Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate change
• Safety
• Community
• Diversity & Inclusion

Environmental Achievements

• 38% reduction in greenhouse gas emissions against baseline (target: 80% by 2050)
• 1,850 km of old iron gas distribution mains replaced in the UK with polyethylene pipes to reduce methane leakage
• Launched a groundbreaking pilot program to generate electricity from energy lost in gas distribution systems

Social Achievements

• Received a Business in The Community Silver Jubilee Award for 10 years of providing education, skills training, and jobs
• 1,000 people successfully completed the Young Offender Programme, reducing re-offending rates below 7%
• US employees generously donated to the United Way campaign, raising over $3.5 million
• Became the first official partner to Special Olympics Great Britain

Governance Achievements

• Undertook a comprehensive review of processes in line with Sarbanes-Oxley requirements
• Internal control systems over financial reporting were effective as at 31 March 2007 and anticipated to be the same for 31 March 2008
• Published Standards of Ethical Business Conduct

Climate Goals & Targets

Environmental Challenges

• Injury frequency rate remained static despite a fall in the number of injuries
• Supply chain disruptions due to flooding in the UK and storms in the US
• Metering competition investigation resulting in a suspended fine

Mitigation Strategies

• Launched a refreshed approach to safety: ‘Trusted to Work Responsibly’
• Implemented an ethos of trust and responsibility
• Refreshed Chairman’s Safety, Health and Environment awards
• Developed alternative sourcing strategies
• Appealed Ofgem's decision on metering competition

Supply Chain Management

Responsible Procurement

• Established a single procurement function covering UK and US

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Storms

Transition Risks

• Changes in laws or regulations
• Regulatory treatment of commodity costs

Opportunities

• Development of energy-efficient products
• Renewable energy development

Reporting Standards

Frameworks Used: Combined Code on Corporate Governance

Certifications: ISO 14001 (partially)

Third-party Assurance: PricewaterhouseCoopers LLP

Awards & Recognition

• Business in the Community Silver Jubilee Award
• Platinum company in the Business in the Community 2007 corporate responsibility index

Environmental Metrics

ESG Focus Areas

• Environment
• People
• Communities
• Economy
• Governance

Environmental Achievements

• Reduced Scope 1 and 2 GHG emissions (target: 80% by 2030 from a 1990 baseline)
• Reduced Scope 3 GHG emissions (target: 20% by 2030 from a 2016 baseline)
• Reduced SF6 emissions (target: 50% by 2030 from a 2019 baseline)
• Moving to a 100% electric fleet by 2030 for light-duty vehicles
• Reduced energy consumption in offices (target: 20% by 2030 from a 2019 baseline)
• Improved natural environment (target: 10% improvement by 2030 on land owned)
• Achieved zero carbon emissions from business air travel (target: at least 50% reduction in air miles from 2019 baseline)

Social Achievements

• Increased transparency on gender and ethnicity/race in workforce
• Maintained fairness in pay across the organization
• Increased diversity in Senior Leadership group (target: 50% by 2025)
• Increased diversity in new talent programs (target: 50% by 2025)
• Provided unconscious bias training to all employees
• Developed skills for the future, focusing on lower-income communities (target: 45,000 people by 2030)
• Achieved employee volunteering hours (target: 500,000 by 2030)

Governance Achievements

• Reviewed and adapted governance policies to support responsible business commitments
• Continuously reviewed company culture to ensure inclusivity
• Ensured stakeholder voices are heard at the highest levels
• Increased diversity in Group Executive Committee (target: 50%)

Climate Goals & Targets

Environmental Challenges

• Transitioning to a clean energy system
• Reducing Scope 3 emissions
• Maintaining fairness and affordability of energy services
• Ensuring a fair transition to clean energy for all communities
• Managing risks and opportunities associated with climate change

Mitigation Strategies

• Developed a Responsible Business Charter with specific commitments and targets
• Embedded commitments into business plans of each business unit
• Monitored progress through Monthly Business Review process
• Invested in research and development through National Grid Partners
• Engaged with supply chain to set carbon reduction targets
• Developed a Climate Transition Plan

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• Global Supplier Diversity Policy
• Engagement with suppliers to set carbon reduction targets

Climate-Related Risks & Opportunities

Opportunities

• Investments in renewables

Reporting Standards

Frameworks Used: TCFD

Environmental Metrics

ESG Focus Areas

• Diversity
• Greenhouse Gas Emissions
• Air Quality
• Community Affordability

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: PricewaterhouseCoopers LLP

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Biodiversity

Environmental Achievements

• Reduced Scope 1 & 2 GHG emissions by 7% compared to the previous year.
• Reduced SF6 emissions by 21% since 2019.
• Replaced or eliminated over 360 miles of leak-prone pipe in the US, avoiding approximately 410 metric tonnes of methane emissions annually.

