic needs but also aligned with operational realities.

Significant strides have been made in aligning SEPA’s performance metrics, starting with the development of KPIs that reflect our "What we do" pillars. This alignment ensures that the KPIs accurately capture the essence of SEPA’s core operations. As we progress, our focus will expand to prioritising and refining these into specific goals, setting the stage for more targeted strategies that enhance our decision-making processes.

Through this collaboration, we have engaged colleagues and conducted in-depth workshops to capture insights across various levels of the organisation. Benchmarking against similar agencies has allowed us to identify best practices and tailor our approach to fit SEPA’s operational environment. These efforts are designed to ensure that the framework not only measures performance accurately but also supports decision-making, enabling the organisation to adapt and improve in real-time as we pursue our long-term objectives.

2. Overview of Performance Management Framework

SEPA’s performance management framework is designed to align the organisation’s day-to-day activities with its strategic priorities. At its core, the framework integrates KPIs, which provide continuous metrics on operational and strategic performance, and Objective and Key Results (OKRs), which set short-term priorities focused on what is most important for the year. Together, these components offer a clear structure for tracking SEPA’s progress and adapting as necessary to meet its strategic objectives.

The KPIs are matched to SEPA’s "What we do" pillars—Protect, Improve, Adapt, Avoid, Warn and the newly added Our Organisation pillar. This ensures that the performance metrics are directly tied to SEPA’s purpose and provide measurable insights into how well the organisation is delivering on its commitments to Scotland’s environment, the people of Scotland and its own organisational health. This alignment enables SEPA to focus on core priorities, improve decision-making, and enhance accountability across all levels.

2.1. Key Pillars and KPIs

The KPIs within each of SEPA’s pillars were selected with the aim of ensuring that performance in each area is measured and tracked over time. These KPIs provide both operational and strategic insights, allowing SEPA to maintain a view of how well it is meeting its obligations while driving improvements where necessary. Below is a summary of the rationale behind the selection of KPIs for each pillar:

Protect: This pillar focuses on SEPA’s core regulatory and enforcement responsibilities. KPIs such as the percentage of regulated sites in compliance with environmental standards and the percentage of statutory reviews completed on time are being considered to measure the organisation’s ability to protect Scotland’s environment from harm. These metrics ensure that SEPA’s regulatory interventions are effective and aligned with its goal of maintaining high environmental standards.

Improve: This pillar captures SEPA’s efforts to proactively enhance Scotland’s environmental quality. KPIs such as reductions in greenhouse gas emissions and the improvement of wastewater treatment works to meet environmental standards reflect SEPA’s role in driving positive environmental outcomes. The considered KPIs focus on areas where SEPA’s interventions can make a significant difference, directly contributing to Scotland’s long-term environmental goals.

Adapt: SEPA’s role in helping Scotland adapt to climate-related risks, such as flooding and water scarcity, is the focus here. KPIs such as the percentage of households in high-risk flood areas registered for SEPA’s flood warning services and percentage of licensed water users in high-risk scarcity areas registered for SEPA’s water scarcity service are being considered to assess how well SEPA supports communities in becoming more resilient to climate change. These metrics provide essential data on SEPA’s effectiveness in preparing Scotland for future environmental challenges.

Avoid: The goal of this pillar is to prevent environmental harm before it happens. KPIs such as the percentage of new developments approved in line with SEPA’s flood risk advice and the percentage of flood risk maps that meet confidence thresholds for accuracy are being considered to measure SEPA’s proactive efforts in managing flood risks and safeguarding infrastructure. These KPIs ensure that SEPA’s advice and regulatory actions are leading to tangible reductions in environmental risks.

Warn: Timely and accurate communication of environmental risks is critical, and this pillar focuses on SEPA’s capacity to issue warnings. KPIs such as the percentage of Flood Guidance Statements issued on time and the number of people registered to receive flood alerts are being considered to measure the effectiveness of SEPA’s warning systems. These metrics are key to ensuring that SEPA’s communication with the public and stakeholders is fast, reliable, and impactful in mitigating potential environmental damage.

Our Organisation: The newly added pillar focuses on the internal health of SEPA as an organisation. KPIs such as time taken to fill critical roles, customer satisfaction net promoter score (NPS), and the percentage of FOI requests responded to within statutory timelines are being considered to ensure SEPA remains an efficient and well-functioning organisation. These KPIs reflect the organisation’s commitment to fostering a positive work environment, maintaining public trust, and operating transparently and effectively.

2.2. KPI Implementation and OKRs

While KPIs provide continuous insight into SEPA’s operational and strategic performance, we are complementing them with OKRs to set clear, focused priorities for the year. The OKRs will guide the organisation's efforts toward its most critical objectives, ensuring that resources and attention are aligned with SEPA’s high-level strategic priorities as outlined in the Corporate Plan.

The OKRs serve as a tool to clarify what SEPA needs to achieve within defined timeframes, while KPIs monitor our progress in broader, ongoing operational areas. OKRs will be reviewed regularly and adjusted as needed to reflect evolving priorities and challenges, allowing SEPA to maintain agility while pushing forward on its most important goals. Through the use of OKRs, we are able to align cross-functional teams and focus on key outcomes that drive both immediate impact and long-term success.

To support the implementation of OKRs, we are also introducing a prioritisation framework that will help teams and leaders determine which objectives require the most immediate focus and resources. This framework will ensure that SEPA’s limited resources are optimally allocated to initiatives that offer the highest strategic value, without losing sight of broader operational demands monitored by KPIs.

2.3. Approach to Rollout

We are adopting a Phased Rollout approach, which balances maintaining momentum while allowing for flexibility and adjustments. The phased approach involves piloting the OKRs within a selected business unit before expanding the framework across the entire organisation. This method allows us to gather lessons from the initial pilot, enabling refinements and adjustments to be made based on real-world feedback before full implementation.

The phased rollout ensures that any challenges or roadblocks encountered in the pilot stage can be addressed before the OKRs are scaled across SEPA. The steps involved in this approach include:

• Confirm organisational KPIs: Ensure KPIs are fully aligned with the "What we do" framework and reflect SEPA’s overall organisational health and performance.
• Define annual organisational OKRs: Establish a clear set of OKRs for the year, based on SEPA’s Corporate Plan priorities, and align them with the KPIs.
• Pilot OKRs within a business unit: Use organisational OKRs to develop project plans in one business unit, allowing for focused testing and refinement.
• Document lessons and feedback: Collect and analyse feedback from the pilot unit, making any necessary adjustments to the OKRs and the implementation process.
• Adjust for wider rollout: Incorporate feedback and make refinements before extending the OKRs framework across other business units.

This phased approach will allow SEPA to move forward at a controlled pace, ensuring that the OKRs framework is tailored to the organisation's needs and is effective in driving strategic outcomes.

3. Recommendations

The Board is asked to discuss the work undertaken on developing SEPA’s Corporate Performance Framework, provide feedback on the phased rollout and identify areas for further alignment.