Social Achievements

• Launched Fossil Free Vision in the US to transition communities to zero carbon.
• Acquired Western Power Distribution (now National Grid Electricity Distribution) in the UK.

Governance Achievements

• Established board-level oversight of climate-related issues.
• Increased proportion of executive incentives linked to ESG and climate targets.

Climate Goals & Targets

Environmental Challenges

• Decreased useful economic life of US gas assets due to evolving regulatory environment.
• Increased frequency of extreme weather events causing asset damage and operational risks.
• Meeting stringent regulations on SF6 leakage.

Mitigation Strategies

• Investing in renewable natural gas (RNG) and hydrogen projects (£54m invested).
• Investing in storm hardening measures (£31m invested in FY22-23).
• Investing over £1.2m in SF6 research and development to reduce leakage and explore alternatives.

Supply Chain Management

Supplier Audits: 260 suppliers (representing 71% of spend and 80% of emissions)

Responsible Procurement

• CDP climate change submission requirement for top suppliers.
• Inclusion of climate-related requirements in supplier contracts.

Climate-Related Risks & Opportunities

Physical Risks

• Increased frequency of extreme weather events
• Changing long-term climate trends
• Flooding

Transition Risks

• Decreased demand for US natural gas
• Failure to adapt to net-zero transition

Opportunities

• Increased revenue through UK SF6 reduction incentive
• Increased demand for electricity in the UK
• Access to new markets through interconnectors

Reporting Standards

Frameworks Used: TCFD, GRI, SASB, EU Taxonomy

Certifications: ISO 14001

Third-party Assurance: PwC

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 13 (Climate Action)

Initiatives contribute to these goals through emissions reductions, renewable energy investments, and support for clean energy policies.

Sustainable Products & Innovation

• Electricity Distribution Networks
• Electricity Transmission Networks
• Renewable solar and wind
• Electricity Interconnectors
• UK Electricity System Operator Business

Environmental Metrics

ESG Focus Areas

• Climate Change

Environmental Achievements

• Reduced absolute Scope 1 and Scope 2 GHG emissions by 60% by 2030/31 from a 2018/19 baseline (target)
• Reduced absolute Scope 3 GHG emissions (excluding sold electricity) by 37.5% by 2033/34 from a 2018/19 baseline (target)
• Reduced the carbon intensity of power generation by 90% per MWh by 2030/31 from a 2018 base year (target)
• Eliminated Scope 1 emissions from unabated fossil-fuel power generation by 2040 (target)
• Reduced SF6 emissions from global operations by 50% by 2030/31 from a 2018/19 baseline (target)

Social Achievements

• Increased investment in energy efficiency programs for customers
• Engaged extensively with investors and wider stakeholders on CTP
• Developed a Supply Chain Sustainability Strategy with Scope 3 emissions reduction at its center
• Implemented a new method for assessing employee skills and capabilities to support net zero ambitions

Governance Achievements

• Incorporated emissions reduction performance and actions to enable the energy transition into remuneration policies
• Established clear accountability for climate-related goals across Board and management levels
• Published Delivering for 2035 and Clean Energy Vision outlining policy and regulatory needs
• Published a comprehensive Trade Association Review assessing alignment of memberships with policy positions and climate commitments

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions and higher material prices impacting Scope 3 emissions reduction
• Policy and regulatory delays impacting the ability to achieve targets
• Uncertainty in the extent of electricity demand growth
• Uncertainty about what replaces the reduction in fossil fuel gas
• Increased frequency of extreme weather incidents and changing long-term climate trends impacting assets

Mitigation Strategies

• Collaborating with supply chain partners to reduce emissions
• Engaging with policymakers and regulators to shape supportive policies
• Investing in infrastructure to enable renewables and improve network efficiency
• Developing a range of customer investment and programs to support energy transition
• Implementing leak-prone pipe replacement programs to reduce fugitive emissions
• Investing in leak detection, repair and prevention for SF6 equipment
• Exploring and implementing SF6-free technologies

Supply Chain Management

Responsible Procurement

• GHG emissions as an integral element of the assessment process
• Support for suppliers to set science-based targets
• Collaboration with suppliers to reduce capital GHG emissions through innovation

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (storms, flooding)
• Changing climate trends (coastal flooding, high/low temperatures, wildfires)

Transition Risks

• Policy and legal changes impacting gas demand
• Market and policy uncertainty regarding electricity demand growth
• Uncertainty regarding the replacement of fossil fuel gas

Opportunities

• Increased demand for electricity
• Decarbonisation of gas networks
• Development of new products and services

Reporting Standards

Frameworks Used: TCFD, GRI, SASB, EU Taxonomy

Third-party Assurance: Independent limited assurance of material metrics using ISAE 3000 (Revised) and ISAE 3410